Monthly Archives: June 2015

Essel Mining Cuts Iron Ore Lump Prices by INR 200/MT

Essel Mining Industries Ltd (EMIL), which is a part of Aditya Birla group, has cut iron ore lump prices by INR 200/MT, where as fines prices have been kept unchanged. Prices have been cut on back drop of increased supply of ore in domestic market post MMDR act.

Current offers for 30-80mm (61%) are at INR 2,500/MT, 10-30 (61%) at INR 2,850/MT and 5-18mm (62%) at INR 3,850/MT on ex-mines basis, incld royalty.

Other miners like Serajuddin, Indrani and KJS Ahluwalia have already reduced their lump prices by INR 200-350/MT last week.  NMDC likely to cut prices by INR 200-300/MT for July deliveries.

Currently, EMIL’s koira mines is operational, where as Kasia and Jhilling has been closed for quite some while.

 

South African Coal Prices Range-bound Over Q1 FY16

South African coal offers fragile in current week and also expected to decline further in upcoming months.

South African coal prices have been replicating a range-bound trend over the first quarter of FY16. India’s highly preferred grade by sponge plants, South African RB2 (5500 NAR) has been offered at an average range of 61-63/MT CFR India over the past three months (Apr-Jun’15) of this fiscal.

On Monday, South African high GCV RB1 coal (6000 NAR), index prices dipped sharply to USD 59.5/MT FoB for delivery in July’15 which was traded at USD 61.5/MT in previous week. Meanwhile, market has persistently followed a backward trend as South African same grade material is offered at USD 59/MT and USD 58.9/MT for August and September bookings respectively.

South African RB1

The prices have been reflecting a rather stable outlook as the market suffers from low demand as well as excess supply worldwide. On the other hand, the market has seen a huge gap between demand and production, as global demand failed to match pace with supply.

Current offer of South African RB2 is assessed at USD 61-62/MT CFR East Coast for July end delivery. Same material is being offered by Adani Enterprises at USD 66/MT CFR Dhamra port.

An East Coast based trader highlighted, “South African RB2 ready to sale material is offered at INR 4500-4600/MT at Vizag Port (All duties and clearance included). Contrastingly, the same material is being offered at INR 4800/MT at Paradip Port owing to additional demurrage cost.”

India’s stock & sale coal prices at different ports have also turned down sharply in last few weeks owing to low demand coupled with sufficient stock. Almost stable trends have prompted miners and traders to come out with comparatively low offers.

Few market experts anticipate that prices may strengthen by the end of the year, as many global producers have curbed their supply to regain a better position.

 

Pig Iron Market Updates on Week 27

Demand for Pig iron remain dull in Indian market; no discounts work.

Despite price cuts and discounts offered by primary Pig iron manufacturers, buying is heard to remain poor in the Indian market. Participants are hesitatant towards bulk-buying even against discounts of INR 100-400/MT on booking of quantity above one rake.

Offers for steel grade Pig iron by Odisha based plants like NINL (Cuttack) and SAIL-RSP (Rourkela) are at INR 17,400/MT, ex-plants, with quantity discounts upto INR 400/MT on bulk purchases around 14,000 MT. Whereas, secondary manufacturers here are offering the same grade in retail quantity at INR 17,200-300/MT, ex-plant.

Pig iron offers at Durgapur are also witnessing a perfect competition; prices here range between INR 17,000-17,200/MT, ex-plant. Bulk buying is more inclined towards INR 17,000/MT, ex-plant. Similar grade of Pig iron at Bokaro is offered at INR 17,000/MT ex-plant and INR 17,200/MT to Durgapur (delivered, freight included).

Meanwhile, prices in other parts of India remain unchanged. Offers in central India are at INR 18,000-200/MT ex-Raigarh and INR 18,700-800/MT, ex-Raipur; northern India at INR 23,000/MT, delivered to Ludhiana (including ED) and southern India at INR 18,700/MT ex-Vizag and INR 19,500-700/MT ex-Hyderabad.

Trade wise

  1. MMTC is about to ship 42,000 MT Pig iron to Thailand. Loading taking place at Paradip Port
  2. MMTC settled export deal at USD 264/MT FoB Paradip Port
  3. Sesa sailed 30,000 MT Pig iron to Thailand last week; settled deal at USD 273-275/MT CFR Thailand, a month back
  4. Vizag Steel received bid at USD 257/MT FoB Vizag; tender is yet to be awarded
  5. Chinese billet has hit Pig iron market, both domestic and global.
  6. Offers for Chinese billet are around USD 355/MT CFR South East Asian ports

