Indian Pig Iron Prices Likely to Remain Supported in Short Term

Indian Pig iron producers are anticipating further surge in prices in line with active demand & rising input cost. Recently NINL, which is the largest producer of Indian pig iron have sharply raised prices by INR 1,800/MT (USD 25).

Below are the factors which indicates domestic pig iron prices are likely to remain strong-

High input cost: The producers claimed that, their input cost two fold with the significant hike in coal & Iron ore prices.

Notably the imported met coke prices trending at all time high since Aug'13 & currently hovering at USD 404-406/MT, CNF India. Similarly, Odisha iron ore prices have hit 6 years high over rising pellet exports. Odisha merchant miners have raised prices by around INR 1,100-1,200/MT via three price hikes made from end Aug till early September.

Rising exports: Indian pig iron exports improved as the rupee devaluated against USD & also due to rising global scrap prices. The large scale mills in India are quite active for exports and are floating tenders frequently amid good response.

In recent tender concluded, in Aug'18 end MMTC sold 30,000 pig iron at around USD 385/MT FoB, also the company floated another tender for same quantity which is expiring on 26th Sep'18. SAIL has also floated a 18,500 MT Pig iron export, with an bid submission due date of 18th Sept'18.

Increasing domestic consumption: As there are predictions that Indian steel demand will grow with the end of monsoon season. Local pig iron consumption is expected to boost as EA or Induction furnaces will have to expand productions to meet the demand.