Monthly Archives: October 2017

Daily Update: Indian Sponge & Billet Market

Since couple of days there has been continues price rise seen in Indian semis market following fluctuating demand in long steel products. In fresh update, the prices seen rise – Sponge by INR 100-350/MT & Billet by INR 200-600/MT D-o-D.

SteelMint’s price assessments for induction furnaces billet size 125×125 mm are reported at INR 26,400-28,500/MT (USD 408-440) ex-plant.

Further the coal based sponge (78-80 FeM) C-DRI price assessment was at INR 17,000-18,200/MT (USD 263-282); prices are ex-plant & excluding GST.

Today (Tuesday, October 31, 2017) INR to USD exchange rate stood at INR 64.75 & BSE Sensex closed at 33,213 (-53).

Key Market Updates:

1. IDCOL issues sale tender for 60,000 MT crushed iron ore fines and 20,000 MT screened iron ore fines from Keonjhar (Odisha).

2. On weekly basis, Indian pellet offers has increased by INR 100-300/MT except in western India where prices have come down by INR 200/MT.

3. MMTC has floated export tender of 15,000 MT non-alloy Pig Iron on behalf of Neelachal Ispat Nigam Limited (NINL). The due date for submission of bids is 08 Nov’17.

4. Central India, Raipur based Integrated plants have offered P-DRI (Sponge pellet) at INR 16,600-16,700/MT against last day at INR 16,500/MT; basic price & excluding of GST at 18%.

5. According to sources in Durgapur, Rashmi Metaliks today has increased offers by INR 200/MT to INR 17,200/MT for FeM 78 P-DRI.

6. Odisha based medium size sponge manufacturers reported increase offers by INR 200-300/MT; FeM 80 C-DRI (70:30 mix material) at INR 16,900-17,000/MT ex-plant & excluding GST.

7. BMM Ispat in South India has increased offers for FeM 80 P-DRI by INR 300-400/MT to INR 16,900-17,000/MT ex-Bellary, Karnataka.

8. Sunvik Steels in Karnataka has increased sponge prices by INR 300/MT; offering FeM 80 & 82 C-DRI are INR 17,700/MT and INR 18,100/MT. All prices are ex-works

9. ILC Iron & Steel, a 350 TPD sponge iron manufacturer from Karnataka sold FeM 80 P-DRI at INR 17,000/MT ex-plant, an official reported

10. Induction furnace billet offers in Ahmedabad reported at INR 28,500/MT for Non-alloy steel makers & INR 28,800/MT for alloy steel makers. Both prices are excluding GST.

