Monthly Archives: February 2017

Highlights From Indian Ferro Alloys Producers’ Association’s National Summit

Indian Ferro Alloys Producers’ Association (IFAPA) conducted its national summit which was held in Kolkata on 27th and 28th February 2017. There were discussions and presentations by industry stalwarts which provided insights into the global and domestic Ferro Alloy market.

India produces around 3.5 MnT of Ferro Alloys and consumes around 2.3 MnT while exporting the rest. Ferro Chrome contributes 1 MnT towards the yearly production and the rest 2.5 MnT are Manganese Alloys. India has been witnessing an increase of 5.4% in its Ferro Alloys production on CAGR basis.

The Indian Manganese Alloys industry are on the brink of facing stiff competition from Malaysian and Indonesian market. In the current scenario the Indian ferro alloys producers have been seeking protection from the low priced Malaysian imports. It is expected that by the end of 2017, Samalju Industrial Park in Malaysia will be producing as much as 0.29 MnT of SiMn and 0.26MnT of high carbon FeMn annually. This is currently seen as the biggest threats to Indian Manganese Alloy producers in Asian subcontinent.

In the global market, demand for ferro chrome surpassed its supply by 0.2 MnT in 2016. The price went upwards from Oct’16, due to which some producers could come back to business. In respect to production, India contributes around 10% of global Ferro Chrome production. The global supply is expected to increase to 11.7 MnT reflecting a growth rate of 3%.

The stainless steel industry is expected to grow which may increase the demand of Ferro chrome with an expected rate of 5%. China and India are considered as the key drivers of global stainless steel growth.

Also, highlighted were the various challenges which the Indian Ferro Alloys industry is facing:

  • Power tariff has been the most imperative factor which is responsible for India to lag behind its competitors.
  • The non-captive producers are at perils as the power is cross subsidized.
  • Scarcity of low phosphorus coke.
  • High cost of production due to anti-dumping duty on Chinese coke.
  • Manganese alloys industry has also been facing difficulties amid non-availability of high grade manganese ore.
  • Poor logistics remains an issue for the industry as well.

 

 
Global, Iron Ore, Prices, Global Iron Ore Prices

Global Iron Ore Prices Close at USD 92/MT

Plummeted futures caused the seaborne iron market to slow down on February 28.

According to reports the steel production is marginally higher in prominent China mills comparing the numbers with the last couple of weeks’ output this month, the stocks are at higher levels in one year’s period.

The major contributing sentiment for the downward trend can be the funds allocated by Chinese government for the railway infrastructure and roads are almost equal to the amount a year earlier spent and reflects no sustainability value for the current rally in steel market.

Billet
Billets were traded at 3,220 Yuan (USD 468/MT) including VAT in Tangshan, down 90 Yuan (USD 13/MT) compared with yesterday’s closing price.

Rebar
Falling futures affected rebar and billet prices negatively to close lower compared to yesterday. The purchases were lesser during the day with falling offers. Amidst the falling prices some traders still feel that when the supply shrinks due the production cut the rebar prices will possibly gain the momentum in near future. On the other hand some participants think that high level of inventory will bring prices down.

Trades
East China, domestic, grade III 16-25 mm rebar, traded at 3,630-3,660 Yuan (USD 528-532/MT) , including VAT.

North China, domestic, grade III 16-25 mm rebar, traded at 3,680-3,710 Yuan (USD 535-540/MT) , including VAT.

Dalian Commodity Exchange
The most-traded May iron ore futures contract closed at 690.50 Yuan (USD 100.50/MT) on 28th Feb, down 23.50 Yuan (USD 3.40/MT) compared with yesterday’s closing price.

Shanghai Futures Exchange
The most-traded May rebar futures contract closed at 3,471 Yuan (USD 505/MT) on 28th Feb, down 141 Yuan (USD 20.50/MT) compared with yesterday’s closing price.

Global, Iron Ore, Prices, Global Iron Ore Prices

 

Indian Pig Iron Prices Increase Further

In the present week, the pig iron suppliers across major Indian markets have further increase prices. The sources claim that, prices surge in line with strong demand from the both Indian domestic & global market.

The fresh prices are assessed – at INR 23,200-23,200/MT (+150) ex-Raipur, Central India, INR 21,800-22,000/MT (+550) in Durgapur, East India, INR 27,000-27,500/MT (+750) FOR Ludhiana, North India & INR 23,000-23,500/MT (+250) FOR Hyderabad, South India. Price changes are mentioned on weekly (against last week) basis.

