Indian Pig Iron Prices Hit One Month Low, Yet Suppliers Are Hopeful

In India, the Pig Iron market is facing a downtrend with prices hovering at similar levels to the beginning of April 2023. Weak demand and falling Steel and coal prices are the major factors contributing to this drop. As assessed by Ofbusiness, several factors have contributed to the decline in Pig Iron prices in India recently. In this article, we will delve into the same.

Current Scenario Of Pig Iron Market

• Factors Affecting Price Fluctuations- The Indian market is highly dependent on the Steel industry. Hence, any changes in Steel prices have a direct impact on prices.

• Decline In Steel Prices And Demand- This week, the mid-sized Steel mills’ billet prices have declined sharply by Rs 1,000-2,000/ton and with a drop in Pig Iron-consuming markets in central, east, and southern regions by Rs 1,500-2,000/ton, with some markets in western India dropping by Rs 2,000/ton.

• This has caused buyers to hold back bulk bookings, and prices have dropped significantly. The buyers, mainly ingot and billet manufacturers, are waiting for price stability before placing major orders.

• Hurry To Receive Orders- Since suppliers have limited orders, they have followed the Steel commodities’ price movement to match supply and demand. However, despite lowering their offers, the response from buyers was poor. This raised competition among suppliers, and the price fall continued in the domestic market.

• Falling Prices Of Raw Materials- Another key factor contributing to the sharp fall in Steel and Pig Iron prices is Coal prices decline by $20/ton in a week, although it has recovered slightly by $8-10/ton. Australian premium HCC Coking Coal prices have fallen about $70/ton month-on-month and are currently hovering around $250-255/ton CNF India. Moreover, Iron Ore prices have been on a downtrend, putting pressure on the industry.

Current Offers

• Steel Grade- The latest offers through Durgapur-based mills are reported to be around Rs 41,300-41,500/ton ex-works in east India, while in Raipur, central India, the prices stand around Rs 41,200-41,500/ton. These prices have dropped by Rs 1,000-1,300/ton against the previous week’s offers.

• Foundry Grade- The prices have dropped this week by Rs 1,000/ton in Punjab, with current offers ranging from Rs 44,700-45,000/ton in Ludhiana, Rs 45,700-46,000/ton in Delhi, and Rs 47,500-48,000/ton in Ahmedabad on a delivered basis.

OFB’s Insight

After a constant price drop, suppliers are hopeful that prices will stabilize soon. They believe that Steel and Coal prices have reached their bottom, leaving less scope for further sharp corrections in the Pig Iron industry. However, there is no clarity in the market, and the price movement will depend on Steel and Coal prices globally.

Read more: Downward Price Trend Continues: When Will Be The Right Time To Buy Finished Long Steel Products?

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