Pig iron sales at SAIL auctions fall by over 20%, m-o-m; prices climb to record highs

Sales of basic pig iron fell by over 20% at auctions conducted by state-owned steelmaker SAIL in Feb'22 to 27,900 tonnes (t) from nearly 36,000 t in Jan, SteelMint data show. However, demand remained firm throughout the month even as prices climbed to near-record highs at auctions.

Notably, prices rose to an all-time high at auctions held in the first week of March.

Despite active participation in auctions during Feb, sales dropped on higher internal consumption by SAIL as finished steel realisations increased sharply.

Notably, sales at auctions had fallen in Q3 and Q4 of CY'21 compared to the previous quarters due to the rise in domestic merchant pig iron production.

Prices trend higher

Prices at SAIL auctions edged higher on historic-high seaborne coking coal prices, which kept metallurgical coke prices stiff. That apart, pig iron prices remained supported as steel prices headed north, thanks to noticeable recovery in domestic demand compared with the last quarter of CY'21.

In the auction for 2,000 t of basic grade pig iron from the Bhilai Steel Plant (BSP), for instance, buyers booked the entire quantity at a weighted average price of INR 46,800/t exw. Bid prices increased by INR 2,770/t compared to the previous auction on 25 Jan.

Similarly, 4,800 t was sold from the Rourkela Steel Plant (RSP) on 23 Feb. Buyers actively participated in the auction and booked the entire quantity at INR 45,100-46,350/t. The weighted average price of bids was INR 46,000/t exw.

It deserves mention that bids at auctions from BSP as well as RSP rose in the range of INR 2,500-5,000/t compared with auctions in Jan. However, except RSP, sales volumes declined drastically from other SAIL plants.