Monthly Archives: August 2014

Iron_Ore_Vessel

India: Steelmakers seek Pellet Imports despite Ample Capacity

India’s Pellet making capacity of 66.6 MnT, which observed an exceptional escalation since 2009, is unable to meet the industry’s demand.

Pellet plants are either non operational or running at nearly 25% capacity and facing tough times over Iron ore scarcity, besides existence of 5% export duty, overcapacity and high railway freight charges.

SteelMint foresees no respite from Pellet imports as 5% royalty hike on Iron ore w.e.f 01 Sep, 2014 will make Indian Iron ore & Pellet procurement expensive. To add on, Chinese Fines prices are at 5 years low and Indian currency is strong.

August, 2014 recorded highest import quantity at 133,000 MT, after 77,200 MT in March, 2013. Steelmakers have already imported 54,248 MT BF grade & Fe 65% Pellets from Finland at USD 148/MT CFR Kandla port in Jul’14 and 53,200 MT Fe 65% Pellets from Ukraine at USD 138/MT CFR Kandla in Aug’14. A vessel carrying 79,800 MT Pellets, which is imported by Simec, is at berth at Paradip port.

It has been heard that Fe 65% Brazilian Pellets are being offered at USD 136-137/MT CFR India; landed cost at INR 8,700/MT and Australian material is being offered through a tender process.

Monthly Imports since Mar’13

3

 

 

 

 

 

 

 

 

 

 

In the quarter under review, viable import offers supported by strong Rupee, have made imports possible. Restricted availability of domestic Iron ore and Pellets after the Supreme Court had temporarily suspended mining in Odisha from 16 May, 2014, has pushed the steelmakers to seek imports. While, Pellet exports haven’t taken place Jun’14 onward and domestic Pellet prices have sustained at INR 7,500-8,400/MT (USD 125-140/MT).

For the first time in May’12, Paradip port, a major Iron ore exporting port, dealt with Pellet import consignments. Bhushan Steel had imported it from Brazil, citing difficulties in sourcing the mineral locally, over mining and transportation constraints enforced by the Odisha government.

Director at one of the leading Pellet importing company in North-West region says, “The little exchange rate support and international Iron ore prices have made Pellet imports viable. Though, suppliers are active, they aren’t able to supply the required quantity. Indian steelmakers are opting for overseas Pellets for quality and price parity reasons, specially the port based plants. Also, with expected economic indicators growth, buying in dollars looks to be a preferred option.

 Australian Pellets have high basicity and can either be used in Indian blast furnaces or for making DRI, which will be consumed in arc furnaces.  Pellets from Ukraine and Brazil are also on offer and suppliers are hesitating to sell at prices lower to USD 132-135/MT CFR India. Brazilian Pellets containing high Silica is being offered for November-end delivery.

Low supply of Iron ore in Indian market, which ultimately drags down Pellet production, may not be resolved shortly. In addition, quick recovery in international Iron ore prices from USD 87/MT CFR China levels is unexpected in near term. Thus, Pellet import outlook looks positive in the months to come”.

 
Re-bar

Secondary Re-bar Sales Weak in Major Indian Market

At present, Secondary Re-bar sales are weak on the ground of low buying from end-user and upcoming festival season.

Secondary Re-bar market is not in a good situation because of the continuous fall in demand of finished Long product. Although, manufacturers have increased the offer prices last week by almost INR 700-1,000/MT in central, western and northern market but the prices re-bound from the increased level owing to low buying.

In Raipur (central India), India’s one of the largest Sponge iron market, few trades are happening in the market at very low prices owing to weak demand. Re-bar prices have fallen by almost INR 1,000/MT in the last 1-week.

In western India, which is Scarp based market, Re-bar prices in Mumbai & Jalna have corrected marginally owing to shortage of material. Re-bar mills have been running on single shift from the last 1-month, which bound the prices to correct further.

In southern India, viability of Re-bar increases from Hyderabad to Chennai owing to lower prices in Hyderabad. It is almost INR 500/MT cheaper than Chennai after delivered to Hyderabad.

