Monthly Archives: January 2015

CG Commercial Tax Department release notification on VAT and CST

CG Commercial Tax Dept has finalised VAT and CST after it looses the case in High Court on different tax structure in same goods (under Industry classification as per capital invested in Plant and Machinery).

The much awaiting tax has released today finally by the Chhattisgarh Commercial Tax Department. It is going to be applicable with effect from 1st of Feb’15 on all steel goods,except MS Ingot i.e 2% (VAT) against declaration.

VAT- 5%
CST- 2% against ‘C’ form.

The new notification copy is attached for your perusal below.

On 9 Jan’15, Chhattisgarh High Court had ordered a uniform VAT regime for state based Steel Industry. The court’s decision implied that CG Notification No 60/2014 is the breach of article no. 301 and 304 of Indian Constitution Act that give rights to free flow of trade to every Citizen of India.

The C.G. government notification no. 60 in the budget FY-15 defines different tax structure on same product on the basis of industry size. The court also says the notification is also violation of CG Government Tax Structure law article no. 14 that clearly says each goods will taxed uniformly and to all class of dealers.

As per a leading VAT lawyer and consultant, “Rate of tax on iron and steel CST 2% from 01.02.2015. VAT as per notification 5% from 09.01.15. But as per law any notification can be rescinds or issued from prospective date if it enhance the rate of tax. As per my opinion VAT up to 30.01.15 – 3% for all and 5 % for all from 31.01.2015. For Ingot 2% against declaration will continue”.

Please click below file 1

Please Click Below File 2

 

 

 

 

 
TMT

Rebar Prices in South India decline by upto INR 600/MT

Rebar prices in Bangalore have declined by INR 600/MT and in Hyderabad by INR 300/MT W-o-W.

Sponge based Market.

Demand seems to be continuously weak in South Rebar market. Prices in Bangalore have declined by INR 600/MT W-o-W owing to lesser buying from end-users and the material is currently being offered at INR 33,400/MT. In Karnataka, Rebar production capacity is about 0.5 MnT pa.

As per a trader in Bangalore, “Rebar mills have surplus stock available, as a result, they are offering the material at lower price to clear their stock. He also added, few units have cut down their production for temporary period and are under maintenance.

In Hyderabad, Rebar is currently being offered at INR 31,200/MT; down by INR 300/MT owing to decline in Ingot prices by INR 500/MT coupled with slowdown in construction activities, which is due to high prices of construction material like cement and sand.

Scrap based Market

Rebar prices in Chennai (Scarp based market) remains unchanged in the last one week. The trade activities remained dull in the whole month because of continuous festival season.

As per a leading Rebar manufacturer in Chennai, “Currently, we have reduced the production capacity to almost 40-50% owing to low sales of Rebar and we are manufacturing the material as per the requirement in order to maintain the inventory level, but market is likely to pick up in the upcoming month.”

Weekly & Monthly MS Ingot and 12 mm Rebar Prices

Region 

City  Ingot Price  W-o-W  M-o-M Rebar Price  W-o-W

M-o-M

Central Raipur 26,750 -650 -800 30,700 -500 -900
Eastern Durgapur 27,450 -100 -6000 30,200  0 -1,000
Western Ahmedabad 29,000 -150 -1,800 32,600 -500 -1,600
Mumbai 29,300 -500 -1,700 32,800 -200 -1,400
Northern Mandi Gobindgarh 30,350 -200 -1,200 35,100 -300 -1,200
Southern Hyderabad 27,800 -500 -1,200 31,200 -300 -600
Bangalore 29,250 0 + 450 33,400 -600 -1,400
Chennai 29,000 -350 -400 33,400 0 -700

Basic prices in INR/MT as on 31st Jan’15
Source: SteelMint Research

Rebar hyd bng (1)

 

Imported Scrap Offers to India fall further by USD 5/MT

Scrap offers from Europe have came down by USD 5/MT to USD 290-295/MT, CFR India.

Why Scrap Offers in Europe fall by USD 15-20/MT in a day?

