Monthly Archives: April 2016

26% Iron Ore Sold via 15th Goan Iron Ore E-auction

The recent iron ore e-auction conducted in Goa received a cold response as only 26% of the offered material was sold.

Directorate of Mines & Geology, Govt. of Goa conducted 15th iron ore e-auction on 27 Apr’16. 2.11 MnT iron ore was put under hammer in 123 lots out of which only 0.55 MnT was sold.

As per the data released by Goa DMG, 0.55 MnT iron ore was sold. The e-auction fetched participation of the exporters. Royalline Resources remained the largest buyer at 0.23 MnT followed by Vedanta (0.18 MnT) and Crest Merchandise (0.03 MnT).

Buyer-wise allotted quantity in 15th Goa iron ore e-auction

Bidder Name

Fines Lump ROM

Total

Royalline Resources  115,000   110,610   225,610 
Vedanta   178,440   178,440 
Crest Merchandise   33,340   33,340 
Shree Someshwar Traders  30,000   30,000 
Bagadiya Brothers  4,910   7,390   13,420   25,720 
Agrawal Minerals Goa  20,000   20,000 
Acropolis Export  14,920   2,700   17,620 
Kalinga Allied Industries  15,270   15,270 
Total  200,100   43,430   302,470   546,000 

Qty in MT
Source: SteelMint Research, Goa DMG

42% of the offered fines sold, ROM & lump less preferred

  1. 0.15 MnT lump was offered out of which 0.04 MnT lump lots received bids and all the lots received bids at par with the base price except one lot. Lump (Fe 51.9) located at Vagus jetty was base priced at INR 730/MT but it fetched bids at INR 810/MT
  2. Out of 0.48 MnT fines offered, 0.2 MnT was sold. Most of the lots fetched bids equivalent to base price. However some lots fetched high bids. Lot containing fines (Fe 60%) located at Vagus jetty received bids at INR 1,440/MT against its base price of INR 930/MT
  3. Out of 1.48 MnT ROM offered, 0.3 MnT aws sold. Most of the lots fetched flat bids, while some fetched higher bids. For instance, ROM (Fe 60%) located at Suctolim mine was base priced at INR 560/MT but it received bids at INR 1,200/MT

Out of 15 e-auctions conducted so far in Goa, 20 MnT was offered out of which only 8.78 MnT has been sold, thus around 6.3 MnT iron ore out of the 15.1 MnT stockpile is yet to be sold.

Goa e-auction

 
Re-bar

Rebar Inventory Rises in West India

Amid low consumption, rebar stock has been risen fortnightly. Meanwhile, prices in Ahmedabad have fallen by INR 1,000/MT in a week’s time.

Indian secondary rebar manufacturers have been facing extreme selling pressure fortnightly due to low consumption of rebar in the market.

Most of the rebar manufacturers shared that the major reason behind low consumption is ongoing summer season, leading to shortage of labour and excessive heat.

A secondary rebar manufacturers based in Gujarat has reported, ”Our inventory has increased abnormally during last few days and if the same situation persist in coming days, prices are likely to fall by around INR 500-1,000/MT.”

Another rebar manufacturers based in Gujarat said that at an average, there is 2,000-4,000 MT of finished material lying at every plant in Ahmedabad, Alang and Gandhidham; depending on plant’s condition.

Rebar prices have fallen by around INR 1,000/MT W-o-W in Ahmedabad and evaluated at around INR 26,400/MT (basic price) for 12 mm.

Indian billet and rebar prices as on 30 Apr’16

Region  City Billet D-o-D 12 mm Rebar D-o-D
Central Raipur 22,100 0 25,100 -200
Eastern Durgapur 22,500 -100 25,000 -200
Western Mumbai 24,000 -200 27,300 -200
Ahmedabad 23,800 -600 26,400 -300
Northern Gobindgarh 25,500 -200 29,600 0
Southern Hyderabad 25,000 0 27,800 0
Bangalore* 24,500 0 29,500 -300

Basic prices in INR/MT; excise duty and CST/VAT extra
* Ingot price
Source: SteelMint Research

 
semi finish market

Week 18 Ends on Sluggish Note for Indian Semis Market

Week 18 concluded on sluggish note as semi finish market reported price corrections of INR 200-500/MT.

In a week, sponge market showed decline in prices by INR 100-500/MT and billet by INR 150-250/MT in domestic market. However, billet offers in south, especially Hyderabad boosted up by INR 500/MT in the duration.

Contrastingly, Pig iron prices upsurged by INR 300-1,000/MT on account of supply shortage in domestic market.