Reference prices as on 31st October 2017

Particular/Delivery Size, Grade, Origin Prices Min Max Change 1W 1M
C-DRI Ex-Durgapur  Mix, FeM 78%, +/-1 18,000 17,900 18,000 + 100 17,000 17,500
Ex-Rourkela  Mix, FeM 80%, +/-1 17,000 16,900 17,000 + 350 16,000 16,000
Ex-Raipur  Mix, FeM 80%, +/-1 18,200 18,100 18,300 + 200 17,000 16,600
Ex-Bellary  Lumps, FeM 80%, +/-1 17,000 17,000 17,100   0 16,900 16,500
Ex-Hyderabad  Lumps, FeM 80%, +/-1 17,600 17,400 17,700 + 200 17,100 17,000
P-DRI Ex-Durgapur  Lumps, FeM 78%, +/-1 17,200 17,100 17,300 + 100 16,300 16,500
Ex-Raipur  Lumps, FeM 80%, +/-1 16,600 16,500 16,700 + 50 15,650 15,300
Ex-Bellary  Lumps, FeM 80%, +/-1 16,900 16,800 17,000 + 100 16,700 16,400
Ex-Hyderabad  Lumps, FeM 80%, +/-1 17,500 17,500 17,600 + 100 17,100 17,000
Ingot Ex-Mandi Gobindgarh  3.5 x 4.5 Inch, IS 2830 29,150 29,100 29,200 + 200 28,450 28,150
Ex-Durgapur  3.5 x 4.5 Inch, IS 2830 27,000 26,900 27,100 + 50 26,000 26,000
Ex-Rourkela  3.5 x 4.5 Inch, IS 2830 26,000 25,900 26,100 + 350 25,100 25,550
Ex-Raipur  3.5 x 4.5 Inch, IS 2830 26,500 26,400 26,600 + 100 25,550 26,200
Ex-Mumbai  3.5 x 4.5 Inch, IS 2830 27,400 27,300 27,500 + 50 26,300 25,900
Ex-Chennai  3.5 x 4.5 Inch, IS 2830 27,000 26,900 27,100   0 27,250 27,000
Ex-Hyderabad  3.5 x 4.5 Inch, IS 2830 27,500 27,500 28,000 + 250 27,100 26,500
Billet Ex-Mandi Gobindgarh  125×125 mm, IS 2831 29,600 29,500 29,700 + 200 28,700 28,500
Ex-Durgapur  125×125 mm, IS 2831 27,400 27,300 27,500   0 26,400 26,600
Ex-Rourkela  125×125 mm, IS 2831 26,400 26,300 26,500 + 400 25,450 25,800
Ex-Raipur  125×125 mm, IS 2831 27,100 27,000 27,200 + 300 26,100 26,700
Ex-Mumbai  125×125 mm, IS 2831 27,700 27,600 27,800 + 100 26,600 26,100
Ex-Chennai  125×125 mm, IS 2831 27,500 27,300 27,700   0 27,750 27,500
Ex-Hyderabad  125×125 mm, IS 2831 27,500 27,500 28,000 + 250 27,100 26,500
TMT Ex-Delhi/NCR  12MM 33,700 33,500 33,900   0 32,500 32,000
Ex-Durgapur  12MM 30,300 30,100 30,500   0 29,500 29,500
Ex-Raipur  12MM 29,900 29,700 30,100 + 200 28,800 29,300
Ex-Mumbai  12MM 31,000 30,600 31,100 + 200 29,900 29,500
Ex-Chennai  12MM 31,700 31,500 31,900   0 31,500 31,500
Ex-Hyderabad  12MM 30,500 30,300 30,700 + 400 30,000 29,500

Basic prices in INR/MT & excluding of GST @ 18%
Source: SteelMint Research

 

Tata Steel Investor Conference Call Highlights- Q2 FY18 Results

India’s major steel giant Tata Steel has announced Q2FY18 results yesterday (i.e on 30 Oct’17). The company officials remained optimistic about domestic demand picking up in H2 FY18.The investor conference call highlights are mentioned below.

1. Company’s EBITDA for its India operations moved up by 17% in Q-o-Q basis-In India Tata Steel EBITDA move up by 17% on quarterly basis.In Q2FY18 company reports EBITDA at INR 3,408 Cr as compared to INR 2, 922 Cr in previous quarter. However in Q2 FY17, it stood at INR 1,991 Cr.

2.Company’s steel production and deliveries shows upward trend – Tata Steel, India, produced 3.03 MnT steel in Q2 FY18 compared to 2.95 MnT in the previous quarter, up by 2% . Deliveries have also increased by 12% to 3.08 MnT in Q2 FY18.

3. Optimistic domestic demand in H2 FY18 – Tata Steel company officials remained optimistic in terms of demand forecast for H2 FY18. Global steel prices in international markets seem to stabilize.

4 .Tata Steel, India segment sales highlights– Automotive sector sales grew by 14% on Q-o-Q basis owing to development of new grades and new vehicle models in Q2FY18.Meanwhile sales in branded products, retail & solutions increases by 16% on quarterly basis due to restocking, improved government spending and festive season.And sales volume of Industrial products and projects grew by 18% Q-o-Q basis.

