Iron Ore Analysis

Volume 6 / Issue 47 / March 9, 2012

Today in raw materials

Coking coal market

Impasse emerging in Asia-Pacific

coking coal market 3

Scrap market

Turkish mill procures deep-sea scrap

cargoes from US 4

East Asian scrap importers pause

to assess market 4

Exchanges

Iron ore swaps trading subdued,

prices drift slightly 6

Other News

Tata Steel calls on UK government to

act on energy 6

Ferroalloys market

Japanese ferromoly prices fall,

Chinese FeSi price up 11

Marketplace

12

The McGraw-Hill Companies

www.twitter.com/PlattsSBBSteel

Platts raw material assessments, March 9

Close/Midpoint Change % Chg

IODEX Iron ore fines 62% Fe ($/dmt)

CFR North China 144.75-145.75 145.25 1.25 0.87

Please see Platts complete iron price/netbacks table, p.3

Coking coal, premium low vol ($/mt)

FOB Australia 208.50 208.50 +0.00 0.00

CFR China 223.50 223.50 +0.00 0.00

Please see full metallurgical coal price/freight table, p.4

Ferrous scrap ($/mt)

HMS FOB Rotterdam 404.00-408.00 406.00 0.00 0.00

A3, FOB Black Sea 414.00-416.00 415.00 -1.00 -0.24

HMS CFR Turkey 439.00-441.00 440.00 0.00 0.00

Ferrous scrap ($/lt)

Shredded del Midwest US 440.00-445.00 442.50 0.00 0.00

Shredded del dock East Coast 420.00-425.00 422.50 0.00 0.00

HMS del dock East Coast 395.00-400.00 397.50 0.00 0.00

TSI raw material indices, March 9

Frequency Change % Chg

Iron ore fines 62% Fe

Chinese imports (CFR North China port), $/dmt 142.60 Daily 0.00 0.00

Please see TSI’s complete iron ore price table, p.2

Ferrous scrap

HMS 1&2 80:20, Turkish imports (CFR port), $/mt 442.00 Daily -3.00 -0.67

Shredded, US domestic (del Midwest mill)*, $/lt 443.00 Weekly (Fri) -1.00 -0.23

Shredded, Indian imports (CFR port)*, $/mt 484.00 Weekly (Fri) 1.00 0.21

* Latest index March 9

Singapore—Seaborne iron ore prices destined

for Asia rebounded Friday after a two-day losing

streak as stronger rebar futures and a revival in

market confidence led to higher spot deals.

The Platts 62% Fe IODEX assessment was up

$1.25 Friday to $145.25/dry mt CFR North China.

On Friday, Rio Tinto sold a 165,000 mt

cargo of 61% Fe Australian Pilbara Blend fines

at $143.50/dmt CFR China main port, loading

March 20-29.

Earlier in the day Rio was heard to be

offering the cargo at $145/dmt CFR China

main port, after being absent almost the

entire trading week. Most market participants

said the settlement suggested the market

had indeed recovered ground Friday.

A Singapore-based trader said $143.50/

dmt CFR was an acceptable price because

“PB fines are well-valued and mills like them

for steelmaking. I think they might pay more

Iron ore rebounds on improved steel market

for it.” Another trader said buying interest and

inquiries were increasing for medium grades

of iron ore, lending support to prices.

A Singapore-based trader said the increased

Rio Tinto tender suggested buyers were getting

“buoyant” on demand for iron ore as construction

activity picked up due to warmer weather in China.

Meanwhile, Australian miner BHP Billiton

sold a Capesize cargo of 61% Fe Mining Area

C fines at $140.50/dmt CFR Shanghai, several

dollars lower than the PB fines trade.

However, a number of traders said they had

not received this offer, indicating it may have

been restricted to mills.

Vale back in the spot market

Brazilian miner Vale was back in the spot market

Friday after seven consecutive days of offering

iron ore cargoes. The miner was heard to have

Coking coal market

ArcelorMittal refutes coking

coal Q2 settlement report

Singapore—ArcelorMittal, the world’s

biggest steelmaker, said Friday it had not

reached an agreement to buy hard coking

coal from Anglo American at $210/mt FOB

for the April-to-June quarter.

“This suggestion of us reaching a settlement

at that price of $210 is incorrect,”

Giles Read, a London-based spokesman

for the company, said by e-mail.

Platts reported earlier this week (SBBSMD,

March 7, page 1) that Anglo

American reached an agreement with a

European mill for its premium hard coking

coal, German Creek, at that price, with

widespread market chatter pointing to

(continued on page 2) (continued on page 3)

SBB Steel Markets Daily March 9, 2012

2 Copyright © 2012 The McGraw-Hill Companies

TSI Dai ly Iron Ore Price Indices

TSI’s indices reflect average daily iron ore spot prices. Full price histories are available to TSI

subscribers on its website. Details of TSI’s methodology and product specifications, together with

general information about TSI and its full range of steel indices and subscription services, can also be

found on its website: www.thesteelindex.com

To reach Platts

E-mail:[email protected]

North America

Tel:800-PLATTS-8 (toll-free)

+1-212-904-3070 (direct)

Latin America

Tel:+54-11-4804-1890

Europe & Middle East

Tel:+44-20-7176-6111

Asia Pacific

Tel:+65-6530-6430

SBB Steel Markets Daily is published daily by Platts, a division of The McGraw-Hill

Companies. Registered office Two Penn Plaza, 25th Floor, New York, NY 10121-2298

Officers of the Corporation: Harold McGraw III, Chairman, President and Chief

Executive Officer; Kenneth Vittor, Executive Vice President and General Counsel; Jack

F. Callahan Jr., Executive Vice President and Chief Financial Officer; John Weisenseel,

Senior Vice President, Treasury Operations.

Prices, indexes, assessments and other price information published herein are based

on material collected from actual market participants. Platts makes no warranties,

express or implied, as to the accuracy, adequacy or completeness of the data and

other information set forth in this publication (‘data’) or as to the merchantability or

fitness for a particular use of the data. Platts assumes no liability in connection with

any party’s use of the data. Corporate policy prohibits editorial personnel from holding

any financial interest in companies they cover and from disclosing information prior to

the publication date of an issue.

Copyright © 2012 by Platts, The McGraw-Hill Companies, Inc.

Permission is granted for those registered with the Copyright Clearance Center (CCC)

to photocopy material herein for internal reference or personal use only, provided that

appropriate payment is made to the CCC, 222 Rosewood Drive, Danvers, MA 01923,

phone (978) 750-8400. Reproduction in any other form, or for any other purpose, is

forbidden without express permission of The McGraw-Hill Companies, Inc. For article

reprints contact: The YGS Group, phone +1-717-505-9701 x105 Text-only archives

available on Dialog File 624, Data Star, Factiva, LexisNexis, and Westlaw. Platts is a

trademark of The McGraw-Hill Companies, Inc.

Managing Editor

Colin Richardson

(+44 0 151 228 1081)

Markets Editors

London; Ciaran Roe

(+44 20 7176 6346)

Bursa, Turkey; Cem Turken

(+90 224 234 1522)

Senior Managing Editor,

Markets

Annalisa Jeffries

(+44 207 176 6204)

Americas Managing Editor

Christopher Davis

(+1 412 431 0398)

Senior Editor

Tom Balcerek

(+1 412 431 0416)

Markets Editor

Pittsburgh; Nicholas Tolomeo

(+1 412 431 0632)

Managing Editor, Ferroalloys

New York; Anthony Poole

(+1 212 904-2992)

Senior Managing Editor

Singapore; Russ McCulloch

(+65 6227 7811)

Managing Editor,

raw materials

Keith Tan

(+65 6530 6557)

Team Leader, raw materials

Julien Hall

(+65 6530 6538)

Asian Markets Editors

Melvin Yeo

(+65 6530 6517),

Celestyn Wong

(+65-6530-6442),

Helena Sheng, Edwin Yeo,

Hongmei Li, Della Fu, Anna

Low, Vivian Teo, Anitha

Krishnan

Managing Editor

Paul Bartholomew, Australia

(+61 410 400 156)

Editorial Director

Joe Innace

(+1 212 904 3484)

Manager, Advertisement Sales

Kacey Comstock

Volume 6 / Issue 47 / March 9, 2012

Vice President, Editorial

Dan Tanz

Platts President

Larry Neal

ISSN:

Advertising

Tel: +1-720-548-5508

All rights reserved. No portion of this publication may be photocopied, reproduced,

retransmitted, put into a computer system or otherwise redistributed without prior

authorization from Platts.

