India: Domestic Pig iron Prices Likely to Find Support Amid Hike in Billet Offers

Domestic pig iron industry in India which was undergoing constant fall in prices is now expected to find support.

The participants stated that, recent increase in steel prices and limited price reduction by Neelachal Ispat (NINL) has improved inquiries for private pig iron producers.

Also as the scrap and raw materials has found support globally, this may give room to the pig iron producers to maintain prices. Scrap prices in global & Indian domestic market have recovered in the current week by close to $ 5/MT.

NINL is the India's largest & price trend setter for pig iron and as per current offers by the company landed cost of pig iron in neighbouring markets is not much competitive, which has supported private pig iron producers as deals are taking place now of them.

In addition narrowed down price gap between Pig iron & Billet has gained sharply on improved demand of secondary finished long steel products in domestic market.

With the fresh hike in Billet prices, price gap between Pig iron & Billet has increased to INR 4,500-5,000/MT ($ 63-70) in Raipur & Durgapur (Central & Eastern India), which was at around INR 2,000-2,500/MT ($ 28-35) beginning of Jan'19. Hence, the rising gap is providing support in pig iron demand and furnace started future bookings.

Is is being learned that, NINL has also commenced Billet production and as per closed sources with the company, in primary stage the producer is making about 20% Billet of the total hot metal productions and remaining is pig iron.

Hence, this may give support as merchant supply of pig iron may gradually come down with the beginning of Billet productions of NINL.