India: NMDC's latest pig iron auction sees mixed response amid subdued market dynamics

• NMDC raises auction prices, reduces quantity offered

  
  
  

• High pig iron supply, weak finished demand trouble market

  
  
  

NMDC's Nagarnar Steel Plant in Chhattisgarh conducted an auction for 12,500 tonnes (t) of steel-grade pig iron on 30 January 2025. Of the total quantity, 4,000 t were booked at an average price of INR 31,500/t. The base price was raised by INR 1,400/t compared to the previous auction held on 24 January 2025, where 16,000 t was offered, with the entirety booked at an average price of INR 30,100/t.

Market trends, observations

1- Prices raised amid lower quantity: NMDC reduced the offered volume at its latest auction but simultaneously increased the base price. Despite this hike, the auction received a moderate response, indicating steady demand for NMDC's pig iron.

2- Freight-based pricing adjustments: Prices for both rake and road supply increased in the latest auction, reflecting logistical cost adjustments amid steady demand across both transportation modes.

3- Increased competitive pressure in market: Domestic pig iron manufacturers are adjusting their pricing strategies to remain competitive against NMDC's auction tags, with many reducing their offers to attract buyers. Additionally, tenders are receiving only an average response, indicating selective buying interest in the market.

4- High supply but limited finished steel demand: While the supply of pig iron and heavy melting scrap (HMS) availability remains strong, finished steel demand continues to be limited, which is limiting price support in the broader market.

Outlook

The domestic pig iron market is looking forward to the Budget for relief. If a safeguard duty is applied, prices may strengthen; otherwise, volatility is expected. Increased finished steel demand will be the key driver of a rise in pig iron prices. If a demand pick-up does not materialise, the market will stay range-bound. Meanwhile, coke prices in January have remained firm, adding cost pressure on producers.