Indian pig iron production increased to 524,000 mt in May this year, rising 4.8 percent compared to April, according to Indian Ministry of Steel figures provided to SteelOrbis on Thursday, June 21. The country's pig iron production during April-May 2012 increased 11.9 percent to 1.02 million mt compared to the corresponding months of 2011.
The higher production is expected to put greater pressure on domestic pig iron prices, which had already been softening from low demand from foundries, a Kolkata-based trader said. Foundry grade pig iron is currently quoted at INR 27,500/mt ($487.22/mt), down INR 500/mt ($8.86/mt) since the beginning of June, the trader said.
Foundries which produce automobile and industrial moulds have been buying less pig iron amid dwindling demand from the automobile and related sectors.
On Wednesday, June 20, Toyota Kirloskar Motors Limited announced the shutdown of production of petrol-engine cars for the next few months owing to declining demand and high inventories. Maruti Suzuki will implement a week-long annual maintenance shut down in last week of the current month. Fiat India Automobile Limited (FIAL) has announced that the company is monitoring raw materials and vehicle inventories to decide on a shutdown program.
According to the Society of Indian Automobile Manufacturers (SIAM), Indian car sales in May totaled 163,229, recording a growth rate of 2.78 percent month on month, the slowest growth rate recorded in the last seven months.
The South Korean and Taiwanese markets, which are usually main destinations for Indian pig iron exports, have also remained depressed, the trader said, citing the example of Neelachal Ispat Nigam Limited (NINL), a major pig iron exporter, whose overseas shipments during the fiscal year 2011-12 fell 20 percent to 328,771 mt compared to the fiscal year 2010-11.