Monthly Archives: April 2013

Mumbai structure prices open at same level

Light Structure prices in Mumbai continue to remain same as Angle 40, 65 open at Rs 34,700/t (Basic) with marginal downward of Rs 200-300/t W-o-W basis. MS Ingot (ladle) today offers at Rs 29,900-30,000/t down by Rs 100/t with W-o-W change of Rs 800/t. MS Billet is offers at Rs 30,100/t low by Rs 100/t. Heavy melting scrap (super heavy) last traded at Rs 23,000-23,500/t (basic). 12MM TMT yesterday traded at Rs 33,900-34,300/t down by Rs 100/t. 

Offers of premium brand of Angle 40×6, 35×5, 65×6 remain at Rs 34,900-35,600/t whereas other local offers were Rs 34,700/t (basic). In line 25×3 Angle is available at Rs 37,700/t and Flat of 40×6 is available at Rs 35,100/t.

 

India-IDCOL (Odisha) floats tender for sale of Iron Ore

Industrial Development Corporation of Odisha Ltd (IDCOL), a state owned miner has floated tender for sale of total 30,700 tonnes of high grade Iron ore from its Roida mines located in Odisha.

As per tender documents quantity of 10,700 tonnes of high grade (Fe 65%) is on for sale of size 5-18mm and another quantity of high grade lumps of 5-150mm and grade 65% is available for sale on ex-mines basis.

Bids are only acceptable from steel plants for self consumption, no traders and crushing units are eligible to participate, according to tender documents.

Last date of submission of bids is 2nd May 2013.

Current prices of high grade CLO (5-18mm) is working out to be in range of Rs 7,600-7,650/t (Loaded to wagons at major railway sidings in Odisha)

 

A Review of Iron ore Pellet (Indian/Imported) market in April

Indian Iron ore Pellet

In the beginning of AprilIron ore Pellet manufacturers in Odisha, preferred to hold prices in the range of Rs 7,450-7500/MT (Loaded to wagons at Barbil) for  material with Fe% 63, due to advance bookings received.

At Bellary (Karnataka), prices unchanged at Rs 7,400/MT for material with Fe% 62.

Discount of Rs 150/MT was offered to buyers for purchasing 10,000 tons of Pellets at one time

Production of low grade Pellets with Fe% 60 (prices at Rs 6,800/MT ex works), was a compulsion due to limited and inferior quality ore supplied in e-auction.

Week 2 – At Odisha, prices were increased by Rs 100-200/MT on improved demand, higher lumps prices by private miners in Odisha and rise in sponge iron prices.

Rungta mines offers for CLO 5-18 mm lumps with  Fe% 63 was at Rs 7,250/MT (Loaded to Wagons, Barbil)

Sponge iron units expected fall in Pellet prices on NMDC's price cut in lumps.

At Karnataka, offers remained firm.

Week 3 – At Odisha, prices stepped up by Rs 100-200/MT more on anticipations of low supply further, due to approaching monsoons when quality is impacted and not due to a better demand.

Also, a major manufacturer is to take a 20 days shut down on annual maintenance reasons.

Though, new prices were accepted, buyers avoided bulk purchases on price gap in lumps and Pellets.

In Karnataka, high grade (Fe% 62) Pellet prices were constant.

Low grade material with Fe% 59-60 was cheaper by Rs 200/MT on weak buying interest from 30% of sponge iron units running at 50% capacity.

Hence, Pellet plants were utilizing 70% of total capacity. 

Week 4 – Prices remained firm in eastern and southern region as demand was ok.

Current Ex works Prices (Rs/MT) for Fe% 63 Pellet with M-oM change

Barbil 7700-7850, Up by 200

Jharsuguda 7800, Up by 100

Keonjhar 7400-7650 Up by 200

Raipur 9000 Stable

Tatanagar 7900 Up by 300

Bellary 7,100 (Fe% 62) Stable and 6,600 (Fe% 59) Down by 300

Imported Pellet

Week 1 – Importers of Iron ore Pellet (Fe% 65) located in Gandhidham (Gujarat), which imports about one lac tons of Pellet per month, received offers, unchanged at $170-172/CFR India.

Imported Pellet was preferred on factors such as:

  • Low phosphorus content (0.2%)
  • Low silicon content (2.5%)
  • High Fe content (64%)
  • Freight cost of carrying Pellet from Karnataka is Rs 2,200, landed costs stands at around Rs 9,550/MT and above
  • Pellets offered from Karnataka are of low grade i.e. with Fe% 58-60, which is not very suitable for use
  • From Odisha, it is not feasible to get the material through trucks. And through railways, we have to take risks as there are chances of the material being carried away.

