Pig iron export rates might surge in the days ahead, taking a cue from other steel raw materials which have gone up in response to better demand, said Neelachal Ispat Nigam Limited (NINL), the biggest exporter of the commodity.
The rates could touch as high as $380 a tonne in the upcoming tender, said the company, whose last deal was to deliver 50,000 tonnes of steel grade pig iron at Paradip Port for $375 a tonne.
“The rates are definitely going to rise as other steel commodity prices have witnessed a steady rise recently. Besides, the demand for pig iron is good these days,” said an NINL official. He added that the company will float a global tender for export of 50,000 tonnes of pig iron next week.
Pig iron is the solid form of hot iron metal, obtained by smelting iron ore with coke. It finds its usage in domestic as well as international markets, in electric arc furnaces and foundries. Although it is a processed form of iron ore, it takes cues from other steel-making raw material for pricing.
In global markets, iron ore rates inched up on Thursday after dull trade last week, indicating positive signal for the steel commodity. According to NINL, there is no question of fall in prices because it is getting better enquiries for its products. The company benefited immensely in the last couple of months by a sharp drop in rupee against the dollar. However, since the rupee has started to recover, the rates in dollar terms must rise, NINL argued.
“As we were getting better realisation from exports, we did not mind selling pig iron at same dollar price for last two months. But with rupee now strengthening, the rates must go up,” said an NINL official.
NINL produces around 5.5 million tonnes of pig iron every year. The company incurred a nearly Rs 100-crore loss in the last financial year because of poor demand for pig iron in both global and local markets.
It mainly supplies pig iron to southeast Asian countries.
The company is jointly promoted by MMTC Ltd and the Odisha government. MMTC floats all tenders on behalf of NINL for pig iron export as well as coking coal import.