Monthly Archives: September 2013

Iron Ore Exports likely to drop in Near Future- Indian Exporters

Exports of Iron ore from India, which had jumped sharply in 2nd quarter (July-September), are likely to plunge in 3rd quarter according to Indian exporters owing to the following reasons:

  • Improving Indian rupee against US dollar
  • Falling spot iron ore prices in Chinese market
  • Implementation of busy season charge by Indian railways (from Oct-Mar)

“Exports have gone up primarily due to weak Rupee and high prices in Chinese market. Margins were good when spot prices of 63% Fe Iron ore was at around USD 136-137/MT CFR China and Rupee was at 65 odd levels.

 

Now when prices have come down to around USD 132/MT and Rupee is at 62/ US dollar, margins have fallen. Above that, with busy route charges getting effective from 1st Oct, cost will further go up by INR 500-600/MT.

 

Overall exports will certainly decline in coming months, said an Iron ore exporter based in Eastern region of India.

On the other hand, ban on mining and exports imposed in Goa (in Oct 2012) has also hit overall exports from India. In 2012-2013 Goa alone exported around 7-7.2 million tonnes against a total Indian exports of 18 million tonnes.

 

According to SteelMint, India exported around 5 MnT of Iron ore in 2nd quarter against 2.5-3 MnT in 1st quarter. India has lost its place in sea-borne Iron ore market since Indian government has tried to reserve Iron ore for domestic use.

 

India: NINL likely to revise Pig Iron Prices on October 01 

Neelachal Ispat Nigam Limited (NINL), India's largest Pig iron producer since 2004-05 and rice setter of Indian Pig iron industry, might revise prices of its material on October 01.

Current Stock Position 

The current inventory position of NINL's Pig iron is on the lower side. Only about 15,000 tonnes of Steel/N1 grade material is available presently.

Stock of Steel/N2 grade is quite low and foundry/N3 grade Pig iron is not available.

NINL's current Pig iron prices 


Grade Si%             Price (INR/MT)


N1     Up to 1.24   23,500

N2     1.25-1.79    24,000

(Basic Prices; Ex NINL Plant basis)

Expected Price Trend of NINL's Pig Iron in October 

SteelMint thinks that NINL's domestic Pig iron offers do not have any scope for an upward movement.

The company is unable to get rid of its material in large quantities at prevailing price level.

NINL might introduce discount of INR 400-500/MT for purchases of the material in big quantities or cut prices to encourage domestic sales.

The company has recently closed an export deal for 30,000 tonnes of Pig iron at prices close to its domestic offers.

It might offer the additional 30,000 tonnes through a new tender in the month of October.

Why NINL's Pig iron production came down in last 3 years?


Campaign Life of Blast Furnace Needs to be Increased

NINL, with an installed capacity of 0.85 MnT pa, produces Pig iron from a single blast furnace.

It was commissioned about 11-12 years back and requires repairs and maintenance in order to enhance its efficiency.

Issues around Raw material procurement

The Pig iron manufacturer procures Iron ore from miners such as OMC, NMDC and private mines in Odisha.

Iron ore availability in limited quantities and at high prices, have impacted the production level.

Total Capacity Utilization of BF

Since 2004-05, NINL has utilized only 57-77% of its total installed capacity for manufacturing Pig iron.

The blast furnace has produced about 4.9 MnT pa of the material which includes 57% of sales to export market.

Apart from domestic sales, about 20-30% of the total Pig iron production is being used in Steel making and NINL is also a consistent exporter of its material.

 

India: Passenger Vehicles sales declined by 5.3% Y-o-Y (April-August)

* Passenger Vehicles sales declined by 

   5.3% during April-August, 2013

* Dealer's inventories rose to 40%

* Dealers are expecting that it's difficult to

   match last year's festive season demand

 

 

Society of Automobile Manufacturers (SIAM) has revealed that passenger vehicles sales have been declined by 5.3% during April to August, during the last year's same period.

 

As SIAM reported, passenger vehicles sales have been declined 5.3% during April-August 2013, compared with the same period last year. Within the passenger vehicles segment, sales of passenger cars, utility vehicles and vans dropped 5.80%, 3.11% and 6.24%, respectively. Which add the inventory at the dealers end to that and things begin to look much grimmer.

