Monthly Archives: January 2014

India: NMDC’s 12th Advance Iron Ore E-Auction

NMDC’s 12th Advance Iron ore e-auction for Donimalai mines in the states of Karnataka will be held on 07 Feb, 2014. The total quantity of Iron ore offered for sale in e-auction is 460,000 MT.

MSTC`s monitoring committee will conduct the auction on behalf of NMDC. Auction will commence at 15.00 hrs IST and conclude by 17.00 hrs IST. The inspection of material will take place on 31 Jan to 06 Feb, 2014

Total Quantity of Iron ore offered for Sale

Iron ore lumps: 184,000 MT, Fe: 63.0%, Moisture: 4-6%, under size up to 15%

Iron ore fines: 276,000 MT, Fe: 60.5%, Moisture 6-8%

Weekly Schedule 

Week 1 (15-21 Feb’14) 

  • Iron ore lumps: 44,000 MT
  • Iron ore fines: 64,000 MT

Week 2 (22-28 Feb’14) 

  • Iron ore lumps: 48,000 MT
  • Iron ore fines:  68,000 MT

Week3 (01-07 Mar’14) 

  • Iron ore lumps: 44,000 MT
  • Iron ore fines: 72,000 MT

 Week4 (08-14 Mar’14)

  • Iron ore lumps: 48,000 MT
  • Iron ore fines: 72,000 MT

Royalty 10%, VAT 5.5% (on auction price and royalty), FDT 12% are applicable.

 
sponge manufacturers

Indian Sponge Iron Prices stable on restricted supply of Iron Ore

World’s largest sponge iron producing country, India, with an installed capacity of over 40 MnT, is struggling to operate at optimum level owing to restricted supply of Iron ore.

 

Sponge Iron prices in Indian market are stable owing to restricted supply of Iron ore from Odisha, the largest Iron ore producing state in the Country. Speaking to several Sponge manufacturers based in Eastern & Central region, SteelMint assessed that with ongoing 50:50 rule in Odisha, which mandate miners to sell or reserve 50% for state based industries and rest 50% to outside state has created an imbalance in Iron ore supply.

Manufacturers claim that Iron ore requirement in Odisha is not so high that 50% of total production has to be reserved for state based industries. On one hand, miners have sufficient stocks at their mines and on the other hand, there are limited permissions for sale of Iron ore to outside state.

Sponge manufacturers also blame that Pellet manufacturers are taking undue advantage of this situation by keeping their Pellet prices high as Pellet is an excisable item and do not come under mining regulations.

It is tough to source Iron ore from Odisha. To run our plants, we have to depend on Pellets, which is quite expensive.said a Sponge iron manufacturer based in West Bengal

Price difference between Sponge iron & Sponge pellet

  1. Large availability of Sponge made from Pellet over Sponge made from Iron ore:  After increase production of Sponge pellet in Raipur there is no major changes in Sponge market. Earlier, gap between prices of Sponge Iron and Sponge Pellet are at around INR 900-1,000/MT; now it’s increased by INR 200-300/MT i.e. at around INR 1,200-1,300/MT.There is same situation in Bellary (Karnataka) as gap between Sponge pellet and Sponge iron was at INR 700-800/MT in October, 2013; now it is at INR 1,000/MT.
  2. Induction furnaces and EAF units prefer Sponge iron over Sponge pellet: Owing to low prices of Sponge pellet, Ingot/Billet manufacturers are focusing on utilization of Sponge pellet as on priority. This is also a reason behind stabilize prices of Sponge Iron in Central & Eastern India.

Sponge Prices in INR/MT as on 31 Jan, 2014

Place

Sponge Iron

Sponge Pellet

Diff

Raipur 20,700                           19,400 1,300
Raigarh                    20,100                           19,100 1,000
Rourkela                    19,200
Durgapur                    20,500                           19,500 1,000
Bellary                    19,400                           18,400 1,000
Mandi                    22,900

Basic Prices, Excise duty @12.36%; VAT as applicable.

 

Structure Gauge Difference increased to make better the conversion

Structure manufacturers based at Raipur changed gauge difference to increase conversion. Gauge difference changed for light & heavy Structure only.