 Pig Iron Prices as on 30 Jun’15

Particular/Delivery Prices Change
Ex-Raigarh INR 18,000-200/MT   0
Ex-Raipur INR 18,800/MT + 100
Ex-Bokaro INR 17,000-200/MT   0
Ex-Cuttack (NINL) INR 17,400/MT   0
Ex-Cuttack INR 17,200-300/MT + 200
Ex-Durgapur INR 17,000-200/MT – 100
Ex-Giridih INR 17,500/MT – 200
Ex-Hyderabad INR 19,700/MT + 200
Ex-Jharsuguda INR 17,600/MT   0
Ex-Ludhiana INR 23,000/MT   0
Ex-Rourkela INR 17,400/MT   0
FOB Brazil $260/MT   0
FOB India $264/MT   0
FOB Black Sea $265/MT   0

Source: SteelMint Research

 

Steel Companies Tussling over Project Hurdles

As per the financial stability report published by RBI on Thursday, out of the top 10 private steel companies, 5 are tussling with severe financial stress owing to delay in implementation of their projects. The projects have been delayed due to problems with land acquisition, environmental clearances including other factors.

In addition, the steel industry is also tussling with other challenges like access to capital for investment, iron ore shortage, low placed mechanism of mines, lower level of capacity utilization of coal washeries, dependence on imported coking coal and volatility in currency market.

China and Brazil continue to dump their steel products in India amidst lower custom duty and Indian export has fallen drastically due to sluggish demand and high pricing.

“These factors have stressed the Indian steelmakers especially private companies,” mentioned in the report.

The centre has taken many measures like surge in import duty from 5% to 15% on semi finish & finish long steel, improved logistics, increased emphasis on research, development and relaxation on ECB rules, which will support the steel industry to recover from prolonged issues.

Few vital upcoming projects such as Bharat Nirman, The Pradhan Mantri Gram Sadak Yojana, The Rajiv Gandhi Awaas Yojana and the recent highway projects by the government are the silver lining for the steel industry as it will help boost demand.

 
Indian Mill Scale Prices

Indian Mill Scale Export Offers Remain Unchanged

Indian mill scale export offers remain unchanged although anticipated fall in Iron ore prices in spot market keeps buying interest low.

Recently an Indian exporter, Aeron Exports, has concluded a bulk deal for 30,000 MT Mill scale at USD 47-48/MT, FoB Kandla Port (West Coast India). Cargo was heard to have sold to Minmetals Cherry Glory, a Chinese trader and it was to be shipped on 30 June’15 to Chinese port.

Indian domestic prices remain unaltered, with Fe 70% iron ore trading at INR 2,200-2,400/MT, delivered Kandla Port. Indian exporter, KK Resources heard to have bought cargoes from domestic mills at INR 2,300-2,400/MT, delivered Kandla Port.

Mill Scale prices in central India remain majorly in the range of INR 2,700-2,900/MT (ex-factory).

Also Read: India Mill Scale Vessels Rejected at Chinese Port

 

Chinese Spot Iron Ore Market Scenario in June’15

Monthly average spot iron ore fines (Fe 62%) prices moved up by USD 3/MT, M-o-M to USD 63/MT, CFR China.

Spot iron ore prices in China witnessed a marginal uptrend this month. Monthly average prices for Fe 62% prices moved up by USD 3/MT from USD 60/MT, CFR China, in May’15 to USD 63/MT, CFR China in June’15.

This month started at the level of USD 62/MT, CFR China, but ended at USD 59.3/MT, marking lowest this month. Talking about today ie 30 June’15, prices fell sharply by 2% against yesterday’s closure and stood at USD 59.3/MT, CFR China for Fe 62% fines.

China Prices Monthly (June)

Global Iron Ore Prices as on 30 June’15


Particular

Material Type

Prices in USD/MT
Fe 62, Australia Fines 61
Fe 62, Australia PB Lump 73
Fe 65, Brazil Fines 64
Fe 65, Brazil Lump 71
Fe 64/63, South Africa Lump 77
Fe 64.5, South Africa Concentrate 68
Fe 65, South Africa Fines 66
Fe 63/62, India Fines 59.6
Fe 61/60, India Fines  53
Fe 59/58, India Fines 49

CNF China prices
Source: SteelMint

In the beginning of Apr’15, spot iron ore prices had touched USD 47/MT, CFR China levels over grounds of increasing iron ore supplies from the world’s major miners and then gradually gained momentum.

