Monthly Archives: December 2014

India: NINL cuts Pig Iron Prices by INR 500/MT

Neelachal Ispat Nigam Limited (NINL), a state-owned and India’s largest Pig iron manufacturer, has reduced its offers by INR 500/MT.

NINL gifts its customer by offering cheaper Pig iron in year-end. It’s current offer is INR 20,700/MT for N1 grade (Si upto 1.24%) and INR 20,900/MT for N2 grade (Si: 1.25-1.79%) ex-Cuttack, with an additional discount of upto INR 500/MT.

Participants shared, failure of recent Pig iron export tender (issued on 28 Nov, 2014) coupled with prevailing selling pressure and price war in the domestic market has bounded the company to reduce Pig iron prices for domestic end-users.

Quantity Purchase N1 Price N2 Price  Discount
Upto 499 MT 20,700 20,900 No discount
500 to 999 MT 20,600 20,800 100
1,000 to 1,999MT 20,500 20,700 200
2,000 MT and above 20,300 20,500 400

Prices in INR/MT

Company in order to make its offer more acceptable in market, is allowing discount for minimum purchase of 500 MT. It is also offering additional freight rebate of upto INR 300/MT on the above discounted prices for rakes movement (one rake = 3,500 MT approx).

Distance (in kms) Freight Rebate (in INR/MT)
0-799 No Rebate
800-1,199 100
1,200-1,599 200
1,600 and above 300

Note:

  • The above offers are against 100 % advance payment
  • Prices are valid till 10 Jan, 2015

Domestic Prices as on 31 Dec, 2014

Particulars Market Grades Price in INR/MT W-o-W
Pig iron Durgapur Steel grade 21,000 -100
Raigarh Steel grade 21,00021,200 -200
Raipur Steel grade 21,700-22,000 -200
Cuttack Steel grade 20,500-20,900 -200
Rourkela Steel grade 21,000 0
Jharsugda Steel grade 20,700 0
Giridih Steel grade 21,400 -100
Sponge iron Raipur 80 FeM 19,500 -150
Durgapur 78-80 FeM 19,400* -1,100

*Delivered price
Source: SteelMint Research

 
TMT

Rebar Prices in South India plummet by INR 1,000/MT

Rebar prices in Hyderabad have fallen by INR 1,000/MT. While in Bangalore, it has slumped by INR 400/MT W-o-W because of poor demand and low buying sentiments.

In Southern region, construction activities have slowed down owing to ongoing festival season especially in Tamil Nadu, where festivities will continue till 15 Jan, 2015. Currently, Rebar prices in Chennai remain at the same level of INR 34,100/MT W-o-W.
In Hyderabad, Rebar prices have declined sharply by INR 1,000/MT to INR 32,100/MT owing to low demand from end-users. While, Ingot prices have soften by INR 600/MT to INR 29,200/MT.

Bangalore, which is a major Rebar consumer, is offering the material at INR 34,800/MT with a price correction of INR 500/MT. While, market participants are expecting further correction of INR 500/MT.

According to Bangalore based trader,” Hyderabad is a major supplier of Rebar because of better viability and offering the material at INR 40,000/MT after consideration of all taxes and freight (current freight from Hyderabad to Bangalore is INR 1,500/MT).”
On the other hand, prices in Western & Central India remain firm. SteelMint learnt that stockiest are buying the material as per their requirement. At present, Rebar in Mumbai is being traded in the range of INR 34,000-34,400/MT and in Raipur at INR 31,400-31,800/MT.

Week Price Change of Ingot & Rebar (12 mm)

Region  City  Ingot Price  W-o-W  Rebar Price  W-o-W
Central Raipur 27,550 + 150 31,600 + 100
Eastern Durgapur 28,000 – 650 31,200 – 500
Western Goa 29,500 – 100 35,600 0
Mumbai 30,800 + 200 34,200 – 300
Northern Muzaffarnagar 30,500 – 500 33,300 + 300
Mandi Gobindgarh 31,800 – 250 36,300 – 400
Southern Bangalore 28,880 – 450 34,800 – 400
Hyderabad 29,000 – 600 31,800 -1,000
Chennai 29,400 – 150 34,100 – 100

Basic prices in INR/MT as on 31 Dec’14; Excise & VAT extra

New Gauge Difference in Gujarat still not applied

Gujarat Rolling Mill Association on Monday announced the new gauge difference, which is still not been applied. Few Rebar manufacturers have not agreed with the decision and opposing the final judgment, which is to be taken in a day or two.

