Why Pig Iron Demand In India Is Slowing Down?

The Pig Iron market in India has been witnessing a decrease in demand. The market has turned optimistic with the beginning of FY24 as prices rose nearly Rs 2,000-3,000/ton. However, with a sharp price surge, demand has slowed down with suppliers based in the eastern region, Durgapur, indicating a slight price fall if demand remains the same. In this article, we will discuss the reasons for the slowdown in demand, current offers, and market outlook of the Indian Pig Iron market.

Reasons Behind Demand Slowdown

• Sufficient Bookings- Industry participants reported to Ofbusinesss that the buyers have already booked sufficient quantity when the prices started to surge. That is why fresh buying has been quite low. This indicates that there will be no further price hikes.

• Falling Coal Prices- The declining coking coal price (fell by $50/ton from the mid of March 2023), is the key reason for weakening Pig Iron prices in the coming days and has also affected the spot demand in the market.

• Declining Long Steel Prices- Another reason cited for the slowdown in demand is the decline in Long Steel product prices of mid-sized Steel mills and primary Steel mills. The Steel prices per ton fell nearly by Rs 1,000 recently. This seems to reduce Pig Iron consumption and improve supply in the spot market in the coming days, ultimately prices of Pig Iron will be under pressure.

Current Offers

• Steel-grade Pig Iron– The latest offers for Steel-grade Pig Iron through Durgapur-based mills are reported to be around Rs 42,300-42,500/ton ex-works in east India, and in Raipur, the prices stand around Rs 42,800-43,000/ton. The prices in Durgapur fell by Rs 500-700/ton from the peak levels of Rs 43,000/ton during the last week, while in Raipur, it remains more or less the same and is trending about two months high against the previous high in February 2023.

• Foundry-grade Pig Iron- On the other hand, Foundry-grade Pig Iron Steel prices per ton have slightly changed by Rs 100-300, week-on-week, with current offers ranging from Rs 45,800-46,000/ton in Ludhiana and Rs 46,000-46,300/ton in Delhi, both on a delivered basis.

Market Outlook

Industry experts suggest that Pig Iron prices in India are less likely to surge further and may remain volatile or record a slight downtrend if the prevailing demand continues for a few days. Meanwhile, the major change in offers will be dependent on domestic Steel price movement.

OFB’s Insight

Several reasons such as buyers already booking sufficient quantities, declining coal prices and Steel prices of mid-sized Steel mills and primary Steel mills for long Steel products can be attributed to the change in Steel demand in India. The current offers for Steel-grade Pig Iron slightly fell and Foundry-grade Pig Iron has remained stable. Steel market experts are suggesting that Pig Iron prices in India are less likely to surge further.

Read more: Indian Flat Steel Market Remains Supported; Expect to Stay Stable

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