The IPL tender that closed May 9 had more than 3 million mt offered at prices beginning at $296/mt CFR.
First-time participant Montana Shipping came in the lowest for various east-coast ports with 120,000 mt at $296-$300/mt CFR. Sources said over the weekend, however, that Montana was being dropped because it did not post a bid bond as part of its tender filings.
Traditional companies came in a couple of dollars higher for the same ports.
Samsung set the low price for west coast ports at $299.25/mt CFR.
Counter bids were also reported sent to the 21 offering companies that were within $5 of the lowest offer.
Under that plan, the price range will be from $298.30/mt CFR from Liven to $303.50/mt CFR from ETA. The netback to China for this range is pegged at $285-$290/mt FOB. While this is the rate that was being quoted just before the tender closed, sources say the Chinese producers may dig in their heels and hold off for a floor of $290/mt FOB.
If all the companies get awards, IPL would be booking almost 1.7 million mt. Sources said before the tender getting 1.5 million tons would be a good start for the next application season. One trader noted IPL would most likely be looking at 2 million tons to make up for the material not being delivered under the previous STC tender.
In the run up to the tender, traders said the fear Chinese producers would hold firm in the $290s/mt FOB might lead to conservative offers, limited to one or two cargoes. The tender tally showed how many traders were indeed unwilling to go long on large quantities.
The base offers from 14 companies in the $5 range of the lowest price offered 60-70,000 mt. Six offered 100-125,000 mt and Swiss Singapore offered a whopping 280,000 mt.
The buyer is expected to issue awards with base prices for different ports. The shipping deadline is June 29.