The company failed to receive response in previous tender; issued fresh export tender till 12 Oct’15.
Vizag Steel (RINL), one of the largest steelmakers, has issued an export tender for 30,000 MT Pig iron till 12 Oct’15. The company has not closed any export tender since a long time (4 months). Its last export tender, held on 9 Sept’15, also failed to receive response.
After witnessing the irregular market, the global traders are very cautious and reluctant to take any buying position. One of the global traders shared, “No trader would be ready to take the risk of placing bulk order in an Indian export tender, when they can easily get Pig iron at lower rates from global market, at around USD 200-205/MT FoB Black sea.”
However, as per our assessment Vizag steel has greater opportunity in domestic market. Because, even if they succeed in fetching bids in export tender, it would not be more than USD 205-210/MT FoB India, (INR 13,500-13,800/MT); whereas, domestic offer for Pig iron is at INR 17,300/MT, ex-Vizag. Hence, concentrating in domestic sales would lead to better realization for the company.
Outlook
The reluctant attitude of traders and rapid fluctuation in global market hint that the upcoming tender could also fail to attract bidders.
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