Indian domestic
pig iron prices have continued their downward journey losing INR 500/mt ($9/mt) week on week with producers' offers at INR 20,000/mt ($366/mt) ex-works amid a complete lack of export offers and a glut in the market, traders said on Friday, January 11.
According to market sources, leading producer Neelachal Ispat Nigam Limited (NINL) has slashed its
pig iron prices by INR 500/mt ($9/mt) effective this week. Another major producer, Rashtriya Ispat Nigam Limited had cut prices by an identical amount last week. Over the past 30 days, the large Indian
pig iron producers have pruned prices by INR 1,500/mt ($27/mt) in one of the sharpest price falls over the past one year following the drying up of export orders, the sources said.
"The domestic market is glutted by
pig iron with the export surplus diverted for local sales. The market estimates that about 125,000 mt of surplus
pig iron is available and this has been putting prices under pressure," a Kolkata-based trader said.
"
Pig iron prices have been in a very bearish cycle. Demand is stagnant and foundries have not been willing to make large bookings either, anticipating a further fall in prices," the trader said. An official with an Orissa-based steel mill said margins had turned negative for
pig iron producers with iron ore prices continuing to increase. Producers have been reducing prices to clear export surplus inventories and losses have been mounting since production cuts are not an option. The current demand level will not support prices and a decline to $350/mt is a distinct possibility without an improvement in exports, the official added.