Local Indian local pig iron prices have showed little change during the past week, remaining at around INR 18,100/mt ($296/mt) ex-works as foundry buyers have showed no interest to conclude significant transactions, traders said on Wednesday, August 6.
According to a Kolkata based trader, demand from foundry segment has remained weak with pig iron users refusing to conclude transactions and build inventories.
He said that though most traders have kept their prices stable even in face of sluggish movement in volumes, few traders in eastern India around Kolkata have been offering discounts of INR 90/mt ($1.4/mt) on steel grade pig iron to reduce their inventories.
"Till last month, pig iron market was being supported by firm prices of long steel products. With local prices of long products under correction, demand for steel grade pig iron was suffering," he said.
"Long product prices were down by INR 400/mt ($7/mt) over the past week, on slowdown of construction activity. The fallout is being faced in low volume movements in steel grade pig iron," he added.
Market sources said that even successful export transaction for shipments in current month has failed to improve sentiments since the volume was considered by traders to be not large enough to take care of excess supply in the domestic market.
It was reported that government-owned trading house, MMTC Limited, which acts on behalf of pig iron producer, Neelachal Ispat Nigam Limited (NINL) concluded an export transaction for 30,000 ton pig iron for August shipment at an offer of $398 FOB. This was about $3/mt higher than NINL's previous export transaction concluded in May 2014.
Sources said that MMTC had announced export of total of 60,000 mt of NINL produced pig iron but there were no confirmation of any transaction for the balance 30,000 mt on offer, thereby weakening market sentiments.