Local Indian local
pig iron prices have trended downwards during the past week, softening by INR 200/mt ($3/mt) to around INR 18,200/mt ($299/mt) ex-works as producers have cut prices to counter production cuts by induction furnaces, traders said on Wednesday, August 20.
Traders said that Neelachal Ispat Nigam Limited (NINL) has announced a INR 200/mt ($3/mt) cut in its
pig iron prices and dealers have readily passed on the lower prices to buyers in order to keep inventories at low levels.
Another large producer, Rashtriya Ispat Nigam Limited (RNIL), is also expected to lower its base
pig iron price before the end of the current month, traders said.
According to a Kolkata-based trader, induction furnaces across eastern and western
India had lowered production responding to a sharp fall in prices and transaction volumes of long steel products, putting pressure on volume off-take and prices of steel grade
pig iron.
The gains in
pig iron prices recorded earlier in the month have been wiped away during the past week, the trader said.
"
Pig iron prices had moved up on the back of improved sentiment relating to shortages of iron ore. But this was short-lived since the market soon realized that demand from foundries and induction furnace would continue to weaken and tight iron ore supplies would not support
pig iron prices," he said.
Sources said that government-owned trading firm MMTC Limited has floated an export tender for 40,000 mt of
pig iron on behalf of NINL with August 28 as the closing date.
As reported by SteelOrbis earlier this month, this would be in addition to an export tender floated by RINL for overseas shipment of 30,000 mt, also closing at the end of this month.
Sources, however, said that revival of export shipments would support sentiment but not change fundamentals as local prices would continue to be under pressure from low demand from user segments.
$1 = INR 60.69