Local Indian
pig iron prices have weakened by INR 300-500/mt ($5-8/mt) during the past week to around INR 18,200/mt ($303/mt) ex-works amid a slump in demand and low expectations for export transaction prices, traders said on Wednesday, July 23.
According to a Kolkata-based trader, a sharp fall in local prices of billets and scrap has weakened local
pig iron prices during the week, with a few large
pig iron producers lowering their offers for July-August,
For example, Neelachal Ispat Nigam Limited (NINL), a large eastern
India-based
pig iron producer, has cut its prices by INR 500/mt ($8/mt) in order to push volumes into the market, the trader said.
Apart from lowering prices, NINL is also reportedly offering volume discounts of around INR 500/mt ($8/mt) to keep its inventories low, the trader said.
Sources said that a smaller price reduction around INR 300/mt ($5/mt) is reported from the central Indian market around Raigarh, while a higher reduction is reported from the eastern Indian market in Orissa.
Sources said that NINL has also floated a tender for exports of 60,000 mt of
pig iron with July 28 as the last date for submission of bids. However, the sources said that the first
pig iron export tender in the last two months has failed to offer any support to the market. The export offer volume is perceived by the market to be too small to ease supply side pressure on prices and expectations for the export transaction price are far below the price level in NINL's last successful export shipment, the sources added.
NINL had last recorded an export transaction price of $395/mt for shipment to Singapore. But, according to market expectations, transaction prices from current export offers from NINL will not exceed the range of $320-330/mt in view of the weakening of
pig iron prices in the CIS, the sources said.