1935-7354

SBB Steel Markets Daily

General Manager, Metals

Andrew Goodwin

The McGraw-Hill Companies

TSI daily iron ore indices, March 9

$/dmt Change % Chg Low* High*

62% Fe fines, 3.5% Al, CFR Tianjin port 142.60 0.00 0.00 116.90 183.30

58% Fe fines, 3.5% Al, CFR Tianjin port 132.90 -0.10 -0.08 102.90 163.70

62% Fe fines, 2% Al, CFR Qingdao port 144.40 0.00 0.00 119.20 186.60

63.5/63% Fe fines, 3.5% Al, CFR Qingdao port 146.10 0.10 0.07 122.70 190.00

* Past 12 months

Per 1% Fe differentials, $/dmt

$/dmt Change

Range: 61-64% Fe 3.00 0.00

Range: 56-59% Fe 4.00 0.00

FOB netback per route / basis TSI 62% Fe, 3.5% Al fines

Origin Vessel Type FOB ($/dmt) Change % Chg

W.Australia Capesize 134.79 0.08 0.06

India Supramax 128.90 -0.06 -0.05

Brazil Capesize 122.22 0.02 0.02

Rolling Averages, $/dmt

5-day Monthly Quarterly

62% Fe fines, 3.5% Al, CFR Tianjin port 142.88 142.97 140.74

58% Fe fines, 3.5% Al, CFR Tianjin port 133.12 133.01 127.71

62% Fe fines, 2% Al, CFR Qingdao port 144.68 144.77 142.52

63.5/63% Fe fines, 3.5% Al, CFR Qingdao port 146.30 146.39 144.66

sold 220,000 mt of 63.13% Fe Standard

Sinter fines Guaiba at $143.75/dmt CFR

China main port, market sources who received

the tender said. The cargo will pass Singapore

March 14 and contains 1.47% alumina, 5.22%

silica, 0.055% phosphorus and 8.5% moisture.

This trade was normalized and reflected

in the Plat`ts assessments.

Penalties were factored, because

sources pointed out that the size of this

cargo restricted the number of ports and

buyers that could receive it. Additionally,

there was a penalty due to the cargo’s silica

content of over 4.5%.

Separately, sources said the improvement

in market sentiment could also be attributed to

China’s consumer price index slipping to a

20-month low of 3.2% in February.

“With the worries on inflation easing, markets

are getting buoyant that the Chinese government

may adopt a more loose monetary

policy to spur spending, such as lowering interest

rates; that will lower capital costs and the

injection of more liquidity into the economy will

spur steel consumption and inevitably lift the

price of iron ore,” a Shanghai trader said.

Meanwhile, among the lower-Fe grades,

a Guangdong-based trader sold an 80,000-

90,000 mt cargo of 54% Fe Indian lump

ore Thursday at $109/dmt CFR main China

port. “Buying mood is gaining traction,” the

trader said.

Trading company PT Resources was still

offering its Panamax cargo of 52/52% Fe fines

at $102/dmt CFR North China. It first made

the offer Tuesday, but said it had yet to award

Iron ore rebounds on improved

steel market ... from page 1



Platts Dai ly Iron Ore Price Assessments

Platts daily iron ore assessments, March 9

$/dmt Midpoint Change % Chg

IODEX 62% Fe CFR North China 144.75-145.75 145.25 1.25 0.87

63.5/63% Fe CFR North China 148.75-149.75 149.25 +1.25 +0.84

65% Fe CFR North China 156.50-157.50 157.00 +1.25 +0.80

58% Fe* CFR North China 128.25-129.25 128.75 +1.00 +0.78

52% Fe CFR North China 99.50-100.50 100.00 +1.00 +1.01

*Al = 4.0% max

Per 1% Fe differential (Range 60-63.5% Fe), $/dmt

$/dmt Change

Range 60-63.5% Fe 3.75 0.00

FOB netbacks per route / basis IODEX 62% Fe

Route Vessel Type Freight rate ($/wmt) Moisture (%) IODEX ($/dmt)

Australia Capesize 7.80 8.03 136.77

India West Panamax 13.25 8.11 130.83

India West Handymax 15.50 8.11 128.38

India East Handymax* 16.25 8.00 127.59

Brazil Capesize 20.70 9.00 122.50

South Africa Capesize 14.25 3.00 130.56

* Typical two-port co-loadings from Haldia and Paradip

Freight differentials to major import ports, $/wmt

From Qingdao on a Free Out basis

To North China: Caofeidian, Tianjin & Xingang 0.25

To East China: Beilun -0.25

To South China: Zhanjiang & Fangcheng -0.75

Rolling monthly average, $/dmt

IODEX 62% Fe 144.57

IODEX 62% Fe CFR North China OTC swaps assessment, March 9

switch

IODEX 62% $/dmt Change % Chg TSI 62

Apr 12 138.000 -0.500 -0.36 1.500

May 12 137.000 0.000 0.00 1.500

Jun 12 136.000 0.500 0.37 1.500

Q2 2012 137.000 0.000 0.00 1.500

Q3 2012 133.500 0.000 0.00 1.500

Q4 2012 131.500 1.000 0.77 1.500

Calendar 2013 127.500 0.500 0.39 1.500

Detailed methodology and specifications are found here: www.platts.com/IM.Platts.Content/

MethodologyReferences/MethodologySpecs/ironore.pdf

ArcelorMittal as the buyer.

Contacted by Platts SBB, Read would not

say whether or not ArcelorMittal had agreed

a settlement with Anglo American at another

price. “If a European steelmaker has agreed

a deal at that price, it wasn’t us,” he said

over the phone without elaborating further.

Both companies were unable to comment

at the time of Wednesday’s report.

— Keith Tan

Impasse emerging in Asia-

Pacific coking coal market

Singapore—The spot market for hard

coking coal destined for Asia was steady

Friday, with buy- and sell-side indications

not alluding to movement in any direction.

Spot trade remained rather limited, especially

on second-tier hard coking coals,

the tender at a price it found satisfactory. The

cargo had 8% alumina and 8% silica and was

for prompt loading in Goa. Meanwhile, Radiant

World was still offering a 75,000 mt 52/52%

Fe cargo with 8% alumina and 9% silica.

The most active October rebar futures in

Shanghai gained traction for the second

straight day Friday, increasing Yuan 38 to Yuan

4,319/mt, from Thursday’s last trade. The

spot price of square billet in Northern

Tangshan was up Yuan 10 to Yuan 3,760/mt

ex-stock, according to mill sources in Hebei.

Iron ore freight rates were stable at

$13-13.50/wet mt for a Panamax from

Goa to China, shipping sources reported.

The slightly firmer numbers seen earlier

this week were due to high bunker costs,

and more demand for vessels.

“There has been an increase in

demand for coal and this is pushing rates

up,” a shipping source in India said.

Outlook pessimistic for Japanese steel

While steel prices in China took a positive

turn Friday, Japanese mills were heard

to be struggling with poor margins and consequently

kept production levels low.

A Tokyo-based steelmaker said its output

levels were being maintained at 70-80%, with

no immediate plans to ramp up production.

“The first quarter of the Japanese fiscal year

[April to June] will not see any recovery for the

Japanese steel industry,” the mill source said,

adding, “I think we can only expect some good

news in July, so we will aim to go back to higher

production between July and September.”

The source added that he was asking

suppliers to lower their long-term contract

tonnage and some have already agreed.

— Celestyn Wong and Melvin Yeo

with Annalisa Jeffries, in London

Coking coal market

...from page 1

where no cargoes were heard offered.

Platts premium low-vol coal was

assessed at $208.50/mt FOB Australia,

while HCC 64% CSR mid-vol also was

unchanged at $186.50/mt.

In the premium category, on top of offers

heard this week for Illawara and German

Creek, on Friday Xstrata’s Oaky Creek was

said to have been offered to China at $210/

mt FOB although this could not be verified.

Chinese buy-side interest for top-tier

coals could be found in the $215-220/mt

CFR North China range.

For non-premium HCCs, an Indian trader

expressed buying interest for a coal

such as Vale’s Carborough Downs at

$180-185/mt FOB Australia.

All buyers surveyed sensed weakness

in the market. “If monetary policy in China

improves, then the market could rise briefly,

but otherwise the overall trend is

down,” a Chinese trader said.

“I still think the market is going down.