Highlights of the month:

  1. Steel market in China remained burdened with overcapacity and weak demand. According to China Iron & Steel Association, crude steel output in China is likely to shrink by 2% this year
  2. Looking at dull steel demand in China and overcapacity, one of the major steelmakers, Baoshan Iron & Steel, slashed steel (hot rolled & cold rolled coils) prices for July’15 bookings
  3. Construction activities which hold a major share of steel demand in China have not recovered much yet
  4. The first week of the month noticed uptrend in prices over temporary shortage of availability of high grade ore. But later the prices fell over waning demand for steel
  5. Also, iron ore market remained closed on 22 June’15 on account of dragon boat festival, as a result of which thin trade was noticed for a couple of days that followed
  6. Roy Hill is likely to begin exporting iron ore later this year. The miner has a production capacity of 55 MnT pa. This might further add up to iron ore supply to China
 

Indian Sponge Iron Prices Continue to Remain Under Pressure

Sponge price in eastern India went down by INR 300-700/MT W-o-W, giving signals to watch prices of central & southern India.

Indian sponge makers are tussling with iron ore prices due to squeezed production cost. A market participant said that sponge prices will remain under pressure in near term due to over supply and increased availability of iron ore. In week 26, few Odisha miners reduced lumps prices by INR 300/MT; other miners may soon follow suit. Similarly, NMDC is also expected to reduce prices for July’15 deliveries.

Pellet Sponge & Iron-Ore Sponge Prices

P-DRI

Markets Grade Prices W-o-W M-o-M
Ex-Durgapur# 78 FeM 13,100 -800 -1,400
Ex-Rourkela 78 FeM 12,900 -500 -1,100
Ex-Raipur 80 +/-1 FeM 14,350 +100 -450
Ex-Bellary 78 +/-1 FeM 13,800 0 -200
Ex-Hyderabad 77 FeM 14,500 -200 -100

C-DRI

Markets Grade Prices W-o-W M-o-M
Ex-Durgapur# 78 FeM 15,200 -700 -1,100
Ex-Rourkela 78 FeM 14,300 -300 -500
Ex-Raipur 80 +/-1 FeM 16,000 NA -700
Ex-Bellary 78 +/-1 FeM 14,700 -200 -650
Ex-Hyderabad 84 FeM 16,800 -50 -200

# delivered
Payment next day/advance
Source:SteelMint Research

Trade wise:
1.Jharsugda (Odisha) based sponge manufacturers offered P-DRI 78-79 FeM at INR 12,800- 13,000/MT, whereas in Raipur it is available at INR 14,300-14,400 /MT
2.Odisha based sellers are offering CDRI at INR 14,500/MT whereas in Raipur it is available at INR 16,000-16,200/MT, by only few makers.
3.Supply from Odisha to Raipur for sponge iron increased this month
4.Durgapur manufacturers are offering P-DRI at INR 13,100/MT and CDRI at INR 15,300/MT. Demand from North India for semi finish is average.
5.Bhaskar Steel based in Bonai (Odisha) is selling 80 FeM C-DRI at INR 14,500-14,600/MT ex-works; advance payment
6.Western India based induction operators prefer to buy C-DRI from South against central & eastern India owing to cheaper offers; 82 FeM C-DRI lump available at INR 15,600-15,800/MT ex-Bellary (Karnataka), while in Raipur it was offered at approx INR 16,700-16,900/MT.
7.Pellet prices unchanged across India W-o-W.

 

MMTC invites Sale of 33,000 MT Concast Billet

Indian billet export market is dull owing to increased import duty by Bangladesh. This is creating a major concern for Indian billet manufacturers who are trying to secure buyers in domestic market.

MMTC, on behalf of NINL, has released an expression of interest (EOI) for signing MOU with the domestic buyers for sale of concast billets . The period of sale will be for one year. The EOI should be submitted till 28 July’16 on first-cum-first serve basis.

It should be noted that the company recently started production of 100 X 100 mm billet. This is the first time that the company is offering 100 X 100 mm grade material.

Minimum quantity lifted by the buyer will be at least 33,000 MT +/- 10% of concast billet at the rate of 2,750 MT per month.

The company will consider the prevailing prices mentioned in the valid price circular at the time of actual delivery on ex-NINL basis. The MOU signing party will be given an additional discount of INR 200/MT in the open sale offers declared by MMTC through price circulars. These additional discounts would be offered to parties at the end of the year for lifting of material as per the following slabs:

  1. Achieving 60% of Annual Quantity: Discount of INR 100/MT
  2. Achieving 80% of Annual Quantity: Discount of INR 150/MT
  3. Achieving 100% of Annual Quantity: Discount of INR 2000/MT

Tough time for Indian exporters

India, being a net exporter of billet, exports around 0.7 MnT billet every year, majorly to Bangladesh, Sri Lanka and Africa. However, China is now aggressively selling billet in global market and is offering at USD 320-330/MT FOB China port.

As such, Bangladesh, the major export market for Indian billet, is preferring Chinese billet over Indian billet, and has also slowed down imports owing to hike in import duty and sufficient inventory levels. It is also anticipated that Indian billet will not be able make room as per current Chinese billets offers, forcing them to sell their material in domestic market itself.

