Thursday, September 30,
Post autumn holiday some vibes have been felt in the Iron ore market. It seems with the National Holidays knocking on the door faint desperation seems to have set in.
At the same time production in Hebei, Shandong and Guangxi provinces is expected to increase as the restriction on electricity use is removed up to a certain extent leading to enhanced demand for Iron ore.
Spot Iron ore is showing buoyancy with Fe 63.5/63 cargo being quoted at $149/MT. Demand is expected to rise further after the week-long Chinese National day holidays starting October 1 precisely due to the momentum set in.
Thursady, September 30,
BHP Billiton and Rio Tinto are looking at revising or postponing their proposed $116 billion Iron ore joint venture.
A postponement would allow time for the Australian Government to set the terms of its planned mining tax.
The joint venture have been awaiting approval from competition regulators in Europe, Australia and Asia since last December for their plan to merge their Australian Iron ore operations.
Steel Authority of India Ltd (SAIL), the country’s second largest steelmaker, said on Thursday that its concern on cheaper steel imports harming local industry has now reduced.
This is because imports from China, the world’s largest steel exporter, have dropped by as much as 45 per cent in August this year.
Domestic steelmakers had been asking the Government to increase import duties on steel, in order to protect domestic industry. However, the Steel Ministry had been reluctant to support such a demand.
Speaking after the company’s AGM, Mr C. S. Verma, Chairman, SAIL, said, “The degree of concern about steel imports has now reduced. Chinese imports have drastically reduced – by 40-45 per cent in August. This is because the Chinese production has also come down.”
Chinese steel imports stood at 5 million tonnes (MT) in May this year, but fell to 4.3 MT in July and to 2 MT in August. China’s steel production fell 1.1 per cent to 51.6 MT in August 2010.
He further said that given the current situation of high demand, prices are likely to go up next month. “Market conditions look bullish. Prices won’t reduce for sure, but we have to make an assessment on how much it will go up now,” he said.
Source: The Hindu
Essel mining and Rungta mines based in Orissa have increased their iron ore lumps price by Rs 450/MT on high grade and medium grade. “We have increased our ore prices by Rs 450/MT w.e.f. from 1st october looking at recent hike in steel prices ” said one of the officials.
Indian steel prices have seen a jump of about Rs 1000-1200/MT last week, after major players have announced an increase in their steel prices by Rs 1500/MT.
“Iron ore prices are going crazy at this time, recent hike of Rs 450/MT will increase our sponge production cost by about Rs 800/MT. We are not sure how sustainable are prices at these levels” said one of the sponge manufacturer based in Durgapur.
Where as sponge manufacturers based in Central India have diverted their procurement from NMDC (Govt owned mines) based in Chattisgarh.
” NMDC Iron ore prices are cheaper by about Rs 500/MT compared to Iron ore from Orissa sector, after a hike of Rs 450/MT by orissa mines will make iron ore dearer and unaffordable for us to buy from that sector. Markets are uncertain at these levels’ said one of the integrated steel plant manufacturer based in Raipur , Chattisgarh
Thursday, 30 September,
Steel prices at major mandis’ have come down at the same pace they had jumped up early this week. Basing it on our research, below are a few view points on the current markets:
– Ingot prices in the past one week moved up quickly as if the concerned people were waiting for an opportunity to increase prices (this was the case actually). Traders are of view that absorption of such prices is difficult as demand has not picked up that well yet. Some were also of an opinion that the interim demand that was witnessed was from people who wanted to stock-up as the news of price increase by big players from October 1 was already heard.
– Ayodhya’s pending verdict has had a direct or an indirect effect on consumer’s decisions. Manufacturers are of view that people may have postponed there purchases till the verdict is announced.
“Demand and prices should improve Friday onwards as consumers have been waiting for the Ayodhya verdict. There is gonna be very limited business on Thursday, the day of the verdict”, said an Ingot manufacturer based in Raigarh.
Verdict on Ayodhya is gonna play an important role in people’s decisions between today and tomorrow. It may be a good idea to be cautious for a couple of day. As visible, there would be more clarity on the markets after the verdict has been spelled.
Wednesday, September 29,
The series of holidays starting from 22nd September and National Holidays in first week of October in China has put the market in slumber. Transactions are few. However, it doesn’t seem unusual in the backdrop of truncated steel production in the aftermath of power cuts to enforce emission norms.
This receding commenced from the end of August when the regional Governments got hyperactive cutting power supply to manufacturing units. However it has been noticed that the decline has been gradual over the last fortnight. In fact the prices have remain dormant for the past 1 week at levels of $146-148/MT CNF at main Chinese port for Fe 63.5/63% cargo of Indian fines.
Despite news of production revival in Wu’an region of Hebei Province there is little chance that transactions would resume significantly since traders have opted for caution due to the uncertainty and holidays. It will be only after the National holidays that some change in dynamics can be contemplated.
Wednesday, 29 September,
Spot iron ore prices in China have moved up by $1-$2/MT; 63.5/ 63 Fe cargo is being quoted at $149-150/MT with a previous deal concluded at $148/MT. “There were few inquiries for higher grade cargo at $149-150/MT; reason might be most of the exporters based in India do not have stocks ready with them. Though, heard few deals were concluded at $149/MT”said an exporter based in Mumbai.
China Government might restrict import of low grade Iron ore (less than 52% Fe) said one of the officials in Beijing. Spot iron ore prices in China were stable at $145-146/MT for quite some time but looks like that’s picking up.We will get to know the actual picture after China comes back from its holiday i.e.on the 8th of October.
Wednesday, September 29,
Global crude steel production is on track to hit record highs this year and the next, largely driven by top producer China, where booming output and demand has overcome that of the recession-hit developed world.
A government campaign to cut production in the world’s top producer and consumer did not manage to reduce the forecasts for Chinese output of around 620-630 million tonnes this year, up 9-10 percent from 2009.
Analysts predict global steel production to be near or hit 1.4 billion tonnes this year, its highest ever and 4% above the pre-crisis high of 1.345 billion tonnes in 2007.
“If you look at the first half of the year, with China’s production annualized, global output is looking at 1.5 billion tonnes,” said an analyst Colin Hamilton. “So even with these cutbacks, we’re still pretty comfortable with the 1.4 billion figures.”
Wednesday, September 29,
China’s state-owned Xinxing Pipes Group Co Ltd said on it plans to invest up to $1 billion in a Canadian Iron ore project, the latest in a series of major investments as China scouts for more supplies.
China’s top Iron-ore users, such as Wuhan Iron and Steel Group, have sought to develop overseas Iron ore resources in a bid to reduce their heavy reliance on the three major global suppliers — Rio Tinto, Vale and BHP Billiton.
Xinxing said its subsidiary, Xinxing Ductile Iron Pipes one of the world’s largest producers of cast iron pipe, has formed a joint venture with Canada’s Advanced to develop the proposed Roche Bay magnetite mine in Nunavut, and located on the north coast of Canada.
Wednesday, September 29,
The Singapore Mercantile Exchange (SMX) today announced that it plans to list the world’s first Iron ore Futures contract.
It said the contract would be settled on the basis of Metal Bulletin Iron Ore Index, which is provided by Metal Bulletin, an independent information and price provider for the metal industries.
Commenting on the contract, SMX CEO Thomas J McMahon said: “It is especially strategic, given that China is the world’s largest importer of Iron ore. The futures market for Iron ore and Iron ore spot market have only recently begun to take shape and as such, both are in need of a firm reference-price mechanism. SMX is stepping into that space in the markets via a robust index upon which effective price hedging can be conducted with a strong measure of certainty.”