Monthly Archives: July 2017

Japan: Coal Import Up 2% Y-o-Y in H1 CY17

Japan, world’s second-largest coal importer, has recorded an increase in coal imports during the first half of 2017. The country’s import has increased 2% Y-o-Y to 97.37 MnT in Jan’17-Jun’17 compared with 95.51 MnT in Jan’16-Jun’16.

On the monthly basis, Coal Import has surged by 18% to 17.71 MnT in Jun’17 compared with 15.01 MnT in May’17.

Moreover, Imports in Jun’17 were 19% higher than 14.94 MnT coal imported during Jun’16.

After the closure of nuclear reactors in the wake of 2011 Fukushima Disaster, coal’s share in Japan’s energy mix has increased to 31%. The country is planning to build 41 new coal-fired power stations over the next decade.

Japan monthly Coal Imports

Grade-wise Coal Imports:
Japan has majorly imported Non-Coking coal during H1 CY17, whose share was more than 66% in country’s total coal import.
Non-coking coal imports have increased 4% Y-o-Y to 65.17 MnT during Jan’17-Jun’17.

Among the other major coal commodities, imports of Coking coal and Met coke have decreased over the year, while imports of Anthracite and Pet coke have recorded growth during the year.

Grade H1 CY17 H1 CY16 % Change
Non Coking Coal 65.17 62.45 4%
Coking Coal 20.84 21.2 -2%
Anthracite 3.53 2.96 19%
Pet Coke 2.46 2.39 3%
Met Coke 0.54 1.1 -51%
Others 4.81 5.43 -11%
Grand Total 97.37 95.51 2%

Source: Japanese Customs
Quantity in MnT

Major Coal Exporters:
Australia was the major coal exporter to Japan during H1 CY17, followed by Indonesia, Russia, USA and Canada.

Australia had exported 59.04 MnT coal in Jan’17-Jun’17, the country’s coal export remained almost unchanged during the first half of CY17 in comparison with export during the same time frame of previous year.

Indonesia, second-largest coal exporter, had exported 15.8 MnT coal during Jan’17-Jun’17, down by 6% Y-o-Y.

Major improvement in coal export was seen from USA, whose exports have increased 47% Y-o-Y to 6.03 MnT in Jan’17-Jun’17.

Japan Country-wise Coal Imports

 

India’s SAIL Salem Unit not to be Divested Fully- Steel Minister

The loss-making salem steel plant of SAIL will not be fully divested, but only a majority stake of upto 51% will go in the hands of the private sector, steel minister Mr. Chaudhary Birender Singh said in Lok Sabha on Monday.

“The Salem Steel Plant is incurring losses for the last five or six years. Therefore, the Ministry took a decision that there should be strategic disinvestment as far as the Salem Plant is concerned,” the minister said.

High power costs is one of the major reasons for the unit running into losses. The minister said that efforts were made to get power at concessional rates from the state of Tamil Nadu went in vain. Power accounted for 46% of the losses, he said.

“Ultimately, the strategic disinvestment decision, particularly I would say this is a Cabinet decision, has already been taken where if somebody comes forward, 51% or more than 50% of the shares would be disinvested; he would have management and also run the plant but 49% of the shares would remain with the Salem Plant as it is already there,” he said.

Salem Steel Plant has a total stainless steel capacity of 3.39 lakh tonnes per annum. The unit has incurred a loss of INR 1,855 crore in the last five years – from 2011 to 2015-16. SAIL has invested INR 2,200 crore in the plant.

The Salem Steel Plant has a total of 4,000 acres of land of which 2,900 acres is for the plant, 415 acres is for the township and the rest of 1,549 acres of land has been earmarked for further installations.

Though there has been stiff opposition from the state government and the company officials; legal advisors, surveyors and asset valuers have been deployed to make a detailed analysis of the plant. A decision on the future of the plant would be taken after receiving their reports.