People have tons to move,” a European



Platts Daily Metallurgical Coal Assessments, March 9

Coking coal price assessments ($/mt)

FOB CFR CFR Change

Australia China India Australia China India

HCC Peak Downs Region 208.00 223.00 226.00 +0.00 +0.00 +0.00

Premium Low Vol 208.50 223.50 226.50 +0.00 +0.00 +0.00

HCC 64 Mid Vol 186.50 201.50 204.50 +0.00 +0.00 +0.00

Low Vol PCI 145.00 160.00 163.00 +2.00 +2.00 +2.00

Low Vol 12 Ash PCI 127.00 142.00 145.00 -3.00 -3.00 -3.00

Semi Soft 134.00 149.00 152.00 -1.00 -1.00 -1.00

Met Coke - - 385.00 - - +11.00

HCC Assessed Specifications

CSR VM Ash S P TM Fluidity

HCC Peak Downs Region 74% 20.7% 10.5% 0.60% 0.030% 9.5% 400

Premium Low Vol 71% 21.5% 9.3% 0.50% 0.045% 9.7% 500

HCC 64 Mid Vol 64% 25.5% 9.0% 0.60% 0.050% 9.5% 1,700

Penalties & Premia: Differentials ($/mt)

Within % of Premium Low Vol FOB Net Value

Min-Max Australia assessment price ($/mt)

Per 1% CSR 60-74% 0.50% 1.04

Per 1% VM (air dried) 18-28% 0.50% 1.04

Per 1% TM (as received) 8-11% 1.00% 2.09

Per 1% Ash (air dried) 7-10.5% 1.25% 2.61

Per 0.1%S (air dried) 0.3-1% 1.00% 2.09

The assessed price of HCC Peak Downs® originates with Platts and is based on price information

for a range of HCCs with a CSR > 67% normalized to the standard of HCC Peak Downs® (CSR 74%).

Peak Downs® is a registered trade mark of BM Alliance Coal Operations Pty Limited “BMA”. This price

assessment is not affiliated with or sponsored by BMA in any way.

Dry bulk freight assessments

Route Vessel Class Freight rate ($/mt) Moisture (%)

Australia-China Panamax 15.00 9.50

Australia-India Panamax 18.00 9.50

East Australia: basis Hay Point port. North China: basis Qingdao port. East India: basis Paradip port.

Detailed methodology and specifications are found here: http://platts.com/IM.Platts.Content/

MethodologyReferences/MethodologySpecs/metcoalmethod.pdf

Source: Platts

steelmaker commented.

A Japanese mill had a similar point of

view. “Obviously it’s a buyer’s market. I

don’t have to buy spot, but if I did, I would

probably bid below $200/mt FOB [for premium

low-vol coal],” he said.

A Mediterranean steelmaker added

that with the global economy “not getting

any better,” there was “room to go down a

little more.”

Asked to forecast the Asian HCC outlook,

a mining executive said he foresees

some pressure in coming months, because

traders had recently taken substantial long

positions of US coals for resale in Asia,

including high-quality low-vols.

Met coke jumps on tight supply

There appeared to be a divide in India’s

met coke market with strong supply of lowerquality,

lower-priced material from the Black

Sea, but a tightness for higher-quality met

coke with over 62% CSR, sources reported.

Highlighting this split, Ukrainian 62% CSR

coke was heard offered mid-week at $345/mt

CFR India, while an Australian 70% CSR cargo

was said to have been sold closer to $390/mt

CFR in the last week, and a high-quality Asianorigin

62% CSR at $385/mt CFR.

Market participants in India highlighted

that because of inconsistent quality, material

from the Black Sea, even when of a

similar CSR, was not as valued as

Japanese or Australian coke.

The large differentials between higher

and lower-CSR coke also were apparent in

India’s domestic market. Indian 65% CSR

was heard being sold around Rupees

21,000/mt ($419) ex-works East India, while

57-60% CSR blast furnace coke was pegged

at Rupees 19,000/mt, or $381 CFR India.

— Julien Hall

Scrap market

Turkish mill procures deep-sea

scrap cargoes from US

London—A Turkish mill booked two cargoes

from a US supplier containing HMS I/II

(80/20), market participants said Friday.

One of the bookings is believed to be for

March shipment and both were heard at a

price of $443/mt CFR Iskenderun by a longrolled

steelmaker. This price was confirmed to

a number of participants close to the sell side.

But, an offer from a major US recycler

— not a regular exporter — at $445/mt

CFR for the same grade to be loaded in

Tampa, Florida attracted demand from

Turkish mills at about $435/mt CFR. The

Platts daily HMS I/II (80/20 blend) import

assessment therefore remained flat at

$440/mt CFR Turkish ports Friday.

The reason for the unusual entrance of

the US recycler offering this cargo was

viewed differently by market players.

Market bulls believe it shows the recycler’s

desire to push down global benchmark prices,

such as CFR Turkey, for positional reasons,

while bears argue that it indicates there is too

much scrap on the ground in the US, which,

unlike Europe, did not undergo the same cold

snap that limited collection in February.

US contracts being settled for March procurement

showed no change on-month and

were inked on February 13-14 last month. In

that period, the Turkish HMS I/II (80/20

blend) assessment basis Platts was

between $425-430/mt CFR. Since then,

freight has hardened on many of scrap’s

main Handysize routes though, and is rendering

much of the Black Sea A3 supply

uncompetitive at current market levels.

However, with Turkish mills feeling more

strain on their finished product prices now that

domestic buyers have filled their stocks, export

offers will have to return to international levels.

A French recycler that is rarely heard

dealing with Turkish mills was also in the

market this week with its own HMS cargo

on offer. While shred and other higher-graded

scrap is in scarce supply on the continent,

HMS blends are being offered; one

such cargo was heard at $428/mt CFR

Turkish ports for HMS I/II (70/30 blend).

— Ciaran Roe

East Asian scrap importers

pause to assess market

Singapore—The scrap import market in

East Asia was quiet with thin buying activity

this week, sources told Platts.

“Scrap prices appear to be close to the

top,” a regional trader told Platts. Without

much support from rebar prices, with the

regional rebar markets sluggish, there was

not much room for scrap prices to rise further,

he added.

“The market may be softening a little but



SBB-SMD raw materials reference prices

$/mt Change % Chg

Coke and coal

Coke 10.5-12.5% ash - China export, FOB Tianjin 480.00 10.00 2.13

Charcoal - Brazil domestic 238.19 2.87 0.01

Iron

SGX 62% Fe Iron Ore cash-settled swaps (dry mt) - front month 139.00 0.67 0.48

Iron ore concentrate 66% Fe wet - China domestic 171.60 2.38 0.01

Vale blast furnace pellet 65.7% Fe, Europe, FOB Tubarão ($ cent/mtu) 295.85 -65.38 -18.10

Pig iron - FOB - Black sea export 470.00 10.00 2.17

Pig iron - FOB Ponta da Madeira - Brazil export 485.00 -5.00 -1.02

Pig iron - Hebei - China domestic 521.15 -4.77 -0.01

HBI - Venezuela export 360.00 20.00 5.88

SBB-SMD ferrous scrap reference prices

Price Change % Chg

Scrap, Europe/Turkey ($/mt)

Auto bundles - Turkey domestic, delivered 430.64 0.00 0.00

OA (plate & structural) - UK domestic, delivered 412.69 -3.97 -0.01

Shredded - delivered - N. Europe domestic, delivered 446.98 -13.44 -0.03

Shredded - delivered - S. Europe domestic, delivered 432.86 -6.61 -0.02

Scrap, Asia ($/mt)

H2 - del Olayama - Tokyo Steel purchase price, at works gate 417.29 -37.37 -0.10

H2 - del Utsunomiya - Tokyo Steel purchase price, at works gate 411.06 -18.68 -0.05

Heavy - Shanghai - China domestic 542.92 0.00 0.00

HMS 1/2 80:20 CFR - East Asia import 467.50 0.00 0.00

Shindachi Bara - del Okayama -

Tokyo Steel purchase (list) price 442.20 -37.37 -0.09

Shindachi Bara - del Utsunomiya -


Shredded scrap A (auto) - del Okayama -


Shredded scrap A (auto) - del Utsunomiya -


Scrap, Americas ($/lt)

#1 Busheling - N. America domestic, del, Midwest US 472.50 0.00 0.00

HMS 1/2 - N. America domestic, del Midwest US 397.50 0.00 0.00

Plate & Structural - N. America domestic, del Midwest US 427.50 0.00 0.00

($/mt)

HMS 1/2 - Brazil S.E. domestic 261.87 14.55 0.05

there is still demand among the mills,” another

trader noted. Limited offers for bulk HMS I/II

(80/20) were at $470-480/mt CFR East Asia.

In Taiwan, fresh offers for containerized

80/20 fell to $450/mt CFR, from $455/mt

earlier last week. However, Taiwanese importers

were largely absent during the week.

Taiwan’s scrap import market was flat after

three weeks of rising prices since mid-February.

“Many mills are adopting a wait-andsee

approach,” a local trader said.

Taiwanese mills were trying to book local

scrap at lower purchase prices. “The mills

also want to adjust inventories and average

costs for imported scrap cargoes

booked in the last round,” he added.

Traders reported that a few deals

involving small tonnages were booked at

$445-450/mt CFR Taiwan, down from

$450-455/mt CFR the week before. Offers

of containerized 80/20 to Southeast Asia

were prevailing at $450-455/mt CFR.

