Why Indian Pig Iron Market Is Reporting Fluctuations?

The Indian Pig Iron market is experiencing a mixed response due to fluctuating Steel prices. Suppliers in the eastern region reported improved demand on lower prices, while the central region is witnessing limited inquiries.

The price comparison for the week registered a surge of around Rs 300-500/ton in the central region, while it declined by Rs 500/ton in the eastern markets such as Durgapur. In this article, we will delve deeper into the reasons behind the fluctuation in Pig Iron prices and the current offers in the market.

Reasons Behind Price Fluctuations

• Volatile Steel Market- The mid-sized Steel mills’ Billet prices registered volatility during the week, as they fell in the initial days. However, later with a slight uptick in demand, it increased by Rs 500-1,000/ton, which in turn subdued demand for Pig Iron, as furnaces are also having sufficient stock, especially in the central region.

• Unclear Future Outlook- Due to the unclear price movement for the upcoming days, the buying is as per the sales of Steel products, and future buying remains very limited by most participants. This, in turn, slightly balances the demand-supply in the market, especially in the eastern region, where a couple of plants based in Jharkhand and West Bengal have halted the supply of Pig Iron for a few days.

• Coal Prices Stability- After a sharp fall in March 2023, the prices of coking Coal slightly dropped in April 2023 by around $10-20/ton with current offers of around $290-295/ton CNF India for premium grade Australian Coke. This is influencing Pig Iron suppliers to change their prices as per the demand in the spot market.

Current Offers

• Steel-grade Pig Iron- The latest offers for Steel-grade Pig Iron through Durgapur-based mills are reported to be around Rs 42,500-42,700/ton ex-works in east India, while in Raipur, central India, the prices stand around Rs 42,800-42,900/ton. The prices in Durgapur fell by Rs 300-500/ton from the past week’s peak levels of Rs 43,000/ton, while in Raipur, it increased by Rs 400-500/ton, week-on-week.

• Foundry-grade Pig Iron- Foundry-grade Pig Iron price has slightly changed by Rs 100-200, week-on-week, with current offers ranging from Rs 45,800-46,000/ton in Ludhiana, Rs 46,000-46,200/ton in Delhi and Rs 48,300-48,500/ton in Ahmedabad; on a delivered basis.

Market Outlook

Industry participants believe that Pig Iron prices are likely to remain volatile considering fluctuating Steel demand and the hold on domestic supply by a few plants in the eastern region. Also, the expected slight change in raw material prices, i.e., iron ore and Coal, is likely to balance the Indian Pig Iron industry in terms of price movement.

OFB’s Insight

Several reasons such as buyers already booking sufficient quantities, declining Coal prices and volatile mid-sized Steel mills prices can be attributed to the change in Pig Iron demand in India. The current offers for Steel-grade Pig Iron slightly fluctuated, and foundry-grade Pig Iron has remained stable. Steel market experts suggest that Pig Iron prices in India are likely to remain volatile.

Read more: What Is Industry Scenario For Stainless-Steel Market In India?

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