India: SAIL Pig Iron Auction Receives Dull Response Despite Reduction in Base Price

Steel Authority of India Ltd (SAIL) conducted auction today for 2,200 MT steel grade pig iron from its Rourkela steel plant (RSP) in eastern India. The participation remained weak despite reduction in base price by INR 300 (USD 4)/MT.

SteelMint's reliable sources revealed that, only about 250 MT pig iron was sold at the base price of INR 27,500/MT EXW-Rourkela, while remaining of material (89%) remained unsold.

As per sources, in today's auction the company reduced base price to INR 27,500/MT as against last auction held on 19th Feb'20, in which base price was kept at INR 27,800/MT EXW-Rourkela.

The key factors behind dull participation are - competitive offers in neighboring states and recent power cuts in Punjipatra, Raigarh based steel mills, which in turn weakened demand for pig iron.

-- Current offers of steel grade hovering at INR 27,300-27,500/MT ex-Durgapur, INR 27,000/MT ex-Jharkhand, INR 28,100-28,200/MT ex-Raigarh/Raipur & INR 27,300-27,500/MT ex-Jajpur.

-- The landed cost to Raigarh of Jharkhand pig iron is at around INR 28,100-28,200/MT, while if it sourced from Rourkela than landed cost would be around INR 28,500-28,700/MT FoR Rourkela. Thus, buyers didn't actively participated in RSP auction.

-- Sources reported, SAIL pig iron offers from its ISSCO Steel Plant, eastern India at near to INR 27,200-27,300/MT (ex-works) via rake delivery.