India: MMTC's Pig Iron Auction Receives Good Response

Amid competitive offers than prices neighboring markets, the company received good response in today's auction.

MMTC- India’s largest and state-owned trading house, conducted auction for around 10,000 MT steel grade pig iron today on behalf on NINL. The company offered quite competitive offers for this auction and near to 4,000-5,000 MT (40-50%) material has been sold out, as per participants.

As per sources, in today's auction the company had kept base price at INR 22,300/MT (USD 310), whereas the tender also fetched bid at INR 22,400/MT (USD 312); ex-plant, Jajpur, Odisha, eastern India.

The offered base price was quite attractive as the private mills offered in neighboring markets are close to INR 22,800-23,000/MT in Odisha & INR 23,300-23,500/MT in Jharkhand. While in Durgapur the offers are near to INR 24,000-24,200/MT on ex-plant basis.

If sources are to be believed, due to some technical issues, the remaining quantity remained unsold. However there was expectation that the total quantity may get sold out as offers were quite low than the prevailing offers in neighboring markets.

Neelachal Ispat Nigam Limited (NINL), Odisha, is a joint venture company of MMTC ltd. and Government of Odisha through IPICOL and OMC Ltd. This is a 1.1 MnT integrated Steel Plant. In the past, SAIL had tried to take over NINL several times in 2007, 2010 and 2014; but for various reason it could not materialize. In May 2007 with approval of committee of secretaries, SAIL wanted to take back NINL (which was originally founded by SAIL in 1982) by paying around 1000 crores to promoters.

Now that MMTC Ltd, main promoter decided to quit NINL, it will be prudent to revive the earlier proposal, to merge NINL with steel behemoth SAIL.