Monthly Archives: December 2016

Bulk Shipping Freight Rates Likely to Upturn in 2017

Bulk shipping freight rates have remained almost at the rates prevailed the week last. Demand for cargo vessels had been low as trading activities shrunk due the festive season.

However, the freight rates are expected to rise as Crude Oil prices are on the rise. The latest Crude Oil price was reported at USD 52.25/barrel.

Current freight rates (coal cargoes)

Route Supramax Panamax Capesize
Australia to India 13.5 11.5 10
South Africa to India 12 12.5 8
Indonesia to India 7 8 6

Freights in USD/MT
Source: SteelMint Research

Current freight rates (iron ore cargoes)

Route Supramax
India to China 10

Freights in USD/MT
Source: SteelMint Research

The outlook is optimistic,arising out of the prospect demand for cargo ships strengthening on account of China’s continuing infrastructure development, apart from economic growth in other regions of the world.

The Baltic Dry Index has shown an upward trend driven by the optimistic outlook. The latest value of the index was reported at 961 points. The index is an indicator of global movement in cargo freight rates in respect to all classes of vessels, carrying all kinds of commodities, including coal and iron ore.

 

Coal Production on Schedule: CIL Likely to Achieve FY17 Production Target

Coal India Limited (CIL) is expected to achieve its production target for FY17 as operations of most of the coal mines are on schedule, albeit lower production.

In a recent review by the Coal Ministry on the status of functioning of the coal mines in the country, it was found that in the 79 coal mines allocated the last year, the production was at 22 MnT, up from the production of 20 MnT in FY16.

The 79 mines were divided into Schedule-II producing mines and Schedule-III operational mines. Out of the 34 producing mines auctioned to private players and allotted to state governments, 10 have started production; but, 7 mines spread across Jharkhand and Chhattisgarh are struck in state level clearances and judicial matters.

The review also established that Schedule-III mines, for which production has to be started from scratch, are also functioning steadily. Barring the three such mines- Ganeshpur, Miral and Majra — the rest 38 are functioning in accordance to schedule.

According to the extant rules, Schedule-II mines are supposed to achieve at least 90% of the annual scheduled production or attain the rated capacity as per the approved mining plan, in case of opencast mines. The mandate for underground mines is 80% of the annual scheduled production or reaching the rated capacity as per the approved mining plan.

Except Jharkhand, Odisha, Madhya Pradesh, Rajasthan and Chhattisgarh have commenced the mining operations in respect to the allocated mines. The Jharkhand state government says that due diligence is being performed prior to starting mining operations.

 
Ferro Silicon

Surge Expected in Ferro Silicon Prices

Ferro Silicon prices are likely to move upwards very soon. In Bhutan Ferro Silicon (grade70-75) is being offered at around INR 64,000 /MT.

In line with steady prices in Bhutan, Ferro Silicon producers in India also keep their prices unchanged. Ferro Silicon grade 70-75 is being offered around INR 62,000/MT (Ex-Guwahati).

There is an upsurge in demand for Bhutanese produced Ferro Silicon. A source at one of the major Ferro Silicon producers in Bhutan revealed that they have concluded deals with European companies post-Christmas, in the range of USD 1020-1030 /MT FOB Kolkata.

Steelmint assessed that one of the major Ferro Silicon producers in Bhutan have stopped their production for a few days. This may result in a price hike in India due to supply tightness. On future trend, demand is expected to be intact and as less production is expected during the winter months, supply could be very tight although this is unlikely to lead to shortages as demand in India has been quite lacklustre, after the demonetization of the 500 and 1000 currency notes.

 
Indian Structure, Domestic Market, Sentiments W-o-W

Indian Structure Market Remain Strong

Indian structure prices have remained strong except in Central and West. Small scale structure manufacturer have raised prices up by INR 1,000/MT in South.

Meanwhile, structure prices have plunged by INR 400/MT in Mumbai followed by Raipur INR 200/MT amid weak demand hovering in the market. “Structure demand from North India is firm. We have sold 700 MT to NCR area in last two days” said a Central India trader. He added there is shortage of vehicle to deliver the material.

At the same time, 125×125 mm billet prices have moved down by INR 1,000/MT in Mumbai and hovering at the range of INR 23,750-27,950/MT.

Heavy, 200×100 mm beam offers are evaluated in Durgapur at INR 29,500/MT, Ghaziabad at INR 32,200/MT, Ahmedabad at INR 29,700/MT, Mumbai at INR 31,700/MT and in Raipur at INR 27,500/MT.

