Monthly Archives: June 2014

Non-coking Coal

India: Coal Inventory reaches 11.2 MnT W-o-W

Combined Coal stock (Coking, Non-coking & Anthracite) at major Indian ports stood at 11.2 MnT, which shows a slight growth at the end of week 26, regarding previous week.

As per the consideration of SteelMint, 16 major Indian ports have stock of around 2 MnT Steel grade Coal. Coal at ports is showing a decline of 0.5% against previous week. However, Non-coking Coal stock at ports has risen by 1.5% to around 9.2 MnT.

Nearly, 2,000 MT of Anthracite stocked at Paradip port belongs to Balasore Alloys & IMFA.

Krishnapatnam port situated on East Coast had the highest Coal stock of around 2.8 MnT, which registered improvement of 12% regarding previous week. Stock quantities followed by Gangavaram port in terms of volume & stockpile 1.7 MnT, which holds the same quantity as previous week. Whereas, Paradip & New Mangalore port had stock of around 1.6 MnT & 0.92 MnT respectively. Stock position at Tuticorin port has declined by 14.5% from previous week and reached at around 0.30 MnT.

Coal Stock Week 26

Adani, JSW Steel & MGB Commodities have the highest quantity of Coal stock i.e. about 1.9 MnT, 1.4 MnT & 0.7 MnT respectively. Total stock quantity of JSW is at Krishnapatnam, Goa & Mangalore port, while RINL has stock of around 0.48 MnT at Gangavaram port.

The ports considered are: Dahej, Mormugao, New Mangalore, Hazira, Kandla, Bhavnagar, Tuticorin, Magdalla, Pipavav, Muldwarka, Gangavaram, Haldia, Krishnapatnam, Kakinada, Paradip & Vizag.

 

 
Silico Manganese

India: Silico Manganese Prices Unchanged at INR 59,000/MT (Ex- Raipur)

Silico Manganese prices steadied as more than adequate supply and lower offers from traders. Reportedly, market was quiet this week as buying interest has diminished from end-users.

Silico Manganese prices remain unchanged in the domestic market with market participants reporting a lack of trade along with excess of supply for the material. In Raipur, Silico Manganese 60-14 is being offered at INR 59,000 MT (Ex-Raipur). According to sources, Prakash Industries is offering Silico Manganese at INR 59,000/MT (Ex-Champa, Chhattisgarh). In Durgapur, Silico Manganese 60-14 is currently being traded at around INR 59,000/MT. Indian producers reported that supply of Silico Manganese in the market has increased and so prices have moved down.

A producer source from Raipur said, “This week the market was weak with limited buying. Buying appetite has subsided as production of the material has increased.”

Export Market

In the export market, Silico Manganese prices remain stable as demand improves from European nations, South-East Asian and Middle-East countries. Silico Manganese 60-14 is being offered at USD 950-960/MT FoB East Coast India and 65-16 is being offered at USD 1,070/MT FoB East Coast India. Indian traders reported buying interest has reemerged and boosted trade values.

The mood is better in the export market and we are receiving inquiries from international buyers and currently we are also filled with bookings till July. Demand is edging up bit by bit, slowly going higher,” stated an exporter based in Kolkata.

On the future outlook, market participants believe that although Silico Manganese prices have been stable, the market is facing downward pressure and there is a possibility of further price-cut.

Exchange Rate: USD 1=  INR 60.06

 

 

India: HPC looks for Supply of Imported Steam Coal

Hindustan Paper Corporation invites bid from supplier for supply of imported Steam Coal for use in stoker fired boiler on delivery basis, at Nagaon Paper Mill, Kagajnagar, Morigaon (Assam).

Supplier could be indigenous or outside.

Quoted quantity should be 10,000 MT (Min).

General Conditions

  • Bidder should have sound financial position to execute the Purchase Order for minimum value of INR 9 crore in a year
  • Bidder should have experience for supply of either imported or indigenous Coal (or both) to various industrial unit of repute in India during last 3 years
  • Bidder should have past experience of supplying at least10,000 MT in 1-year during last 3 financial years in its own name 

Specification 

Parameters

Units

With low Moisture

With high Moisture

Gross Calorific Value (ADB)

Kcal/Kg

6,200

5,600

Total Moisture (ARB)

% by wt

12

22(max)

Inherent Moisture (ADB)

% by wt

10 (max)

10 (max)

Ash (ADB)

% by wt

12

8

Volatile Matter (ADB)

%

40 – 45

40 – 45

Size

mm

0 to 50

0 to 50

(Note: ADB: Air Dried Basis, ARB: As Received Basis) 

Quantity: 50,000 +/- 20 % MT

Important Time & Dates:

  • Bid submission date: 15.00 hrs IST on 10 Jul, 2014
  • Technical bid opening date: 15.30 hrs IST on 10 Jul, 2014

All taxes, duties, levies & cess etc will be payable by the supplier till despatch of the
shipment and all other taxes payable in India will be bear by the purchaser.

