Transcription

1 Iron Ore Report Join us on LinkedIn and join other stakeholders in the India Steel Market Watch group in networking and initiating conversations with each other. To visit the group and join, click the following link International prices Sea borne iron ore demand in China continued to remain subdued on falling steel prices and the Chinese Premier s indication of further regulation on the fast growing realty sector, a major consumer of steel, also impacted sentiments. Reports of cyclone in Australia failed to prop up prices as demand was low. Some traders believe that the cyclone will hit supply from Australia but softening steel prices are stopping importers from making aggressive purchases. Following are the prevailing iron ore prices in the international markets: Grade % Fe Origin Product Load port Destination CNF ($/ton) 63.5 India Fines Vizag Qingdao India Fines Vizag Qingdao India Fines Vizag Qingdao India Fines Vizag Qingdao India Fines Vizag Qingdao India Fines Vizag Qingdao Brazil Fines Tubarao Tianjin Australia PB Dampier Tianjin 151 Source: Traders Domestic prices Iron ore miners in Odisha have lowered iron ore fines prices by Rs /ton owing to higher inventories and low exports. The government in its budget has on one hand ignored to look into the reduction of iron ore exports duty and on the other has hiked the railway freight charges by 5%. Iron

2 ore exports have registered a drop of 68% in April 2012 to January Now the iron ore industry in Odisha is waiting to hear what Shah Commission's final report has to say about mining conditions, which is expected around March 15. According to a miner in Odisha, 63% Fe iron ore is offered at Rs 2,000/ton ex-mines at some places showing the bearish trends in the prices although the listed prices are around Rs 2,600/ton. However, DRI grade lumps are offered around the range of Rs 6,500-7,500/ton loaded to rakes. Rungta lowers fines prices: Sources said Rungta Mines has lowered its iron ore fines prices for the month of March by Rs 350/ton because of higher supplies. Rungta is now charging Rs 2,300/ton for high quality iron ore fines of Fe% 63. Rungta has decided to continue offering iron ore lumps at similar prices. NMDC lowers lumps prices: NMDC, which kept prices unchanged in February, has reduced prices of higher grade iron ore lumps by about 2.5% for March. After the price cut, iron ore lumps would be available in the range of Rs 4,980/ton, while the unchanged fines (having iron content of less than 60%) are currently at Rs 2,610/ton. Following are the prevailing prices in the domestic markets in India: Price (ex-mine) Company Size Grade 4-Mar 1-Mar 25-Feb 4-Feb 17-Dec 8-Dec 14-Nov 31-Oct NMDC 6-20mm mm Fines Rungta 5-18mm mm mm mm Essel 5-18mm mm Blue Dust Source: Traders Iron ore buying by steel companies Prime steel mills like JSW are regular buyers from the e-auctions in Karnataka. Other buyers of iron ore lumps and fines are Kalyani Steels Ltd, BMM Ispat Ltd, Sona Alloys among others. Major players buying ore from Odisha are JSW, Bhushan, Essar, Jai Balaji and Monnet. The average bid prices including royalty and forest development tax are given below: Material Indicative grade %Fe Bid price Rs/ton Lumps Fines Fines Fines Fines Source: Steel mills

3 Iron ore vessel position The iron ore vessel position shows that around 764,487 tons of iron ore are lying in the ports for exports. Following is the indicative vessel position for export material: PORT Vessel's Name PRINCE HENRY JAHAN SISTERS WHITE HAWK STOVE CAMPBELL CONCORD ORIENT GRACE Berthed / ETB Cargo Quantity (in MT) Import /Export ,840 EXPORT ,000 EXPORT ,000 EXPORT 18,000 EXPORT ,000 EXPORT ,000 EXPORT NIKOLAS III ,400 EXPORT MARYLEBO NE BLUE ,000 EXPORT ,000 EXPORT AGRIA 20,000 EXPORT SRI PREM VEENA ,500 EXPORT Shipper FALGUN EXPORT R.PIYARILAL / KALING SWATHI / OTHELL SINGHANIA & SONS GATEWAY COMMODIT RUNGTA MINES LTD. AKS MINERALS/OT HELL KALINGA ALLIED RUNGTA MINES LTD. RUNGTA MINES LTD. SUDHAMA,CH AMONG,ESSEL MINING Load / Discharging Receiver SHIMANAMI S.M.NIRYAT 20,000 EXPORT QUEEN PVT.LTD. SVENNER 22,000 EXPORT OTHELL GRAND INFRASTIL 17,000 EXPORT ROYAL GLOBAL NIKOLAS III 23-Feb 37,500 EXPORT SM NIRYAT SHIMANAMI 25-Feb QUEEN 40,052 EXPORT SM NIRYAT BULK AMERICAS 6-Feb I.ORE 56,185 EXPORT SM NIRYAT BEIJING VENTURE 12-Feb I.ORE 5,500 EXPORT ABM BEIJING VENTURE 12-Feb I.ORE 5,000 EXPORT LG MINERALS MARYLEBO NE 23-Feb I.ORE 24,000 EXPORT KAI FLORINDA ,700 EXPORT DOLPHIN, / REVERT WANGARAT TA VENUS KAVO ALKYON ,490 EXPORT MMTC / REVERT 60,000 EXPORT RUNGTA /LIANYUNGA NG - 68,100 EXPORT MMTC / PT. MINERALS NIPPON STEEL &

