Monthly Archives: July 2014

Riotinto_ICVL

India: ICVL cheers for Major Acquisition at Mozambique

ICVL has made its first overseas deal with acquisition of Rio Tinto Coal assets in Mozambique.

International Coal Ventures Private Limited (ICVL), which was formed with an objective to secure the supply of metallurgical and thermal Coal for India, was looking for Coal mines assets since its foundation in 2009.

On 28 Jul, 2014 an agreement was signed by Ajay Mathur, CEO of ICVL and George Hartley, Director in charge of M&A in Rio Tinto. The agreement includes assets in Benga Coal mine and other projects in Tete province. The mines have got reserves of 2.6 BnT that comprises 70% Coking Coal reserves.

As per data available with SteelMint, India mainly fulfilled its domestic requirement by importing Coking Coal from Australia. It has imported around 0.60 MnT from Mozambique from Jan-Jun’14.

Monthly Coking Coal Import 

Month

Jan’14

Feb’14

Mar’14

Apr’14

May’14

Jun’14

 Mozambique

          0.05 

            0.03 

             0.06 

          0.18 

             0.20 

          0.07 

 Australia

          2.54  

            2.29 

             3.37 

          2.67 

             2.79 

          3.07 

 Others

          0.62 

            0.29  

             0.73 

          0.51 

             1.00 

          3.50 

 Total Import

          3.21 

            2.61

             4.16

          3.36

             3.99

          3.50

    Qty in MnT                                                          

“The asset is going to be useful for our domestic steel industry and it is a right step with expansion plans of steel sector,” said Narendra Singh Tomar, Union Steel & Mines Minister.

However, some of the industry experts stated that India is a logical market for Mozambique because of its proximity and the Coal quality, which is appropriate to run Indian plants.

India is trying to diversify its sourcing of Coal through acquisition of different overseas assets. Current acquisition may enable India to reduce both supply risks and manage price volatility.

As per some market participants, asset acquisitions in Mozambique may give India a logistical advantage as well. This joint venture for overseas Coal assets will help CIL to fulfill the growing demand in the country.

CIL already owns a mining company in Mozambique named as ‘Coal India Africana Limitada’.

 
HC Ferro Chrome

India: HC Ferro Chrome Prices Stagnant at INR 68,500/MT Ex-Odisha

High Carbon (HC) Ferro Chrome prices remained static amid slack activity, as lower offers failed to entice buyers.

Trading activity was scant in the week gone by, as buyers steered clear of any transaction because market awaited clearer direction. Currently, 60% grade is being traded at around INR 68,500/MT Ex-Works Odisha and INR 70,000/MT Ex-Raigarh.

“Demand has been limited and there is no real activity for such a long period,” remarked a producer from Odisha.

Chinese Market

Domestic spot prices of 50% Cr Chinese HC Ferro Chrome remain unchanged for the sixth straight week at RMB 6,400-6,600/MT (79-81 cents/lb), as the market awaited indications from the August purchase prices of major local stainless steelmakers.

But, spot prices were expected to come under pressure soon after two of the stainless producers tabled cuts to August prices. Baosteel and Jiuquan Iron & Steel set its August prices at RMB 6,500/MT, all down by RMB 50/MT M-o-M. Spot prices had yet to react, with the market still awaiting Shanxi Taigang Stainless Steel’s August price decision, though most observers were expecting the same RMB 50/MT cut from its July price of RMB 6,300/MT. Other than lower bid prices, the Ferro Chrome market was also under pressure from seasonally slower demand, while supply remained high in the country. A source from China also noted that many Chinese producers of Nickel Pig iron had switched to producing Ferro Chrome on high prices and tightening supply – of Nickel ore, since Indonesia introduced a ban on Nickel ore exports starting January.

On the future outlook, SteelMint learned from market participants that the overall market sentiment is quite negative, as prices have remained dormant for a long time. Indian producers for Ferro Chrome are quite hesitant in increasing prices looking at the dull market condition

Exchange Rate: USD 1= INR 60.45

 

OMC Chrome Ore Prices down for Outside-State Buyers in July

Bhubaneswar: Chrome ore prices of Odisha mining Corporation (OMC) has declined for the outside state buyers in the e-auction held on 18 Jul, 2014. However, the prices for the inside-state buyers have changed slightly, except for few grades like 50-52 &46-48.

