Local Indian pig iron prices have fallen back during the past week, losing about INR 300/mt ($5/mt) to around INR 19,200/mt ($319/mt) ex-works on reports of producers planning to roll back prices and amid high inventories, traders said on Wednesday, June 25.
According to a Kolkata-based trader, large Indian pig iron producers are planning to roll back prices since the market has not absorbed the current high prices and as several mills have built up high inventories.
A lowering of domestic pig iron prices is expected in July, but the market has no information on the likely size of the price cut, the trader said.
Market sources said that most producers had increased their base prices over the past two months by about INR 1,000/mt ($16/mt), reacting to higher prices charged for iron ore by the largest Indian iron ore producer NMDC.
The sources said that pig iron prices had firmed up over recent weeks riding on the back of higher prices of long steel products, ingots and billets, caused by expected higher demand from the construction sector.
The demand for long products and billets did not materialize and prices are now moving down, in turn resulting in pressures on steel grade pig iron and in higher pig iron inventory levels, the sources said.
Medium-sized producers of pig iron which, unlike large producers like Neelachal Ispat Nigam Limited (NINL) and Rashtirya Ispat Nigam Limited (RINL), are not able to offer volume discounts are believed to have seen their inventories increase by 5,000-7,000 mt during June, the sources said.