Monthly Archives: September 2015

Australian Coking Coal Prices Fall Further This Week

Australian Premium HCC offers have fallen by about USD 1-2/MT W-o-W. Whereas, Australian HCC offers are stable.

Australian Premium HCC offers have witnessed continuous downfall in past couple of months. Prices have fallen continuously W-o-W. Australian Premium HCC prices, this week are assessed at USD 80-82/MT FOB against USD 82-83/MT in the previous week.
Australian HCC offers are stable and are assessed at USD 75-76/MT FOB, similar to last week.

A market participant highlighted, “Coking coal offers from Australia are falling continuously in global market and show limited scope for betterment in near future.” Whereas, one of the importers claimed that they have booked Australian Premium HCC at USD 86/MT CFR India for 65,000 MT vessel.

Freight rates from Australia to India are in the range of USD 8-14/MT.

1. Supramax- USD 13-14/MT
2. Panamax-USD 10-11/MT
2. Capesize- USD 8-9/MT

According to SteelMint’s latest assessment, India has imported 3.8 MnT of coking coal in Sept’15, which was around 4.3 MnT in Aug’15.

Sep30

Grade – Australian Premium HCC
Prices in FOB (Average Monthly Prices)

Contract price between Australia and Japan

Global contract price for coking coal was settled at USD 89/MT for Q4 CY’15 registering a decline of about 24% compared to Q1 CY’15. Production increased continuously from the giant coking coal exporter, Australia and there were strict rules and regulation on import of coking coal by China, the major importer of coking coal. Together, these resulted in over supply of material, which caused crashing of prices in global market.

 

Indian Foundry Pig Iron Market Updates: Week 40

Indian foundry grade Pig iron market experienced mixed sentiments in week 40.

Tata Metaliks, India’s largest foundry grade Pig iron manufacturer has kept its offers unchanged. Pig iron with silicon content more than 2% is being offered at INR 23,000/MT (excluding excise of 12.5%) on ex-works basis. On the other hand, secondary manufacturers have cut their offers to INR 21,800-22,200/MT, ex-works.

Offers at most active foundry grade market of India, Ludhiana, fell by INR 400-500/MT. Here, offers by Sesa and Sona Alloys were heard in the range of INR 24,500-24,600/MT (FOR price, including excise duty of 12.5%). Whereas, Tata Metaliks was heard to have sold bulk quantity at INR 25,000/MT (FOR price, including excise of 12.5%) 15 days back, which turns out to be INR 20,500/MT on ex-works basis.

Over all demand for foundry grade remains weak owing to falling scrap prices in global market.

Meanwhile, prices at western foundry clusters like Kolhapur are at INR 24,500/MT (FOR price, excluding excise duty of 12.5%, VAT extra)

Southern markets also remained dull with foundry grade offers at Koppal at INR 24,500-25,000/MT (ex-plant) and Coimbatore at INR 24,500/MT (FOR price, excluding excise duty at 12.5%, VAT extra).

Foundry Grade Prices as on 30 Sep’15

Particular Delivered Taxes Prices in INR/MT
Durgapur ex-works excluding E.D 22,000-23,000
Koppal ex-works excluding E.D 24,500-25,000
Kolhapur F.O.R excluding E.D 24,500
Coimbatore F.O.R excluding E.D 24,500
Ludhiana F.O.R including E.D 24,500-24,600

Source: SteelMint Research

 

Indian Billet Makers Remain under Pressure, Seeking Bulk Buyers

Domestic billet manufacturers are still under pressure to reduce their offers in order to sustain in market. In a week, prices in central and west India have declined by INR 500/MT and a sharp price correction of INR 1,000/MT has been seen in east and north regions.

Alongside, central and east India based maufacturers are persistently seeking bulk buyers in other regions, but demand is still subdued, leading to price corrections.

