Pressures have become widespread across the local Indian pig iron market with prices moving down by INR 200/mt week on week to INR 29,000/mt ($422/mt) ex-works amid over-production and discounting spreading to the different regions, traders said on Wednesday, July 11.
Market sources said that pig iron prices are showing divergent trends across regional markets with the material available in central and eastern regional markets at INR 28,600/mt ($417/mt), after discounts.
Even large producers like Neelachal Ispat Nigam Limited (NINL) which had lowered prices for current month deliveries by about INR 400/mt are also offering volume discounts - an indication of the surplus material available in the domestic market, the sources added.
“Most large pig iron producers are operating their plant above their rated capacities and there is too much surplus volume available in the market and large inventories held by intermediaries, and hence discounting is becoming widespread,” a Kolkata-based trader said.
The trader said that, even though both Steel Authority of India Limited (SAIL) and Rashtriya Ispat Nigam Limited (RINL), have been successful in concluding export tenders for 12,500 mt and 25,000 mt respectively during the past week, reports in the market indicate that average margins from these overseas shipments were about INR 400/mt lower than margins from previous export shipments.
Significantly, there has been no new export tender floated during the past week by any of the major pig iron producers, sources said.
$1 = INR 68.78