Saturday, April 30,
Steel Authority of India Ltd (SAIL) forecasts no major fluctuations in steel prices in the coming future.*
SAIL does not expect “wild fluctuations” in steel prices in the near future. However, demand for steel products in India is likely to continue to rise, said C.S. Verma, Chairman of SAIL.
Situation of the existing steel market has forced Asian steel mills to delay the price hikes in order to offset the rise in input costs in the first quarter of 2011.
Earlier on Friday, SAIL reported a 28 percent fall in its March-quarter net profit, hurt by rising input costs.
Saturday, April 30,
Weak demand and stock piling up with traders remain a problem for Indian steel industry say experts..* Indian steel prices has been weak for last few months on followng reasons
1) High raw material cost
2) Weak construction activity
3) Liquidity crunch in the market
4) Stock piling up with traders and stockist
Our analyst found out that finished goods have been piling up with traders and manufacturers and movement have been slow in last few months.” Real demand is missing, we have good quantity of stocks lying at our stock yard.” said Mr Neeraj Agrawal a steel trader based in Raipur.
It will be interesting to see that where does prices head to.
Saturday, April 30,
Responding to a report of the Central Empowered Committee (CEC), the Supreme Court has directed suspension of the 19 mining leases in Karnataka in the Bellary region, on Friday.*
The Forest Bench comprising Chief Justice of India S.H. Kapadia passed the interim order and said: “The CEC in its report has recommended that mining operations in the cases of 19 mining lease-holders be suspended with immediate effect.”
CEC in its report has said, “In respect of certain recommendations, necessary steps have to be initiated. However, the State is committed to curbing the menace of illegal mining and will take all necessary action in this behalf, including those steps which are recommended by the CEC”
In its response, the State said it accepted the findings of the CEC and assured the court that it would implement the findings of the Lokayukta suggesting a ban on illegal mining.
Saturday, April 30,
Spot iron ore prices have moved up by $3-4/MT this week with Chinese buyers still cautious about large purchases. Quotations of Indian ore with 63.5 percent iron content hovers at around $191/MT.*
Persistent supply problems from India have supported spot prices, and traders are expecting prices to rise further after the Labour Day holiday when steel mills return to the market to rebuild stockpiles ahead of the Indian monsoon season.
Iron ore swaps cleared by the Singapore Exchange also jumped on Thursday with investors upbeat about demand as a result of the much-anticipated restocking after Labour Day.
April contract rose 70 cents to $179.26/MT, May surged $5.25 to $180/MT, and June also gained $4.94 to $174/MT.
Friday, April 29,
China’s steel sector still faces the problem of excess capacity and controlling the output remains cumbersome. Expensive imported ore encourages steel makers to purchase iron ore from domestic market.*
* Excess capacity
China Iron & Steel Association (CISA) blames small-scale and privately-owned steel mills for the long-standing supply glut that has been weighing on prices and profits in steel sector.
However, analyst suggest that an anticipated cut down in power supplies in the coming months might help in reducing the output and boost prices.
* Expensive raw materials
Higher input cost especially imported iron ore is shrinking profit margins of steel makers in China. Taking cues from this, few small Chinese blast furnaces have stopped using imported iron ore.
A Hebei-based steel company opted to purchase 40% of its ore from the domestic market compared with 15% in 2010. Hebei Iron & Steel Group said last week that its first-quarter profit also fell by 3%o n higher raw-material costs and increased competition.
Xu Lejiang, chairman of Baosteel, said that some Chinese steelmakers have stopped importing iron ore. However, the amount of iron ore imports that have been suspended is not large, he added.
According to CISA, If Chinese steelmakers’ profits continue to remain depressed, then more and more steel producers will opt for suspending imports of spot iron ore.
Friday, April 29,
Spot market iron ore prices could raise as high as $200/MT by the end of the year before falling back, said an iron ore executive in Brazil.*
Prices will remain firm for the next two years as demand for the steelmaking ingredient stays strong and new projects may delay bringing new capacity into production, said Roger Downey, Chief Executive Officer of Brazilian iron ore miner MMX Mineracao e Metalicos.
After hitting the $200/MT mark, iron ore spot prices may then fluctuate under that level for the next two years and tension in the market should continue for as much as five years, Downey added.
