Local Indian pig iron prices have increased over the past week, rising by INR 2,300/mt ($33/mt) to INR 23,500/mt ($345/mt) ex-works, amid a tightening of supplies from large producers and expectations of base price hikes, traders said on Wednesday, January 11.
Market sources said that most large producers have reported a sharp fall in their inventories and several traders have stated that they have been unable to conclude deals for required volumes from any of the major pig iron producers.
At least two traders said that producers are increasingly diverting volumes to the export markets as margins on export deals are improving, resulting in reduced volumes for the domestic market.
The traders pointed out that most of the export contracts clinched last month were above $310-320/mt, reflecting the revival in overseas demand for Indian pig iron, and this has provided strong support for local prices despite the weak demand and volume off-take by some domestic sectors such as foundries.
At the same time, sources said that large producers like Rashtriya Ispat Nigam Limited and Neelachal Ispat Nigam Limited are expected to commence upward base price revisions of around $7-8/mt starting next week, triggering fresh bookings by dealers.
$1 = INR 68.30