Proposed Gauge Difference Old Gauge Difference
Basic = 20mm Basic = 20mm
8mm =Basic + 3,000 8mm =Basic + 2,200
10mm = Basic + 1,500 10, 32mm = Basic + 1,000
12, 16, 25mm = Basic + 400 12, 16, 25mm = Basic + 400
28, 32mm = Basic +1,500
 

Indian Government reduces Import Duty on HRC from Korea to 1.25%

Something not good for Indian Steel Industry especially Flat steel manufacturers, as Indian government has further reduced customs duty on some category of Hot Rolled products from Korea under FTA.

According to notification released by Ministry of Finance dated 29 Dec’14, “In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Indian government in the Ministry of Finance (Department of Revenue), No.152/2009-Customs, dated the 31st December, 2009, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 943 (E), dated 31 Dec, 2009.”

India had implemented comprehensive FTAs with Korea in 2010 and with Japan in 2011. Under FTA, duties on most of the products, traded between the countries, are in the process of either elimination or reduction. Duties in the related cases come to zero levels in phases.

Among the Asian countries, Japan and Korea have started to reap benefits of free trade agreements, while imports to India have been rising sharply and exports have been falling. Indian steel industry has been lobbying hard to keep Steel out of FTA agreements with Japan & Korea.

The Recent Modifications wef  1 Jan’15

Flat Steel Import Duty & Import Quantity
  2013 2014
HS Code Import Duty (Rate%) Import Qty Import Duty (Rate%) Import Qty*
720810 1.88 132 1.25 2,361
720825 5.00 14,352 5.00 5,688
720826 0.00 20,440 0.00 9,550
720827 1.88 60,637 1.25 42,384
720836 0.00 62,754 0.00 28,514
720837-51 1.88 944,994 1.25 663,448

Quantity in MT
*between Apr’14-Sep’14
Source: Dept of Commerce

 

 

India: Sponge Iron Prices correct further by INR 100-300/MT

Sponge iron (DRI) prices in India continue to decline owing to lower demand and easing of raw material supply. Prices have corrected further by INR 100-300/MT on Wednesday, with offers ranging from INR 18,400-19,400/MT for 78-80 FeM Sponge iron (C-DRI) and INR 17,200-18,200/MT for 79-80 FeM Pellet Sponge (P-DRI).

Key Highlights

  1. Sponge iron prices in Durgapur have corrected by INR 300 /MT. Current offer for C-DRI is INR 19,000/MT and INR 17,500/MT for P-DRI
  2. Iron Pellet prices for Fe 63 grade material is prevailing in the range of INR 6,800-7,300/MT (USD 108-115/MT) across India
  3. Steel grade Pig iron prices are being assessed at INR 20,500-21,500/MT (USD 325-340/MT) across India
  4. Imported Scrap demand is stagnant on falling Sponge iron prices. HMS 1&2 offers were assessed at USD 310-315/MT, CIF India

C-DRI & Pig Iron Weekly Price Change

Markets C-DRI (78-80 FeM) Weekly Change Pig Iron (Steel Grade)

Weekly Changes

Raipur 19,400 – 150 21,900 – 200
Durgapur 19,000 – 1,250 20,800 – 400
Jharsugda 18,700 – 200 20,700 – 300
Bellary 18,800 – 350

Basic prices in INR/MT on ex-works basis
Taxes as applicable

 
Ferro Silicon

Indian Ferro Silicon Market Unchanged; Demand Thin

Ferro silicon market was relatively quiet, with participants showing a lack of firm buying interest.

Bhutan Ferro silicon prices were unchanged as buyers remained absent during the seasonal holidays. The market is relatively calm as buy-side participants seemed to shrink away. Bhutan-origin Ferrosilicon 70-75% min is being offered at INR 77,000/MT. Export offers remain flat this week with most international buyers not inquiring for the material due to New Year holidays.

Indian producers have also kept Ferro silicon prices firm aided by stable prices in Bhutan. Current price for 70-75 grade is INR 74,000 /MT in Guwahati. Sources agreed that trade was limited, but seemed buoyant as they felt chances of prices to correct next year is negligible.

“Ferro silicon market is looking very bleak at the moment and I think any price uptick can only be possible in the next month if the steel market improves,” stated a Meghalaya based producer.

SteelMint assessed Ferro silicon market is subdued amid slack demand and market conditions are unchanged with stable prices.