However, 40×40 mm angle is being offered in Durgapur at INR 30,000/MT, Ahmedabad at INR 29,200/MT, Mumbai at INR 30,400/MT, Raipur at INR 27,500/MT and in Hyderabad at INR 30,500/MT.

Simultaneously, 200×75 mm channel offers are assessed in Durgapur at INR 29,500/MT, Ghaziabad at INR 32,700/MT, Ahmedabad at INR 29,900/MT, Mumbai at INR 31,100/MT and in Raipur at INR 28,000/MT.

To view all size structure steel price, click here.

 

Private Commercial Mining Likely in India in 2017

In a never before change, active private participation in commercial coal mining is expected to function in India from 2017, according to a hint by Piyush Goyal—the Union Coal and Power Minister –while interacting with the media.

The minister explained that since domestic supply of coal has become abundant, there is no need for continuing with the government restrictions. Coal, thus, could become an openly traded commodity, according to the minister.

He also expressed confidence in seeing good growth in the coal sector in 2017, and imports declining substantially.

 

Current Week Update: Uncertain Price Movements in Indian Semis

During the current week, mix price change have been assessed in Indian semis products. In the week, sponge prices registered price movement of INR 100-400/MT, where as billet market registered price change of INR 1,000/MT. Manufacturers added that on price fluctuations, sales were bearish amid lack of clarity for market outlook.

Current week dynamics

1. 78-80 FeM C-DRI offers are assessed at INR 15,100/MT (+350) ex-Durgapur, INR 13,800/MT (+100) ex-Rourkela, INR 15,550/MT (-50) ex-Raipur and INR 15,250/MT (+150) ex-Bellary; change of prices depends upon weekly assessment.

2. 78-80 FeM P-DRI prices are assessed in the range of INR 13,400-16,000/MT across major markets.

3. 125×125 mm billet prices are evaluated at INR 24,600/MT (+250) in Durgapur, INR 23,750/MT (-100) in Rourkela, INR 24,300/MT (-300) in Raipur, INR 26,000/MT (-1,000) in Mumbai, INR 24,250/MT (-650) in Chennai and INR 25,250/MT (-750) in Hyderabad.

4. Essel mining in Odisha has surge Iron ore prices by INR 125-275/MT for Jan’17 rest of miners yet to declare fresh offers. Where as pellet prices surge up to INR 400/MT in large markets.

5. During the week, global Iron ore & Pellet prices inched up by USD 1-2/MT.
Current offers for Pellet at USD 104/MT & Iron ore (Fe 63.5) at USD 80/MT (CNF China).

6. During the week, Pig iron prices in Central & East India rose by approx INR 500/MT owing to strong demand and less supply for the material.

Coming Week outlook

1. According to the market players, semis prices likely to remain supported looking at strong sentiments amid no selling pressure to the manufacturers.

2. Pellet prices may slightly change on anticipated increase supply for the material.

3. Strong demand & less supply may further support Indian Pig iron market.

Raw material & Semis prices as on 30 Dec’16

Products Markets Prices in INR/MT W-o-W
Billet 125*125 MM ex-Mumbai 26,000 – 1,000 
Scrap HMS (80:20) ex-Mumbai 17,600 + 100
C-DRI 80 FeM ex-Raipur 15,500 – 50 
P-DRI 80 FeM ex-Raipur 14,500 – 150 
Pig iron Steel grade ex-Raipur 22,600 + 350 
Pellet Fe 63%, 6-20 mm ex-Durgapur 4,800 0
Iron ore Fe 62%, 5-18 mm Joda loaded to wagon 3,300* 0

Basic prices in INR/MT; all taxes will be applicable
*Incld Royalty, DMF & NMET
Source: SteelMint Research

 

Southern India Steel Makers Iron Ore Procurement in Dec’16

With one iron ore import vessel, southern India steel makers focused more on domestic iron ore/pellet sourcing in Dec’16.

Base prices in Dec’16 Karnataka e-auctions moved up marginally – NMDC Kumaraswamy mines are currently as follows: fines (Fe 59.5%) stood at INR 1,707/MT and lump (Fe 63.4%) at INR 2,302/MT. Base prices for NMDC Donimalai, are as follows – lump (Fe 62.2%) – INR 2,286/MT and fines (Fe 60.2%) – INR 1,980/MT.

Base prices of iron ore offered by private miners were as follows: fines (Fe 60.3%) offered by SMIORE was at INR 1,850/MT and for lump (Fe 61.8%) it stood at INR 2,180-2,300/MT (basic).