 

 

The slowing automobile industry seems to be deeper than the SIAM figures indicate. With comparison to previous year, inventories with dealer has increased by 40%

 

Federation of Automobile Dealers Associations' (FADA) Secretary, Mr. Gulshan Ahuja has said to media, “The average inventory at the dealers end is more than two months. Given that there are 2,800-3,000 passenger car dealers in the country, if one considers an average of INR 10 million worth of inventory per dealer, it means dealers are sitting on an inventory worth around INR 3,0000 million .”

 

The average per-dealer inventory had stood at around INR 6.0 million last year, say dealer sources. The average inventory for dealers, then, was around three-four weeks. The number is significant because when car companies sell automobiles to dealers, these reflect as 'sold' on their books.

 

 

One of Ahmedabad -based car dealer has reported that, Last year car selling was around 400 cars per month on an average but this selling an average 270 cars per month. 

 

“Since March this year, sales are down by around 35% at the dealers' end. In good times, the inventory turnaround time is 24-30 days. A dealer always maintains a month's inventory. But, due to slow off take, the inventory level has gone up to around two months,” the dealer claims.

 

SIAM also has mentioned that compared with last financial year, the industry could be staring at lower sales this year. SIAM's Deputy Director-General, Sugato Sen had said in September “If we have to match last year's 2.7 million units, we need to be selling over 200,000 units each month. But in the past three months, we have sold less than that.”

 

 

India: Iron Fines Prices increased by 12.5% on 27th September E-Auction

Iron ore e-auction result, which was held on 27th September'13, conducted by MSTC on behalf of various mines and stockyards in Karnataka. The total quantity of Iron ore offered for sale was 460,000MT out of which 268,000MT of Iron ore was sold i.e. 58%.

 

Auction1: Total number of bid came 304 out of which number of bidders was 15 and winner13.

Auction2: Total number of bid came 406 out of which number of bidders was 11 and winner 07.

 

In auction1 Iron ore fines booking price is increased by 12% against the floor price and Iron ore lumps price increased by 0.5% against the floor price.

 

In auction2 Iron ore fines booking price increased by 13% and Rom price by 26% against the floor price. Whereas, Iron ore lumps was sold on floor price.

 

Details of Bidding Quantity: Auction1

 

Iron ore fines 84,000 MT

Iron ore Lumps 96,000 MT

 

Overall Iron ore booking price increased by 4.66% against the floor price in auction1. The main bidder was JSW Steel Ltd, which purchased 55% of Iron ore.

 

 Average booking price for Fe 63% Iron or fines is INR 3160/MT and 57% INR 2705.Iron ore lumps Grade Fe 58-60% average price was INR 3021/MT.

 

Details of Bidding Quantity: Auction2

 

Iron ore lumps 12,000MT

ROM 28,000 MT

Iron ore fines 76,000MT

 

Overall Iron ore booking price increased by 14% against the floor price in auction2.The main bidders were JSW Steel Ltd and MSPL Ltd. JSW Steel ltd purchased 57% of Iron ore and MSPL Ltd purchased 15% of Iron ore  

 

Average booking price for Fe 63.5% Iron or fines was INR 3795/MT

 

 

Manganese Ore Auction in Karnataka Fetches Lower Bids

India's state-owned trading company MSTC, which had conducted the e-auction of manganese ore in Karnataka has fetched fewer bids, with most of the material being bought by Manganese Alloy producers from the Southern states of India, as imported Manganese Ore is still expensive with the weak Rupee. The Percentage Increase in winning bids received over Floor Value stood at 16.29 in the recently concluded e-auction, whereas, in the previous e-auction it stood at 31.75.

About 9,424 tonnes of Manganese Ore was put on auction all of which was auctioned from SMIORE, Bellary. The winning bids for the recently concluded e-auction were substantially lower to the previous e-auction, as demand for domestic Ore has waned with imported Ore available at lower prices due to the strengthening of the Rupee and correction in offer prices by international miners. The manganese content of the material offered ranges from 20-22%, 26-28% and 28-30%, according to information on MSTC's website.

