Local Indian pig iron prices have continued to consolidate at higher levels, increasing by another INR 700/mt ($11/mt) during the past week to INR 23,200/mt ($365/mt) ex-works, due to the combination of strong billet prices, higher export offers and rising prices of scrap, traders said on Wednesday, August 2.
“The pig iron market is in a strong consolidation phase now, having moved up INR 1,600/mt ($26/mt) in just the past two weeks” a Kolkata-based trader said.
“There are several strong positives for the market including the tightening of supplies from large producers who are increasing shipment volumes to the export markets as export prices are increasing” the trader added.
Explaining the positives in the market, at least two other traders said that domestic billet prices are also maintaining their strength at higher levels of INR 29,000/mt ($456/mt) ex-works, prompting several large pig iron producers to keep larger pig iron volumes for their own captive conversion to billet.
At the same time, there has been a rise in export offers and producers have increased their export shipments, and these two factors have led to a tightening of pig iron supply in the domestic market.
According to market sources, pig iron export offers have moved up in the range of INR 300-500/mt ($5-7/mt) on FOB basis over the past two weeks and this, coupled with rising scrap prices, has been providing strong support for local pig iron prices.
$1= INR 63.67