Current MS billet offers across major markets are: Raipur at INR 23,050/MT (-450), Durgapur at INR 22,650/MT (-1,050), Mandi Gobindgarh at INR 26,000/MT (-800), Mumbai at INR 23,700/MT (-600), Jalna at INR 23,800/MT (-600), Hyderabad at INR 24,000/MT (0) and Chennai at INR 23,800/MT (-50).

steel

No Viability in Market

In order to supply billet from central (Raipur) to west India (Mumbai and Jalna), there should be a price gap of INR 1,800-2,400/MT, which is currently in the range of INR 1,200-1,300/MT. Similary, price gap from Raipur to Gobindgarh should be around INR 3,700-4,000/MT, which has reduced to INR 3,000/MT. This has created non-viability in domestic market.

In future prospects, it seems that there is lesser probability for improvement in billet prices looking at declining prices of imported scrap (a key raw material in west and north based markets) and subdued finish steel demand.

 

Global Iron Ore Market in Sept’15: Highlights

Global iron ore prices remained almost stable throughout the month. Starting Sept’15, spot iron ore fines prices began with USD 56/MT, CFR China remained in the range of USD 55-57/MT, CFR China and finally ended today at USD 54.4/MT, CFR China.

China iron ore market is still very cold. Market participants anticipate that prices may fall further in the coming months.

Weak steel demand in China is continuously pressurizing iron ore prices. Due to this, few Chinese mills have already slashed their prices in order to sustain in the market and stimulate sales. Currently, there is no profit to manufacturers on steel.

Chinese market will remain closed starting 1 Oct to 7 Oct on account of National Day Holiday.

Highlights of the month

1. In first half of Sept’15, spot iron ore prices lifted up slightly. This was since China iron ore imports were affected due to explosion on at Tianjin Port, which halted movement of iron ore cargoes. This led to lesser imports in Aug’15, resulting in less availability of iron ore in starting of this month which lifted spot iron ore prices.

2. In second half of Sept’15, China iron ore market remained almost stable at USD 56- 57/MT. Reasons for stable prices were no-pick up in demand post-monsoon. Another reason for stable prices was China’s annual conference held in 3rd week of Sept’15. Usually, this conference presents a nice platform for traders to make profitable deals, but due to weak demand, the conference was not remained much beneficial to them.

3. Gina Rinehart’s Roy Hill iron ore project is all set to make its first shipment by next month. This could result in over supply of iron ore and erode the prices, which may slump to USD 40/MT in the coming months. The project will flow around 55 MnT iron ore in the market.

4. Iron ore inventories at major Chinese ports reached 84.52 MnT till 25 Sept’15, up by 2% starting Sept’15. Analysts forecast further increase in port inventories in the coming weeks.

5. Inspite of weak demand and slow economic growth, steel exports from China geared up in first eight months of the year as Chinese mills opted to produce more steel. Recently, steel exports from China have shown signs of entering a declining phase. Export is becoming unviable not only due to weak domestic demand, but also because overseas prices are already lower than export offers.

6. On 30th Sept’15, Shanghai rebar hit record low prices at USD 288/MT. In Aug’15, it hit an all time low of USD 304.5/MT. Major reason was slow Chinese economic growth and lesser steel production.

global prices

 
Ferro manganese tender

SAIL Finalizes 20,440 MT HC Ferro Manganese Tender

SAIL, one of the major steel producers in India, floated a tender to procure 20,440 MT of High Carbon ferro manganese for its various plants. The requirement of the material is for a period of 4 months, starting Sept–Dec’15. The techno-commercial bid had revealed that 12 plants had participated in the tender.

The online reverse auction tender process has also been completed and the material to be purchased shall be covered under two markets:
Market-I (Bhilai Steel Plant)
Market-II (Bokaro Steel Limited, Durgapur Steel Plant, IISCO Steel Plant, Alloy Steel Plant)

L1 (lowest) LCNS price for Market-I has been fixed at INR 45,079/MT and for Market-II at INR 42,105/MT.
L1 price is inclusive of freight; CST/VAT and Entry Tax as applicable.