About HPC
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.

 

US Shredded Scrap offers to India surge by USD 4-5/MT

Shredded Scrap offers from US, which had fallen to the level of USD 400-402/MT CFR India in the beginning of last week, has increased by USD 4-5/MT by end of the week.

US_Shredded_ScrapUS based suppliers have increased their offers for Shredded Scrap owing to a good demand in the domestic market. They are currently offering it in the range of USD 405-407/MT CFR Nhava Sheva (in containers). Many market participants speculate that there is currently very little chance of price correction looking at the present US Scrap demand; they expect prices likely to go up further by USD 2-3/MT.

Weak demand in Indian steel market currently will restrict manufacturers to purchase US Scrap at higher prices. Manufacturers would rather prefer buying HMS/Shredded Scrap from Europe, which is cheaper as compared to US Shredded offers. European offers for HMS 80:20 is at USD 385/MT CFR and Shredded at about USD 400-402/MT CFR Nhava Sheva.

Indian manufacturers are infact expecting Shredded offers in the range of USD 395-400/MT CFR India.

 It is surprising to note that offers from Middle East are declining day by day, and have touched USD 380-383/MT, which is even cheaper than European offers.

One of the Scrap consumers based in India quipped, “We are facing some quality issue with Scrap from Middle East countries and this infact is pulling its offers down in the Indian market.”

Offers from Middle East are currently hovering at USD 380-383/MT CFR Nhava Sheva. A fresh deal of HMS 1&2 was settled at USD 383/MT CFR Nhava Sheva.

In domestic market, Sponge iron is likely to dominate Scrap market in upcoming days. As discussed by the panelists, in the ’Indian Pellet & DRI Summit 2014’, an event organized by SteelMint on 27 Jun, 2014 at Kolkata, “Iron ore prices may fall in future as mining operations in Odisha resumes by the end of July.”

Sponge iron prices are trading in the range of INR 20,000-22,500/MT and are expected to remain in the same range for the time being.

 
Indian Pellet and DRI Summit

Indian Pellet & DRI Summit: Odisha Government drafts Mechanism for 50:50 Rule

Kolkata,June 28

Odisha government, who has to submit a mechanism for supply of Iron ore to stand alone state based industry in an equitable manner along with a fair price before 3 Jul, 2014 (as per High Court’s order), has drafted a mechanism.

In Dec’12, the Odisha government had come up with the regulation, which has asked the merchant miners to sale 50% of their ore to state based industry at a fair market price. Meanwhile, the captive miners were excluded from the order.

However, the miners have been opposing the regulation saying it restrictive and there is no such provision in the MMDR or MCR act. Subsequently, the miners under the banner of Federation of Indian Mineral Industries (FIMI) had moved to Odisha High Court.

Later, the honorable Odisha High Court vide judgment and final order dated on 2 April upheld the 50:50 as being valid exercise of right of pre-emption under rule 27(1)(m) of MCR, subject to state evolving a mechanism (within 3 months) to give notice to mine owners of minerals quantum to be purchased and payment of price within reasonable time.

Mr UC Jena, Deputy Director of Mines, who participated in ‘Indian Pellet & DRI Summit’ conducted in Kolkata on 27 Jun, 2014 mentioned that a draft on mechanism for 50:50 rule has been formed and will be submitted to the High Court before 3 Jul, 2014.

Indian Pellet and DRI Summit
Indian Pellet and DRI Summit

How will it Work?

  1. Director of Mines (DoM) will act as a nodal agency
  2. Odisha based industry with no captive mines will tell their ore requirement (quantity, quality and type of ore) in a prescribed format to DoM on quarterly basis
  3. DoM will consolidate requirement from all the standalone mineral based industry (along with necessary documents like PAN card, trading licenses and other related documents)
  4. Iron ore purchased under this rule cannot be transferred, re-sold or exported in any form
  5. This rule will not be applicable for mining companies who already have agreements with state based industry for supply of more than 50% (OMC has almost 90% supplies reserved for state based industry)
  6. After consolidating requirement of Iron ore fines & lumps required by standalone state based industries , DoM has to get it approved from the state government
  7. State government will then indicate miners, the quantum of ore required and place of delivery, nominee name in first 10 days of every month for that quarter
  8. State government will also collect an amount of 10% on the total value of ore required in form of bank guarantee from the state based units (applicants)  during that quarter
  9. Miners will have time to deliver the ore within 30 days
  10. Delivery of material can be Ex-mines basis or as per miner & plant agreement
  11. Sampling will be done at the point of delivery under supervision of Deputy Director of Mine (DDM)
  12. State based units can get third party sampling done 7 days before by giving consent to DDM
  13. The minimum purchase price will be fixed on monthly prices released by IBM (Indian Bureau of Mines) until & unless miner and state based units have come into price agreement
  14. Total value of ore has to be paid well in advance before taking the delivery
  15. Merchant mines are free to deal the rest 50% of the ore
  16. Exports from any port will be considered as sale outside the state
  17. In case any state based industry fails to lift the ore in time or fails to pay the amount that quantity will be offered to another state based industry. The former will be disqualified from this scheme of 50:50 and also bank guarantee will be seized
  18. In case, another state based industry also fails to lift the material,  Director of Mines will take further direction from the state government
  19. All disputes arising related to this rule will be restricted to Bhubaneswar (Odisha) Court

