Local Indian
pig iron prices have surged by INR 2,300/mt during the past week to INR 25,000/mt ($387/mt) ex-works on the back of base price revisions by producers, the sustained rally in billet prices and the tightness of supply faced by foundries, traders said on Wednesday, April 12.
"This has been one of the largest week-on-week increases in
pig iron prices in recent years. Dealers have been booking large volumes, but at the same time several foundries have reported that they are unable to obtain their required supply volumes, which indicates the tightening of supply in the market," a Kolkata-based trader said.
According to market sources, large domestic producer Neelachal Ispat Nigam Limited (NINL) has increased its based prices by INR 400 during the past week with other producers expected to announce their revised prices later this week, triggering a rush among dealers to conclude fresh bookings.
The sources pointed out that billet prices are going through a sustained rally with prices rising by INR 500/mt and the bigger
pig iron producers are setting aside larger
pig iron volumes for captive consumption, resulting in reduced commercial sales and a tightening of market supplies.
At least two other traders said that rising optimism over export shipments and export price margins has also provided support for local prices, while resulting in reduced volumes being offered to the domestic market.
The traders said that export offers received by larger
pig iron producers had crossed the $300/mt mark and at least two of the latest export shipment transactions were concluded at around $325/mt FOB, leading to buoyant sentiment in the market.
$1 = INR 64.67