Foundry grade pig iron market went through a difficult phase in the last six months. Now, with Brazilian pig iron becoming most expensive, it gives an opportunity to regulate the supplies of foundry grade pig iron in the domestic market by exporting it to viable markets, says Rajesh Mishra, Executive Vice President (EVP), Tata Metaliks Limited, in a conversation with Steel 360.
Q. How, according to you, did Indian Pig iron market perform in FY13 ? Will rising prices of Coking Coal support Pig iron prices both in Indian and overseas market, in months to come ?
Performance of Indian Pig Iron market during the FY 2013 can clearly be divided into two parts.
First half of the year was quite good in terms of demand as well as prices. However, the scenario started changing since October 2012 when the domestic market was being affected by :
- Slowdown in the global markets on account of which demand of steel grade Pig iron in the South-east Asian countries reduced significantly, as a result of which bulk exports totally dried up and those materials which normally were exported, started finding way to domestic market.
- Slowdown in domestic casting market as a result of general drop in automobiles and engineering goods demand.
Although, Pig iron prices are generally linked to the major raw material prices, i.e. coking coal, coke and iron ore. It also depends on the demand, both domestic as well as global. We feel that the current prices of Pig iron have bottomed out and expect a reversal in the falling price trend. Signs are visible in the Eastern parts of India where the market has been stable, although at a low level, during the last one month.
A slight increase in coking coal and coke prices would further push Pig iron prices up. Small improvement is also being observed in the global steel grade Pig iron market with some successful transactions of over USD 400/MT FoB. This is expected to reduce the flow of steel grade Pig iron into domestic market by the large manufacturers. Under such changing scenario, we expect Pig iron prices to move up, both in the domestic as well as the export markets.
Tata Metaliks – Pig Iron News
Q. Tata Metaliks Limited, nation’s leading foundry grade Pig iron manufacturer commenced steel grade production in February 2013. Can you brief us on the ups and downs the foundry grade industry has witnessed recently?
TML manufactures Pig iron of various grades; many of which are customized grades that meet specific end-user requirements. Steel grade is also one of the grades in TML’s product portfolio. However, its production is normally not considered as it is only competitive to produce steel grade Pig iron in large blast furnaces. TML produced and sold small quantity of steel grade Pig iron recently in order to balance the demand supply gap of foundry grade Pig iron in the market without curtailing its production.
Foundry grade Pig iron market went through a difficult phase during the last six months. However, to overcome this challenge, TML took many initiatives such as :
- Production of branded Pig iron as ‘Tata efee’ which melts much faster and results in energy saving of up to 10% as validated by its customers.
- Direct contact with as many customers as possible instead of relationship through market intermediaries.
- Providing extensive and enhanced technical services to foundries.
- Organizing channel financing for its customers and partners to tide over the liquidity problems.
- Export of Pig iron to niche high-value markets.