Monthly Archives: June 2016

Central India’s Pig Iron Offers Fall by INR 600-700/MT

Central India based Pig iron manufacturers have reduced their offers in order to compete with NINL’s prices.

After price cut of INR 1,000/MT by Neelachal Ispat, some big manufacturers have also reduced their prices by INR 600-700/MT.

Jindal Steel based in Raigarh has corrected prices by INR 600-700/MT to INR 18,000/MT ex-plant. In similar line, Jayaswal Neco Industries has also reduced prices by INR 700/MT to INR 18,100/MT ex-Raipur, according to market sources.

East based manufacturers hold offers

Durgapur based Kajaria Steel, Neo Metaliks and Jai Balaji Steel have kept offers unchanged to INR 17,100-17,200/MT. Manufacturers are in wait and watch mode and delivering previous bookings. Fresh offers by these all merchant Pig iron suppliers are likely to be made in the next week.

Atibir Industries, a Jharkhand based manufacturer, mentioned to open new price circular in the coming week. Last offers were assessed at INR 17,500-17,600/MT ex-plant. The plant was under maintenance for last few days but has resumed production now.

Recent tender for 7,000 MT issued by Rourkela Steel Plant (RSP) at a base price of INR 16,700/MT has also received lukewarm response. Sources mentioned that the company managed to sell only 200-300 MT of material.

Pig Iron Price Movement since Jan'16

 

Indian Pig Iron Export Tender Receives Bid Below USD 240/MT-Sources

Indian Pig iron export tender by MMTC for export of 15,000 MT Pig iron, on behalf of Neelachal Ispat received bids below USD 240/MT, FOB India East Coast according to sources.

MMTC has floated this tender on 20 June’16 , which got expired on 28 June’16 and the delivery of the shipment is scheduled between 05 Jul’16 to 15 Jul’16.

According to sources , three companies participated in the tender and bids were made below USD 240/MT FoB India East Coast.

Market participants expect this cargo to be shipped to Bangladesh if concluded.

It may be noted that steel making capacity has increased in Bangladesh .Pig iron and scrap are in high demand especially after the government has raised import duty on billets.

Pig iron offers in CIS market also remain the range of USD 235-240/MT FOB Black Sea. In addition, current offers for HBI are at USD 200-210/MT CFR Bangladesh from Russia.

Indian Pig iron export prices

 

Indian Billet Prices Fall to Pre MIP Levels

– Indian domestic billet prices fall to pre MIP levels due to bearish trade activities.
– Limited impact of MIP on long steel and semi finished products.
– Prices are likely to remain subdued owing to monsoon.

In current scenario, Indian billet prices have fallen to pre MIP (Minimum Import Price) levels. On 4th Feb’16, the Indian government had imposed MIP on 173 steel products, including billet for 6-month i.e till Aug’16 in a bid to control rising imports.

Billet in Raipur is currently trading at INR 20,500/MT, which were last recorded on 1 Feb’16 before MIP was imposed. The similar price movements are noticed in Durgapur, Mumbai and Rourkela, where current prices have dropped to pre MIP levels.

Limited impact of MIP on billet

MIP has limited impact on billet,as low amount of material has been imported to the country. Market participants believe that MIP has greater impact on flat steel as major portion of imports have been made for flat steel. Since the imposition of MIP, flat steel manufacturers have managed to raise their offers by upto INR 4,000/MT

Steel demand to remain weak during monsoon

Steel (rebar, structures and wire rod) demand from construction area will remain weak due to upcoming monsoon season in India. Market participants want MIP to be extended for more time till real demand pick up in India.Billet Price Movement since Feb'16

 
bar & rod

Indian Bar and Rod Production Up by 13% in May’16

India’s bar and rod production by primary steel producers up by about 10%. While, it rose by 15% by secondary producers in May’16 against Apr’16.

As per the Steel Ministry’s monthly reported data, India’s total bar and rod production in May’16 stood at about 3.10 MnT compared to 2.75 MnT in May’16. There was an increment of 13% in production.

If we talk about the production of integrated steel producers like SAIL, RINL, Tata Steel, JSW Steel and JSPL reported a positive growth of 10% to 0.99 MnT in May’16 against Apr’16. While, mini & others steel producers registered a significant growth of 15% to 2.11 MnT in the same period.

Almost all the primary steel players have showed an increase in production during May’16 compared to Apr’16, as per the JPC data.

On a cumulative basis during Apr-May’16, India’s bar and rod production of both primary and secondary players has seen an increment of about 2% as compared to same period of the previous year.

As per our sources, Jindal Steel and Power Limited (JSPL) based in eastern India is going to start their commercial production of new bar mill from Angul (Odisha) very soon, which is going to increase the supply of material in the domestic market.