5.Indian Steel demand remained subdued in Q2 FY18-Indian flat steel demand showed the growth of 4% on Q-o-Q basis. Factors like GST implementation coupled with monsoons affected the steel demand in India.Construction was weak due to seasonal factors and impact of RERA (Real Estate Regulation Act) implementation in various states. Also demand from consumer durable sectors remained weak.However passenger vehicles reported the rise of 11% to 1.03 Million in Q2FY18 against 0.93 millions in previous quarter.And commercial vehicles witness the surge of 31% on quarterly basis to 0.21 millions

6.Indian steel Imports Jumped to 2.6 MnT in Q2FY18-Indian steel imports jumped to 2.6 MnT in Q2FY18 ,surged by whopping 53% from 1.7 MnT in Q1FY18.However on yearly basis India’s imports boost up by 44% in Q2FY18 against 1.8 MnT in similiar quarter of previous year.

7.Kalinganagar plant is close to full ramp up- The company aims at doubling steel capacity in next 5 years.

8. Tata steel export volumes surged by 12% in Q2FY18– Tata Steel export volumes showed the rise of 12% to 0.31 MnT in Q2 FY 18 comparison to 0.27 Mnt in last quarter.

9. India to remain net steel exporter in FY18 – Indian steel exports remain marginally higher than imports driven by elevated international prices. India will turn out to be net exporter of steel since Chinese export volumes have started declining which will be the good opportunity for India to cater in SE Asian markets.

10.Tata Steel signed MoU in this quarter-Company has achieved a major milestone by signing a MoU for 50:50 joint venture with German steelmaker ThyssenKrupp in this quarter.The MoU is signed with the intention to join forces and form Europe’s second-largest steel producer, which will be named ThyssenKrupp Tata Steel.

 
MCL Production Vs Imports Trend

Will Indian Coal Imports Rise on Inadequate Coal Supply by MCL?


The coal shortage at power plants is haunting the Non-power consumers as well, following MCL’s decision to cut down coal supply to the Non-power sector for the second successive month.

MCL has allocated for its Non-power consumers (lifting coal through FSA and Linkage route) only 80% of the monthly scheduled quantity for Nov’17. Earlier in Oct’17, the company had also requested the same, in order to facilitate coal supply augmentation to power plants.

In the period of limited coal availability when CIL is increasing coal supplies to power plants, Non-power consumers are forced to meet their coal requirements through Spot E-Auctions which are costlier way of sourcing coal in comparison to the normal FSA route, as it involves aggressive bidding to procure from a reduced pool of Coal.

Traditionally, spot coal auction conducted by MCL yields INR 250-300/MT higher than the reserve price of coal. However, during the recent spot auction bid prices were reportedly INR 1070-1850/MT higher than the corresponding reserve price.

Sponge Iron manufacturers are more affected by MCL’s decision, as they are forced to pay higher to meet their coal requirements following the aggressive bidding in the auctions.

MCL Spot Coal Auction Result:

Source Size/Grade Reserve Price Bid Price Difference
Hingula 3701-4000   Steam 1416 2486 1070
Hingula 3401-3700  100mm 1032 2272 1240
Balram 3401-3700  100mm 1032 2602 1570
Bharatpur 3401-3700  100mm 1032 2272 1240
Ananta 3401-3700  100mm 1032 2882 1850
Lingaraj 3701-4000  100mm 1092 2892 1800

Source: CoalMint Research
Price in INR/MT

A Sponge manufacturer has commented that it is more viable to use South African imported coal rather than the domestic coal. According to him, coal costs INR 10,400/MT for sponge manufacturing while using domestic coal comparable to INR 7500/MT for South African 4800 NAR coal.

1 MT of imported Non-Coking coal is equivalent to 1.3 MT of domestic coal supplied by CIL, because of the high ash content in Indian coal.

CIL’s coal production has increased in the recent months but it will still take a while for coal supplies to get normalized again, and with the sponge iron plants running at high rates across the country, it is highly likely that South African coal import to India will increase further.

