Monthly Archives: February 2011

20 per cent Export Duty on all grades of Iron ore

Monday, 28 Feb 2011

SteelMint Exclusive

 

As per our series of updates on possibilty of an increase in export duty on Iron ore that is sent mainly to China and other nations..*

 

Export duty on all grades of Iron ore exported from India has gone up to 20%. Earlier, iron ore lumps attracted 15% duty whereas fines attracted 5% only. However, excise duty has been kept unchanged at 10%.

 

Hike in export duty on iron ore pleases Orissa Government

Tuesday, March 01,

Orissa government has welcomed the four-fold rise in the export duty on fines announced in the budget saying that it would discourage exports of iron ore..*

Minster for industries, steel and parliamentary affairs, Raghunath Mohanty on Monday told, “We have been demanding a ban on the export of iron ore and chrome ore from the state to meet domestic demand and prevent illegal mining. The union finance minister has taken the first move by increasing the duty by four fold. It is a welcome move”. 

Confederation of Indian Industries [CII], Orissa chapter chairman, Mr R K Jena said, “The introduction of 20% ad valorem export duty on iron ore and withdrawal of export duty on iron ore pellets is in line with the expectation from several Industries and will promote value addition inside the country and conservation of natural resources”. 

At present the export price of high grade iron ore fines (63.5%) is nearly $ 175 FOB including $ 5 export duty earlier charged by the union government. 

“The four-fold hike in export duty of iron ore fines will force exporters to either stop their trade or the mine owners have to bring down the price of iron ore fines. There will be huge losses by the traders who have either stockpiled the iron ore fines for export and pending contracts”, said, Orissa Mineral Traders Association [OMTA] president P K Nayak.

Source: The Economic Times

 

Impact will be seen in Indian fines market after 10-15 days”- Experts

Tuesday, March 01,

With an unexpected announcement of hiking export duty to 20% on Iron ore fines by Finance minister have increased cost up to Rs 1000/MT, squeezing margins of exporters and miners drastically..*

 

“We saw good bookings in the first week of February as export prices were surging all time high. Impact will not be seen immediately as those who have booked the material have to lift it and it will take about 2-3 weeks said one of the mine owners based in Orissa. Number of queries has come down in last few days he added.

 

 

 

Spot Iron ore prices ease on poor demand from Chinese steel mills

Monday, February 28,

 

 

Spot iron ore pricesextended losses after slumping 5 percent from mid-February last week, with Chinese steelmakers expecting prices to fall further on demand uncertainties..*

 

Indian ore with 63.5 percent iron content was quoted in China at $189/MT on Monday, including freight, down from $190 on Friday.

 

Comments by:

 

Iron ore trader: “We can’t tell how the market will go so far. Demand is weak and steel mills still don’t want to buy unless steel prices rise strongly. And unless the buyers step in, we should see prices continue to ease down to $ 180/MT as we go forward into this week.”

 

 

 

 

 

 

Budget 2011-2012 highlights: GST Bill to be introduced in the current year

Monday, February 28,

 

 

Finance Minister Pranab Mukherjeepresents the federal budget in Lok Sabha today. Preparation of GST rollout is in the final stages. Goods and Services Tax Bill is to be introduced in Parliament this year..* The government originally planned to roll out GST from April 1 last year but a consensus could not be reached on the introduction of the Bill.

 

GST would include most of the central and state taxes like excise and sales tax, making rules easier for the industry and other tax payers.

 

Some other highlights include- rising of housing loan limit from Rs 20 lakh to Rs 25 lakh for priority sector lending.

 

Direct Tax Code Bill likely to be passed by Parliament next financial year after getting Standing Committee report.

 

 

 

Coal prices accelerate by 30%

Monday, February 28,

 

 

Coal India’s Board of Directors has approved a revision in coal prices effective from27th Feb 2011.* This increase is made in basic coal prices to match the international and domestic prices. The current domestic price is said to be 50 % lower than the imported prices. Coal India Ltd (CIL) shares surged today after the announcement of the price hike. Due to the revision of coal prices, CIL would generate approximate additional revenue of Rs 6.5 billion in 2010-11 and Rs62 billion in 2011-12.

