Indian domestic pig iron prices have fallen by INR 500/mt ($9-10/mt) to INR 23,000/mt ($422/mt) ex-works amid the sharp rise in inventories of unsold export surplus at several major producers and the lack of supporting buying interest from local foundries, traders said on Thursday, November 8.
"No export tenders from producers are pending and no export shipments are scheduled for November. It is estimated that about 70,000 mt of pig iron meant for exports has moved in for domestic sales," said a Kolkata-based trader.
"Buying offers from foundries are unchanged but most of them are keeping volumes at lower levels. Hence, producers have been lowering prices to keep stocks moving and ensure their cash liquidity," the trader said.
According to market sources, Neelachal Ispat Nigam Limited (NINL), one of the largest pig iron producer has officially announced a temporary exit from the export market until prices revive, while Rashtriya Ispat Nigam Limited (RINL) is still uncertain about making shipments at offers of $410/mt and is increasingly looking at domestic sales.
"The impact of too much material on offer and tepid demand from foundries is expected to continue for a fortnight or to the end of November because the series of festival holidays next week will keep traders away from the market," said an Orissa-based trader.
According to an official at an eastern Indian steel mill, after a very short-lived weakening, the rupee has started to gain again against the dollar, moving up to INR 54.20 after touching a low of INR 54.61 during the week and the appreciating trend was a further disincentive for realizations in dollar terms.
During the current month, domestic prices are expected to continue to have a downside risk of another $5-10/mt with producers keeping up domestic selling pressures to manage inventories, the official said.