 

Coal Market Snapshots

>> The Goa State Pollution Control Board has urged the Union Environment Ministry not to give environmental clearance to the Mormugao Port Trust to increase the coal handling capacity until the ongoing study on the air quality is completed.

>>Coal exports from South Africa are likely to be hampered as there is a likelihood of the mine workers embarking upon a strike if its wage demand is not met by the Chamber of Mines.

>> The Indian government is studying the feasibility of building a coal-gas factory at a Mozambican mine, owned by Indian Coal Ventures Limited. The underlying idea is to use the low quality coal, which is expected to find many buyers.

 

Indian Iron Ore Production Increased 10% Y-o-Y Apr-Aug’17

India is the world’s 4th largest iron ore producer. According to the recently released data by Ministry of Mines, Govt. of India, the country produced 13.7 MnT iron ore in Aug’17 which was up 1% M-o-M compared to 13.6 MnT in Jul’17.

Indian iron ore production was also up by 21% Y-o-Y in Aug’17 compared to the Aug’16 which was 11.03 MnT then.

In first five months of FY’18 the country has produced 78.1 MnT iron ore up 10% compared to 71.13 MnT in the same period last year.

Odisha’s Iron ore output moved up 10% M-o-M in Aug’17
According to the provisional data of Odisha govt maintained with SteelMint,. state’s iron ore production was up 10% to 6.87 MnT in Aug’17 against 6.22 MnT in Jul’17. Iron ore production from the state moved up by 30% Y-o-Y which was 5.29 MnT in Aug’16.

NMDC’s iron ore production down 7% M-o-M in Aug’17
Iron ore production by India’s single largest iron ore producer-National Mineral Development Corporation (NMDC) was recorded 7% down to 2.25 MnT in Aug’17 against 2.41 MnT in Jul’17. However the miner’s production was up 5% Y-o-Y compared to Aug’16 which was 2.14 MnT then.

 

UPSBC Issues Tender for Purchase of Cement and TMT

U.P. State Bridge Corporation Ltd. a company under U.P. State Government has issued a tender for purchase of 26,000 MT Cement and 4,600 MT TMT.

Delivery: The delivery is to be completed within 10 days from the date of receipt of P.O. placed by consignee unit.

Validity: The offer shall remain valid upto 60 (Sixty) days after the date of opening of
Tender.

Description of Material:

Product

Grade

Quantity

Cement

OPC 43

16,000 MT

PPC

10,000 MT

Total

26,000 MT

TMT

8 mm

300 MT

10 mm

500 MT

12 mm

1,000 MT

16 mm

1,000 MT

20 mm

500 MT

25 mm

500 MT

28 mm

300 MT

32 mm

500 MT

Total

4,600 MT

Tender schedule (IST):
Due date for submitting the bids is 6th Nov’17 till 17:00 hrs and the opening of the bids is scheduled on 7th Nov’17 at 15:30 hrs

For contact details view tender section:
http://www.steelmint.com/tender/purchase-of-cement-and-tmt-8557

 

India: Domestic Pellet Offers Move Up On Rising Sponge Prices

Domestic pellet offers across all major Indian markets have increased by INR 100-300/MT W-o-W except in western India where prices have come down by INR 200/MT.

Amid hike in sponge prices, pellet offers in central, eastern and southern India have increased up to INR 300/MT W-o-W. P-DRI prices have moved up by about INR 1,000/MT in last one week. Following this, pellet manufacturers have also raised their offers.

Another factor that has supported Indian pellet prices is rise in pellet exports. Higher Chinese demand has supported Indian pellet export prices which are hovering around USD 109-110/MT, FoB India.

However Bhilawara (Rajasthan) based pellet maker – Jindal SAW has reduced pellet offers by INR 200/MT. Presently prices Fe 63% pellets are at INR 6,200/MT (delivered Kandla). The pellet maker has reduced prices amid fall in global iron ore prices which has in turn resulted in fall in offers for imported lump. Offers for imported lump from South Africa are heard around USD 80/MT, CFR India.

