Monthly Archives: March 2011

Asian scrap prices under pressure on declining Turkish import prices

Thursday, March 31,

 

The world’s top consumer of steel scrap Turkey traders quoted prices for its steel scrap imports at $440-450 per tonne cost-and-freight (CFR) Turkey this week, down from $455-465 two weeks ago.*

 

Steel scrap is a key raw material for steel long products such as billet and rebars used in construction, and Turkey’s import prices represent a benchmark for international prices.

 

Turkish steel scrap import prices fell this week on poor demand from steelmakers and may fall further if tensions in North Africa and the Middle East continue to affect Turkey’s steel sales to key consumers.

 

Falling Turkish prices have influenced domestic prices in Europe, which fell by about $10-20 a tonne in the last couple of weeks, traders said.

 

Demand from China, the second-largest importer of steel scrap, was also weaker, putting further downward pressure on international prices. 

 

 

 

 

Spot iron ore market up on freight hike announcements

Thursday, March 31,

 

Spot iron ore market in China opened with a positive note and Shanghai steel rebar futures rose by 0.4% after Indian Railways said, it will impose a “busy season” charge of 7% on iron ore freight rates.* from April 1 to June 30 and from Oct. 1 to March 31, 2012.

 

Fe 63.5/63 Indian cargo was heard being quoted at $176-177/MT while iron ore indexes gained on the prospect of costlier freight charges for Indian cargoes.

 

According to traders in China, “”It looks like demand growth will be moderate. We still have a bit of an inventory hump to get over, which in the short term may cap steel prices, in particular in China and even cause a lull in iron ore demand in the next three to six months, but it’s temporary.”

 

 

 

 

Iron ore exports ban make Indian Railways lose revenue by Rs. 2,100 crore

Wednesday, March 30,

 

 

According to Samar Jha, the outgoing financial commissioner of the Railways, “the ban in iron ore exports have impacted our revenue by Rs.2, 100 crore.* We cannot, however, put a figure on how much it will impact our profit. Such traffic moves in specific lines that only move iron ore. So, those lines remain unutilized. The wagons have, however, moved to coal.”

 

In 2011-12, the Indian Railways will, for the first time, borrow money from the market by selling tax-free bonds. The state-owned body has ambitious plans for modernizing its aging infrastructure and enhancing capacities.

 

 

 

 

India: Government to award small coal blocks to state mining utilities

Thursday, March 31,

 

Government will award small coal blocks to State mining utilities of host states to feed the fuel needs of local industries, a senior coal ministry official said.* The move will benefit coal-starved small- and medium-scale industries in states such as West Bengal and Jharkhand.

 

 On Monday, coal minister Sriprakash Jaiswal had approved a policy for small and isolated coal blocks that are economically unviable but are enough to feed local demand. These mines hold reserves of 5-10 million tonnes. 

 

“Coal mined out of these small and isolated blocks would be available to local industries, addressing to an extent the huge demand-supply gap for the fuel. The blocks would be awarded to state mining utilities under government dispensation route,” the official said on condition of anonymity. 

 

According to the official, there are about 20 small and isolated coal blocks with reserves of up to 10 million tonnes. They have not been explored, as the reserves are considered small for scientific and economic development. Also, coal from such blocks cannot be transported by railway. 

 

 

 

India: February Iron ore exports down by 18.5% -FIMI

Wednesday, March 30,

 

According to FIMI (Federation of Indian Mineral Industries), India’s iron ore exports in February have declined by 18.5% to reach 10.14 million MT from 12.45 million MT a year earlier due to lower supplies and weak demand.*

 

Supplies were tight in the local market after Karnataka banned iron ore exports in late July and restricted movement of the ore via road to check illegal mining in the state.

 

Barring Goa, Vizag and Paradip ports, which showed a slight increase from a year earlier, the rest of the 12 ports in the country either saw a sharp fall or didn’t export any ore during the month.

 

India’s exports in the current financial year are expected to fall 23% to around 90 million tons, according to R.K. Sharma, secretary general of the trade body.

 

In the next financial year starting Apr. 1, exports may decline below the 90 million MT estimated for the current year due to a hike in the export tax.

 

The Steel ministry has been lobbying for more export curbs on the raw material as the country aims to raise Steel production capacity to 120 million tons by December 2012 from around 78 million tons.

 

 

 

Indian Railways impose 5-7 % surcharge on freight for Iron ore & Coal

Wednesday, March 30,

 

 

Indian Railways have levied surcharge on freight for Iron ore & coal  w.e.f. 1st of April as it is considered to be the peak season.*

 

Surcharge on freight is 7 % for iron ore and 5 % for coal loading (domestic and exports).

 

Freight on exports is likely to move up by Rs 150-200/MT after the surcharge is implemented. Whereas,freight charges in domestic market are likely to go by Rs 30-50/MT.

 

According to exporters, “higher freight charges and weaker demand from Chinese buyers might reduce the iron ore exports further”

 

 

 

 

India: No link between futures trading, high commodity prices: C. Rangarajan

Tuesday, March 29,

 

 

According to Dr C. Rangarajan, Chairman, Economic Advisory Council to the Prime Minister, “There is no evidence to show that futures trading in commodities results in a surge in the prices of those commodities”.*

 

In an address on ‘Some Perspectives on Growth and Inflation’ at a seminar, Dr Rangarajan observed, in response to a question, that among the commodities in which futures trading is permitted, the prices of some have gone up, while those of many others have not.

 

Even the Abhijit Sen Committee, which went into the question of whether or not futures trading in commodities lead to an increase in the prices because of the speculation, was inconclusive on this matter.

 

Source: The Business Line

 

 

 

Coking coal price will fall further: SAIL Chairman

 Wednesday, March 30,

 

 

Steel Authority of India Chairman C S Verma said that the coking coal prices that have softened in the last two weeks will fall further on expected rise in production.*

 

“Coking coal prices in spot market have already fallen. I am of the firm opinion that the current coking coal price of $ 235 a tonne cannot be sustainable,” Verma told reporters.

 

Following flash-floods in Australia’s Queensland province, the price of coking coal had skyrocketed to $ 350 a tonne just two weeks back. However, it felled sharply since then to $ 235 a tonne now.

“For the last two weeks, coking coal prices have been softening, especially on Japan fall-out. Japan is importing about 10 million tonnes every month. So, there is more availability in the market,” he added.

 

Verma said the coking coal price would come to normalcy once mining companies in Australia resume full operations.

 

When asked if SAIL has entered into a contract for supply of coking coal for the April-June quarter, he said that the company was yet to take a final call, but it would soon happen.

 

“We have reached to a provisional pricing only. I can’t share the detail since it is confidential,” Verma said.

 

SAIL requires around 15 million tonnes of coking coal a year. Only 4.5 MT is met through domestic sources and the remaining 10.5 MT comes from imports, around 60 per cent of which comes from Australia.

 

Source:The Economic Times