Over the past week, prices in the local Indian pig iron market have increased by INR 1,000/mt to INR 27,200/mt ($420/mt) ex-works, amid market expectations of base price increases by producers and apprehensions of short supplies in the market, traders said on Wednesday, February 20.
Market sources said that Vedanta has already announced a price increase for pig iron following the closure of its mines in Goa and other large producers are also expected to announce higher prices over the next few weeks.
The sources said that there are reports in the market that major domestic pig iron producer Neelachal Ispat Nigam Limited will only be back in production in April, and not in March as expected, and this has triggered fears of short supplies in the market, leading to a price surge.
“The full impact of the closure of iron ore mines on overall pig iron production is yet to be clarified. Sentiment is largely based on fears of short supplies, and this is fuelling the price surge and is expected to be seized by producers as a reason to increase prices,” a Kolkata-based trader said.
“Prices are surging but are impacting the volumes in the market as dealers are cautious about booking large volumes,” the trader added.
No significant export tenders were reported from any of the large producers during the past week, sources said.
$1 = INR 64.80