Domestic FeMn Prices

Affected by very weak demand, Indian producers have been constantly reducing prices to generate buying interest for ferro manganese. SteelMint assessed that the current price for 70% min grade is around INR 44,000-44,500 /MT. However for larger quantities, deals were being concluded at even lower levels.

 
Tata Steel

Tata Steel’s Resumption of Iron Ore Mines Might Pressurize Domestic Pellet Prices

With Jharkhand HC allowing the steel giant to resume its operations at its Noamundi Mines, its sourcing from merchant market would reduce, which might lead to further fall in pellet prices.

Tata Steel raised its procurement of iron ore and pellet drastically after Jharkhand HC stopped dispatches from its Noamundi Mines. The steel giant loaded 93 rakes (47 rakes of iron ore and 46 rakes of pellet) in Sept’15 against 34 rakes (17 rakes of iron ore and 17 rakes of pellet) last month.

It also raised its iron ore sourcing from Odisha mines, loaded 30 rakes in Sept’15 against 3 rakes in Aug’15. Procurement of iron ore from other mines remained almost same. The steel biggy sourced 10 rakes from Rungta Mines and 7 rakes from NMDC.

Tata Steel’s pellet sourcing nearly tripled in Sept’15

The steel giant procured 46 pellet rakes in Sept’15 in comparison with 17 pellet rakes in Aug’15. Major source was Jindal Steel & Power (34 rakes). Others include Brahmani River Pellet (6 rakes) and Odisha Minerals-Adhunik (6 rakes).

Tata Steel iron ore and pellet sourcing – Sept’15 vs Aug’15

Source

Rakes loaded by Tata Steel
Sept’15* Aug’15
Iron Ore Iron Pellet Iron Ore


Iron Pellet

Jindal Steel & Power 34 16
Brahmani River Pellet 6 1
Odisha Minerals (Adhunik) 6 Nil
Rungta Mines 10 7
NMDC 7 7
Tata Steel Odisha 30 3
Total 47 46 17 17

*till 29 Sept’15
1 rake approximately carries 3,850 MT
Provisional data
Source: Railways, SteelMint

Pellet Prices in eastern India might fall

Major pellet makers in eastern India raised their prices sharply in 1st week of Sept’15 over increase in sponge iron prices and sufficient bookings. Tata Steel has remained a major buyer of pellets in Sept’15. Increased intake of pellets from the steelmaker also gave a push to the prices. Pellet prices in Odisha were around INR 4, 750/MT (loaded to wagons at Barbil) and around INR 5,000/MT at Jamshedpur.

It seems that pellet prices which have remained high since last few days might undergo a decline as the major buyer is expected to reduce its purchases in the days to come.

 

No Reduction of Iron Ore Output Cap yet – Odisha Govt

Rubbishing media reports, the Odisha government has denied any reduction of iron ore output cap from non-captive mines in mining circles Joda and Koira for the current financial year. Rather the state steel and mines department may very soon sit to discuss on the matter.

“No decision has been take by the government for lowering of iron ore output cap from non-captive mines in the Joda and Koira mining circles”, said Mr Deepak Mohanty, Director of Mines.

Earlier, there was a media report that the government has lowered iron ore output cap to 50 MnT from 57 MnT in these two mining circles owing to luck luster despatch.

Miners have also denied any such development. “We have not got any order such from the government on the issue. Rather, no output cap has been fixed for this year so far. Moreover, we have information that the government may sit soon to discuss on the matter”, said Mr Prabodh Mohanty of the Eastern Zone Mining Association (EZMA), a body of miners operating in Odisha.

 
Odisha Chrome Ore Production

India: Chrome Ore Production Falls Marginally in August’15

Production of chrome and chrome concentrates has gone down approximately 10% in Aug’15 in comparison to July’15.

Odisha contributes around 98% of the total Chrome Ore produced in India. In August, Odisha produced 167,883 MT of chrome ore and chrome concentrates. This was mainly due to OMC’s production decreasing to 39,206 MT in August, down by over 40% M-o-M.

