Pig Iron Prices In India Remain Strong Despite A Change In Billet Prices

Plants located in eastern India (Odisha, West Bengal & Jharkhand) contribute about 60%-70% of India’s pig iron production. The private plants based in Durgapur reported offers for steel-grade pig iron at around Rs 44,000-Rs 44,200/ton, up by Rs 200/ton against the floated offer on 7 January 2023.

Steel-grade pig iron prices remained strong in India (especially in the eastern region) as suppliers have sufficient orders. As for the price movement of billets, it fell by Rs 500- Rs 1,500/ton in the last 5-7 days.

Similarly, the prices of foundry-grade pig iron delivered in the northern region (Punjab and Delhi-based mills) remained strong at around Rs 46,600-Rs 47,000/ton. On 9 January 2023, the major foundry-grade pig iron producers in Western India raised their offers by Rs 500-1,000/ton.

Key Factors Behind Strengthened Pig Iron Prices

Good Orders: The majority of standalone pig iron suppliers reported having sufficient orders in hand for more than a week. A mismatch in supply and demand influenced them to keep prices higher. In addition, spot pig iron supply by primary mills has narrowed down in the last month.

Increased Supply: It has been a month since Steel Authority of India Limited (SAIL) decreased pig iron supply, as demand for finished steel products remained strong.

Resumed Exports: Recently, a bulk shipment of pig iron export deal has been finalized for approx 50,000 tons by a western India-based plant. 

Higher Prices Of Substitute Products: Prices of substitute products scrap and sponge iron are trending higher. Scrap prices in the international market have increased by about $15-20/ ton in January 2023.

Rising Coking Coal Prices: The prices of coking coal contribute (in major proportion) to pig iron’s input cost. The prices of coal have significantly increased by $60-65/ ton since December 2022 and about $15-20/ton in January 2023.

Read more: Indian Mid-Sized Steel Mills Slash Offers But Large Indian Mills Remain Firm