The downward movement in the local Indian pig iron market has gained momentum with prices slumping by INR 2,200/mt during the past week to INR 29,800/mt ($438/mt) ex-works, as increased supplies from producers eased supply constraints which had been supporting prices and as there have not been any new reports of export tenders, traders said on Wednesday, May 16.
Market sources said that much of the increased availability of pig iron in the market is expected to come from Neelchal Ispat Nigam Limited (NINL), which completed capital repairs of its blast furnace and produced 2,772 mt of pig iron on May 12, the highest-ever single day production by the company - an indication the higher volumes which will be available from the producer.
The sources said that other large producers including Rashtriya Ispat Nigam Limited (RINL) and Steel Authority of India Limited (SAIL) are also expected to increase pig iron production in the short term and, in the absence of any reports of export tenders being floated, this will naturally result in higher volumes flowing into the local market and thereby cooling prices which had early in the month crossed the INR 32,000/mt mark.
“What started as a cooling of the market is snowballing into a slump. But I would reckon that the market could move in either direction from the current level. Critical for the market direction will be export shipments,” a Kolkata-based trader said.
“A possible rise in export shipments could result in a throwback to tight supplies, fuelling prices again and hence local traders are seen to be restocking at current lower levels,” he added.
$1= INR 67.86