NMDC’s sponge grade lump fetches higher bids in Dec’16 e-auctions – Southern India based sponge iron manufacturers continued procuring sponge grade lump in Karnataka e-auctions. Lump (10-20 mm, Fe 61.4%) offered by NMDC Kumarswamy mines received bids at INR 1,912/MT against base price of INR 1,762/MT (basic).

Andhra Pradesh based steel maker – Steel Exchange India continues to source iron ore from NMDC (Chhattisgarh).

Southern India pellet offers move up amid increasing P-DRI prices – Bellary pellet manufacturers have raised offers amid improved trades over hike in P-DRI prices. Fe 63% pellet prices are presently in the range of INR 5,400-5,500/MT (basic).

Single iron ore import vessel arrived at Krishnapatnam port in Dec’16 – Kamachi group imported a vessel carrying 60,500 MT South African lump at Krishnapatnam port in 1st week of Dec’16.

Another import vessel carrying 54,300 MT South African lump is expected to reach Krishnapatnam port on 06 Jan’17. The vessel is being jointly imported by Pulkit Metals and Akshara Industries.

 

IDCOL Issues Tender for Sale of 12,300 MT Iron Ore

Industrial Development Corporation of Odisha Limited (IDCOL) has issued three different tenders for tentative sale of 4,500 MT crushed iron ore fines, 4,000 MT sponge grade iron ore lumps and 3,800 MT sponge grade calibrated lump ore (CLO) from its Roida ‘C’ iron and manganese mines, Keonjhar (Odisha) on “as is where is and no complaint basis”.

Specification and quantity of items, tender-wise

Material Size
 (mm)
Fe Content 
(%)
Quantity 
(MT)
Crushed iron ore fines 0-10 55 4,500
Sponge grade iron ore lumps 5-200 62 4,000
Sponge grade calibrated lump ore 5-18 62 3,800
Total 12,300

 

Validity & delivery of offer

Bids submitted by the bidder shall be valid for the period of 30 days from the last date of price bid opening and the delivery period of the material shall be up to 60 days from the date of receipt of the order. The delivery of the material should be done by trucks/tippers and the bidder are required to ensure that loaded trucks are to be covered with tarpaulin during transport.

Eligibility criteria

1. Bidder should have a valid license under Odisha Minerals (prevention of theft, smuggling and illegal mining and regulation of possession. Storage, trading and transportation).
2. Bidder need to submit the copy of sales tax/VAT/CST/TIN registration certificate registration certificate.
3. Bidder must have the Indian Bureau of Mines (IBM) registration certificate under rule 45 of MCDR.
4. Iron ore lessees are not eligible to participate.

Tender schedule (IST)

Bid submission due date: 6 Jan’17 at 11:00 hrs
Technical bid opening: 6 Jan’17 at 11:30 hrs
Price bid opening: 6 Jan’17 at 15:00 hrs

 

Chinese Rebar Export Offers Further Fell by USD 5-10/MT

Chinese rebar export offers are hovering in the range of USD 440-445/MT, FoB main port, decreased by USD 5-10/MT W-o-W consecutively for the last two weeks.

In the beginning of Jan’16, rebar export offers in China was in the range of USD 260-265/MT which is now around USD 440-445/MT. Since then, the price has increased by about 70%.

However, other global markets reported rebar offers to be firm – CIS export offers increased by about USD 10/MT W-o-W. While, Turkey export offers and UAE imported rebar offers remain steady in the same duration and stood at USD 440-445/MT.

Global Rebar Offers in Week 53 (26 Dec’16-01 Jan’17)

Country-wise Offers in USD/MT W-o-W
China export FoB main port 440-445 -7
CIS export FoB Black Sea 430-455 +10
Turkey export FoB main port 440-445 0
UAE import CFR Jebel Ali 440-445 0
India (ex-works Mumbai) 430-440 -5

USD 1 = INR 67.90
Source: SteelMint Research

 

Anthracite Coal Import Offers Drift Downwards, No Improvement in Indian Demand

Anthracite Coal import offers have shown a downward trend as demand stagnated in the key international regions.

The latest import offer is assessed significantly lower at USD 110/MT CFR India, which is lower by USD 10/MT than that in the week last.
anthracitecoaloffersfy17

Source:Market Participants

In the meantime, stocks of Anthracite Coal are heard to have declined at the thermal power plants in Ukraine to 877 ‘000MT.

IMPORTS

In India, demand has continued to be sluggish as buyers’ preferred alternate fuels over the coal variant. There was almost no import during the month of Dec’16. According to CoalMint Research, only JSW Steel imported 24,300 MT of Anthracite Coal in Dec’16.