In northern India, Re-bar prices are volatile owing to huge fluctuation in Mandi Ingot prices in the current month. In Muzaffarnagar & Jaipur, Rolling mills have cut the power for almost 4-5 hours per day since yesterday, which is uncertain. It is expected that this may support prices further.

Ingot & Re-bar (12 mm) Price Correction from 21-30 Aug, 2014

Market

Region

City

Ingot Price

Correction

Re-bar Price

Correction

Sponge Based

Central

Raipur

29,700

– 800

33,700

– 1000

Eastern

Dugapur

30,200

– 500

32,900

– 200

Scrap- Based

Western

Mumbai

31,800

0

35,200

– 300

Jalna*

31,650

– 350

34,600

 – 400

Northern

Mandi

33,300

– 1,000

37,600

– 500

Muzzaffarnagar

32,250

– 550

35,600

– 600

Southern

Hyderabad

30,200

– 800

34,000

– 800

Chennai

31,150

– 150

36,000

0

Basic prices in INR/MT as on 30th Aug, 2014; Excise &VAT extra,

Note: Jalna*= Billet price

 

India: SAIL offers 5,000 MT Pig Iron for Sale

Steel Authority of India Limited (SAIL), a Government of India Enterprise, is offering Pig iron (basic grade) for sale from Rourkela Steel Plant (RSP) through its open offer. 

SAIL is offering 5,000 MT Pig iron at INR 24,000/MT (ex-Rourkela), which is available for sale on “As is Where is” and “No Complaint” basis against 100% advance payment by Rail/Road.

Specification
Grade: Basic

Total Quantity: 5,000 MT
PCM-II: 5,000 MT (+/- 20%) approx

Price
PCM-II: INR 24,000/MT
Given prices are exclusive of taxes & duties and will be applicable as on dispatch date.

Minimum Booking Quantity: 50 MT or its multiple for road dispatch. Whereas, for rail it should be full rake load

Loading

  • Loading shall be done by RSP and free of cost in case of rail delivery. However, railway freight to be paid before issue of release order
  • Loading shall be done by the concerned party with its own labor & equipment for which loading charges shall be declared along with application for charging service tax. Road delivery procedure at RSP shall be applicable

Important Date

  • Booking period: Till 05 Sep, 2014
  • Sale period: 06 Sep to 06 Oct, 2014

Dispatches will be against 100% advance payment. 

Recently, Neelachal Ispat has also revised its Pig iron offers for the domestic market; selling Steel grade Pig iron in the range of INR 22,900-23,100/MT (ex-Cuttack) with a price correction of INR 500/MT. This time the company is not offering any discount for bulk purchase, same as RSP. Witnessing sluggish demand in market, other Pig iron manufacturers have also reduced their offers by upto INR 500/MT.

 
Odisha Iron Ore Block Auction

India: JSPL starts to purchase Iron Ore from Merchant Market

Bhubhaneshwar, Odisha

Jindal Steel & Power Ltd (JSPL) having a steel capacity of 3 MnT along with 9 MnT Pellet plant is struggling to run plant on the background of Iron ore issues.

Sarda Mines, which produced about 7 MnT in FY14 and used to be the major source of ore for Jindal Steel, has been closed since April, 2014 owing to lack of necessary clearances.

JSPL’s Tensa Mines is operational but has a capacity of 2 MnT pa against total requirement of about 13-14 MnT.

As per the market source, JSPL has started sourcing the key raw material from market. Source, who has recently supplied Iron ore fines to JSPL at market price, has confirmed it.

Market participants mentioned that if the operation of Sarda Mines did not start within a month, it will take a major hit on JSPL’s operation.

Current offers for Fe 62/63 Fines are hovering in the range of INR 2,700-2,800/MT ex-mines, including royalty.

Iron ore supply in odisha has been disturbed since the Apex Court had suspended mining operations for the mines running under 2nd deemed renewal.

Market participants anticipated that there will be short supply of Iron ore fines, if JSPL speed up their purchases from the open market.

