Monthly Archives: January 2016

Pig Iron Exports from India Drop; Rise from Russia & Brazil in 2015

Indian Pig Iron Export Falls by 40% Y-o-Y, while Russia and Brazil rise by 15% and 6.5% respectively in 2015.

Slowdown in steel sector all across the globe during 2015 had hit Indian Pig iron exports to great extend. Pig iron exports from India witnessed a fall of around 40% Y-o-Y in 2015. India recorded total exports of 420,500 MT Pig iron during 2015 against 741,000 MT in last year.

Competitive billet offers from China had further added to the pressure for Indian manufacturers, as South East Asian nations which fell among the most favored destination by Indian exporters have seen shift in interest from Pig iron to affordable billets. Indian exports to Thailand and South Korea were recorded at 246,000 MT and 69,000 MT respectively in 2015.

Pig iron exports from Russia rise by around 15%

Despite poor sentiments at global market, Russian Pig iron export market have witnessed rise of around 15% in 2015, recording export at around 4.7 MnT in 2015 against 4.1 MnT in 2014.

The top export destination of Russian exporters in 2015 was US (accounting for about 45% of the total Russian Pig iron exports) followed by Spain, Italy, Turkey and Taiwan

Pig iron exports from Brazil inched up by 6.5%

As per country’s foreign trade ministry report, Pig iron exports from Brazil have witnessed increase by 6.5% Y-o-Y in 2015. The country has exported around 2.75 MnT, against 2.58 MnT in 2014.

Alike Russia, Brazil exported the majority of Pig iron to US market, but recorded a fall of around 10.1% Y-o-Y, to 1.6 MnT from 1.78 MnT.

Meanwhile, Pig iron exports from Brazil to Netherlands and Mexico increased to 286,700 MT and 250,000 MT respectively in 2015 (from 223,850 MT and 98,200 MT in 2014).

 

Pig iron Exports

 

Click on graph for better view

 
Iron ore

Odisha Merchant Miners Selling Iron Ore Fines at Discount of INR 200-300/MT- Sources

Market sources shared that Odisha based merchant miners have sold iron ore fines at discount of INR 200-300/MT to local based pellet manufacturer.

In a recently concluded deal, an Odisha miner has sold fines (Fe 60%) at INR 700/MT (ex-mines) to local based pellet manufacturer.

It also learned that Odisha fines (Fe 63%) offer at INR 1,400/MT (loaded to wagon) to C.G. based pellet manufacturers. West Bengal pellet manufacturer Shyam Sel has hold fines buying at present at any price.

However official prices of fines (Fe 63%) offered by Odisha merchant miners are in the range of INR 1,400-1,450/MT (ex-mines). Iron ore fines buying has fallen significantly with majority of pellet plants closing their production resulting into increased inventory of fines at mine pit.

 

Vizag Steel Further Extends 30,000 MT Pig Iron Export Tender

Vizag Steel, a leading state owned Pig iron producer and exporter in the country, has once again extended the bid submission date for 30,000 MT basic grade Pig iron export tender.

The tender which was due on 11 Jan’16 failed to attract global participants. Hence, the company has extended bid submission date to 5 Feb’16 with the expectation of better response.

Material specification

Carbon: 3.5-4.5%
Manganese: 0.50% max
Silicon: 1.0% max
Phosphorus: 0.12% max
Sulphur: 0.05% max

Tender schedule

Revised bid submission due date: 15:00 hrs on 5 Feb’16
Revised bid opening date: 15:30 hrs on 5 Feb’16

 

Bulk Freight Rates Stable on Low Demand

Bulk shipping freight rates have remained stable in the absence of any change in demand.

Persistence of weak demand in the major global economies coupled with availability of excess vessels have prevented bulk shipping freight rates from undergoing movements, apart from keeping the rates low.

Current coal freight rates

1. Australia to India: USD 5.2/MT (Panamax), USD 10.50/MT (Supramax)
2. USA to India: USD 11.75/MT (Panamax)
3. South Africa to India: USD 9.50/MT (Supramax), USD 9/MT (Panamax)
4. Indonesia to India: USD 5.50/MT (Supramax), USD 4/MT (Panamax)

Current iron ore freight rates

1. India to China: USD 4.9/MT (Supramax)

In the meantime, crude oil prices also have remained low to impact shipping freight rates. Crude oil prices were reported at USD 28.28/barrel on 28 Jan’16.