The Centre government has already accorded ‘in-principle’ approval for strategic disinvestment of three units of Steel Authority of India Ltd. (SAIL) viz, Visveswaraya Iron and Steel Plant, Bhadravati, Salem Steel Plant, Tamil Nadu and Alloy Steel Plant, Durgapur. These three units of SAIL have been consistently making losses.

 

Daily Update: Indian Sponge & Billet Market

Indian billet and sponge prices remain slightly fluctuate by INR 100-300/MT on daily analysis amid mix trade trade activities.

SteelMint’s price assessments for induction furnaces billet size 125×125 mm are reported at INR 25,400-27,900/MT (USD 396-436) ex-plant.

While, coal based sponge C-DRI price assessment was at INR 16,200-17,500/MT (USD 253-273) ex-plant.

Key Updates

1. Nagpur, Maharashtra based renowned sponge manufacturer who’s production is about 25,000-30,000 MT per month, heard to offering P-DRI(FeM 80) at INR 16,200-16,400/MT ex-plant

2. BMM Ispat in South India has increased offers of FeM 80 P-DRI lumps by INR 500/MT to INR 16,500/MT ex-Bellary, Karnataka.

3. Sunvik Steels in Karnataka has increased offers by INR 300/MT; offering FeM 80 & 82 sponge C-DRI lumps are INR 16,600/MT & INR 17,000/MT ex-plant, respectively.

Indian sponge & billet reference prices as on 31 July 2017

Particular/Delivery C-DRI D-o-D W-o-W Billet D-o-D W-o-W
Ex-Raipur 17,500 0 +700 26,450 -50 +650
Ex-Durgapur 17,250 -100 +850 26,100 -100 +200
Ex-Rourkela 16,200 0 +700 25,450 -50 +450
Ex-Bellary 16,550 +300 +450 27,300 +300 +500
Ex-Ahmedabad 27,900 0 +150
Ex-Mumbai 27,200 0 +400

Basic, ex-works prices & excluding of GST @ 18%
Source: SteelMint Research

 

India: SAIL-Arcelor Mittal JV Agreement to be Inked in Aug’17

The USD 1 billion joint venture (JV) between SAIL and ArcelorMittal for producing auto-grade steel may come up at Sanand in Gujarat, though the two parties are yet to finalise the location.

A senior steel ministry official said that “Almost all the contentious issues involving the joint venture has been resolved and an agreement for the setting up of the joint venture is likely to be signed in Aug’17”.

The two parties have been negotiating on the deal since the signing of a Memorandum of Understanding (MoU) in May 2015 for setting up the JV mainly to cater to the fast-growing automotive sector of India, which is poised to become the world’s fourth largest automobile manufacturing nation by 2020.

“The JV will come up in one of the three automotive hubs in the country. We have given them a timeframe to compelete the formation of JV and operationalise it. We have directed them to do the foundation stone-laying ceremony before December this year,” said a source.

Asked whether Gujarat’s Sanand has a fair chance of hosting the joint venture, the official said, “I can’t confirm that now.”

Raw material for the proposed plant in the form of HR Coil would be supplied from SAIL’s Rourkela plant while ArcelorMittal, which commands over 15% of the autograde steel market globally, will supply the technology for the venture. It might take two years to operationalise the plant from the zero date of construction starts.

Once operationalised, the JV will give JSW and Tata Steel a run for their money. In association with JFE, JSW produces auto-grade steel while Tata Steel has partnership with Nippon Steel for manufacturing such products.

India mostly relies on imports to meet the requirement of the auto-grade steel.

 

India: Higher Semis Offers Pushed Rebar Prices in West and South Regions

Rebar offers are stagnant since couple of weeks across all regions in India. However last weekend there was a sharp hike in the rebar offers in West and Southern regions.

In the last couple of days, rebar offers surged around INR 500-800/MT (USD 8-12) in Maharashtra, Gujarat (Western region) and in Tamilnadu & Andhra Pradesh (South India).

