The local Indian pig iron market has staged a sharp turnaround with prices surging by INR 1,800/mt during the past week to INR 21,600/mt ($335/mt) ex-works, amid the significant increase in fresh bookings by foundries and optimism over the revival of exports, traders said on Wednesday, July 12.
“The rally in the pig iron market has taken everyone by surprise. The trend from prices at an eight-month low just a few weeks ago to an eight-month high now clearly shows the volatility in the market,” a Kolkata-based trader said.
“I am not sure how much of the upsurge is rooted in the fundamentals of demand and how much in speculative buying,” the trader added.
Some market sources said that there are some reports in the market of buyers making new bookings for speculative purposes and the possibility of under-invoicing to avoid the new Goods and Service Tax although this cannot be confirmed independently.
However, at least two other traders said that foundries are seen to be back in the market and are booking larger volumes than observed previously.
The market is also reacting to positives from the export front with the government trading firm announcing a new export tender of 30,000 mt, for which bids are expected to come in by July 14, the traders added.
$1 = INR 64.55