Mr P L Kandoi, President of All Odisha Steel Federation (AOSF) said that draft looks fine, only issue will be with price. He mentioned that association has called a joint meeting with state based and Steel & Sponge iron units to discuss on the draft and take further step.

 

India: SAIL seeks TMT Conversion Agent under Rourkela BSO

SAIL has invited a tender for TMT Conversion Agent (CA) under jurisdiction of BSO Rourkela covering districts of Sundargarh, Sambalpur, Jharsuguda, Kendujhargarh & Deogarh.

Tenderer should be a bonafide, resourceful, financially sound person(s)/firm(s)/ company.

Tenderer must be a well-established entity who has an installation of any one of the mentioned TMT process such as Turboquench, Thermex, Tempcore & Evcon. CA should have production capability in range of 8 mm to 16 mm.

SAIL can decide one or more number of conversion agents depending on requirement.

Eligibility

  • Tenderer should be a BIS license holder of TMT bars as per IS1786:2008 for Fe 500,550, Fe 500D when they apply and have reputed name
  • They should have financially good record during past 3 years

SAIL will supply re-rollable materials or semis to CA directly from the nearest plant (ISP, BSP, DSP, RSP & VISL) or stockyard as per occasion.

Important Time & Dates

  • Due date:  14.30 hrs on IST 14 Jul, 2014
  • Tender opening date: 15.00 hrs on IST 14 Jul, 2014
 

Government approves INR 125 billion Transmission Projects

In a bid to fast track building of high capacity inter-state transmission lines, the Ministry of Power has approved 9 new projects with an aggregate cost of over INR 125 billion.

These transmission projects will benefit several states such as Haryana, Chhattisgarh, UP, MP, Maharashtra etc by enabling high capacity 765kv lines carrying up to 2100MW each apart from construction of new 765/400kv substations. The projects will help evacuate power from central generating stations such as 660 MW Sipat of NTPC, 1600MW Gadarwara, private sector generating stations such as Sassan UMPP (1320 MW). Congestion will also be reduced in Haryana Region by the strengthening of the Northern Transmission system. Projects which will be developed through tariff based competitive bidding process inviting participation from all Bidders including private sector.

These projects were mainly stuck in the approval process in the government since last several months. The approval to go ahead with implementation was granted immediately.

In the country as a whole, the total inter-regional transmission capacity of about 28,000 MW will be added in the next 3 years so that the total capacity is enhanced to more than 66000 MW by 2017.

List of Transmission Schemes approved by Government for High Capacity Inter-State /Inter Region Transmission is as follows:

Scheme Name

Estimated Cost

(INR Billion)

Northern Region system Strengthening Scheme–XXXV

0.88

Additional System Strengthening for Sipat STPS

24.73

System Strengthening for IPPs in Chhattisgarh and other generation projects in Western Region

8.23

Additional System Strengthening Scheme for Chhattisgarh IPPs

21.91

Transmission system associated with Gadarwara STPS (2×800 MW) of NTPC (Part-A)

25.25

Transmission system associated with Gadarwara STPS (2×800 MW) of NTPC (Part-B)

23.60

Connectivity lines for Maheshwaram (Hyderabad) 765/400 kV Pooling S/s

3.96

Transmission system for LTA of 400 MW for 2×500 MW Neyveli Lignite Corporation Ltd. TS-I (Replacement) (NNTPS) in Neyveli

6.12

Transmission System Strengthening associated with Vindhyachal-V

10.50

Total

125.18

 
Wire Rod

India: Wire Rod Prices surge by 3% from mid-June

Wire rod prices has increased in Durgapur & Raipur by almost INR 1,000/MT from mid of June.

 Since the beginning of this month, Wire rod offers have been continuously falling but bounce back from the mid of June. It is expected that prices will remain in range bound in near future. Although, price rise is not due to increased demand from the end-user, increase in raw material prices is the main reason.

