Monthly Archives: November 2014

Indian Iron Pellet Prices likely to weaken in December

Despite higher Iron ore fines prices in the domestic market, Pellet makers may be compelled to reduce offers owing to weak demand and rising imports of Iron ore.

Current prices (basic) of Fe 63% Pellet are standing in the range of INR 8,000-8,500/MT in eastern region and around INR 7,800/MT in southern part.

Sponge iron manufacturers mentioned that it is nonviable to manufacture DRI by procuring Pellets at these prices. They also stated that most of the Sponge iron units are under closure because of high cost of production.

“We have 300 MT per day Sponge iron capacity but are operating at only 100 MT per day owing to shortage of Iron ore & coal. We are seeking for imported Iron ore lump, which is offered to us at around USD 105/MT CIF East Coast of India for December delivery, by a trading house,” said a Sponge iron manufacturer based in West Bengal.

Market participants expect NMDC to lower Iron ore prices for December, which will put pressure on the domestic Pellet prices.

Rising Iron Ore Imports

India’s Iron ore imports have touched an all time high in FY15. Total imports are expected to remain in the range of 9-11 MnT during this fiscal.

Imported Iron ore lump offers from South Africa in bulk quantity are assessed at around USD 97-98/MT CIF Krishnapatnam port; loading in December/January. There are few offers for imported Pellets but manufacturers claim it should be around USD 112-115/MT CIF India.

Pellet Manufacturers reduce Production

Pellet manufacturers said that though demand is not picking up at these prices, it is difficult to pull down prices as Iron ore fines prices are quite high. Some of big Pellet makers like Essar Steel, Jindal Steel & Power and Bajrang Power & Ispat have closed sales as of now because of in-house consumption.

Rajasthan based Jindal Saw, which sells Pellet to Gujarat based buyers, is looking into deliveries of its previous orders, which were booked at INR 6,400/MT (ex-plant). The company is yet to open new prices for fresh bookings.

Indian Iron Pellet Prices

City

Grade (Fe%)

Prices in INR/MT

Barbil 64 Arya Iron & Steel –  8,000*
Paradip 63 Essar Steel – 7,700
Jajpur 64 Brahmani River Pellets- 7,900
Tatanagar 63 Adhunik Metaliks –  7,900
Jharsuguda 62 Shyam Metalics & Energy –  7,800
62 Bhusan Power- 7,600
Raipur 63 Godawari Power & Ispat – 8,600-8,800
Durgapur 62 Rashmi Metaliks –  8,000
Bellary 63 MSPL – 7,800
60 Janki Corp – 6,900
62.5 Minera Steel & Power – 7,850
61.5 Minera Steel & Power – 7,400
Mangalore 63 KIOCL –  7,750

Essar Steel, Jindal Steel & Power, Bajrang Power & Ispat & Jindal Saw have sales closed

Basic prices
*Prices as per loaded into wagon
Source: SteelMint Research

 
Iron_Pellet_Coastal_Movement

India: Essar Steel to ship 100,000 MT Iron Pellets to Iran by Nov’14 end

Essar Steel, having India’s largest Iron Pellet capacity of 14 MnT pa (6 MnT at Paradip and 8 MnT at Vizag), is to ship 102,000 MT high quality DR grade Pellets to Iran by Nov’14 end.

Essar Steel has concluded an export deal with Iran based DRI plants in the price range of USD 130-133/MT FoB Vizag port, including export duty. Export of Pellets attracts a duty of 5%.

In contrast to low margins from export to China, which operates Blast Furnaces and imports BF grade Pellets, export to Iran has fetched better prices. DR grade and superior quality i.e. Fe 66% Pellets are hardly available in Indian market, which is required by Iranian DRI plants.

The deal comes up as a surprise, at a time when global Iron ore prices are trading at 5 year low. Market participants have justified that there is scarcity of high grade DR Pellets in the global market.

