Monthly Archives: January 2018

NMDC Keeps Iron Ore Prices Unchanged for Feb- Sources

India’s largest iron ore producer – National Mineral Development Corporation (NMDC, Chhattisgarh) has kept prices unchanged for February deliveries, according to sources.

Miner had increased prices by upto 22% in January, post closure of five operational mines in Odisha.

Current offers for fines stands at Rs 2,760/t , baila lumps at Rs 3,100/t and DR CLO at Rs 3,600/t (ex- Chattisgarh Mines). Prices excluding 15% royalty, 4.5 % DMF and 1.5% NMET.

NMDC produced 24.23 MnT iron ore in first nine months of the current fiscal year. About 15.16 MnT was produced from Chattisgarh mines and 9.07 MnT from Karnataka.

SteelMint learned that prices have been rolled over amid better import parity and subdued sponge iron prices in Indian domestic market.

 
POSCO FINEX

POSCO Withdraws its FINEX Steel Mill Project from Iran

POSCO E&C Withdraws its Steel Mill Project from Iran amidst Political Tensions between Saudi Arabia and Iran

In May’16, South Korea’s POSCO Engineering & Construction (E&C) signed a USD 1.6 billion agreement with the Iranian steelmaker, Pars Kohan Diar Parsian Steel (PKP) to build a steel mill incorporating the company’s proprietary FINEX technology in Iran’s Chabahar Free Trade-Industrial Zone.

This project involved export of technology and POSCO’s investment in this project is estimated to be about USD 128 million which is 8% of the total budget.

Recent Happenings

In a recent update, POSCO E&C has stopped its investment deal in Iran’s steel industry and has withdrawn from a project to construct a steel mill in Iran.

According to the reports, the company’s decision is believed to be influenced by the Saudi Arabian directors that were elected as outside directors after the POSCO E&C sold a 38% stake (worth USD 1.1 billion) to the Public Investment Fund (PIF) and Saudi Arabia’s Sovereign Wealth Fund in Sep’15.

Iran-Saudi Arabia relations have strained following an attack on Saudi Arabia’s Embassy in Tehran in 2016. Both the countries ‘relations are increasingly fraught with hostility, tension and confrontation, due to differences in political agendas that are strengthened for their differences in faith.

While a memorandum of understanding (MOU) was signed among POSCO, POSCO E&C and PKP in September 2015, a memorandum of agreement (MOA) was signed by the companies in Feb’16 to construct the integrate steel mill in two phases commencing from Mar’17. This MOU was completely evaluated as a part of practical implementation of the project.

However, POSCO E&C has cited un-feasibility of the project as main reason for its withdrawal from the project. This has raised serious doubts about PIF’s outside directors’ influence on POSCO E&C withdrawal decision.

While POSCO E&C has backed out of the project, its parent organisation, POSCO has mentioned that it will continue negotiating the export of the project and FINEX engineering method related to the construction of the FINEX steel mill in Iran. This is because unlike POSCO E&C, POSCO does not have any outside directors with a connection with Saudi Arabia.

 

JSW Steel to Commence Operations at Two Iron Ore Mine Blocks in Early FY19

JSW Steel – India’s largest steel producing company conducted Q3FY18 investor conference call today for quarter ended Dec’17. The company officials have a positive outlook for 2018 in terms of government announced projects related to infrastruture, metros, roads and highways ets. Below are the highlights of the investor conference call.

