Monthly Archives: January 2011

India: Iron ore futures start to attract exporters

Tuesday, February 01,

 

The world’s first iron ore futures contracts attracted small exporters in their first two days of trade in India.

 

“We were surprised to get speculators and physical market players, and some of the big names are already trading in our contracts,” said, Sanjay Chandel, chief executive officer at Indian Commodity Exchange (ICEX).

 

The most actively traded Indian ore contract on ICEX, which promises 62 percent iron content for March delivery, had gained 0.05 percent to trade at 7,269 rupees per dry metric tonne (DMT), cost and freight (CFR) delivered to China.

 

Chandel expects more corporate participation in the near-term. “Going forward, we are bullish on the commodity, as far as turnover is concerned. Many miners and exporters are already our members. There are many waiting on the fence. They have plans, and discussions are on,” said Chandel.

 

Iron ore exporters Phulchand Exports and Bagadiya Brothers have taken membership with the exchanges, a source at an exchange dealing in the commodity said. Company officials declined to comment.

 

Source: Reuters

 

 

 

India: Pig iron prices remain firm, manufacturers worry over rising spot coking coal prices

Monday, January 28, 

 

Prices remain unchanged. Shortage of imported coal is likely to curb production and prices are expected to remain high. However market players are looking for other options like Indonesia to procure coal after the recent supply crunch from Australia.. News about another cyclone hitting Australia this weekend might disrupt the supplies further.

 

Comments by:

 

Traders: “Manufacturers are looking for options such as Indonesia to procure coal after the floods in Australia.  It is heard that BSP has imported some coal from Indonesia Prices are likely to remain firm over squeezed supply of imported coal” 

 

 

 

India: Trading in iron ore futures on day one at Rs 19.5 crore on ICEX

Monday, January 31,

 

Mumbai based Indian Commodity Exchange (ICEX) has successfully launched the world’s first iron ore futures contract. Total volume of all the three contracts- March, April and May 2011- was 246 lots (24,600 tonnes) valued at Rs 19.50 crore on the first day of trading.

 

ICEX iron ore March 2011 contract prices were up 1.20 per cent to trade at Rs 8,069 per tonne while April 2011 contracts traded at Rs 7,628 per tonne.

 

The contract will be on monthly expiry basis with a trading unit of 100 dry metric tons (DMT). The delivery unit is 5,000 DMT.

 

In the international markets, the spot Australian benchmark iron ore price hit USD 185 per tonne on Friday while Indian iron ore price with 63.5 per cent iron content was quoted above USD 190 per ton including cost and freight.

 

“Based on the run up to launch of iron ore contract, trade volumes on first day of trade on ICEX were robust with good participation and liquidity seen in its March and April contracts,” ICEX Chief Executive Officer (CEO) Sanjay Chandel said.  

 

 

 

Indian Steel majors to hike prices by up to Rs 1,500/t

Monday, January 31,

 

With the sharp rise in iron ore and coking coal prices, steel companies are set to hike prices by Rs 1,000 to Rs 1,500 a tonne in February. Though manufacturers such as Tata Steel, JSW Steel and Essar Steel have hinted at a possible increase, there has been no reference to the quantum of the hike.

 

The recent increase in global steel prices has provided enough headroom for companies to pass on the incremental cost of production to end-users.

 

Flat steel prices have gone up by about 10 per cent since November in Europe, 37 per cent in the US and 30 per cent in Russia. Prices in China have relatively ruled flat in contrast.

 

Mr Vikram Amin, Executive Director, Essar Steel, said with Indian steel prices aligned to international levels, they will have to keep in line even if margins are under pressure. “If domestic prices are higher, there is always a chance of cheap imports. At present, international prices are higher,” he said.

 

Mr Jayant Acharya, Director of JSW Steel, said costs of raw materials, especially that iron ore and coking coal, have jumped substantially in the last few months. As a result, steel prices have had to move in tandem with input costs.

 

Coking coal (Australia spot) prices have jumped 56 per cent in the last one year to $270/tonne, while iron ore fines are up 38 per cent to $182/tonne and LNG 47 per cent to $10/ million metric British thermal units.

 

Despite the increase in raw material costs, steel makers have been unable to hike prices due to lower global prices. Domestic HR coil prices (ex-works) have gone up 13 per cent to Rs 33,250/tonne in the last year, while the landed cost of imports rose 14 per cent to $729/tonne (around Rs 32,800). Steel importers were also benefited by the weak dollar (against the rupee).

 

The likes of SAIL and JSW Steel reported a drop in net profit during the December quarter despite higher sales.

 

Source: The Business Line

 

China: Imported iron ore stocks up 1.3% this week

Saturday, January 29,

 

Stockpiles of imported iron ore at major Chinese ports rose for a sixth consecutive week to reach 78.06 million tonnes this week, up 1.3 percent from last week.

 

Australia ore stockpiles rose 1.5 percent or 430,000 tonnes to 29.71 million tonnes over the week, and ore from Brazil rose 520,000 tonnes to 19.94 million tonnes.

 

Ore originating from India rose slightly to 12.34 million tonnes this week, from 12.25 million tonnes last week.

