Downward pressures have persisted in the local Indian pig iron market for the third consecutive week, with prices moving down by INR 200/mt during the past week to INR 26,000/mt ($405/mt) ex-works, amid a combination of falling demand from foundries, the softening of scrap and billet prices and the lack of export opportunities, traders said on Wednesday, February 7.
“Clearly the eight-week long bull run in the pig iron market has come to an end. Apart from falling demand, particularly from foundries, expectations for the downward movement to gain momentum are keeping buyers on the sidelines,” a Kolkata-based trader said.
Market sources said that, with local billet prices moving down by INR 300/mt during the past week to INR 32,500/mt ($506/mt) ex-works, this has prompted several large pig iron producers to push volumes for commercial sales and to reduce captive conversion, and this along with weak demand has compounded the pressures on pig iron prices.
Supply-side pressures have also been aggravated by the fact that no new export tenders have been reported by any of the large producers since start of this calendar year, much against producers’ expectations of a sharp rise in export earnings early last month.
$1 = INR 64.18