The surge in local Indian pig iron prices has continued unabated for the fourth consecutive week, increasing by INR 500/mt ($7.5/mt) week on week to INR 21,000/mt ($316/mt) ex-works, with more producers completing hikes for October prices and due to the further tightening of supplies, traders said on Wednesday, October 8.
Market sources said that Rashtriya Ispat Nigam Limited (RINL) and Neelachal Ispat Nigam Limited (NINL) have both hiked base prices by INR 1,000/mt ($15/mt) for current month deliveries.
Sources said that, against the backdrop of rising demand for long products, integrated steel mills like Steel Authority of India Limited (SAIL) are refraining from commercial sale of steel grade pig iron and are instead reserving production for downstream value addition by its own mills, resulting in the tightening of pig iron supplies in the market.
“Apart from the rises in base prices, there is considerable supply-side pressure too. Several traders have reported that producers are deferring deliveries of booked volumes as they are running low on stocks,” a Kolkata-based trader said.
“The rise in prices of billets by 10-15 percent over the past two weeks has also provided additional support for local pig iron prices. Market intermediaries are making large-volume bookings particularly for steel grade pig iron, anticipating a sharp upturn in demand for long products as construction activity receives a boost at the end of the rainy season,” the trader added.
$1 = INR 66.53