Sponge Manufacturer’s started feeling the heat of the low Sponge price and better realization to Furnace. SteelMint learned that increasing demand and high input cost may boost the Sponge prices anytime soon.
Main reasons that may trigger Sponge price are:
Increased MS Ingot/Billet Production: We can see that Sponge offers from last 5-6 days experienced a slight hike owing to improve demand. Recently, increased production (around 30-40%) of MS Ingot/Billet in Central, West & North regions in India will increase the Sponge demand in near future.
Increase cost of Iron ore: Hike in Iron ore prices by INR 200-600/MT in a week’s time may increase the cost of Sponge. NMDC increased the price by INR 200/MT M-o-M on Dec’13. Odisha miners also increased their Iron ore price by INR 400/MT in mid Dec’13 that impacted Pellet prices resulting in a increase by INR 500-600/MT M-o-M. It’s in the news that Odisha miners may increase further price their Iron ore in Jan’14 due to shortage.
Improve Finish demand: Seasonal demand supporting Semi Finish demand (Sponge, MS Ingot/Billet) across India. Increased Re-bar prices by INR 700-1,500/MT in a week’s time, is a sign of Increase sales.
“December mid to March there is a seasonal demand as construction activity expedite. Prices may remain high due to Scrap shortage and limited production,” commented a TMT manufacturer based at Jalna.
Price may feel pressure due to:
• Increase production of Pellet and Pellet Sponge will keep a check in Sponge iron prices.
• Low buying and low stock maintained by Ingot/Billet manufacturer
• Sponge iron mix in melting is low due to better availability of domestic and imported Scrap.
NMDC is a state-controlled mineral producer of the Government of India. NMDC’s Bailadila mines (Kirandul & Bacheli) in Chhattisgarh, offers sale of Iron ore through E- auction.
The material will be delivered on FOR/FOT Mine basis. The last date for the submission of EMD & Online Forward Auction (OFA) document is up to 12.00 hrs IST on 09 Jan, 2014.
The date of auction is on same day i.e. 10 Dec, 2013, which is scheduled to commence between 13.00 to 15.00 hrs IST.
Details of the quantity offered:
- Calibrated Lumps ore:
Quantity: 44,000 MT
- Iron ore Fines:
Quantity: 60,000 MT
- Iron ore Lumps:
Quantity: 24,000 MT
Total quantity: Iron ore offered for sale is 148,000 MT.
For transportation of Iron ore, as per Government of Chhattisgarh order, a transit fee of INR 7/MT is collected by NMDC and paid to the CG forest division.
The transit fee will be in addition to Royalty, Sales tax/ VAT, Forrest development Tax, Forrest permit fee and labor welfare cess etc. will be applicable at the time of supplies or that may be introduced in future are payable by the successful bidders.
MMTC, through an export tender on behalf on NINL, had offered 30,000 MT Pig iron to international buyers on 11 Dec, 2013.
On 23 Dec, the exporter received highest bid at USD 392.33/MT FoB Paradip Port from the Switzerland based trader Prime Carbon GmbH. Another Singapore based trader MMTC Transnational Pte Ltd (MTPL) had participated on behalf of Starcom Resources Pte Ltd and bid at 389.61.
Today, MMTC decided to close the deal with the highest bidder. Specification of the material is N1/Steel grade & Si is up to 1.24%. Shipment of the material will take place between 20-31 Jan, 2013.
The exporter has received higher realizations by around INR 550/MT from export market in comparison to domestic prices at INR 23,500/MT (ex plant).
MMTC’s Pig iron Export Deals in Q3 FY14
||Qty (in MT)
||Price (USD/MT FoB)
|| Prime Carbon GmbH (Switzerland)
|20 to 31 Jan
|| Prime Carbon GmbH (Switzerland)
|20 to 31 Dec
|| Prime Carbon GmbH (Switzerland)
|25 Nov to 10 Dec
|| MMTC Transnational Pte Ltd (Singapore)
|By Nov 10
MMTC is India’s largest international trading company and offers Pig iron for exports on behalf of NINL (Cuttack), the largest Pig iron producer and exporter in India with 0.85 MnT pa installed capacity. The former sets domestic Pig iron prices for NINL too.
High Carbon Ferro Chrome prices were unmoved from last week as there was resilient demand from end-users.
Current price for HC Ferro Chrome (60% Grade) is settled INR 71,500-72,000 /MT (Ex-Works Odisha) and INR 72,000 – 72,500 /MT (Ex-Raigarh).FACOR Alloys one of India’s largest and established producers and exporters of High Carbon Ferro Chrome is offering HC Ferro Chrome at INR 73,500 /MT.
