Monthly Archives: August 2016

Chinese Billet Offers Down by RMB 90/MT (USD 14)

Chinese domestic billet offers within last two days have moved down by RMB 90/MT (USD 14) and today closed at RMB 2,280/MT (USD 345).

Offers in domestic market were seen at RMB 2,320/MT (USD 352) on 30 Aug’16 and RMB 2,370/MT (USD 359) on 29 Aug’16. All prices are including 17% VAT.

Sources reported that the major factor of price correction was drop in Chinese steel and iron ore futures to its weakest levels in almost a month amid demand worries.

However analyzing the whole month, it is assessed that Chinese billet prices have gained by RMB 160/MT (USD 24) from RMB 2,120/MT (USD 321) to current RMB 2,280/MT (USD 345).

billet

 

Will Bullish Steel Prices Trigger Domestic Iron ore Prices for September?

With onset of festive seasons, finished steel manufacturers are likely to raise their offers in Sept’16. Sponge iron prices have also gained momentum. Will prevailing positive sentiments in semi-finished and finished steel market lead to hike in domestic iron ore prices?

SteelMint in talk with some market participants received mixed responses. Odisha iron ore prices are expected to remain firm as sources shared that dispatches are still not at par with the increasing production. Iron ore production as well as dispatches through rakes remained impacted because of monsoons.

However ,market sources in central and southern India looked optimistic over increasing sponge prices.

Steel & iron ore prices

Key highlights to govern iron ore prices for Sept’16:

1. JSW Steel sourced 48 rakes in Aug’16 – JSW Steel procured 48 rakes of iron ore from NMDC (C.G.) in Aug’16*. It had sourced 65 rakes last month. Thus its procurement is down by 26% M-o-M.

2. RINL’s iron ore sourcing from NMDC (C.G.) falls further in Aug’16 – Vizag Steel sourced 84 rakes of iron ore from NMDC, Chhattisgarh mines in Aug’16* compared to 102 rakes in Jul’16.

3. West coast based steel makers sourcing iron ore from NMDC (C.G.) – Gallant Metal – a Gujarat based steel maker has participated in the recently conducted iron ore e-auction for NMDC’s Chhattisgarh region and is likely to procure 12 rakes of iron ore. West coast based steel makers kept themselves away from booking any new shipment over costly imported offers.

4. KIOCL resumed purchases from NMDC (C.G.) – KIOCL has also resumed purchases of iron ore fines from NMDC (Chhattisgarh) for its upcoming pellet export shipment. In Aug’16*, it has procured nine rakes from NMDC (C.G.).

5. Sponge iron prices rally and hit 5-month high – Domestic sponge iron prices have moved up sharply in Aug’16 and touched 5-month high. Lesser production owing to monsoons, increasing prices of coal and increase in freight have led to rise in prices. Price movements of C-DRI across major markets were as follows: Durgapur – INR 12,950/MT (+ INR 650/MT M-o-M), Raipur – INR 12,950/MT (+ INR 550/MT M-o-M) and Bellary – INR 12,650/MT (+ INR 750/MT M-o-M).

6. Global iron ore prices up by USD 4/MT M-o-M – Monthly average iron ore fines (Fe 62%) index moved up from USD 57/MT, CFR China in Jul’16 to USD 61/MT, CFR China in Aug’16. Amid increase in steel prices in China, iron ore prices have also moved up. Towards the mid-Aug’16, prices touched USD 62/MT, CFR China and later towards the end of the month it fell to USD 59/MT, CFR China over thin trade activities.

Note-* indicates data updated till 30 Aug’16

 

MMTC Increases Pig iron Export Quantity on Improved Demand

On 22 Aug’16, India’s largest and state-owned trading house has issued an export tender for 15,000 MT basic grade Pig iron with scheduled technical bids to open on 08 Sept’16.

In its recent official notification, the company has doubled its tender quantity from 15,000 MT to 30,000 MT on improved demand. In addition, the company has also amended the shipment period. Previously, the shipment period was scheduled between 10 Sept-20 Sept’16 which is now extended till 10 Oct’16-20 Oct’16.

Currently, global prices are strong on improved demand. As Chinese billet prices were up due to rise in raw material prices (i.e. seaborne coking coal and iron ore prices), which has also driven global scrap prices to move up further.

