Indian state owned steel maker Steel Authority of India Ltd (SAIL) pig iron auction fetched weak response on anticipation that prices may correct.
SAIL had scheduled an auction for sale of about 7,400 MT steel grade pig iron from its Rourkela plant. The auction’s bid due date was scheduled today i.e. 31st May 2018.
As per reports, RSP has received poor response in this auction and company was able to sell only 400 MT out of the offered quantity of 7,400 MT. The material have been sold at the base price of INR 29,400/MT, participants reported.
Notably, Indian domestic pig iron prices have been rising since December 2017. Prices have increased by about INR 4,000/MT (USD 60/MT) in last 4-5 month’s.
Reasons which indicates pig iron prices may fall further –
1. Market awaits NINL export tender response: MMTC had floated export tender for 40,000 MT pig iron which got expired on 28th May’18. As per fresh update received by SteelMint, the highest bid for the tender was around USD 390-395/MT, FoB although company was looking for levels of around USD 400/MT. Thus, the company may cancel the tender and company has floated a fresh tender for same quantity which due date is 6th Jun’18.
2. Market feels prices may fall on higher production: After the NINL’s capital repair works in his blast furnace, production have increased to two fold and recorded highest ever at close to 3,000 MT of hot metal in a day just after the operations resumed. Thus with the higher production of NINL, pig iron supply in Indian domestic market has increased resulting downtrend in prices.
3. High disparity between domestic and export realisations: Indian domestic pig iron prices are trading at a premium of at least INR 2,500 – 3,000/MT (USD 37-45) against export prices. Domestic pig iron prices are hovering at around INR 29,500-30,000/MT ( ex-mill, Cuttack) where as exports demand is at around USD 390-395/MT FOB, which is equivalent to INR 26,300- 26,700/MT
Latest offers through producers
— Jindal Steel has reduced offers – Pooled iron at INR 28,300-28,500/MT & Granulated Pig iron (Panther shots) at INR 29,300-29,500/MT ex-plant, Odisha. The company also offer steel grade Pig iron from its Raigarh unit at INR 30,500/MT ex-plant.
— Durgapur based Neo Metaliks has reported latest offers for steel grade Pig iron at around INR 31,000/MT against last trading at INR 31,200/MT ex-plant. The plant also offered material in bulk quantity at around INR 30,700/MT
— Ludhiana, North India based trade participants reported fall in pig iron prices over low market trade activities amid improved supply; Steel & Foundry grade pig iron offers at INR 31,400/MT & INR 34,100/MT FoR & excluding 18% GST.
— South India – Pig iron prices remain firm and are assessed at INR 30,300-30,500/MT ex-plant, Vizag.
— Tata Metaliks yet to open fresh offers for June 2018 deliveries. In May the foundry grade material was offered at around INR 33,800/MT ex-Kharagpur, East India.
— The latest offer for the Premium HCC is assessed at around USD 206.8/MT CNF India, incline by around USD 8/MT, W-o-W.
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