At Vizag port, vessel named ‘Avang’ is at berth and 50,000 MT Pellets (Fe 66%) is under loading. The vessel is anticipated to leave Vizag port by 29 Nov, 2014; unloading port is Bandar Abbas, one of the biggest sea port in Iran. Another vessel named ‘Artman’ is at anchorage since 27 Nov, 2014 and is expected to leave the port on 30 Nov, 2014 carrying 52,000 MT Pellets (Fe 66%).

Essar Steel procures Fe 64% Iron ore fines from NMDC’s Chhattisgarh mines. The company has a 8 MnT pa beneficiation plant at Kirandul. The material is pumped as slurry through a 267 km pipeline, to Vizag.

On 19 Nov’14, Kredence Multi Trading, a company of Uttam Galva had shipped 55,000 MT Pellets to Iran from Vizag Port, which was procured from Essar Steel.

Iran uses 100% DR grade Iron Pellets as basic raw material for steelmaking. There is no surplus Pellets in Iran at this stage, so DRI plants are running short of Pellets and many new DRI plants are under construction. According to SteelMint Research, Iran’s current DRI capacity at 17.6 MnT is facing shortfall of 5.1 MnT Pellets.

Operational DRI Plants with 17.6 MnT pa Capacity

Plant Name

Location

Capacity

Mobarakeh Steel Mobarakeh 7
Khouzestan Steel Ahvaz 2.9
South Kaveh Steel Bander Abbas 1.8
Hosco Bandar Abbas 1.6
Khorasan Steel Mashhad 1.6
Bardsir Steel Bardsir 1
Ghadir Steel Ardakan (Yazd) 0.8
Arfa Steel Ardakan (Yazd) 0.8

Capacity in MnT pa
Source: SteelMint Research

 
Wire Rod

Indian Wire Rod Prices show mixed Response

Wire rod prices in Raipur have fallen by upto INR 800/MT in the last 2-3 days. However, offers in Durgapur raised by INR 500/MT W-o-W.

Imported Wire rod especially from China is continuously impacting the domestic market. It is mostly viable nearby coastal regions like Mumbai and Chennai.

Importer based in Bangalore said, “Imported Wire rod from China is of better quality as compared to domestic and currently it is being offered at Chennai port in the range of around USD 462-472/MT CIF (equivalent to INR 29,300); other expenses like port handling, all taxes and freight extra.”

5.5 mm Wire rod offers have fallen in Raipur by upto INR 800/MT in the last 2-3 days and being offered at INR 38,500/MT. However in Durgapur, it is offered at INR 39,100/MT; up by upto INR 500/MT W-o-W.

A Wire rod trader in Raipur said that manufacturers are offering the material by reducing prices rather than giving any discount. Price gap between 12G GI Wire and 12G Barbed Wire widen to INR 2,000-2,500/MT owing to shortage of material in the market. In last month, it was in the range of INR 1,500-2,000/MT. Currently, 12G GI Wire in Raipur is being offered at INR 47,200/MT and 12G Barbed Wire at INR 49,500/MT (inclusive of all taxes).

According to GI and Barbed manufacturer based in Raipur, “Demand seems to be moderate currently coupled with shortage of Barbed Wire, which in turn supporting the prices.”

20 G Binding Wire trading in Raipur & Durgapur at INR 46,000/MT and INR 49,500/MT respectively (inclusive of all taxes).

Weekly Price Change of Billet & Wire Rod (5.5 mm)

City Wire Rod  W-o-W Change Billet W-o-W  Change   Remarks  
Raipur 32,600 -500 28,200 +50  Better demand of GI wire but shortage of Barbed Wire
Durgapur 33,100 +500 29,600 +200   Wire rod prices up by INR 500/MT

Basic prices in INR/MT as on 28 Nov’14
Excise and VAT extra

 

 

India: MMTC floats Tender for 40,000 MT Pig Iron Export

MMTC, India’s largest trading company, on behalf of NINL has invited overseas buyers to purchase basic grade Pig iron on FOBST basis.

Metals & Minerals Trading Corporation (MMTC) has issued an export tender for sale of 40,000 MT basic grade Pig iron (Indian origin) for interested overseas buyers, produced by Neelachal Ispat Nigam Limited (NINL) in Odisha.

