Indian pig iron exports regain momentum on rising prices

Indian pig iron exports have turned active after a gap of about four months. India's pig iron exports were recorded around 0.6 mnt in CY22 with the US being the largest importer followed by Oman and China. However, in CY'23 (till Jul'23), Indian pig iron exports were recorded around 0.22 mnt.

Recent deals concluded:

1. A western India-based player was heard to have concluded a deal nearly 10 days back. The deal concluded was for 45,000t pig iron to the US.

2. In another deal heard, a mills was heard to have sold 30,000-35,000t steel-grade pig iron to the US last week. Sources mentioned that the deal was concluded at $415-420/t FOB, however, confirmation could not be received till the time of publishing this report.

3. In another deal heard, 25,000 t pig iron to the US was at $420/t FoB this week. However, no firm confirmation was received till the time of publishing this report.

Reasons behind recovery in pig iron export bookings:

1. Indian domestic pig iron prices fall: SteelMint's benchmark steel-grade pig iron index fell from INR 38,900/t exw Durgapur in Oct'23 to INR 37,170/t exw in November, 2023 on falling semi finished and other metallics prices.

2. Global pig iron prices rise m-o-m: Pig iron prices have risen globally in the last one month, with Brazil-origin prices rising by $15 m-o-m.

3. Surge in global ferrous scrap prices: Global ferrous scrap prices have risen by around $40-50/t in the last one month. Turkish deep-sea import ferrous scrap prices continued to surge, reflecting bullish sentiment and the need for more cargoes for January shipment. A key driver in recent market dynamics has been the unexpected surge in US domestic scrap prices, marking a pivotal fundamental shift.

Outlook:

Indian pig iron prices have risen by INR 500/t in eastern India in a week's time and it is expected that prices may become firm on supportive steel prices. On the other hand, global ferrous scrap prices are less likely to rise further amidst completion of majority of bookings done and approaching holidays.