— Anna Low

Japanese scrap export

prices rise in Kanto auction

Singapore — Prices of Japanese scrap

exported through Tokyo Bay seem set to

rise following Friday’s auction for H2 grade

material, sources told Platts.

The regular monthly auction held by the

Kanto Tetsugen grouping of scrap dealers serving

the Chiba-Yokohama-Tokyo areas selected

four winning bids for shipments during April.

The winning bids were awarded 5,000 mt

each at Yen 32,700/mt ($399/mt) FAS, Yen

32,500/mt FAS and Yen 32,410/mt FAS while

the last, which secured 10,000 mt, was at Yen

32,400/mt. The winning tender was Yen

1,800/mt ($22/mt) higher than that last

month for material for export during March.

Industry sources said the first bid was

submitted by Sangyo Shinko, the second

and fourth by JFE Shoji Trade, and the third

by Marubeni Tetsugen.

It is understandable that bids were

higher this month than last as prices have

risen, a Tokyo-based trader said. But prevailing

export prices of Japanese H2 for

Korea are around Yen 33,000/mt FOB or

equivalent to Yen 31,500-32,000/mt FAS.

“As the winning (Kanto Tetsugen) bids

were higher than current export prices, export

prices may climb again,” the trader told Platts.

Another Tokyo-based scrap trader said

domestic prices have been weakening but

deliveries to mini mills were still smooth

despite the recent cuts.

Last Thursday Tokyo Steel

Manufacturing cut its scrap purchase prices

by Yen 500/mt, the leading mini mill’s

first cut since end-January. Its buying price

for H2 material at its Okayama works in

western Japan became Yen 34,500/mt

($421/mt) for seaborne delivery and Yen

34,000/mt for truck delivery, as reported.

Japanese scrap exports to Korea were currently

quiet but as soon as the Korean mills

start booking for April delivery, scrap collectors

will begin accumulating scrap around the Tokyo

Bay area in preparation for export.

“The Japanese mini mills will then have

to lift prices again to ensure they get deliveries,”

a trader added.

— Yoko Manabe

China’s scrap prices hold

stable, steel market shaky

Singapore—Domestic scrap prices

were generally stable in the majority of

China’s regions this week as the finished

steel market remained unsettled. However,

the buying prices of major mills have fluctuated,

sources told Platts SBB.

In eastern China’s Jiangsu province,

Wuxi Xuefeng Iron & Steel — a subsidiary

of the Shagang Group — raised its scrap

prices by Yuan 50/mt ($8) on Tuesday.

This took its buying price for heavy melting

scrap to Yuan 3,270/mt including 17% VAT.

In central China’s Hubei province, leading

steelmaker Wuhan Iron & Steel lifted its

buying price for HMS to Yuan 3,360/mt on

Thursday from its previous Yuan 3,350/mt.

This was done to catch up with the buying

prices of neighboring mills to ensure its supply,

a local source told Platts.

Meanwhile, in southern China’s Fujian

province, Sangang Steel — the region’s largest

steelmaker — lifted its scrap prices Yuan 50/

mt to Yuan 3,300/mt with VAT effective Friday.



However, another major mill in the region,

Sanbao Iron & Steel, reduced its prices by

Yuan 30/mt on the same day, taking its buying

price to Yuan 3,360/mt including VAT.

“Mills that had been paying relatively low

prices are hiking their prices to improve deliveries,

while those that had been paying higher

prices are shaving them to avoid possible

risks, given the uncertain steel market,” a

Shanghai-based market observer said.

She added that market prices have

not seen obvious change, despite these

small fluctuations.

Market prices for HMS were prevailing

at Yuan 3,250-3,350/mt in the country’s

east regions, Yuan 3,250-3,430/mt in the

central and Yuan 3,250-3,360/mt in the

south. All prices include 17% VAT.

— Della Fu

US shredded scrap prices

maintain month-long stability

Pittsburgh—After volatile price swings from

October through mid-February, shredded scrap

pricing in the US has remained relatively flat for

the past four weeks. The latest price from The

Steel Index of $443/lt delivered Midwest mill

for the week ending March 9 is down just one

dollar from the prior two weeks.

After averaging $463/lt in January, the

index has remained in the range of $443-

444/lt for the prior four weeks, moving up

or down in only $1 increments. As previously

reported, early March bookings by US

mills of obsolete and shredded grades had

been settled at February levels.

“Market direction is still unclear as we

move further into March,” TSI noted. TSI, is a

separate price-specialist unit owned by Platts.

“Mills were trying to hold off [the anticipated]

increase,” one Midwest scrap dealer said.

The TSI index price fell close Friday to the

Platts shredded scrap assessment midpoint

price of $442.50/lt delivered to Midwest mills.

“Scrap yards seem pretty full,” a US

east coast (USEC) scrap yard source said.

“The market is quiet, very quiet. There is

not a lot of business taking place.”

The Platts assessment for shredded scrap

delivered to USEC docks held at a midpoint of

$422.50/lt, while the HMS price delivered to

USEC docks was at a midpoint of $397.50/lt

— down $5 compared to the prior week.

— Nicholas Tolomeo

Exchanges

Iron ore swaps trading

subdued, prices drift slightly

London—Iron ore swaps slipped marginally

over the course of the Asian trading

day on weaker tender results, despite a

firmer start on the back of rebar futures

moving up, brokers told Platts on Friday.

Q2 traded down to $135.50/mt while

April was done at $136/mt, slightly below

the SGX daily settlement level for Thursday.

Q4 traded at $130/mt and the Q2/Q3

spread remained unchanged at $3.50/mt.

Swaps trade was relatively quiet with people

looking to the physical market for direction,

brokers said. “It feels like a few people were

interpreting tender results as negative,” one

said, adding that everyone seemed “ambivalent”

to the rangebound market.

The SGX daily settlement price for April

slipped 33 cents to $136.17/mt, with May

down 58 cents to $134.92/mt. Its settlement

price for June was down $1.50/mt at

$133.33/mt, while July was off $1.16/mt

at $132.67/mt.

The Steel Index’s reference price for

62% Fe material, CFR North China, was

unchanged at $142.60/dry mt. TSI, a separate

specialist price unit owned by Platts,

cited some trades done at higher levels

and others at lower marks.

One options broker said he did a 150,000

mt Q3 zero-cost collar at $118-$149.50/mt —

where one counterparty buys the $118/mt put

option and sells the $149.50/mt call, a common

hedging strategy.

Coking coal and scraps swaps markets

were quiet.

Chinese market in for ‘long winter’

Despite some policies from Beijing,

such as increasing liquidity, offering temporary

respite, the Chinese steel industry

is still in for a “long winter” amid a gloomy

macroeconomic environment, Fan Jianping,

head of economic protection of China’s

State Information Center said at the Global

Coking Coal Resource & Market Summit

2012 Thursday.

“Q1 is not the bottom,” he said.

“Unlike what has happened in China in the

past, mills will not be able to get out of

trouble when they succeed in destocking,

as Beijing will continuously clamp down on

real estate.”

— Colin Richardson

Other News

Tata Steel calls on UK

government to act on energy

London—Tata Steel Europe believes

high electricity costs in the UK are eating

into its competitiveness, the company told

Platts Friday.

It has calculated that its facilities in

the UK are paying 50% more for electricity

than its site in France, and 25-30% more

than its site in Germany. On Thursday,

Karl-Ulrich Kohler, head of Tata Steel

Europe, said the disadvantage for producing

steel in the UK could be calculated at

GBP5/mt ($7.84/mt) of steel, according to

local press reports.

The company wants the UK government

to apply a mitigation package for heavy energy

users (worth GBP250 million) announced

in November 2011 and discuss further

measures to mitigate the disadvantage compared

with other continental markets.

In March 2011, the UK government

announced measures on carbon credits,

affecting energy prices. This April the

impact on prices is expected to increase

further as subsidies for renewable energy

will be introduced.

Comments from other crude steel producers

in the country, such as the Spanish

electric arc furnace producer, Celsa, were

not immediately available.

According to Platts data, continental

European wholesale power prices for delivery

next year are around 20% below the

comparable UK wholesale power prices

(Platts ContiCal 13 at Eur53.12/MWh

($69.64/MWh) vs. UK Year-Ahead at

Eur64.50/MWh, as of March 8).

French heavy-energy users benefit from

generous tariffs. In the spring of 2010, the

local Exeltium industrial consortium comprising

electricity intensive industrial power users,

including ArcelorMittal, entered into a 15-year

supply contract with state-controlled EDF. The

consortium said the deal would provide its

members with “long-term visibility.”

