MMTC, India’s largest international trading company had offered 30,000 MT Steel/N1 grade (Si up to 1.24%) Pig iron to overseas buyers on behalf of NINL, through an export tender on 25 October, 2013.
NINL, located in Cuttack (Odisha) is India’s largest Pig iron producer and exporter with 0.85 MnT pa installed production capacity.
3 traders participated in the tender and made through the technical round. In contrast to street expectations, the tender has received quiet high bids, owing to a couple of reasons with respect to international market demand.
Participants in MMTC’s Pig Iron Export Tender
Prime Carbon GmbH (Switzerland), LG International Corp (South Korea) and MTPL (Singapore) are the participants. MTPL is a wholly owned subsidiary of MMTC, a Government of India undertaking under Ministry of Commerce.
MTPL has participated on behalf of Starcom Resources Pte Ltd, an international trading company located in Singapore.
Prime Carbon GmbH bid highest at USD 390.02/MT FoB for 60,000 MT, LG International Corp is the second highest bidder at USD 387.02/MT FoB for 30,000 MT and MTPL bid lowest at USD 380.11/MT FoB for 30,000 MT.
Why Traders Bid High for Indian Pig Iron Tender?
Requirement of Pig iron has gone up in Korea as they are manufacturing more of finish flat products in comparison to finish long. Traders are keen to export Pig iron as end user demand is good and therefore bid high.
Also, Scrap prices have increased by USD 10-15/MT in a week’s time. Traders foresee an uptick in overseas Pig iron offers because of better demand and strengthening of Scrap prices.
MMTC is yet to take a Decision
MMTC is yet to take a decision about awarding the Pig iron export tender. It is expected that both the lots (another 30,000 MT was offered as an optional lot on seller’s decision) might be awarded to Prime Carbon GmbH.
In comparison to last domestic Pig iron prices at INR 23,000/MT, which was opened by MMTC on 09 October, it has received offers higher by INR 1,000/MT from the highest bidder.
As domestic demand is not so encouraging and Indian Pig iron prices are standing at the similar level, NINL will be able to get rid of huge inventory at high margins.
Domestic Pig Iron Prices might gain Strength
MMTC might open domestic Pig iron prices for NINL in the beginning of the next week as last quoted prices were valid till 31 October, 2013.
It is expected that domestic offers for N1 grade material might move up because of higher realizations from export market.
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