Local Indian pig iron prices have firmed up during the past week by INR 500-800/mt ($8-12/mt) to the range of INR 18,200-18,500/mt ($293-297/mt) ex-works, on higher demand from secondary steel plants and foundries, traders said on Wednesday, February 19.
Discounts across the domestic market have been withdrawn amid expectations of higher demand and improved transaction activity, traders said.
According to a Kolkata-based trader, the rise in pig iron prices in the local market, the first in the last three months, was largely owing to most steel mills increasing their prices of finished products, prompting traders also to test higher price levels.
Some of the furnaces in northern India, which had either shut down or cut capacity utilization due to shortage of power, have gradually been returning to full production levels with the improvement in the energy supply situation and the anticipated rise in demand for pig iron has also prompted traders to increase their prices, he said.
In the medium term, foundries are expecting increased capacity utilization and demand from the auto sector given the lower excise duty on passenger cars announced by the government, earlier this week, he added.
However, market sources said that there is uncertainty over the sustainability of the rise in pig iron prices since supply side pressure still exists with no large domestic pig iron producer reporting any pending export tenders during the current month.