Category Archives: Cement

Iran: Billet export prices surge in a recent deal

Chadormalu Mining and Industrial Company, one of the leading billet exporters of Iran, recently concluded a 30,000 t billet export tender. According to SteelMint sources, the company achieved a price level of $527/t, FoB. The shipment schedule is for end-Jan ’21/early-Feb ’21 with the African nation as a likely destination. SteelMint’s assessment for billet export offers from Iran has moved up by $25-30 w-o-w and is at $520-525/t, FoB.

 

Indian Cement Firms to See Pricing Pressure from Sept

The cement industry, which is heavily dependent on housing and construction, two segments that, in turn, are steel guzzlers themselves, will feel a pricing pressure going into the second half (H2) of the current financial year (2020-21), after the dust settles on the pandemic outbreak across the country. Yes, indeed, analysts expect demand in the cement sector to rebound only from September 2020 onwards, or post-monsoon, that is.

After witnessing a meaty increase of INR 25-INR 40 per bag across markets in the last financial year, cement prices are expected to decline in the range of INR 5-10 per bag in the current fiscal. An analyst, corroborating this, said cement prices are expected to witness pressure in the current year on account of the fact that there is no demand, at present, a scenario that has become the norm across industries on the heels of the outbreak of COVID-19. All cement units have gone into shut-down mode since the lockdown. There is no production because there is virtually no demand with housing, construction and infrastructure having come to a grinding halt. If the cement companies keep producing in a no-demand scenario, they will have to incur all the variable costs, which is highly avoidable in the current scenario.

Explaining the pricing pressure in an exclusive chat with SteelMint, Anupama Reddy, Assistant Vice President, ICRA Limited, emphasised that, going into H2, cement companies will possibly not be able to increase prices given that the ability of their end-consumers to accept such a rate increase may be lower, owing to pressure on the latter’s profitability metrics. Further decline in prices would also not be significant given that cement companies show pricing discipline.

Housing enjoys almost 60% demand share in cement. Infrastructure accounts for 20-25% share and industrial and commercial construction bring up the rear at 10% of demand.

Input prices lower

However, going forward, Reddy said that, while there could be pricing pressures for the cement companies, on the margins front, one factor would possibly work in their favour. And, that is the downward price trends of input materials like pet coke and thermal coal. Imported pet coke prices till March 2020 have been lower by 20-25% year-on-year (Y-o-Y), which is a significant drop. Crude prices have been on a declining trend. Consequently, pet coke prices could see a further drop. The decline may not be in tandem with the fall in crude prices but still they would be lower and work to the advantage of cement companies.

Coal prices too have been at low levels. In fact, Indonesian mid vol thermal coal of 4,200 GAR averaged USD 44.93/MT CNF India (Paradip Port, Odisha) over April 2019 to March 2020 (FY20), down 11.7% Y-o-Y compared to USD 50.88/MT in FY2019 (April 2018-March 2019). Similarly, South African RB2 (5,500 NAR) coal averaged USD 69.81/MT CNF India (Paradip Port, Odisha) during FY2020, down 21.5% Y-o-Y against USD 88.92/MT in FY2019. And, going forward, analysts do not see prices of coal shooting up either because demand is low.

Thus, on the cost side, there is not much of a pressure on the cement companies to goad them into becoming too aggressive on the pricing front from the second half.

Growth hit

In financial year 2018-19 (FY19), the cement industry had seen a double-digit growth of 13.3%, which had acted as a booster dose since the sector had not seen this kind of a spurt in the last decade and it had been mainly driven by affordable housing, especially the Pradhan Mantri Awas Yojna (PMAY) and a bit of infrastructure push from the government as well.

However, analysts clarify that the government, in the current year, probably will not have the kind of resources to pursue such projects after handling the COVID-19 impact through various relief packages.

Another analyst said it is too early to predict by how much demand could spurt in real estate and construction, and that some numbers would emerge from Q2. “We will have to wait and see how the sectors evolve. Because, the negative impact of this disruption will be on the income, profitability and liquidity positions of the construction and real estate companies. It all depends on how quickly they bounce back,” the analyst added.

Offtake to take a hit

Indeed, demand has been almost nil so far in the first quarter (Q1). It is likely that the COVID-19 impact will continue through the entire Q1 and into Q2, because the monsoon would set in by then – a period in which demand, in any case, remains low.

And several factors will have to be in place for most of the construction and real estate activities to pick up and these include parameters like finances, raw material (especially sand) availability, labour management etc. Thus, analysts expect on ground activity to pick up only from the second half. “For cement, it all boils down to the consuming sectors, which are real estate, construction and infrastructure,” reiterates Reddy.

