Monthly Archives: July 2020

Vietnam: Demand for imported HRC may soften on rising concerns over COVID

HRC importers based in Vietnam softened their bids because few cities namely Ho Chi Minh, Ha Noi, and Da Nang are practising social distancing from today onwards due to the spread of COVID-19, SteelMint learned from its sources based in Vietnam.

This may soften the demand for imported HRC to Vietnam from major exporting nations. However, offers for the imported HRC continue to remain same at the moment since importers had already actively booked cargoes for Aug-Sep shipments last week.

SteelMint reported that Indian steel mills collectively booked around 40,000 t HRC to Vietnam by the end of last week at $475/t CFR basis for end-Aug/early-Sep shipment. However Indian mills have further raised HRC export offers to Vietnam by $10/t and offering at $485/t CFR basis.

In addition to this, Japan’s Nippon Steel, and South Korea’s Hyundai Steel also lifted their HRC offers to Vietnam by $5/t and are offering at $480/t CFR against $475/t in the previous week. Meanwhile, Russia based MMK steel has resumed its HRC export offers to Vietnam for Aug-Sep shipments and offering at $465/t CFR basis.

However, impact of the pandemic may lead to a decline in imported HRC offers on limited buying at current levels.

 

India: Imported scrap trades slow down amid increasing offers

Imported scrap offers to India moved up sharply by around $10-15 this week after remaining stable for almost two weeks. Thin trades were reported throughout the week. Most of the buyers opted to stay away from the market considering fluctuations in finished steel prices, traders highlighted.

SteelMint’s assessment for containerized Shredded 211 from UK/Europe surged to $308-310/t CFR Nhava Sheva, rising by around $15/t as compared to last week’s closing.

  1. Offers for HMS too increased on a weekly basis. However, the buyers are more likely interested in domestic scrap and sponge iron. HMS 1&2 (80:20) from UK and Middle East is being offered at around $270-275/t CFR Chennai, depending on the quality of the material. UK HMS (80:20) offers were heard at $275-280/t CFR Nhava Sheva.
  2. Offers for HMS 1&2 (80:20) from West African origin being reported at $262-265/t CFR to Goa, increasing sharply by $ 8-10/t against last week’s report. While buyers price idea now stands at $255/t CFR basis.
  3. Other grades in the market included cast iron scrap from West Africa quoted at around $280-285/t CFR Goa basis, while the buyers are bidding at $275/t CFR level. Offers for turning scrap from Middle East and UK origin also reported this week at $245/t CFR Chennai.

Imported scrap offers to Pakistan rise further

Pakistani scrap market remained active throughout the week. Some trades were witnessed in last two days, with shredded 211 scrap deals getting concluded at $303-305/t CFR Qasim from UK/Europe.

Fresh offers for Shredded reported at $307-310/t CFR from Europe. Few offers from USA also reported at $300/t CFR basis.

Notably, offers for Dubai origin P&S are heard at $295-300/t CFR Qasim.

 

SE Asia: Billet import offers stable; decent trade volumes this week

The southeast Asian billet import market was active this week after sluggish trade over the past two weeks.

Multiple bookings of over 100,000 t from Iran were concluded for different SE Asian destinations at an average price of $389/t, on a FoB Iran basis, trade sources told Steelmint.

Billet export offers from India were around $422-425/t CFR Thailand.

SteelMint assessed for billet offers in the SE Asia region at $420-430/t, CFR, unchanged from last week.

Billet export offers from Vietnam were at $410/t, FoB, for Oct’20 shipments, down by $5/t from last week.

The SE Asian countries like Vietnam, Indonesia, and Malaysia are attracting the Chinese buying interest amid rising offers from India supported by duty advantages over non-ASEAN countries. For instance, recently, China was reported to have booked around 50,000 t billets from Vietnam at $420-422/t, CFR. While for Indian billet, the Chinese bids are below $420/t, CFR, a trade source mentioned during a conversation with SteelMint.

 

India: Bids in OMC iron ore lump e-auction surge by upto INR 500/t ($7)

Odisha’s state-owned miner- Odisha Mining Corporation (OMC) had scheduled iron ore lump e-auction today (31st July’20). The entire quantity of 600,000 t has been booked. Bids in today’s auction increased upto INR 500/t over the set base price. The bid prices have risen amid tighter availability in Odisha owing to monsoons and also with majority of auctioned mining leases yet to resume production.

SteelMint’s price assessment for Odisha iron ore index has increased by INR 500-600/t in the last one month.

The auction was conducted for 600,000 t iron ore lumps, out of which 590,000 t was DR-CLO and remaining 10,000 t was lumps. The miner had increased the base price by up to INR 300/t.

