Local Indian pig iron base prices have remained unchanged during the past week at around INR 19,000/mt ($320/mt) ex-works, but market intermediaries have been offering discounts of about INR 200/mt ($3/mt) in a reaction to the correction in long product prices, traders said on Friday, June 6.
According to a Kolkata-based trader, discounting has emerged in the southern and eastern Indian markets as "the euphoria over long product prices has seemed to be settling down."
Last month pig iron volumes and prices had been supported by strong demand for steel grade pig iron in anticipation of buoyancy in demand for long products from the construction sector, he said.
However, long product prices had moved up too sharply and the market felt that the prices increases were excessive compared to the actual demand situation for long products, and as result fresh volumes purchases of pig iron have fallen sharply during the past week, the trader added.
Market sources said that traders have been offering discounts to keep volumes moving and reduce inventories, as they are unsure about the prospects for demand for long products.
The pig iron market is currently seeking its direction and is expected to continue to move sideways until genuine demand emerges in the construction sector, the sources said.