German steel manufacturers, on the other

hand, have to pay part of the renewable energy

subsidies, according to a market analyst. Last

July, the German longs steelmaker Saarstahl

announced its intention to acquire a 310 MW

coal-fired power plant from RWE as “rising

energy costs in Germany represent a real competitive

disadvantage.”

— Andreas Franke and Emanuele Norsa

Shuttered Pike River Coal’s

mine sold to Solid Energy

Perth—Pike River Coal, the owner of a

New Zealand coking coal mine that closed

after an underground explosion that killed

29 miners in Nov 2010, has been sold to

the country’s state-owned coal producer

Solid Energy for an undisclosed sum, said

PricewaterhouseCoopers, receivers for Pike

River Coal, in a statement Friday.

John Fisk, a receiver appointed to oversee

the sale of Pike River Coal, said he

was unable to disclose the price paid by

Solid Energy, or the identities and number

of potential buyers who had expressed an

interest in acquiring the company.

“We, as the receivers, are pleased with

this agreement as we consider it the best

way forward for all parties. No further

details of the transaction or any related

matter can be released until the agreement

is unconditional,” Fisk said in a



Platts steel industry assessments, March 9

Close/Midpoint Change % Chg

Asia

Hot-rolled coil $/mt

FOB Shanghai* 630.00-640.00 635.00 5.00 0.79

Reinforcing bar $/mt

FOB China* 630.00-640.00 635.00 20.00 3.25

* Assessed March 08, 2012

Europe

Hot-rolled coil Eur/mt

Ex-works, Ruhr 565.00-570.00 567.50 0.00 0.00

CIF Antwerp 540.00-550.00 545.00 0.00 0.00

$/mt

FOB Black Sea 625.00-635.00 630.00 0.00 0.00

Plate Eur/mt

Ex-works, Ruhr 615.00-625.00 620.00 0.00 0.00

CIF Antwerp 545.00-555.00 550.00 0.00 0.00

Reinforcing bar Eur/mt

Ex-works, NW Eur 550.00-560.00 555.00 0.00 0.00

$/mt

FOB basis Turkey 670.00-680.00 675.00 -5.00 -0.74

Billet $/mt

FOB Black Sea 600.00 600.00 -5.00 -0.83

North America

Hot-rolled coil $/st

Ex-works, Indiana 690.00-700.00 695.00 0.00 0.00

CIF, Houston 650.00-670.00 660.00 0.00 0.00

Plate $/st

Ex-works, US SE 940.00-960.00 950.00 0.00 0.00

CIF, Houston 850.00-870.00 860.00 0.00 0.00

Reinforcing bar $/st

Ex-works, US SE 730.00-750.00 740.00 0.00 0.00

CIF, Houston 650.00-660.00 655.00 0.00 0.00

Europe and US cold-rolled coil assessments, March 9

Eur/mt Close/Midpoint Change % Chg

Ex-works, Ruhr 635.00-640.00 637.50 0.00 0.00

CIF Antwerp 595.00-600.00 597.50 0.00 0.00

$/mt

FOB Black Sea 735.00-745.00 740.00 0.00 0.00

$/st

Ex-works, Indiana 790.00-800.00 795.00 0.00 0.00

CIF, Houston 760.00-770.00 765.00 0.00 0.00

statement posted on PwC’s New Zealand

website on Friday.

Over the telephone, Fisk said the sale

of Pike River Coal to Solid Energy was subject

to the satisfactory conclusion of due

diligence checks by the end of March, and

that financial settlement for the deal would

likely follow in May.

He said Solid Energy was interested in

restarting coking coal mining at Pike River

Coal’s mine, which had only been in production

for a short time when the underground

explosion occurred, leading to the mine’s

immediate closure.

Pike River’s receivers PwC would continue

with their operation to reclaim the mine’s

main tunnel, and in the next few weeks it

was expected the top end of the mine’s

underground drift would be sealed and the

tunnel re-ventilated, Fisk told Platts.

“As part of the agreement, negotiations

will continue with the Crown to establish a

trust that will help oversee efforts to enter

the main area of the mine and facilitate body

recovery if it is safe and technically feasible,”

he said in the PwC statement.

Several overseas companies were

speculated by market sources to have

expressed an interest in acquiring Pike

River Coal, including possibly one of its

two Indian shareholders Gujarat NRE

Coking Coal with a 7% stake, and some

Chinese companies.

A Solid Energy spokesman confirmed

Friday the sale of Pike River Coal to the stateowned

company, which owns several mines in

New Zealand, adding that the deal was subject

to certain undisclosed conditions.

The spokesman declined to go into

detail about the specifics of the deal

including price, and said the company

would be making a fuller statement after it

had completed its due diligence of Pike

River later this month.

Pike River Coal’s underground mine is

located on New Zealand’s South Island

and has a coal resource of premium, high

fluidity hard coking coal of 58.5 million mt,

according to the company’s website.

New Zealand Oil & Gas, another stateowned

company, was Pike River’s largest

shareholder with a stake of 29.4% and

was also its biggest creditor being owed

NZ$40 million ($33 million), most of which

it has recouped in insurance payments.

— Mike Cooper

Indian iron ore export

volumes declined in February

Singapore — India exported some 4.079

million mt of iron ore through major central

government-controlled ports in February, a

5.8% drop from 4.329 million mt exported

the previous month, according to provisional

data from the Indian Ports Association.

Although the market has been sluggish

for Indian exporters for several months

now, transaction levels in January declined

further owing to the Chinese Lunar New

Year holidays that month, Indian market

participants said.

Ore export volumes from ports on the

east coast remained largely stable last

month. The Paradip port of Odisha (formerly

Orissa) state shipped 133,000 mt of ore

last month, slightly up from 125,000 mt in

January but down 91% year on year.

Similarly, shipments from the

Vishakhapatnam port in Andhra Pradesh

state totaled 973,000 mt in February, up

from 921,000 mt the previous month but

down 52% y-o-y from some 2.03 million mt

exported in February 2011.

On the west coast, the Mormugao port

in Goa state saw export volumes slipping

to 2.433 million mt last month from 2.679

million mt in January. February shipment

volumes were also down some 47% y-o-y.

So far this fiscal year Indian iron ore

exports from major ports have dropped

28.6% y-o-y to 56.226 million mt from

78.754 million mt exported during April

2011-February 2012.

“We look set to complete the fiscal

year with some 60-62 million mt of ore



exports (from major ports),” a New Delhibased

analyst told Platts.

The major ports covered by the data

are conduits for 80-90% of India’s total

iron ore export shipments.

— Anitha Krishnan

Rogesa sees seaborne coking

coal demand growing

London—Global seaborne coking coal

demand will rise by more than a third to

over 363.5 million mt by 2015, compared to

2011, Hans-Joachim Welsch, CEO of German

pig iron producer, Rogesa, told Platts.

Welsch was talking at the Handelsblatt

Stahlmarkt conference in Düsseldorf.

Worldwide seaborne coking coal demand

in 2010 was 278 million mt, slipping to 265

million mt last year, he said, based on figures

from banking group Credit Suisse.

The largest growth in demand over the

next five years will come from China, followed

some way behind by India, and Central

and South America, he noted (see table).

Turkish demand will level off over the

next year or so, rising from 5 million mt/y

last year to 6.5 million mt/y in 2015, while

annual EU-27 demand will also increase by

over 2.5 million mt.

“This shows that while there are no

particular problems [for EU producers] to

secure coking coal at present, the problems

of the past might return in the

future,” Welsch told Platts. The biggest

issue will be the shortage of particular

qualities, he added.

— Victoria Glasson

BofA still bearish on China’s

lagging steel output vs 2011

New York—China’s daily production

of crude steel declined to an annualized

rate of 612.7 million mt in late February,

according to an industry overview published

Friday from Bank of America/Merrill

Lynch’s Hong Kong research team, which

also forecast short-term “price risk for iron

ore and coking coal.”

The report cited CISA estimates that

daily crude steel production declined to 1.68

million mt in late February, down by 1.22%

from the previous 10-day period. February

average daily production was 1.7 million mt,

9.3% below average production in 2011 of

1.87 million mt/day, BofA-ML noted.

The annualized rate of nearly 613 million

mt is about 70 million mt less than

2011’s total crude steel output from China

of 683.3 million mt, based on World Steel

Association data.

“We remain bearish on the steel sector

for the following reasons 1) weak steel

demand 2) high raw material cost,” wrote

Yongtao Shi, research analyst in Hong

Kong, who added: “We also see downside

risk for iron ore and coking coal price in

Q2, due to a slower than expected steel

production recovery.”

Nonetheless, BofA-ML forecast a

“V-shape recovery” is likely to occur in the

second half of 2012.