There were 61,000 MT friable chrome ore and 5,000 MT of concentrate on offer. +54 grade friable ore for the inside-state buyers have been corrected by 2% to INR 15,193/MT against June price to INR 15,481/MT. But, the prices of the same grade for the outsiders had declined by 12% to INR 12,193/MT, which was INR 13,881/MT in June auction.

The prices for 52-54 grade has increased by just 1% to INR 15,760/MT, which was INR 15,552/MT in the previous month. However, the prices for the same grade for the outsiders have decreased by 12% to INR 11,560/MT against INR 13,152/MT in the month of June.

On the other hand, 50-52 grade price for the inside state buyers has increased by 14% to INR 13,687/MT compared to INR 11,995/MT in June, whereas for the outside buyers, the prices corrected to INR 9,387/MT, which was fixed at INR 11,595/MT in June, 2014.

Among the inside state buyers, JSL has managed to get the highest allocation of 12,800 MT fribale and 4,400 MT concentrate Chrome ore. The company is followed by Navbharat Ventures with 11,900 MT of friable Chrome ore and Rohit Ferrotech with 9,000 MT and VISA with 5,500 MT.

Among the outside quota, Srivasavi has got an allocation of 6,200 MT and Rohit Ferrotech’s West Bengal unit has got 5,700 MT.

 OMC Chrome Ore E-auction (18 Jul, 2014)

Inside-State Quota

Outside-State Quota (South Kaliapani)

Grade

Current Price

Previous Price

Current Price

Previous Price

54+

15,193

15,481

12, 193

13, 881

52-54

15,760

15,552

11,560

13,152

50-52

13,687

11,995

9,387

11,595

48-50

15,515

15,323

10,812

11,223

46-48

12,436

13,851

8,936

10,851

44-46

10,961

11,000

8,661

 

42-44

10,585

10,000

8,285

 

         

Concentratred

   

Grade

Current Price

Previous Price

   

38-40

8,584

9,111

   

42-44

12,033

10,852

   

46-48

12,781

11,393

   
         

Allocations in MT

 

 

Inside-State

Outside-State

 

Company

Quanity

Company

Quanity

 

JSL

12,800

Rohit Ferrotech (Bishnupur)

5,700

 

VISA

5,500

Sri Basavi

6,200

 

Rohit Ferrotech

9,000

Tirumala balajee

3,900

 

Arti steel

1,500

Shaym Ferro

1,000

 

Jabamayee

1,500

 

 

 

Navbharat

11,900

 

 

 
         

Concentrate

     

Company

Quanity

     

Visa

4,400

     
         
 

India: Coal Stock at Ports decline W-o-W

Total Coal stock that includes Coking, Non-coking & Anthracite at major Indian ports stood at 10.2 MnT, shows a slight downfall at the end of week 30.

As per the consideration of SteelMint, 16 major Indian ports have stock of around 2 MnT of metallurgical Coal, rise by 17.5% than previous week. Approx 8 MnT of power grade Non-coking Coal laid at Indian ports which registered a decline of 9.8% compared with previous week.

Almost 37,076 MT Pet Coke imported by Ultratech Cements, around 7,000 MT of Anthracite Coal stocked at Paradip port, which belongs to Balasore Alloys & IMFA.

East Coast based Krishnapatnam port had the highest Coal stock of around 1.8 MnT. Stock quantities followed by Paradip port in terms of volume & stockpile 1.7 MnT, which decreased by 3.9% compared to previous week. However, Gangavaram & Mangalore port had stock of around 1.6 MnT & 1 MnT respectively. Stock position at Haldia port has increased by 47.5% from previous week and reached at around 0.32 MnT.

Adani, JSW Steel, SAIL & MGB Commodities have the highest quantity of Coal stock i.e. about 1.5 MnT, 1 MnT 0.8 MnT & 0.5 MnT respectively. Total stock quantity of JSW is at Krishnapatnam, Goa & Mangalore port, while RINL has stock of around 0.43 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.

Week 30

 

India: Flat Imports gain Traction on higher Domestic Prices

Correction in international prices and higher domestic prices has made much leeway for imports of Flat steel products. SteelMint while talking to dealers & importers of Flat products across India understood that higher domestic prices for HR Coils and supply constraints in the domestic market has been concern for many traders.

