Local Indian pig iron prices have fallen by INR 500/mt ($8/mt) during the past week to around INR 18,500/mt ($312/mt) ex-works, with producers starting to adjust prices, traders said on Wednesday, June 11.
According to a Kolkata-based trader, Neelachal Ispat Nigam Limited (NINL) has already announced a $8/mt price cut, while Rashtriya Ispat Nigam Limited (RINL) is expected to follow suit shortly.
Sentiments in the markets have improved with the reports of price adjustments and also that NINL is expecting to clinch export contracts over the next two months, the trader said.
Market sources said that the NINL plant in the eastern Indian province of Orissa is reported to be planning an increase in pig iron production, but most of the incremental production would be for overseas shipments.
NINL is close to closing an export contract for 50,000 mt for July shipment and another 60,000 mt has been scheduled for the export market in the August-September period, the sources said.
However, lower domestic prices have only contributed to a marginal improvement in transaction volumes and are expected to have a limited impact in boosting demand in the medium term.
Most foundries particularly in northern India have remained reluctant to build up inventories since they are facing acute power shortages, the sources said.
Most foundries in northern India have been forced to cut capacity utilization or reduce working hours due to prolonged power cuts and the heat wave in the region, the sources added.
$1 = INR 59.30