Rising billet prices in the Chinese market, as well as higher global scrap prices, has prompted buyers to look for alternative supplies. In the situation, export offers from India have also increased.

So, MMTC has increased pig iron export quantity to 30,000 MT, in the hope of getting better response for its upcoming tender (scheduled on 08 Sept’16).

It is to be noted that, Indian Pig iron export is at 54,750 MT in Aug’16, against 23,500 MT in Jul’16. Indian Pig iron exports have increased in Aug’16 owing to improved demand from the global market.

 
Steel slabs

Slabs Market Overview: Week 36

Latin America: Slab export offers from Latin America are heard to be up by USD 10/MT this week amid positive demand outlook after the end of summer holidays in European markets. Current offers are heard at USD 325/MT, FoB basis and are further expected to go up to USD 340/MT, FoB basis in the month of September.

India: Slab export offers from India which registered a surge of USD 10-15/MT last week has remained stable this week. Current offers are assessed at USD 315-320/MT, FoB India basis. The Indian manufacturers have become quite active in slabs export market in the last four months, given the subdued demand for flat products in domestic market.

CIS Countries: Slabs export offers from CIS countries are currently assessed at USD 320-325/MT, FoB Black Sea. The key export markets for CIS countries are Turkey and Europe. Although there are some political distractions in Turkey currently,the demand outlook from European market seems to be positive with the end of summer holidays in the country.

Brazil: Brazil is one of the major exporters of slabs. The country has exported 0.36 MnT of slabs in the month of Jul’16 and 3.28 MnT in the first seven months from Jan-Jul’16.

In the first week of Aug’16, CSP (a joint venture between POSCO, Dongkuk and Vale) offered slabs at much cheaper rate to Asian and East Asian countries in order to mark its presence in the market. The offers were heard at USD 320-325/MT, CFR basis.

Although currently no fresh offers are being heard from the company, it has been reported that the company plans to export 1.06 MnT of slabs in current year 2016.

 

Snapshot of Indian Billet Market in Aug’16

During Aug’16, Indian billet offers remained under pressure as demand was not much supportive amid off sales season.

On monthly average basis, Indian billet prices fell slightly by INR 100-600/MT (upto 3%) in Aug’16. However, a steep price corrections of upto INR 1,500/MT (7%) were recorded in Jul’16.

In the month of Aug’16, both rolling mills and induction furnaces were operational for limited hours, which led to subdued seasonal off-take and in turn reduced prices in billet market.

Besides, heavy rainfall in east, north and west India broke the billet supply chain in domestic market, which increased the selling pressure on suppliers. As a result, conversion spread (margins) between C-DRI and billet hit lowest level of INR 7,000/MT in Aug’16, which generally used to be INR 8,500-9,000/MT, reported the manufacturers.

Major price corrections of INR 400-600/MT (2-3%) were seen in Hyderabad and Chennai, followed by Raipur, Durgapur and Rourkela (INR 100-150/MT). However, there was no price corrections reported in Mumbai.

Billet Price Movement Jan New

MS billet monthly average prices since Jan’16

Month Durgapur  M-o-M Raipur M-o-M Rourkela M-o-M Mumbai M-o-M Chennai M-o-M
Jan’16 21,100 620 21,250 300 20,550 720 22,900 150 22,250 850
Feb’16 21,500 400 21,950 700 20,750 200 23,850 950 23,050 800
Mar’16 22,300 800 22,650 700 21,500 750 24,450 600 25,550 2500
Apr’16 22,650 350 22,550 -100 21,750 250 24,450 0 25,700 150
May’16 21,750 -900 21,550 -1,000 20,850 -900 23,250 -1,200 24,150 -1550
Jun’16 20,600 -1,150 21,000 -550 20,100 -750 22,650 -600 22,200 -1950
Jul’16 19,750 -850 19,900 -1,100 19,100 -1,000 21,450 -1,200 22,050 -150
Aug’16 19,650 -100 19,750 -150 18,950 -150 21,450 0 21,450 -600

Basic prices in INR/MT
Sources: SteelMint Research

 

Thailand Ferrous Scrap Import Increases in Jul’16 M-o-M

As per Thailand Customs,  Ferrous scrap imports by Thailand registered a growth of 70% M-o-M, the nation imported about 0.11 MnT during Jul’16. Imports were down by 21% Y-o-Y, country’s ferrous scrap import during Jul’15 was 0.14 MnT. Thailand imported around 0.94 MnT during CY’15. Import was registered to be around 0.62 MnT during Jan-Jul’16.

