MMTC (on behalf of NINL) had offered 30,000 MT Pig iron to overseas buyers, through an export tender on 11 Dec, 2013.

Specification: N1/Steel grade & Si up to 1.24%

Technical bids of the tender had opened on 20 Dec, 2013. A couple of traders namely Prime Carbon GmbH (Switzerland) and MMTC Transnational Pte Limited (MTPL) (Singapore) participated in the tender.

Traders bid high albeit low demand

At 1500 hrs IST today, MMTC opened price bids and has received high bids from the two participants. Prime Carbon GmbH bid highest at USD 392.33/MT FoB. MTPL is the second highest bidder at 389.61. MTPL has participated on behalf of Starcom Resources Pte Ltd, a Singapore based trader.

Shipment of the material is expected to take place between 20-31 Jan, 2013, from Paradip Port, provided the deal is finalized.

“Demand from international market is slow because of low requirement. Cost of producing Pig iron has increased and Indian exporters will therefore be reluctant to accept bids lower to this. Therefore, we bid high as we are keen on the cargo and are yet to finalize the deal with end users”, traders told SteelMint.

MMTC receives Better realization from Export Market

INR is around 61.5 against USD and the company receives 1.3% export benefit on the FoB price Therefore, the final FoB value at 397.43 converts to INR 24,441/MT.

Realization from export market is higher by around INR 550/MT (after deducting logistics cost from NINL plant to Port) in comparison to the company’s domestic offers. To domestic takers, MMTC is offering N1 grade Pig iron at INR 23,500/MT (basic); offers were raised by INR 500/MT on 17 Dec, 2013.

MMTC is yet to take a decision about awarding the tender. Chances are high that the tender might be awarded in line with higher realization from export market (for a bulk quantity) as compared to domestic sales.