Chinese import prices for Ferro Chrome and charge chrome were flat this week with little demand for imports at year-end. The spot price for Indian origin high carbon Ferro Chrome (58-60% Cr) was assessed at 84-85 cents/lb CIF China, and that for South African charge chrome (48-52% Cr) at 83-84 cents/lb CIF China Friday, both unchanged from a week earlier.
Domestic spot prices of High Carbon Ferro Chrome (50% basis Cr) in China were Yuan 6,750-6,900/MT (84-86 cents/ lb), on a delivered basis including 17% VAT.
Although demand for imports remained weak, market participants saw support for domestic and import prices in the near-term after China’s largest stainless producer — Shanxi Taigang Stainless Steel lifted its January purchase price and on higher first quarter term contract settlements in Europe and Japan. Taigang lifted its Ferro Chrome purchase price by Yuan 20/MT (USD 3/MT) month on month to Yuan 6,650/MT (equivalent to 82 cents/lb) for January deliveries. Its competitors, including Baosteel, Jiuquan Iron & Steel and Tsingshan Holdings, all rolled over purchase prices for January.
The spot price of high-carbon Ferro Chrome (60-65% Cr) exported to Japan was assessed unchanged from last week at 89-91 cents/lb CIF Japan, amid thin trading ahead of the year-end. There was no other deal, bid or offer reported this week.
SteelMint learned from market sources that there is confidence in the market for High Carbon Ferro Chrome, as most market participants are holding a positive outlook with better demand expected in the coming year.
Exchange Rate: USD 1= INR 61.87
Hindustan Paper Corporation (HPC) invites bid from Coal suppliers to supply Meghalaya Coal by road at Nagaon Paper Mill (NPM), Kagajnagar, (Assam).
- Bidder must possess an experience of supplying at least 10% quantity of Coal mentioned in this tender by road to any reputed party for a year in the last 7 financial years.Bidder should offer a minimum of 20% of tender quantity.
- Annual turnover/transaction in the last 3 financial years ending 31st March should be minimum INR 100 million.
- Bidders shall quote all-inclusive rate delivered at NPM Coal yard basis. (Inclusive of freight/levies/duties/cess/loading/unloading and any other incidental charges).
- The period of order may be divided into monthly/weekly/daily schedules and shall be stipulated in the order or intimated from time to time.
- Supply shall be made on staggered basis, evenly spread out as per purchaser’s requirement.
Quantity: 50,000 MT
- GCV: 6,200 Kcal/Kg (min)
- Fixed Carbon: 45-48%
- Size: 25-300 mm
- Ash: 16% max
Important Time & Dates:
- Bid Submission Due Date: 15.00 hrs IST on 17 Jan, 2014
- Bid Opening Date: After 15.00 hrs IST on 17 Jan, 2014
HPC group has four paper mills, two of which are units and two are subsidiary companies. HPC is the holding company for Hindustan Newsprint (HNL) and Nagaland Pulp & Paper Company (NPPC). Nagaon Paper Mill (NPM) and Cachar Paper Mill (CPM) function directly under HPC’s control and their performance is reflected in HPC’s operating results.
Iron Ore fines prices remain same at around USD 133/MT CFR China, the Spot sales price of Fe 63.5 keeps stable at around RMB 920/WMT (vat included) in Tianjin port.
The Sea borne Iron ore market tends to pick, doubting the supply of material by Steel Mills owing to bad weather in near future.
In early trading, spot prices for Fe 61.5 PB fines stay at around RMB 880/WMT at Qingdao Port and foreign quotes remain unchanged around USD 133/DMT CFR China. Currently, Square Billet prices are at around RMB 2,980/MT (EXW; VAT included) in Tangshan. The most traded rebar contract for May delivery opens at RMB 3,574/MT, up by RMB 1/MT from its previous close.
China based traders sold Iron ore at following prices at various ports:
USD 1 = RMB 6.0969
Justice M.B. Shah Commission’s report on illegal mining in Odisha is yet to be made public. The Odisha government has submitted its response on the M.B.Shah Commission’s report to the union government. However sources close to this matter believe that things will not be as severe as they were in Karnataka and Goa.
In Dec 2013, India exported 139,500 MT Iron Pellet to China.
Exports dropped by 59.9% M-o-M in comparison to 347,800 MT exported in Nov 2013. In the current month, 88,300 MT Pellets was shipped (Provisional data till 25 Dec) from Paradip Port; the rest 51,200 MT from Gangavaram Port.
A couple of deals were finalized by Indian exporters this month
After 15 months, KIOCL concluded 50,000 MT (Fe 63) export deal with a Singapore based trader at USD 161.65/MT FoB. KIOCL received high realization of around INR 500/MT as it offered a big quantity for immediate shipment (December).