However, after getting an extension only till 2020 under non-captive status for Sukinda chrome mines, Tata Steel is ramping up its chrome ore production. In August’15, Tata Steel produced 78,687 MT, which is almost 50% of the total chrome ore production in Odisha for the month.

Below is a table of production by chrome ore mines in Odisha for July’15 and Aug’15.

Odisha’s Chrome Ore Production
Mines Name Aug’15 Jul’15
Captive
IMFA Ltd.     20,072     20,029
Balasore Alloys Ltd.     17,333     17,485
Jindal Stainless Ltd.       5,539       8,730
IDICOL       4,073     12,321
FACOR Ltd.       2,972       2,715
Sub-Total(A)     49,990     61,279
Other than Captive
TATA Steel Ltd.     78,687     59,888
O.M.C. Ltd.     39,206     65,711
B.C. Mohanty  –  –
M.L. Mines  –  –
Sub-Total(B)   117,893   125,599
Total (A+B)   167,883   186,878
Qty in MT

Source: Govt. of Odisha

 

Truck Transporters to Go for Indefinite Strike from 1 Oct’15

All India Motor Transport Congress (AIMTC) on 29 Sept’15 has announced in Mumbai an indefinite strike from 1 Oct’15 to oppose toll charge collections by the government.

AIMTC’s Secretary, Amritlal Madan stated, “The government has denied its promises made during the elections to provide a toll free road for truck transporters. Thus, we have decided to go for nationalized strike from 1 Oct’15.”

Bombay Goods Transport Association has also announced to provide endorsement to AIMTC’s decision. Mr. Madan in a press conference held in Mumbai said that among all issues, with which we are tussling now, toll collection should be resolved on priority basis.

He further added that during the elections the government had promised to provide toll free road. In this context, he had met Central Ministry of Road Transport & Highways, who stated that it is not possible to completely eliminate toll collection system. The government has treacherously dealt with the civilians, he highlighted.

AIMTC’s previous President and Advisor, Bal Malkit Singh, mentioned that if government’s motive behind toll plaza is to collect revenue, then we are ready to pay notional amount to the government every year. But, we are not able to understand the problem in accepting our proposal.

– Sources

 

 

Odisha Iron Ore Production Fell Marginally in Aug’15

Monthly iron ore production in Odisha has undergone a marginal fall of 9% M-o-M in Aug’15 and stood at 4.6 MnT (excluding production of SAIL Bolani mines).

Iron ore production in India’s largest iron ore producing state has reduced marginally by 9% from 5.04 MnT in July’15 to 4.6 MnT in Aug’15.

Among merchant miners, Rungta Mines was the largest iron ore producer at 1.09 MnT, followed by Serajuddin Mines at 0.49 MnT and Indrani Patnaik at 0.38 MnT. Odisha Mining Corp (OMC) produced around 47,000 MT iron ore last month.

Among captive producers, Tata Steel produced 0.99 MnT iron ore and SAIL iron ore production stood at 0.09 MnT (excluding production of SAIL Bolani mines) in Aug’15.

Mine-wise Odisha iron ore production in July & Aug’15

Mines Name

Iron Ore Production in ‘000 MT
July’15

Aug’15

Rungta Mines  1,176  1,089
Tata Steel  858  998
Serajuddin Mines  646  488
Indrani Patnaik  355  382
KJS Ahluwalia  331  332
K.N.Ram  156  240
Essel Mining & Industries  184  212
SAIL  577  90.63*
OMC  88  47
Others  668  727
Total  5,039   4,604 *

*Excluding production of SAIL Bolani mines
Provisional data
Source: Govt. of Odisha

Odisha iron ore production at 24.89 MnT in first 5 months of FY16

In first five months of this fiscal, Odisha iron ore production stood at 24.89 MnT. Rungta Mines remains the top producer at 6.3 MnT, followed by Serajuddin Mines at 4.75 MnT and Tata Steel at 3.68 MnT.

Odisha production