The quantity has been offered in two lots – first, firm lot of 30,000 MT and second for 10,000 MT, which is optional lot at seller’s end. Depending upon the availability of material, MMTC may offer the second lot to H-1 bidder at H-1 price.

The loading of the firm lot shall be done at Paradip port along with delivery basis on FOBST. Also, the shipment period is scheduled between the duration of 24 Dec, 2014 to 04 Jan, 2015.

Product Specification

  • Grade: Basic grade
  • C: 3.6-4.3%
  • Mn: Less than 1%
  • Si: Upto 1.24%
  • S: 0.05% max
  • P: 0.15% max
  • Weight: 15-20 Kg

Last date for bid submission will be on 12 Dec, 2014 at 14.30 hrs and the technical bids are scheduled on the same day at 14.45 hrs. Also, the price bids shall open on the same day at 16.30 hrs.

Quoted unit price may be on FOBST Paradip port basis by bidders in the price bid format.

Recently, MMTC has finalized the export deal of 30,000 MT Pig iron with Prime Carbon GmbH, which it had issued in the month of October. The deal was sealed at USD 330/MT FOB ECI. Sources mentioned that Prime Carbon GmbH has further sold this cargo to a Thailand based company at around USD 350/MT CIF.

 
HC Ferro Chrome

India: Uncertainty looms over Indian Ferro Chrome Prices

Although, Ferro chrome prices in China are increasing, Stainless steel prices remain at the same level. Also, there is insufficient demand in the Indian domestic market to suggest any improvement in the near-term.

Indian producers are hopeful that demand from China will increase on the backdrop of rising prices in China. But, demand from the domestic Stainless steel mills in India is very low, as there has been a surge in Stainless steel imports from China at very low rates. As a result, Indian Stainless steel industry’s capacity utilization is just over 50%. Indian Ferro chrome producers need the domestic market share as it accounts for almost half their sales.

Deeply affected by surge in imports from China, the Delhi Stainless Steel Trade Association has written a letter to PMO requesting the Hon’ble Prime Minister Narendra Modi to abolish customs duty on raw material like Nickel and Melting Scraps and to increase custom duty on finished Stainless steel to 15%. SteelMint assessed that this would not only safeguardinterest of the domestic Stainless steel industry but also provide a big boost to Ferro chrome industry in India, which has been plagued by very weak demand of late. Currently, Ferro chrome (grade 60%) is being offered at around INR 69,500/MT (ex-works Odisha) and INR 70,000/MT (ex-Raigarh).

Also, a deal was heard to be concluded at 88-89 cents/lb CIF Japan for early December delivery for small quantities. Currently, Japan is a better market than China for the Indian producers.

Earlier, China’s major stainless steelmakers raised its December purchase price by RMB 50/MT M-o-M late last week.

Following suit, Chinese Ferro chrome suppliers have also lifted domestic spot offers by RMB 50/MT. Domestic spot prices of 50% Cr Chinese HC Ferro chrome rose to RMB 6,300-6,450/MT (equivalent to 78-79.5 cents/lb) in line with higher December bids set by major steelmakers.

This is the first increase in spot prices in China in almost a year and a half. Prices had been falling since July last year amid rising Ferro chrome production capacity and weak demand from the Stainless steel industry.

 Exchange Rate: USD 1= INR 62.10

 
TMT

India: Bombay High Court accepts Petition on Imported Rebar Case

Bombay High Court accepted the petition (writ petition (L) no. 2961 of 2014 and 2962 of 2014) filed by Magnum Steel and Jagannath Steel against mandatory BIS norm for import of Rebar, due to which some imported cargo from China is not being cleared by customs.

Also, Bombay High Court has made Steel Re-rollers Association of Madras and Steel Re-rollers Association of Mumbai as party in this case because any judgment will directly impact members associated to it.

On 07 Nov’14, Central Board of Excise & Customs (CBEC) under Ministry of Finance has ordered and restricted all customs officials to check in all entry points of ports whether the imported Rebar material are in according to BIS norms or not.

On the plea of various importer in Mumbai, High Court has accepted the petition and hearing is likely to schedule soon.

