Local Indian pig iron prices have edged down INR 600/mt ($9/mt) during the past week to INR 22,200/mt ($343/mt) ex-works as leading producers started slashing prices for current month deliveries, traders said on Wednesday, May 10.
“The cut in base prices has caught the market by surprise as most producers increased base prices late last month. The reversal in pricing within such a short time is a possible indication of mounting inventories held by producers,” a Kolkata-based trader said.
According to market sources, leading Indian pig iron producer Neelachal Ispat Nigam Limited (NINL) lowered its base price by INR 1,200/mt ($18/mt) with others expected to follow suit over the next few days.
The sources said that dealers are not passing on the benefits of lower base prices to end-users as they are carrying stocks previously booked at higher levels, though most are expected to lower prices further next week. They added that large producers are able to reduce base prices following the softening of import coking coal prices and the lower base prices will enable producers to liquidate higher inventories.
Pressure on Indian prices is expected to increase over the next few weeks in the wake of the softening of international pig iron prices and given the bearish export outlook.
$1 = INR 64.62