Expect Q4 pig iron spreads to be upwards of Rs 12,000: Tata Metaliks

Tata Metaliks is buzzing post a SteelMint report that the company has hiked foundry grade pig iron prices by Rs 800 per tonne.

Sandeep Kumar, MD of the company, said there was a temporary fall in prices, but have recovered in the last one month.

“The pig iron prices have moved up once again in February. In January they had reached a peak of about Rs 42,000 or there about and then fell by almost Rs 4,000 or so. However, they have come back very rapidly to scale back the same levels which is 41,000-42,000. So, we have recovered quite a bit in the last one month,” he said in an interview to CNBC-TV18.

He said restocking of pig iron and softening of iron ore prices have also led to increase in prices.

“People have started restocking and the sentiment has changed. It is also linked to the raw material prices. For the pig iron makers, the advantage is that there is some softening in the raw material prices because Odisha has started producing more iron ore. So, all this has resulted in spreads improving further for pig iron makers,” he said.

He expects Q4 spreads to be similar to Q3. “In Q3, the average spread was upwards of Rs 10,000-12,000. As of now it is holding on, in fact it is better also. January there was a bit of dip and towards the second half of February it started moving up. March is holding on. So, I think Q4 should be similar if not better than Q3. So, at least for us it will be more than Rs 12,000 for the fourth quarter,” he said.
Source: CNBC TV18