Indian pig iron exports are significantly on rising mode as the large producers have concluded deals about 100,000 MT till the last week of Feb’17. Also, the producers few tender are inline which quantity similar as concluded during the month i.e. 100,000 MT.

Thus, strong demand by global buyers has made positive trends in the market. In addition sharp hike in semis prices is an additional plus point for domestically strong demand in pig iron.

The traders in Central & East India added that, prices may remain on rising mode as the large producers are eyeing to take bulk bookings by global buyers instead to sell material in domestic market. So, this may result in short supply and positively impact on prices.

Plant wise Offers:

1. Jindal Steel has gain prices by INR 400/MT to INR 22,700/MT ex-Raigarh. According to the officials few quantities have been sold out at increased prices in the local market.

2. Suppliers in Raipur are offering Odisha’s pig iron FOR at INR 23,200/MT which was a week ago offered at INR 22,800-22,900/MT. They added limited quantity are available with them and aggressively waiting for NINL fresh prices which likely to increase.

3. Durgapur reported hike in prices for steel grade material by KIC (Kajaria Iron company) and Neo Metaliks by INR 500/MT to INR 22,000/MT.

4. Atibir Industries in Giridih, has kept prices unaltered for steel grade at INR 20,600/MT ex-plant. According to the officials the company may soon increase prices looking at price rise in the major competitor markets.

5. Ludhiana based participants reported, major supply from Sona Alloys & Vedanta Sterlite. They further added that previous booked steel grade material in NINL yet to dispatch where quantity was nearly 5 rakes.

6. The sources in Hyderabad, South India reported Gerdau steel’s pig iron trade today at INR 23,250/MT FOR. Moreover, Vedanta sterlite offers is heard in the range of INR 24,000-24,500/MT.

Pig Iron 28 Feb

 

India: Govt to Float a Policy In a Month For Cheaper Iron Ore Availability

Government of India is in the process to float a policy for the availability of cheaper iron ore. The policy elements are expected to be out within a month.

The news arrives at a period when iron ore prices are continuously on the rise.

“What policy steps we need to take to ensure that iron ore is plentifully and cheaply available is something which we are working on and there could be various formulations to that,” an official privy to the development said.

“We are examining those and hopefully in a month or so we would be able to say that these are recommendations,” the official said, adding that “Niti Aayog has been mandated to examine that. They will examine that and come and give us the suggestions”.

As a basic principle “…prices of raw material resources should be cheap because that gives us (Steel Ministry) a competitive advantage because we are involved in many schemes,” the official said.

Steel Minister Chaudhary Birendra Singh had earlier said an expert group that would be formed by the government to study sale of iron ore by NMDC will also analyze the mining giant’s ore pricing and auction.

Since beginning of 2017, NMDC-India’s single largest iron ore miner has made two successive price hikes. In Feb’17, it raised iron ore prices up to INR 185/MT (7% M-o-M). Almost similar reflection was seen in base prices of Karnataka e-auctions.

Indian Govt to Float a Policy In a Month For Cheaper Iron Ore Availability

On the other hand, Odisha based merchant iron ore miners raised iron ore offers up to INR 300/MT in Jan’17. Towards the end of Feb’17, they have further hiked iron ore lump prices up to INR 300/MT

 

Indian Flat Steel Market Awaits Further Price Revision

By the end of Feb’17,flat steel market has witnessed various fluctuations in traders as well as in manufacturers market. After the hike of INR 3000/MT in the start of January, prices have came down to Dec’16 levels. Hence, Indian Flat steel market is waiting for further price revision for the month March.

Currently HRC (IS2062) 2.5mm-8mm is assessed in the range of INR 40,500-41,000/MT (ex-Mumbai),INR 40,000-40,500/MT (ex-Delhi) and INR 40,500/MT (ex-Chennai).Prices are inclusive of excise duty 12.5%

Currently CRC (IS513) 0.9mm is hovering in the range of INR 46,000-46,500/MT (ex-Mumbai),INR 46,000-47,000/MT (ex-Delhi),and INR 46,000-47,000 /MT(ex-Chennai).Prices are inclusive of excise duty 12.5%.

Prices of flat steel have seen plummeting in the domestic market owing to dull and mute demand prevailing in the domestic market. Moreover, flat steel prices have come down to the Dec ’16 levels and have been declined up to INR 3,000-3,500/MT till date.

According to a flat steel manufactures based in southern India “There are chances of roll over in flat steel prices for next month deliveries. However discounts of around INR 500-1,000/MT may come in form of quantity discounts on bulk purchases. March being fiscal year end, companies will focus to clear inventories so as to boost sales.”