For, Mn% Range= 20 to 22; Fe% Range= 28 to 30

Average H1 (winning bids) is around INR 1,356 /MT, with a Floor price of INR 750 /MT.

For, Mn% Range= 26 to 28; Fe% Range= 22 to 27

Average H1 (winning bids) is around INR 5,441 /MT, with a Floor price of INR 5000 /MT. 

Meanwhile, offers from private miners in Balaghat could not be confirmed, as they are awaiting the announcement by MOIL for its offer prices for the next quarter, which is expected to be made in the first week of October. With the strengthening of the Rupee, Manganese Ore imports into India have increased and it is expected MOIL will offer at similar levels to the import prices.

 

India: Semi Finish Prices continue to see Support at Present

MS Ingot prices remained stable last week and market participants expect it to remain firm this week as well over steady raw material prices and limited semi finish production. The week's major highlights are:

 

  • Mandi Gobindgarh: MS Ingot prices remain firm with availability of Scrap which has increased because of limited production of Ingot.  Power tariff during night shift has been reduced at a concessional rate of INR 1 per unit from earlier 7.25/unit from 10 pm to 6 pm. However manufacturers have not yet received any bill with reduced tariff.
  • Raipur: Sponge Iron prices continue to trade which remain firm with buying from Maharashtra, U.P and local market. SteelMint learned that because of low scrap availability in Maharashtra, Sponge iron's demand has increased in the market. Whereas, many Sponge units (4-7) in Raipur are in maintenance due to lack of Iron ore. Market participants believe that, this week Iron ore's availability will increase and close plants will resume production.
  • Raigarh: Sponge availability has also decreased as many units have been shifted to Jindal conversion of Sponge Iron over Iron ore supply by Jindal. Raigarh Sponge iron feeding is presently carried by Rourkela manufacturer at INR 19,700-20,000/MT FoR Raigarh.
  • Durgapur: Market continues exporting Billets to Bangladesh at Ex works USD 450-455.
  • Re-bar's demand in M.P continues to remain low as border remains closed for sales audit. Central India's major production (around 60%) of Finish long is being supplied to M.P.
  • Maharashtra, the biggest producer of Finish long remain subdued as Re-bar prices corrected by INR 500/MT W-o-W similar to South Indian market where Re-bar prices are trading low at INR 400/MT W-o-W.
 

Australia: Newcastle Shipments slipped by 8.4% W-o-W

* Newcastle Port, Coal exports shipment dropped by 8.4%

* 11.5 MnT of Coal has been shipped in September so far

Australia's leading Coal exporting, Newcastle Port's Coal shipment during week ended 30 September, 2013 is down by 8.4% as compared to preceding week, port report says.

During the week under review, the port shipped around 2.7 MnT of Coal and a total of 11.5 MnT of the material has been shipped to different destinations in the month so far.

As forecasted by the Port, around 12.2 MnT of Coal including both Coking and Non-coking is expected to be shipped during the month. However, on current situation, port is estimating to ship around 11.96 MnT in September on the basis of actual shipped plus projected balance from Coal terminal.

The Port has also reported that during the week ended 30 September, 33 vessels entered the port for loading with an average waiting time of 5.21 days. However, during the preceding week around 25 vessels had entered the Port with an average waiting time of around 5.19 days.

At the end of the week, 7 vessels were loading Coal, 7 vessels were waiting to get loaded and 38 vessels were expected to reach the Port.

SteelMint assessed that Coal's demand from China and Japan has slightly improved and is offering 6,000 NAR (Kcal/Kg) Thermal Coal at USD 82-84/MT, which gained USD 2-3/MT last week and remained at the same level at the beginning of 39th week. Whereas, it is noted that offers for Australian Coking Coal slightly dropped during last week and was quoted at around USD 150-152/MT for Premium Hard Coal (VM-20.7%, CSR-74%, ASH-10.5%).

