The Indian domestic
pig iron market has remained subdued during the past week with prices remaining unchanged at INR 18,600 ($282/mt) ex-works amid weak demand and high inventories and widespread discounts of around INR 1,000/mt ($15/mt) across the local markets, traders said on Monday, September 2.
According to a Kolkata-based trader, sentiment in the
pig iron market is very low, while there has been negligible demand among
pig iron consuming industries. Indeed, government data issued on Monday showed a contraction in domestic manufacturing sector output during August - the first contraction in the last four and a half years.
Most large producers and traders are carrying high inventories and, according to market estimates, the oversupply of
pig iron is about 125,000-150,000/mt with no export tenders reported so far for shipments in the current month.
Market sources said that neither users nor distributors have been willing to conclude any large volume transactions in view of several negative macroeconomic indicators like the contraction in manufacturing and the slump in Indian GDP growth to 4.4 percent, which is also the lowest rate in four and a half years.
"Local base prices have lost all relevance since demand is at an all-time low and there is rampant discounting in the eastern and southern Indian markets," a trader based at Raipur in central
India said.
"Most traders in the southern Indian markets have been pushing
pig iron stocks even at negative margins in order to reduce carrying costs," the trader added.