Rashtriya Ispat Nigam Limited (RINL), had offered 30,000 tonnes of Pig Iron to domestic takers, through an open tender on July 18.
The tender was re-opened on August 17, after it failed to receive a response twice in the last one month.
As per SteelMint`s analysis and expectations with reference to an article posted on the 17th, a couple of traders had participated in the tender and got through the technical round.
Price bid received from a Vizag (Andhra Pradesh) based trader was quite low at Rs 20,100/MT (ex works).
Whereas, the Raipur (Chhattisgarh) based trader did not submit a price bid.
As prices were quite low in comparison to RINL's high cost of production and current domestic offers at Rs 22,500/MT (ex works), the state owned Pig iron maker based in Vizag, has decided not to award the tender.
Looking at rising inventory levels, it is expected that the manufacturer will extend the tender date for the third time, in order to liquidate the stock.
It is being difficult for RINL to get rid of the stock in large quantities through domestic sales, owing to weak demand and slow off take of finished steel products.
Since the beginning of Q2 FY 14, Indian Pig iron manufacturers have been unable to lift offers and are quoting discounts up to Rs 500/MT on bulk purchases.
Current steel grade Pig iron offers in the central and eastern part of India are standing at almost two years and eight months low.
For more details, contact
Seema Goenka
(seema@steelmint.com)
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