Steel industry news

Factors that might drive the fluctuating Indian steel market

For the last 4 years, the Steel industry has been facing obscurity. The affects of macro & micro economic factors is whats making the fluctuating Indian steel market. Steel market is waiting to be rescued by demand. Factors such as overcapacity, low prices and economic slowdown are adversely affecting it.

India urban population is expected to touch 600 million by 2030 from the current (2013) 400 million. A rosperous India will need new infrastructure. Government promised for economic growth and infrastructure investment. If it stays faithful to the 12th Five Year Plan, this will lead to additional demand of 40 MnT pa of Steel, which is about 60 per cent hike.

The gap between production capacity of 74 MnT and demand of 68 MnT doesnt seem wide. But companies are made miserable by expensive raw material and competitive imports. The net debt of Indias top six steel producers combined is about INR 1525.6 billion, which is ever expanding with the shrinking rupee.

Since Steel making is cash intensive business, its survival depends on strategic cost cutting. The best decision could be to optimize the operations of factory. It can be done effectively if company can forecast how prices will behave in the coming months. Steel production costs are spread amongst many variables such as prices for Iron ore, Coking Coal, Limestone, Natural gas and Power. Since these are all separate components, risk managers believe that it couldnt create an effective hedge. Futures prices are a forecast tool. Decision making on capital investment can be more objective. Knowing the future revenue in well advance means that producers should be able to better plan capacity. Such planning may also help to control the working capital.

Banks charge higher interest rates for businesses which they view as being more risky. If a producer can show that his future cash flow risks are less with a hedge of futures contracts, a bank is likely to lend cheaper money.

A risk management tool such as futures contracts may help in potentially increasing the available capital, reducing the cost and thus improving profitability. The open exchange price and related transfer pricing makes integrated business less risky. Also, the open exchange price allows the whole industry to share the risk. Source : http://news.steel-360.com

AIL is on expansion drive as it plans to invest INR 700 billion in mines and steel plants. With the expansion of its steel-making capacity, state-owned SAIL plans to raise the Iron ore production capacity to 43 MnT pa by FY15-FY16 from the existing 28 MnT pa.

The countrys largest steel maker is also the second-largest Iron ore producer after NMDC. SAIL believes that with the ongoing and proposed expansion at the mines, it would be able to achieve 58 MnT pa Iron ore production by 2020.

It generally takes 1.6 MT Iron ore to produce one MT of steel.

SAIL plans to raise capacity of its Kiriburu mines to 5.5 MnT pa from 4.25 MnT pa now. Also, there are plans to raise production capacity at Meghataburu and Bolani mines to 6.5 MnT pa and 10 MnT pa from 4.3 MnT pa and 4.1 MnT pa respectively. SAIL plans to raise its Gua mines production capacity to 10

MnT pa from 2.4 MnT pa now. It has proposed to raise capacity of its Barsua, Kalta and Taldih mines to 6.5 MnT pa from 3.3 MnT pa.

The major boost in Iron ore production might come from the Rowghat mine, where the company plans to produce 12 MnT pa Iron ore. SAIL has already received all statutory clearances for the mine to develop. The company gets all its Iron ore needs from captive sources. SAIL is in the process of investing INR 700 billion on its mines and steel plants. This will not only enhance SAILs contribution to nation building but will put SAIL among the top steel companies globally, said CS Verma, Chairman of SAIL. He was outlining the companys ambitious plans to shareholders at the companys 41st Annual General Meeting recently.

NCDEX launches modified Steel futures with compulsory delivery

Commodity Online reported that India's National Commodities and Derivatives Exchange is launching a new steel futures contract with compulsory delivery with an option to opt for warehouse delivery and direct delivery to be executed by buyers and sellers Contracts expiring in December 2013,January 2014,February 14 and March 14 will be available for trading from Thursday November 21st 2013.