Few trade sources are expecting stability in prices over dull demand until Holi festival. However others are anticipating some price cut as March being end of accounting year  will force companies to clear inventories.

It is to be noted that flat steel manufacturers were seen offering rebate of INR 1,500-2,000/MT in Feb’17. However exports market has somehow reduced sales pressure, although realizations is still low. In traders market, prices fell sharply over increased inventories.

Screenshot from 2017-02-28 18:39:23

 
Imported scrap Offers

India: Imported Scrap Fresh Offers Rise Further by USD 5/MT and M-o-M USD 35/MT

Containerized scrap offer improve by USD 5/MT where Pakistan buying remain intact and India buyers cautious. Month on Month price are up by USD 35/MT where as Turkey bulk price up by USD 50/MT.

In line with rising global scrap offers, India containerized scrap price increased further after active buying from Pakistan is reported. Pakistan Shredded scrap UK origin CFR deal heard at USD 302-305/MT level that was last reported at USD 300/MT. Dubai HMS 1 heavy 25 MT loading cargo CFR Pakistan traded at USD 282-285/MT.

India offers of containerized HMS 80:20 (1&2) are assessed at USD 270-275/MT where buyers continue to remain cautious. Shredded scrap are assessed CFR at USD 300-305/MT Nhava Sheva port.

“India buyer continues to hold buying where Pakistan market is actively holding stock in anticipation of further increase in prices” UK based scrap supplier reported.

“India bid for HMS 1&2 UK are at USD 260-265/MT but offer are more by USD 10/MT. Only alloy steel with small cargo deals are heard.” said a scrap indenter in Mumbai.

Middle East scrap heavy HMS 80:20 CFR Mumbai heard at USD 280-285/MT with limited quantity that was USD 270-275/MT.

Imported scrap offer in global market rise up to USD 50/MT M-o-M with bullish future outlook:

Turkey bulk scrap cargo deal US origin is heard at CFR USD 287/MT up by USD 5/MT from 27th Feb’17 trade and USD 50/MT M-o-M. Europe origin heard at USD 278-280/MT.

Market participant expect further increase in price as local mill in UK will increase domestic price for Mar’17.

Global Imported Scrap Offers in Week-10

Particular Size Prices 1W 1M
CNF India HMS(80:20), Europe 270 265 245
HMS-1, Middle East 280 275 252.5
HMS-1&2, S.Africa 270 265 237.5
Shredded, Europe 300 295 265
Shredded, US 300 295 265
CNF Taiwan HMS(80:20), US 263 255 250
CNF Turkey HMS(80:20), US 287 282 236
CNF Bangladesh Shredded, Australia/Europe 312 303 273.5
HMS 80:20, Australia/Europe 290 285 255
CNF Pakistan Shredded, US/Europe 305 300 265

Source: SteelMint Research

 

Indian Sponge Iron Trade Log, D-o-D

The major sponge producing markets has seen mix price trend on day on day trade basis. In South region the prices of sponge iron again surge up to INR 300/MT. But in Central & East regions it declined up to INR 150/MT.

Currently, FeM 78-80 C-DRI prices are hovering in the range of INR 15,600-17,500/MT (USD 234-264) and P-DRI within INR 15,700-17,000/MT (USD 235-255) ex-plant.

In context of raw material, recently Odisha based large miners have increased Iron ore price up to INR 300/MT for Mar’17 deliveries. Sources are assuming that, NMDC Chhattisgarh based miner may also follow suit and hike their prices.

For a sponge market outlook the Industry watchers added that as the miners have raised prices and demand is strong, the sponge manufacturers may keep offers on higher side.

Trade Log:

1. The Integrated plants in Raipur cut P-DRI prices by INR 100/MT to INR 16,500/MT. On 27th Feb’17 the manufacturers have released limited quantity at the price of INR 16,600/MT ex-plant.

2. According to sources in Durgapur, Rashmi Metaliks has kept offers unaltered for C-DRI at INR 16,500/MT

3. Singhal Steel, a large semi finish maker with current billet production of 600 MT per day in Raigarh, sold C-DRI (0-20 mm) at INR 16,800/MT ex-plant (Raigarh), an official reported

4. Raigarh (C.G) based smelters purchased FeM 80 C-DRI from Rourkela at INR 16,500-16,600/MT FOR, trade participants shared

5. Bhaskar Steel offered FeM 80 C-DRI lump at INR 15,600-15,700/MT & billet at INR 24,200-24,300/MT ex-plant (Odisha) through CST billing.

