This week, Indian domestic pig iron prices have fallen by about INR 1,000/mt ($18/mt) across northern and southern markets to levels of INR 21,000/mt ($382/mt) ex-works with major producers unable to find buyers for their export surplus, traders said on Friday, December 28.
"Rashtriya Ispat Nigam Limited (RINL) has floated a domestic tender for 50,000 mt after it failed to get any response to its export tender of 30,000 mt for late December shipments," an Orissa-based trader said.
"Though not confirmed by the company, RINL's domestic tender has only evoked little interest from local buyers and offers so far have remained far below the $380/mt mark," the trader said.
According to market sources, leading producers are carrying pig iron inventories above 150,000 mt following very low bids for export tenders since November and no transactions have been concluded lately and this is putting pressure on local prices.
Export transactions are unlikely to materialize unless offer bids exceed $400/mt FOB, the sources said.
Demand from foundries is also low, since several southern India-based foundries are facing acute power shortages and had reduced capacity utilization by over 50 percent. Northern India-based foundries cannot book large volumes either, as they anticipate a sharper fall in domestic prices in January, market sources said.
After reducing base prices by $9-18/mt earlier this month, major pig iron producers may consider another round of reduction of a similar amount in January with smaller capacities aimed at clearing inventories, an official with a West Bengal-based pig iron producer said.