Indian Pig Iron Market Remains Under Pressure On Sluggish Steel Demand

The Indian pig iron market has been experiencing a continuous downtrend as domestic demand remains poor. Mid-sized steel mills’ prices have been falling constantly, leading to a significant drop in pig iron prices since the second half of January 2023.

Reasons For Price Corrections And Current Offers

• The significant pig iron price drop is mainly due to declining steel and scrap prices. Additionally, lower export realizations have kept major buyers away, resulting in fewer positions being taken by Indian smelters. As a result, bookings with pig iron producers have been measured, and suppliers are competing to book more orders.

• Steel prices, including melting scrap, have dropped by Rs 1,000-1,500/ton in a week and overall, about Rs 2,000/ton since the beginning of March 2023.

• Steel-grade Pig Iron Offers- The latest offers for steel-grade pig iron through Durgapur-based mills are around Rs 39,800-40,000/ton ex-works and in Raipur at around Rs 41,000/ton. These prices have dropped up to Rs 1,500/ton in a week’s duration. In northern India, traders in Ludhiana (Punjab) are offering steel-grade pig iron at around Rs 44,000/ton delivered.

• Foundry-grade Pig Iron Offers- The offers for foundry-grade pig iron are reported to be around Rs 46,200-46,300/ton in Ludhiana and about Rs 47,000/ton in Delhi, delivered.

Insight

It is assumed that with the new fiscal year, the demand from major foundries will improve with fresh orders. This may result in an improvement in spot demand in the Indian market, leading to a reaction in prices against the significant drop in the last quarter of FY23.

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