An Odisha based Pellet maker closed 30,000 MT (Fe 63) deal at INR 7,100/MT (ex plant), with a Kolkata (West Bengal) base trader. Shipment took place from Haldi Port in December. Freight from Plant to Port was around INR 1,650/MT and vessel freight at USD 20.
Exports weakened in December because of rise in freight charges and better realizations from domestic sales.
Pellet Export Market active amid Weak Rupee
Depreciated Rupee at 62 against USD has -significantly supported exports of Pellets from India, since July. Once Rupee appreciates to 58-59 against USD, exports of Pellet would not be viable.
Indian Chamber of Commerce (ICC) has written to Fin Min for imposing a ban on exports of Pellets (a 30% duty on exports) from India amid falling Iron ore production. Previous to this, Assocham had urged the Centre to impose 30% duty on Pellet and ensure Iron ore availability to domestic market and increase in DRI output.
Iron Pellet exports have significantly increased in FY14. Whereas, Iron ore production ame down 14% to in H1 FY14. According to ICC, exporters are paying no duty and misusing Pellets, when the Steel industry is suffering from low Iron ore supply.
License for Blast Furnace-1 expires today
Bhushan Steel, whose blast furnace-2 has been closed since the deadly accident in November is facing another challenge as the license of its Blast furnace-1 is expiring today and the Odisha Pollution Control Board (OPCB) has set several stringent norms for the renewal.
According to sources the license of the Blast furnance-1 is valid till today i.e.31st December and the Dhenkanal (Odisha) based company has already applied for the renewal of the license. But after the fire mishap in the blast furnance-2 in November OPCB does not want to take any chances in view of the security risks involves.
The current license has been given on the name of an ‘occupier’, Mr. Rahul Sengupta a general employee of the company who is responsible for any accidents. However, the OPCB wants the license to be issued in the name of the promoter of the company, director or the any stakeholder of the company, which the company is objecting.
The blast furnace-2 has been sealed by the authorities after the blast in November. If license of the Blast Furnace-1 is not renewed, company has to close down its only running blast furnace.
Justice M.B. Shah Commission’s report on illegal mining in Odisha is yet to be made public. However sources close to this matter believe that things will not be as severe as they were in Karnataka and Goa
The Odisha government has submitted its response on the M.B.Shah Commission’s report to the union government. However, this response is for the first phase of the report submitted in last July. According to sources, the state government has informed the central government about the action taken on the basis of the 1st phase report of the probe panel.
The state government has sent the action taken report on the issues like excess lifting of minerals, mining without forest and environmental clearance, mining beyond the boundary, discrepancies in Deemed renewal clause etc. The center would verify the response of the state and submit in the union cabinet before submitting the report in the parliament.
The union mines ministry has constituted the Shah panel headed by Justice M.B.Shah on November 2010 for carrying out investigation into the multi million-dollar illegal mining cases in several mineral-bearing states including Odisha. Initially the tenure of the commission was to expire on July 2012, but later it had been extended till 16th July 2013. The commission has visited Odisha several times for investigation on the illegal mining cases.
In view of Chinese New Year ahead, its Non- coking Coal buying slowed and Thermal Coal demand subdued amid upcoming Chinese New Year.
Market participants say Chinese buyers are not actively trading, but checking only high grade Non-Coking Coal from Australia and Indonesia. As some of the spot trades have been heard at USD 70-71/MT FOB of 5,800 Kcal/kg (GAR), however Indonesian sellers are offering at USD 71-71.5/MT.
Market participants are expecting Coal demand to jump after Chinese holidays which will also Coal prices will get support from demand.
In 2013, Indonesia has reported Coal production till November to around 388 MnT, whereas their estimation was to produce about 421 MnT in whole year 2013. Indonesia produced 388 MnT of Coal in 2013 (Jan- Nov ) with a total production estimated at about 421 MnT. For 2014 Indonesia has reduced its production estimates to 400 MnT as Ministry is prefers to remain steady on Ccoal production.
Indian Coal demand also seems little passive, as most of the Industries are operating under capacity, which limits their coal demand. Buyers from India are expecting good discount offers from sellers. Traders are offering Indonesian 4,200 Kcal/kg (GAR) Coal at USD 39/MT FOB basis, buyers are bidding around USD 36-37/MT and sellers are unable to up cope with buyers’ expectation. As a result the market is lull.
Few traders have bought 4,200 Kcal/kg (GAR) cargos at Indian West Coast at USD 51.
Experts are expecting market to remain uncertain amid Central Elections and they are more confident for market to rise after elections.
“Market will be clearer after the election only”, a Gujarat based trader said.