“Importantly, the impact will be there on offtake beyond the immediate near term because of the overall domestic demand compression that will arise from the loss of income from prospective consumers,” observed Reddy.

By Madhumita Mookerji

 

Nepal Based Rolling Mills Book Billet from Durgapur

Nepal – a major buyer of Indian Billets has booked good quantities yesterday, as per trade participants. Nearly 4,000-5,000 MT Induction grade Billet have been booked in a trade concluded yesterday, as per sources involved in the deals.

The deal price for the Billets 100*100 mm, induction route reported at around USD 460-463/MT ex-mill at Durgapur (East India), equivalent to USD 485-490/MT CFR Raxaual/Jogbani Border, Nepal.

Also fresh deals for exports of Wire Rod reported close to USD 540-545/MT ex-mill, Durgapur for commercial grade & size 5.5 mm.

The industry participants are in hope for further rise in export demand for Billets & Wire rod post festive off as their are assumptions that rolling mills in Nepal to raise their productions following pick season for construction activities.

Thus this indicates rise is exports for Billet & Wire rod as Nepal’s imports is only from India due to less voyage time & easy payment method through LC.

Nepal has rolling facilities close to 1.5-1.7 million tones per annum. On an average, India’s monthly Billet exports to Nepal is about 100,000 MT and completely from eastern region (West Bengal, Odisha & Jharkhand).

As per custom data maintained with SteelMint, in Sep’18 (15th Aug to 14th Sep) Nepal’s billet import from India stood at 99,986 MT & Wire rod about 13,339 MT.

 
Imported coal

NTPC Invites Tender for 10,000 MT Cement

NTPC limited, a maharatna company invited a tender for purchase of 10,000 MT Portland Pozzolana Cement Grade 43 in behalf of its NTPC Solapur STPP.

Delivery Period: Staggered delivery in Nine months from the date of purchase order.

Eligibility Criteria:
•The bidder should have manufacturing capacity of 1 MnT per annum of PPC cement confirming to IS: 1489 Part-1.
•The bidder should have supplied PPC Cement in single quantity of 8,000 MT or Two quantity of 5,000 MT or three quantity of 4,000 MT each in last two years.
•Average annual financial turnover of the bidder during the last three financial years should be at least Rs.21,587,500.

Schedule (IST): The due date for bid submission is 20 Oct’18 till 18:55 hrs and the technical bid opening is scheduled on 22 Oct’18 at 16:30 hrs

For contact details and other information view TENDER SECTION

 

UPSBC Issues Tender for Purchase of Cement

U.P. State Bridge Corporation Ltd. a company under U.P. State Government has issued a tender for purchase of 35,000 MT Cement.

Delivery: The delivery is to be completed within 10 days from the date of receipt of P.O. placed by consignee unit.

Validity: The offer shall remain valid up to 90 (ninety) days after the date of opening of
Tender.

Description of Material:

Product Grade Quantity
Cement OPC 43 25,000 MT
PPC 10,000 MT
Total 35,000 MT


Tender schedule (IST):

Due date for submitting the bids is 4th Jul’18 till 17:00 hrs and the opening of the bids is scheduled on 5th Jul’18 at 15:30 hrs

For contact details and other information view TENDER SECTION

 

India: BHEL’s Purchase Tender of 25,000 MT Cement

Bharat Heavy Electricals Limited (BHEL) is an integrated power plant equipment manufacturer and one of the largest engineering and manufacturing company of its kind in India.

The company has floated a tender for purchase of 25,000 MT ordinary portland cement (OPC-43) as per IS:8112, at 5X800MW, MW Yadadri Thermal Power station Nalgonda district – 508208 ,Telangana. on ‘F.O.R’ Site Basis.

Validity: Offer shall be for six months from the latest due date of offer submission.

Tender schedule:
Bid submission due and tender opening dates are on the same day i.e 04 June’18 at 14:00 hrs IST and 14:30 hrs IST respectively.

For contact details and other information view TENDER SECTION

 

BHEL’s Purchase Tender of 8,000 MT Portland Pozzolana Cement

Bharat Heavy Electricals Limited (BHEL) is an integrated power plant equipment manufacturer and one of the largest engineering and manufacturing company of its kind in India.

The company has invited a tender for purchase of 8,000 MT portland pozzolana cement (PPC) as per IS 1489 part 1, at 3X800MW, PVUNL Patratu, District- Ramgarh, Jharkhand on FoR site basis.

Validity: Offer shall be for six months from the latest due date of offer submission or specified otherwise in GCC/SCC of tender.

Tender schedule:
Bid submission due and tender opening dates are on the same day i.e 09 Mar’18 at 15:00 hrs IST and 16:00 hrs IST respectively.

For contact details and other information view TENDER SECTION