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Indian Pig Iron Prices Change Slightly, Suppliers  Expect Recovery
3 months ago
Mild Steel
Mild Steel
Insights
OfBusiness
OfBusiness

Indian Pig Iron Prices Change Slightly, Suppliers  Expect Recovery

Summary
Indian Pig Iron prices have slightly changed after a continuous decline since October 2023. The market outlook indicates stability, with potential changes dependent on the pace of demand recovery in the coming week.

Pig Iron prices in the Indian domestic market have maintained stability with a slight increase after a continuous drop since October 2023. Prices in major locations of central, east, and north India increased by Rs 100-500/ton. However, in the western part, prices are more or less stable.

The recent slight change is negligible compared to a drop of Rs 3,000-4,000/ton since October 2023 before the Diwali festival, as assessed by OfBusiness.

Although the prices have slightly changed, trade activities are yet to resume fully as the workforce remains away due to festive celebrations of Diwali and Chhat Puja, and is expected to be back in work in the coming week. Producers anticipate demand and prices to find support considering the current prices at the bottom line on higher input costs.

 Current Prices

With recent revisions, the current prices of Pig Iron are hovering as follows:

Steel Grade

  • Durgapur: Rs 37,000-37,300/ton (an increase of Rs 200-300/ton week-on-week), ex-works.
  • Raipur: Rs 36,800-37,000/ton (stable on a week-on-week basis), delivered.
  • Ludhiana: Rs 39,800-40,200/ton (an increase of Rs 500/ton week-on-week), delivered.

Foundry Grade

  • Ludhiana: Prices are in the range of Rs 42,700-43,000/ton (an increase of Rs 500/ton in a weekly comparison), delivered.
  • Delhi: Prices stand at Rs 43,000-43,500/ton (stable on a week-on-week basis), delivered.
  • Ahmedabad: Prices range from Rs 46,500-46,800/ton (stable on a week-on-week basis), delivered.
  • Kolhapur: Prices are at Rs 46,500-47,000/ton (stable on a week-on-week basis), delivered.

Influencing Factors

Here are the details:

  • Positive Trends: Strengthening prices of Indian Iron Ore and Pellet due to recovery in Chinese futures, resulting in positive trends in the Indian market.
  • Supported Prices: Increasing Pellet exports from India, ultimately supported Steel commodities prices including Pig Iron in the domestic market.
  • No Price Contractions: Despite continued low demand for Pig Iron from domestic steelmakers, hopes are high for a resumption in purchases to stock material, anticipating no major price contractions from now onwards.
  • Substitute Products’ Price Support: A slight price recovery in substitute products such as Scrap and Sponge Iron at a few major locations is likely to influence Pig Iron producers to keep prices strong to maintain positive sentiments and demand.
  • Imported Scrap Price Rise: Ferrous scrap prices have slightly rebounded in the international market, leading to a surge in import offers for India. As per assessments, imported scrap offers to India surged by $10/ton week on week and overall by $20-25/ton compared to low-level prices during the end of October 2023.
  • High Production Cost: Pig Iron producers in eastern regions reported that if the prices fall again, then they need to bear a loss as input costs are higher due to a sharp surge in Coal and Coke prices during the previous months (September-October 2023). Thus, their input costs remain high in current circumstances.

 Market Outlook

Considering the above factors for demand and price recovery, which somehow indicate bottom-line Pig Iron prices currently, it seems the prices should not change drastically. Major price movements will depend on demand recovery and are likely to become clearer in the coming week once market activities resume fully.

OFB’s Insight 

Indian Pig Iron prices have stabilized with slight changes, showing signs of positivity after a significant drop. Producers anticipate demand to rebound, supported by factors like strengthening Iron Ore, Pellet prices, resumed pellet exports, and a positive movement in substitute products. The market is expected to gain clarity as activities are expected to resume fully in the coming week.

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