The local Indian pig iron market has continued its downward trend for the third consecutive week, with prices decreasing by INR 300/mt week on week to INR 23,300/mt ($256/mt) ex-works, with the export market showing signs of drying up and foundries floundering from lack of demand, traders said on Wednesday, October 4.
Market sources said that medium-scale foundries are facing acute working capital shortages in wake of the Goods and Services Tax (GST) and have drastically reduced capacity utilization and raw material offtake.
A number of foundries are refusing export bookings for castings and forgings since they have to pay tax under the GST and claim refunds later, leading to a blocking of working capital, and this is having a negative impact on foundry grade pig iron offtake, the sources added.
“For several weeks, there have been no reports of any export tenders floated by any of the large Indian pig iron producers. The signs of the export market drying up have affected sentiment and contributed to concerns that more pig iron volumes will flow into the local Indian market, putting renewed pressure on prices,” a Kolkata-based trader said.
$1 = INR 65.03