The Indian domestic pig iron market was characterized by conflicting trends during the past week, with a few producers increasing prices, while traders in certain regions cut prices, resulting in confusion among buyers, traders said on Monday, April 15.
Several traders based in Orissa in eastern India and in Raigarh in central India said that Neelachal Ispat Nigam Limited (NINL), a leading producer, increased its prices by INR 500/mt ($9/mt) to levels of INR 23,000/mt ($421/mt) ex-works, while traders cut prices by around INR 250/mt ($4.5/mt) and are now offering foundry grade pig iron at INR 22,500/mt ($411/mt), ex-warehouse.
"NINL's price increase is a result of the company successfully transacting export orders and it is now trying to offset higher iron ore costs. But the price increase is not in tune with extremely poor local demand," said an Orissa-based trader.
"The market is resisting higher price levels, as indicated by the extremely low volumes booked by foundries during the past week, and traders are forced to either slash their prices or offer discounts to keep their stocks moving and ensure cash flows," the trader added.
Market sources said producers like NINL are adopting a short-term pricing regime. The company had slashed prices by around $10/mt late last month and negated this reduction by a matching price increase last week.
The absence of even medium-term pricing by producers and the price cutting in the market is indicative of underlying demand weakness and input cost increases, the sources added.