Monthly Archives: April 2020

India: Steel Cargo Volumes Swell at Paradip Port on High Export Orders

The Covid-19 pandemic has hit port operations hard and cargo handling has been impacted. Incidentally, due to depressed domestic demand exports are surging at a time when scarcity of manpower at ports has resulted in inevitable disruptions.

Force Majeure

In a trade circular issued by the Traffic Department on April 29, authorities at the Paradip Port Trust (PPT) have directed all steel cargo at the port to be handled by the General Cargo Berth (GCB) instead of the Paradip International Cargo Terminal (PICT).

The exclusive terminal that only handles steel cargo was overwhelmed by the “unusually high traffic volume and have notified the outbreak of Covid-19 as a force majeure event”, the circular reads. Steel cargo will now be handled by the other terminals till June 30, 2020 till further review of the situation.

The EQ-1 berth at the port has been earmarked to handle steel cargo; however, other berths could be pressed into service if they happen to remain vacant for want of vessel, the circular reads.

The shifting of vessels from PICT berth to EQ-1/GCB berths or vice versa for part loading of steel cargo of minimum of 5000 MT will be considered as shifting on “Port convenience” and no shifting charge will be levied on vessel/exporter, the circular further states.

Rise in Dwelling Time

“Force majeure for PICT was invoked on March 25,” Capt. Satyabrata Satpathy, in-charge of PICT at PPT, tells SteelMint. “The terminal is working in the absence of manpower, equipment and other resources and productivity is down. However, as an essential service we are continuing operations but since we are not working to full capacity force majeure was invoked.”

“Although operations are continuing the dwelling time of cargo at the port has increased due to unavoidable disruptions in operations during the prevailing lockdown,” says Satpathy. “The dwelling time has increased to 6-7 days. Usually in normal circumstances, the dwelling time for steel coils is 2-3 days and for billets it is 5-6 days. The dwelling time also depends on the exporter. For example, JSPL sends across plates, billets and other products for 3-4 shipments all at a time. So in order to have a complete shipment cargo ready it takes about 7-8 days.”

“PPT handles about 3-4 MnT cargo each year and at normal times the material at the port is hardly 30,000-40,000 MT. During lockdown this has increased to 1-2 lakh tonnes,” informs Satpathy.

~ By Nirmalya Deb

 

Lower Bids Keep Iran Billet Export Offers Under Pressure

Lower bids from buyers continue to keep Iran billet export offers under pressure. For the consecutive week, the Iranian billet export market was noted to be actively functional over the marginal rise in the export offers.

KSC- one of the leading billet exporters of the country was noted to book 30,000 MT billets to SE Asia at USD 345-350/MT FoB Iran, and the shipment is scheduled for early Jun’20. The other billet export majors were also noted to be actively offering in the export market. ESCO and Chadormalu were among the few.

Another deal of 20,000 MT billets from the country was noted to conclude at USD 370/MT, CFR, China.

SteelMint assessment for billet export offers from Iran is at USD 350/MT, FoB Iran, stable against last week.

The lockdown has been lifted in Iran, post which the mills are enjoying trades in both the markets; domestic and export. However, the realizations are better in the domestic market. Yesterday; 29 Apr’20, 35,000 MT billets have been traded in the Iranian market with an average price of IRR 45730/kg. Pasargad, Chadormalu, and SKS were the major sellers reported, SteelMint learned from reliable trade sources.

The Iranian marketers are expecting enormous inflation in the near future and hence are trying to stock the billets to the maximum possible extent to convert the national currency into goods. However, the purchases are largely speculative, SteelMint learned from the market participant.

Iranian mills urge for relaxing export restrictions – Meanwhile, the country also wants to capitalize on the export market opportunities. In recent, the steel manufacturing association of Iran has written a letter to the Iranian Steel Ministry, mentioning a request for relaxing the current restriction on exports. In current guidelines, the mills mandatory have to allocate a certain percentage of their production for the domestic market, which varies from mill to mill depending upon the capacity of the mill. In the letter to the ministry, it was mentioned “if it were not for the regulatory and executive restrictions of the Market Regulation Headquarters and the Ministry of Silence,” Iran’s steel exports could range from USD 3.5 billion to about USD 5 billion. However, the response from the ministry is awaiting.

 

Russia: EVRAZ Steel Sales Volume Fall by 10.4% Q-o-Q in Q1 CY’20

Russian leading steelplayer EVRAZ Group today announced its Q1 CY’20 trading update. Total steel sales were recorded at 3.23 MnT in Q1 CY20 against 3.6 MnT in previous quarter. Sales of both semi-finished and finished steel products fell against last quarter.

