This week, Indian domestic pig iron prices slipped INR 1,000-1,200/mt ($18-21/mt) to levels of INR 22,000/mt ($401/mt) ex-works, across various north and southern markets after major producers Neelachal Ispat Nigam Limited (NINL) and Rashtriya Ispat Nigam Limited (RINL) dropped their pig iron prices by INR 500-1,000/mt ($10-18/mt) for December and January bookings, traders said on Thursday, December 20.
"While NINL announced lower prices, another large producer Rashtriya Ispat Nigam Limited (RINL) made a more modest price reduction of INR 500/mt ($10/mt)," an Orissa-based trader said.
"The price announcements unexpectedly weakened the local pig iron market since these two large producers had both earlier stated that existing domestic prices would be maintained through the current month," the trader said.
Although there were no official comments from exporting producers, market sources said that lower than expected offers for NINL's 30,000 mt pig iron export tender for January shipment prompted producers to lower prices and push rising inventories into the market.
According to market sources, with domestic prices hovering near the $400/mt mark, producers' margins from pig iron sales are close to negative, since the prices of locally sourced iron ore are rising for steel mills with no captive mines.
At the same time, with most foundries in southern and northern Indian operating at very low capacities, it is uncertain whether lower prices will result in higher bookings, the sources said.