Downward pressures have persisted in the local Indian pig iron market, with prices edging down by INR 200/mt ($3/mt) during the past week to INR 29,300/mt ($430/mt) ex-works, in response to reports of mounting inventories at producers and bearish export sentiments, traders said on Wednesday, June 20.
Market sources said government trading firm, MMTC Limited, acting on behalf of Neelachal Ispat Nigam Limited (NINL) cancelled an export tender during the week and, although no official reason was cited, traders believed that price offers were not acceptable.
At the same time, Rashtriya Ispat Nigam Limited (RINL) which had floated an export tender for 15,000 mt earlier in the month, extended the last date for submission of bids, which market sources attributed to the poor response from overseas buyers.
Coupled with the lack of new export tenders reported from any of the large producers during the given week, the market has also been apprehensive that the already high inventories at producers will increase further and impact prices, the sources added.
“Several large producers are producing at maximum capacity utilizations levels. Dealers are also unwilling to increase booking volumes. At the same time, export orders seem to be drying up. There is too much material floating in the domestic market and prices are reacting accordingly,” a Kolkata-based trader said.
“Present market dynamics indicate the possibility of another round of price cuts by producers early next month, which has also prompted dealers and end-users to postpone any transactions in the local market,” the trader added.
$1 = INR 68.15