Monthly Archives: May 2011

Brazil: Vale expects third quarter iron prices to remain steady

Tuesday, May 31,

 

Brazil’s top miner, Vale expects the quarterly contract prices for iron ore to remain steady in the third quarter.

 

Murilo Ferreira, Vale’s Chief Executive Officer said at a press conference, “The prices will remain practically unchanged for the third quarter”

 

Commenting about the credit tightening in China, he further said, “I don’t believe in a slowdown in China, but rather a movement in the economic cycle. I expect a strong second semester for China”

 

Spot iron ore prices for Fe 62% lied at around $173-174/MT on May 25, i.e. 9% less than its record high in February, but nearly triple the price two years ago.

 

 

 

Sponge iron prices in Bellary likely to stabilize- Manufacturers

Tuesday, May 31,

 

 

Sponge iron manufacturers in Bellary might get some relief as Karnataka Government allows transportation of iron ore from mines which are not under survey.

 

Sponge iron prices in Bellary moved up by Rs 600-700/MT since the apex court ordered to stop all kind of mining activities in about 99 mines located in the Bellary-Hospet-Sandur belt.

 

So, now with improved supplies, sponge iron prices are expected to stabilize at the current level.

 

Sponge iron manufacturers in Bellary expressed their happiness towards the decison and said, “We are glad about the State Governments’ decision. This will definitely help in easing the supply crunch of iron ore within the state. The decision was very crucial as any further delay would have lead to closure of many sponge iron plants”

 

 

China: Iron ore prices edge lower; buyers reluctant to build stocks

Tuesday, May 31,

 

Spot iron ore prices are hitting the two-month low and buyers are refraining from building stocks of iron ore.

 

Fe 63.5/63 of Indian cargo is heard being quoted at between $177-$178/MT.

 

A lot of factors are influencing the spot market for iron ore in China at present. A few of them are as follows:

 

  • The Steel output is very high as compared to demand and it’s simply too much for the local market to absorb
  • Thinner appetite from Chinese steel mills as they have abundant stock for imported iron ore
  • Bigger price gap between China’s domestic & importer iron ore makes buyers stick to domestic ore
  • Rising stock piles at China’s major ports which has reached to a peak
  • Anticipated rise in electricity prices by about 3%, the first increase since 2009 might lower the production levels.

All these factors suggest that the trading activities might remain on a lower side in the coming month and prices might decline further. However, prices may not collapse given by the factor that supply from India is expected to remain low during the monsoons.

 

 

 

Karnataka: Ban lifted on iron ore mines not under survey

Tuesday, May 31,

 

Various mines located in the northern Karnataka region have been given a fresh lease by the State Government to allow them to resume operations and transport iron ore.

 

The Apex court on May 6 had directed formation of a special team to conduct survey and demarcation (S & D) in 99 mining leases in the Bellary-Hospet-Sandur belt.

 

However, mine owners and their association had the decision and said the S & D activities were being carried out in phases, there was no point in suspending operations in the remaining mines.

 

Following these representations, the joint survey committee consisting of officials from the Departments of Mines & Geology, Forest and the Karnataka Lokayuktha reviewed the earlier notice and decided to allow mining activities in those areas which “have not been covered in the current phase of S & D operations” on May 21

 

Though the order was issued on May 21, it is only now that some of the mine owners are becoming aware of it.

 

Industry bodies expressed their happiness for such a decision by saying, “We are glad that the State Government has realised that it is not practical to ban mining completely as they had argued in the court”

 

Source: The Business Line

 

Spot iron ore prices drop by $1-2/MT ; Fe 63.5/63 quoted at $177-179/MT

Monday, May 30,

 

 

Spot iron ore prices drop by $1-2/MT. Prices might slip further this week if demand for Steel in China continues to be lean.

 

Global miners like Vale and Rio Tinto are also likely to keep their third-quarter contract prices largely steady after a record 20% jump in second-quarter rates.

 

“I don’t think we will see a big move in contract prices for the fourth quarter as well with average prices likely staying between $170 and $180. They could even drop,” said a Shanghai-based iron ore trader.