Week 18 highlights

1. 78-80 FeM C-DRI offers assessed at INR 11,800/MT (-300) ex-Durgapur, INR 11,000/MT (-100) ex-Rourkela, INR 12,400/MT (-500) ex-Raipur and INR 12,100/MT (+50) ex-Bellary. Price change is weekly.
2. 78-80 FeM P-DRI prices dipped to INR 10,700-12,800/MT across major markets.
3. 125*125 mm billet prices evaluated at INR 22,500/MT (-200) in Durgapur, INR 21,500/MT (-150) in Rourkela, INR 22,050/MT (-250) in Raipur, INR 24,050/MT (-150) in Mumbai and INR 25,000/MT (+500) in Hyderabad.
4. Pellet prices in central India (Raipur) fell by INR 150/MT amid dull buying.
5. Chhattisgarh based plants prefer Odisha iron ore over NMDC CG iron ore in Apr’16 over cost effectiveness.
6. Bullish global sentiments have driven up imported scrap offers by USD 15-30/MT; shredded available at USD 285/MT, CFR India.

Week 19 outlook

1. Minor fluctuations in semi finish offers are expected in days to come.
2. Imported scarp offers are likely to rise further as Turkey is still showing active participation in buying. However, Indian buyers showed less willingness.
3. As per sources,iron ore fines prices in Odisha are under pressure and expected to fall further.

 
Spot Lump premium as on 30 Apr'16

Spot Lump Premium Further Increases Marginally

Spot lump premium continuous to strengthens upon strong steel margins as well as tighter lump availability.

In Week 17, seaborne lump premium moved up by 14%. It was 0.2075/DMT, CFR China in week 17.Now, in week 18, spot lump premium increased marginally and is assessed at USD 0.2080/DMT, CFR China.

While, global iron ore fines Fe 62% fines prices dropped down at USD 65/MT, CFR China after a recent hike of USD 4/MT within this week, lump premiums were still increased marginally upon strong production margins.

Spot Lump premium as on 30 Apr'16

Currently, Chinese steel mills using blast furnace route to produce steel are preferring high grade ore to feed their blast furnaces, and as prevailing shortage of pellet in China upon destruction of Samarco project which supplies around 11 MnT pellet to China, usage of high grade lumps would be best choice for Chinese mills. This led to continuous increase in lump premium.

Alongside, there were also thin availability of lumps at major stock ports.  Stock of lump cargoes was recorded at 11.3 MnT on 15 Apr’16. The figure declined to 10.5 MnT by the end of this week (as on 29 Apr’16).

Spot pellet premium remains stable at USD 21/DMT

In week 18, spot lump premium remained stable at USD 21/DMT, CFR China for Fe 65%BF grade pellets. In week 17, pellet premium escalated by USD 3/MT W-o-W and touched to USD 21/DMT.

Premium is highest since Oct’15 as many transactions been done at Chinese stock market of seaborne pellet. Meanwhile, world’s a major miners are preferring exporting pellet to countries like Japan and Korea because of high pellet premium available in these countries.

 
global billet

Global Billet Offers Move Up by USD 10-20/MT W-o-W

Global billet offers continue to move up this week, with most of the suppliers raised their offers by USD 10-20/MT. Rising scrap prices in global market and low inventories with Chinese mill have lend support to global billet prices.

On the contrary, buyers remain extremely cautious on consistent rise in prices. Buyers feel that rise in prices are unjustified and prices may come down anytime soon.

But at the moment, its a complete sellers market. Buyers are willing to pay a premium for immediate delivery to capitalize price hike.

Also, with delivery defaults taking place from Chinese exporters, buyers are seeking alternative options.

Indian 30,000 MT billet export tender receives overwhelming response

Recent billet (150*150 mm) tender by Vizag Steel fetched overwhelming response. Bids were heard to receive at around USD 380-385/MT, FoB Indian East coast. Last tender for the same size material was concluded at USD 363/MT, FoB India.

