Domestic and export prices keep rising in the Indian market for pig iron.
The rise in Indian export pig iron quotations has been largely caused by an upward trend in the Far East, which is the main sales destination. New export prices for Indian pig iron are regularly set according to results of tenders held by two major producers — Vizag Steel and MMTC.
The former has sold its traditional 30,000 tonnes of the material at $505/t FOB during the latest tender, $30/t up compared to the previous one. Visag Steel is planning to come back to the market in mid-February with new offers at $520-525/t FOB.
MMTC has closed its latest tender in mid-January, with prices for pig iron at $512/t FOB. The company has already announced the next tender, which is held from January 17 to January 25. The producer offers 60,000 tonnes of pig iron to be shipped in the second half of February. Considering the current pace of export price growth, MMTC expects to sell the material at $520/t FOB at least.
Prices in the domestic market are also rising. Local suppliers have already lifted their offers from the levels of the second half of December enough to compensate for their failure to increase quotations last month. At the moment basic pig iron is available in the domestic market at $510-515/t EXW, on average $47/t up m-o-m.
Current export prices have already exceeded their April high — $501/t FOB. In 2010 foreign markets showed more volatility in comparison with the domestic one, with prices falling by more than $100/t after reaching their peak in April, while the local price decrease was smoother and totaled about $60/t.
Quotations are forecast to keep growing further, both in the domestic and foreign markets. Besides, producers of merchant pig iron have another reason to raise offers – substantially higher prices for iron ore and coal, which will certainly affect February production cost.
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