Monthly Archives: May 2016

South African Coal Offers Trending High amid Weak Demand

India’s demand for South African grade has limited now. Sponge sector is buying conventionally in small quantities due to higher offers.

South African Coal index has shoot up again this week and assessed at USD 55/MT (6000 NAR), FoB Richards Bay for Jul’16 shipments. However, 5500 NAR CFR India offers remain unchanged at USD 53-54/MT for Jul’16 shipments.Indian buyers are still looking for discount of USD 5-5.25/MT on the given offers.

Particularly, India’s interest for South African grade seems to be falling regularly as the country is flooded with non-conventional suppliers from other regions with competitive offers.

An Indian trader quoted, “There are few enquiries heard in West Coast India for current loading with a discounted bid of USD 5-5.25/MT on offers as current prices are too high to take quick position in the market. However, still have moderate demand from Indian sponge sector.”

Also added, they are offering about 50,000 MT South African RB2 (5500 NAR) coal at USD 54/MT, CFR Mangalore Port. The vessel is expected to reach in Jun’16 end at the port. Meanwhile, the same grade material in a capsize vessel is also being offered at USD 54/MT CFR Vizag, which is expected to reach till the end of Jul’16.

South African RB2

Another market participant highlighted that there are strong market speculations that prices will fall shortly as no major demand seems in the market on the given level.
In India, South African low CV 4800 NAR is available at USD 43-44/MT, CFR Kandla port for Jun’16 loading.

At present, ready to sell material of 5500 NAR coal is available at INR 4,500/MT at Magalore Port. Whilst, the same grade material is being offered at INR 4,400/MT (all duties and clearance included, taxes will be added further) at Krishnapatnam Port.

At West Coast India, low CV 4800 NAR coal stock & sale material is being offered at INR 3900/MT. While, high CV 6000 NAR is available at INR 5,000/MT at Kandla Port.

Vessel freight rates
Sea freight rates have gone up now a days. Also, freight for shipping coal in Panamax vessel from South Africa to India is assessed at USD 8-9/MT for East Coast ports.

Meanwhile, vessels freight rates are driven by increased crude oil market, which inched up to USD 50/barrel on Monday for the first time in 7 months. All size of bulk vessel freights are hovering in the range of USD 6-12/MT.

 

 

SAIL’s Production and Sales Performance in FY16

India’s largest steel maker, SAIL reported 14.3 MnT of crude steel production and 12.4 MnT of saleable steel production. Its saleable steel sales was at 12.1 MnT.

Steel Authority of India Limited has reported its FY16 results and produces 14.3 MnT crude steel and 12.4 MnT saleable steel in the fiscal. The company’s hot metal production touched at 15.7 MnT in FY16.

In the meantime, SAIL’s saleable steel sales was registered at 12.1 MnT in the duration.

Production and sales performance in FY16

Particulars Quantity in MnT
Hot Metal Production 15.7
Crude Steel Production 14.3
Saleable Steel Production 12.4
Semis component in production 26% of saleable steel
Value Added Production 5.1
Production through concast route 10.8
Saleable Steel Sales 12.1

 

The company’s saleable steel production fell by 3% in FY16 against FY15. However, its salebale steel sales grew by about 4% Y-o-Y in the same duration.

Steel

SAIL’s modernisation & expansion plan

The company planned to ramp up crude steel production from 14.28 MnT to 21.4 MnT in FY16 and saleable steel production from 12.38 MnT to 20.2 MnT after on-going capacity expansion.

SAIL Chairman PK Singh stated to media, “SAIL witnessed better figures in last quarter of FY16 and is targeting to complete the balance modernisation and expansion with a focus on energy saving methods, enriching its product mix and introducing customer centric processes”.

Capacity after expansion

Plant Hot Metal Crude Steel Saleable Steel
FY16 After Expansion FY16 After Expansion FY16 After Expansion
BSP 5.3 7.5 5.1 7 4.2 6.6
DSP 2.2 2.5 2 2.2 1.9 2.1
RSP 3 4.5 2.7 4.2 2.4 4
BSL 3.7 5.8 3.4 4.6 2.6 4.2
ISP 1.4 2.9 0.9 2.5 0.9 2.4
VISL 0.1 0.3 0 0.2 0 0.2
ASP –  –  0.1 0.5 0.1 0.4
SSP  –  – 0.1 0.2 0.3 0.3
Total 15.7 23.5 14.3 21.4 12.4 20.2

Quantity in MnT
Source: SAIL’s Report

 

Indian Ship Breaking Demolition Plunges by 47% in May’16

The number of ships arriving for demolition in Alang (Gujurat) fell drastically by about 47% to 16 ships in May’16 in contrast to 30 ships in Apr’16.