The Steel Long contract with base centre at Ghaziabad will have delivery centres at Mandi Gobindgarh, Raipur, Mumbai, Chennai, Jaipur and Jharsuguda, base grade commercial and delivery mechanism through warehousing.

The other contract Steel Long IS 2830 will have the base centre at Mandi Gobindgarh with delivery centres at Mandi Gobindgard, Ghaziabad, Mumbai, Raipur, Hyderabad, Jaipur and Kolkatta. It will follow a warehousing model plus direct delivery mechanism.

According to exchange officials, the direct delivery mechanism will help traders bypass the warehousing mechanism and thus reduce the various costs associated with storage and logistics.

Clearing and settlement of contracts will commence with the commencement of Tender Period by compulsory delivery of each open position tendered by the seller on T + 2 to the corresponding buyer matched by the process put in place by the Exchange. Upon the expiry of the contract all the outstanding open position shall result in compulsory delivery.

Earlier, NCDEX had a steel long futures contract which was discontinued due to insistence of BIS mark and related issues.

Source - www.commodityonline.com

(www.steelguru.com)

Rebar TMT QST price movement in India on November 21

TMT Fe 415 12mm

Location Change

Ahmedabad 100

Bangalore 0

Chennai 0

Delhi 0

Hyderabad 236

Indore 400

Kanpur 0

Kolkata 300

Ludhiana 104

Mandi 0

Mumbai 234

Raipur 0

Rudrapur 0

Muzaffarnagar 0

Change is on 21st November 2013 as compared to 20th November 2013 Change is in INR per tonne

Source - Steel Price India (www.steelguru.com)

Indian steel price index ump by 8 points on November 21

The Indian Long Product Price Index ILPPI has inclined by 17 points, whereas Indian Flat Product price index IFPPI has remained stable. The overall Indian Steel Price Index INDSPI has gone up 8 points.

Class 20-Nov 21-Nov Change %

ILPPI 8776 8793 17 0.2%

IFPPI 8737 8737 0 0.0%

INDSPI 8756 8764 8 0.1%

ILPPI Long Product Price Index IFPPI Flat Product Price Index INDSPI Indian Steel Price Index

Long Products

Category 20-Nov 21-Nov Change %

PI - TMT 8891 8907 16 0.2%

PI - WRC 8886 8912 26 0.3%

PI - Angle 8377 8377 0 0.0%

PI - Channel 8455 8445 -10 -0.1%

PI - Joist 7701 7712 11 0.1%

PI Product Index Flat Products

Category 20-Nov 21-Nov Change %

PI - Narrow Plates 8223 8223 0 0.0%

PI - Wide Plates 8495 8494 -1 0.0%

PI - Hot Rolled 8408 8408 0 0.0%

PI - Cold Rolled 9332 9332 0 0.0%

PI - Galvanized 9160 9160 0 0.0%

Steel angle price movement on November 21

ANGL GR A 65X6

Location Change

Ahmedabad -236

Bangalore 0

Chennai 0

Delhi 0

Indore 0

Kanpur 0

Kolkata 0

Ludhiana 209

Mandi 0

Mumbai 234

Raipur 0

Rudrapur 0

Change is on 21st November 2013 as compared to 20th November 2013 Change is in INR per tonne

Source - Steel Price India (www.steelguru.com)

India's steel output growth slows to 2.8% in Jan-Oct at 66 MT

Hit hard by the slowdown in economy, India's steel production growth eased to just 2.8% in January-October this year but the country faces no immediate threat of being dislodged from its position as the fourth largest steel producer globally.

Global industry body World Steel Association (WSA) data today showed India produced 66.387 million tonnes (MT) steel during the first ten months of the current year compared to 64.556 MT in the same period last year.

The growth in production during January-October period of 2012 at 64.556 MT was 5.6% higher than 61.077 MT output recorded during the corresponding period of 2011.

Industry officials blame the subdued steel production growth to slow expansion of the economy.