Although, few sectors of the economy have seen minor improvement in demand, but the actual trading volumes in the market has not yet recovered. Some market participants expect minor changes in prices if demand recovers. One of the importers in Mumbai while replying to an email query from SteelMint cited,

 “There could be a price increase after the monsoons if demand picks up, but that is to be seen as although there is a positive outlook in the medium term, the short term is unpredictable.”

As per traders based in Mumbai, imported HR Coils of 2.2 mm thickness from Hyundai Steel is available at INR 38,500-39,000/MT on Ex-Plot basis which is almost close to domestic prices. One of the industry experts say that there is close difference between domestic & import prices. A revial in the domestic economy can spur imports thereby putting pressure on domestic prices.

Many traders across India believe that actual demand has not returned to the market and thus price hike is difficult. Manufacturers may prefer to roll over prices or offer discount at current market prices to battle with the slowdown in the domestic economy.

Import Dynamics

It is interesting to note that Cold Rolled products are in short supply across many trading regions in India and the imports of Cold Rolled products have gradually increased in the past few months.

Import HR CR

 

India: Iron Ore Sales surge in Karnataka E-auctions

Iron ore sales through Karnataka e-auctions have increased by 10% to 2.2 MnT in Jul’14 (till 25 Jul, 2014) against 2 MnT in Jun’14.

Till now, JSW Steel purchased 1.5 MnT Iron ore in July, 2014 through e-auctions, which amount to 70% of the total Iron ore sales.

In the two e-auctions held on 25 Jul, 2014 in Karnataka by MSTC, 0.24 MnT Iron ore has been sold. The highlights of the e-auction are as follows:

  1. JSW Steel was the largest buyer at 0.18 MnT
  2. Iron ore fines offered by NMDC was allotted entirely
  3. 71% of the material offered by private miners remain unsold owing to high prices

Bid prices of NMDC’s lumps & fines stood almost at similar levels in contrast with NMDC’s previous e-auction.  Bid price of Fe 60% fines was at INR 2,428/MT,  (basic) while for Fe 63% lumps, it stood at INR 3,925/MT (basic).

244,000 MT Iron Ore sold in Karnataka E-auction

 

Bid Qty

Allotted Qty

Material Type

Fines

Lumps

Fines

Lumps

NMDC

72,000

116,000

 72,000

56,000 

Private Mines

328,000

60,000

 80,000

32,000 

Total

400,000

176,000

152,000

88,000

Qty in MT
Source: SteelMint Research

Top 5 Iron Ore Buyers in E-auction

Bidder Name

Cargo Type

Allotted Qty

W.A Grade (%)

W.A Bid Price

W.A Floor Price

JSW Steel

Fines

128,000

60

2,640

2,640

Lumps

56,000

62

3,876

3,833

Sesa Sterlite

Lumps

16,000

65

4,425

4,425

Xindia Steels

Fines

12,000

64

3,480

3,480

Slr Metaliks

Fines

4,000

59

2,400

2,400

Lumps

4,000

59

3,450

3,450

Janki Corp

Fines

8,000

56

1,910

1,900

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

Note: Grade & Bid prices are Weighted Average

 

 

Indian Scrap Prices fall; Sponge Prices resist

Scrap prices fall by INR 500/MT owing to falling Billet prices, however Sponge iron prices remain stable amid short supply of Iron ore.

Ferrous Scrap contributes nearly 15% of India’s crude steel production. The market has witnessed a correction in the range of INR 100-500/MT W-o-W across major markets. Current offers in domestic market are trading between INR 24,000-26,000/MT (basic prices, excluding taxes).

Sponge iron contributes about 25% of India’s crude steel production. Sponge prices remain stable owing to low supply of Iron ore. Current offer are hovering in the range of INR 19,500-21,500/MT (Ex-Works).

Prices in Jalna, India’s one of the largest smelting region, noticed a correction by INR 500/MT on account of slowdown in finish steel buying and production cut.

“Manufacturers in Jalna are expected to reduce their production time to 12 hours a day from 1st week of August owing to poor demand in finish steel. Prices may see some correction,” said a trader based in Jalna.

Sponge Prices remain Unchanged

Falling Billet prices have limited effect on Sponge iron prices. SteelMint has learned from the sources that there is shortage of Sponge iron in the market, which will lead prices to remain at the same level or increase slightly from the current levels.

