Local Indian pig iron prices have continued to move sideways this week at INR 20,000/mt ($369/mt) ex-works, while downward pressures eased with small export transactions being concluded, traders said on Friday, February 14.
"The purchase volumes of foundries have continued to be negligible, but sentiment in the market has improved amid confirmed reports of export shipments being concluded," an Orissa-based trader said.
According to market sources, Rashtriya Ispat Nigam Limited (RINL) had concluded a transaction for 30,000 mt of pig iron to South Korea, but the price in question could not be confirmed.
The sources said in addition that Neelachal Ispat Nigam Limited (NINL) was close to concluding an export offer for a similar quantity, and these reports have eased downward pressures on prices, with local prices remaining stable.
However, the markets and traders remain unsure of the impact of the revival of exports, given the small volumes.
According to traders in Raigarh, a pig iron production hub in central India, the revival of exports over the past week has been too small in volume terms compared to the estimated 125,000 mt of export surplus which had been diverted for domestic sales and, hence, current export volume levels may not have an upward impact on local prices.
Besides, several foundries in the Raigarh region and in southern India are still operating at less than half capacity owing to low demand from the manufacturing sector in general.
However, Kolkata traders who generally deal with pig iron produced in the eastern Indian steel town of Durgapur said domestic pig iron prices had bottomed out. The export market can only gain momentum from the current export volume levels and so domestic pig iron prices have a potential upward room of $5-7/mt even at current static demand levels, the traders said.