Supply Shortage Keeps Pig Iron Market Supported In Eastern India

The Pig Iron market in eastern India, specifically in the Durgapur region, has shown stability despite Steel prices dropping significantly. This can be attributed to a combination of factors, including the high materials cost from neighbouring major producers and a slight shortage in the local market. It is because of the temporary shutdown of a plant due to technical issues. These factors have supported Pig Iron prices, as Steel prices in India experienced a sharp fall of around Rs 1,000-1,500/ton week-on-week.

Latest Updates

Let’s explore the latest Pig Iron updates.

• Anticipated Price Correction

Market participants expect Pig Iron prices to come down soon. This expectation is based on assumptions that the temporarily shut-down plant will resume operations and the bearish trends in the global market, coupled with falling raw material prices such as coal and iron ore, as assessed by OfBusiness.

• Declined Steel Billet Prices

MS Billets prices, a Semi-finished Steel product, have declined by approximately Rs 1,000-1,500/ton in major locations in a week. This drop is primarily due to poor Finished Steel sales, which has created pressure across various commodities, including Pig Iron.

• Declining Coke Prices

Coking coal import offers have been under pressure, with a recorded drop of around $30/ton in May 2023. Australian premium coal’s current price stand at approximately $235-240/ton CFR India. The coal prices downturn had an impact on the Pig Iron market as well.

• Exports

The Pig Iron export market remains weak, with no major fresh export deals and low-price realizations. As a result, domestic market supply remains strong, putting further pressure on prices.

Current Prices

Steel Grade Pig Iron

• Durgapur- The latest mills’ offers for Steel-grade Pig Iron are reported to be around Rs 41,800-42,000/ton ex-works in east India. This reflects a decrease of only about Rs 100-200/ton compared to the decline in billet prices by Rs 1,000-1,500/ton, week-on-week.

• Raipur- Just like billets, the prices recorded a drop as Pig Iron supply remained sufficient from the Odisha-based plants, including SAIL. The current price stands at around Rs 41,000-41,200/ton, which is a decline of Rs 800-1,000/ton week-on-week.

Foundry Grade Pig Iron

• Foundry-grade Pig Iron prices have been volatile, with fluctuations of Rs 300-500/ton on a week-on-week basis. However, in western India’s Gujarat and Maharashtra, there has been a decline of Rs 500-700/ton compared to the previous week. The current offers range from:
  • Ludhiana- Rs 45,300-45,500/ton
  • Delhi- Rs 45,500-45,800/ton
  • Ahmedabad- Rs 46,500-47,000/ton
  • Note- The prices are on a delivered basis.

OFB’s Insight

Despite the Steel price drop, the Pig Iron market in eastern India’s Durgapur market has maintained stability. Factors such as the high cost of materials from neighbouring major producers and a slight supply shortage have supported prices. However, market participants expect prices to come down soon due to the anticipated resumption of operations at the temporarily shut-down plant and bearish trends in the global market, along with falling raw material prices. The current Pig Iron prices, both Steel Grade and Foundry Grade, reflect the market conditions in different regions of India.

Read more: India’s Domestic Semi-Finished Steel Market Remains Uncertain, Are Prices Affected?

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