6. Maharashtra based smelters purchased FeM 80 C-DRI from Bellary at INR 17,800-18,000/MT FOR Jalna, trade participant shared. Also added they are getting offer of same material at INR 18,500-18,700/MT FOR Jalna from Rourkela, Odisha.

7. BMM Ispat in Karnataka; sold FeM 80 P-DRI lumps at INR 16,800/MT ex-plant. And opened new offer at INR 17,000/MT ex-plant

8. Sunvik Steels in Karnakata have kept offers unaltered; offering FeM 80 & 82 C-DRI are INR 17,000/MT and INR 17,400/MT ex-plant

9. ILC Iron & Steel, a 350 TPD sponge manufacturer from Karnataka hike offers for FeM 80 C-DRI lump by INR 200/MT to INR 17,200-17,300/MT ex-plant. The company officials mention few deals to Indore (M.P) at around INR 17,000/MT (ex-plant).

10. Apple Industries, who produces 8,000-9,000 MT billet per month and also a merchant seller is offering billet at INR 27,000/MT and FeM 80 C-DRI lump at INR 16,700-16,800/MT ex-plant (Karnataka).

11. Shiv Shakti Steel (Hyderabad) offered FeM 80 C-DRI lump at INR 17,600/MT ex-plant. And billet at INR 26,500/MT ex-plant. While, the same grade P-DRI is being offered by Sunder Ispat in same place at INR 17,000/MT ex-plant.

Domestic sponge offers as on 28 Feb’17

Particulars C-DRI D-o-D W-o-W P-DRI D-o-D W-o-W
Ex-Durgapur 16,500 – 150 + 700  15,900 – 50 + 700
Ex-Rourkela 15,500  -100 + 700  0 0 0
Ex-Raigarh 16,600 – 150 + 950  15,700 + 50 + 900 
Ex-Raipur 17,550 – 50 + 750  16,450 – 100 + 700 
Ex-Bellary 17,000 + 300 + 1,100  16,800 + 300 + 1,000 
Ex-Hyderabad 17,500 + 200 + 700  17,000   0 + 200 

Prices in INR/MT
Source: SteelMint Research

 
Indonesian Coal Price

Indonesian Thermal Coal Offer Prices Remain Firm

Offer prices for Indonesian thermal coal stayed high, denting buying interest from China.

The recent rally in Indonesian thermal coal prices was expected to continue in the near term as heavy rain and road haulage issues kept spot cargo availability tight. Inclement weather in Indonesia was the main reason for the tightness in supply during the period.

4200 GAR preferred by Indian and Chinese utilities is available at USD 47/MT, FoB Kalimantan, March Loadings. Low CV 3600 GAR is offered at USD 36/MT, FoB Kalimantan, 3800 GAR coal is offered at USD 38/MT, FoB Kalimantan. High CV 5000 GAR is available at USD 61/MT, FOB Kalimantan.

In India, CFR offers for 3600 GAR coal are heard at USD 44/MT, CFR West Coast. 3800 GAR coal is accessed at USD 46/MT, CFR West Coast.4200 GAR is offered at USD 55/ MT, CFR West Coast. While 5000 GAR coal is being offered at USD 69/MT, CFR West Coast.

Indonesian Coal Price

Indian Market Scenario:
Indian demand for Indonesian coal has been falling recently, as inferred from increasing coal stock at power plants and declining imports from Indonesia.

Combined stocks of thermal coal at 110 Indian power plants rose 4.83% W-o-W to 26.04 MnT on 26 Feb’17, the highest level since Sep ‘16, according to data released by Central Electricity Authority (CEA).

Coal stocks levels at power plants moved beyond 25 MnT mark this month for the first time since September last year. The stocks were also 21% higher on the month compared with Jan’17, but have dropped 25 % Y-o-Y against 36.18 MnT in Feb’16.

Coal imports from Indonesia have fallen by 13% M-o-M from 7.7 MnT in Dec’16 to 6.69 MnT in Jan’17, as state-run Coal India Ltd. has increased production and supply to power plants.

Stock and Sale Offers:
At West Coast Mangalore port, stock and sale offer for 3600 GAR was heard at INR 3,850 while that for 3800 GAR offers were INR 3,700. 4200 GAR was not available for sale, however, high CV 5000 GAR is available at INR 5,750.

3600 GAR material at Kandla port is available at INR 3,500, 3800 GAR at INR 3,700, while 4200 GAR at INR 4,400. High CV 5000 GAR coal prices for sale were heard at around INR 5,400.