Raipur based Structure manufacturers increased gauge difference for light & heavy Structural items. From past few months, conversion cost is regularly falling.

When asked for the reason to change gauge difference, a Raipur based Structure manufacturer said, “During these days conversion from Ingot to Structure (50×5 Angle basic) is at around INR 3,000/MT. If we operate our units on this conversion cost, we have to bare loss of INR 300-500/MT. We must have conversion around INR 3,500-4,000/MT to operate the plant normally.

Earlier, for 40×5 mm Angle INR 400/MT was added in Basic size that is 50×5/6 mm Angle which is increased by INR 200/MT to about INR 600/MT.

At present, in Raipur major demand is from Southern & Northern market. So, this change is quite important for market players based at these regions.

Structure prices at Mumbai fell by INR 100-200/MT as demand slightly dropped. Today, Angle 40 mm traded at INR 36,000/MT. Meanwhile, Structure offers in Ahmedabad are unchanged. Channel 75 mm offered at around INR 34,800/MT.

At the same time Northern India’s Structure manufacturers kept offers same after increased prices by INR 100/MT on Wednesday. Beam 150 mm in Ghaziabad offered at INR 36,200/MT and in Mandi Gobindgarh Angle 40 mm is traded at INR 35,400/MT.

Raipur Gauge Difference w.e.f. 30 Jan, 2014

Basic size = Angle 50×5/6

Angle

Channel

Beam

25×3 = Basic + 2300

75×40 = Basic + 500

125 = Basic + 600

25×5 = Basic + 2000

100×50 = Basic + 300

150 = Basic + 800

35×5 = Basic + 1000

*75×40 = Basic + 1700

32×3 = Basic + 2000

*100×50 = Basic + 1500

37×3 = Basic + 2300

125 = Basic + 600

40×5 = Basic + 600

150 = Basic + 800

65×6 = Basic + 200

65×8 = Basic + 400

75×6 = Basic + 400

75×8 = Basic + 500

75×10 = Basic + 700

Note: Prices in INR/MT. *Super Light Size

 

India: JSW Steel hikes Prices by 2%; SAIL & Essar to follow suit

JSW Steel, a major producer of Flat Steel products has announced a price hike of INR 1,000-1,200/MT effective from February, 2014. Rising input cost is posing a challenge for the  Flat Steel major.

Industry experts are still skeptical of any major revival of domestic demand for Flat products.  But, lower imports of Flat products has given JSW a room to raise its prices amidst a dull demand in the economy. Industry sources believe that JSW Steel has locked their orders till 31 Mar, 2014. Moreover, it has been able to find a lucrative overseas market. JSW has more than doubled its exports to overseas markets, which has helped in better realizations.

‘Me -too’ pricing strategy 

The Flat steel industry is witnessing a ‘me-too’ pricing strategy as the increase in prices by one major player triggers other manufacturers to raise prices. Last month the price hike from JSW Steel was followed by SAIL and other primary manufacturers.

This month Essar Steel is also planning to raise its prices for Flat Steel products by INR 1,000- 1,200/MT, confirms a spokesperson from Essar Steel.  SAIL, too plans to raise prices of Flat Steel products by INR 750-1,200/MT, confirm a senior official of SAIL. Traders in North region also expect price hike by SAIL.

We are expecting price hike of INR 750 – INR 1,200/MT by SAIL; inventory of SAIL products are low.Trader in Ludhiana

JSW has raised its prices in beginning of January by INR 1,000-1,200/MT and this price hike trend still continues. As reported earlier by SteelMint, the procurement prices of Iron ore for JSW has risen between Oct’13 & Dec’13.

A comparison of Flat Steel production and Iron ore procurement prices is as shown under.

JSW Steel Output
Source: SteelMint, JSW

 

 

 

India: Mumbai Pig Iron offers up by INR 500/MT

Foundry grade Pig iron market holds different sentiments in different market of India.

Few manufacturers have raised their offers observing the good demand & high production cost. Whereas, others have kept their offers unchanged, describing stable or low demand in the market.

