Monthly Archives: March 2015

Chinese Spot Iron Ore Prices heading Below USD 50/MT?

Spot iron ore prices in Chinese market corrected further by USD 1-1.5/MT on Tuesday, as market fears over supply of Iron ore.Fe 62% Iron ore fines index prices sank to USD 51/MT CIF China, falling to a level of 2004-2005.

Market fears Iron ore prices will fall below USD 50/MT owing to increasing supply in global market and stagnant demand from Chinese steel mills.
“Iron ore prices had to fall looking at growing supplies from global miners, but we did not expect it to fall so low. There is further scope of correction.” said a trader based in Rizhao, China.
 

GRI will keep Imported Scrap Offers firm- Importers

Scrap offers from Europe are expected to rise by upto USD 5-10/MT on account of implementation of GRI (General Rate Increase) on freight of containers transported from Europe to Asian countries w.e.f from Apr’15.

GRI is average increase in freight rates of containers, which is largely due to demand-supply and oil rate in global market. Last year, general rates were increased by USD 200 per container of 20 ft.

According to a trade source,“General rates of containers have increased by around USD 100-150 per container w.e.f 27 Mar’15, though the market currently lacks clarity on application part.”

On a similar note another source at Mumbai shared,“Freights of containers transported from  Middle East countries are also about to increase by around USD 100 per container w.e.f 1 Apr’15, which may inch up Scrap offers by USD 5/MT in coming days.”

Whereas, Scrap offers currently from Europe, South Africa & Middle East remain unchanged at USD 275-280/MT, USD 285-290/MT USD 295-300/MT CFR India respectively. No buying rush is seen in the market. Market seems to be busy with their year end closing activities.

Recent Trades

A deal of 4,000 MT HMS (25 tonnes loading) of South African origin was heard to have settled at USD 285/MT CIF Nhava Sheva.

On the other hand, a deal of 500 MT HMS 80:20 (Europe origin) was settled at USD 278/MT CIF Chennai, recently. Shipment is expected to arrive in the first week of May’15.

Global Scrap prices (in USD/MT) as on Week 14, 2015 ( 30 Mar – 05 Apr)

Particulars Origin Offers in USD/MT W-o-W
HMS(80:20) Europe 275-280 0
HMS 1&2 Middle East 295-300 0
HMS 1 Middle East 305-310 0
S.Africa 285-290 0
Shredded Europe/US 295 0

Prices are CFR Nhava Sheva, India
Source: SteelMint Research

 

Indian Silico Manganese Prices unchanged amid Fiscal Year-end

Buying interest remained lukewarm with most end users staying on sidelines due to the financial year-end .

The spot price for Silico Manganese in India remains unchanged with scanty trading activity, as buyers steered clear of any transaction; waiting for MOIL prices for the next quarter to provide a direction. Most market participants are of the view that MOIL will cut Manganese Ore prices for the next quarter.

Grade 60-14 is currently being offered at around INR 45,000-45,500/MT (ex-Raipur) and at around INR 47,000 (ex-Durgapur).

Moreover, Odisha High Court in its hearing on 25th March 2015, ordered the State Government to act according to the MMDR Act, which gives a transition period till March 2020 for merchant miners and 2030 for captive miners. Market participants expect mining to resume in Odisha by the end of April or beginning of May 2015. This will further boost Manganese ore supply in the market.

It may be noted that nine Manganese ore mines in Odisha, which were due for second deemed renewal, have been closed since May 2014.

Meanwhile, Silico Manganese 60-14 is being offered at USD 720-730/MT FoB East Coast of India, and 65-16 grade at USD 800/MT FoB East Coast of India. In the export market, Indian Silico manganese FoB prices continued on a sharp decline on account of the weak INR and willingness by sellers to lower prices to attract buyers. However, most Indian producers of Silico manganese reported of poor overseas demand and seemed gloomy over the current market situation as they are unable to compete with their Russian and Ukrainian counterparts.

 

India: Odisha miners hopeful of resumption of mines by April

On 25th March 2015, the Odisha High Court, hearing petitions filed by several miners, ordered state government to allow operations in mining shut for second deemed renewal, as per MMDR act.

MMDR act (amended) which passed in the upper house of the parliament, has given a transition period till March 2020 for merchant miners and 2030 for captive miners, which are deemed to be renewed.

