Poor response in the company’s last export tender hits domestic prices; cuts Pig iron prices a day before new export tender.
Just a day before its export tender, NINL cut its Pig iron prices and is currently offering N1 grade (Si content below 1.24%) at INR 17,500/MT ex-Cuttack, with additional discounts upto INR 400/MT on bulk purchase. Previously, in the first half of May, the company offered N1 grade Pig iron at INR 17,700/MT ex-Cuttack with discounts upto INR 200/MT.
For N2 grade Pig iron (Si 1.255 to 1.74%), the current offers are at INR 17,700/MT with discounts upto INR 100/MT on bulk purchase. In the first half of May, offers for this grade were at INR 18,400/MT, supposed to expire on 20 May’15. There was no discount offered on the bulk purchase. The company has now withdrawn those prices before time and released a fresh one.
Grounds for Price Cut
Owing to poor export realization, clubbed with dull global as well as domestic market sentiments, forced the company for price reduction. In addition, the company may have witnessed piling up of stocks on account of failure of export tenders, which could have driven it towards price correction.
An export tender conducted on 11 May’15 failed to fetch good bids; bids were received at USD 250-255/MT levels (offered 40,000 MT basic grade Pig iron). This made the company re-issue its export tender further for 20 May’15, with a different pattern. This time the company is trying a new strategy of offering the material in two lots, each containing 40,000 MT basic grade Pig iron, instead of one lot of 40,000 MT. Total quantity offered this time is 80,000 MT with one lot to be shipped between 25-30 May’15 and another one in the mid of June.
SteelMint assesses that today’s surprise cut in Pig iron prices, gives an indication that the company isn’t very confident about tomorrow’s export tender.
Discount Quantity Price Table
| Quantity Purchase | N1 grade Prices in INR/MT | Discount in INR/MT |
| Upto 3,499 MT | 17,500 | No Discount |
| 3,500 MT to 6,999 MT | 17,400 | 100 |
| 7,000 MT to 10,499 MT | 17,300 | 200 |
| 10,500 MT & above | 17,100 | 400 |
| Quantity Purchase | N2 grade Prices in INR/MT | Discount in INR/MT |
| Upto 3,499 MT | 17,700 | No Discount |
| 3,500 MT to 6,999 MT | 17,600 | 100 |
One Rake: 3,500 MT
100% advanced payment & other condition applied
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