Crude oil prices vs coal cargo vessel freight rates

Month Crude Oil Prices Vessel Freight, Australia to India
Jul’14 105.61 13.9
Aug’14 100.75 14.2
Sept’14 95.98 15.3
Oct’14 85.06 15.1
Nov’14 75.57 17
Dec’14 59.46 11.5
Jan’15 44.38 9.3
Feb’15 54.06 10.3
Mar’15 52.46 10.2
Apr’15 57.3 9.9
May’15 62.16 10.2
Jun’15 60.21 10.7
Jul’15 54.19 10.5
Aug’15 45.46 9.5
Sept’15 44.48 8.9
Oct’15 48.1 9.5
Nov’15 39.65 9
Dec’15 31.45 6.15
Jan’16 28.18 5.2

Panamax vessel prices in USD/MT
Oil prices in USD/barrel
Source: OPEC, Research

 

Japan’s Total Steel Export Down 1%; Import by 12% Y-o-Y

Japan is the second largest steel producing nation after China with crude steel production of more than 100 MnT. However due to intentional steel crisis, country’s crude steel production have fallen by 5% from 110.7 MnT in 2014 to 105.2 MnT in 2015.

In case of flat steel products, Japan’s CRC production fell by 8.32% followed by HRC and plates production.

Japan’s Crude Steel Production in 2014 & 2015


Steel Production 

2014 2015


% Change

Hot rolled Sheet & Plate 10.85 10.36 -0.05
HRC 45.79 44.73 -2.31
CRC 20.20 18.52 -8.32

Quantity in MnT

As per Japan’s customs data, country’s total steel exports are recorded at 41.64 MnT for 2015 down by 1.04% against previous year. Japan’s highest steel export of 6.63 MnT was made to Korea followed by China of 5.36 MnT and to Thailand of 5.21 MnT.

However Japan’s total steel imports in 2015 were down by 11.59% from 49.08 MnT in 2014 to 43.39 MnT in 2015.

Japan’s Steel Export & Import in Last 4 Years


Years

Steel Exports


Steel Imports

2012 42.49 44.60
2013 43.45 41.59
2014 42.09 49.08
2015 41.64 43.39

Quantity in MnT

Japan’s Flat Steel Export-Import

Country’s total flat steel export for year 2015 are recorded at 18.88 MnT up by 10.73% against 2014 whereas imports stood at 3.06 MnT down by 10% against previous year.

Japan’s HRC exports in 2015 increased by 14.6% followed by increase in CRC by 4.24% and HR plates by 1.18%. However its import for HRC plunged by 5.81% CRC imports fell by 18% and plates import by 13.24%.

Japan’s Steel Export and Import in 2014 & 2015


Steel Exports

2014 2015


% Change

Hot rolled Sheet & Plate 2.85 3.14 10.18
HRC 11.37 13.03 14.60
CRC 2.83 2.71 4.24


Steel Imports

2014 2015


% Change

Hot rolled Sheet & Plate 0.68 0.59 -13.24
HRC 1.72 1.65 -5.81
CRC 1.00 0.82 -18

Quantity in MnT

Japan’s Export-Import from India

Japan’s total steel exports to India in 2015 stood at 2.48 MnT which was 1.62 MnT in year 2014. However Japan’s steel imports from India stands to be very low at just 806 MT in 2015.

Japan’s Steel Export-Import to India in Last 4 years


Years

Steel Exports


Steel Imports

2012 15,30,427 413
2013 16,38,090 1,913
2014 16,18,149 697
2015 24,85,898 8,016

Quantity in Metric Tonnes

 

Indian Ship Breaking Demolition Records High in Jan’16

Number of ships arriving for demolition to Alang has recorded highest figures in Jan’16; reporting surge of 89% to 36 ships in regard to 19 ships in Dec’15.

The month of Jan’16 was comparatively better off in terms of ships coming for demolition. At an average, earlier about 30-32 ships were arriving for demolition, which drastically fell to merely 4 ships in Oct’15.

But in Jan’16, the number of ships increased widely by 89% to 36 ships against 19 ships in Dec’15. Alongside, 11 ships are still waiting for breaching and 7 vessels are expected to arrive in coming days.

The surge in ships (for breaking) is supported by higher Indian price compare to global ship breaking offers. In India steel prices also surged post the announcement of MIP imposition by Indian government during Dec’15. steel Global & domestic ship breaking price scenario

Global ship breaking market remained stable this week with no price fluctuations. In global market, general cargo CNF offers to India, Bangaldesh and Pakistan are currently assessed at the same level of USD 260/MT. While, tanker CNF offers to these countries are reported at USD 290/MT.

On the flip side, ship breaking prices in domestic market are under pressure and slumped by INR 1,000-1,400/MT this week. Current offers in Alang are hovering in the range of 15,050-19,000/MT for all grades amid decline in steel product prices and sluggish demand.

Global ship breaking prices (in USD/ltldt) in week 4

Country General Cargo Tanker
India 250 280
Bangladesh 240 270
Pakistan 245 275
China 125 145
Turkey 150 160

Source: SteelMint Research

 

Panic Continues in Indian Semis Market during Week 5

Indian semi finished manufacturers continued to be under pressure during this week. Sponge prices declined steeply by INR 600-800/MT and billet by INR 300-1,250/MT due to limited buyers and dwindling demand.