Scrap Prices

 

 
Mauritanian Iron Ore

India imports Mauritanian Iron Ore at USD 86-88/MT CFR Krishnapatnam Port

Mauritania’s national Iron ore mining company, SNIM aims to produce 13 MnT in 2014, which is almost same as last year, as reported by Reuters.

Production from the mine in the Northern desert town of Zouerate hit 6.7 MnT in the first 6 months of this year; rise by 8.5% from the same stage in 2013, the company said in a statement.

Mauritania holds a 78.35% stake in SNIM and last year exports from the project accounted for some 17% of government revenue in the desert nation.

Europe, which is a major buyer of Mauritanian Iron ore, has cut down imports owing to economy slowdown. As a result, SNIM has developed a new product called Tazadit Fines (TZFC), which has slightly higher silica content.

Recently, JSW Steel, India’s largest private steel maker, had imported 148,000 MT of Iron ore from Mauritanian miner at Krishanapatman in 3rd week of July, 2014. Deal was heard to be settled at USD 86-88/MT CFR India for grade 63%+ Fe.

Mauritanian Iron Ore

 

Indian Government declares Coal Production Target for Captive Mines

Ministry of Coal has declared a fix production target of around 68 MnT, extracted through captive Coal mines. This has been allocated to various public & private companies.

Government has set a fix Coal production target for captive Coal block holders in FY15. The step taken by the government may help to examine Coal scarcity crisis and persistently rising Coal import owing to increase in domestic demand-supply gap.

An official meeting was held under the chairmanship of Additional Secretary with Representatives from SAIL, JSPL, Sasan Power, Jaiprakash Associates and other mine holders, to analyze the development from captive mines in current fiscal.

As per the information, there have 21 captive Coal blocks, which are running under production and 6 blocks are likely to start production in current fiscal year.

The Ministry expressed concern over the several blocks included Tasra Coal blocks of SAIL, Moher & Amlori blocks allocated to Sasan Power and Damodar Valley Corporation’s Barjore block, which has been involved in production but running under capacity.

India has one of the world’s biggest Coal reserves. Contrastingly,the country has been increasing Coal imports from last few years.

As per the SteelMint analysis, Coal imports hit a massive 181 MnT in FY14, climbing from 148 MnT in previous fiscal year. 

The reason behind rise in imports pointed towards slow development of domestic Coal sector. Emphasize the fact that few major Coal mines began production just last week.

 
NMDC

India: NMDC to conduct Iron Ore Auction in Chhattisgarh

NMDC is conducting auction for sale of Iron ore through MSTC for its Chhattisgarh based mines.

National Mineral Development Corporation (NMDC) is a state-controlled mineral producer of Indian Government. NMDC’s Bailadila Sector (Kirandul & Bacheli) in Chhattisgarh offers sale of Iron ore through e-auction conducted by MSTC.

The material will be delivered on FOR mine basis. The last date for the submission of EMD & Online Forward Auction (OFA) document is up to 12.00 hrs IST on 05 Aug, 2014.

The date of auction is on same day i.e. 05 Aug, 2014, which is scheduled to commence between 13.00 to 15.00 hrs IST.

Inspection Date:  30 Jul to 04 Aug, 2014.

Details of the Quantity Offered

  • Lumps (Fe: 65.5-67%): 84,000 MT
  • ROM (Fe: 65.5%): 4,000 MT
  • Fines (Fe: 64%): 60,000 MT

Total Quantity: 148,000 MT

As per the Government of Chhattisgarh order, a transit fee of INR 7/MT is collected by NMDC for transportation of Iron ore and paid to the CG forest division.

Successful bidder may be charged transit fee additional to royalty, sales tax/ VAT, forest development tax, forest permit fee and labor welfare cess etc will be applicable at the time of supplies or that may be introduced in future are payable.

NMDC had earlier invited sales of 112,000 MT Iron ore (Fines: 60,000 MT; Lumps: 52,000 MT) from its Bailadia mines in Chhattisgarh in third week of July, 2014.
JSW Salem was awarded 7 rakes of Baila Lumps and Uttam Galva was allotted 1 rake of lumps. 20,000 MT lumps remain unsold.
Tata Steel was awarded 10 rakes of Iron fines and JSW Steel’s Amba River Coke plant was allotted 5 rakes of Iron fines. Each rake contains approximately 4,000 MT ore.