A Detailed Look at the Performance of Indian Pig Iron Market (April 2024)

The Indian pig iron industry experienced a notable shift in prices in April 2024, influenced by a significant surge in steel prices. To be precise, pig iron prices in April reached a 10-month high, aligning closely with those observed in June 2023. Keep reading for more insight on the industry performance.

Factors Driving the Rise in Pig Iron Prices

• Triggered by Steel Prices:

OfBusiness reported a substantial increase in domestic steel including billet prices, with secondary steel mills witnessing a surge of up to Rs 5,000/ton in April. Additionally, primary TMT prices rose by Rs 4,500-5,000/ton. Prices of metallic commodities, particularly pig iron, saw an increase of Rs 3,000-5,000/ton in April, vary upon markets.

• Optimistic Trends Amidst War Tensions:

Rising tensions between Iran and Israel contributed to optimistic trends in steel prices. Many industry participants anticipated that the conflict between these nations could lead to trade tensions, potentially resulting in unbalance in import-export dynamics.

The anticipation of a sharp rise in oil prices due to the war situation prompted expectations of increased freight costs for shipping lines and a surge in import-export prices for various materials, including steel. Analysing these factors, a significant trigger in Indian domestic steel prices was noted, leading to price hikes across commodities.

• Strengthening Scrap Prices:

In addition to the surge in steel prices, the primary substitute for pig iron, ferrous scrap, saw price support due to increasing steel prices and a tightening imported scrap market. Domestic scrap prices rallied by Rs 3,000-3,500/ton, while imported scrap prices increased by $15-25/ton in April, providing support to pig iron trades despite a sharp rally in prices.

• Higher Bids in Pig Iron Auctions:

Active participation in pig iron auctions influenced major producers to raise spot prices. Auctions conducted by SAIL and NMDC received bids that were Rs 3,000-4,000/ton higher month-on-month in April, leading to a sharp increase in pig iron prices by private producers.

For example, NMDC’s pig iron auction for 12,000 tons on April 30 received bids around Rs 41,000-41,200/ton ex-plant, compared to bids of around Rs 37,500-37,700/ton in the company’s previous auction, showing a surge in bids by Rs 3,500/ton.

Current Pig Iron Prices

• Steel-grade pig iron prices in various markets:

Durgapur: Rs 43,500-44,000/ton (Up by Rs 4,000-4,500/ton in April)

Raipur: Rs 42,500-43,000/ton ex-Raipur (Up by Rs 4,500-5,000/ton in April)

Ludhiana: Rs 42,500-43,000/ton (Up by Rs 3,000-3,500/ton in April)

• Foundry-grade pig iron prices:

Ludhiana: Rs 46,000-46,300/ton (Up by Rs 3,000/ton in April)

Delhi: Rs 46,000-46,500/ton (Up by Rs 3,000/ton in April)

Kolhapur: Rs 47,000-47,200/ton (Up by Rs 500/ton in April)

Ahmedabad: Rs 46,500-47,000/ton (Stable)

Will the Pig Iron Market Trends Continue in May?

Industry sources believe that pig iron prices are likely to remain supported in May amidst ongoing elections in the country, which may continue to firm domestic steel demand. However, significant changes may also occur based on global steel price movements. Since pig iron is a globally traded commodity, any major changes in the international market are expected to impact the Indian market.

Get latest steel news, market updates, and price trends on OfBusiness.