Trade-wise:

1. A Raipur based pellet maker was heard to have sold around 5,000 MT in local market at INR 5,300/MT (basic).

2. Durg based pellet plant – Raipur Power & Steel is offering pellets at INR 5,400/MT (ex-Durg)

3. Offers for Fe 65% grade pellets in Bellary are around INR 6,700/MT (basic)

4. Durgapur based pellet manufacturer concluded a deal at INR 5,300/MT

Indian Pellet Reference Prices as on 31 Oct’17

City

Grade (Fe %)

Basic Prices in INR/MT

Durgapur 63 5,300
Raipur 63 5,300-5,400
Bellary 63 6,200-6,300
Barbil* 63 4,800-5,000
Kandla** 63 6,200

Prices (GST extra) mentioned are for min 1000 MT qty booking on advance payment basis
Source: SteelMint Research
*Loaded to Wagon
**Delivered

 

Met Coke Global Offers Slide on Bearish Sentiments

Met Coke offers from the key international market are sinking as the sentiments in that market have turned bearish on account of the steel production cut about to be implemented in that country. As reported earlier, the Chinese government has ordered 50% steel production cut during the mid-Nov’17 to mid-Mar’18 in order to curb atmospheric pollution levels.

As the steel production will go down demand for Met Coke has declined in that country and the spot prices also have decreased. Market participants have speculated that the prices will undergo further downturn in the coming days.

According to the latest assessment, offers for the 64% CSR Met Coke were lower by around USD 16/MT, at around USD 326/MT FoB China, over the week-ago offers. Likewise, offers for the 62% CSR Met Coke also is assessed lower by around USD 16/MT, at around USD 316/MT FoB China, against the offers in the last week.
metcokeoffers

Source: CoalMint Research

For Indian buyers, these offers translate into: USD 341/MT and USD 331/MT respectively on CFR India basis.

In India, demand has temporarily softened as buyers were waiting for the prices to decline further, according to a few traders, contacted by CoalMint. As the offers are expected to move further down, the prices in the domestic market in the country also will decline to significant levels in the future.

However, the Indian Met Coke producers have not yet revised their prices, perhaps in the view of the prospect of strong buying to start in the near future; when they will be able to align their price levels to the market demand.

The prevailing ex-works prices for the Blast Furnace grade in the country are: INR 22,200/MT (east coast), and INR 27,000/MT and 30,000/MT (west coast).
metcokeprices

Source: CoalMint Research

IMPORTS

There were no significant imports of Met Coke as buyers waited for the offers to decline. During the 1-30Oct’17 period, around 0.5 MnT of Met Coke was imported in India, data compiled by CoalMint Research shows.

 

SAIL Issues Purchase Tender for 74,550 MT HC Ferro Manganese

SAIL has invited a open tender for tentative purchase of 74,550 MT HC ferro manganese from indigenous source for its different plants/units.

Steel Authority of India Limited (SAIL) is the India’s largest steelmaker and produces a variety of steel and iron products including Pig iron, flat and long products and special steels at its plants spread over India. The company will require annual quantity of about 74,550 MT HC ferro manganese from indigenous source for its different plants/units.

SAIL intends to procure a tentative quantity of 24,880 MT of High Carbon Ferro Manganese to be supplied in four months Nov’17-Feb’18.

Technical specification along with the quantity required in different plants of SAIL :

Market SAIL Plants Size (mm) Packing Tentative Quantity (MT) for period Nov’17-Oct’18 Tentative Req. (MT) for period Nov’17-Feb’18

Market 1

BSP, Bhilai 25-50 1T Jumbo Bag

47,000

15,700

Total Market 1    

47,000

15,700

Market 2

DSP, Durgapur 25-50 Loose

2,000

700

ISP, Burnpur 25-50 1T Jumbo Bag

3,700

1,300

ASP, Durgapur 10-30 1T Jumbo Bag

550

80

Total Market 2    

6,250

2,080

Market 3

BSL, Bokaro 25-100 Loose

10,800

3,600

BSL, Bokaro 25-50 Loose

6,000

2,000

Total Market 3    

16,800

5,600

Market 4

SSP, Salem 25-50 1T Jumbo Bag

4,500

1,500

Total Market 4    

4,500

1,500

Grand Total

   

74,550

24,880

Chemical specifications:
The material should contain Manganese 70.0% min, Carbon 7.5% max, Silicon 1.5% max, Phosphorous 0.43% max and Sulphur 0.05% max.