As per one of the big Wardha, Maharashtra based manufacturer, who produces about 25,000-28,000 MT rebar monthly stated that “the demand is average for the day, the current rise in the offers is owing to the high input cost (expensive scrap & sponge) and an hike in the billet offers

Further few medium size mill owners in the state (each unit’s rebar production about 6,000-9,000 MT) stated that, both RERA (Real Estate Regulation Act) and monsoon has adversely affected the bulk bookings from the builders end and are expecting the market to pick up in second or third week of August once the monsoon eases.

Heading towards, Gujarat, there is no major movement seen in the finish steel as there are heavy rains for a week now in the region. The rise in the billet offers are supported by the good exports have resulted in strong rebar offers.

One of the manufacturer based in Gujarat with the production of 350 TPD stated that “the inventories with us rose almost three times as there is no major demand for rebars. In near terms there are high possibilities that few plants might halt the production in Gujarat owing to the piled up stocks with them with lull demand for the material” he said.

Similar situation is seen in the South region; wherein surge in billet offers have resulted rebar offers to increase.

However, the other regions like Central, East and North India offers remained unaltered owing to the weak demand for rebars.
Daily analysis news
Source: SteelMint Research

 

Indian Manganese Alloys Receives Firm Demand from Overseas Buyers

Improved demand for Indian manganese alloys from overseas markets has pushed its prices upwards.

Indian Manganese alloys market has witnessed strong demand from various regions like the Middle-East, the Far-East Asian countries and Northern Africa.

Firm demand from overseas for Indian Silico Manganese grade 65-16 have helped lift its export offers to USD 1130/MT, while grade 60-14 is being offered at USD 1000/MT.

Moreover, Ferro Manganese also recorded improvement in its overseas demand. SteelMint assessed Ferro Manganese at USD 1120/MT for 70% grade and USD 1175/MT for 75% grade.

“Demand from overseas is good enough to shift our focus from the domestic market,” remarked a producer source referring to the increasing number of inquiries from overseas. He further mentioned that the demand in domestic market is soft and presently they are highly dependent on export orders.

Silico Manganese witnessed price fluctuation where offers in Durgapur went down while in Raipur it has gone up. Offers of 60-14 grade have been assessed at INR 64,000/MT (Ex-Durgapur) and INR 64,500/MT (Ex-Raipur). With increased inquiry for 65-15 grade, most of the producers in Raipur have turned towards producing 65 grade, while production of 60-14 grade has gone down, thereby, increasing its price in the market.

On account of moderate domestic demand, offers for Ferro Manganese remained stable at INR 71,500/MT (Ex-Durgapur) and INR 72,500/MT (Ex-Raipur).

SteelMint assessed that in the coming 1-2 weeks Indian Manganese Alloy market may run steadily and the demand in the spot market may stay at current level.

Mn Alloy

 
Japan Iron Ore Imports, Japan, Iron Ore, Imports

Japan Iron Ore Imports Down Marginally in Jun’17

Japan, second largest iron ore importer of the world imported 10.63 MnT iron ore in Jun’17 against 10.74 MnT in May’17. The imports were down by 1% M-o-M.

The countries imports were down Y-o-Y as well compared to Jun’16 by 6%. In Jun’16, the country imported 11.28 MnT iron ore. However the imports were up 8% for the quarter ended Jun’17 against the previous quarter. Japan imported 32.77 MnT iron in CY17-Q2 against 30.41 MnT iron in CY17-Q1.

In the first half of 2017, the country imported 63.18 MnT iron ore, down 2% as it was 64.23 MnT in the same period last year.

The non-agglomerated iron ore import in the month of Jun’17 was registered at 9.23 MnT against 9.72 MnT in May’17 down 5% M-o-M and 7% Y-o-Y against Jun’16 which was at 9.90 MnT. However the agglomerated iron ore imports were registered up 36% M-o-M at 1.39 MnT in Jun’17 compared to 1.02 MnT in May’17 and 1% up Y-o-Y against 1.38 MnT in Jun’16.
Japan Iron Ore Imports, Japan, Iron Ore, Imports

Australian iron ore exports to Japan have witnessed a growth of 2% M-o-M which was 6.31 MnT in Jun’17 and 6.18 MnT in May’17,  it were down 6% Y-o-Y compared the same month last year.  Australia exported around 6.73 MnT iron ore in Jun’16 to Japan.