In May’16, total 16 ships have arrived to Alang, which was 30 ships in the month of Apr’16, and 17 ships in May’15. There are still 7 ships in this month waiting for breaching and two vessels are expected to arrive.

Currently in Indian domestic market, ship breaking prices are hovering in the range of INR 16,000-18,900/MT (USD 239-282); down by INR 300-900/MT within a month.

Imported scrap offers in the month of May have plunged by USD 45-55/MT M-o-M. Besides, billet prices have also fallen steeply by INR 800/MT in Mumbai during the month.

shipbreaking

Price scenario

During week 21, buyers in Bangladeshi markets were cautious after the recent steel price corrections in China and India.

Turkey market remained weak as offers moved down by USD 10/MT in a week and were assessed at USD 170/lt Ldt for general cargo and USD 175/lt Ldt for tanker.

Global ship breaking prices (in USD/ltldt) in week 21

Country General Cargo W-o-W Tanker W-o-W Market sentiments
India 260 -10 290 0 Cautious
Bangladesh 270 -5 300 0 Cautious
Pakistan 265 -5 295 +5 Cautious
China 150 0 160 -5 Cautious
Turkey 170 -10 175 -10 Weak

Offers in USD/MT
Source: SteelMint Research

 

Indian Pellet Makers Look For Domestic Buyers as Global Demand Weakens

Domestic pellet price continue to remain stable across all major regions in India except southern India where prices have fallen by around INR 100/MT W-o-W.

Pellet offers remain unmoved this week except southern India. Market sources reported dull demand in global market as most buyers wait for further buying. Few pellet makers who were looking up for exports have now turned to domestic market as exports have turned less viable post decline in global prices. As per market sources, an Odisha based pellet maker has recently resumed domestic pellet sales.

”Buying interest is very week. We are offering pellets at INR 3,300/MT (basic) and discounts accordingly on purchases above 5,000 MT. We have received some bookings at current offers. Currently pellet offers in Durgapur are assessed in the range of INR 3,300-3,500/MT (basic)”, quoted a West Bengal based pellet maker.

Raipur based pellet makers reported that offers are presently in the range of INR 4,000-4,100/MT (basic). Market sources shared that buyers are seeking offers INR 100/MT less than current offers.

Bellary based pellet makers shared that pellet prices have come down this week (by INR 100/MT W-o-W) over weaker sentiments prevailing in sponge and finished steel market. Present offers for Fe 63% pellets are heard in the range of INR 4,100-4,175/MT (basic).

Pellet prices

Trade-wise: 

  1. A Raipur based pellet maker sold around 15,000 MT pellets to a Raipur based sponge manufacturer at INR 4,050/MT (basic)
  2. Rourkela based Shri Mahavir Ferro Alloys is offering pellets at INR 3,100/MT (ex-Rourkela)
  3. As per sources, landed prices of Odisha pellets to Raipur are currently at INR 4,020-4,050/MT


Indian Pellet Prices as on 31 May’16

City

Grade Prices W-o-W M-o-M

 (Fe %)

Barbil* 63 2,900-3,100 0 -100
Jharsuguda 63 3,500 0 -100
Rourkela 63 3,100 0 -100
Jamshedpur 63 3,300 0 -50
Durgapur 63 3,300-3,500 0 -200
Raipur 63 4,000-4,100 0 -100
Bellary 63 4,100-4,175 -100 -350

Basic prices in INR/MT
* loaded to wagons
Source: SteelMint Research

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18th Bulk Scrap Vessel to Land Indian Port in 2016

India’s interest for bulk scrap import remains intact. 18th bulk vessel was reported to arrive at Chennai Port on 6 Jun’16 from USA.

SteelMint assessed that one scrap vessel named as Sentosa Bulker, carrying 25,130 MT is expected to get berth at Chennai Port on 9 Jun’16. India’s total scrap import in 2016 was recorded at 2.7 MnT, out of which 18.5% was contributed by bulk shipments.