The High Court order states ” Having heard learned counsel for the respective parties and after having perused the affidavit of the State filed in Court today, we direct as follows:

(i) The State of Odisha shall implement the Mines and Minerals Development (Amendment) Ordinance, 2015 and the direction of the Union of India as contained in its letter dated 05.02.2015 latest by 27.04.2015. Compliance affidavit be filed on 29.04.2015.

(ii) We further make it clear that, pendency of the writ application shall not come on the way of the State Government to execute/amend the lease deeds and permit operation to the parties who are entitled for extension of term of lease in terms of the Ordinance.

Order Copy

Will Odisha govt increase cap on Iron Ore by 57 MnT?

Odisha government is following a cap of 57 MnT on iron ore production by non captive miners since financial year 2013-2014 and 2014-2015. Big question arises,

Will Odisha government increase cap, when Rungta Mines and Serajuddin have been granted to produce additional 18-20 MnT in December 2014?

Significantly, the Shah Commission in its report tabled in parliament had recommended the production be capped between 50 and 55 million tonnes per annum (MTPA), with an increase of 7.5 percent per annum or equivalent to the growth of steel and sponge iron industry’s requirement.

Odisha miners believe that state government may allow mining by April end but with certain terms and condition.

” Even if mining starts in Odisha, over all production may not increase. State govt’s capping is 57 MnT for non captive miners and can only increase by 7.5% annually.Certainly, miners will push their ‘already mined’ stock, which may put pressure on prices in short term. We have to  wait till state government submits its compliance report to high court on 29th April 2015.” said a miner based in Odisha.

Supreme Court in its order on 16th May asked Odisha state government to temporary suspend operations at all those mines running under second deemed renewal. Total 26 running Iron ore and manganese mines were shut.

Later state government in its express order allowed 8 mines {SAIL(4 mines), Tata (3 mines), OMC(1 mines)} to resume operations and asked them to get statutory clearances with 6 months from date of supreme court’s order.

While SAIL has got all the clearances, Tata and OMC is yet to get. After expiry of 6-months, Tata has filed a petition in High court seeking extension.

 

Indian Pellet Prices remain firm amid Weak Buying

Pellet makers have kept Pellet prices stable on the backdrop of weak buying from Sponge iron manufacturers.

Pellet makers have kept their prices unchanged as of now. Sponge iron (P-DRI) prices have fallen by INR 100-600/MT W-o-W. One of the market participants shared that prices have remain unchanged as of now & we are waiting for the miners to disclose Iron ore prices for the month of Apr’15.

Eastern India: Odisha based Pellet maker, Arya Iron & Steel is offering Fe 63% Pellets at INR 5,700/MT (loaded). Fe 63% Pellet prices in Durgapur are hovering in the range of INR 6,100-6,500/MT (basic). Pellet offers in Jamshedpur are at INR 6,000/MT (basic).

Central India: Pellet offers in Raipur are around INR 6,100-6,200/MT (basic). Sources mentioned that demand continues to remain poor which has resulted into fall in prices of semi-finished steel products. P-DRI prices have declined by upto INR 600/MT W-o-W in Central India.

Western India: Gujarat based sources shared that current Pellet offers for Fe 63% are at INR 5,600/MT (delivered Kandla) though buyers are looking for offers at lower levels.

Southern India: Pellet makers in southern India have also kept their prices unaltered. Hospet Pellet offers for Fe 60% are at INR 6,250/MT.

Indian Pellet Prices 

City

Grade Prices

 (Fe %)

Barbil 63 5,700*
Raipur 64 6,100-6,200
Jamshedpur 63 6,000
Jharsuguda 63 5,900
Durgapur 63 6,100-6,500
Hospet 60 6,250
Kandla 63 5,600**

Basic prices in INR/MT
*as per loaded into wagons
**delivered
Source: SteelMint Research

 

RINL Export Tender for 30,000 MT Pig Iron

Rashtriya Ispat Nigam Limited (RINL) issues an export tender for 30,000 MT Basic grade Pig iron to other countries.

After successful bidding response in the last export tender conducted on 17 Mar’15 for Pig iron, the company is now looking forward to another export tender in the month of April. On 30 Mar’15, the company floated another export tender for sale of 30,000 MT basic grade Pig iron to other countries.

The delivery of material will be till 30 Jun’15, FoB Vishakhapatnam port or Gangavaram port on direct export basis. Quotations for bids will be accepted till 20 Apr’15 at 15.00 hrs and technical bids will open on the same day at 15.30 hrs. The company will not accept bid for less than 30,000 MT as it is to export the whole quantity. Also, the quoted price bids shall be in USD or INR.

