Rashtriya Ispat Nigam Limited (RINL), a state owned producer of Basic grade Pig iron based in Vizag (Andhra Pradesh), had offered 30,000 tonnes of Pig iron through an open (domestic) tender.
The domestic tender was floated on July 18.
Technical bid is to open at 1500 hrs IST and price bids at 1600 hrs IST today.
In the last one month, RINL received no response from buyers and the tender date was extended twice, due to weak demand for Pig iron in Indian market.
SteelMint thinks that at least one or two traders might be interested to participate this time, owing to requirement of the material.
But, it is anticipated that RINL might receive a low bid at around Rs 20,500/MT or slightly above this.
It is offering domestic Pig iron at Rs 25,000/MT (ex works Vizag) with a discount of Rs 500/MT, being quoted for buyers willing to lift a minimum quantity of 8,000 tonnes or above.
Considering the discount structure mentioned above i.e. Rs 500/MT for every 8,000 tonnes, a total discount of around Rs 2,000/MT stands for 30,000 tonnes.
Therefore, after deduction of the discount price (Rs 2,000/MT) from Rs 25,000/MT, the amount is equal to the expected price bid.
The domestic tender might be scrapped, provided RINL does not accept low bid.
Tata Steel's Pooled Iron is being sold through e-auction at Rs 18,000/MT (ex works Jamshedpur).
Prices have dropped by Rs 2,000/MT in a span of two month's only, as buyers based in Odisha, Chhattisgarh, West Bengal and Jharkhand have preferred to take the material in big quantities.
Availability of cheaper Pooled Iron has impacted Pig iron sales in the last couple of months.
Since mid-June, Indian Pig iron prices weakened by Rs 1,500-1,800/MT (7-8%) in the eastern region (Odisha).
For more details, contact
Seema Goenka
(seema@steelmint.com)
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