“Even assuming flat steel production

growth in 2012, we will expect 582 million

mt crude steel production in the next 10

months, equivalent to daily production of

1.94 million mt, on average15% higher

than current level,” said Shi.

“The ground check has indicated a

weak steel demand outlook near-term,

caused by slowing property investment and

infrastructure activities. Hence, we would

expect a V-shape rebound in 2H12, driven

by increasing infrastructure investment and

social housing kick-off,” the analyst added.

— Joe Innace

Perth firm expects iron ore

sales from Indian project

Melbourne — Perth-based commodity

developer, NSL Consolidated, expects to

make the first sales of iron ore from its

Kurnool beneficiation plant in India before

the end of June, the company said in a

statement on Friday

All the main structures for the first

phase of the project have been erected

and commissioning on individual equipment

components was underway Friday.

NSL expects to produce 200,000 mt/

year of hematite ore in the first phase of

the project and remains on track to generate

sales revenue from its Kurnool operations

in the first half of 2012.

The second phase of the project will

see a 200,000 mt/y wet beneficiation

plant beginning operations later this year.

An official from NSL told Platts the focus

for phase one output would be to sell into

the Indian domestic market.

Subsequently, NSL will consider exporting

material to China. “We have the agreements

and infrastructure in place to

export, so obviously China is a potential

market,” the official said.

The Kurnool project is located in southeast

India’s Andhra Pradesh state and

includes the Mangal mine. NSL also has

another mine, the Kuja iron ore mine,

which lies adjacent to Kurnool. It is also

the only foreign company to own and operate

iron ore mines in India.

Rio Tinto could follow suit after it realises

plans to invest US$2 billion in India’s

iron ore industry as the miner announced

last week.

— Marnie Hobson

Hegang’s receives approval

for Tianxing iron ore mine

Singapore — Hebei Iron & Steel Group

(Hegang), China’s top steel producer in

north China’s Hebei province, has secured

approval for a 15 million mt/year iron ore

mining project in Tianxing, Hebei, which it

says will be the country’s largest underground

mine.

In a posting on its website Thursday,

Hegang said the National Development

and Reform Commission granted formal

Global seaborne coking coal demand 2010-2015 (million mt)

2010 2011 F 2012 F 2012 F 2014 F 2015 F % change % change

2010-2015 2011-2015

EU-27 40.5 39.3 39 40 41 42 4% 7%

Asia* 100 95 100 103 106 110 10% 16%

India 34 34 36 38 42 50 47% 47%

China 49.1 43.3 58.5 70.2 82 92.8 89% 114%

North America 7.5 7.5 7.5 7.5 7.5 7.5 0% 0%

Central/South America 14.9 16 19.8 20.8 22.3 23 54% 44%

Turkey 4.6 5 6 6.5 6.5 6.5 41% 30%

Rest of World 27.3 25.7 28.2 30.7 31.2 31.7 16% 23%

TOTAL 277.9 265.8 295 316.7 338.5 363.5 31% 37%

*excluding India and China

Source: Credit Suisse



approval late last month for mine development

to proceed.

Although the steelmaker plans to invest

Yuan 4.2 billion ($666 million) in the project,

the present status is unknown as Hegang

officials could not be reached for comment.

Construction on mine projects in

China sometimes start before formal

approval is given.

Hegang hopes to commission the

Tianxing mine by 2015 as the project

has a major role in the steelmaker’s target

of lifting its iron ore concentrate

capacity to 35 million mt/year within

three years.

Located at the southern part of Hegang’s

core Sijiaying iron ore tenement in Luxian

County of Tangshan city, the mine is said to

boast 843 million mt of iron ore resources at

an average 30.8% Fe.

Just 60km from Hegang’s Tangshan

steelworks, the Tianxing mine may dip to

850 metres underground and is being

designed to have a concentrate capacity at

66% Fe of 5.1 million mt/y.

Sijiaying, with 2.3 billion mt of resources,

is Hegang’s core iron ore mining development

region and hosts large mines such

as Yanshan and Dajiazhuang.

Hegang expects to develop Sijiaying

into Asia’s top iron ore mining area supporting

42 million mt/y of mining or 14.2

million mt/y of concentrate capacity,

according to its website.

— Hongmei Li

Australia approves second

foreign takeover in a week

Melbourne — Australia’s Foreign

Investment Review Board (FIRB) has

approved the acquisition of Gloucester

Coal by China’s Yanzhou Coal subsidiary

Yancoal Australia, making it the second

takeover of an Australian resources company

by foreign owners in a week.

The other takeover approved by the

FIRB last week was Russia’s Magnitogorsk

Iron & Steel Works’ (MMK) acquisition of

iron ore miner Flinders Mines.

The approval of the Gloucester deal

comes after the original offer was revised, to

allow Gloucester a smaller stake in Yancoal

of 22% down from 23% with Yanzhou retaining

78% in the merged companies.

The combined company will operate

seven mines producing around 12.8 million

mt/year of coking, PCI and thermal coal.

Production is planned to increase to

25 million-30 million mt/year by 2016, as

previously reported.

Gloucester said in a stock exchange

statement on Friday that meetings with

shareholders to vote on the merger are

scheduled to be held next month.

— Marnie Hobson

Indonesian miners to gain

from new ownership law

Jakarta—Indonesia’s new mining regulation,

which paves the way for domestic

mining companies to retain a 51% stake

while foreign ownership will be limited to

49%, will boost the growth of local miners

and government revenue but may pose an

obstacle for foreign investment, industry

sources told Platts.

“The government aims for domestic mining

companies to grow and be able to be as

good as foreign companies, therefore we are

increasing the divestment obligation [of foreign

companies] to 51%,” deputy minister of

energy and mines minister Widjojono

Partowidagdo told Platts Friday. “What the

government does is always to help the public’s

welfare,” he added.

Indonesian President Susilo Bambang

Yudhoyono signed the decree on February

21, but the announcement was made on

Wednesday. The ruling states that a foreign-

controlled mining company has an

obligation to divest 51% of its share in a

company to Indonesian parties — including

the central government, regional government,

state enterprise or other domestic

investors — by the time it completes 10

years of production.

The divestment should reach 20% in

the sixth year of production, 30% in seventh

year, 37% in the eighth year, 44% in

the ninth year and 51% in the tenth year,

according to the regulation. This ruling

applies to companies mining for coal, minerals

and metals.

In the previous 2010 regulation, the government

said foreign-controlled mining companies

were required to divest at least 20%

of shares after five years of operation.

Government to renegotiate contracts

The director of mineral business development

at the energy and mines ministry

Dede Ida Suhendra said Friday the new

51% divestment regulation would be discussed

with various foreign mining companies

under a renegotiation of contracts.

“The negotiations are still going on,”

Suhendra said.

There are seven points that the government

will renegotiate, including the divestment

clause and royalty, he added: the

government earlier said it wants to

increase the royalty received from the mining

contracts.

Mixed reaction from China nickel players

Those with existing mining interests in

Indonesia said it will discourage fresh investments

while analysts reckoned it is not a

huge deterrent for Chinese nickel investors.

“With the ban on ore exports and restriction

on majority ownership of mines by foreigners,

foreign companies will be reluctant to

invest in mining in the country,” a senior official

with Shanghai Tsingshan Mineral Co told

Platts SBB. The company is still confirming

details of the new rule, he said. Tsingshan’s

parent company, Shanghai Dingxin

Investment Group, has a 55:45 joint venture

covering nickel mining, ferro-nickel and stainless

production with Indonesia’s

Bintangdelapan Group.

Another senior official with a Chinese

state-owned miner holding nickel mining

investments in Indonesia said the latest

regulation is a huge departure from existing

rules that allow mining projects to be

wholly foreign-owned. “We will now need to

proceed with more caution with any new

investments in Indonesia,” he said. A

Beijing-based nickel analyst, however,

believed Chinese investors will continue to

invest in nickel resources there. “China

needs the nickel resources. Chinese companies

do not necessarily have to take a

majority share in projects,” he said.

Analysts also argus that Chinese investors

mulling mining investments in

Indonesia are more likely to consider other

existing hurdles to investing there, such as

confusing regulations and conflicting rules

followed by central and local governments.

“Building a plant there is not easy as it

is,” a Shanghai-based nickel analyst said.

— Anita Nugraha and Vivian Teo

Tata Steel could sell some

Canadian Fe ore to market

London—India’s Tata Steel could

become a player in the merchant iron ore

market if proposed expansions at its New

Millennium joint venture in Canada begin production,

according to a local media report.

“To make a project viable of that

nature, we may have to produce 10-15 million

[mt] of iron ore but we can’t use all of

that. So, we may then look at selling some

on merchant basis to others,” Tata Steel’s

managing director H.M Nerurkar told the

Business Standard Thursday.

