Indian Pig Iron Prices Remain Volatile, Supported By Sufficient Orders And Measured Supply

Generally, the pig iron market reacts according to the price movements of billet. As per the industry experts, there is less scope for a decline in prices and the prices are likely to remain volatile. Due to bullish trends in the industry, the suppliers are keeping prices higher. Pig iron prices in the Indian domestic market fluctuated by Rs 300-500/ ton in the last two-three days. During this duration, even billet prices fell by Rs 500-1,000/ ton.

Here are the reasons why the pig iron prices in India remain volatile:

Less Supply By Primary Mills- According to industry experts the supply of pig iron in the spot market has decreased (specifically by primary mills) due to better margins in finished steel sales and strong sales in final products. As a result, the majority of primary mills, including SAIL (which sells material through auctions) have limited supply currently and are focusing on fulfilling finished steel orders.

Resume Exports- With exports resuming, the supply of pig iron in the spot market has decreased from a few regular suppliers based in western and eastern India. As a result, these mills are keeping prices higher for domestic deals. This decreases the supply in the spot market which impacts the prices.

Less Supply By Producers- It is worth noting that production has been disrupted at a few plants based in the eastern and southwestern regions, which are major suppliers of pig iron. Due to the less supply from these plants, the demand-supply is mismatched, ultimately leading to higher prices in the spot market, despite the declining steel and billet prices of secondary mills. This disruption in production and the decrease in supply from these plants also contribute to the volatility of pig iron prices in the Indian domestic market.

Higher Prices Of Substitutes- The prices of substitutes for pig iron such as scrap and sponge iron have also remained higher which is supporting the pig iron market. This is due to active finished steel sales and it is expected that this price hike will continue. Ultimately, it will support the demand for pig iron at the current prices. The higher prices of substitutes are another reason that pig iron prices are likely to remain volatile and less chance of a decline in prices in the Indian domestic market.

Read more: Indian Primary Mills Packed For January 2023 Long Steel Orders, Hints Change In Steel Prices