NINL offered 60,000 tons of N1 grade Pig iron (30,000 tons as an optional lot) containing 1.24% of Silicon, to overseas takers on 29 April, through an export tender.
Technical bids of which is to be opened today; Price bids on 22 April (the next day).
Its been heard that six parties have participated in the export tender which includes a couple of new ones from Singapore and Korea.
The competition seems to be tough as the expected price at which importers would bid is around $395/MT FoB i.e. around Rs 21,749/MT (considering $ = Rs 55.06). It seems difficult that bids would reach above $398/MT FOB.
NINL's current domestic Pig iron Prices w.e.f 9 May:
Steel (N1) grade Rs 22,500/MT (Si 1.24%), up by Rs 500/MT on scarcity of material in domestic market and improved bookings.
On one side, depreciating Rupee is in favor of exporters; falling Pig iron prices in international market, on the other hand, is not supporting exports as of now.
Indian exporters are not very keen to sell their material for exports purposes at current prices that are quite below the domestic offers.
They would rather consider not to award the tender and consider domestic sales as requirement in domestic market is good after government imposed 2.5% import duty on Scrap and also as there is shortfall of material from RINL.
Chances are high that w.e.f 30th May, NINL's Steel Melting Shop, trial phase of which is taking place at the moment, would start operations in full swing.
Though, RINL resumed sales for May, it does not have sufficient material to meet with domestic demand; might start offering very soon in competition with NINL, as chances are less that any export deal would be concluded at low prices.
NINL last finalized a 30,000 tons Pig iron export deal at $413/MT FOB on 9 April, with Stemcor (London).
“It is not economical to shift Pig iron from Brazil to South East Asia. And, from India, it is just about viable in the present day.
Demand in Korea, though, not very high, Pig iron prices are quoted in the range of 410-15/MT CFR and are anticipated to weaken by 5 dollars by the end of the week. Overall steel market is not very aggressive, making price fluctuation predictions a dilemma”, said importers.
LAST EXPORT DEAL: An additional lot taken from NINL
For tender floated on 26 February, RINL concluded 60,000 tons Pig iron export deal at $403.02/MT with Stemcor (London) and LG International (South Korea) on 7 March.
It is believed that due to delay in shipment of the material to Stemcor, as RINL was looking into supply of Pig iron to its MoU customer, the London based importer on an urgent requirement of material, asked NINL for another 30,000 tons at prices higher by 9.98 dollars ($413/MT FoB).
This is considered to be the reason why NINL in the last few days was not offering Pig iron in domestic market and is expected to re-start it this week.
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