  1. Company reported highest ever operating EBIDTA in Q3 FY18 at INR 3,573 crore, up 29% Y-o-Y. Revenue from operations moved up by 13% Y-o-Y to INR 16,453 Crore.
  2. Highest ever Crude steel production recorded at 4.11 MnT in Q3 FY18, up 7% Y-o-Y and highest ever saleable steel sales of 3.97 MnT by 9% Y-o-Y.
  3. 2018 is expected to be strong year in terms of govt announced projects. Rebar demand has been strong amid projects of metros, roads & Highways, River linking, bridges and infrastructure push from govt. India’s steel demand growth improved in Q3FY18 largely due to the base effect .However steel consumption is expected to grow strong on back of government’s push for infrastructure spending and strengthening consumer demand.
  4. Steel prices increased by about 5-6% in Jan’18 and expect prices to increase and be sustainable in the coming months.
  5. Imports of coated steel to India remain a matter of concern. Import of coated steel to India increased 107% in first 9 months of FY18 and color coated imports increased by 250% amid increase in imports of substandard coated steel. Share of imports from China, Japan and Korea constituted 70% of total imports. Govt has introduced BIS in color coated this month. JSW Steel coated products registered a production volume of 0.35 MnT and sale volume of 0.51 MnT. Volumes were impacted by planned shutdown of its two galvanizing lines at Tarapur works for maintenance and revamping to enhance production capacities.
  6. The company focussed on increasing export sales volume up 24% Q-o-Q especially for long products to leverage upon a robust demand and pricing environment in international market. Exports went up by 66% Y-o-Y. Q3 FY18 exports were at 1.19 MnT and around 3 MnT in 9 months of FY18.
  7. Expect 2 ‘C’ category iron ore mine blocks that won in auctions to become operational in early FY19 which has limit of 0.71 MnT pa. Once all 5 iron ore mine blocks become operational JSW will be able to extract 4.71 MnT pa of iron ore.
  8. Seemed optimistic related to acquisition of Bhushan Steel and Monnet. Financial bids have already been submitted for Monnet.
  9. Auction of 8 new C category iron ore mine blocks in Karnataka are in pipeline. Last date for bid submission is in Mar’18.
  10. NITI Ayog had submitted proposal uniform iron ore pricing policy in India, but no improvement has been seen regarding it.
 
Indian plate export

SAIL Concludes 7,000 MT Plate Export Tender for Europe- Sources

Steel Authority of India Limited’s (SAIL) global export tender for 7,000 MT prime mild steel hot rolled plates for late Feb shipment, has been concluded, according to trade sources. This tender was closed on 19th Jan 2018, with a price validity till 29th Jan 2018.

The tender was put up for the offer from Rourkela Steel plant having specifications – EN10025 S235/S275 JR(BASE GRADE+CE) for Europe.

As per sources, tender was concluded at around $590/t FOB India for base grade and size (12-40mm), which is equivalent to $625/t CFR Europe.

It may be noted that SAIL charges premium related to technical requirements and specifications.High tensile plates are costlier than mild steel by around USD 35-40/MT.

Europe has imposed anti dumping duty on imports of HR plates of Chinese origin.In order to provide relief to domestic EU companies, European Commission imposed duties ranging between 65.1% and 73.7% for heavy plates.

This proves to be the opportunity for the Indian mills to export plates to European nations and gain good realizations in global market. Also recently European currency – Euro has appreciated in last few months making imports cost effective.

 

Indian Steel Mill Books Bulk Scrap Import Vessel

Falling global scrap prices and increase in India’s domestic scrap prices have attracted Indian mills towards booking imported scrap cargoes.

According to sources, a West India (Gujarat) based steel maker has booked a bulk cargo containing 30,000 MT comprising a mix Shredded and HMS scrap. The cargo sold by SIMS one of the largest scrap supplier from USA at an average price of around USD 370/MT, CFR Nhava Sheva.

Last week few buyers in India were eyeing for correction in bulk offers. Offers for bulk cargoes were prevailing at USD 390/MT last week. As soon as offers showed further downfall, a new bulk cargo booked at USD 370/MT levels – shared a source

Offers for Shredded scrap in bulk cargo were at USD 375/MT, CFR India. While for Mix grade and HMS scrap bulk cargo offers were at USD 367-370/MT, CFR India.” a source informed

Present offers for containerized Shredded scrap from USA are around USD 360-365/MT, CFR Nhava Sheva. Last week few trades were concluded for containerized Shredded at USD 370/MT, CFR level. Thus, the latest price assessment further moved down by USD 5-7/MT against last week’s assessment.

Price assessment for HMS 1&2 (80:20) in containers is at USD 350/MT, CFR Nhava Sheva from Europe and offers for HMS heard from West Africa are at USD 345/MT, CFR.