 

Restocking by Chinese steel mills has almost ground to a halt in the final week ahead of the Lunar New Year holiday, although iron ore prices have stayed firm round $189-190/MT including freight. 

 

Source: Reuters

 

 

 

India: JSW Steel to hike prices yet again in February due to rising input cost

Saturday, January 29,

 

 

JSW Steel Limited, India’s third-largest steel producer, will increase its product prices in the next month in the wake of rising input costs, a senior official of JSW Steel told.

 

“We raised our product prices in the first week of January, while our spot market prices were also increased marginally. We will go for another price hike in February,” said Jayant Acharya, director, commercial and marketing, JSW Steel. 

 

However, Mr Acharya refused to disclose the quantum of the hike.

 

“Production cost in the quarter increased by around 30% as prices of raw materials, mainly coking coal, surged in the international market. However, prices of steel increased by around 13% and that hurt our net profit,” said Seshagiri Rao, joint managing director, JSW Steel.

 

In the next fiscal, the company will require 7MT to meet higher production targets. Currently, it needs 5MT of coking coal, annually. However, the shipments of the commodity have been impacted due to the floods that have swamped Queensland, Australia.

 

“Not every mine and port has been hurt due to the floods. There are a few mines and ports that have not been affected. But yes, shipments have slowed down,” said Mr Acharya.

 

JSW Steel imports around 100% of its coking coal requirements-most of it comes from Queensland.

 

Source: MoneyLife

 

 

 

 

Brazil: Vale iron ore, coal shipments delayed by rains

Saturday, January 29,

 

Heavy rains over recent weeks have interrupted Brazilian miner Vale’s shipments of 600,000 tonnes of iron ore from Brazil and 500,000 tonnes of coal from Australia. 

 

Roberto Castello Branco, director of investor relations, said the shipments were expected to be made up over the next couple months. 

 

Iron ore delays were relatively small compared to the company’s expected production in 2011 of 311 million tonnes. 

 

The coal delays will have a greater effect on operations, given that Vale expects to produce around 5 million tonnes of coal in 2011 in Australia. 

 


 

 

MCX, ICEX to start iron ore futures trade from Jan 29

Saturday, January 29,

 

Multi Commodity Exchange (MCX), the country’s largest by tunover, and Indian Commodity Exchange (ICEX), will start futures trade in iron ore from Saturday, giving an opportunity to traders and exporters to weather near-record prices.

 

“We expect this contract to start slowly and would hope it to become one of our top ten contracts,” Lamon Rutten, managing director and chief executive, MCX, told Reuters on Friday.

 

 

The monthly-expiry contract, which will have a trading unit of 100 dry metric tonnes (DMT), will have an initial margin of 8 percent, MCX and ICEX said in a statement.

 

 

Delivery unit for the contracts on MCX is 20,000 DMT, while for ICEX, the unit is 5,000 DMT. The ICEX has proposed to use the the spot TSI prices.

 

 

Futures contracts would be in addition to the existing forward swap contracts, launched in 2008, being offered by bourses from Singapore to the United States and Europe to prod steelmakers into hedging price risks after the industry moved to a more flexible quarterly pricing system last April after the collapse of a 40-year-old annual benchmark system.

 

 

Rutten said he expects to draw wide participation from traders and exporters, who suffer on the margin front due to price fluctuations.

 

 

Indian ore with 63.5 percent iron content remained quoted above $190 a tonne, cost and freight delivered to China, on Friday, with offers of as high as $192.

 

 

“Once Indian markets open for foreign players, we hope this would become a global reference price,” said Rutten.

 

Source: Reuters

 

Pig iron prices remain firm; buyers hesitant to pay higher

Friday, January 28,

 

India

 

Pig iron prices remained firm at most of the major mandis’.  Market players remained cautious due to poor off take of Ingot.

 

China

 

Pig iron prices in China remain unchanged.  Stability in pig iron market is supported by steel and billet market.  Transactions in market are less but producers expect a rise in prices in  the subsequent days and so steelmakers increase purchase of inventories due to tight supply as iron ore prices and coke prices are on rise, stimulating pig iron market to be firm. Market is currently on a holiday mood speculating hike in prices followed by dull transactions.

 

Comments by

 

Manufactures, India: “Weaker demand for Ingot is impacting the demand for pig iron; however, manufactures not willing to decrease the prices as raw material such as Iron ore & coal are expensive.”

 

Traders, India: “Traders are opting to wait and watch; Supply is likely to remain low due to the shortage of imported coal.”  

 

 

China: Activities slow down in spot iron ore market; offers for Fe 63.5/63 remain at $189/MT

Friday, January 28,

 

Most Chinese steel mills and traders have headed home as early as this week, and the spot market is likely to remain quiet for the next week due to Lunar New Year, said an iron ore trader in Shanghai.

 

“Very few of them are still out there buying and those who do are buying port stocks”

 

“But for the moment, supplies are still tight so there’s nothing to push prices down and some are optimistic that prices will continue to rise after Chinese New Year.”

 

Fe 63.5/63 Indian cargo remained quoted at $189/MT.

 

Iron ore exports from India are likely to get costlier after India’s railway operator raised freight cost on iron ore exports by 50 percent from Thursday as it rides on rising prices of the raw material.