Scrap bulk vessel in 2016

Berth Date Vessel Name Quantity  Discharge Port Origin Buyers Grade
8 Jan’16 Puget Sound 22,800 Kandla USA MTC/ASR/Electrotherm/
Varsana
SH Scrap
15 Jan’16 Dl Pansy 42,000 Kandla USA Hariana Group SH Scrap
12 Feb’16 Tasman Sea 26,400 Kandla USA ASR/Galant/Varsana/
Neelkant
SH Scrap
2 Mar’16 Elliott Bay 26,250 Kandla USA ASR SH Scrap
2 Mar’16 Harmony Sw 10,500 Chennai Australia MTC SH Scrap
7 Mar’16 Aurora Bulker 30,500 Kandla USA Adani/Mono Steel SH Scrap
21 Mar’16 Postojna 35,200 Kandla Netherland Varsana/Galantata/
Electrtherm/Neelakanth
SH Scrap
23 Mar’16 Tai Shan 10,150 Chennai Japan MTC SH Scrap
23 Mar’16 Sea Star 44,000 Chennai South Africa MTC SH Scrap
24 Mar’16 Victoria Harbour 19,300 Chennai USA MTC SH Scrap
28 Mar’16 Venture Sw 9,500 Chennai Japan Kamachi SH Scrap
8 Apr’16 Team Hope 31,000 Kandla USA ASR/ Mono Steel/ Gallant SH Scrap
14 Apr’16 Cape Moreton 27,500 Chennai USA Kamachi HMS/SH
19 Apr’16 Golden Gemini 40,500 Chennai South Africa Surya Dev SH Scrap
14 Apr’16 Stove Campbell 35,000 Kandla USA MTC SH Scrap
19 Apr’16 Fortune Epoch 2,000 Chennai Japan N/A SH Scrap
18 May’16 Loch Melfort 20,900 Kandla USA Varsana HMS
18 May’16 Loch Melfort 9,000 Kandla USA Electrotherm SH Scrap
6 Jun’16 Sentosa Bulker 15,130 Chennai USA N/A HMS
6 Jun’16 Sentosa Bulker 10,000 Chennai USA N/A SH Scrap
Total   467,630        

Quantity in MT
Source: SteelMint Stats; Provisional data

Indian buying interest remains weak for imported scrap

Indian scrap importers prefer to stay out of the market owing to falling billet prices in domestic market coupled with availability of cheaper sponge iron (DRI).

Current offers for shredded scrap from US/Europe are assessed at USD 240-245/MT, CIF India, though buying interest remains low.

HMS scrap from South Africa and Middle East (24-25 tonnes)  is available at USD 220/MT, CIF India.

 

Indian Chrome Ore Production Decreased by 32.2% in Apr’16

Production of chrome ore and chrome concentrates decreased by 32.2% in Apr’16 in comparison to Mar’16.

Odisha contributes to around 98% of the total chrome ore produced in India. Chrome ore production in Odisha decreased by over 32% and stood at 319,952 MT in Apr’16. In Mar’16, chrome ore production was 472,307 MT.

Captive miners in Apr’16 have increased production by 13.2 % M-o-M mainly contributed by IMFA and IDCOL. However, merchant miners in Apr’16 have decreased production by 48.1% with OMC reducing production by over 85.5%. Although, Tata Steel in Apr’16 has increased production by over 46% in comparison to Mar’16.

Chrome Ore Production in Odisha during Mar’16 and Apr’16

Mines Name March’16 April’16
Captive
Balasore Alloys     56,770     35,914
Jindal Stainless        8,128     11,838
FACOR     28,740     17,108
IMFA     19,208     54,849
IDICOL        9,664     18,986
Sub Total (A)   122,510   138,696
Other than Captive
O.M.C.   233,189     33,769
TATA Steel     89,584   131,385
B.C. Mohanty and Sons     27,024     16,102
Sub Total (B)   349,797   181,257
Grand Total (A+B)   472,307   319,952

Qty in MT
Source: Govt. of Odisha

 

Indian Sponge Offers Increase on Expensive Coal

Sponge offers improved today as Coal India has recently increased coal prices by 6.29% w.e.f 30 May’16. However, prices in south India have corrected by INR 200/MT D-o-D.