Economic growth of a country has a direct bearing on steel production. The usage of steel often mirrors the health of an economy and usually rises by 1.5 times of the country's GDP growth rate.

The economic growth rate slipped to decade's low of 5% in 2012-13 and during the first quarter of current fiscal it stood at 4.4%. The growth figures for the second quarter are scheduled to be announced on November 29.

The feeble economic growth appears to have impacted steel-consuming segments like real estate and consumer durables, which are the major consumers of the alloy.

India's steel output growth at 2.8% in the first 10 months of the current year compares with 3.2% average growth recorded worldwide. China's steel industry saw its output grow by 8.3% in the same period.

World's steel production stood at 1,321 MT and China's 884 MT during the same period.

Amid the slowing steel output, data suggests that India is unlikely to be dislodged from its fourth largest global producer tag, which it has been holding for some years now. Its immediate competitor for the position, Russia, is close to 10 MT away.

No change in the top four of the global order is also likely soon. China, which is miles ahead from the second best, Japan, is expected to retain its numero uno position. Japan so far has produced 90 MT. US is also expected to retain the third position. It has produced 73 MT steel during the January-October period of the current year.

Source : Business Standard

Friday, November 22, 2013 | 03:23 PM IST

Primary Steel Producers are Likely to keep Finish Long Prices Unaffected

Primary steel producer had kept their finish long offers unchanged for November13 and it seems that they are likely to keep it same again for December13 as finish long market need some more improvements in demand.

On the other hand in secondary Re-bar market premium brands prices increased by INR 1,300-1,900/MT.

In Maharashtra Guardian TMT a Mumbai based brands prices increased by INR 1,900/MT from 1 Nov, to till date. 20mm TMT is offered at INR 35,300/MT exclude taxes.

Anant TMT manufacturer, based at Indore, MP has increased its prices by INR 1,300/MT in same period (from 1 Nov to till date). Presently its offer is at INR 36,100/MT for 20mm. (Basic Price)

High Raw material and Semi finish products prices are the reasons behind these increment in prices.

Primary TMT prices (in INR/MT) as on month Nov 2013 Region Particular Price (Basic) Price#(All Tax) M-O-M

North India Delhi/NCR 38,000 44,800 - 250

West India Mumbai 37,200 43,900 - 350

South India Chennai 38,800 45,800 - 250

Hyderabad 37,800 44,600 - 350 Monthly Assessment Size 12MM Grade- 500 Fe Excise Duty @ 12.36% ;VAT as applicable. # Prices including all taxes

India: Re-Bar Prices increases owing to Shortage of Semi Finish Products

Indian Manufacturers have to increase the price of Re-bar by INR 200-500 per MT in last 2-3 days owing to the hike in prices of Semi Finish product. In Central India, Re-bar prices have moved up by INR 200-300 per MT from yesterday owing to shortage of Ingot and Sponge. In addition, there is some demand in Raipur and Raigarh from MP. In Raipur and Indore 20 mm Re-bar is traded at INR 30,500 per MT and at INR 35,100 per MT respectively.

In Maharashtra, Mumbai based Shree Vaishnav Industries Private Limited, with a Re-bar production capacity of approx 18,000 MT per month has increased its Re-bar price by INR 400 per MT in last 2-3 days. 20 mm Re-bar is now offered at 34,100 per MT.

The demand for finish product after Diwali was good, but right now we have a normal demand for the product. It seems that steel market will either sustain or go up, said a Re-bar trader based at Mumbai.

Few days back, in Hyderabad, a spurt of INR 200-300 per MT was seen in TMT and Ingot due to little increment in local demand. Presently 20 mm Re-bar is quoted around at INR 31,700-32,000 per MT.

Market participants are of the view that there are fewer chances of rates to decrease, many plants have shut down while some are running at very low production capacity, creating product shortage across the cities.

Note: All prices are Basic.

