Pig iron prices in the Indian domestic market hit record highs with a constant surge in prices and a notable hike of up to Rs 1,500/ton (US$ 18/ton) in May.
The current offers for steel grade pig iron are over a year high considering they were in the same range during February 2023. Read more on the current trade dynamics in the pig iron industry to know what lies ahead.
According to industry participants, a constant rally in steel offers, including billet prices, and higher bids in the pig iron auction floated by major PSUs, such as SAIL and NMDC, have boosted confidence in the market. As a result, there is a constant surge in pig iron prices and even if the offers are high, the trades remain active.
Generally, it was noted that when there is a constant surge in prices, the trades slow down. However, in current circumstances, trades are active. This boosts confidence in the market and accordingly, trades are taking place on floated higher offers.
OfBusiness noted that recent auctions concluded by SAIL have fetched bids higher roughly by Rs 3,000-4,000/ton against the previous auctions, whether it was during the last week of April or the initial days of May.
Notably, the recent auction floated by SAIL’s Rourkela Steel Plant (RSP) on 7th May has received bids higher by Rs 4,000-4,200/ton to Rs 43,200-43,500/ton ex-plant. The company’s previous auction on 2nd May was reported to have received bids about Rs 41,200-41,500/ton, showing a sharp surge in bids.
Apart from higher bids in auctions, the strengthening steel prices have also influenced private pig iron producers to keep prices higher. OfBusiness noted a surge in domestic steel prices, including those of billet, by Rs 1,000-1,500/ton in May ’24, similar to the surge in pig iron prices.
Participants based in central, east, and north India have reportedly maintained supply and an active demand was noted for the material.
According to them, the supply is meeting with demand, leading to support in the market. Since the steel market including billet market is strong, the steel mills are procuring pig iron at the prevailing higher prices, they mentioned.
Steel-grade pig iron prices in various markets are as follows:
Foundry-grade pig iron prices are as follows:
Several participants from the eastern region believe that the prices of pig iron are likely to remain strong due to the non-viability of material from neighbouring states. They thus anticipated that if the trades remain the same, they may further hike their prices. They assume that the domestic steel market is likely to remain supported, following which pig iron prices are likely to remain elevated.
Also, there are assumptions that major foundry-grade pig iron producers might revise their prices again since steel-grade pig iron prices are trending higher. To maintain a gap between the both, foundry pig iron producers must revise their prices, they believe.
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