The Pig Iron industry in Eastern India, specifically in the Durgapur market, has recently faced a period of subdued demand, leading to stagnancy. Producers reported stagnancy in the market. While Pig Iron demand remains stable, it is not experiencing the same support levels and growth as seen in other commodities.
Let’s explore the factors behind this stagnation, recent developments, and the market outlook.
According to reports from private Pig Iron producers based in Durgapur, the Pig Iron demand has failed to match the vigour seen in other commodities. Unlike the robust demand and price support enjoyed by various semis commodities such as Sponge Iron, and Billets, the Pig Iron market has remained in a state of stagnation. Market players lament the lack of significant support for this crucial component in the Steel manufacturing process.
To add to the complexity of the situation, two Pig Iron plants in the region were temporarily closed for about 10 days due to technical glitches. However, they recently resumed operations on 31 August 2023. As a result, there has been an improvement in the Pig Iron supply in the market, leading to price stability within the current week amidst stagnant demand. There has been a slight price increase of Rs 200-300/ton, on a week-on-week.
In contrast to the Eastern region’s stagnant Pig Iron market, other regions have witnessed varying price movements. The central region, for instance, saw Pig Iron prices rise by Rs 800-1,000/ton. This price surge can be attributed to a slight supply shortage reported by SAIL (Steel Authority of India Limited), a major producer that is largely focusing towards finished Steel commodities in response to increased demand and the Indian government’s drive to diversify Steel production.
Here are the current prices in various locations:
Industry participants believe that Pig Iron price movement will closely correlate with the Billet price. They anticipate a slower pace of price change compared to other commodities. Pig Iron supply in both the Western and Eastern regions seems to be sufficient due to pauses in exports and import arrivals. Consequently, the Pig Iron industry may experience less support compared to other commodities, such as Sponge Iron, scrap, Billets, and other Finished Steel products.
The Pig Iron industry in the eastern region of India is currently facing stagnant demand and price challenges. It remains to be seen how market dynamics will evolve in the coming months, but industry players are keeping a close watch on Billets prices and supply factors that will influence the future of this crucial industry.