The local Indian pig iron market has seen a reversal of its previous bullish trend, with prices decreasing by INR 700/mt during the past week to INR 24,300/mt ($378/mt) ex-works, in reaction to overall resistance in the market against high price levels, traders said on Wednesday, September 20.
“The three-year high of pig iron prices proved to be short-lived. The high level of pig iron prices was not sustainable when the entire market was resisting the high prices of finished steel and when billet prices too have lost momentum,” a Kolkata-based trader said.
Market sources said that at least two medium-sized pig iron producers reduced their base prices by around INR 500/mt in the past week, faced with a slowdown in off-take and over-optimism regarding export prospects.
Although it is not clear in the market whether large producers will follow suit in lowering base prices, signals from smaller producers are negative, with dealers staying away from making fresh bookings, the sources said.
At the same time, the spate of holidays, particularly in the eastern region for the Hindu festivals, may also ensure that market activity will remain weak, prompting a retreat by market participants, traders said.
$1 = INR 64.30