Over the past week, local Indian pig iron prices have increased by INR 300/mt to INR 28,800/mt ($400/mt) ex-works, amid a slight revival in buying interest at some producers’ auction sales and reports of new export tenders, traders said on Wednesday, December 12. However, the upside potential is foreseen to be limited by excess production and supply-side pressures.
Market sources said that the auction of pig iron held during the past week by Steel Authority of India Limited (SAIL) attracted a good response, with the entire volume on offer being sold. At the same time, government trading firm, MMTC Limited floated a export tender for 30,000 metric tons of pig iron for end-of-December delivery on behalf of producer Neelachal Ispat Nigam Limited (NINL), the sources said.
“The response to auction sales and the reports of export tenders have supported prices. However, unless export volumes increase sharply, these developments are unlikely to support local pig iron prices considering high production levels and significant supply of material flowing into the local market, which will limit the upside potential of prices from current levels,” a Kolkata-based trader said.
“I do not think that the gains in prices will be sustained over the next few weeks in view of the supply-side dynamics at present,” the trader added.
$1 = INR 71.99