Ending a declining trend of six to seven months, local Indian pig iron prices have gained INR 200/mt ($3.22/mt) during the past week to about INR 16,600/mt ($268/mt) ex-works amid renewed all round buying of foundry and steel grade pig iron, traders said on Wednesday, February 25.
According to a Kolkata-based trader, most foundries and secondary steel plants had aggressively reduced their inventories over the past several months and lowered plant capacity utilization rates due to stagnant demand.
However, with pig iron inventories falling to critical levels, both foundries and secondary steel mills in western and central Indian regions are observed to have concluded fresh purchases during the past week, he said.
At the same time, the market felt that prices of both scrap and billet may have bottomed out and that the sharp rise in imported scrap prices over the past week has also had a supporting impact on local pig iron prices, the trader added.
However, a number of market sources have maintained that the uptick in pig iron prices is too modest to be sustainable as the outlook and general sentiment have remained negative.
The sources pointed out that transaction volumes are not sufficient to absorb the heavy oversupply in the market and that the absence of any significant export transactions will offer very little support for the present uptrend which is likely to be temporary.
$1 = INR 62.02