On the other side, Pig iron prices rose steeply by INR 200-800/MT as the primary producer, NINL opened its offers with rise in Pig iron prices. However, market participants anticipate this price rise will not sustain for long duration.

Week 5 major points

1. Current 78-80 FeM sponge iron prices prevailing in Durgapur at INR 11,000/MT (-600), Rourkela at INR 10,050/MT (-650), Raipur at INR 11,500/MT (-800) and Bellary at INR 11,000/MT (-600).
2. Meanwhile, P-DRI prices hovered within INR 9,900-11,900/MT in the market.
3. Billet price movements are INR 19,350/MT (-1,250) ex-Durgapur, INR 18,900/MT (-1,250) ex-Rourkela, INR 19,450/MT (-1,150) ex-Raipur, INR 21,650/MT (-1,100) ex-Mumbai and INR 21,200/MT (-300) ex-Hyderabad.
4. Imported scrap offers were on lower side this week; HMS offers were in the range of USD 185-195/MT and Shredded scrap within USD 200-210/MT, CFR India.
5. Odisha government had stopped sales and dispatches of iron ore from Serajuddin’s Balda iron ore mines for allegedly producing less than the fixed limit.

Week 6 major prospects

1. Prices already at decade low levels. Manufacturer may start production cut to sustain price and reduce selling pressure.
2. Odisha based iron ore miners are likely to open their offers in coming week.
3. Viewing resistance in buying, it is expected that imported scrap offers may fall in days to come.

 

JSW’s Saleable Long Steel Sales Up by 40% in Q3 FY16

JSW Steel reported its 3rd quarter results; crude steel production down by 15% and flat steel sales by 24%, but long steel sales up by 40% against Q3 FY15.

JSW Steel yesterday reported increase in its saleable long steel sales by 40% Y-o-Y to 0.66 MnT and 2% Q-o-Q. However, saleable flat steel sales decreased by 24% Y-o-Y to 2.55 MnT and 26% Q-o-Q.

Similarly, the company also reported fall in crude steel production by 15% Y-o-Y and 17% Q-o-Q. The major reason behind the fall is JSW had planned to shutdown its blast furnaces because of relining/modification and capacity expansion at all upstream steel making location viz Vijayanagar, Dolvi and Salem Units.

It also reported that sales in domestic market especially in retail segments have grown up by 82% Y-o-Y during the quarter amid expansion in distribution network.

The company’s domestic sales grew by 8% Y-o-Y but export sales fell to 12% of the total sales from 29% in the same quarter last year.

JSW Steel quarterly performance (standalone)

Particular

Q3 FY16 Q3 FY15 Q2 FY16 %Y-o-Y

%Q-o-Q

Crude Steel Production 2.7 3.17 3.25 -15% -17%
Long Steel Sales 0.66 0.47 0.65 +40% +2%
Flat Steel Sales 1.86 2.44 2.5 -24% -26%
Semis Steel Sales 0.03 0.11 0.03 -73% 0%
Total 2.55 3.02 3.18 -16% -20%

Quantity in MnT
Source: Company Website, SteelMint

 

Update-Central Team Visits Serajuddin Mines

Bhubaneswar: A day after the held-up notice, a team of the union mines ministry lead by Director Prithul Kumar yesterday (29 Jan’16) made an inspection at the Balda iron ore mines of M/s Serajuddin & Company in the Joda mining Circle. He was accompanied by Mr  Prem Prakash, a senior official in the regional office of IBM in Odisha visited one day after the Mining Department.  
 
Though the exact purpose of the visit is still unknown, official sources said that the team studied several technical parameters of the mine in view of the amended MMDR Act, aspects of mineral Administration, IT usage, SDF implementation etc. 

 

Major Markets in North & Central India Change Time for MS Ingot/Billet Trade

Furnace associations in Raipur and Gobindgarh decided to trade MS ingot/billet only for 4 hours on daily basis in order to control volatility.

Trade market in Gobindgarh during 2nd week of Jan’16 decided to trade MS ingot/billet for 4 hours between 11:00 and 15:00 hrs. Major reason behind this is to get stability in current volatile market. However, after the decision (from last 15 days), ingot prices in Gobindgarh fell by INR 700/MT.

Following suit, Raipur based Mini Steel Plant Association (MSP) also decided to trade MS ingot/billet between 13:00 and 17:00 hrs in a day. Association’s spokesperson reported that viewing the panic situation and increase in price volatility, they are forced to do this. If the logic works, manufacturers can replicate the same to sponge iron and rebar trading as well.