 Exchange Rate: USD 1= INR 63.2

 

Ferrous Scrap Imports from Singapore & Malaysia to become Cheaper

‘Acche din’ for Scrap consumers and importers may begin with arrival of new year 2015 as Indian government has cheered the importers with removal of import duty.

Cheerful moment for Ferrous scrap importers as the Indian government has removed the import duty of 2.5% on Scrap w.e.f 1 Jan, 2015  under Preferential Trade Agreement (PTA) with ASEAN countries (Indonesia, Thailand, Malasyia, Singapore, Vietnam and Myanmar).

Singapore, Malaysia & Thailand are emerging as Scrap suppliers to India. In FY14, India had imported about 4.5 MnT Ferrous scrap, out of which, 5-7% was imported from ASEAN countries.

A recent notification by Ministry of Finance notified revised basic Customs duty for goods imported from ASEAN countries (Indonesia, Thailand, Malaysia, Singapore, Vietnam and Myanmar). Import duty is revised in every 2 or 3 years provided, the import proves to the satisfaction of Deputy Commissioner of Customs or Assistant Commissioner of Customs.

Chapter Heading Product Description Year Remarks
2010 2011 2015*
CH-72 Iron & Steel, Ferro Alloys 7.4 5 0 Negative for Steel makers as imports of Ferro Alloys, Re-bars and Wire rods may increase
CH-72 (7204) Scrap (Ferrous & SS) 7.4 5 0 Positive for Steel makers as import of ferrous and SS scrap will become cheap
CH-27 (270111) Anthrcite Coal 4 2 0 Postive for Indian Power producers, Indonesia contributes about 60% of total Coal imports
CH-27 (270112) Bituminous Coal 4 2 0
CH-27 (270119) Steam Coal 4 2 0
CH-26 (2601-2617) Iron ore, MnOre, Chrome Ore,Lead Ore, Moly Ore, Nickel Ore 2 2 0 Positive for Alloy manufacturesas imports will not attract any duty

* With effect from 1st Jan 2015

 

Indian Coal Importers to benefit as Government cuts Duty on Indonesian Coal

A new year gift to Indian coal importers, who are importing coal from Indonesia, as government has removed import duty of 2% on Indonesian coal wef 1 Jan, 2015 under Preferential Trade Agreement (PTA) signed with ASEAN (Association of Southeast Asian Nations) countries in 2009.

In a recent notification uploaded by Ministry of Finance, which notified revised basic customs duty for goods imported from ASEAN countries (Indonesia, Thailand, Malaysia, Singapore, Vietnam and Myanmar), import duty is reduced in every 2 or 3 years provided that the importer proves the satisfaction of Deputy Commissioner of Customs or Assistant Commissioner of Customs.

Indonesia contributes a major portion of total coal imported to India. In FY14, India had imported 168.4 MnT, out of which, 34.8 MnT of coal was imported from Australia. The rest was imported from other countries such as Indonesia (103.1 MnT) and South Africa (20.6 MnT), as per Indian Coal Ministry.

Chapter  Particulars Year Remarks
2010 2011 2015
CH-72 Iron & Steel, Ferro Alloys 7.4 5 0 Negative for steelmakers as imports
of Ferro Alloys, Rebar and
Wire Rod may increase
CH-72 (7204) Scrap (Ferrous & SS) 7.4 5 0 Positive for Steelmakers as import of
Ferrous and SS scrap will become cheaper
CH-27 (270111) Anthracite 4 2 0 Positive for Indian power producers because
Indonesia contributes about 60% of total coal imports
CH-27 (270112) Bituminous Coal 4 2 0
CH-27 (270119) Steam Coal 4 2 0
CH-26 (2601-2617)

Iron ore, Mn ore, Chrome ore,
Lead ore, Moly ore, Nickel ore

2 2 0 Positive for Alloy manufacturers
as imports will not attract any duty

*wef 1 Jan, 2015

To download the original copy: Click here

 

Top 5 Indian Iron Ore Producers in FY15

Financial Year 2015 has not been an encouraging year for Indian mining industry. On one hand, the Supreme Court lifted mining ban from Goa and on the other, the court orders the temporary closure of nearly half of the Iron ore mines in top producing state like Odisha and Jharkhand due to non-renewal of years old leases.