Current global billet prices

Particular Delivery Grade (mm) Currency Price W-o-W M-o-M Remarks
China Export FoB China 150*150 USD 400-410  +23 +93  Chinese billet export offers remain high on rising domestic prices and low inventories.
India Export FoB Vizag 150*150 USD 380-385 +20   +55 Vizag Steel’s recent tender received bids at around USD 380-385/MT.
CIS Export FoB Black Sea 125*125 USD 410-420 +23  +85  Higher scrap prices is lending support to billet prices in CIS region.
South East Asia Import CFR SE Asia 150*150 USD 395-405  +5 –  Offers rise in-line with Chinese prices.
Bangladesh Import CFR Chittagong 150*150 USD 400-410  +13  +78 Low buying interest, mills have stock to last for next 1-2 months. Indian induction furnaces prefer billet.
Middle East Import CFR Dubai 150*150 USD 400-410 +24   +80 Offers moved up on rising scrap prices; domestic billet prices also remain strong.
Turkey Import CFR Turkey 125*125 USD 420-430 +23  +85  Prices up on rising imported scrap offers, which touched USD 310-320/MT, CFR Turkey.
India Domestic Ex-Mumbai 100*100 INR  24,200  -500 Limited trade activities led to price corrections.
China Domestic Ex-Tanshang 150*150 RMB 2,490 -70 +510 Prices remain volatile in domestic market.

Price in Currency/MT
Source: SteelMint Research

 
Iron Ore Mine in Odisha

Odisha Iron Ore Fines Prices may Further Come Under Pressure

In Apr’16, few Odisha based miners had cut iron ore prices while others chose to roll over. Market participants shared that miners are facing pressure more in fines as they are having considerable stock with them. Also sluggish demand has kept east India sponge iron manufacturers under pressure with limited buying interest.

Trade-wise:

  1. Fines (Fe 62%) prices in Odisha are at INR 1,250/MT (ex-mines) and for Fe 63% they are in the range of INR 1,150-1,300/MT (ex-mines). Offers for loaded to wagons for Fe 63% fines are at INR 1,550/MT
  2. Odisha prices for 5-18 mm (Fe 63%) are in the range of INR 2,150-2,400/MT (ex-mines). The variation in prices is due to logistics expenses incured for carrying material from plant to railway siding
  3. Prices of 10-30 mm (Fe 63/62%) are at INR 2,050-2,150/MT (ex-mines). However market sources shared that some Odisha based miners are seen offering 10-30 mm (Fe 63%) at INR 1,750/MT (ex-mines) owing to considerable stock lying with them. Koira miners were heard selling 10-30 mm (Fe 61%) at INR 1,500/MT
  4. Iron ore prices in latest OMC e-auction remained as follows-Koira 10-40 mm (Fe 62%) was base priced at INR 1,750/MT and for its Daitari mines it was base priced at INR 1,800/MT

Prices mentioned above are inclusive of Royalty, DMF & NMET

Fines prices in Odisha may further come under pressure-

On 8th Apr’16, Odisha High Court ordered Jindal Steel & Power (JSPL) to lift its iron ore stocks of nearly 10 MnT (majorly fines) lying at Sarda mines. JSPL is a major pellet maker and had to source iron ore from Odisha merchant miners (primarily from Kaypee Enterprises, Rungta Mines & Serajuddin) to fulfill its requirement.

The steel maker has not yet started lifting iron ore stocks but once it starts lifting the stocks (probably by mid of May’16), fines prices in Odisha may further come under pressure. It is anticipated that fines prices may decline by INR 100-150/MT in the coming month.

 

MIP Drives Down India’s HR/CR Imports in Apr’16

In order to restrict cheaper steel imports in to India, government announced MIP (Minimum Import Price) on 173 steel products on 5 Feb’16.

However, as the lead time for any import shipment to reach India is usually 45-60 days, the MIP impact can be seen only in the import numbers of April month.

As per the provisional customs data, HR/Plates imports have fallen by 69% whereas CRC import plunged by 79% M-o-M basis. HR/Plates imports (under HS code 7208) in Apr’16 (till 23 April) stood at 0.11 MnT and CRC import (under HS code 7209) stood at 37,560 MT.

If Y-o-Y comparison is done, HR/Plates imports this year registered a fall of 62% whereas CRC imports fell by 58% against previous one.

Since June 2015, Indian government has been imposing trade barriers to restrict steel imports in to India.

In June, import duty on steel imports was hiked by 2.5%. Later on in Aug’15, import duty was once again hiked by 2.5% making it to 12.5% in order to help domestic players battle out cheap Chinese imports after currency devaluation by China.

Then in Sept’15, government imposed 20% provisional safeguard duty on hot rolled flat products of non alloy and other alloy steel for 200 days.

However all these measures failed to restrict cheap imports in to India resulting which government announced MIP in Feb’16. As MIP is imposed for six months till 4 Aug’16, government has already initiated anti-dumping duty investigations on HRC, plates, and CRC.

What is MIP?