Brazil exported 2.88 MnT iron ore to Japan in Jun’17 up 1% M-o-M but down by 9% Y-o-Y compared to the month of Jun’16 which was 3.15 MnT.

Canada was the third largest iron ore exporter to Japan in Jun’17 and exported 0.53 MnT iron ore against 0.59 MnT in May’17 down 10% M-o-M. Canada exported 0.56 iron ore in to Japan in Jun’16

India turned out to be the fourth largest iron ore exporter to Japan in Jun’17 and exported 0.42 MnT iron ore down 21% against 0.53 MnT in May’17; however it increased Y-o-Y by 200%. India exported 0.14 MnT iron ore to Japan in Jun’16.
Japan Iron Ore Imports, Japan, Iron Ore, Imports

 

Pakistan: Imported Scrap Offers Rise; Buying to remain Slow this Week

Rising global scrap prices and with previous inventory in hand, Pakistan based steel mills have kept away from booking fresh vessels this week.

In conversation with SteelMint, Pakistan based market participants shared that imported ferrous scrap market is volatile and owing to hike in offers in Turkey, global offers have also shown upwards movement.

This has resulted in hike in offers to Pakistan as well. Since most of the Pakistan based steel mills are having inventory left with them for about a week’s time, Pakistan based mills may keep themselves away from booking cargoes this week.

Offer prices for HMS 1&2 (80:20) are assessed at USD 300-305/MT, CFR Qasim and for Shredded are at USD 317 /MT, CFR.

”A 12,000 MT P& S cargo of South Korean/Japan origin was offered to me last week at USD 322-323/MT, CFR basis”, shared a Pakistan based steel maker.

However, it is anticipated that prices may increase further by USD 5-10 /MT on weekly premises. Thus, the prices for HMS 1&2 (80:20) is expected to touch levels of USD 305-310 /MT, CFR and that for the containerized Shredded cargoes are likely to move up USD 320-325 /MT, CFR by end of this week. P&S offers are likely to climb to USD 325-330 /MT ,CFR Qasim by end of this week.

The market participant also highlighted that last week we received an offer for a cargo containing 80% Shredded scrap and 20% HMS at USD 330-332/MT, CFR Port Qasim, although we did not book it.

Trade sources are anticipating prices to remain strong as steel mills in world’s largest scrap importing country – Turkey are quite optimistic about hike in rebar offers and are booking scrap cargoes at increased offers.

 

Japan: Flat Steel Exports Decline 7% Y-o-Y in H1 CY17

According to the latest customs data released, Japan flat steel exports which includes 7208 (HR coils /Plates), 7209 (CR coils), 7225 (Electrical sheets), 7210/7212(GP/GC) have reported the downfall of 7.3% to 12.86 MnT in H1CY17 against 13.88 MnT in similar time frame of previous year.

However on monthly premise nation’s flat steel exports showed the marginal rise of 0.4% to 2.13 MnT in Jun’17 against 2.12 MnT in May’17.

If yearly comparison is made, Japan flat steel exports plunged by 8% in Jun’17 against last year. In Jun’16 the same stood at 2.31 MnT.

Screenshot from 2017-07-31 12:49:06

 

CRC exports from Japan jumped 6 times in H1 CY17-In first half of 2017 Japan flat steel products is shown as:

Sub Commodity H1 CY16 H1 CY17 Y-o-Y%
HRC/Plate 8.04 7.01 -12.81
Electrical Steel 2.92 2.98 2.05
Galvanised Steel 1.59 1.54 -3.14
CRC 0.22 1.29 486.36
Others 1.11 0.07 -93.69
Total 13.88 12.89 -7.13

Quantity in MnT
Source-SteelMint Research

Country-Wise Japan Flat Steel Exports in H1FY17-China was the major flat steel importer and has procured 2.14 MnT of flat steel Other major flat steel importing countries from Japan include Thailand,Korea followed by Mexico and Vietnam.