Current 78-80 FeM C-DRI prices are assessed in the range of INR 10,700-12,600/MT and P-DRI at INR 10,400-12,200/MT ex-works.

Rourkela and Durgapur based manufacturers reported that they have raised their offers on account of increase in enquiries from buyers. This week, trades are more or less remained firm due to bullish sentiments.

Rourkela based sponge makers are offering 80 FeM C-DRI lump to west and north India based buyers at INR 10,900-11,000/MT. While, Durgapur is offering 78 FeM mix material to north-east buyers at INR 11,300/MT; both offers are on ex-plant basis.

Manufacturers mentioned that they are not fetching better production cost at current offers. Moreover, they are aggressively waiting for iron ore price declaration for Jun’16 deliveries as it expected that miners may reduce their offers.

Sponge market in Hyderabad has registered a fall of INR 200/MT against last day trade. Manufacturers here are saying that lack of demand from buyers has pushed them to sell material at low price. Today, 80 FeM C-DRI sold at INR 12,600/MT. While, billet prices remain unchanged at INR 22,500/MT.

Few Bellary based manufacturers reported that demand from local market remains dull and they prefer to hold stock instead of price cut. Offers for 80 FeM P-DRI lump are assessed at INR 11,400-11,500/MT and C-DRI at INR 11,700-11,800/MT ex-plant.

Premium between sponge iron (C-DRI) and pellet sponge (P-DRI) in central India has decreased to INR 1,300/MT, which was 1,400/MT last week. In eastern region, it is firm at INR 1,050/MT and in south to INR 300-400/MT.

C-DRI and P-DRI prices as on 31 May’16

Particulars C-DRI D-o-D P-DRI D-o-D Current Premium 1 Week earlier Premium
Ex-Durgapur 11,450  + 150 10,400  + 100 1,050  1,000 
Ex-Rourkela 10,700  + 100
Ex-Raipur 12,300  + 100 11,000  + 100 1,300  1,400 
Ex-Bellary 11,400  – 50 11,100  – 50 300  400 
Ex-Hyderabad 12,600  – 200 12,200  – 100 400  250 

Prices in INR/MT
Source: SteelMint Research

 
Silico Manganese

Indian Silico Manganese Price Decline Continues

The silico manganese market weakened further as unstable steel fundamentals put a damper on buying interest.

SteelMint assessed its weekly silico manganese grade 60/14 price at INR 46,000 (Ex-Durgapur) and INR 46,500/MT (Ex-Raipur), both prices down by INR 1,000/MT from last week.

Buying interest seemed to have dissipated, with most buyers in a wait-and see mode in anticipation of further price falls. Demand from steel mills has diminished significantly for which silico manganese buying is low, and hence prices are weak. “The whole demand situation for Silico Manganese is so bad now and it’s really down to the drab performance of the steel market,” stated a producer from Raipur.

Market sources predict a further downward correction in prices, in the coming weeks.

Subdued Silico Manganese Export Market Keeps Prices Flat

The silico manganese export market is relatively quiet as international buyers have not been interested in buying from India and are inquiring for material at lower levels.

Silico manganese 60-14 is being offered at around USD 700/MT FOB East-coast India, and silico manganese 65-16 is being offered at USD 780/MT FOB East-coast India.

Indian producers reported that buyers are expecting much lower prices. Despite prices being at a low level end-users were unwilling to buy. Looking at the situation a producer from Kolkata says, “It has been a very quiet few days. We cannot identify a clear direction for prices. Buying appetite has subsided from domestic as well as overseas markets.”

Silico manganese prices are expected to remain under pressure, and the possibility of seeing a rebound in prices in the next three to four weeks remains non-existent.

Exchange Rate: USD 1 = INR 67.2

 

Uncertain Market Outlook Restricts Movement in Indian Met Coke Prices

The Indian Met coke market is in a dull state; with buyers restricting from excessive purchases in the prospect of possible down-turn in the prices in the near term.

MARKET TREND

Falling Coking coal import offers have created uncertainty among buyers in the country over movement in Met coke prices in the near future. Buyers have thus become cautious in their Met coke purchases in the prospect of the prices getting lower in the coming days.

The uncertain market outlook also has restricted the domestic Met coke producers from revising their ex-works prices. Prices of Met Coke in the eastern as well as western coasts of the country have remained unchanged from that assessed last.