 

Indian Sponge Iron Prices correct Marginally W-o-W

  • Indian sponge iron prices correct marginally W-o-W
  • Indian Scrap importers see imports increasing on Rupee appreciation
  • 'Busy season charge' will increase sponge iron cost of production by INR 150-200/MT

 

Indian sponge iron prices trade marginally lower as compared to last week. Market traders highlight that with rupee finding strength against US dollar, imports of Scrap is expected to go up in coming weeks, which might put some pressure on sponge iron prices.

 

Current prices at Chhattisgarh, India's largest sponge producing state, stands at around INR 20,100-20,300/MT (Ex Raipur) and INR 19,800-20,000/MT (Ex Raigarh). Sponge iron in Odisha being offered at INR 18,700-18,800/MT and West Bengal at around INR 19,300-19,500/MT.

 

Sponge manufacturers mention that overall cost of production will go up by INR 150-200/MT after 'busy season charge' by Indian railways under dynamic pricing policy ,gets effective from 1st October'13. However participants believe that this marginal hike will not increase prices to a great extent. 

 

Sponge iron prices which were trading at a low of almost 2 years last month had shown significant jump, after Rupee crashed to 69 levels.

 

India is the largest producer of sponge iron in the world with an installed capacity of over 35 MnT pa, however with several restriction implied on mining, sponge iron production has been hit hard. According to sponge iron manufacturer's association, production in FY'13 stands at around 18-19 MnT.

 

India: SAIL invites Global Tender for Import of Hard Coking Coal

SAIL, one of India's largest Steel manufacturers invites bid from overseas Coal producers/suppliers for supply of 300,000 MT washed/unwashed hard coking coal (size 0-50 mm) to be delivered during January 2014 to March 2014 with the first shipment to be made in January 2014.

General Conditions:

1. Established overseas Coal producers owning, managing and controlling coal mines and producing washed/unwashed hard coking coal

Or

Established overseas Coal suppliers offering hard coking coal produced by

overseas Coal producers,duly by a Letter of Authority of the concerned Coal producer, specifically authorizing the said Coal supplier and no one else to make an offer in response to this invitation to Bid

2. SAIL reserves the right to conclude the contract on FOB(T) or C&F (FO) or part  FOB(T) and part C&F (FO) basis and also to take the coal to any of the above stated discharge ports

3. Bidder must quote for a minimum quantity of one panamax shipment of about 75,000 MT +/- 10%

Specifications:

Ash: 8% Max

Volatile Matter: 20-32%

Important Dates: 

Due Date: 12.00 hrs (IST) on 11 Nov, 2013

 

India: Fines Price increased by 18% on 26th September E-Auction

Iron ore e-auction results held on 26th September in Karnataka got a good response from the bidders. 92% of Iron ore was purchased by the bidders. The total quantity of Iron ore offered for sale 734,000MT out of which the bid came for 678,000MTof Iron ore.

 

Auction1: Total number of bid came are 188 out of which number of bidders was 10 and winner09.

Auction2: Total number of bid came 135 out of which number of bidders was 07 and winner 05.

 

In auction 1 Iron ore fines price increased by 18.1% and ROM price increased by 2.1% whereas in auction 2 Iron ore fines price increased by 18%

 

Detail of quantity: Auction1

Iron ore fines 286,000 MT

ROM 72,000 MT

 

Overall increase in booking price of Iron ore against the floor is 6.67%. The main bidder in auction1 was JSW Steel Ltd, BMM Ispat, Divyajyoti Steels Ltd and MSPL Ltd. JSW Steel Ltd purchased 43% of Fines and 38 % of ROM. 37% of Fines and 33% ROM was purchased by BMM Ispat Ltd. Divyajyoti Steel Ltd purchase 24000MT of Iron Fines.

 

Detail of quantity: Auction2

Iron ore fines 80,000 MT

Iron ore Lumps 240,000 MT

 

Iron ore booking price increased by 2.20% against the floor price. The main bidders in auction2 was JSW Steel Ltd, BMM Ispat Ltd and Xindia Steels Ltd. 96% of Iron ore lumps was purchased by JSW Steel ltd. BMM Ispat Ltd and Xindia Steel Ltd purchased 12000MT Iron fines each whereas JSW Steel Purchased 50% of Iron ore Fines.