Neelachal Ispat Nigam Ltd, one of the largest pig iron manufacturers in India, has reduced pig iron offers sharply by INR 400/MT (USD 6/MT) for October deliveries.
Currently, offers for N1 grade (Si content below 1.24%) pig iron are assessed at INR 17,400/MT, ex-Cuttack, which were previously at INR 17,800/MT. The company is allowing discount of upto INR 300/MT on purchase of bulk quantity.
Discount Table
| Quantity | N1 grade Pig iron | |
| Discount Offered | Offers in INR/MT, ex-Cuttack | |
| Up to 499 MT |
No discount |
17,400 |
| 500 to 999 MT |
100 |
17,300 |
| 1,000 MT to 1,999 MT |
200 |
17,200 |
| 2,000 MT & above |
300 |
17,100 |
Valid till 12 Oct’15
Source: SteelMint Research
Reasons for price cut
- Poor fundamentals : Despite of poor fundamentals like declining iron ore and coal prices, pig iron prices have rallied in last two weeks. This clearly indicated that surge in prices will not sustain for a longer time.
- Low buying interest: Secondly, low buying interest on inflated offers (INR 17,800/MT) along with costlier delivery to the targeted market has made manufacturer to cut offers by INR 400/MT.
For an instance, when Neelachal Ispat offered pig iron at INR 17,800/MT ex-Cuttack, offers in Raigarh were in the range of INR 19,000-19,100/MT ex-works and offers for pig iron delivered from Neelachal Ispat (Cuttack) to Raigarh were around INR 19,400/MT ( INR 17,800 (ex-rate)+ 2% CST+ 0.5 % entry tax+ INR 1,200/MT freight).
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