What Is The Current Scenario Of Pig Iron Market In India?

The Indian Pig Ion market has been weak due to limited demand from domestic buyers, resulting in a price correction across regions. In the past week, the market was low to moderate, but this week it has turned weaker. The prices have declined by Rs 500-1,000/ton in a week’s duration due to a mismatch in demand supply, with supply exceeding demand in the spot market.

In this article, we will explore more about the Pig Iron market and its impact on the Steel industry in India.

Factors Impacting Pig Iron Market

Several factors have put pressure on Pig Iron prices in the Indian market as observed by Ofbusiness.

• Decline In Steel Prices And Demand- Mid-sized Steel mills’ billet prices have seen a decline this week by Rs 1,000-1,500/ton, resulting in weakened demand for Pig Iron. Buyers (ingot & billet manufacturers) are waiting for stability in Steel prices and postponing their future orders for raw materials.

• Limited Orders With Suppliers- While most Pig Iron producers in central and western regions had enough orders during the last week, weak demand this week has left them keen for orders. This has increased selling pressure and resulted in softening offers among suppliers.

• Negative Market Sentiment- Steel prices are expected to remain volatile or decline further due to weak market trends globally and a slight rise in Steel inventory with mid-sized Steel mills for sponge iron and finished Steel products. This will lead to a negative outlook for Pig Iron prices if the demand remains the same.

• Falling Prices Of Raw Materials- A sharp fall in coal prices, the key fuel for Pig Iron production, has also contributed to the weakening of the Pig Iron market. The prices of Australian premium HCC Coking coal have fallen to around $245-250/ton compared to $380-390/ton during the first week of March 2023. Additionally, prices of iron ore are under pressure and have recorded a fall of about Rs 1,000/ton, month-on-month.

Pig Iron Current Offers

· Steel-Grade Pig Iron- The latest offers through Durgapur-based mills are around Rs 42,500-42,800/ton ex-works in east India. When it comes to while Raipur, central India, the prices stand around Rs 42,500-42,700/ton.

· Foundry-Grade Pig Iron- The prices have remained slightly changed for the second consecutive week, ranging from Rs 45,500-45,800/ton in Ludhiana, Rs 46,000-46,200/ton in Delhi, and Rs 48,000-48,300/ton in Ahmedabad on a delivered basis.

Market Outlook

The Pig Iron market outlook has been revised, and prices are expected to remain under pressure due to sluggish trends caused by softening Steel prices and low demand for Pig Iron, coupled with sufficient supply in the Steel industry in India.

OFB’s Insight

The Indian Pig Iron market has turned weak this week, and the prices have declined due to limited demand and an oversupply situation in the spot market. The market outlook for Pig Iron remains negative due to weak market trends, falling prices of raw materials, and softening Steel prices. The situation may improve if the demand for Pig Iron rises in the future.

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