Indian Ferro Manganese Prices Holds Firm Amid Low But Constant Demand:
Ferro Manganese offers in India maintain stability at INR 72,500/MT (Ex-Durgapur) and (Ex-Raipur). There is little scope of price correction as Manganese Ore prices remain firm. India relies heavily on imported Manganese Ore to produce Ferro Manganese – as producing it requires high grade Manganese Ore. The Chinese alloy and steel market is on a downtrend and in such a scenario, it is the higher grade which is preferred over low and medium grade Ore. Thus, a firm imported high grade Manganese Ore market will leave little scope for a price correction in Ferro Manganese, despite the moderate demand.

Tender schedule:
Due date of submission is 7-Nov’17 at 12:00 hrs IST and the techno-commercial opening is on same day at 15:30 hrs IST.

For contact details view tender section:
http://www.steelmint.com/tender/purchase-of-ferro-manganese-8556

 

China: Scrap Consumption in Steelmaking on Upswing

China world’s top steelmaker has been witnessing sharp increase in steel scrap ratio in this fiscal in its steel production. The increasing figures of scrap consumption is an indicator of Chinese steel industry has started stepping forward to greener steel making against environmental issues.

As per recently released statistics from CAMU (China Association of Metal Scrap Utilization), the scrap consumption in steelmaking in the country during first nine months of CY17 (Jan-Sept’17) has crossed 100 MnT level. The prime Chinese steel plants have consumed total 101 MnT steel scrap during Jan-Sept’17.

During Jan-Sept’16, Chinese scrap consumption was at 64.47 MnT which is lesser by 36.53 MnT, thus almost 57% Y-o-Y rise has been witnessed in Jan-Sept’17 against the scrap consumption during the same time frame in previous year. The country now aiming to boost its annual steel scrap usage to 150 MnT by 2020 and to achieve a 30% scrap ratio by 2025 as against just over 11% in 2016.

China Crude Steel VS Scrap Cons.2

China was the world’s biggest steel scrap user in the first half of CY17 as steel scrap consumption in China was at 62.2 MnT followed by EU-28 at 47.71 MnT, USA at 23.8 MnT, Japan at 17.85 MnT, Turkey at 14.58 MnT and Russia at 8.10 MnT respectively.

During Jan-Sept’17, China produced 639.09 MnT crude steel which is up by 5.7% Y-o-Y against 604.67 MnT crude steel produced during same time frame in CY16. As per crude steel production figures maintained with SteelMint, China produced 808.37 MnT crude steel in CY16.

In the same year steel scrap generation in China was around 160-170 MnT out of which 90.1 MnT scrap consumed in steel making in main mills, around 10 MnT scrap used in foundry plants and the rest 60-70 MnT scrap was used in induction furnace production.

Thus scrap usage ratios in China have increased during Jan-Sept’17 and expected to climb further in coming days.

CAMU also claims that the strong implementation of environmental protection laws and the establishment of nationwide carbon emission trade system has created favorable condition for the development of scrap industry in China and increasing domestic consumption of scrap supplement it further.

Perticulars Jan-Sept’17 Jan-Sept’16 CY16 CY17(EXP)
Crude Steel Production 639.09 604.67 808.37 855
Steel Scrap Consumption 101 66 90.1 130
Steel Scrap Imports 1.74 1.51 2.13 2.35
Steel Scrap Exports 1.39 _ _ 1.75

Quantity In MnT;
Source: CAMU & SteelMint Stats