Demand for pig iron to revive after Diwali

The demand for pig iron would continue to remain subdued during the next couple of months in both international and domestic markets owing to the economic slowdown, but there was a possibility that it might rise thereafter, said its makers.

“Normally construction activities pick up after Diwali and it has been seen that buying orders for billets and ingots are higher during the period. So, we are expecting the prices and demand to pick up only after the festival,” said T K Chand, commercial director, Rastriya Ispat Nigam Ltd (RINL).

The festival of Diwali, which usually falls in November after the four-month monsoon, marks the beginning of the traditional Hindu financial year. The manufacturers of pig iron, which is used in steel making, said, usually the demand for houses and other construction activities goes up after the festival. Demand for pig iron is directly linked to buying interest for long steel products, used in construction, as it is the raw material for producing billets and ingots, the semi-finished steel long products.

“Last year also, we experienced similar situation for pig iron market, when demand was poor during the monsoon, but later it went up after Diwali,” said S P Padhee, financial director, Nilachal Ispat Nigam Ltd (NINL), the largest producer of pig iron in the country.

NINL and RINL together account for about half of the total 5.5 million tonnes per year pig iron output in the country.

Pig iron is the solid form of hot iron metal, obtained by smelting iron ore with coke. Though most integrated steel plants use this product for steel making, they also set aside some quantity to sell in the domestic as well as international markets.