 

Tata Steel Starts Ferro Chrome Production At Gopalpur

Tata Steel has started ferro chrome production at its recently commissioned facility at Gopalpur in the eastern state of Odisha. Ferro chrome has been produced by the briquetting plant at the Gopalpur ferro alloys complex. The briquetting units had begun production on January 23 this year.

Gopalpur houses the only greenfield ferro chrome production unit of Tata Steel. Chromite for this facility is sourced from the captive mines at Sukinda.

D B Sundara Ramam, Executive-in-Charge, ferro alloys & minerals division of Tata Steel said, “This marks the completion of the commissioning of the ferro-chrome plant. It also goes a long way in consolidating our footprint in Odisha and the long standing partnership with the state towards industrial progress of the region.”

As part of the anchor investment in Tata Steel’s Gopalpur industrial park, the Rs 542 crore ferro-chrome plant has an installed capacity of 55,000 tonne per annum (tpa). The plant was inaugurated on November 30, 2016 by chief minister Naveen Patnaik.

It is a unique environment-friendly plant with state-of-the-art pollution control equipment and technology such as the ETP (Effluent Treatment Plant) and STP (Sewage Treatment Plant). The plant has 100 per cent water harvesting facility that caters to most of the water needs of the plant. It has an indigenously built semi-closed hybrid furnace, which is first of its kind in India and components procured from all over the world to maintain high standards of quality and safety. Also, it is the first plant in India to use briquetting method of chrome ore fines agglomeration.

Besides the plant at Gopalpur, Tata Steel has two other ferro-chrome plants in Odisha- a 65,000 tpa plant at Bamnipal in Keonjhar district and the other at Athagarh in Cuttack district of 55,000 tpa capacity under the management of its subsidiary T S Alloys.

India’s total HC Ferro Chrome Installed Production Capacity is around 1.3 MnT per annum and Tata Steel aims to boost up their production by the next Financial Year to 0.5 MnT per annum (production from conversion agents included). As per the MMDR Act 2015 all merchant mining leases will expire in 2020 and all the merchant blocks will be put on auction after that. Tata Steel’s Sukinda Chrome mine was accorded merchant status, and this led to Tata Steel maximizing their  chrome ore  resource.

 

India: Pellet Manufacturers Hike Offers Further Amid Improved Demand

Improved pellet demand from P-DRI manufacturers has compelled majority of Indian pellet makers to hike offers this week. Pellet offers in India’s major markets have moved up in the range of INR 100-350/MT W-o-W. However pellet prices in Raipur continue to remain stable this week.

Domestic P-DRI prices in India have gone up to INR 1,000/MT in a week’s time.

However few market participants remain skeptical about sustenance of increased offers.

Trade-wise:

1. Southern India based pellet maker – MSPL raised pellet offers. Offers for Fe 65% grade pellets are at INR 6,600/MT (basic).

2. Durgapur based Super Smelters sold 2,000 MT pellets to a Durgapur based sponge manufacturer at INR 5,200/MT. Current offers are at INR 5,500/MT.

3. Bilaspur based Rashi Steel & Power sold 2,000 MT pellets at INR 4,950/MT (ex-Bilaspur) in local market. Current offers are at INR 5,000-5,100/MT (ex-Bilaspur).

Indian Pellet Prices as on 28 Feb’17

City

Grade (Fe %) Basic Prices
in INR/MT
W-o-W

Remarks

Barbil* 63 4,600-4,700 +100

JSPL pellet offers are at INR 4,700/MT and
that of Arya Iron & Steel are at 
INR 4,600/MT (loaded to wagons).

Jharsuguda 63 5,200 +300

Shyam Metaliks & Energy raised pellet offers 
by INR 300/MT W-o-W.

Durgapur 63 5,200-5,500 +250 Rashmi Metaliks increased offers to INR 5,200/MT. 
Shyam Sel & Super Smelters have also hiked
offers to INR 5,500/MT.
Jamshedpur 63 5,000 +200

Adhunik Metaliks raised offers by INR 200/MT W-o-W.

Raipur 63 5,000

=

Trade sources shared that deals have been concluded 
at INR 5,000/MT and as of now offers remain the same.

Bellary 63 6,200-6,250 +350

Amid increasing P-DRI prices, Bellary based 
pellet makers have raised pellet offers.

Kandla** 63 6,750 +150 In line with increasing global iron ore prices, 
Jindal SAW has raised pellet offers. Prices for 
South African lump (Fe 64/63) are at USD 97/MT, CFR China.

*loaded to wagons
**delivered
Source: SteelMint Research