India’s bar and rod production during Jan-May’16

Month SAIL RINL TSL JSPL JSWL Total ISP M-o-M Mini & other producers M-o-M
Jan’16 2,10,000 2,15,000 2,83,000 70,000 2,29,000 10,07,000   19,56,000  
Feb’16 2,01,000 2,17,000 2,59,000 70,000 2,08,000 9,55,000 -5.2% 18,09,000 -7.5%
Mar’16 2,10,000 2,46,000 2,80,000 70,000 2,50,000 10,56,000 +10.6% 13,94,000 -22.9%
Apr’16 1,89,000 1,82,000 2,41,000 74,000 2,26,000 9,12,000 13.6% 18,40,000 +32%
May’16 1,90,000 2,41,000 2,66,000 69,000 2,33,000 9,99,000 +9.5% 21,10,000 +14.7%
Total(Apr- May’16)* 3,79,000 4,23,000 5,07,000 1,43,000 4,59,000 19,11,000   39,50,000  
Total(Apr- May’15)* 3,23,000 3,93,000 5,03,000 1,41,000 4,01,000 17,61,000 +8.5% 39,90,000 -1%

* Compared to Year-on-Year (Y-o-Y)
Quantity in MT
Source: JPC – Steel Ministry

 
Ferro Silicon

India: Ferro Silicon Prices Firm on Steady Demand

The ferro silicon market is in a wait-and-see mode, as sellers continued to keeps prices unchanged for almost M-o-M.

Ferro silicon prices in Bhutan continue to remain unchanged on steady demand and the market is witnessing some supply tightness. SteelMint weekly assessment for ferro silicon (grade 70-75) is at INR 65,000/MT (Ex-Bhutan).

A Bhutan based producer stated, “Although demand, meanwhile, continues to hold stable and expectations are that the prices would increase in the coming months as supply is restricted.”

Domestic Ferro Silicon Holds Steady on Stable Offers

In line with steady prices in Bhutan, Ferro Silicon producers in India also keep their prices firm.

Shortage of material in the Indian market has led to rigidity in price levels. SteelMint weekly assessment for ferro silicon (grade 70-75) is at INR 63,000/MT (Ex-Guwahati).

Sources in the market continue to suggest that prices to be stable in the market and believe that the market condition is unlikely to change in the near future, despite talks of limited supply still continues.

Exchange Rate: USD 1 = INR 67.5

 

India: Ferro Chrome Prices Unchanged on Steady Demand

Ferro chrome prices were unchanged this week, as demand continues to remain steady.

SteelMint assessed weekly ferro chrome grade 60% price at INR 62,500/MT (Ex-Odisha)

The Indian domestic ferro chrome market remained at same level as last week. Sources reported that decent end-user demand has kept prices on the same level. “The market is steady with good demand and currently we’re seeing no changes in market dynamics,” remarked a Odisha based producer.

Market watchers are uncertain about any price rise and most of them expect that market condition to remain stable for this month.

Ferro Chrome Export Prices Keeps Firm

Ferro chrome prices remain unchanged although buying interest from overseas markets was coming down.

The spot price of 58-60% chrome-grade material was assessed at 74-75 cents/lb CIF China while Japanese spot ferro chrome pricing was assessed at 75-76 cents/lb CIF Japan.

Indian Ferro Chrome Exports in May & Jun’16 (till 22nd)

Country Jun’16(till 22nd) May’16
Taiwan                    12,970         6,743
China                       7,968         8,907
South Korea                       1,324      10,228
Japam                          330         5,418
Europe                       2,608         7,274
Others                       2,355         5,152
Grand Total                    27,555      43,723

Qty in MT
Source: SteelMint Research

 

Indian HRC Export Offers Fall by USD 10-15/MT

Indian export offers for commercial-grade hot rolled coil (HRC), have fallen by at USD 5-10 per tonne this week on lower offers from China, Russia and Ukraine.

Indian HRC export offers have come down to about USD 390 per tonne FOB India main port for July/August shipments, compared to last week during which offers were at USD 400-405 per tonne FOB.

Indian exporters cut their offers owing to intense competition from Chinese and CIS based suppliers. Offers for Chinese HRC are assessed at USD 325-330/MT, FOB China main port and from CIS region at USD 350-360/MT FOB Black Sea.

Increased Production & Low Demand in Domestic Market

Three months back in Feb’16, when prices soared in the international market, Indian mills shifted their focus to exports given good sales realizations from export market. This move also intended to create tight supply situation in the domestic market so that domestic prices can be pushed up further.

However, export offers in global market started falling from late May’16 which forced Indian manufacturers to move out of export market.

Increased production from Bhushan Steel , Essar Steel and JSW Steel led to increased supplies in the domestic market. Also Tata Steel’s Kalinganagar plant is expected to commence HRC production soon which may further increase supplies in the market.

With sluggish demand in domestic market, Indian manufacturers are again back in the export market with lowered prices.

Screenshot from 2016-06-30 17:05:09

 

Factors to Decide Indian Iron Ore Prices for Jul’16

Iron ore prices are likely to remain under pressure in the month of Jul’16 amid rising production and comparatively lesser dispatches.

As per trade sources, big Odisha merchant miners are giving rebate in prices by INR 100-200/MT but its official announcement is yet to come. Participants expect Odisha miners in Jul’16 will make the rebate officially and will not reduce prices further.