Week 3 – Offers dropped by $5/MT to $170-172/MT CFR India from Gulf region, on falling spot iron ore prices in China.

Buying interest was low and importers preferred Pellets from KIOCL on the below stated reasons:

Imported Pellet v/s KIOCL Pellet

  • Grade           Fe% 65 Fe% 63
  • Price (basic)  7,600    9,000
  • Landed cost  8,800    10,000
  • Silica,alumina5%       7%
  • Phosphorus   0.04%  Higher

Importers were also disinterested to procure expensive and low grade lumps, available in limited quantities in domestic market.

 

INDIA- Bhavnagar ship cutting scrap remains constant

Bhavnagar
ship breaking plates and HMS scrap prices open at same level at Rs 22,800-900/t
after it increased marginally yesterday.

Rolling
plate cutting scrap also unchanged and offered as same as yesterday. Scrap of 4
ANI plate offered at Rs 23,900/t, 6 ANI at Rs 24,900/t and 12 ANI at Rs
26,400/t, all prices basic.

HMS (80:20) scrap offered at Kolkata stands at Rs
22,300-22,800/t (Basic), Chennai at Rs 23,000/t (Basic Prices).


Market
traders highlight that scrap sales have been hit as sponge iron (DRI) prices in
India have hit hard in last 2-weeks.

 

CIL to supply coal on domestic prices to pre-2009 projects 

State-owned Coal India Ltd (CIL) will continue its supply of coal at domestic prices to power projects commissioned before 2009, while the post-2009 plants, which have signed power purchase agreements (PPAs) with producers, will get the dry fuel largely at cost plus basis.

“The Cabinet Committee on Investment (CCI) on April 22 decided that CIL will continue to supply domestic coal at 90 per cent of the annual contracted quantity (ACQ) for pre-2009 projects,” official sources said.

In case of post-2009 power projects that have either been commissioned or will be commissioned by March 31, 2015, where letters of assurance have been issued and PPAs concluded, will get 65 percent of the ACQ on cost plus basis, sources said. New projects commissioned after 2009 largely have a cost-plus mechanism for calculation of electricity tariff and so any higher imported cost of coal will be passed through to the consumers.

This has apparently put an end to the logjam between the coal and power ministries over the pooling of price of imported and domestic coal. The power projects commissioned before 2009 aggregate a capacity of 65,185 MW, whereas post-2009 projects have a capacity of 36,000 MW. Sources further said that the present arrangement however “will not cover the projects where tapering linkages have been issued”.

“The Committee further decided that the details of other post-2009 projects where PPAs have not been signed or have been concluded on a competitive bid basis or projects with high bank exposure will be ascertained.” It directed officials to work out detailed modalities by the first week of next month added sources. 

Earlier, an inter-ministerial panel was formed, under the chairmanship of coal secretary S K Srivastava, to look into the pricing issues impacting power generation. The cabinet committee on economic affairs in February had approved in-principle the price pooling mechanism while Planning Commission deputy chairman Montek Singh Ahluwalia recently said that coal pool pricing may lead to revision in power tariffs.

The Prime Minister's Office had earlier directed CIL and Central Electricity Authority (CEA) to work on pooling coal prices to ensure 80 % supplies to power plants. 

Sourced

 

Thermal coal market remains constant

Prices of non-coking coal from Indonesia and South Africa have remained firm due to low buying interest from traders, summer season and Indonesia fulfilling supply orders till May end.

Offers for Indonesian 3800 GAR (Sumatra) are between $32-33/MT (FoB) and 3800 GAR (South Kalimantan) are in the range of $36-37/MT (FoB). However 4200 GAR is in the range of $42-43/MT (FoB). South African RB1 (6000 NAR) material is available and is being quoted around $80-81/MT.

According to an Importer based in Ahemdabad, “Prices of 3800 GAR (Sumatra) are low due to high moisture content in the coal compared to 3800 GAR (South Kalimantan)”. Freight cost is stagnant at this time, any change in freight will be seen after the month of May with the onset of monsoon he further added.

Supramax freight from Indonesia (South Kalimantan) to East Cost of India is constant at around $12/MT, whereas it costs around $14/MT when it reaches West Coast of India. 

 

Indian Billet manufacturers fail to hold offers; prices down by Rs 200-300/t

There is no stopping in fall in billet prices in Indian market.Prices have corrected upto Rs 1,000/t in last one week on falling re-bar and structure prices which have also corrected over Rs 1,000/t (W-o-W).