–The company’s consolidated crude steel output for the first quarter increased by 3.2% Q-o-Q to 3.55 MnT, mainly due to completion of capital repairs at EVRAZ NTMK’s converter no. 2, which took place in Q4 2019

— Pig iron production grew by 2.3% Q-o-Q, with a 5.2% Q-o-Q increase in production volumes at EVRAZ NTMK mainly due to the resumption of operations at blast furnace no. 5

— Output of iron ore products rose by 9.7% Q-o-Q, mainly due to completion of capital repairs of roasting machine no. 1 and lower pellet production

— Sales of semi-finished products fell by 15.9% Q-o-Q due to higher than usual sales volumes from Russia at Q4 2019 on the back of good export market conditions

— Sales of finished products dropped by 3.9% Q-o-Q due to seasonal decline in demand in the first quarter of the year in Russia and sale of Palini e Bertoli in CY’19

EVRAZ OPERATIONAL RESULTS FOR Q1 CY’20
Production Q1 CY’20 Q4 CY’19 Change Q-o-Q Q1 CY’19 Change Y-o-Y
Total Crude Steel Production 3,559 3,449 3.2% 3,488 2%
Iron Ore Products 3,595 3,277 9.7% 3,636 -1.1%
Coking Coal Concentrate 3,747 3,537 5.9% 3,684 1.7%
Total Steel Sales 3,227 3,603 -10.4% 3,135 2.9%
Semi-finished Products 1,437 1,697 -15.3% 1,335 7.6%
Finished Products 1,790 1,906 -6.1% 1,800 -0.6%
Iron ore products’ Sales 355 273 30% 1,176 -34.9%

Fig in ‘000 MT

 

Indian Steel Market Update – 30 Apr’20

Rebar & Billet prices of mid scale mills in the central region increased by INR 200-400/MT. However in other locations prices remained firm, as per SteelMint’s daily assessment.

Participants mentioned that, with improved lifting of Billet & Rebars, some shortage in availability was reported with plants in major supplying regions. Thus this has resulted in price hike, specifically in central India like Raipur & Raigarh.

Rupee & BSE Sensex

— On 30th Apr’20 (Thursday) INR to USD exchange rate stood at INR 75.22

— BSE Sensex closed at 33,717 (+997) Thursday (30th Apr’20) as against last day (Wednesday) 32,720 (+605).

— NSE Nifty50 index was closed today at 9,859 (+306) & Nifty Metal at 1,859 (+136).

Secondary steel market update –

Raipur: Rebar offers increased by INR 400-500/MT to INR 32,000/MT, while trades reported close to INR 31,600/MT and lowest range observed at INR 31,200-300/MT EXW.

Factors that pushed up prices are limited material availability at manufacturers end as most rolling mills are yet to resume operations and trade associates needed immediate delivery.

— Heavy structure base offers were marginally up by INR 200/MT and reported at INR 31,000/MT and trade discounts inched down by INR 100-200/MT to INR 300-700/MT and 200 Angle offers assessed at INR 33,300-33,600/MT EXW.

— While, medium & light structure basic prices remained almost in the same range at around INR 25,500/MT and 100/50 Channel offers assessed at INR 29,500-600/MT, EXW.

— Real Ispat has increased GK TMT offers by INR 300/MT to INR 34,000/MT, EXW.

— Wire rod base offers remain unchanged at INR 30,000/MT, although deals assessed at INR 28,800-29,000/MT EXW. Meanwhile, GI Wire (12 G) offers maintained at INR 39,000-39,200/MT & BINDING Wire (20 G) at around INR 37,500/MT EXW.

— Billet offers increased to INR 26,100-200/MT FoR basis from Raigarh (advance payment) & also in local Raipur based plants it rallied to INR 26,000-26,200/MT EXW on next day payment.

— Silicon Manganese (60-14) deals by a trade participant was reported at around INR 66,000/MT EXW.

— Sponge P-DRI offers down by INR 300/MT to INR 15,600-700/MT EXW.

Raigarh: The sponge manufacturers have kept P-DRI offers unaltered to INR 15,000/MT EXW, however buying interest was reported near to INR 14,700-14,800/MT EXW. Billet offers increased slightly by INR 300/MT to INR 25,400-500/MT EXW.

— Billet deals were learned at INR 26,100/MT FoR Raipur from Raigarh based manufacturers.

— Scan Group branding (Shrishti TMT) offers are at INR 30,800/MT EXW (up by INR 100/MT).

— Raigarh Iron is offering P-DRI at INR 15,000/MT & C-DRI at INR 16,000/MT EXW.

— As per Ingot/billet manufacturers, steel grade pig iron is offered by traders at around INR 23,500/MT EXW.

