Spot iron ore prices in Chinese market gained substantially post their national holidays.Indian exporters do not hold much cargo on Indian ports, thanks to mining ban in Goa,several restriction imposed in Odisha and high freight charges and export duty.
A large Indian miner, Essel mining and Industries Limited managed to conclude Fe 63.5/63 iron fines at around $122-123/t CFR China, sources tell SteelMint. Better prices in spot market and depreciating Rupee has helped Indian exporters recently.
There were few more deals concluded by Australian and Brazilian miners as well, all at similar levels. Australian PB fines of Fe 61.5 was sold at around $121-122/t CFR, Brazilian Fe 65+ fines was concluded at $129.06/t CFR.
Market participants tell that prices likely to be in range of $110-120/t for Fe 63, as steel mills are still not convinced paying high for iron ore.
With a view to
find a long term solution to the raw material crisis of the mineral based
industries the Odisha government has constituted an inter-ministerial committee
headed by the finance minister Mr.Prasanna Acharya and minister for industries
Mr Niranjan Pujari, Steel and mines minister Mr.Rajnikant Singh as members. The
aim of the panel is to formulate a policy to provide raw materials to the user
industries on long term basis.
The terms of
reference of the committee will be to suggest measures for making iron
ore,manganese ore,Bauxite and chrome ore available to the mineral based
industries in the state in a fair and equitable manner through the OMC and
other mining lease holders. Also the committee will suggest modalities for
making the ore available to the industries on a sustainable basis through long
term ore linkage arrangements. ItÃ¢â‚¬â„¢ll also suggest a framework for making the
ore available to local industries through a transparent process. The panel will
submit its report within 3 months i.e by 31 January 2013.
The formation of
committee is vital as the mineral based industries in the state have been
facing raw material crisis. As per the government data there are 108 sponge
iron and 29 partially producing integrated steel plants in the state and almost
all are facing iron ore crisis for the last few years. More than half of the
sponge iron plants have already fully or partially closed owing to scarcity of
raw material. On the other hand Vedanta Aluminium has decided to shut down its
Lanjigarh refinery from December, owing to unavailability of Bauxite.
The All Odisha
Steel Federation is fighting a long battle with the OMC and the state
government for this cause. Now the federation is preparing to put its case
before the Shah Commission who is visiting the state from 31st of
this month. The president of the federation Mr.P. L. Kandoi has asked all the
steel mills to mention their raw material requirement so that an exact aggregate
figure could be presented before the Shah committee.
Edited by Tapan Moharana
“Limited availability of Iron Ore in states such as Odisha, Karnataka and Goa is a major issue. Rolling mills are using the substitute, Iron Ore Pellets in large quantities due to shortage of fines.
On account of this, we are offering Iron Ore Pellets at high prices”, said senior officials at JSPL, Adhunik Metaliks Ltd, Ardent Steel Ltd, Sarda Energy & Minerals Ltd, MSP Steel & Power Ltd and X india Steels Ltd.
By the mid of November, producers forsee a hike of Rs 300/MT more in Pellets offers as it is too early to anticipate any improvement in the demand and supply gap of iron ore.
Following is the increase in prices at various locations:
Barbil: Rs 500/MT
Tatanagar: Rs 400/MT
Keonjhar: Rs 200/MT
Raipur: Rs 200/MT
Jharsuguda: Rs 200/MT
Bellary: Rs 150/MT
Impact of tight supply of Iron ore sees little impact on sponge
trading as buyer remains cautious. Sponge prices are trading as per demand and
supply factor, Raipur sponge Fe(M)79 traded at Rs 22,000++ (down by Rs 100-200
per tonne) and Ingot trading at Rs 30300++ maintain conversion gap of Rs. 8300.
Ã¢â‚¬Å“No raw material shortage and increasing Iron ore prices are
helping to sponge demand and pricesÃ¢â‚¬Â, said sponge manufacturer based in Raipur.
Ingot buyers only maintain the conversion gap, they buy sponge at a gap of
Rs.8200-8500 per tone.
NMDC Board headed by C.S. Verma will meet on 7th
of November to discuss on iron ore prices for the month of November. Earlier in
October, NMDC had switched to monthly pricing policy from the quarterly policy
in order to offset the volatility in steel prices.
According to industry experts, Ã¢â‚¬Å“Prices are high and this has forced companies
like JSW and ESAAR to import iron ore from other countries.
Last month, NMDC had cut prices by 2-11% which was below the market
expectation. However, looking at the current iron ore crisis at Odisha, chances
are less for NMDC to cut prices further.
The iron-ore mining industry in Odisha is facing its worst ever crisis resulting in anticipated short fall in supply of sponge iron in near term.
Steel mills have started hunting for scrap over the reason the crisis in Odisha likely to worsen further tell sources to SteelMint.
“It is expected that there will be a short fall in supply of sponge iron, way things are proceeding in Odisha. Most of small and medium mills are looking for domestic and imported scrap so that they can immune themselves from expected crisis.” said a steel trader.
“Chances are high that sponge prices may go high, we are looking to secure scrap from domestic or international market.” said an induction furnace owner based in Chattisgarh.
Prevailing Iron Ore crisis in
Odisha which is a consequence of the governmentÃ¢â‚¬â„¢s new norms on mining restriction
has prompted pellet manufacturers to raise
Adhunik Metaliks, one of the largest pellet manufacturers in West
Bengal has recently revised its pellet offers to Rs 8,400/MT, Ex-Tatanagar
as against the previous offers of Rs 8000/MT Ex-Tatanagar.
Adhunik Metaliks in West Bengal
has an installed capacity of 1.2 million tons per annum
to manufacture iron ore pellets.
China seems to have come back with visible increase in
purchases against a silent and stable market in the last week. As speculated in
the earlier reports, Oct-Dec quarter looks quite active and more participative than the previous
Premium low volume HCC material is trading at about $149/MT
FOB Australia in the spot market converting to over $166/MT, CFR India.
Traders are of view that such an uptick could be because
of upcoming rains in China or domestic supply crunch. But, certainly suppliers in both India and China are now not chasing buyers so much.