Price rise of Wire rod & HB subsequently increases the prices of binding, G.I and barbed wire. Market seems to be very volatile & unpredictable and it is likely to remain same for some time. It is anticipated that demand of barbed wire, which is used in fencing, will increases as monsoon has approached.

Binding wire prices in Raipur are cheaper by INR 500/MT as compared to Durgapur offers. Currently, it is being offered at INR 53,500/MT (including all taxes) in Raipur; however it is at INR 54,000/MT (including all taxes) in Durgapur. 

Comparison of Wire Rod Prices in Durgapur & Raipur for June, 2014

1

 Basic price  in INR/MT

 

India: Only 11% Total Lumps sold in Karnataka Iron Ore E-auction

MSTC has declared the results of NMDC Iron ore e-auction conducted on 27 Jun, 2014. As per the results, the total quantity offered was 0.17 MnT, out of which 0.05 MnT was sold.

“Iron ore lumps attracted less buyers in Karnataka e-auction because of lack in supervisory control over Iron ore grade offered. Also, requirement level restrained the buyers from purchasing lumps in e-auction. Since our requirement for Iron ore lumps was less, therefore we have purchased it in limited quantity.” – stated an official of the participating company.

Key Facts of NMDC’s E-auction held on 27 Jun, 2014

  • JSW Steel was the largest buyer and purchased 24,000 MT followed by BMM Ispat at 12,000 MT
  • In comparison with previous NMDC’s e-auction, bid prices of Iron ore lumps (Fe 62%) have fallen by INR 90/MT and stood at INR 3,916/MT (basic)
  • Bid prices for Iron ore fines (Fe 60%) remain unchanged since one month and stood at around INR 2,434/MT (basic)

48,000 MT Iron Ore sold in Karnataka E-auction

Material Type

Offered Qty

Allotted Qty

Fines

56,000

36,000

Lumps

112,000

12,000

Total

168,000

48,000

Qty in MT
Source: SteelMint Research

Iron Ore Buyers in 27 June, 2014 E-auction

Buyers

Allotted Qty

Cargo Type

W.A. Grade

 (in %)

W.A. Floor Price

W.A. Bid Price

JSW Steel

24,000

Fines

60

2,428

2,438

BMM Ispat

12,000

Fines

60

2,428

2,428

Sona Alloys

4,000

Lumps

62

3,786

3,916

Jai Raj Ispat

4,000

Lumps

62

3,786

3,916

Hindusthan Calcined
Metals

4,000

Lumps

62

3,786

3,916

Qty in MT
Basic prices in INR/MT
W.A. (Weighted Average)
Source: SteelMint Research

*Note: Bid & floor prices are weighted average; prices are basic

 

India: OMC receives higher Bids for Iron Ore Tender

Orissa Mining Corporation (OMC) has received higher bids for 2nd quarter by INR 200-900/MT.

Odisha Mining Corporation, a state-owned miner which had floated a tender for sale of 31,100 MT Iron ore lumps (10-40 mm) for Q2 FY15 from different mines based in Barbil, Daitari, Gandhamardhan, has received higher bids in line with rising Iron ore prices by other private miners in Odisha.

The Supreme Court on 16 May, 2014 had ordered to suspend operations of mines running under second deemed renewal in Odisha, however later allowed 8 mines (Tata, SAIL & OMC) to resume operations. Other private miners had raised their offers by INR 500/MT last month itself.

OMC produced around 2 MnT of Iron ore in FY14 against the annual target of 5.5 MnT. 90% ore is reserved for state based mills. Another 10% is being tendered, which is open for both state and outside states’ mills on quarterly basis and is used as a benchmark for setting prices.

OMC Iron Ore Bids received for 2nd Quarter

Mines

Size (mm)

Fe%

Qty Tendered

Bids Received

Bidder

Apr-Jun’14

Jan-Mar’14

Oct-Dec’13

Barbil

10-40

62

5,000

4,595

Llyod

3,701

3,701

3,701

Gandhamardan

10-40

62

10,000

4,059

Llyod

3,531

3,531

3,303

Gandhamardan

10-180

65

5,000

3,505

Nakoda

3,355

3,355

3,710

Gandhamardhan

10-40

62

3,000

No Bids

3,303

Koira

10-40

62

4,250

4,855

4,501

Koira

5-18

65

4,053

Daitari*

10-40

62

8,100

3,526

Viraja

3,501

3,303

3,501

Prices in INR/MT including royalty; Qty in MT
*FOR Railway Siding; Bid received for Jul-Sep’14

Industry participants mentioned that bids have moved up owing to low quantity of Iron ore tendered. They also stated that certainly there is crisis of Iron ore lumps in the market, but ample availability of Pellets in merchant market has compensated the short supply of lumps.