Material Specification

  • C: 3.5-4.5%
  • Mn: 0.50% max
  • Si: 1.0% max
  • P: 0.12% max
  • S: 0.05% max

Scenario regarding previous Pig iron Export Tenders

On 25 Feb’15, the company had floated an export tender for 30,000 MT basic grade Pig iron with scheduled technical bids to close on 17 Mar’15. Sources mentioned that the company received a single bid from Prime Carbon GmbH in the entire round at around USD 255/MT FoB Vizag for entire 30,000 MT lot. Though it is not yet confirmed by the company officials, but the company seemed to be positive and tried for negotiation towards the deal.

Another export tender issued in the month of Jan’15, for 30,000 MT basic grade Pig iron, with scheduled technical bids to close on 11 Feb’15, received bid at USD 263/MT FoB Vizag again from Prime Carbon itself.

Other Pig iron Export Tender

MMTC’s another export tender for 40,000 MT is in the pipeline. This tender will expire on 6 Apr’15. The company’s last export tender, closed on 10 Mar’15, had failed due to lack of participants.

RINL has submitted a draft of memorandum of understanding (MoU) to the state government for setting up an ultra mega Steel plant in Keonjhar district (Odisha).
 

Indian Sponge Iron Prices decline by INR 300-500/MT W-o-W

Indian Sponge iron prices have noticed a downfall on Monday, with trades settled at INR 300-500/MT lower from last week.

A big manufacturer in Raipur sold C-DRI (lump) at INR 17,700/MT ex- works, which was at the level of INR 18,200-18,300/MT last week. Similarly, P-DRI is being traded at INR 16,000/MT ex- works, which was offered at INR 16,300-500/MT last week in Raipur.

Situation is very similar in other parts of the country and trades are taking place with INR 300-500/MT lower from last week offers.

Sponge iron manufacturers are optimistic that closed Iron ore mines in Odisha and Jharkhand will resume their operation soon after approval of MMDR bill.

Also, NMDC, India’s largest Iron ore miner has commenced production from its 7 MnT mine in Chattisgarh. Sponge manufacturers are also waiting for NMDC’s Iron ore prices, which will play role in setting direction for the market. NMDC has cut prices by INR 300-500/MT in the month of March.

Trade-wise

  1. Shyam Metalics is offering P-DRI at INR 15,000/MT and Billet at INR 26,000/MT ex-Jharsugda (Odisha)
  2. A large Sponge maker based in Raipur sold P-DRI at INR 16,000/MT and C-DRI (lump; 80 FeM) at INR 17,700/MT ex-works. While, another manufacturer is offering DR-CLO (0-20 mm; 80 FeM) at INR 17,400-17,500/MT ex-Raipur
  3. Durgapur based manufacturers offering C-DRI at INR 17,500/MT and P-DRI at INR 16,500/MT, buying interest remains low
  4. A well-known Sponge maker based in Bellary is offering 77 FeM P-DRI at INR 15,500-600/MT ex-works
  5. NMDC  commences production from its 7 MnT Iron ore mine in Chattisgarh
 
Auction Notice

OMC to auction Chrome Ore & Concentrate on 06 Apr’15

Odisha Mining Corporation (OMC) will be conducting two e-auctions of 25,700 MT Friable Chrome ore and 900 MT Chrome concentrate on 06 Apr’15; kept base price unchanged.

Two online auctions will be conducted by MSTC on behalf of Odisha Mining Corporation (OMC) for 25,700 MT Friable Chrome ore and 900 MT Chrome concentrate on 06 Apr’15. Material is available in different lots at its mines and COB (Chrome ore benification) plant, and is open for both Odisha based and other-state based buyers.

Bidders have to quote for basic price in INR per MT, which will be inclusive of royalty and exclusive of Cess and statutory duties & levies. Also, the minimum quantity to be quoted is 100 MT and in multiples of 100 MT. Bids will open on 06 Apr’15 at 14.00 hrs and last date for bid submission is 04 Apr’15 at 16.00 hrs.

Talking about the prices, the company has kept their base price unchanged for the upcoming auction. Although in the last e-auction conducted on 02 Mar’15, prices of Chrome ore had declined to maximum of 34% (for 48-50 & 46-48 Cr2O3).

