The slump in the local Indian
pig iron market has gathered momentum with prices slipping for the second consecutive week, losing about INR 300/mt ($5/mt) to about INR 15,600/mt ($248/mt) ex-works as more producers have started to cut base prices and with buyers withdrawing from the market across the country, traders said on Wednesday, May 27.
"The market has been nervous due to soft prices. In particular, the steady downward movement with uncertainty over the bottom levels has been pushing most buyers out of the market," a Kolkata-based trader said.
"Buyers for both steel and foundry grade
pig iron are desperate for some kind of stability even at lower levels instead of the present steady downward journey," the trader added.
Market sources said that Steel Authority of
India Limited (SAIL) has cut its base
pig iron prices by INR 400/mt ($6/mt), joining other large
pig iron producers which had lowered base prices earlier in the month. One trader said that it is unusual for a producer to change its base prices towards the end of the month and the price cut announced by SAIL has indicated the depth of the negative outlook for the local
pig iron market.
Market players said that bearish sentiments are aggravated by reports that an export tender for 30,000 mt floated by Rashtriya Ispat Nigam Limited (RINL) which has been closed this week had evoked just one bid, reflecting the depressed situation in the global market.
While no confirmation is available on whether the single bid will be accepted by RINL or not, traders are apprehensive of oversupply stemming for the export surplus flowing into local markets.