Scrap offers in the world’s largest Scrap supplying region, Europe, has fallen sharply by USD 15-20/MT to USD 255-258/MT, FoB Rotterdam in past two days. This is because of less booking from Turkey, which has led to fall in Scrap offers to India as well as across the globe.

Russia, very well using opportunities in adversities (depreciating currency), is offering Scrap & Billet to Turkey at cheaper rates. This has made shift in interest of Turkey from Europe to Russia, pulling down Scrap offers in Europe by USD 15-20/MT.

Currently, Scrap in Turkey (which is the benchmark) is trading in the range of USD 280-285/MT, CFR Turkey Port, depicting price war and low buying interest in the market.

Indian Scenario

As above, Indian Scrap suppliers are also complaining about no buying inquiries in market; floating offers in the range of USD 290-300/MT. On the same note, a renowned Indian importer shared,”We are offering European Scrap, HMS 1&2 at USD 290-295/MT, CFR India. But, still buying interest is lacking.”

While, an importer based in West Coast of India confirmed,“A deal of 2,000 MT HMS 1&2 Scrap is settled at around USD 290-295/MT, CFR Pipavav Port of South African origin. The shipment is expected to reach around mid of Feb’15.”

On the other hand, Middle East suppliers being out of the vogue are continuing to offer HMS 1&2 at USD 300-305/MT and HMS 1 at around USD 315-318/MT, CFR West Coast of India. Out of many, a Dubai based Scrap supplier and yard owner is offering HMS 1 (Fabrication Scrap containing no GI & no CI) at USD 317/MT with 25 MT loading and have sold 4 containers (100 MT) of HMS 1&2 at USD 305/MT, CFR Nhava Sheva. However, a recent deal of HMS 1&2 was heard to have settled at USD 301/MT, CFR Nhava Sheva and HMS 1 at USD 318/MT, CFR Mundra Port.

Indian participants are still hesitant to take position, anticipating fall of another USD 10-15/MT in a month’s time. Buyers are hopeful about Indian Budget and are keeping it a benchmark as a sentiment driver in near future.

Resistance for Scrap in Bangladesh too

After Pakistan, resistance for Scrap purchase is seen in Bangladesh also. Cheaper Billet offers from China & Russia has kept Bangladesh manufacturers in dilemma i.e. whether to buy Billet at USD 380-400/MT or Scrap from Europe at USD 290-300/MT, CFR Bangladesh.

However, few market sources reported a deal of large quantity European HMS 1&2 to have settled at USD 280/MT, CFR Chittagong.

In outlook, surprises in the international market (steep fall in prices) as well domestic policies (upcoming Indian Budget) may drag market for another price correction of upto USD 10-15/MT, CFR India.

Imported Scrap Offers as on 31 Jan’15

Particular Origin Offers W-o-W M-o-M
HMs 1&2 Europe 290-295 -10 -20
South Africa 290-296 -10 -20
Middle East 300-305 -5 -10
HMS 1 Middle East 315-318 0 -15
Shredded Europe 305-310 -10 -20

Prices in USD/MT, CFR Nhava Sheva
Source: SteelMint Research

 
Ferro Manganese

India: HC Ferro Manganese Prices decline on Lower Sales

HC Ferro manganese prices continued to decline in Durgapur and Raipur on factors like low steel prices and poor end-user demand.

Ferro manganese prices slipped further as trade volume remained thin. Currently, 70% min grade is being offered at INR 49,000/MT (ex-Raipur) and INR 51,000-51,000/MT (ex-Durgapur). Buying interest for Ferro manganese continues to weaken as the steel market in India is going through a period of sustained weakening.

“There is a lot of uncertainty about whether the market has bottomed out or there is a possibility of a further weakening in prices”, stated a Raipur based trader.

The export market reported no further fall in prices but remained flat. Export offer for HC Ferro manganese 70% min is around USD 825/MT, FoB India (East Coast) and 75% min is around USD 920/MT, FoB India.

Market participants reported to SteelMint that HC Ferro manganese prices showed no signs of recovering as lower trades and a pullback in buying positions pointed to a lack of confidence in the market and buying interest for Ferro manganese will continue to be restrained.