 

India: Raipur’s Sponge Iron Prices slip by INR 100-200/MT

Sponge iron prices in Raipur, India’s one of the largest Sponge iron market, has seen a downfall of INR 100-300/MT. Prices, which were unchanged for quite some time owing to scarcity of Iron ore, have corrected on the ground of weak demand.

At present state of affairs, Sponge iron (50% Fines; 50% Lump) is hovering in the range of INR 21,600-21,700/MT and 100% Lump is being offered at INR 21,800-22,000/MT. Meanwhile, DR CLO Sponge is at INR 22,300/MT and 100% Fines is offered in the range of INR 21,000-21,100/MT. Pellet sponge is now at INR 20,000/MT (all prices on ex-works basis).

Market participants mentioned that despite tight supply of Iron ore, prices have corrected owing to production cut by Ingot & Billet manufacturers.

Prices in other parts of the country have also noticed some correction.

Current Offers for Sponge Iron on Ex-Works Basis

Region

City

Grade (FeM)

Price (Basic)

W-o-W

North India

Mandi Gobindgarh

78-80

24,200

– 400

East India

Rourkela

78-80

20,600

– 300

Durgapur

78-80

21,000

– 400

 

Raigarh

79-80

21,600

– 900

South India

Bellary

75

19,600

+ 400

Basic prices in INR/MT; Payment next day/advance

 
Coal Price

India: South African 5500 NAR Coal assessed at USD 76-78/MT CIF India

South African 5500 NAR (RB2) Coal, which is currently in high demand by Indian Sponge iron manufacturers, is assessed in the range of USD 76-78/MT CIF India; based on quantity and delivery period.

For an instance, a capesize vessel for September delivery is offered at USD 76/MT CIF Krishnapatnam port and around USD 77-78/MT CIF Indian East Coast.

With rising Coal prices in the domestic market, imports have been surging continuously.

Traders stock offer of South African RB-2 (52+ Fixed Carbon) is at around INR 5,350-5,400/MT ex-Mangalore port.

The Supreme Court recently declared that all Coal blocks allocated since 1993 are illegal. Next hearing is on 01 Sep, 2014 which will decide the fate of these blocks.

Currently, Indonesian 4800 GAR is offered at USD 50/MT FOB. Meanwhile, 4200 GAR is offered at around USD 49-50/MT CIF India (USD 36/MT FOB). Indonesian new export license regulation is creating fear on thermal Coal buyers. Some of them are seeking big Indonesian miners to secure their shipments; even buyers are willing to pay around USD 0.5/MT extra for safe deal.

 
Beam

India: Heavy Structure Prices fall in Raipur

After stability of more than a week, Structure offers have finally fallen in Raipur amid semi finish price correction.

Raipur based Heavy Structure manufacturers had kept their offers unchanged from last two weeks; even though Ingot/Billet prices had fallen by INR 600-800/MT W-o-W. However at present, Heavy Structure manufacturers reduced their offers by INR 300-500/MT W-o-W after Sponge iron prices corrected by INR 600/MT.

Monnet Ispat is offering 500 I-Beam at INR 37,700/MT ex-Raipur. Meanwhile, Sarthak Ispat is offering 152 H-beam at INR 35,600/MT ex-Raipur; both advance payment.

Ahmedabad Scrap prices have risen by INR 600/MT against previous closing.  This has resulted in Structure price rise by INR 500/MT.

On the other hand, Grace Casting based in Ahmadabad is offering 75 Channel and 50 Angle at INR 34,200/MT ex-plant; advance payment.

Also, Structure prices in Ghaziabad have marginally declined by INR 100/MT and 200 I-Beam is traded at INR 37,600/MT.

 
High Carbon Ferro Manganese

India: HC Ferro Manganese Prices correct by INR 1,000/MT Ex-Durgapur

Ferro Manganese market continues to remain timid as producers and traders continue to lament on low deals.