Graph - 1

• Import from Australia increased by 300% M-o-M and by 33% Y-o-Y. Thailand imported 0.04 MnT during Jul’16. The nation basically imported Scrap generated from Plate cutting from Australia. Total import from Australia was 0.01 MnT during Jun’16 and during Jul’15 ,it was 0.03 MnT.
• Around 0.03 MnT ferrous scrap was imported from USA. The nation registered a downfall of 57% Y-o-Y. Majorly scrap generated from Plate cutting was imported during Jul’16, followed by scraps generated from Turnings, Shavings etc. The nation imported around 0.07 MnT, during Jul’15 and a very nominal quantity was imported during Jun’16
• Thailand imported about 0.01 MnT from Japan during Jul’16 Import were stable Y-o-Y. A very nominal quantity was imported from Japan during Jun’16.

Graph - 2
• Import of Scrap generated from Plate Cutting during Jul’16 was 0.08 MnT, registered a growth of 300% M-o-M and 100% Y-o-Y. The nation imported 0.02 MnT during Jun’16 and 0.04 MnT during Jul’15.
• Import of Scrap generated from cast iron decreased by 50% M-o-M, remained stable Y-o-Y. The nation imported 0.02 MnT during Jul’16 and 0.04 MnT during Jun’16.
• A very nominal quantity of scrap generated from Turnings, Shavings, and Tinned Iron were also imported from Thailand during Jul’16.

 

 

Japan’s Coal Imports Surge By 13% in July’16

Japan monthly coal imports rose by 13% in Jul’16. Besides, yearly imports has fallen by 9% as compared to Jul’15.

Japan, the world’s third largest coal importer, has imported 16.84 MnT, coal in Jul’16, hit the highest of the fiscal (Since Apr’16). The country’s imports surged by 13% on monthly basis. While, yearly imports fell by 9% which was at 18.6 MnT in Jul’15. As per to Japan’s customs data.

In the month of Jul’16, out of the total imports, the country imported 11 MnT Bituminous coal, 4 MnT coking and about 0.69 MnT coke & anthracite.

Grade Jul’16 Jun’16 % Change
Bitunminous Coal 11.03 9.52 16%
Coking coal 3.80 3.41 11%
Coke and semi-coke 0.20 0.22 -6%
Anthracite 0.49 0.39 28%
Petroleum coke 0.03 0.03 -4%
Others 1.28 1.38 -7%
Grand Total 16.84 14.94 13%

Source: Japan Custom
Quantity in MnT

In the first 4 months of FY17 (Apr’16-Jul’16), the coal imports is down by 4% to 61.4 MnT, compared with the same period in FY16.

Major exporting countries in Jul’16
Australia was the largest supplier to Japan in Jul’16, shipped about 10.5 MnT coal with a remarkable rise by 16% compared with Jun’16, followed by Indonesian with 2.42 MnT, Russia with 1.58 MnT and USA with 0.85 MnT coal.

Moreover, Australia caters more than 60% share of the total coal imports of Japan. Also recorded as top supplier and shipped about 37.92 MnT coal over Apr’16-Jul’16.

Country-wise Coal Imports in Japan, Jul'16

Quantity in MnT

 

India: Ferro Chrome Prices Rise on Supply Shortage

Ferro chrome prices regained ground as limited availability coupled with demand from overseas buyers have lent support and firmed trade levels.

SteelMint weekly assessment for grade 60% is around INR 64,500-65,000/MT (Ex-Odisha).

Indian producers of Ferro Chrome have raised offers in the domestic market owing to shortage of ferro chrome in the market, and equally supported by strong demand from overseas buyers. A producer source from Odisha stated, “The market is bullish and I see it going higher now. Tight supply is the fundamental along with robust demand.”