 

 

 

 

Coal auctions: Surplus supply showed gradual decrease in prices

 Saturday,February 26,

 

 

With excess supply and moderate demand in domestic market, coal prices went down by Rs 50-200/MT. Hike seen in the freight rates due to excess supply.* The auctions held on 25th Feb for SECL’S Gevra mines showed a fall in price by Rs 64/MT and average winning price knocked at Rs 994.18/MT. MCL’s Lingraj mine’s average winning price showed a sharp decline of Rs 260/MT and closed at Rs1593./MT.Market players believed 30% rise in basic value  of coal prices in forthcoming coal auctions.

 

 

 

 

International scrap prices moved up slightly; political crisis in Middle East kept buyers cautious

Friday, February 25,

 

 

CFR Turkey prices moved upwards slightly, with market participants nervous however as the political crisis continues to unfold and spread to other regions of the Middle East.* This week, Kuusakoski of northern Europe sold HMS 80:20 (1&2) and shredded at $448/MT and $453/MT respectively to a Turkish mill, CFR basis

 

The weaker sentiment in the Turkish market was also reflected in the European scrap markets this week. French and German shredded scrap fell this week to levels of around $440/MT.

 

Traders also informed of rumors that eleven ferrous scrap cargoes will soon depart for China. A US trader added, “It’s normal after the Chinese New Year period that traders are now restocking.”

 

In the Indian market, traders reported that price levels jumped up in the local market by around $20/ton earlier this week but settled by Wednesday. “Right now, the Indian market seems to be dead. At the moment, Indians are bidding at $475-480/ton for material. Some interest however does seem to be coming from the Vietnamese players who are bidding $454/ton right now”, a trader said. 

 

 

 

 

What Does Metal Industry Expect from Budget 2011?

Saturday, February 26,

 

What does Metal Industry expect from this budget?..*

 

Tushar Poddar, Chief India Economist at Goldman Sachs said he expects Finance Minister Pranab Mukherjee to hike the excise duty by 2%. 

 

Poddar further said that the direct tax norms are likely to remain the same and the he does not expect the Finance Minister to tinker with the rates. He, however does see some revenue and expenditure measures. 

 

India’s growing fiscal deficit has been a major cause for concern and Poddar said that it was highly unlikely that deficit would come in below 5% of GDP.

 

2% hike in excise duty on cars & bikes.Buying and maintaining a car or a bike got a lot more expensive with the government announcing a 2% hike in excise duty, leading to an immediate near-corresponding increase in vehicle price across categories.

 

Hike in duty on Exports of iron ore fines to 10-15% from current level of 5%.A proposal from steel ministry on hiking export duty means FOB prices will go down and domestic prices might fall too.

 

Import duty on Ferro Alloys to be imposed, which will reduce the cheap import of Ferro alloys and it will be positive for domestic Ferro alloys producer.

 

 

 

NMDC hopeful of raising ore dispatch capacity by 3-4 mn tonne

Saturday, February 26,

 

 

State-run miner NMDC is hopeful of increasing its ore dispatch capacity by 3-4 million tonne per annum with the completion of doubling work in Bailadilla mines in Chhattisgarh, connecting it to the main line up to Visakhapatnam in Andhra Pradesh..*

 

NMDC has several mines at Bailadila in insurgency-riddled Dantewada district where it produces over 70% of its total annual iron ore output and rest from mines in Karnataka.

 

According to S Thiagarajan, Director (finance), NMDC, they had entered into an MOU with Indian Railways sometime ago on the Bailadilla- Kirandul railway line doubling project according to which NMDC will fund the project and Railways will construct the railway line.

 

It is a very critical line for NMDC with 150 km-single line from where currently they are dispatching around 18 million tonne of iron ore, he said.

 

To a query on freight charges, Thiagarajan said as there was no mention of freight charges in the Railway Budget, the company does not foresee any impact on the ore prices.

 

“As far as freight is considered there may not be any impact. Railways charge Rs 780 per tonne for the ore meant for domestic consumption and Rs 2,546 for export purpose,” he explained.