Local Indian pig iron prices have remained unchanged during the past week at around INR 18,200/mt ($301/mt) ex-works against the backdrop of a lack of off-take from the foundry segment and any significant transaction volumes, traders said on Wednesday, September 3.
According to a Kolkata-based trader, foundries suffering from low capacity utilization have stayed away from making any significant bookings in most western and central Indian markets, while the low transaction volumes in northern India have failed to impact prices.
"The price cuts last month appear to have failed to drive demand, at least from the foundry segment which is facing complex issues of power shortages as well as depressed demand from user segments, causing pig iron prices to remain at lower levels," he said.
On August 28, Neelachal Ispat Nigam Limited (NINL) announced an INR 500/mt ($8/mt) cut in pig iron prices for September shipments, but has withdrawn any volume discounts for the period.
Sources said that the market is waiting for large pig iron producers to respond to successful bids for export shipments which were concluded at significantly higher levels.
The market is expecting that, if attractive export offers gain momentum, large producers will be able to divert domestic supplies to overseas markets and higher export margins might prompt them to adjust local prices further in order to drive demand, the sources said.
One of the largest pig iron export tenders in recent months, for 40,000 mt offered by trading house MMTC Limited, floated in mid-August, received a significant offer at around $393/mt, the sources said.
$1 = INR 60,43