The upward movement of the local Indian pig iron market has gained momentum during the past week with prices increasing by INR 700/mt week on week to INR 21,200/mt ($311/mt) ex-works, as large producers have commenced increasing their base prices earlier than expected and also due to the improvement in exports, traders said on Wednesday, December 28.
"The market was caught by surprise as producers have started to make upward adjustments to their base prices which had been expected next month," a Kolkata-based trader said.
"The successful conclusion of export offers has also provided support for local pig iron prices, which have recorded gains for the second consecutive week," the trader added.
Market sources said that both Rashtriya Ispat Nigam Limited and Neelachal Ispat Nigam Limited have pushed up their base prices by INR 500/mt ($7/mt), which was unusual for producers as they normally prefer to make price revisions at the beginning of a month.
The sources pointed out that one of the reasons for the end-of-month price revisions was producers' eagerness to improve margins from domestic sales against the backdrop of successful export contracts.
Sources said that over the past week trading firm MMTC Limited acting on behalf of Neelachal Ispat Nigam Limited has successfully closed an export tender for 30,000 mt of pig iron. While market sources were unable to provide the contract price, they said that market reports suggested that the price was about $10-12/mt higher than the export contracts concluded last month.
$1 = INR 68.22