Raipur based sponge iron & pellet makers are hopeful for price cut by NMDC amid falling sponge prices and shift in sourcing pattern of JSW Steel. C-DRI (DR-CLO) prices in Raipur are down by INR 300/MT M-o-M and are currently assessed at INR 12,750/MT (ex-works) and P-DRI prices in Raipur are currently heard at INR 10,650-10,750/MT (ex-works).

Factors governing domestic iron ore prices for Jul’16 –

1. Domestic sponge iron price scenario – Eastern India sponge iron prices remained range bound in Jun’16 with minor corrections. Sponge iron prices in Durgapur fell by INR 100/MT M-o-M and in Odisha they fell by INR 50-100/MT. In central India prices fell by upto INR 350/MT. On the other side, sponge iron prices in southern India have moved up recently by upto INR 550/MT M-o-M over temporary closure of few plants.

2. JSW Steel’s sourcing from NMDC (C.G.) remains nil in Jun’16 – A prominent buyer of iron ore from NMDC (Chhattisgarh) – JSW Steel, Dolvi has not sourced a single rake of iron ore from NMDC in Jun’16*. Last month it had sourced 32 rakes from NMDC’s Chhattisgarh mines. The steel maker has shifted its buying interest to Odisha iron ore over cheaper availability of ore. It increased its procurement from Odisha from 62 rakes in May’16 to 79 rakes in Jun’16*.

3. RINL’s sourcing from NMDC (C.G.) – Iron ore sourcing of Vizag Steel (RINL) has remained stable on monthly premises. In Jun’16* it has sourced 126 rakes against 124 rakes in May’16.

4. Chhattisgarh based units sourcing from NMDC stable in Jun’16 – Chhattisgarh based sponge units have procured 56 rakes in Jun’16*. The figure is stable against that of May’16. Last month state based units had procured 62 rakes from NMDC Chhattisgarh mines.

5. Sourcing of C.G. based units from Odisha fall in Jun’16 – Chhattisgarh based plants had procured 298 rakes of iron ore from Odisha in May’16. In Jun’16*, they sourced 203 rakes.

6. Global iron ore prices down by USD 4/MT M-o-M – Monthly average prices of fines (Fe 62%) was recorded at USD 51/MT, CFR China in Jun’16 against USD 55/MT, CFR China. No vessel of lump import to India was observed in Jun’16 as steel makers preferred domestic material. Gujarat based lump importers were also seen going for domestic pellets of Jindal SAW.

* data updated till 26 Jun’16

 

Indian Sponge Market Day-on-Day Updates

Today, domestic sponge market opened with a minute price change of INR 50/MT against last day trade. Less number of sellers at lower prices has supported domestic sponge offers.

Currently, 78-80 FeM C-DRI prices are hovering in the range of INR 10,550-13,000/MT and P-DRI within INR 10,200-12,600/MT ex-plant.

Manufacturers from east & south India quoted, “ Buying activities are good since a week. Sponge prices may sustain at the current level. As of now, we are not willing to reduce our prices”.

Domestic sponge offers as on 30 Jun’16

Particulars C-DRI D-o-D P-DRI D-o-D Current Premium 1 Week earlier Premium
Ex-Durgapur 11,200  + 50 10,200  + 50 1,000  1,050 
Ex-Rourkela 10,550  + 50
Ex-Raipur 11,900  + 50 10,800  + 50 1,100  1,150 
Ex-Bellary 12,000    0 11,400    0 600  400 
Ex-Hyderabad 13,000    0 12,600    0 400  400 

Prices in INR/MT
Source: SteelMint Research

Key highlights

1. Sponge DR CLO lump in Raipur sold at INR 12,700/MT. Few large manufacturers have kept P-DRI offers unchanged at INR 10,800/MT.
2. Sponge prices in Raigarh are supportive as few plants are under maintenance. Also, higher sponge offers in Odisha have supported sponge prices in Raigarh.
3. Sources reported that Shyam Sel and Rashmi Metaliks, who are the price trend deciders in Durgapur, have increased offers today by INR 100-200/MT to INR 10,300-10,400/MT for P-DRI.
4. Odisha based 750 TPD sponge manufacturer, Jay Jagannath Steel & Power sold 500MT 80 FeM C-DRI lumps to north at INR 10,800/MT ex-plant.
5. Shiv Shakti Steel, a 200 TPD sponge manufacturer in Hyderabad, sold 80 FeM C-DRI lump at INR 13,000/MT ex-plant. Also, the company is offering billet at INR 22,300/MT ex-plant.
6. Prakash Sponge, a prime grade sponge maker in Karnataka, sold 80 FeM C-DRI lump at INR 12,300/MT. Mostly deals had concluded to Hindupur and Silvasa. An another sponge manufacturer in the region namely Yeshashvi Steel & Alloys is also offering the same material at the similar price.

 

Prism Cement Secures 1.2 Lakh Tonne per Annum of Coal in Auction

Prism Cement Limited has secured coal supply for the next five years by bidding for 120,000 tonne per annum of coal in the auction of coal linkages for the cement sector that was conducted on 28Jun’16.

In the coal linkage auction conducted by Coal India Limited, the cement company had secured the coal quantity from South Eastern Coalfields Limited, according to inputs received.

CIL had conducted the auction to ensure adequate coal availability to cement manufacturers in the country.