Pig iron export by PSUs banned
The government has imposed a temporary ban on export of pig iron by public sector companies.
NEW DELHI: In yet another move to check spiralling steel prices, the government has imposed a temporary ban on export of pig iron by public sector companies, Steel Authority of India (SAIL), Rashtriya Ispat Nigam (RINL) and MMTC-controlled Neelachal Ispat Nigam (NINL).
The Centre is planning to hold an auction for the pig iron produced by the public sector companies for domestic buyers at their existing prices. Domestic buyers will get 10 days to make purchases, following which the PSUs will be allowed to export the left-over metal. The advertisement for the auction will be released soon, sources said.
The move is aimed at supporting the export-oriented foundry and casting units that have been complaining about supply constraints and steep rise in prices of pig iron. According to industry estimates, the price of pig iron has increased 40% in a year.
Government sources told ET the move to mandate PSUs to give first preference to domestic buyers of pig iron before exporting would help in controlling the situation.
���Since the auction for domestic players will give opportunity to all buyers to source as much as they want at existing prices, the problem of supply constraint and rising prices is expected to be addressed,��� an official said.
Since prices of PSUs are much lower than those maintained by private companies, giving first preference to domestic buyers will ensure the foundry and casting units will have access to more supplies from them than before. This may also encourage other private sector players to reduce prices and look for opportunities in the domestic market itself.
���Export of pig iron from SAIL and NINL has already stopped. We are going to come out with the advertisements soon,��� the official said. Steel PSUs will be allowed to sell in the international market 10 days after the start of the auction. This would ensure that the PSUs have the means of selling their entire inventory, sources added.
Pig iron is an intermediary product largely used by induction furnaces for melting and value addition. With the automobile and engineering sector expected to grow at 10% and 5% respectively, pig iron consumption is also likely to rise by 7-10% in the medium term.
Pig iron production in the country is around 5.5 million tonne. Even though the quantum of exports is low, it is likely to grow with more players entering the business. PSUs are expected to play a stabilising role by preventing widening of demand-supply mismatch in the domestic market.
The Centre is planning to hold an auction for the pig iron produced by the public sector companies for domestic buyers at their existing prices. Domestic buyers will get 10 days to make purchases, following which the PSUs will be allowed to export the left-over metal. The advertisement for the auction will be released soon, sources said.
The move is aimed at supporting the export-oriented foundry and casting units that have been complaining about supply constraints and steep rise in prices of pig iron. According to industry estimates, the price of pig iron has increased 40% in a year.
Government sources told ET the move to mandate PSUs to give first preference to domestic buyers of pig iron before exporting would help in controlling the situation.
���Since the auction for domestic players will give opportunity to all buyers to source as much as they want at existing prices, the problem of supply constraint and rising prices is expected to be addressed,��� an official said.
Since prices of PSUs are much lower than those maintained by private companies, giving first preference to domestic buyers will ensure the foundry and casting units will have access to more supplies from them than before. This may also encourage other private sector players to reduce prices and look for opportunities in the domestic market itself.
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���Export of pig iron from SAIL and NINL has already stopped. We are going to come out with the advertisements soon,��� the official said. Steel PSUs will be allowed to sell in the international market 10 days after the start of the auction. This would ensure that the PSUs have the means of selling their entire inventory, sources added.
Pig iron is an intermediary product largely used by induction furnaces for melting and value addition. With the automobile and engineering sector expected to grow at 10% and 5% respectively, pig iron consumption is also likely to rise by 7-10% in the medium term.
Pig iron production in the country is around 5.5 million tonne. Even though the quantum of exports is low, it is likely to grow with more players entering the business. PSUs are expected to play a stabilising role by preventing widening of demand-supply mismatch in the domestic market.
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