With domestic demand having remained muted in recent months, India's pig iron producers have continued to lose out on overseas customers due to the export duties. As SteelOrbis previously reported, on May 21 the Indian government imposed a 15 percent export duty on pig iron and spiegeleisen in pigs, blocks and other primary formats, apart from other products, in order to soften prices under supply-side pressures. However, the steps in question have led to nothing more than discontent and serious concerns among local pig iron producers, who have been forced to reduce their outputs, given weak domestic demand and the higher costs of exports. Besides, coking coal prices are not to the advantage of India's pig iron suppliers.
“There is extreme pressure on suppliers. The market is weak in India, with post-holiday demand not having picked up yet. A further correction by around INR 1,000/mt is not excluded,” a market source commented with regard to the current developments. Meanwhile, current basic pig iron (BPI) prices are at around INR 42,500/mt ($513/mt) ex-works in the eastern regions of India, while in the west of the country the material is available at INR 41,500/mt ($501/mt) ex-works. This is around a INR 2,500-3,000/mt ($30-36/mt) decline in prices compared to the levels valid in early October. According to some traders, the tradable BPI prices in India have apparently settled at levels considerably below INR 41,500/mt ($501/mt) ex-works, though producers have denied such levels. In particular, the major Indian BPI supplier closed its tenders for small lots (1,000-2,000 mt) at INR 42,200-42,400/mt ($510-512/mt) ex-works in late October. According to some rumors, an Indian pig iron producer is in the market with ex-Russia BPI at INR 41,000/mt ($495/mt) ex-works, while fresh ex-Russia BPI offers have been heard at around $450/mt CFR. Consequently, aggressive offerings for ex-Russia BPI have become another obstacle for Indian pig iron producers while doing business.
It is noteworthy that there is a five percent import duty on non-alloy pig iron imports into India.