 Exchange Rate : USD 1 = INR 62

 

India: Essar Steel issues Tender to purchase 2.4 MnT Iron Pellets

Essar Steel’s global tender for purchase of Iron ore pellet from potential Pellet manufacturers for a period of 1-year on FOBST/CFR basis.

Essar Steel, one of the leading steel manufacturers, has released an invitation for potential Pellet manufacturers for supply of 2.4 MnT Iron ore pellet at Hazira, Gujarat.

Key Points regarding Tender

Product: Iron ore pellet
Grade: Direct Reduced (DR)
Specification: Fe 67% min
Quantity: 2.4 MnT
Loading port: Should be mentioned by seller
Discharging port: Hazira, Gujarat
Quotation of prices: Prices should be quoted in USD on FOBT/CFR Hazira basis

Note: The supply contract can be extended upto 3 years depending upon mutual understanding between Essar Steel and the seller.

Last date of submission of bid will be on or before 15 Feb, 2015 at 15.00 hrs.

 
Met Coke

India: Jindal Stainless Offers Met Coke at INR 14,100-14,200/MT ex-works

Jindal Stainless, one of the largest merchant Met coke manufacturers based in East India, is offering Met coke at INR 14,100-14,200/MT ex-works. The company is yet to conclude fresh deals at its current offers with East/Central region based consumers.

Met coke supply in the domestic market has been hit because of Coking coal shortage. Imported Coking coal vessels arriving at East India ports are waiting for about 20-25 days or more for a berthing slot.

Limited rakes available for transferring the material from port to their coke oven plants, has forced importers to use trucks for movement at an additional cost. Even captive Met coke producers do not have sufficient material available for consumption in their blast furnaces as of now.

Ideally, Met coke prices in the domestic market should come down in line with the weakening prices of raw material such as Iron ore, Pellets, Pig iron and Sponge iron, which have decreased by INR 1,000-1,400/MT in a month. But, above mentioned market conditions have supported rise in Met coke prices.

 
Iron_Pellet_Prices

Iron Pellet continues to trade Low in Eastern India

Iron Pellet prices in Eastern India continue to remain under pressure amid falling Iron ore prices in the domestic market. Current Pellet offers are hovering in the range of INR 5,500-6,000/MT for Fe 63% in Odisha, INR 7,000/MT in Chhattisgarh, INR 6,000-6,500/MT in West Bengal and INR 6,950/MT (Fe 62%) in Karnataka.

Odisha based miners have decreased Iron ore prices to an extent of INR 1,000/MT in last one month owing to increased supply and falling steel prices in the domestic and global market.

Trade Log

  1. A Barbil (Odisha) based manufacturer sold Fe 63% Pellets at INR 5,700/MT (as per loaded into wagons)
  2. A Jajpur (Odisha) based manufacturer is offering Fe 63% Pellets at INR 5,500-5,700/MT (as per loaded into wagons)
  3. Raipur based manufacturers are offering Fe 63% at INR 7,000/MT (ex-works)
  4. Hospet (Karnataka) based manufacturers are offering Fe 62% at INR 6,950/MT
  5. Steelmakers claimed to have Pellet offers from Australia at around USD 100/MT, CIF India

Indian Pellet Prices

City

Grade Prices

 (Fe %)

Barbil 64 5,700*
Keonjhar 64 6,000*
Jharsuguda 63 6,500
Raipur 63 7,000
Tatanagar 63 6,100-6,400
Jajpur 63 5,500-5,700*
Durgapur 63 6,000-6,500
Vizag 63 6,600
Hospet 62 6,950
61 6,900

Basic prices in INR/MT
Source: SteelMint Research

 

Spot Iron Ore (Fe 62%) Prices in China decline to USD 61.7/MT CFR

Chinese spot Iron ore prices have declined further by USD 1/MT today. Fe 62% fines is currently at USD 61.7/MT, CFR China.

Continuing the downfall, Iron ore prices in China have fallen further by USD 1/MT today and are at USD 61.7/MT, CFR China.

