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IRON ORE INSIGHT 13 November, 2013
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SteelMint
Steel int
TM
IRON ORE INSIGHT
Steeling is Basic
13 November, 2013
1
Iron Ore Fines Prices raised by Odishabased private miners
Prices as on 13 Nov, 2013
P
rivate and mid-sized merchant miners based in Odisha, India’s largest Iron ore producing state, raised fines prices by INR 200-300/MT in November ‘13, owing to low production. Miners mentioned that production was down by almost 20-25% as cyclone hit the Indian east coast in midOctober.
Particulars
Grade/Size
(INR/MT)
Prices
M-o-M Change
Fe 63/5-18 mm
6,600
200
Fe 65/6-40mm
4,300
0
Fe 63 Fe 63.5/63
2,150 136
400
Fe 63
7,000
100
Steel Grade
23,000
0
80 FeM
19,700
800
Iron ore Lumps Odisha (Rungta Prices, Loaded to wagon, Incld Royalty) NMDC (Basic Prices, Royalty & Taxes extra) Iron ore Fines Domestic (Ex Mines Odisha, Incld Royalty) Export (CFR China in USD/MT)
However, big miners such as Rungta and Essel, which raised offers in the month of October, kept them unchanged for November.
2
Iron Pellet Odisha (Loaded to wagon, Basic Prices) Pig Iron
Some of the merchant miners like Serajuddin and Indrani Patnaik have preferred to hold sales currently and are looking at delivery of previous booking orders.
Cuttack (Basic Prices) Sponge Iron Raipur (Basic Prices)
Current offers for Fe 63 fines are hovering in the range of INR 1,800-2,000/MT (Ex-Mines, Including royalty); was offered at around INR 1,500-1,700/MT (Ex-Mines, Including royalty) couple of months back.
Odisha Miners Iron Ore Fines Offers in November 2013 Fe %
Prices (in INR/MT)
Remarks
Rungta Mines
63
2,450*
-
Essel Mining
63
2,475*
-
KJS Ahluwalia
63
2,150
-
Serajuddin
63
1,860*
Bookings Closed
Indrani Patnaik
63
2,200*
Bookings Closed
KN Ram
62
Bookings Closed
KMC
63
1,900 -
RP Sao
63
-
Mines Closed
Miner
Rungta and Essel mines are offering Fe 63 fines at INR 2,450-2,475/MT (Loaded to wagons, Including royalty).
Bookings Closed
All prices are ex-Mines; including royalty *Prices loaded to Wagons; including royalty Additional cost of INR 400-500/MT from mines to Railway siding
Private Iron Ore Miners in Odisha agree upon e-auction process
I
n a meeting held among high level officials in the last week of October, Odisha government finally convinced most of the leading private Iron ore miners for sales through an e-auction route.
Though, modalities of the e-auction have been finalized, decision about the time of starting e-auction is yet to take place. Miners will have to submit details around the quantity, Fe content and prices of Iron ore they wish to sell, on a fortnightly basis to MSTC. 0.2% of the sale price of Ore will be charged as commission by MSTC.
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IRON ORE INSIGHT
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13 November, 2013
2
Indian Iron Ore Exports down 54% M-o-M in October 2013
I
ron ore exports from Paradip Port, the biggest Port in Odisha, dropped by 70% Mo-M in October because of cyclone ‘Phailin’, which hit eastern coast in mid-October and caused huge damages. Daily traffic at Port dropped by 55% and bigger ships were not allowed.
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It resulted in closure of cargo handling and vessel movement at Port and truck and rail movement to and from Port for few days. Restart of full operations took few days and Port workers in big numbers, were away from work. Vessels at berth and anchorage, in big numbers, were vacated and those yet to come were shown a red signal.
Port Wise Iron Ore Exports from India in Oct
Vizag
262.9
43
Paradip Haldia Dhamra
205.3 140.7 115.3
70 49 45
Total
77.3
36
801.4
54
Qty in '000 MT Provisonal Data
Qty in MnT
October
Gangavaram
Iron Ore Exports from India
M-o-M Change (in %)
Ports
120 100 80 60 40 20 0
100.9
46.8
46.9 18.1
FY 10
FY 11
FY 12
FY 13
8.0 *FY 14
*Till October Source: SteelMint
Source: SteelMint
Indian Iron Ore Output drops 13% Y-o-Y in H1 FY14; Odisha’s Iron Ore dispatches rise
M
ining bans in Goa and only a partial resumption of mining activity in Karnataka resulted in a sharp drop in production of Iron ore.
71 MnT of Iron ore was produced in H1 FY14 (132-133 MnT Iron ore is the expected output in FY14) against 82 MnT of output in H1 FY13 (147 MnT of Ore was produced in FY13). Iron ore dispatches from Odisha went up by 19% to 34.90 MnT in H1 FY14 in comparison to 29.10 MnT in H1 FY13. Indian Iron Ore Production and Exports Financial Year FY 10 FY 11 FY 12 FY 13 FY 14* FY14* Expected Qty in MnT
Production 219 207 167 147 132
Y-o-Y Change (in %) 5.5 19.3 12.0 10.2
Exports 117 98 61 18 13
Y-o-Y Change (in %) 16.2 37.8 70.5 27.8 Source: SteelMint
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IRON ORE INSIGHT
Steeling is Basic
13 November, 2013
3
Indian Iron Ore Lumps Prices remain unaltered for November 2013
N
MDC, India’s largest Iron ore miner with 32 MnT pa installed capacity decided to maintain its November Iron ore prices at levels similar to that of October. Although, monsoons impacted the miners Iron ore production and dispatches, but better sales volume in comparison to the total production resulted in stability in prices. In October, NMDC produced 1.9 MnT Iron ore with total sales at 2.26 MnT. In September, the miner had raised offers by INR 100/MT after a year’s time, on account of improved sales in H1 FY14. NMDC’s Iron Ore Output down 9.5% M-o-M in October
NMDC’s Iron Ore Production and Sales
October
1.90
2.26
Q1 FY14
6.92
7.25
September
2.10
2.30
Q2 FY14
5.90
6.48
H1 FY14
12.82
13.73
Qty in MnT Source: SteelMint
Qty in MnT Source: SteelMint
Miners in Odisha, Nations largest Iron ore producing state with about 43% of country’s total output and 35 MnT of merchant capacity, unchanged offers, owing to lower Iron ore output by about 20-25% in October 2013 and slightly improved demand in comparison to previous month. Limited supply of the raw material has resulted in stability of Sponge iron prices as well. In mid-October, Rungta and Essel mines had increased offers by INR 200/MT for rest of the month.