Durgapur: The offers remain steady in Kharagpur with limited inquiries and reported for Rebar at INR 30,000-30,100/MT, Wire rod at INR 29,400-29,500/MT & Billet at INR 25,500/MT.

Rourkela: The sponge manufacturers are offering C-DRI mix material at INR 15,500/MT EXW, offers fell by INR 300/MT as against the last day. While Billet offers remain the same at INR 25,200/MT EXW.

— Bajrangbali Steel Industries has kept unchanged Rebar & ERW Pipe offers at INR 31,300-500/MT & INR 32,000/MT EXW.

— In SAIL’s Rourkela Steel Plant tender held today (30th Apr’20) for sale about 3,000 MT steel grade pig iron, received no response. The base price for the tender was quoted by RSP at INR 25,600/MT EXW. and entire material remained unsold.

Muzaffarnagar: Old dispatches are clearing and limited fresh deals were reported. Fresh orders with full advance payment only, are being given priority at the moment, as stated by suppliers.

— Sarvottam Rolling Mill (Paras TMT) is offering Rebar at INR 32,500/MT EXW.

Hyderabad: Most of the manufacturers are working to fire its engine in a day or two.

Bellary: BMM Ispat, a renowned sponge manufacturer has offered FeM 80 P-DRI lumps at INR 16,400-16,500/MT ex-Bellary & only 800-1,000 MT deals reported in nearby markets.

— Also added deals of around 10,000 MT pellets at INR 6,200-6,300/MT (ex-plant) in the last 2-3 days.

Mumbai: Today also no offers for Ingot and Billet, however in Rebar as per few traders price is hovering at INR 34,200/MT EXW.

— Structure offers for 25*25 Angle stood at INR 36,800/MT and for 40*40 Angle at INR 34,800/MT EXW.

Jalna: Market still remains closed with no fresh deals & offers.

Ahmedabad: Alang Ship breaking yards offering limited scrap in the market i:e; Melting & Attachment along with few other sizes. Melting stands at INR 21,500-600/MT & Attachment registered at INR 22,500-600/MT, Ex-Yard.

— Bhavnagar based few mills offering Ingot at around INR 28,000/MT, Whereas sufficient quantity in Billet concluded at INR 28,000/MT FoR, as shared by SteelMint sources.

— Trade price of Rebar unchanged at INR 33,400-33,900/MT FoR.

— Shreeyam Power & Steel Industries Ltd. (National TMT) has kept Rebar offer unchanged at INR 34,200/MT FoR.

— Mono Steel India Ltd. (Mono TMT) is offering Rebar at INR 33,400/MT FoR.

Note: The prices mentioned above for Rebar at 12-25mm, Wire rod at 5.5mm & Billet of 100*100mm.

 

Russia: Metalloinvest’s Crude Steel Output Up 2.6% Q-o-Q in Q1 CY’20

Metalloinvest – a Russian mining and metallurgical company today via press release announced its operational results for Q1 CY’20.

–Crude steel production increased by 2.6% Q-o-Q, mainly driven by increased demand for heavy plate.

–The company’s iron ore production for Q1 CY’20 was recorded 10.3 MnT, increased by 1.2% Q-o-Q and by 7.2% Y-o-Y. This dynamic was due to an increase in efficiency as a result of improved quality characteristics of the mined iron ore and decreased ore consumption for concentrate. Another factor was the optimisation of maintenance work duration

–Total volume of iron ore product shipments to third parties decreased by 6.2% Q-o-Q and amounted to 7 MnT, mainly driven by the increase in pellet supply to China.

–In Q1 CY’20, HBI/DRI production increased by 6.3% Q-o-Q and 3.2% Y-o-Y to 2.1 MnT due to completion of major maintenance works at HBI-3 plant at LGOK.

–Pig iron shipments to third parties increased by 7.9% Q-o-Q to 0.4 MnT. Meanwhile, the same decreased by 30.5% Y-o-Y mainly due to the growth of internal consumption.

OPERATIONAL RESULTS FOR Q1 CY’20

Production by product Q1 CY’20 Q4 CY’19 Change Q-o-Q Q1 CY’19 Change Y-o-Y
Iron ore 10,292 10,173 1.2% 9,602 7.2%
Pellet 7,070 6,848 3.2% 6,840 3.4%
HBI/DRI 2,085 1,961 6.3% 2,020 3.2%
Crude steel 1,272 1,240 2.6% 1,185 7.3%
Shipment by product Q1 CY’20 Q4 CY’19 Change Q-o-Q Q1 CY’19 Change Y-o-Y
Iron ore 1,842 2,268 -18.8% 1,624 13.4%
Pig iron 370 343 7.9% 532 -30.5%
Steel products 1,184 1,161 2% 1,126 5.2%

Fig in ‘000 MT

Metalloinvest is world’s leading producer of merchant HBI, the second largest producer of pellets, the largest iron ore company in Russia and CIS and a leading producer of high quality steel. The company’s iron ore and crude steel production in CY’19 was recorded 40.2 MnT and 4.8 MnT respectively.