Prices in Durgapur for foundry grade is offered at INR 27,000/MT (basic) by few manufacturers, but material is asked at INR 26,800/MT. “The manufacturers are even selling it at the asked price, seeing the bulk purchase”, shared a trader in Durgapur.

Steel grade offers in Durgapur is at INR 24,600-24,800/MT (basic) with a nominal rise of INR 150/MT from last week’s offer.

Koppal Pig iron prices remain stable for a while since August 2013, at INR 28,125/MT (basic) for foundry grade.

Opening of NINL price circular for N2 grade Pig iron leaves a great impact on Giridih’s Steel grade Pig iron prices which has steadily raised in last week but could not affect foundry grade offers.

Foundry grade there is currently offered at same level of INR 25,500-26,500/MT(basic) depending on Silica content.

A manufacturer at Mumbai  told, “We have raised our prices by INR 500/MT, in both the grades i.e steel as well as foundry. Iron ore prices have gone high; this made most of the major manufacturers raise their prices.”

Currently, prices at Mumbai for Foundry grade is offered at INR 28,000/MT (basic) and Steel grade is offered at INR 26,500/MT, but discounted to INR 26,250/MT (basic) at bulk purchases.

Raipur maintains its previous price for Foundry grade Pig iron at INR 27,800/MT (basic), revealing stable demand for Pig iron in market.

 
logo

‘Expect to produce 27 MnT Iron Pellet in 2014’ – Samarco

Samarco, a 37 year old Brazilian mining and Pellet producing company, with 22.25 MnT pa installed capacity of Pellet, is expected to touch 27 MnT of production in Jan-Dec, 2014.

Samarco’s fourth Pellet plant of 8.25 MnT pa capacity, which is under construction, is anticipated to be completed in this calendar year, after which it’s total capacity will stand at 30.5 MnT. Since, Jan-Dec 2008, Samarco’s Pellet production increased by 24.3% to 21.31 MnT in Jan-Dec 2012.

The company produces BF grade Pellets with Fe 66.5% and DR grade Pellets with Fe 67.5 & 67.8%. Its major exports market are Europe, Japan and Korea. Presently it has three Pellet plants in Ubu unit.

A senior official at Samarco told SteelMint, “Our Pellet production is likely to touch 27 MnT in 2014 (Jan-Dec)  and the fourth plant is under construction. We are already booked for Q1 2014 (Jan-Mar) and demand is quite good. Current Pellet premium are standing at around USD 42/MT for BF grade material and USD 52/MT for DR grade.”

Samarco’s Recent Pellet Shipments from Port of Ponta Ubu (Brazil) 

Table

Table

Table

Qty in WMT
ETB (Estimated Time of Berthing)
ETA (Estimated Time of Arrival)

 
NTPC-logo new

India: NTPC to acquire Coal-based Power Plants

NTPC, a state-owned power producer is evaluating seven Coal-based Power projects for possible acquisition, which have been put on sale by private developers.

NTPC, the largest power producer in the country, is first time looking for its growth through acquiring power plants. There are seven Coal-based Power plants on its radar. These projects belong to developers who are not in the position to continue with the projects and those who are operating plants but currently not capable to run continuously.

The company may looking for assets which having at least 2,000 MW capacity and units that already have land, water, Coal supply pact, environmental clearances, power purchase agreement and all required permissions from authorities. After looking quality of Power plants and equipment condition, NTPC will decide to make investment on it.

Funding for the acquiring power plants would not be difficult for NTPC; it has enough domestic & foreign investors because Power sector has been giving good returns on the long term investments.

“Power sector is not for those wanting quick returns. It is also not for fly-by-night operators. A long term stay in the segment will give good returns”, said by Arup Roy Choudhury, the Chairman & Managing Director of NTPC.

NTPC plans 30% equity and 70% debt combination for acquire.

Independent power producers of India have been hit by slow economic growth, high borrowing costs, lack of fuel supply, delay in environmental & forest clearances and poor financial health of state electricity boards. Economic growth slowed to 5% at the end of FY12, the slowest in a decade.

Instability in the Indian rupee also affected power developers who import Power plant machinery like boilers, turbines & generators and have exposure to forex loans.

