RINL had offered 30,000 tonnes of Basic grade Pig iron (Si% 1.0 max) to overseas buyers, through an export tender on September 16.
Price bids of the tender, which was to open the last day was extended for today because of unavailability of senior officials.
What led to the Disqualification?
Though, the Singapore based participant, Shabro International Pte Ltd made through the technical bids, but it has been disqualified on following grounds.
a. delay in submission of original Bank Guarantee (BG) documents
b. non submission of the signed and stamped tender documents
The required documents were to be submitted at the time of submission of tender i.e. before 15 hrs IST on October 08, as per the rules given in tender notice by RINL.
Shabro out of the race the second time
Shabro has gone out of the
race the 2nd time. It had participated in RINL's Pig iron export tender floated
earlier on 20 July'13. Late submission of the required documents then too had
resulted in their being out of the race.
At What Price had Shabro bid?
According to sources, Shabro International had bid the lowest at USD 360/MT FoB because of a negative sentiment prevailing in international Pig iron market. However, officials at shabro were not available to confirm the news.
Price Bids of the Other Two Participants
As per SteelMint analysis with reference to an article posted on September 08, two of the other traders have submitted bids lower than USD 370/MT FoB.
Prime Carbon GmbH (Switzerland) was the highest bidder at USD 368.68/MT FoB and LG International Corp (South Korea) bid at USD 364/MT FoB.
Overseas Pig iron offers (USD/MT) remain on the lower side, as mentioned below:
Korea: 394 CFR
Brazil:375 FoB
Ukraine 375-380 FoB
Is the Highest Price Bid Justified?
The highest price bid is at USD 368.68/MT FoB. Adding USD 19 as freight, USD 3 as logistics cost, USD 4 as other charges and USD 3 as margins, the total price stands at USD 397.68/MT/FoB.
Looking at the current market scenario and no expectation of improvement in international Pig iron prices and demand in the near future, end users based in South East Asia and Far East region will not agree to finalize a deal with traders, at a higher price.
Traders were not keen on the cargo and would have to bear loss if they bid higher. Stock position at both trader's and consumer's end is sufficient, there is no extra demand and Chinese market has been quiet.
Is RINL Ready to Award the Tender?
RINL has decided not to award the tender, as the company had expected higher bids. Its domestic prices are at INR 24,000/MT (ex works Vizag) and INR is at 61.5 level against USD.
The Indian exporter is ready to wind up a deal, provided H1 bidder (Prime Carbon) is ready to take the material at higher prices, offered by RINL.
Therefore, market has to hold a wait-and-watch policy on the final decision that is to be taken by RINL and H1 bidder. Also, RINL will come up with a new tender, provided things don't work out in their favor.
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