4 MARYLEBO NE DESTINY WHITE HAWK Source: websites ,000 EXPORT KALINGA / REVERT 54,220 EXPORT RUNGTA / REVERT 24,000 EXPORT 764,487 AKS/SPONGE IRON /LAXMI ENTERPRISES / REVERT Domestic vessel movement The domestic vessel position shows around 666,551 tons of iron ore movement is expected within the various ports of the country. Following is the indicative vessel position for iron ore movement within the country: PORT Vessel's Name Berthed /ETB Cargo Quantity (in MT) Import /Export Shipper Load /Discharging Receiver Ramprasad 3-Feb Iron Ore Import Vizag ESL Malavika 2-Feb Iron Ore Import Paradip ESL Shravan 8-Feb Iron Ore Import ESL KAMLESH Iron Ore Import ESL MALATHI 10-Feb Iron Ore Import ESL MUMBAI NANTONG K 1-Feb Iron Ore 56,000 Import Jaigad Dharamtar Jsw Ispat MUMBAI MATUMBA 4-Feb Iron Ore 43,500 Import Paradeep Dharamtar Jsw Ispat MUMBAI DENSA EAGLE 13-Feb Iron Ore 55,051 Import Dhamra Dharamtar Jsw Ispat MUMBAI BRIGHT MOON 23-Feb Iron Ore 55,000 Import Dharamtar Jsw Ispat NEW MANGALORE NAVDENU PURNA Source: websites 4-Feb IOF Import KIOCL KIOCL Iron ore import scenario India has turned out to be a major importer of iron ore following the mining ban in Karnataka, Goa and restrictions in Odisha. The major ports imported around 950,043 tons during the April-January period. According to industry sources, iron ore imports will reach around 7-8 mt by FY13 if all the ports are considered. Major part of the imports included pellets. Following are some of the indicative import trends from the 11 ports of India: Apr May Jun Jul Aug Sept Ocr Nov Dec Jan '13 PORT WISE TOTAL CHENNAI , ,000 KANDLA 73,195 55,409 93, ,054 85,114 55, ,339 86, ,272 44, ,074 MUNDRA 83 5,151 11,258 5,000 4,034 1, ,598 7, , , , Monthwise Total 73,278 60, , ,989 89,147 56, ,412 97, ,710 45, ,043 Source: Customs data

5 Iron ore export scenario Iron ore exports from India fell 68% year-on-year to million tons (mt) during April 2012-January 2013, according to provisional data released by the Federation of Indian Mineral Industries (FIMI). Exports in January 2013 totalled only 796,000 tons, down around 86% from the 5.5 mt India exported during the same month in This comprised export shipments only from ports on the east coast: 161,000 tons from Haldia in West Bengal, 107,000 tons from Paradip in Odisha, and 528,000 tons from Visakhapatnam in Andhra Pradesh. Shipments from India s west coast fell last year chiefly because ore export volumes from Goan ports dwindled to nil from September when the ban on mining took effect. Karnataka had banned ore exports since July 2010 and, though this restriction was later withdrawn, a ban on mining has been in effect there since August Following are some of the indicative export trends from the 11 ports of India: April May Jun Jul Aug Sept Oct Nov Dec Jan '13 PORTWISE TOTAL Chennai ,000 52,000 Ennore Gangavaram NA NA NA NA 113,275 13,798 27, , ,471 Kandla 0 185, ,756 68,000 64, ,829 63, ,609 91, ,816 Kolkata 155, , , ,774 79,342 24,000 83, , , ,000 1,359,458 Krishnapatnam NA NA NA NA NA NA NA Mangalore 224, , ,127 53,040 10,956 44, , , ,064 1,390,583 Mormugao 3,083,000 3,075, ,356 NA 50, ,917,007 Paradip 127,250 51, , , ,798 53,585 40,000 53, ,835 85,610 1,138,708 Tuticorin ,040, ,040,000 Vizag 1,163, , , , , , ,594 86, , ,125 4,189,582 Monthwise 4,752,576 4,138,148 1,392,505 1,323, , , , ,277 2,083,223 1,270,138 17,254,625 Total Source: Customs Data, official data, Ship agencies data, port website Outlook Domestic: The industry estimates that India will export an additional 2 mt of iron ore in February and March, taking the nation s iron ore export volume to about 18 mt this fiscal, representing a near 71% drop from the 61.8 mt exported in the fiscal year. Ore exports had totalled mt during the fiscal. Government in its budget has ignored to look into the reduction of iron ore exports duty and on the other has hiked the railway freight charges by 5%. This means most of the current fines inventories would be sold in the domestic market. Thus there will be an oversupply of fines in the market and fines prices are likely to be in pressure and expected to stay around Rs 2,000/ton ex-mines in March. However, prices of lumps, which are mostly in demand by Indian steel mills, is expected to remain stable in March. International: UBS expects that international iron ore prices, trading near 16-month highs, may slump 54% to the lowest level since 2009 as China boosts production and global supply climb. Rates may tumble to $70 a ton in the three months ending September after trading between $130 and $160

6 through June, UBS analyst Tom Price told Bloomberg. Rates may jump above $160/ton in the short term amid lower supplies from India and as the cyclone season in Australia threatens shipments, Price said. However, Australia is set to deliver about 80% of total new seaborne supply this year, most of it in the second half, UBS analysts including Price said in a January 31 report. That will coincide at a time when China has sufficient ore and as steel production declines in the second half, they said. The trade will remain pretty tight generally all the way through to June or July and then it starts to fall over going into August or September, said Price. Iron ore slumped 22% in the third quarter of Global seaborne supply will outpace demand by 20 million tons in 2013 from a 37-million-ton deficit last year, says Goldman Sachs Group Inc.