Local India pig iron prices have continued to rise for the third consecutive week with prices surging by INR 800/mt week on week to INR 24,300/mt ($377/mt) ex-works, on the back of a combination of rising scrap and billet prices and sustained exports even at the current high price levels, traders said on Wednesday, December 13.
“All key drivers are very strong, pushing up pig iron prices. There is, particularly, a strong revival in demand from the foundry sector,” a Kolkata-based trader said.
“There is a rush among pig iron users to make fresh bookings, with the market anticipating a tightening of supplies to the market with producers setting aside higher volumes for their own captive conversion,” the trader added.
Market sources said local billet prices have also continued to record gains and have moved above the INR 30,000/mt ($466/mt) mark, surging by INR 1,100/mt during the past week to INR 31,500/mt ($489/mt) ex-stockyard in northern Indian markets.
The sources said that such gains in billet prices would prompt large Indian pig iron producers to increase captive conversion of pig iron, further tightening supplies for commercial sales.
The sources said that apprehensions that a sharp rise in domestic pig iron prices would be a dampener to export shipments have been belied, as indicated by a fresh export tender for 6,000 mt floated during the past week by government trading firm MMTC Limited.
Export prices are unlikely to fall below the $350/mt FOB mark, while market optimism on overseas shipments continues to provide added support for local pig iron prices, the sources added.
$1 = INR 64.44