 

Indian Exporters quote Fe 63.5/63 at $177-$179/MT (CNF China) i.e. unchanged from Friday.

 

Stockpiles of imported iron ore at major Chinese ports last week rose by more than 10 % to a record 92.45 million tonnes suggesting that many steel mills now prefer domestic iron ore over the imported ones.

 

“The small and medium-sized mills have probably increased their use of domestic ore to 60-70 percent from 30-40 percent because it’s cheaper and they have the flexibility to do this given the design of their furnaces which can use any kind of ore”, said a trader in Beijing.

 

 

 

 

Iron ore supply in Orissa likely to remain tight in the near term

Saturday, May 28,

 

 

Deputy Director of Mines at Joda sector (Orissa) has suspended more than 100 trading licenses over irregularities in submitting monthly return.

 

These trading licenses were owned by various sponge iron manufacturers and traders in the region which and they will not be issued permits till  any further notice is issued, said an official at Mining office in Joda (Orissa). 

 

So, stricter norms from the mining authority are likely to squeeze the supply or iron ore in Orissa for the short term.

 

 

 

 

NMDC: Iron ore exports decline in March quarter on reduced demand from Japan

Saturday, May 28,

 

High iron ore prices and improved sales helped NMDC almost double its profits for quarter-ended March 2011, over corresponding last quarter.

 

According to Mr Rana Som, Chairman, NMDC, “increase in iron ore prices of over 70 per cent in the second half of fiscal helped the company to achieve such a performance. We expect to sustain and perform better in 2011-12”

 

Sales and production of iron ore were up 34% and 38% respectively in the March quarter. Domestic sales grew by 15 % during the year, while exports were down by about a fourth on account of reduced Japanese demand

 

NMDC is also looking to acquire overseas companies with mineral assets of coking coal, coal, iron ore, rock phosphate and manganese. Early this week, NMDC signed an MoU to acquire 50% stake in Australian firm Legacy Iron Ore Ltd.

 

Source: The Business Line

 

 

 

Steel scrap shortage to keep ingot prices up in short term

Saturday,May 28,

 

The shipyards at Alang witnessed a drop in business. The fall is due to competition from Bangladesh, which resumed ship-breaking operations at around 60 of its 110 ship-breaking slots from April after getting conditional permission from a Bangladesh court, which had banned ship-breaking activity for almost 10 months on environmental issues”.

 

 

Bangladeshi shipyards are bidding aggressively for ships and are offering up to $20/mt more than their Indian counterparts are. Due to this competitive step by Bangladesh, scrap production fell to 139,596 tonnes in April from 302,356 tonnes in March.

 

 

Scrap plates are a substitute of ingot and used by Mini steel mills for rolling in to finished products Availability of plates is scarce and thus the mini mill owners have to use ingot for making finished products. This has lent support to the struggling ingot market and the impact of this transition is clearly visible in the ingot prices. Ingot prices moved up by Rs 500/mt in the short span of 2 days.And the conditions for ingot manufacturers will remain favorable till the supply of scrap plates scale up to pre-April levels.

 

 

  

 

Sponge prices likely to go up on short supply of Iron Ore

Saturday, May 28

Sponge iron prices across India went up by RS 200-300/mt on Saturday after Deputy Director of mines Joda (Orissa) suspended 107 trading licences.

These licences have been suspended over irregularities in return submitted on monthly basis by traders and sponge manufacturing plants.

Mining authorities in Joda sector have stopped issuing permits till matter is cleared with Indian Bureau of Mines.

 

This will restrict supply of Iron ore from orissa sector and sponge prices are likely to go up further said sources.

 

LME Steel Billet prices move up on improved demand for long products in Middle East

Saturday, May 28,

 

 

LME Steel billet showed an upward trend this week and the cash seller & settlement prices moved up continuously to reach $586/MT on Friday.

 

The LME three month official bid/offer spread was at $566/568 per tonne on Friday i.e. up from $558/561 on Thursday.

 

Market Players believe that increased demand for long products from the Middle East and North Africa (Mena) and higher prices for scrap might have boosted the prices and traders expect the prices to move up further in the coming week.