Rising cheaper import of Rebar especially from China in the last six months without the BIS norms has worried steel mill owners in India. As per the Steel Ministry data, India has imported about 5,18,570 MT Bar & Rod (alloy and non-alloy) from Apr’14 to Sep’14. Many experts believe that Chinese steel manufacturers are exporting the material by taking advantage of subsidy on alloy steel (8-14%) by misdeclaration of Non-alloy steel to alloy steel.

As per sources close to the matter, about 7,000 MT of Rebar is laying at Chennai port, awaiting for custom clearance for the last 2 months. Similarly in Mumbai, about 5,000 MT material is not yet cleared since last 1-month.

Reference document attached for your perusal: Click here

 

Indian Sponge Iron Prices Stable despite Thin Trade

Indian Sponge prices have remained stable although trading activities are low. Unavailability and higher raw material cost have made many Sponge units to reduce their production.

Falling steel and Scrap prices in the global market hit Indian Sponge iron industry. Cheaper offers for imported Scrap and high production cost badly hit margins of secondary steel manufacturers.

Market participants do not expect for any sharp downfall in Sponge iron prices. To some extent, imported Scrap offers have shown some strength.

Key Highlights

  • Supply of Iron ore may improve in Odisha as Serajuddin mines heard to have resumed operations. Current offers within state are assessed at INR 6,100/MT for Fe 63% on ex-mines basis, including royalty. Serajuddin is one of the largest operating merchant miner in Odisha
  • Indrani Patnaik offers are heard to be in the range of INR 6,300-6,400/MT for screened 5-18 mm of Fe 61%
  • Rungta (Odisha) is offering low grade 10-30 mm lump at around INR 5,300/MT (including royalty)
  • Odisha based manufacturers are offering Fe 63% Pellet at INR 8,000/MT; buying interest observed at INR 7,700-7,800/MT
  • Imported Scrap offers move up by USD 5-10/MT due to lower import from US & Europe. Current offers are assessed at USD 315/MT CIF India for HMS 1&2
  • NMDC may reduce Iron lump prices owing to lower demand from Sponge & Steel manufacturers. Current prices are INR 4,400/MT for 6-40 mm; Baila lumps of grade Fe 64% (excluding royalty)
  • Coal prices fall in domestic E-auction to an extent of INR 1,000/MT. Buying for imported steam Coal drops.

Trade Wise

  • Vandana offering Sponge (DR-CLO; 0-20 mm) at INR 20,700/MT ex-Raipur; advance payment
  • Shyam Metalics offers for C-DRI (FeM 78) remain unchanged at around INR 19,700/MT ex-Jharsuguda
  • Sundargarh (Odisha) based Sponge makers offering C-DRI (FeM 79) at INR 20,500-20,600/MT; delivered to Raigarh
  • Hyderabad based Sponge manufacturers are selling C-DRI (FeM 70) to Jaipur at INR 18,000/MT (ex-works); freight to Jaipur (by road) at INR 3,000/MT
  • Sunflag/Llyod/ Pushpit Steel to import 1,65,000 MT Iron lump from South Africa at Krishnapatnam port. Prices are assessed for S. African lump (Fe 64%) at USD 97-98/Mt CIF India; loading in December/January
Particular Price
C-DRI; ex-Raipur (FeM 80) INR 20,400/MT
P-DRI; ex-Raipur (FeM 80) INR 18,600-700/MT
C-DRI; ex-Durgapur (FeM 78) INR 21,500/MT
P-DRI; ex-Durgapur (FeM 78) INR 19,500/MT
C-DRI; ex-Bellary (FeM 75) INR 18,500-18,500/MT
P-DRI; ex-Bellary (FeM 75) INR 16,800-17,000/MT
HMS 1&2, CIF Nhava Sheva USD 315/MT
Imported Iron Ore Lump (10-40 mm), Fe 64% CNF India USD 97-98/MT

Note C-DRI- Sponge Iron produced from Iron ore
P-DRI- Sponge Iron produced from Iron Pellet 

 

Lanka Coal Company floats Tender for purchase of Coal

Ministry of Power & Energy, a government entity of Sri Lanka,  has invited bids on behalf of Lanka Coal Company for procurement of 2.2 MnT pa coal for its Lakvijaya Power Plant.