Supreme Court allows e-auction of mined Iron Ore in Goa
upreme Court has finally allowed sales of 11.48 MnT of mined Iron ore in Goa, through an e-auction process; no fresh mining has been permitted.
S
It will form a panel consisting of six members, responsible for the auction process. The member’s names are expected to be announced by midNovember.
The material available for auction is of low grade because of which domestic steel mills might be uninterested to procure the material in big quantities. Rather, it’s assumed that this eauction has given a green signal to encourage exports.
This committee will decide limitations for Goa's Iron ore output and might present the report by mid-February, 2014.
Court is yet to take a decision and give more clarifications on the following: Whether the Ore is available for domestic sales or exports? Who will conduct the E-auction process and on what parameters? If foreign buyers are eligible to participate in e-auction? When will fresh mining be allowed in Goa?
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Mining in Goa was banned on 10 September, 2012, when Supreme Court’s Ex-justice, M B Shah found the irregularities in mining operations. The total capacity of Goa mines is 36 MnT, out of which 90 per cent of the material used to be exported. But after a ban on mining, Goa’s total production came down to only 18 MnT in FY13.
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IRON ORE INSIGHT
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13 November, 2013
4
Indian Iron Pellet Prices hold firm on Export Parity
Iron Pellet prices in Indian domestic market remain firm at INR 7,1007,200/MT (loaded to Wagons at Barbil, Odisha), owing to improvement in realization from exports market Indian Pellet exporters offer Fe 63.5/63 Pellet at around US$ 147-148/MT FOB east coast On 18 October, Jindal Steel & Power Ltd closed a 50,000 MT Pellet (Fe 63.5) export deal at US$ 163/MT CFR China, with a Switzerland based trader; shipment will take place by 15 November Fe 63.5/63 Iron ore fines prices move up to USD 136/MT CFR China Indian Rupee weakens to 63 levels against USD in the beginning of the 2nd week of November
Monthly Average Pellet Prices in Barbil (Odisha) 7,500
7,400
7,000
7,200
7,100
6,700
6,500
6,300
6,400
July
August
6,000 5,500 May
June
Prices (in INR/MT): Loaded to Wagons Source: SteelMint
T
October
Financial Year 2014
hough, lessening imports of Scrap to India, rise in international Scrap offers and limited supply of domestic Iron ore have helped Sponge iron prices to sustain at current levels and demand to remain intact.
Slowdown in construction activities (low finished steel demand) because of upcoming elections, would not help in price rise. Cheaper Scrap in domestic market has pushed Karnataka based buyers to not to pay high for Sponge iron. Since Q4 FY11, Sponge iron prices in H1 FY14 have stood at the lowest level at INR 19,400/MT (ex-works Raipur).
21,000 Basic Prices in INR/MT
Sponge Iron Prices find Support on Weakening Scrap Imports
September
Monthly Average Sponge Iron Prices in Raipur (CG) 20,600
20,500
20,400
20,000 19,500
19,200
19,200
19,000
18,700
19,000
18,500 18,000 17,500 May
Source: SteelMint
Jun
Jul
Aug
Financial Year 2014
Sep
Oct
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IRON ORE INSIGHT
Steeling is Basic
13 November, 2013
5
Average prices of Fe 63.5/63 fines in October, were almost stable at 133/MT CFR China on M-o-M basis
CFR Price in USD/MT
Half Yearly Average Prices for Fe 63.5/63 Iron ore Fines, CFR China 200
184
180 160
148
140
130
134.5
130.5
H1 FY13
H2 FY13
H1 FY14
120 100 H1 FY12
H2 FY12
Source: SteelMint
Indian Iron Ore Prices (in INR/MT) in November 2013 Miners
State
Fe %
5-18 mm
Fe %
Rungta* Essel* Serajuddin*
Odisha
63
6,600
63
Odisha
63
6,575
Odisha
63
Indrani Patnaik*
Odisha
63
KJS Ahluwalia
Odisha
RP Sao
Odisha
10-30 mm
Fe %
Fines
6,070
63
2,450
63
5,825
63
2,475
5,110
-
-
63
1,860
5,200
-
-
63
2,200
63
5,450
61
4,300
63
2,150
-
-
-
-
-
-
All prices are ex-Mines; including royalty | *Prices loaded to Wagons; including royalty
Fe %
ROM
Fe %
Lumps
Fe %
Fines
E-auction
Karnataka
65
3,700
63
3,834
61
3,085
E-auction
Karnataka
54.5
1,750
63.5
3,693
60
2,520
Fe %
Fines
64
2,610
Royalty 10% & Forest Development Tax 12% are applicable; Vat 5.5 % extra
Fe % NMDC
Chattisgarh
65
6-40 mm
Fe %
4,300
64
10-150 mm 3,750
Basic Prices excluding 10% Royalty Source: SteelMint
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