 

India: Ferro Silicon Prices Steady as Overseas Buyers return to the Market

Ferro Silicon prices remained unchanged as prices have found support at these levels. Market sources gave some hints of bullishness in the market as buying interest returns.

On account of increased demand from Europe and low production in Bhutan, Ferro Silicon producers in Bhutan continued to offer at stronger levels as they were confident of finding buyers. Ferro Silicon (70-75) is being traded in the range of INR 76,500 – 77,000 /MT (Ex-Bhutan). Exports markets have opened in Bhutan and producers are offering Ferro Silicon at around USD 1,265-1,270/MT FoB Kolkata.

A Bhutanese trader remarked, “I am seeing some optimism come back to the Ferro Silicon market in Bhutan as European players are back with some buying activity.”

In line with the increased prices in Bhutan, Indian producers have also kept their prices unchanged. Producers in India are facing pricing headwinds; with the market set to register a potential oversupply. Current price of Ferro Silicon (70-75) is at around INR 74,000- 74,500/MT in Guwahati. Sources agreed that trade was limited, but seemed buoyant as inquiries were steadily rising from overseas buyers. Domestic demand for the material is low as the steel market is weak and sellers are in a wait & watch approach.

A trader from Meghalaya stated, “The domestic market is expected to remain subdued for the time being but we assume it will recover in February, 2014.”

 

On the future outlook, SteelMint assessed that price to increase marginally in the coming months and demand to remain moderate. Market sources reported of enquiries in the export market. However, it is to be seen whether these inquiries can be converted into deals, and does it lead to increase in production levels which could cap the rise in prices.

Exchange Rate: USD 1= INR 62.77

 

India: MSTC conducts Auction for Sale of Iron Ore

Metal Scrap Trade Corporation (MSTC) invites bid for sale of Iron ore from different Iron ore mines/Stockyard at Karnataka.

Material will be available for sale on “As is Where is” basis.

The e-auction is for registered Steel plants, Pig iron plants, Pelletisation plant, Sponge iron plants and Beneficiation plants which have been wholly/partly dependent on Iron ore from Karnataka for their own use.

There are two auctions which are scheduled on 04 Feb & 05 Feb, 2014.

Auction 1

  • Iron ore lumps: 124,000 MT
  • Iron ore fines: 100,000 MT
  • Total quantity: 224,000 MT
  • Bid opening time: 15.00 hrs on 04 Feb, 2014
  • Bid submission due date: Before 14.00 hrs on 04 Feb, 2014

Auction 2

  • Iron ore ROM: 2,100,000 MT
  • Iron ore lumps: 36,000 MT
  • Iron ore fines: 200,000 MT
  • Total quantity: 2,346,000 MT
  • Bid opening time: 15.00 hrs on 05 Feb, 2014
  • Bid submission due date: Before 14.00 hrs on 05 Feb, 2014

Royalty, Forest Development Tax, Sales tax, Cess and other statutory duties & levies etc. applicable at the time of supplies will be extra and payable by the successful bidder.

 
TMT

Indian Primary Producers likely to expand Finish Long Production

sailSAIL’s Finish Long production is likely to boost up in a few months, as its newly opened plant at Burnpur will increase production from 0.35 MnT to 2.3 MnT.

Steel Authority of India (SAIL), one of the largest state owned steelmaker (a primary producer) had set up a new plant of Finish Long a few months ago at Burnpur in West Bengal, whose production is likely to raise in near future.

Company official said, “Presently, only Re-bar & Wire Rod is produced at the Burnpur plant; Billet needed for production is supplied by the Durgapur unit. Total production of Re-bar & Wire is at around 0.35 MnT pa, which is estimated to reach 2.3 MnT pa till April, 2014 including other Finish Long items.”

In production of 2.3 MnT Finish Long, SAIL will produce around 1 MnT Re-bar, 0.5 MnT medium & heavy size Structure, 0.5 MnT Wire Rod, 0.3 MnT Round and including other Finish Long items, he added further.

SAIL had raised the Re-bar offers for Jan, 2014 owing to improved demand in India. Now, increment of INR 500-1,000/MT in price is expected for Feb, 2014.