The rising cost of obtaining capital for new investments in iron ore capacity is expected to delay many of the 180 new iron ore mine projects currently being developed worldwide. New supplies are going to come onto the market “later rather than sooner”.
Roy Vivian, foreign trade director of Brazilian steelmaker Usinas Siderurgicas de Minas Gerais SA said at the event that he foresees spot iron ore prices rising to around $190 a ton at year end, contributing to expected volatility in steel prices.
“Greater volatility is leading steelmakers’ profit margins to fall, linked to pressure from raw materials prices,” Vivian added.
Source: Dow Jones
April, Friday 29,
Black Sea billet this week in Russia rose by USD 40/MT and settled around USD 600/MT and in Ukraine prices went up by USD 20/MT to reach USD 605/MT.*
Traders said that increased demand for steel billet, a semi finished product used for construction, mainly influenced consumers for restocking and higher scrap prices in the International market have caused the billet prices to rise as compared to last week.
Traders – “Prices are increasing at the moment. We will see some more increases in the next couple of weeks and this is bringing additional demand.”
Friday, 29th April,
Volatile steel futures and tight liquidity has held buyers off the market.* Expert’s view on the future outlook of the market differs from place to place. Few people are optimistic to see a demand revival in the coming month. Whereas, a majority of them are still pessimistic on the demand to pick up significantly given by factors such as approaching monsoons, tight liquidity and higher production costs.
Manufacturers, Rourkela: “Production cost remains high due to higher input costs and power tariffs. Lower off-take of finished goods is discouraging us to run at higher capacities”.
Manufacturers, Indore: “Demand seems to be ok. Finished prices have moved up by Rs 200-300/MT after a long time, signaling a mild revival in demand. Market might pick up in the coming month if the demand sustains and improves”.
Trader, Nagpur: “Demand was already low; and uneven rainfalls at few places have further lowered the off-take of Ingot & Billet. Going forward also, market may not take a big jump if uneven rainfall continues to disrupt activities”.
Thursday, April 28,
Despite several efforts by the government for years to curb illegal mining, iron ore is still being mined and transported without valid permits.*
Illegal export of iron ore from Karnataka has reached 30.68 million tonnes over a period of seven years. As against the permits issued for export of 46.84 million tonnes during the seven-year period, the state has exported 77.53 million tonnes of iron ore.
If the figures of illegal mining keep rising, the resources will get exhausted in a much shorter period, said The Central Empowered Committee (CEC), appointed by the Supreme Court to investigate into the illegal mining activities.
Leading Industry body such as ASSOCHAM has asked the Karnataka government to undertake a detailed review of iron ore mining leases. It also lays emphasis on making the mining sector organized.
According to ASSOCHAM’s Secretary General D S Rawat “Absence of iron ore supply would be a death blow to the steel industry which is already grappling with numerous other problems.”
So, Government should ensure effective implementation of rules and regulations as stipulated and keep a close look on individual mining agreement and contracts rather than closing mines and implementing a blanket ban.
Thursday, April 28,
Citing delays in ventures like ArcelorMittal and POSCO due to regulatory and land acquisition hurdles, Steel Ministry has proposed to set up “Ultra Mega projects”.*
Each Ultra Mega Steel Project (UMSP) is to be built on fast track basis using super critical technology on the pattern of Ultra Mega Power Projects (UMPPs). the cost of such projects might be around Rs 50,000 crore.
The steel ministry has raised concerns over rising imports that grew seven-fold in the decade to about 10 Million Tonne at present.
The Joint Plant Committee (JPC) appointed by the ministry has favored setting up of plants having a capacity of 10 Million Tonne per annum beginning the current fiscal, said a Steel Ministry official.
“India will need 145 million tonne (MT) steel capacity by 2015-16, almost double the present, which is not possible through expansion of brown-field projects that will reach limit in three to five years,” the official said.
India at present has capacity to produce about 78 MT. New projects like ArcelorMittal are still to take off and under the circumstances JPC, headed by Joint Secretary Steel , UP Singh, has stressed the need to set up 10 MT Mega Steel Project (UMSPs) each in Jharkhand, Orissa, West Bengal, Chhattisgarh and Karnataka.
Source: The Economic Times