An initial feasibility study on a project to

produce 22 million mt/year of taconite ore

products from either its LabMag or KeMag

deposits near the Quebec-Labrador border is

due within the next few months, a source

within New Millennium said earlier.

Once the initial feasibility study is completed,

Tata will have four months to

decide whether to invest an estimated

$4.85 billion in the project. Production

could begin by 2016, New Millennium

sources have said.

Other vertically integrated steel and

mining groups, such as ArcelorMittal, have

indicated a willingness to sell surplus iron

ore to other steelmakers in North America.

Nerurkar also told the newspaper that

Tata Steel could work closely with other



Platts steel assessments currency and unit comparisons, March 9

Prior assessment

Eur/mt $/mt $/st $/CWT $/mt $ change % change

Hot-rolled coil

Ex-works, Ruhr* 567.50*** 743.65 674.64 33.74 752.62 -8.97 -1.19%

FOB Black Sea* 480.77 630.00*** 571.54 28.58 630.00 0.00 0.00%

CIF Antwerp* 545.00*** 714.17 647.89 32.40 722.78 -8.61 -1.19%

Ex-works, Indiana** 584.15 766.09 695.00*** 34.75 766.09 0.00 0.00%

CIF, US Gulf states, basis Houston** 554.73 727.51 660.00*** 33.00 727.51 0.00 0.00%

Cold-rolled coil

Ex-works, Ruhr* 637.50*** 835.38 757.86 37.90 845.45 -10.07 -1.19%

FOB Black Sea* 564.71 740.00*** 671.33 33.58 740.00 0.00 0.00%

CIF Antwerp* 597.50*** 782.96 710.30 35.52 792.40 -9.44 -1.19%

Ex-works, Indiana** 668.20 876.32 795.00*** 39.75 876.32 0.00 0.00%


Plate

Ex-works, Ruhr* 620.00*** 812.45 737.05 36.86 822.24 -9.79 -1.19%

CIF Antwerp* 550.00*** 720.72 653.84 32.70 729.41 -8.69 -1.19%

Ex-works, US Southeast** 798.47 1047.18 950.00*** 47.50 1047.18 0.00 0.00%


Reinforcing bar

Ex-works, Northwest Europe* 555.00*** 727.27 659.78 33.00 736.04 -8.77 -1.19%

East Mediterranean, basis Turkey* 515.11 675.00*** 612.36 30.63 680.00 -5.00 -0.74%

Ex-works, US Southeast** 621.97 815.70 740.00*** 37.00 815.70 0.00 0.00%


*LN 16:30 Eur/$ ex rate = 1.3104; **NY 16:30 $/Eur ex rate = 0.7625. ***the primary assessments and have not been converted

Tata group firms, such as Tata Power, to

source coal. Coal deposits frequently contain

different qualities of coal suitable for

steelmaking and power generation.

— Nick Edstrom

Downpours dampen Brazil’s

early 2012 iron ore output

Sao Paulo—Brazil’s January deluges

that saw mining giant Vale declare force

majeure resulted in a 15% reduction in iron

ore production versus the year-ago period,

according to the Brazilian institute of geography

and statistics (IBGE).

As previously reported by Platts Steel

Business Briefing, Vale blamed heavy

rains in three states for hampering operations,

resulting in a 2 million mt decline

in production.

According to IBGE’s industry coordination

manager. André Macedo, production

had increased throughout 2011, with output

up 5.1% year on year in H1 and 3.6%

and 2.6% in Q3 and Q4, respectively.

Data from the Brazilian Mining

Association (Ibram) shows January iron ore

exports fell 20% year-on-year to 22.7 million

mt from 18.2 million mt. National iron ore

output reached 420 million mt in 2011, of

which 330 million mt was sent abroad.

“There was a slowdown in the growth

dynamic as 2011 progressed because of

Villacero takes full control of Coutinho & Ferrostaal

Villacero has taken full control of Germany-based trading jv Coutinho & Ferrostaal as

the Mexican firm looks to strengthen and consolidate its overseas operations, Platts

Steel Business Briefing learned from a well-positioned executive involved in the merger.

See more steel news at www.sbb.com

��Prices rise only slowly as economic doubts continue

��China’s daily output continued to slide in late-February

��Alfa Acciai invests in its scrap yard

��Algeria pays slightly more for S. European rebar

��Anglo American says Minas-Rio output may reach 80 mil mt/y

��Brazil opens AD case on stainless pipe from China, Taiwan

��DOC rescinds AD review on Taiwanese HRC

��China to discuss tower dumping allegations with US

��US flats service center expands into Indiana

��US sheet import prices up in Gulf, buying sluggish

��Chinese lift plate export prices to Korea for May shipment

��East Asian importers baulk at higher Chinese HRC prices

��Flats trade in Turkey picks up on end-user restocking

��US Steel Kosice in talks on future workforce

��Egyptian flats trade remains sluggish, outlook uncertain

��Posco to start building plant in Vietnam from July

��China billet prices flat, market outlook positive

��Rebar prices firming up in northern China

��UK structural steel demand fell in 2011, no recovery in 2012

��CIS billet’s tentative recovery on pause as buying halts

��Sidor ramps up longs production after latest stoppage

��Syrian traders offer ready-load Black Sea rebar to Lebanon

��Precision Castparts to buy US tubemaker RathGibson

��New power projects lift Chinese welded pipe demand

��China’s OCTG demand forecast to keep rising

��Pipemaker in Turkey delivers spirally welded pipe

Steel headlines



Weekly Ferroalloy Prices

Ferrochrome

cts/lb change/date assessed

US Charge 50-55%/Impt. 117.000 / 118.000 +2.000 / 03-07-12

US 60-65%/Impt. 117.000 / 118.000 +2.000 / 03-07-12

US Low-Carbon 0.05% Imported 233.000 / 235.000 +1.000 / 03-07-12

US Low-Carbon 0.10% Imported 210.000 / 213.000 03-07-12 / 03-07-12

US Low C 0.15% Imported 202.000 / 207.000 03-07-12 / 03-07-12

Charge Chrome 52% DDP NWE 103.000 / 110.000 +3.000 / 03-08-12

65% 6-8% High-Carbon DDP NWE 115.000 / 120.000 03-08-12 / 03-08-12

Low Carbon 0.10% DDP NWE 212.000 / 216.000 03-08-12 / 03-08-12

High Carbon 60% FOB China 100.000 / 104.000 03-08-12 / 03-08-12

50-55% Regular CIF Japan 123.000 03-08-12

60-65% Spot CIF Japan 105.000 / 106.000 03-08-12 / 03-08-12

Ferromanganese

$/gt change/date assessed

MW 78% Mn/Impt. 1300.000 / 1350.000 +50.000 / +50.000


Medium Carbon 93.000 / 95.000 -1.000 / 03-07-12

$/mt change/date assessed

High Carbon 75% FOB China 1200.000 / 1210.000 03-08-12 / 03-08-12

Ferromolybdenum

$/lb change/date assessed

MW US FeMo 16.500 / 17.000 -0.200 / -0.200

$/kg change/date assessed

MW Europe FeMo 34.800 / 35.300 -0.700 / -0.500

FOB CHINA FEMO 34.800 / 35.000 -1.000 / -1.200

Spot CIF Japan 34.800 / 35.000 -1.000 / -1.200

Ferrosilicon


MW 75% Si Imported 96.000 / 97.000 03-07-12 / 03-07-12


Chinese CIF Japan 1400.000 / 1410.000 -20.000 / -20.000


75% FOB China 1390.000 / 1400.000 +10.000 / 03-08-12

Eur/mt change/date assessed

75% Std DDP NWE 1180.000 / 1220.000 03-08-12 / 03-08-12

Ferrovanadium


Free Market V205 5.800 / 6.200 03-08-12 / 03-08-12

US Ferrovanadium 14.250 / 14.750 +0.250 / +0.250

$/kg change/date assessed

Europe Ferrovanadium 26.000 / 26.300 03-08-12 / 03-08-12

Manganese


99.7% FOB China 3100.000 / 3150.000 03-08-12 / 03-08-12

Molybdenum


MW Dealer Oxide 14.250 / 14.550 -0.350 / -0.250

Oxide Trans 14.250 / 14.550 -0.350 / -0.250

Silicomanganese


MW 2% Free Market 74.000 / 77.000 +2.000 / +2.000


65% FOB China 1480.000 / 1500.000 03-08-12 / 03-08-12

Chinese CIF Japan 1400.000 / 1500.000 03-08-12 / 03-08-12

Eur/mt change/date assessed

65:16 DDP NWE 970.000 / 1000.000 +50.000 / +30.000

Same-date references indicate there was no price change.

[falling] international demand. But at the

start of 2012, there was a complete inversion

of the trend,” Macedo said, citing

heavy rains in Minas Gerais as the main

culprit. “It was a production problem, not a

demand one.”