Region Particular Price (Basic) Price#(All

Tax) Change W-O-W M-O-M Indian 12 mm Re-bar prices (in INR/MT) as on date 19-Nov-2013

North India

Ghaziabad 32,800 38,700 0 + 400 - 700 Mandi Gobindgarh 35,250 41,600 0 + 150 NA

Delhi/NCR 33,000 38,900 0 + 400 - 700 Muzaffarnagar 32,400 38,200 0 + 400 - 700

East India

Rourkela 30,300 35,700 0 - 100 - 900 Durgapur 30,900 36,200 + 200 + 200 - 350

Central India

Raipur* 31,100 36,000 0 + 450 - 500 Indore 35,500 41,900 + 300 + 600 - 150 Raigarh 30,000 35,400 0 0 - 600

West India

Jalna 34,100 40,200 + 100 0 + 200 Mumbai 34,100 40,200 + 200 + 100 + 600 Ahmedabad 33,000 38,900 - 100 0 - 700 Goa 34,900 41,200 + 300 + 100 - 200 Jaipur 32,900 38,800 0 + 250 - 900

South India

Chennai 33,400 39,400 0 0 - 400 Hyderabad 32,850 38,800 0 + 650 + 350 Bangalore 34,400 40,600 0 - 400 0

Daily Assessment Grade-415/500 Fe Excise Duty @ 12.36%; VAT as applicable. *Payment next day # Prices including all taxes

India: Re-bar Prices inch up in Central and Northern Region

Re-bar prices increased by INR 200-300 per MT in Central and Northern Region from last trade. Chhattisgarh

Re-bar prices have increased by INR 200-300 per MT in Raipur for the reason that Semi finish prices increased in city. Ingot and Billet manufacturers have cut their production on dull demand in steel market. There are approx 15-20 manufacturers who have more than two or three furnaces, using only one or two of them. This resulted in shortage of Semi finish products and hike in product prices. An average price for 20 mm TMT is around at INR 30,200-30,500 per MT which is increased by INR 200-300 per MT. Whereas GK TMTs price is

untouched for the day and 20 mm Re-bar is quoted at INR 31,200 per MT.

Madhya Pradesh Anant Steel Pvt. Ltd. with a Re-bar production capacity of approx 14,000MT per month based in Indore has increased its prices by INR 300 per MT from last trade. 20 mm TMT is offered at INR 34,800 per MT. Uttar Pradesh Ingot and TMT prices have moved up by INR 100-300 per MT in Muzaffarnagar because of increased Ingot prices in Mandi Gobindgarh. MS Ingot and 12 mm TMT are offered at INR 30,400 per MT and INR 32,500 per MT respectively. Above mentioned all Prices are Basic.

RE-BAR PRICES INCREASED BY INR 400-500/MT IN SOUTHERN REGION IN LAST TWO DAYS.

Andhra Pradesh In Hyderabad Semi Finish and Finish long product prices inched up as some furnaces and rolling mills have shut down in city. Shortage of the material in market, resulted in its price increase by INR 400-500/MT. 20 mm TMT is offered at INR 31,500/MT. Karnataka Ingot and TMT prices have moved up by INR 500/MT in Bangalore yesterday. This hike was made on account of good demand from Hyderabad and local market. 12 mm TMT and MS Ingot are offered at INR 34,800/MT and INR 29,700/MT respectively. Tamil Nadu Semi Finish and Finish Long prices are continuously unchanged from a long time in Chennai. MS Ingot and 12 mm TMT offers are at INR 28,900/MT and INR 33,400/MT respectively. According to market participants It will not be beneficial for us if we reduce the steel prices according to the other steel market. When we reduce the product prices, buyers wait for some more corrections. So we have decided not to make any changes according to the other markets.

ABOVE MENTIONED ALL PRICES ARE BASIC.

Ingot prices blinks at last but steel rebar clings on for a while

Having gathered enough flab over the last fortnight pencil ingot price levels corrected at most locations in a bid to bring symmetry with the finished price levels. The lopsided rally in pencil ingot price levels fuelled by high scrap levels and shortage finally sputtered without much support from finished buying.