MIP is the price fixed by the government below which imports will not be allowed in to India irrespective of prices in the international market.

For example, if MIP imposed on HRC is USD 445/MT, HRC imports will be allowed in to India only at or above USD 445/MT, FoB India basis.

MIP fixed for HRC is USD 445/MT, for CRC it is USD 560/MT whereas for plates it is USD 500/MT.

Screenshot from 2016-04-29 18:07:57

 
Structure Price

Indian Structure Market Remains Volatile

Domestic structure manufacturers this week reported sight price fluctuations of INR 100-500/MT across major markets.

Prices in east and north India have surged by INR 100-500/MT. Whereas, offers in west and central regions have moved down by INR 150-550/MT. In the meantime, South market remained stable.

In context to raw material, 125*125 mm billet prices are assessed in the range of INR 21,650-25,000/MT; have fallen down by INR 100-600/MT D-o-D.

Meanwhile, 100*100 mm angle is available at INR 28,800/MT in Durgapur, INR 28,500/MT in Ahmedabad, INR 25,600/MT in Raipur and INR 29,000/MT in Hyderabad.

200*75 mm channel and 200*100 mm beam in Ghaziabad are offered at INR 30,200/MT and INR 29,700/MT, registering a price rise of INR 100/MT W-o-W.

The same size channel offers in Durgapur are assessed at INR 28,800/MT, INR 28,500/MT in Ahmedabad, INR 29,700/MT in Mumbai and INR 25,600/MT in Raipur.

To view all size structure steel price, click here.

 
Mill_Scale

Indian Mill Scale Exporters Take positions on Higher Iron Ore Prices

Indian mill scale export, which was very quiet from sometimes, has seen some enthusiasm on account of rising iron ore prices.

Steelmint learnt that, Indian exporters have resumed purchases from domestic market since last week. Purchase price for 68/70 Fe mill scale is assessed at INR 2,000-2,200/MT (USD 30-33/MT ), delivered to Indian port.

China is the largest buyer of seaborne mill scale and is used to blend with iron ore.

Indian mill scale export has dropped sharply in FY16. Total of 0.22 MnT was exported in FY16 against in 0.49 MnT in FY15.

It is to be noted that export of mill scale do not attract any export duty, unlike iron ore (high grade), which attracts a duty of 30%.

No trades for mill scale have been heard concluded but prices levels for bulk shipments are estimated at USD 65-70/MT, CFR China and around USD 50-55/MT, FoB Indian port.

Whereas, iron ore prices for 62% Fe are assessed at USD 64-65/MT, CFR China.

 

Low Demand for Indian Ferro Manganese in Overseas Markets

Indian-origin ferro manganese exports in April’16 (till 23 April) was reorded at 4067 MT. The Middle-East accounted for more than half of the exports from India in April’16. There is an absence of European buyers for Indian origin Ferro Manganese, who are fulfilling their requirement from Ukraine. Also, if Indian producers need to garner any buying interest from Europe, they need to offer 75% min. grade material at below USD 750/MT FoB India. The realization prices in the export market slipped on absence of buyers.

The realization from the Middle-East is much better. SteelMint learned from market sources that export offers for 70% min. is at around USD 800/MT FoB India (East Coast), and 75% min. is being offered at around USD 840/MT FoB India.

Demand from European nations has weakened greatly as European buyers were mostly procuring the material from Ukraine.

“There is no demand, and I have no inquiries this week. Bids are too low, Indian offers are too high for buyers. Many producers are held with stock. We are not sure but prices may fall again as market outlook is very weak,” said a producer from Kolkata.

Market sources remained pessimistic about market fundamentals and outlook.

Ferro Manganese Export April’16(till 23 April)

Country Quantity
United Arab Emirates 1,278
Iran 999
Pakistan 987
Vietnam 216
Taiwan 125
Others 462
Grand Total 4,067

Qty in MT
Source: SteelMint Research
Exchange Rate: USD 1 = INR 66.3

Indian Ferro Manganese Prices Continues to Drift Lower on Shrinking Demand

Buying interest remained lukewarm with most end users staying on sidelines. Steel mills were being cautious with their procurement as steel sales were weak. “The sentiment in the ferro manganese market is bearish and prices could retreat further,” remarked a producer from Raipur.

SteelMint assessed ferro manganese 70% being offered at INR 50,000/MT (Ex-Durgapur) and INR 50,500-51,000 (Ex-Raipur).

Buy and sell ideas remained fairly far apart, as buyers were waiting for offers to fall. Even after dropping the offers buy and sell side offers did not match.