Countries Jan’17 Feb’17 Mar’17 Apr’17 May’17 Jun’17
China 0.33 0.35 0.36 0.36 0.37 0.36
Thailand 0.35 0.34 0.38 0.31 0.34 0.36
South Korea 0.3 0.29 0.29 0.28 0.26 0.29
Mexico 0.16 0.14 0.15 0.18 0.19 0.17
Vietnam 0.16 0.15 0.18 0.14 0.15 0.12
Others 0.85 0.91 0.93 0.74 0.81 0.83
Total 2.15 2.18 2.29 2.01 2.12 2.13

Quantity in MnT
Source-SteelMint Research

 

NGT Ban Not Likely to Impact Petcoke Usage in India: Market Indications

Petcoke users as well as producers in India seem to have had a sigh of relief, with the cloud of uncertainty over the usage of the fuel somewhat started to fade away.

The cloud of uncertainty had gathered over the Petcoke users since the last two months, after the National Green Tribunal (NGT) had announced a slew of measures for restricting usage of Petcoke to curb atmospheric pollution. Readers could refer to: NGT Orders Closure of Petcoke Using Units Without Permission for Usage for the details.

But, with the subsequent developments lately, there seems to be very less prospect of a strict restriction in the usage of the fuel in the future. Two pro user developments have surfaced recently, which subtly indicate so.

>> The Ministry of Environment, Forests, Environment and Climatic Change (MoEFCC) has clarified that Petcoke cannot be classified as a hazardous waste, but as a by-product of Crude Oil refining. At the same time, the Ministry acknowledged the polluting nature of the fuel, due to the release of Sulphur and Nitrous Oxide into the atmosphere while burning. To negate the polluting effect, industrial units were permitted by the Ministry to use Petcoke with anti-polluting mechanisms installed in the units.

>>The Rajasthan state government has decided not to ban usage of Petcoke in the state. The decision was taken after examining the NGT order and consulting the Pollution Control Board of the state. Allowing the Petcoke usage will benefit a number of industrial units in the state.

On the pricing front, international offers as well as domestic ex-works prices have remained unchanged in comparison with those in the last week.

The latest offer for Petcoke (6.5% Sulphur) from USA is assessed unchanged at around USD 86/MT CFR India; while, the recent offer for Petcoke (9% Sulphur) from Saudi Arabia is also assessed steady at around USD 83/MT CFR India.
PetcokeOffers

Source: CoalMint Research

Likewise, the domestic ex-works prices are also unmoved. Reliance Industries Limited (RIL), the largest Petcoke producer in the country, has quoted its ex-works price at INR 7,000/MT. Essar, the second largest producer in India, has set its ex-works price at INR 6,990/MT. Mangalore Refinery and Petrochemicals Limited (MRPL) has quoted its ex-works price at INR 6,610/MT.
PetCokePrices2017

Source: CoalMint Research

However, there is a chance of RIL lowering its ex-works price with the onset of Aug’17 as availability has increased substantially. Supplies from the company’s Jamnagar refinery were cut-off in the recent past due to flood that had resulted in building up a huge stockpile at the refinery. In view of this, RIL is likely to dispose- off the accumulated stock by lowering the price. Since, RIL’s prices are also the benchmark Petcoke prices in India, other refineries are also expected to follow suit, if RIL revises its ex-works price downwards.

IMPORTS

Full-fledged Petcoke imports are going on in India as demand is strong due to cement plants running at high rates. During the 1-28 July’17 period, around 0.93 MnT of Petcoke was imported in India, according to data compiled by CoalMint Research.