On the other hand, domestic scrap prices increased further on W-o-W basis which has resulted in buyers to prefer imported scrap over domestic as price gap between them has narrowed sharply. Currently, HMS (80:20) in Mumbai is assessed at INR 24,700/MT, up by INR 900/MT W-o-W and that in Chennai is around INR 25,000/MT, up by INR 1400/MT W-o-W (Basic prices, GST @ 18% extra).

 

Daily Update: Indian Semis offers Decline

Indian Sponge & Billet market today reported price corrections by about INR 100-500/MT (USD 1-8) due to limited inquiries in major markets. The industry participants are eagerly awaiting the Union Budget which will be declared on Feb 1 and is expected to hold a slew of surprises for Indian Steel Industry.

SteelMint’s price assessments for induction furnaces billet size 125×125 mm are reported at INR 31,400-34,900/MT (USD 494-549) ex-plant. Further the coal based sponge (78-80 FeM) C-DRI price assessment was at INR 20,300-21,700/MT (USD 319-341); prices are ex-plant & excluding GST.

On 31st Jan 2018 (Wednesday) INR to USD exchange rate stood at INR 63.60 & BSE Sensex closed at 35,965 (-68).

Key Market Updates:

1. Vizag Steel has invited a tender for purchase of 100,000 MT iron ore fines from the indigenous source & the due date for submitting the offer is 19 Feb’18

2. Indian sponge iron export offers to Bangladesh remain unchanged with limited trade activities. The latest offers are assessed at USD 390-395/MT CPT Benapole & USD 415-420/MT CFR Chhittagong, Bangladesh.

3. Raipur, Central India based Integrated plants offers reduced by INR 100/MT D-o-D, offering Sponge P-DRI at INR 20,000-20,100/MT ex-plant

4. Rashmi Metaliks in Durgapur has reduced sponge prices by INR 100-200/MT and the latest offers are heard at INR 20,600-20,700/MT for P-DRI.

5. Odisha based manufacturer, Ganesh Metaliks offered Billet at INR 31,400-31,500/MT ex-plant. trade activities are weak at these offers, an official reported.

6. BMM Ispat in South India has kept offers unaltered, offering FeM 80 P-DRI lumps at INR 19,600-19,700/MT ex-Bellary, Karnataka.

7. BIOP Steels in South India has offered FeM 80 & 82 C-DRI lumps at INR 20,900/MT & 21,300/MT ex-plant, Karnataka. trade activities are slow at these offers according to the officials.

8. Jindal Steel offering Pig iron at INR 28,500/MT (ex-Raigarh), Ferroshots at INR 27,000/MT & Pooled iron at INR 26,000/MT (ex-Angul) Odisha.

9. The medium/small rolling mills in Delhi have increased rebar gauge parity by INR 200/MT for 8 & 10 mm.

10. The big plants in Raipur & Durgapur have rolled over Wire rod prices for the day. Meanwhile, rebar prices declined in these markets about INR 100-300/MT on poor inquiries.

