Local Indian pig iron prices have continued to remain under pressure with prices edging down by INR 100/mt during the past week to INR 29,200/mt ($426/mt) ex-works, amid producers reducing their base prices for next month deliveries, auction receiving lower bids and a poor response to export tenders, traders said on Wednesday, June 27.
Market sources said that, in select regional markets like in central India, pig iron prices have risen marginally higher to around INR 29,500/mt ($430/mt) ex-works owing to local issues like disruptions in transportation and lower available stocks at small regional producers, but the overall domestic market outlook has remained bearish.
The sources said that the largest Indian producer Neelachal Ispat Nigam Limited (NINL) has marginally lowered its base prices which market intermediaries have attributed to efforts by the company to push higher volumes into the market considering that it is operating at maximum plant capacity utilization and needs to manage inventories.
”Apart from the market facing an oversupply situation, the fact that export tenders have not been receiving acceptable bids has also increased market apprehensions that supply-side pressures on prices will gather momentum,” a Kolkata-based trader said.
Sources said that Rashtriya Ispat Nigam Limited (RINL) which had early in the month floated an export tender for 15,000 mt and was forced to extend the deadline for submission of bids had to ultimately cancel the tender last week following a poor response from buyers.
Depressed market sentiments in the local market are also evident from the fact that Steel Authority of India Limited (SAIL) had to conclude pig iron auction deals below its base prices after very few bids were submitted to the auctions, the sources added.
$1 = INR 68.62