India is the 4th largest Iron ore producing country in the world. Iron ore production in the country has been steadily falling in the wake of ban imposed in Karnataka, Goa, Odisha and Jharkhand. The country had produced about 150 MnT in FY14 and likely to produce 125-130 MnT in FY15.

Indian Iron ore exports fell sharply in last few years. FY14 recorded total exports of 14.5 MnT, which is expected to fall to 4-5 MnT in FY15.

SteelMint has tried to figure out the top 5 Indian Iron ore miners in FY15 on provisional basis. These five miners to contribute roughly 70% of India’s total Iron ore production.

Particular Company Quantity in MnT
Top-1 NMDC 31
Top-2 SAIL 25
Top-3 Tata Steel 15
Top-4 Rungta Mines 11
Top-5 Serajuddin Mines 8

NMDC to remain the largest Iron ore producer in the country with an annual production of about 31 MnT followed by Steel Authority of India (SAIL) at 25 MnT and Tata Steel at 15 MnT.

Iron Ore Production_2014_15

 
Mill_Scale

Indian Mill Scale Prices hold firm this Week

Mill scale prices in Indian market hold firm this week. Trading activities remained low owing to festive mood. Current prices for Fe 70/68% Mill scale are assessed at INR 2,600-2,800/MT delivered to Kandla port and INR 2,800-3,000/MT ex-works Raipur.

Pellet manufacturers, who are the largest consumer of Mill scale in India, have slowed down their purchases owing to falling Pellet prices and increased supply of Iron ore fines.

A trader based in eastern region highlighted that demand is quite low from Pellet manufacturers and exporters. None of them are willing to stock at these levels. Last trade of Fe 70/68% was concluded at around INR 2,700/MT delivered to Kandla Port.

A Mill Scale exporter highlighted, “We have good amount of stock lying at port, which was bought at high price. Since Chinese prices have fallen, we cannot afford to sell at such low prices. Buying interest from Chinese traders are observed at USD 71-72/MT, CIF China.”

Rising Spot Iron Ore Prices give Some Hope to Indian Exporters

Spot Iron ore prices in Chinese market moved sharply by USD 3/MT on Tuesday, which has given some hope to Indian Mill scale exporters. Mill scale and Iron ore prices are proportional to a very great extent.

Mill Scale Prices as on 31 Dec’14

Place Grade Prices
Ex-Raipur 70/68% INR 2,800-3,000/MT
FoR Kandla 70/68% INR 2,600-2,800/MT
CIF China 70/68% USD 72/MT
FoB India 70/68% USD 54-56/MT

Source: SteelMint Research

 

Will Sponge Iron Prices build pressure on Pig Iron?

Domestic Pig iron market has witnessed slight correction in prices. Participants anticipate further chance of correction in prices.

Eastern & Central Pig iron market of India have witnessed a price correction of around INR 100-200/MT this week. Pig iron prices, which have sustained for a week, began to fall on the backdrop of Odisha government’s allocation of Iron ore to state-based industries under 50:50 rule.

The ordinance passed by Odisha government is damaging Sponge iron prices, which may build pressure on Pig iron prices as well. Adding on to the existing pressure, Steel Authority of India (SAIL) and JSW are also offering fair quantity of Pig iron to the market, when most of induction furnaces are running under capacity and this is creating price war among Pig iron manufacturers.

Meanwhile, growing pressure in Pellet prices, which is continuously falling by INR 200-300/MT per week, is also becoming a reason for market to panic.

Neelachal Ispat to revise Pig Iron Prices Shortly

Neelachal Ispat Nigam Limited (NINL) is likely to revise Pig iron prices soon (probably in a day or two). Earlier, the company had kept its offers firm introducing lucrative discounts on purchase of 100 MT and above.

Failure of recent Pig iron export tender (issued on 28 Nov, 2014) with existing price pressure in domestic market may influence the company to reduce Pig iron prices for domestic end-users.

Domestic Prices as on 30 Dec, 2014

Particulars Market Grades  Price in INR/MT  W-o-W
Pig iron Durgapur Steel grade  21,000-21,200 -100
Raigarh Steel grade  21,000-21,200 -200
Raipur Steel grade  21,700-22,000 -200
Cuttack Steel grade  20,700-21,000 -200
Rourkela Steel grade  21,000-21,300 0
Jharsugda Steel grade  20,700 0
Giridih Steel grade  21,400-21,500 -100
Sponge iron Raipur 80 FeM  19,500 -150
Durgapur 78-80 FeM  19,400* -1,100

*Delivered price