Reference prices as on 31st January 2018

Particular/Delivery Size, Grade, Origin Prices Min Max Change 1W 1M
C-DRI Ex-Durgapur  Mix, FeM 78%, +/-1 21,700 21,600 21,800   0 21,500 22,500
Ex-Rourkela  Mix, FeM 80%, +/-1 20,900 20,800 21,000 – 100 20,900 21,800
Ex-Raipur  Mix, FeM 80%, +/-1 21,300 21,200 21,400 – 100 21,500 22,700
Ex-Bellary  Lumps, FeM 80%, +/-1 20,300 20,200 20,400 – 100 20,600 20,900
P-DRI Ex-Durgapur  Lumps, FeM 78%, +/-1 20,600 20,500 20,600   0 20,500 21,500
Ex-Raipur  Lumps, FeM 80%, +/-1 20,000 19,900 20,100 – 200 20,300 21,700
Ex-Bellary  Lumps, FeM 80%, +/-1 19,600 19,500 19,700 – 100 19,800 20,400
Ex-Hyderabad  Lumps, FeM 80%, +/-1 19,900 19,800 20,000 – 500 20,400 20,500
Ingot Ex-Mandi Gobindgarh  3.5 x 4.5 Inch, IS 2830 34,700 34,600 34,800 + 300 33,950 34,300
Ex-Durgapur  3.5 x 4.5 Inch, IS 2830 31,600 31,500 31,700 – 100 31,300 32,500
Ex-Rourkela  3.5 x 4.5 Inch, IS 2830 30,900 30,800 31,000 – 100 30,700 31,900
Ex-Raipur  3.5 x 4.5 Inch, IS 2830 31,700 31,600 31,800 – 100 31,600 32,700
Ex-Mumbai  3.5 x 4.5 Inch, IS 2830 34,000 33,900 34,100   0 34,100 35,300
Ex-Chennai  3.5 x 4.5 Inch, IS 2830 33,500 33,400 33,600   0 34,200 33,500
Ex-Hyderabad  3.5 x 4.5 Inch, IS 2830 33,750 33,500 34,000 – 250 34,000 35,250
Billet Ex-Mandi Gobindgarh  125×125 mm, IS 2831 35,400 35,300 35,500 + 300 34,800 34,800
Ex-Durgapur  125×125 mm, IS 2831 32,100 32,000 32,200 – 100 31,800 32,500
Ex-Rourkela  125×125 mm, IS 2831 31,400 31,400 31,500   0 31,300 32,500
Ex-Raipur  125×125 mm, IS 2831 32,400 32,300 32,500 – 100 32,500 33,700
Ex-Mumbai  125×125 mm, IS 2831 34,200 34,100 34,300   0 34,300 35,500
Ex-Chennai  125×125 mm, IS 2831 34,000 34,000 34,200   0 34,800 34,000
Ex-Hyderabad  125×125 mm, IS 2831 33,750 33,500 34,000 – 250 34,000 35,250
TMT Ex-Delhi/NCR  12MM 38,200 38,000 38,400 – 100 38,400 39,700
Ex-Durgapur  12MM 36,300 36,100 36,500   0 35,800 36,500
Ex-Raipur  12MM 36,000 35,800 36,200 – 300 36,000 37,100
Ex-Mumbai  12MM 38,800 38,400 38,800   0 39,300 38,800
Ex-Chennai  12MM 38,750 38,500 39,000 – 750 39,250 38,000
Ex-Hyderabad  12MM 37,700 37,500 37,900   0 37,200 38,400

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

 

 

 

India: Ferro Chrome Producers Stand Firm on Offers

Ferro Chrome offers edged up as demand witnessed a surge amid restocking by Chinese traders before the Spring Festival.

“China has been replenishing their inventory prior to the lunar year festival,” said a producer source referring it to be the reason for increasing inquiries.

SteelMint learned that China has been accepting higher prices as their festival is closing in. The spot trades are heard to have been concluded at 94-95 cents/lb CIF China.

“Indian producers are setting their offers to China in line with the Ferro Chrome higher prices achievable in Japan and South Korea, where the commodity is being traded at 100 cents/lb and 99 cents/lb respectively,” said another producer. SteelMint also learned that deals have been concluded to Europe at 104 cents/lb CIF Rotterdam.

An appreciated South African Rand has also played a significant role in increasing Chrome Ore offers in the global market.

Demand in India also remains moderate but has been met with a sudden supply shortage, as a plant producing 2,500 tonnes have had to halt its operation.

SteelMint assessed Ferro Chrome offers at INR 80,000-81,000/MT (Ex-Odisha), while some small quantity deals have also been concluded at slightly higher prices.

On the future outlook, ferrochrome offers are expected to remain stable or might witness further upward movement in the spot market, as sentiment in the market has turned bullish.

 

Indian Chrome Ore Production Up by 34% M-o-M in Dec’17

Odisha contributes almost entirely towards chrome ore production in India. Chrome ore production in Odisha has been recorded at 423,083 MT in Dec’17. It is about 34% above the production witnessed in Nov’17.

