India's SAIL may adopt auction policy for sale of pig iron - sources

Steel Authority of India Ltd (SAIL) is amending policy to sell pig iron. Sources close to the matter reported that from June onwards the company will sell through auction route only, which earlier used to be direct sell to the buyers.

Initially the company is implementing auction procedure in eastern India based plants. Recently auctions have been floated for 4,600 MT pig iron mixed auction from IISCO plant & 600 MT from Durgapur Steel Plant (DSP), which are due on 9th June.

In May'20, the deals for basic grade pig iron by SAIL's IISCO was learned at INR 22,300/MT EXW, in which about 5-6 rakes (equivalent to 15,000-16,000) were booked by the traders & plants based in local market & north-east regions.

Buyers concern

Earlier, the buyers used to pay for the material when the dispatch were scheduled. However now in case of auction they will have to pay in advance according to bid put up and then the dispatch will be scheduled which is a big concern, as it is time consuming.

SteelMint in conversation with participants learned that this amendment in sale policy may not work immediately with these plants of SAIL as they are producing & dealing in huge volumes of pig iron.

Private mills may benefit

Sources believe, the users who will require material on an urgent basis may switch to private pig iron producers who usually book material from SAIL due to advance payment & delivery schedule concern.

The current offers from private mills in Durgapur are hovering at INR 23,500-24,000/MT EXW & excluding GST, via road/rake delivery.