Base price comparision of Chrome ore & Chrome concentrate E-auctions

Details of Chrome Ore (Friable)

Region Lot No.  Grade
(Cr2O3%)
Current Base price
(06 Apr’15)
Previous Base Price (02 Mar’15) % Change Current Qty
Offered (MT)

South Kaliapani
Chromite Mine

A +54 12,219 12,241 0.1 7,500
B 52 11,767 11,788 0.1 9,300
C 50 9,819 9,836 0.1 200
D 48 9,426 9,443 0.1 3,600
E 46 9,033 9,050 0.1 3,000
F 44 8,641 Not offered 100
G 42 8,248 8,263 0.1 300

Sukrangi
Chromite Mine

H 48 9,426 9,443 0.1 500
I 46 9,033 9,050 0.1 300
J 44 8,641 Not offered 400
K 42 8,248 Not offered 500
Total  

25,700

Details of Chrome Concentrate

COB Plant
Kaliapani

I 52 11,729 11,750 0.1 200
II 50 9,786 9,804 0.1 300
III 48 9,395 Not offered 200
IV 44 8,612 Not offered 100
V 40 7,829 7,843 0.1 100
Total

900

Source: SteelMint Research

21,600 MT Chrome ore & 1,000 MT Chrome concentrate auctioned on 02 Mar’15

OMC had last auctioned about 21,600 MT Chrome ore and 1,000 MT Chrome concentrate on 02 Mar’15. It has been assessed that the prices of Chrome ore had declined as compared to the previous auction conducted on 28 Jan’15.

H1 prices for +54% Friable Chrome ore was declined by 15% from INR 14,679/MT (price on auction 28 Jan’15) to INR 12,541/MT. Similarly, there was a decline of 6%, 10%, 19% seen in 50-52, 42-44 (from South Kaliapani Chromite mine) and 46-48 (from Sukrangi Chromite mines) grade Friable Chrome ore respectively. On the other hand, for Friable Chrome ore containing grade 48-50, 46-48% Cr2O3, the prices declined greatly by 34% as compared to prices in the auction conducted in the month of January.

 

Spot Iron Ore (Fe 62%) Prices in China fall below USD 53/MT, CFR

Chinese spot Iron ore prices have declined further today. Fe 62% fines is currently at USD 52.9/MT, CFR China.

Spot Iron ore prices in China have fallen further by 2.2%. It had last touched USD 54.1/MT, CFR China level on 27 Mar, 2015. World’s leading miners continue to ramp up production and demand in China continues to remain weak.

Concerns over pollution has forced steel mills to reduce production especially in the northern province of China.

Global Iron Ore Prices

Particular

Prices in USD/MT

Fe 63/62, India 53
Fe 63.5/63, India 54
Fe 61/60, India 47
Fe 59/58, India 33
Fe 58/57, India 30

CNF China prices
Source: SteelMint Research

Iron ore stocks at Chinese major ports have also witnessed an increase. Stocks have rose from 96.35 MnT to 97.06 MnT W-o-W

 
Coal ministry

India: 16 Auctioned Coal Blocks Production might halt

The Ministry put few auctioned Coal block’s operation on 2 months halt as few formalities are yet to be completed.

The Indian Coal Ministry had finished auction of 31 Coal blocks in two phases i.e. Schedule II &III on 9 March. Taking the process to the next step, ownership rights to Schedule II Block winners had been granted by the ministry on 23 Mar’15. However, production of 16 blocks will not start for at least two months.

Post auction of Schedule II, the government focused on ownership transfers to new winners. But production in all those blocks will stop for next 2 months as there are a number of formalities pending to be completed by the new owners. Until this situation is taken care of, mining in the blocks cannot be continued.

All companies that had won blocks are required to sign a fresh mining lease with the state governments and seek fresh approvals for mine operation from the Director General of Mines Safety. On the other hand, long halt for the operational coal blocks may result in fuel shortage in Steel & Power plants.

Earlier the Ministry had put few auctioned blocks on hold for proper evaluation and still waiting for final verdict of Delhi High Court. Meanwhile, the government had decided to give ownership for certain chosen blocks only.

42 out of the 204 blocks were operational at the time of cancellation. The ministry granted permission to the erstwhile holders of those 42 blocks to continue operation till 31 Mar’15. It also asked to remove their coal stocks within a period of seven calendar days i.e. till 8 Apr’15.

The Coal Ministry allotted 14 Coal blocks to power generation utilities of various states last Tuesday.