On sluggish end-user demand, HC Ferro Manganese market remains dull. Currently, 70% min grade is being traded at INR 57,000/MT (ex-Raipur). In Durgapur, producers in order to liquidate their inventory are trading at INR 57,500/MT, as there is low demand from domestic and export market. Also, producers reported of some power shortage in the region. Reportedly, many companies are switching to produce Silico Manganese to increase potential revenue from sales, as they expect a better market for Silico Manganese in the coming days.

Export Market

Overseas demand for Indian origin HC Ferro Manganese is low, with few spot deals concluded in the past month. Export offers for HC Ferro Manganese 70% min remain stable at around USD 930/MT FoB India (East Coast). Whereas, 75% min grade is being offered at around USD 1,000/MT FoB India.

A deal of around 60 MT was heard to be concluded for Korea at USD 950/MT CIF Korea.

SteelMint assessed that there is low assurance in Ferro Manganese market as demand has not picked up and there is little possibility of any price rise until demand from domestic and export market returns.

 Exchange Rate: USD 1=INR 60.48

 
Imported coal

India: NTPC tenders for Purchase of 5 MnT Imported Coal

NTPC invites bid for purchase of imported Steam Coal through Reverse Auction from eligible bidders for its various plants/units via various Indian ports on FoR basis.

NTPC, India’s largest power company, is inviting 4 separate tenders for importing Steam Coal to its various plants/units located in different location of India.

Coal will be imported through various Indian ports at plants namely Simhadri, Ramagundam, Talcher Kaniha, Farakka, Kahalgaon, Rihand, Vindhyachal, Dadri, Sipat, Korba & Mouda Power plant.

General Conditions

  • Bidder must have experience of import/export and supply (including handling & port operation) of minimum 0.3-0.8 MnT of any dry bulk commodity like Coal, Iron ore, Cement etc
  • Any company based in India, which has supplied the above material for a continuous period of 12 months in past 3 years from the date of bid opening, is eligible to apply
  • Bidder’s average annual turnover in the preceding 3 financial years should not be less than INR 4.63-8.79 billion or in equivalent foreign currency
  • Bidders scope of work are arranging vessels, stevedoring, handling, storage, port clearances, arranging railway rakes, loading, transportation and delivery at NTPC power stations

Name of Plants

Quantity (MnT)

Bid Opening Time on 08 Oct’14 (hrs IST)

Talcher Kaniha, Farakka & Kahalgaon

1.8

15.00

Simhadri & Ramagundam

1.6

15.30

Dadri, Sipat, Korba & Mouda

0.9

16.00

Rihand & Vindhyachal

0.7

16.30


Total Quantity: 
5 MnT

Unloading: NTPC will arrange unloading of Coal from railway wagons at NTPC power station.

Bid Receipt Due Date: 14.00 hrs IST on 08 Oct, 2014

To know more about NTPC Tender: Click here

NTPC has floated its last tender for purchase of 5 MnT imported Coal in the month of July, 2014.

 
Pig_Iron

Indian Pig Iron Export Tender received Bids at USD 393/MT

MMTC, India’s largest international trading company, which had floated tender for sale of 40,000 MT (10,000 MT optional) Pig iron in mid-August, received bids from two participants namely Prime Carbon GmbH and MTPL.

Sources mentioned that MTPL bid at USD 393.70/MT and Prime Carbon at USD 392.18/MT. MMTC has awarded 30,000 MT Pig iron (Si upto 1.24%) to MTPL for Sep’14 shipment on FoB Paradip port basis. Sale for the remaining 10,000 MT is under discussion.

NINL

Odisha

 

 

Market participants mentioned that bids are in line with global prices, which are trading high owing to Ukraine crisis.

Last export tender of MMTC floated in Jul’14 was settled with Prime Carbon at USD 398.02/MT FoB East Coast India, which was USD 6.25/MT higher from its competing participant, MTPL (which bid at USD 391.77/MT).

Indian Pig iron prices have touched 1-year low level owing to sluggish demand. Manufacturers recently have reduced their offers by upto INR 500/MT.