Lanka Coal is the supplier of coal for Lukvijiya Power Plant (900 MW) located at Puttalam in Sri Lanka. Lukvijaya Power Plant is also known as Norocholai Power Station or Puttalam Coal Plant, which is one of the largest coal fired power plant. It is Sri Lanka’s first coal power plant.

The purchase of coal shall be on FOBT basis and also to meet the annual operational requirement of power plant.

Quantity Required: 2.2 MnT pa

Last date for bids submission will be on 14 Jan, 2015 at 15.00 hrs.

 
Essar Steel commissions World’s 3rd Largest Slurry Pipeline in Odisha

India: Essar Steel commissions World’s 3rd Largest Slurry Pipeline in Odisha

Cost of transportation to be reduced by INR 1,200/MT, which in turn will reduce the cost of production.

Bhubaneswar:  Essar Steel has commissioned its 253 km long slurry pipeline with 12 MnT pa carrying capacity connecting the beneficiation facility at Dabuna (Keonjhar) and 6 MnT pa Pellet plant at Paradip. With this, the company has officially announced the commissioning of integrated Pellet complex in Odisha. The pipeline has been termed as world’s 3rd longest pipeline project. Commissioning of the pipeline project is crucial as it’ll reduce the raw material transportation cost and thereby would reduce the cost of production.

pipeline

“With commissioning of this pipeline, our cost of transportation will be reduced by INR 1,200/MT and this in turn will reduce the cost of production,” said Mr. Firdose Vandrevala, Executive Vice President, Essar Steel India. 

Mr. Rajendra Mittal, CEO, Odisha Project, Essar Steel said that the company is currently sourcing raw material (low grade Iron ore and fines) from OMC and some private miners (15:85 ratio). However, due to closure of major merchant miners, we are facing raw material scarcity and Pellet plant is currently running at only 20-25% capacity. But, we are hopeful that the mining situation will improve soon. We have also applied for long-term supply agreements with OMC.

EssarSteel_Paradeep_01

The company has invested INR 60 billion in this integrated Pellet project and is planning to increase its capacity to 12 MnT pa within one year. The project will mainly cater to the domestic Pellet requirement, Mr. Mittal said.

 

India: RINL floats Tender for 100,000 MT Bloom/Billet Export

RINL has floated tender for export of various steel products including Billets, Blooms, Rebar & Wire rod coils. The company is offering a total quantity of 112,000 MT steel products to African, ASEAN (Association of Southeast Asian Nations) & Middle East countries.

Material Description

Material Name Size (mm) Length   (meter) Grade Qty (MT) Min Quoted Qty (MT)
Billet

65×65/
75×75/
90X90

12

IS 2830 Gr. A/
IS 2830Gr. A,
C20MMn

20,000 10,000 or
multiples of 10,000
Rebar

16 to 32

12  IS 1786–2008Fe 500 6,000 2,000 or multiples of 2,000
Wire Rod Coils

 5.5 to 10/
Coil Weight: 1.2 MT

 – SAE 1008/
SAE 1010
6,000 2,000 or multiples of 2,000
Blooms

150X150/
200X200

12 IS2830 Gr.A/ IS2830Gr. AC20MMn 80,000 5,000 or multiples of 5,000

 

Quotations should be given in USD or INR. The delivery of material will be till 15 Feb, 2015 at FOB Vishakhapatnam port or Gangavaram port on direct export basis.

Deadline for submission of bids will be till 18 Dec, 2014 at 15.00 hrs and technical bids will open on the same day at 15.30 hrs.

Other Tenders

Another export tender dated 10 Nov, 2014 for export of 80,000 MT (10,000 MT Billets & 70,000 MT Blooms) to other countries is expecting to get close on 01 Dec, 2014.

Last export tender for export of 80,000 MT (40,000 MT Billets & 40,000 MT Blooms) was closed on 14 Nov, 2014, which was only for African countries.