Production level by captive miners went up by 14% M-o-M. IDCOL and Jindal Stainless witnessed a mammoth increase of 77% and 112% respectively on monthly basis. Moreover, IMFA and Balasore Alloys recorded an increase of 14% and 5% M-o-M respectively. While IMFA registered a fall of 9% M-o-M in its production volume.

TATA Steel, one of the largest merchant miners in the country, registered a significant increase of 33% M-o-M in its production in Dec’17, while OMC registered a massive increase of 184% M-o-M in its production followed by B.C. Mohanty & Sons which also registered an increase of 104% M-o-M.

Odisha Chrome Ore Production in Dec’17 & Nov’17
Mines Name December’17 November’17
Captive
IMFA               70,637                61,730
Balasore Alloys               25,147                23,963
FACOR               13,990                15,452
IDCOL               10,934                  6,178
Jindal Stainless                 3,055                  1,440
Sub Total (A)            123,763             108,764
Other than Captive
TATA Steel            248,113             186,871
O.M.C.               32,195                11,336
B.C. Mohanty & Sons               19,015                  9,306
Sub Total (B)            299,323             207,513
Grand Total (A+B)            423,085             316,277
 
RBCT Coal Exports

South Africa: RBCT Coal Exports Achieves New Highs in 2017

Richards Bay Coal Terminal (RBCT), South Africa’s premium coal terminal, has achieved its highest ever export figures in 2017.

According to the annual results released on the company’s website, RBCT had managed a total coal export of 76.47 MnT in CY17, surpassing the previous best record of 75.38 MnT recorded in CY15. Exports in CY17 were also 5% higher than the levels achieved during CY16.

RBCT had also received the highest tonnage of coal in a single year. During CY17, around 75.60 MnT coal was railed to RBCT from the coal mines, which was 2.2% higher from the previous record of 73.93 MnT marked in CY15.

Major Coal Export Destinations:
Majority of the coal from RBCT was shipped to Asia continent, with India being the chief consumer. India had received highest coal shipment of 35.76 MnT, followed by Pakistan at 8.66 MnT and South Korea at 8.44 MnT.

Europe had received the next highest share among the 4 coal-receiving continents, followed by Africa and South America.

RBCT Coal Export Destination

In term of number of vessels loaded, RBCT had handled 907 vessels in CY17, 6 fewer than the total of CY16. Number of Handy-size and Cape-size vessels had increased during the year to 407 and 279 respectively, while the Panamax vessels loaded during the year were reduced to 221, down 47 from 283 in CY16.

South African Coal Offers:
South African coal prices have not experienced significant change during the month. Coal index API-4, which forms the basis for determining coal prices, had been prevailing in the range of USD 96-98 during the month.

At present, South African 5500 NAR coal was available at a discount of USD 8.5-9/MT on index price, at USD 81-82/MT, FoB Richards Bay. 4800 NAR coal was offered with a discount of USD 13.5/MT, at USD 67-68/MT, FoB Richards Bay.

 

Philippines Based Importers Book Square Billets at around USD 535/MT CFR

Demand for 120 and 130mm size billets remain strong over 150 mm, buyers pay higher price for smaller size billets.

Few trades have been reported in Philippines for square billets of size 120/130 mm,according to trade sources. This is primarily due to absence of Chinese billets of this size.

“Chinese mills want to produce 150 mm sized billets due to higher productivity and not 125 mm sized billets. 125 mm sized billets workable price is around $535-540/t CFR Philippines” said a billet trader based in Singapore.

Recent deals reported are

1. Japanese 6,000 MT billet (130mm) sold at around $533/t CFR LO Manila this week.

2. Middle East 5,000 MT billet (130mm) sold by a Chinese trading house at around $538 CFR Manila,Philippines

3. Taiwan based mills are offering 130 mm billets at around $530/t FOB, although no deal has been reported.

Indian Billet

Similar trend was observed in latest billet tender floated by Indian mills last week. According to reports, 125mm sized billets was concluded which fetched bids close to USD 520/MT FOB India, where as 150mm billets were dropped as bids were below USD 500/MT FOB India.