In the eastern coast of the country, price of the Blast Furnace grade is at INR 14,500-15,000/MT (ex-works). And, that in the western coast is at INR 15,000/MT (ex-works).

In the meantime, import offers have traversed southwards on account of sliding Coking coal prices in international markets.

The latest 64% CSR Met Coke offers from China has declined to around USD 172/MT FoB, which amounts to USD 180/MT CFR India. The recent 62% CSR Met Coke offers also have gone lower to around USD 170/MT FoB China, which comes to USD 178/MT CFR India.

IMPORTS

In May’16(upto the 24th of the month), 369,500 MT of Met Coke was imported into the country, data compiled by SteelMint Research shows.

 

CIL Notifies Grade-Wise Non-Coking Prices Post Revision: Details

State-run mining major, Coal India Limited (CIL), has increased its non-coking coal prices by 6.29% w.e.f 30th May’16, aimed at earning higher revenue in the current fiscal.

The miner had last revised its prices on 27th May’13.

Prices of the respective grades, subsequent to the price revision, are as follows:

29 May’16
Grade GCV Range(Kcal/Kg) Run of Mine Prices(INR/Tonne)
Power Utilities (including IPPs), Fertilizer and Defence Non-Power Utilities (including IPPs), Fertilizer and Defence
G1 Exceeding 7000 * *
G2 Exceeding 6700 and not exceeding 7000 3450 3450
G3 Exceeding 6450 and not exceeding 6700 3210 3210
G4 Exceeding 6100 and non exceeding 6400 3000 3000
G5 Exceeding 5800 and not excedding 6100 2750 2750
G6 Exceeding 5500 and not exceeding 5800 1900 2280
G7 Exceeding 5200 and not exceeding 5500 1600 1920
G8 Exceeding 4900 and not exceeding 5200 1420 1700
G9 Exceeding 4600 and not exceeding 4900 1100 1320
G10 Exceeding 4300 and not exceeding 4600 980 1180
G11 Exceeding 4000 and not exceeding 4300 810 970
G12 Exceeding 3700 and not exceeding 4000 760 910
G13 Exceeding 3400 and not exceeding 3700 720 860
G14 Exceeding 3100 and not exceeding 3400 650 780
G15 Exceeding 2800 and not excedding 3100 600 720
G16 Exceeding 2500 and not exceeding 2800 530 640
G17 Exceeding 2200 and not exceeding 2500 470 570

* For GCV exceeding 7000 Kcal/Kg, the price shall be increased by INR 150 per tonne over and above the price applicable for GCV band exceeding 6700 but not exceeding 7000 Kcal/Kg, for increase in GCV by every 100 Kcal/Kg or part thereof.

 

    27 May’13
Grade GCV Range(Kcal/Kg) Run of Mine Prices(INR/Tonne)
    Power Utilities (including IPPs), Fertilizer and Defence Non-Power Utilities (including IPPs), Fertilizer and Defence
   
G1 Exceeding 7000 * *
G2 Exceeding 6700 and not exceeding 7000 4870 4870
G3 Exceeding 6450 and not exceeding 6700 3890 3890
G4 Exceeding 6100 and non exceeding 6400 3490 3480
G5 Exceeding 5800 and not excedding 6100 2800 2800
G6 Exceeding 5500 and not exceeding 5800 1600 2150
G7 Exceeding 5200 and not exceeding 5500 1400 1890
G8 Exceeding 4900 and not exceeding 5200 1250 1690
G9 Exceeding 4600 and not exceeding 4900 970 1310
G10 Exceeding 4300 and not exceeding 4600 860 1160
G11 Exceeding 4000 and not exceeding 4300 700 950
G12 Exceeding 3700 and not exceeding 4000 660 890
G13 Exceeding 3400 and not exceeding 3700 610 820
G14 Exceeding 3100 and not exceeding 3400 550 740
G15 Exceeding 2800 and not excedding 3100 510 680
G16 Exceeding 2500 and not exceeding 2800 450 610
G17 Exceeding 2200 and not exceeding 2500 400 540

 * For GCV exceeding 7000 Kcal/Kg, the price shall be increased by INR 150 per tonne over and above the price applicable for GCV band exceeding 6700 but not exceeding 7000 Kcal/Kg, for increase in GCV by every 100 Kcal/Kg or part thereof.

 Source: CIL