— Jose Guerra

Ferroalloys market

Japanese ferromoly prices

fall, Chinese FeSi price up

Tokyo—Spot prices of ferromoly imported

into Japan softened to $34.80-35/kg CIF

Japan from $35.80-36.20/kg a week ago,

tracking overseas moly oxide prices lower.

One trader was selling to his customers

at slightly lower than $35/kg and the

price had come down due to the moly

oxide price, he said. Moly oxide overseas

was heard trading at over $14.50/lb inwarehouse

Rotterdam last week, but

there were deals this week reported at

$14.25-14.35/lb CIF Busan/in-warehouse

Rotterdam.

The negative momentum in the moly

market, spurred by talk that inventories are

inflating in Rotterdam, has forced Korean

sellers to quote ferromoly as low as $33-

34/kg CIF main ports Asia, two traders

said. They rejected the offer as they were

“suspicious” of the metal origin. Spot

trade of other ferroalloys was lackluster

due to the stronger US dollar, which was

trading at Yen 81 compared to Yen 79 a

week ago, sources added.

Chinese spot ferrosilicon prices increase

China’s spot ferrosilicon prices were

assessed at $1,390-1,400/mt FOB China

Thursday, up from $1,380-1,400/mt FOB

China a week earlier, as sellers reported

more deals and improved demand.

Chinese suppliers said they were

able to close more deals this week at

lower offer levels. A northwest Gansubased

trader sold 200 mt at $1,400/mt

to a customer in South America, to load

in April from Tianjin. An Inner Mongoliabased

producer sold to several Japanese

buyers at $1,390-1,395/mt this week,

all to load in April from Tianjin, at a discount

to the company’s offer price of

$1,400/mt FOB China.

Sellers who did not close any deals

this week said trading remained slow.

Other offer prices were heard in the

range of $1,400-1,430/mt, with most

surveyed saying they would be amenable

to selling at $1,400/mt. Prices are

unlikely to deviate much from the current

range in the near term, most suppliers

predicted.

— Mayumi Watanabe and Vivian Teo



Posco Specialty Steel issues

40 mt moly oxide tender

Tokyo—Buying interest for molybdenum

oxide powder picked up in South Korea

Friday with Posco Specialty Steel closing a

40 mt ferromolybdenum buy tender, market

sources said.

The ferromoly was for delivery by the

end of March to its Changwon plant.

Local traders said the number of inquiries

for moly oxide powder, used for ferromoly

making, increased, but deals were

not reported. An offer was heard at

$14.30-14.40/lb CIF Busan, and a bid at

$14.20/lb CIF.

Meanwhile, one Chinese trader said he

was keeping his offer at $14.60/lb CIF/inwarehouse

Rotterdam. Another Chinese

trader suspended spot offers, saying the

market was too slow.

Chinese traders, who keep inventories

at bonded warehouses in China, have told

Platts their inventories stand at 40-80 mt,

adding that they were not rushing to sell.

Meanwhile, South Korean ferromoly plants,

which typically buy from Chinese traders, hold

moly oxide inventories in a wide range of 40

mt to 200 mt, excluding moly oxide for tolling

arrangements, local sources said.

— Mayumi Watanabe

with Hongmei Li in Singapore

Silicomanganese price firms,

fundamentals weaker

London—Silicomanganese prices continued

to firm over the week on strong buying

interested, sources said Friday.

Silicomanganese 65:16 was assessed

at Eur970-1,000/mt ($1,271-1,310) DDP

Northwest Europe from Eur920-970/mt the

previous week.

“I’ve heard Eur1,020/mt delivered to a

German mill, but not higher than that,” one

Europe-based trader said. “Material is in the

hand of traders with positions or producers.”

“I wouldn’t buy material now, it’s too

risky. Material is tight now, but if we see a

rush of production, prices are back down,”

he added.

A second trader said he had been told

of an offer at $1,380/mt DDP to a mill,

but said that transactions to consumers

were lower.

“It’s dangerous at the moment, everybody

is back buying and traders are taking

positions. Factories aren’t really buying

that much material,” he said.

An Indian producer was booked out of

material for March and April, but was offering

65:16 at $1,300/mt for May shipment.

“Indians are rushing to buy ore now and

produce more alloys because the prices

are getting good again,” he said.

A second Indian producer said he was also

sold out of material until May shipment, but

was cautious on the recent price increases.

“It’s a 15% hike in prices,” he said.

“It’s difficult to understand why and whether

these prices are sustainable.”

— Jitendra Gill

Marketplace

��Iron ore, 63.13%Fe Standard Sinter Feed Guaiba — Vale sold at $143.75, 220,000

mt, passing Singapore Mar 14, Al 1.47%, Si 5.22%, P 0.055%, moisture 8.5%, market

participants who received the tender said

��Iron ore, 61% Fe Australian Pilbara Blend fines — Rio Tinto sold at $143.50/dmt

CFR China Main Port, 165,000 mt, loading Mar 20-29

��Iron ore, swaps — TSI-basis Apr traded $136/dmt, Singapore-based trader said

��Iron ore, swaps — TSI-basis Q2 traded $135.50/dmt, Singapore-based trader said

��Iron ore, 54% Fe Indian lumps — Guangdong trader sold Thursday at $109/dmt

CFR Main China port, 80,000-90,000 mt, loading from Mar 18-25, Al 8%, Si 7%, P

0.1%, S 0.03%, moisture 9%

��Steel, square billet — Spot price up Yuan 10/mt from Thursday at Yuan 3,760/mt

ex-stock Tangshan, mill source in Hebei said

��Steel futures — October Shanghai rebar up Yuan 38/mt at Yuan 4,319/mt, from

last trade on Thursday.

��Iron ore, 61% Fe Australian Mining Area C fines — BHP Billiton sold Friday at

$140.50/dmt CFR Shanghai, >45,000 mt, loading Mar 16-25

��Iron ore freight—$13-13.5/wmt Panamax Goa to China, shipping source said

��Iron ore freight—$15.5/wmt Supramax Goa to China, shipping source said

��Iron ore freight—$15/wmt Supramax east coast one port to China, shipping source said

��Iron ore 63.5/63% Fe -pegged at $148-149/dmt CFR North China

��Iron ore, 61% Fe Australian Pilbara Blend fines — Henan-based steel mill pegs at

$143/mt CFR North China

��Iron ore, 61% Fe Australian Pilbara Blend fines — Singapore-based trader pegs at

$142-143/mt CFR North China

��Iron ore, 54% Fe Indian lumps — Guangdong trader sold Thursday at $109/dmt

CFR Main China port, 80,000-90,000 mt, loading from Mar 18-25, Al 8%, Si 7%, P

0.1%, S 0.03%, moisture 9%

��Coking coal, premium HCC — Indian trader would bid for Xstrata’s Wollombi at a

maximum of $205/mt FOB Australia

��Coking coal, HCC—China mill was this week offered Australian “second-tier” HCC at

$200/mt CFR, March, either Panamax or Capesize

��Coking coal, freight—China mill pegs Panamax ECAus to East China at $15/mt

(This is a sample of trade and market information gathered by Platts editors as they

assessed the daily iron ore, coking coal, steel, scrap and freight prices. They were first

published on Platts Metals Alert earlier in the day as part of the market-testing process

with market participants. For more related information about that process and our realtime

news and price services, please request a trial to Platts Metals Alert or learn more

about the product offering by visiting http://www.platts.com/Products/metalsalert)

News in Brief

The London Stock Exchange

will take a majority stake in the

LCH.Clearnet Group, holding up

to 60% of the clearing house’s share

capital in a deal worth up to Eur463

million ($608 million), the companies

said Friday. Regulatory change and

customer demand “are creating significant

new opportunities for clearing and

risk management services globally,”

the companies said in the statement.

“Developing its post-trade capabilities,

especially in clearing, is a key priority

for the LSEG Group. This priority

recognizes the importance of providing

customers with an efficient and attractive

service offering across each stage

of the trading value chain,” the statement

added. The transaction “meets

LSEG’s strategic objectives to continue

to build upon its existing assets and

to seek new opportunities, particularly

in the post-trade arena, accelerating

diversification and growth for the LSEG

Group,” it said. Completion of the acquisition

is expected by the fourth quarter

and is subject to regulatory and other

approvals, including anti-trust clearance.

LCH clears a variety of ferrous swap

contracts, including iron ore, hot-rolled

coil and scrap, all of which are settled

against reference prices published

by The Steel Index, which is owned

by Platts. It also clears trades on the

London Metal Exchange, but the LME

plans to build its own clearinghouse

with a launch date currently targeted for

the first quarter of 2014.

Documents

Iron Ore Analysis