SteelMint assessed that ferro chrome supply has fallen sharply with reduced Chrome Ore production in India, so any downside room in ferro chrome prices is expected to be limited in the near future.

Ferro Chrome Export Prices Keeps Firm

The spot price of Indian-origin high carbon ferro chrome (58-60% Cr) was assessed at 69 cents/lb CIF China.

Stainless steel producers typically settle their monthly prices at the end of the preceding month or at the beginning of the month, and spot prices usually take their lead from the adjustments. The market is waiting for major Chinese stainless steelmakers to decide on their purchase prices. However, market participants from China expect Baosteel and other big producers in the region to increase their purchase price for the month, on account of tight spot supply.

Spot price of 60%-grade high-carbon ferro chrome imported into Japan stood at 73 cents/lb CIF Japan.

Few Indian producers also reported of rising inquiries from Europe. Although, no deals could be confirmed Indian producers said that they will not sell below 74 cents/lb CIF Europe.

Price difference continued to remain in the export market as both Chinese and Japanese buyers were asking for lower offers. Indian producers are unwilling to lower their offers as inquires have risen and with the shortage of supply it is expected that prices should increase in the coming week.

ferro chrome Avg export prices

 

Indian Met Coke Prices Move Up on Rising Import Offers, Costlier Coking Coal

Met coke prices have swung upwards, pulled by rising Coking coal prices.

Coking coal prices have risen significantly in the key international market as supplies have gone tight and demand has soared. Met coke prices have followed the rising trend, exhibited by the Coking coal prices.

China, being import dependent in Coking coal, has hiked its offers of Met coke due to the coal variant becoming costlier in Australia, the key market for procuring Coking coal by both China and India.

The import offers of the 64% CSR Met coke are assessed considerably higher at USD 192/MT CFR India; and that of the 62% CSR Met coke are also assessed remarkably up at USD 189/MT CFR India.

The export offers of the Met coke variants are at: USD 181/MT and USD 178/MT respectively on FoB China basis.

In line with the rising import offers, most of the Indian producers also have raised their ex-works prices. The current ex-works prices of the Blast Furnace grade are: INR 14,500/MT(east coast) and INR 16,000-16,700/MT (west coast).

INDIAN MET COKE PRICES (UPPER RANGE) DURING THE LAST FOUR MONTHS

Month East Coast West Coast
Aug’16 14500 16700
July’16 14,650 15,500
Jun’16 14,650 15,500
May’16 14,650 15,000

Prices in INR/MT

In the meantime, demand also has been strengthening, and with the monsoon season likely to start retreating by the second week of Sep’16, demand for Met coke will also strengthen thereafter.

IMPORTS

Met coke imports have been scanty due to the low demand prevailed in the country on account of the ongoing monsoon season. According to data compiled by SteelMint Research, 438,057 MT of Met coke was imported into the country during the 1-29 Aug’16 period.

 

HNL Invites Tender for Purchase of 40,000 MT Non-coking Coal

Hindustan Newsprint Limited (HNL), a subsidiary of Hindustan Paper Corporation Limited (HPC), produces exceptional quality newsprint for the Indian and international markets, which is comparable with the best in the global market.

The company has invited a two part tender for purchase of 40,000 MT non-coking coal from indigenous and imported source.

Delivery of the material is on staggered basis, 15,000 MT in 1st month, 10,000 MT each in 2nd & 3rd months and 5,000 MT in 4th month. The delivery should be started within 45 days from the date of purchase order issued.

Validity of offer: The offer will be valid for a period of 45 days from the date of part-I bid opening.

Specification of item

Coal size: 0-50 mm (-3 mm size up to 18%)
Total moisture (as received): up to 16%
Ash (air dried): up to 12%
GCV (air dried): 6,200 kcal/kg
Fuel ratio (fixed carbon/volatile matter): up to 1.2
Sulphur (air dried): up to 1.0%
Ash fusion temperature: Above 1,300o Celsius
Grindability index: 45-55
Volatile matter (air dried): 35-45%
Inherent moisture (air dried): up to 12%

Tender schedule

Bid submission due date: 23 Sep’16 at 15:00 hrs IST
Technical bid opening: 23 Sep’16 at 15:30 hrs IST
Price bid of the pre-qualified bidders will be opened on the later date after intimating to them.