Bid price comparison of OMC iron ore E-auctions

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

Odisha – India’s largest iron ore producing state recorded production at 6.18 mn t in May’20, up 15%, as against 5.37 mn t in Apr’20, according to the provisional data of Odisha Govt. maintained by SteelMint. OMC output recorded at 1.08 mn t, a rise of 18% as compared to 0.92 mn t in Apr’20.

 

SteelMint pellet index down marginally on softening sponge offers

SteelMint’s bi-weekly domestic pellet index “PELLEX” fell by INR 100/t on Friday (31st Jul’20) to INR 6,850/t DAP Raipur. Few Raipur based pellet makers are still not offering pellets after concluding deals for higher quantity recently. However P-DRI prices have come down by INR 400/t this week, which capped price gains to some extent.

NMDC Ltd, India’s largest iron ore producer, has increased fines and lump price by INR 200/t while the price of DR CLO (calibrated lump ore) has been increased by INR 230/t for Aug’20 against Jul’20.

The PELLEX has been derived using five data points: i.e trades, offers, bids, substitute parity, and export realizations. You can download the detailed methodology by clicking on this link Click here

Assigning weightage to data points:

  • One transaction of 35,000 t was reported at INR 6,950/t (DAP, Raipur) by a Raipur based manufacturer. This transaction was given a 57.1% weightage in the index.
  • Firm offers were reported from Durg and Odisha which have been given a weightage of 14.3%.
  • Two firm bids were recorded at INR 6,850-6,950/t (DAP, Raipur) and a weightage of 14.3%.
  • SteelMint calculated the price at which Raipur pellet can displace NMDC lump in the sponge rotary kiln feed (substitute parity) on a DAP Raipur basis at INR 6,000/t and given a weightage of 14.3%.
  • The export realization factor has not been considered as pellet makers are less active in exports owing to an increase in domestic offer prices.

Calculation of Index:

Source-: SteelMint

Region-wise pellet deals and offers:

 
Coal Ministers Visit to Chhattisgarh

Commercial coal mining will start new era of growth in Chhattisgarh, says Coal Minister

Union Minister of Coal and Mines Mr. Pralhad Joshi on his visit to Chhattisgarh today said that commencement of commercial coal mining will start new era of growth & development in the state.

Ending the series of speculation regarding the blocks offered from the state that the minister informed that suggestion of state government to replace 5 out of the 9 mines put under commercial coal auctions has been approved.

It is pertinent to note that the Chhattisgarh government had requested to withdraw Fatehpur East, Morga-II, Morga South, Madanpur North and Sayang blocks which fall under Hasdeo Arand, Lemru elephant reserve and Mand river catchment area, citing serious concerns over depletion of bio-diversity.

He added that 3 new mines would be introduced in replacement, so that total number of mines put on sale from the state would reach to 7, while the overall reserve of the coal of the mines shall remain almost same.(Detailed state-wise list of blocks can be seen here).

Providing his views on the briefing with Chief Minister of the state, Mr. Joshi said “the meeting was very positive, progressive and open minded. We have discussed various issues related to coal mining in the state. Some good suggestions on DMF and NMET have also been provided on which we will consider positively.”

It was informed that under commercial coal mining the state will fetch minimum INR 4,400 Crores revenue in one year. The initiative would also create around 60,000 additional employment to the people of the State.

Moreover, it will contribute around INR 25 Crores to the various District Mineral Foundation (DMF) funds of the state which can be used for inclusive development of regions surrounding coalfield areas.

Proposals for Coal Evacuation:

During the meeting with CM, it was also decided to get a proposal by a committee comprising of CIL, Chhattisgarh government and MAHAGENCO officials in 15 days for shifting of a railway line of Chhattisgarh East Railway Limited (CERL).

Stressing upon the importance of coal mining for Chhattisgarh Mr. Joshi said that the state has the largest coal mine in Asia and it plays crucial role in fulfilling the power demands of country. He also informed that CIL’s holding company SECL has planned INR 26,000 Crores capex for developing infrastructures across the state in the next 4 years.

Highlighting the efforts of government in building new infrastructure for rapid & smooth coal evacuation, Mr. Joshi said that Chhattisgarh East Railway Limited (CERL), a joint venture of SECL, IRCON & CSIDC is developing a rail corridor, which is meant for meeting the logistic challenges foreseen on account of coal evacuation and providing the region with passenger train connectivity.

The corridor having a total length of 193 km is being developed in two phases. The first phase is from Kharsia to Dharamjayagarh with a route length of 131 km while the second phase with route length of 62 km will further join Dharamjayagarh with Korba with a spur up to Gare-Plama Block of coal mines.