Also, a major Indian primary producer, Vizag Steel, was not able to sell the offered quantity in its recent export tender. In its recent export tender, the company offered 70,000 MT billet/bloom for exports. The company remained barehanded at the end as it could not receive bids for billet. However, only one participant showed interest for bloom.

 
Re-bar

Indian Rebar Producers Struggle to Keep Prices Firm

Rebar prices lowered by INR 100-600/MT W-o-W due to seasonal downtime in steel consumption.

Manufacturers are struggling to keep rebar prices firm due to slow buying from stockists and seasonal downtime in steel consumption. Rebar prices last week went down by INR 100-600/MT, taking cumulative prices down by INR 1,000/MT for June’15.

Mumbai (West India) rebar price went up by INR 200/MT, as Maharashtra increased power tariff by INR 0.70-0.90/unit wef from 1 June’15. Maharashtra’s rebar production reached around 70-80% of the total installed capacity of 3.9 MnT pa in FY15, as per SteelMint’s research. Manufacturers in coastal regions complained of poor financial payment cycle.

MS billet prices also, in line with finish steel, went down by INR 200-850/MT, except in Raipur where prices surged unexpectedly due to news of neighbor city (Raigarh) closing 30 furnace. Sources say that furnace operators had a dispute with Jindal Power over old due of cess in power tariff. However, it is now heard that the dispute has been nearly resolved. As such, few furnances are likely to start by end of day today and the rest may start soon.

Indian Billet and Rebar prices

Region  City  Billet W-o-W  Rebar#   W-o-W
Central Raipur 25,300 + 300 28,900 – 100
Eastern Durgapur 24,600 – 150 27,700 – 200
Western Ahmedabad 26,150 – 850 29,500 – 600
Mumbai 26,600 + 200 29,300 + 200
Jalna 26,300 – 300 29,700 – 100
Northern Gobindgarh(MGG) 28,550 – 200 33,100 – 300
Southern Hyderabad 25,000 – 500 27,700 – 500
Chennai 26,400 + 100 30,300 0
Bangalore 26,250 0 29,900 -200

Basic Prices as on 30 Jun’15, #=12 mm, *Ingot price
Excise duty, CST/VAT extra
Source: SteelMint Research

International Rebar Prices

Country Price (USD/MT) 
China 325
China export (FOB) 335
CIS export FOB (black sea) 395

Note: Prices as on 26 June’15

 

Indian Wire Rod Prices Stable in Week 26

Amid average demand and rising prices of billet in Raipur, this week wire market opened at same prices as it closed last week.

This week, wire rod prices in Raipur and Durgapur opened at INR 29,100/MT and INR 28,800/MT respectively(basic prices). These prices are similar to the last week’s prices. MS billet prices in Raipur went up by INR 300/MT W-o-W and in Durgapur it remained down by INR 150/MT W-o-W respectively.

Raipur’s conversion spread between GI wire and barbed wire has increased to INR 2,000-2,500/MT which was INR 1,500/MT in previous month. Industry participants mentioned that the gap is likely to sustain for a month owing to favorable season for barbed wire. Currently 12G GI wire and 12G barbed wire are being offered at INR 43,000/MT and INR 45,800/MT respectively (prices including all).

Meanwhile, Durgapur market recorded no major changes and the problem related to shortage of material has been reportedly resolved.

Wire Rod Imports

Offers for imported wire rod have declined due to weak Chinese market. Current offers for wire rods of 6.5 mm are prevailing at around USD 365-370/MT FOB China for July end deliveries, origin China.While current trading of ready stock is taking place at USD 380-385/MT CIF Mumbai.7.5% import duty, CVD 12.5% and SAD extra.

One of the officials from amongst primary producers in conditions of anonymity spoke, “After implementation of proposed Steel Quality Order (BIS) in wire rod, we may see a major decline in Chinese import from Sep’15 onwards.” (Quality order attached)

Link to Quality Control Order: DraftNot-130515

Indian Billet and Wire Prices

City MS Billet W-o-W  Change 5.5 mm   Wire Rod  W-o-W  Change 12G  HB Wire W-o-W  Change 20G  Binding Wire W-o-W  Change
Raipur 25,300 +300 29,100 0 30,900 0 35,800 -200
Durgapur 24,600 -150 28,800 -200 30,800 -200 37,900 -200

Basic Prices in INR/MT as on 30th June’15 ED and VAT/CST extra
Source: SteelMint Research

Global Wire Rod Prices

Region

Wire  Rod

US Import CIF 510
EU Import CIF 489
India Import CIF 385

Prices as on 26th June’15,2015
Unit: USD/tonne