Neelachal Ispat Nigam Limited (NINL) had offered 60,000 tonnes of Pig iron to overseas buyers, through an export tender on September 16.
The exporter has received bid for for 30,000 tonnes (1 lot) of Pig iron, from each of the participant namely MMTC Transnational Private Limited (Singapore), Prime Carbon GmbH (Switzerland) and LG International (South Korea).
As per SteelMint analysis, which was based on NINL's prevailing domestic Pig iron prices, MTPL submitted the highest bid, Prime Carbon bid at USD 368/MT FoB level and the exporter did receive a bid at USD 370/MT FoB, though not from LG International. We also mentioned that traders might be interested for a single lot.
Why traders bid low for NINL's Pig iron export tender?
MTPL has submitted the bid at USD 370.08/MT FoB on behalf of a Singapore based trader Starcom Resources Pte Ltd.
MTPL is a wholly owned subsidiary of MMTC Limited. Therefore, MMTC might have asked the former to participate in this tender as it was aware that the usual traders are yet to receive 0.1 MnT of Pig iron from RINL and might quote low prices.
Also, international Pig iron demand and prices are on the lower side.
The similar reasons mentioned above, might have pushed MTPL to bid low, in contrast to streets expectation.
Prime Carbon GmbH bid quiet low at USD 368.68/MT FoB as it already has to sell out 60,000 tonnes of Pig iron in international market.
LG International submitted the lowest bid at USD at 360/MT FoB, though it has to receive just one vessel in October.
Will NINL award the Pig iron export tender to MTPL?
NINL was expecting higher prices for its Pig iron export tender. But, it has received a price bid which is lower to its domestic offers at INR 23,500/MT (basic).
In the past, Indian Pig iron exporters have preferred not to close an export deal rather than offering it at prices standing below their domestic offers.
The exporter has to bear about 3 dollars of logistic cost if it decides to export the material. Whereas, NINL offers Pig iron on ex plant basis to domestic buyers.
The company is yet to take a decision about awarding the tender to MTPL.
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