 

JSPL Fast-tracking Innovations in Rails Business

Leading integrated steel producer Jindal Steel & Power Limited (JSPL) is fast-tracking innovations in its rails manufacturing and rails blooms business both with an eye on the export market as well as catering to the requirements of India Railways.

Some of the new grades the company is presently manufacturing are essential for purposes of greater load bearing and wear resistance. These include 60 E-1, R-260 high-strength rails, Grade 1080 HH (heat treated or head hardened rails) that increase wear resistance and load bearing capacity, Grade 1175 HH rails for ultra heavy traffic and wear resistance and Grade ZU-160 asymmetric rails.

The Indian Railways currently uses Grade 880 rails that have less life compared to grades like R-260, 1080 HH and 1175 HH.

The new grades are meant to meet the Railways’ ambitious new projects and freight corridors, informs VR Sharma, Managing Director, JSPL.

“The Railways want to increase the load bearing capacity of wagons from the existing 64 tonnes to 75 tonnes or, say, 25 tonnes per axle at par with American and Chinese standards. The aim is to boost overall efficiency,” says Sharma.

JSPL has started supplying head hardened rails to metro railways. The first such order has been received from the Kolkata Metro Railways. The construction and track laying part of the project will be carried out by Rail Vikas Nigam Limited (RVNL).

The steel-maker has bagged an order from France for supply of rail blooms. The company has entered into a long-term understanding with France Rails for supply of 200,000 tonnes of rail blooms every year. “JSPL’s blooms are widely considered ideal for manufacture of special rails. Rail manufacturers from Australia, Belgium and Britain have also shown interest in procuring JSPL blooms,” says Sharma.

The company supplies 234/260 metre long rail panels to Indian Railways and its vendors so that laying becomes easier and just three welds are required per kilometre at site.

“Earlier, Railways was using 13 metre and 26 metre rails. These small rails were taken to various rail welding yards and thereafter transported to different sites. There is a great amount of savings now both in terms of time and cost because from the steel mills the 234/260 metre long rails panels are directly despatched through special rakes to different sites,” informs Sharma.

“With a capacity of 1 MnT per annum of rails manufacturing in different grades, JSPL is geared up to meet the ambitious plans of the Railways as the first private sector rails manufacturer and the second steel producer in India after state-owned SAIL to take up the task of upgrading the country’s rail network,” avers Sharma.

~ By Nirmalya Deb

 

India: Low Grade Iron Ore Fines Lot Fetches Good Response in OMC Auction

Odisha’s state-owned miner- Odisha Mining Corporation (OMC) had scheduled its iron ore fines e-auction today (30th Apr’20). Out of 429,000 MT iron ore fines put to auction, low grade fines lot was for 40,000 MT. The entire quantity of low grade fines from Koira mines was booked and fetched bids higher by INR 250/MT over the set base price. Indian low grade fines export prices have remained supported on Chinese buying.

However, high grade material offered in the auction from Koira received flat bids i.e at base price of INR 1,200/MT for 7000 MT of ore while remaining 93,000 MT remained unsold.

The entire quantity of 199,000 MT iron ore from Gandhamardhan mines remained unsold. The total 90,000 MT offered from Daitari fetched bids at base price of INR 2,000/MT.

Price comparison of OMC iron ore e-auctions-:

 Mines Size  Fe (%) Base Price as on 20th Feb’20 Bid Price as on 20 Feb’20 Base Price as on 30th Apr’20 Bid Price as on 30 Apr’20 Quantity offered  Quantity  sold
(mm) (INR/MT) (INR/MT) (INR/MT) (INR/MT) (MT) (MT)
 Gandhamardan -10 60-62 1,150 1,150-1,200 1,150 190,000
-10 64-62 1,700 1,500 9,000
 Kurmitar (Koira) -10 62-60 1,700 1,700 1,200 1,200 100,000 7,000
Fines 58% 750 1,000 40,000 40,000
 Daitari -10 64-62 2,200 2,450-2,500 2,000 2,000 90,000 90000
 Total 429,000 137,000

Base prices in INR/MT on ex-mines basis; including royalty
Source: SteelMint Research

The miner had reduced the base price of the ore by up to INR 500/MT against the last fines auction held on 20th Feb’20.