A slight fall in off-take has triggered a correction in the local Indian pig iron market with prices losing ground for second consecutive week moving down by INR 400/mt week on week to INR 30,700/mt ($423/mt) ex-works amid regional variations widening during the past week, traders said on Wednesday, September 19.
Market sources said that auction sales of pig iron conducted by Steel Authority of India Limited (SAIL) during the past week evoked a tepid response from buyers and the final bid prices were close to the reserve prices.
Market intermediaries were quick to take this as a cue of falling demand and reduced their own off-take from producers, aggravating the forces of correction which had started to emerge during the previous week, the sources said.
The downtrend in prices also revived discounting in select regional markets with offers ranging at around INR 30,600/mt ($421/mt) in central India, net of discounts. However, prices have been slightly higher in the western regional market at INR 30,800/mt ($424/mt) with no discounts on offer, the sources added.
“Despite the slowdown in off-take by market intermediaries, I do not think that the price correction will gain momentum. The lower off-take is more of a seasonal variation with the festive season approaching, and dealers preferring to keep cash in hand,” a Kolkata-based trader said.
“I am expecting large producers to aggressively push export volumes now that the Indian currency has breached the $73 to the dollar mark and to limit the downside risks from current levels,” the trader added.
$1 = INR 72.66