Indian pig iron prices remained unchanged this week at INR 24,500/mt ($438/mt) ex-works, even though volumes fell sharply on reports of price cuts next month and oversupply in the market, traders said on Thursday, August 16.
Several foundries in southern India have either shut down or reduced productions in face of weak demand for castings and their off-take of pig iron during the week was almost nil, according to a Mumbai-based trader.
There was also oversupply in the market with large mills reporting higher production during July but offer prices received a lukewarm response, a Kolkata-based foundry operator said.
Traders have been expecting an official price cut and higher volume discounts since with the rupee gaining strength during the week the FOB price differential between imports and domestic pig iron has narrowed down, he added.
In dollar terms, the domestic pig iron price at $438/mt ex-works is down from $444/mt in the previous week and from $452/mt in the last week of July.
Steel Authority of India Limited (SAIL) reported a six percent month-on-month increase in July pig iron production at 1.06 million mt, whereas Rashtriya Ispat Nigam Limited (RINL) which floated a tender offering for 30,000 mt of steel grade pig iron for September shipment is yet to conclude a deal since prices quoted in tenders are not attractive, indicative of weak sentiments, traders said.
"The market expects producers to cut prices by INR 800/mt ($15/mt) next month. This would align domestic prices with international prices. An ex-China shipment was reported from Chennai port at $415/mt," a Kolkata-based trader said.