Indian pig iron prices stable amid slack buying and low export offer price expectations

Indian pig iron prices are unchanged since last week at INR 24,000/mt ($429/mt) ex-works amid lack of buying interest and low expectations of export offers, traders said on Thursday, September 6.
 
Rashtriya Ispat Nigam Limited (RINL), one of the largest government-owned pig iron producers has floated an export tender of 30,000 mt of steel grade pig iron for September shipment, but the offer price would be far below the expected $471/mt and more around the domestic price of $429-432/mt, a Kolkata-based trader said.
 
"With the export and domestic price almost at par, producers can only expect to improve margins from the weakening of the rupee. Pig iron producers are in no position to pass on a higher price of iron ore to domestic or overseas buyers," he said.
 
International pig iron prices are under pressure from falling iron ore prices. But it is only in India that iron ore prices are on the rise putting pressure on pig iron producers' margins as low demand is forcing them to cut prices instead, according to a trader in Vishakhapatnam in southern India where the RINL plant is located.
 
India's largest iron ore miner NMDC Limited last month increased the price of lump iron ore of  65 percent iron content by 13 percent to INR 6,100/mt ($109.12/mt), while the international spot price for the same grade has fallen to $97/mt, the trader said.
 
Foundries had already reduced offtake of pig iron and the late spread of the monsoon rains across the country will prolong the lull in construction activities and demand for construction steel, increasing the lack of buying interest in pig iron, a foundry operator near Kolkata said.