Damage has been maximum in western region as trade has been affected by strike opposing LBT tax in Maharashtra.

Traders based in central India, blame poor demand for finished steel from Southern India, which is leading to fall in semi finished prices.

 

NMDC received high bids for fines offered on Apr 29 e-auction

From its Donimalai mines located in the state of Karnataka, NMDC offered a total of 68,000 MT of Iron ore fines with Fe% 60-60.50, on April 29.

The bid price was a 27.35% increase over the floor price. Booking price was in the range of Rs 2,566-3,029/MT; floor price at Rs 2,110-2,179/MT.

No. of bidders 5, winners 3 and no. of bids 267.

NMDC sold 88% (60,000 MT) of the total quantity (68,000 MT) of fines offered.

Buyers: JSW Steel (44,000 MT), Sesa Goa (8,000 MT) and BMM Ispat (8,000 MT).

NMDC's iron ore fines e-auction met with a stiff competition among 3 parties, as a total of 267 bids were received, who were looking to procure fines in maximum possible quantity.

JSW is currently utilizing 70% of total production capacity and to maintain operations at current levels, it bid high, having the beneficiation facilities to convert the inferior quality fines to high grade for further use.

Sesa Goa's Pig iron plant is presently running at 60-70% capacity and to continue the current level, it procured fines at high prices. Market for foundry grade Pig iron is not good at the moment, as consumption has come down drastically on cheaper scrap and steel grade Pig iron.

Manufacturers are selling foundry grade material at prices below manufacturing cost.

BMM Ispat also has the advantage of its beneficiation plant in Bellary and would be utilizing it further for Pellet making.

Details of material sold out, Price in (Rs/MT):

20,000 MT Fe% 60.50 Floor price 2,179

JSW 12,000 MT at 3,039 (had bid for 20,000 MT)

Sesa Goa 8,000 MT at 3,029

20,000 MT Fe% 60 Floor price 2,110

JSW 16,000 MT at 2,590

BMM 4,000 MT at 2,580 (had bid for 8,000 MT)

20,000 MT Fe% 60.20 Floor price 2,146

JSW 16,000 MT at 2,576

BMM 4,000 MT at 2,566 (had bid for 8,000 MT)

Royalty 10%, VAT 5.5% (on auction price and royalty), FDT 12% are applicable. Bid value quoted is the basic price in Rs/WMT (Wet Metric Ton).

 

Indian Silico Manganese price drops due to weak demand

Kolkata, India

Owing to limited buying activity witnessed Silico Manganese market weakness continues. Silico Manganese prices slid in line with Steel prices in the Secondary market, which has corrected by about Rs. 1500/MT in last 2 weeks. Current offers for Silico Manganese 60-14 are in the range of Rs. 53,000 – 54,000 /MT. Some producers are quoting at Rs. 54,000 – 55,000 for the same grade, but are unable to conclude any deals.

 

SAIL has announced a tender for procurement of 49,048 MT of Silico Manganese for its various plants. The Due Date for submission of bids is on 14th May 2013. The general perception of the impact of this SAIL tender is that a tender of such huge quantity would create a shortage of Silico Manganese in the open market and result in increased prices. But, this would be in the very short-term as it has been witnessed earlier- a little increase in prices would be offset by increase in production, as most producers are currently functioning at low capacities.

Earlier in this month manufacturers have raised their offers up to Rs 2000/t over hike in power tariffs and hike in manganese ore prices by MOIL (Manganese Ore India Ltd), but that impact looked to be short lived after steel prices corrected sharply.

Manufacturers/exporters maintained their export offers at similar levels, 65/15 grade SiMn is offered in the range of $1070-1080/t FOB Vizag port and 65/16 at around $1080-1100/t FOB.

 

Indian Iron ore Exporters Cut Purchases in the Domestic Market

Indian Iron ore exports have reported to come down drastically in 2012-2013 on high export duty and high railway freight charges. Falling spot Iron ore prices in Chinese market have made Indian exporters cut their purchases in the domestic market.

In conversation with a few exporters and traders, SteelMint assessed that offers for 62% Fe iron fines stand at around Rs 4,000/MT (Delivered Vizag Port), Fe 59/58% iron fines at around Rs 3,300-3,400/MT (Delivered Vizag Port) and Fe 56% iron fines at around Rs 3,000/MT delivered Vizag port.

Indian exporters concluded few deals for Mill Scale at Vizag port at around Rs 5,100-5,200/MT and Rs 4,700/MT at Kandla port.