Reasons behind fall in Spot Iron Ore Prices in China

  1. Raw Material Supply Glut from World’s Major Miners: BHP Billiton and Rio Tinto are continuously increasing their output. In Jan’15, it was reported that Rio Tinto has boosted up its production by 12% in Dec’14 (Y-o-Y).
  2. Increasing Stock at Chinese Major Ports: Iron ore stock at Chinese major ports have increased from 96.94 MnT (as on 26 Dec’14) to 97.96 MnT (as on 23 Jan’15).
  3. Sluggish Steel Market in China: China continues to face tough time with its economy expanding in slowest pace in 24 years in 2014.

Global Iron Ore Prices

Particular

Prices in USD/MT

Fe 63/62, India 61.7
Fe 63.5/63, India 63
Fe 61/60, India 56
Fe 59/58, India 42
Fe 58/57, India 39

CNF China prices
Source: SteelMint Research

Experts anticipate that Chinese spot Iron ore fines (Fe 62%) prices are likely to touch USD 60/MT in the short run.

 

India: SAIL offers 52,800 MT Pig Iron through Open Offer

SAIL is offering approx 52,800 MT Pig iron (Basic grade) for sale from Rourkela Steel Plant (RSP) through its open offer.

RSP, a unit of SAIL, has intended to sale approx 52,800 MT Basic grade Pig iron on ‘As is Where is’, ‘No Complaint’ & ‘First-come-First Serve’ basis by road & rail against 100% advance payment. Interested participants can buy minimum quantity of 50 MT or its multiple for delivery through road and a minimum of one rake in case of delivery by rail.

In the previous SAIL’s open offer dated 19 Jan’15, the company had offered Basic grade Pig iron at INR 20,100/MT delivered by road.

Specification
Grade: Basic

Total Quantity: 52,835 MT approx
PCM-I: 19,080 MT (+/- 20%) approx
PCM-II: 33,755 MT (+/- 20%) approx

Applicable Quantity with Discount Price 

Quantity  Discount Price (By Road) Discount Price (By Rail)
Up to 249 MT 20,100 No Discount
250 to 499 MT 19,950 No Discount
500 to 999 MT 19,800 No Discount
1,000 to 1,999 MT 19,600 No Discount
2,000 to 3,499 MT 19,300 19,400
3,500 to 6,999 MT 19,000 19,100

Discount price in INR/MT

Price mentioned above is exclusive of taxes & duties and will be applicable as on dispatch date. In addition, on the above discount price company has also offered freight rebate for rail customers.

Distance (in Kms)

Freight Rebate (INR/MT)

Up to 349 Nil
350-699 150
700 & above 300

 

Loading
For road delivery: Loading shall be done by the concerned party with its own labor & equipment.
For rail delivery: Loading shall be done by RSP at free of cost.

Important Date

  • Booking period: Till 06 Feb’15
  • Sale period: 31 Jan’15 to 07 Mar’15
 

India: Neelachal Ispat offers 15,995 MT Billet at INR 26,000-26,200/MT

Neelachal Ispat Nigam Limited (NINL), a state-owned steelmaker, is offering 15,995 MT Concast Steel Billet (grade IS: 2830/2831) at INR 26,000-26,200/MT (USD 420-423/MT) ex-plant, Odisha.

  1. Billet of 150×150 mm (9-12 m) is offered at INR 26,000/MT (ex-NINL plant)
  2. 150×150 mm (6 m) Billet is offered at INR 26,200/MT (ex-NINL plant)

NINL’s Offers fall by around INR 1,000/MT against Last Prices

Earlier, NINL had offered the same material i.e. Concast Billet (grade IS: 2830/2831) at around INR 27,000-27,300/MT (USD 435-440/MT) ex-plant. Now, the company has reduced the offers by INR 1,000/MT and increased the quantity to 15,995 MT (earlier quantity was 9,500 MT).

Billet Prices touch 1-year low Level

Indian Billet prices in the secondary market are witnessing continuous downfall movement. SteelMint while analyzing the data assessed, MS Billet prices in the domestic market have almost corrected by INR 1,000-2,500/MT in a month’s time. As per market participant, reasons behind the prices correction is easing supply of raw material and slow demand for finished Long steel. Currently, offers in the secondary market are in the range of INR 26,700-29,700/MT (USD 430-480/MT) ex-plant.

MS Billet Prices touch 1-year low level