Over the last 1 week TMT price levels had reacted in controlled manner since Relentless hike in pencil ingot pushed it out of indolence.

Most of the mills are yet to announce December price but at least one major Producer has hiked long price by INR 500-1000 per tonne without evoking much response from buyers. Clarity will dawn in next couple of days after most of the mills announce December price. In the unlikelihood of easing in credit rates and scrap price level likely to remain buoyant melodrama is set for more action with no result in December.

Pencil Ingot Location Change Mumbai -300 Chennai 0 Kolkata -250 Mandi -300 Raipur -250 Alang -100

Kanpur 0 Rudrapur 0 Ahmedabad -201 Ghaziabad -300 Muzaffarnagar -108 Hyderabad 200 Raigarh -300 Durgapur -300 Nagpur 0 Jamshedpur 0 Jaipur -200 Rourkela -368 Bhiwari -150 Ludhiana 362

Change is on 2nd December 13 as compared to 29th November 13 Change in INR per tonne

Rebar (TMT/QST) Location Change Mumbai -351 Chennai 520 Kolkata 0 Delhi 0 Mandi 0 Raipur 0 Kanpur 0 Rudrapur 0 Ahmedabad 300 Hyderabad 0 Indore 600 Bangalore 0 Ludhiana 104 Muzaffarnagar 0

Change is on 2nd December 13 as compared to 29th November 13 Change in INR per tonne

Source - Strategic Research Institute

(www.steelguru.com)

India: Demand for Wires improve with rising offers

Indian Wires offers are on a consistent rise; an increase of INR 200-300/MT was recorded today. Demand picked up as market participants expect prices to increase further.

In Raipur, Wire offers moved up by INR 200-300/MT from the last trade. 5.5 mm Wire Rod and 20 Gauge Binding Wire was offered at INR 39,900/MT and INR 46,000/MT respectively.

Raipur is witnessing a shortage of Binding wires as some manufacturers have not stared production after Diwali. Queries for GI and Barbed wires have increased quite a bit.

In Durgapur, wires are being quoted higher but buying is still low. 5.5 mm Wire Rod is being offered at INR 38500/MT which is INR 200/MT higher than the last trade.

Note: Prices are Inclusive of VAT.

India: Wire Rod Prices slashed by INR 200-400/MT in a day

Indian Wire Rod Prices have corrected by INR 200-400/MT from last trade. In Raipur and Durgapur Wire Rod prices have come down by INR 200-400/MT from last trade. Industry demand for Wire Rod is not encouraging from past few days owing to festive season and fall in semi finished and finished steel prices all over India.

Presently in Raipur, 5.5 mm is traded at INR 38,350/MT and in Durgapur the same is offered at INR 36,800/MT. Prices include VAT

RINL, a Primary Wire Rod producer has kept their offers unchanged for 8 mm size. Whereas a negligible hike of INR 50/MT has been made in 7 mm size.

Vizag Wire rod 7 mm at INR 42850/MT Wire rod 8 mm at INR 42750/MT Prices include ED, VAT Extra.

Increased Steel Prices are Center of Attention to Finished Buyers

Steel prices (Ingot, Billet, Sponge and Finished products) increased by INR 700-1,400/MT in last one week across India. Limited production of Ingot/Billet due to low conversion cost and shortage of Raw material have increased the product prices creating center of attention to finished buyers. Eyeing the spurt in Steel prices finished demand has increased in some places of India.

In Rajasthan, Re-bar prices are increased by INR 1,400/MT on W-o-W basis. In Jaipur 12mm Premier Re-bar is being quoted at INR 35,900/MT, INR 300 higher from last trade. (Basic Price) According to a Re-bar trader based at Jaipur Ingot prices are increasing 2-3 times in a day and it is attracting the demand for finish buying. Whereas in some places Re-bar manufacturers have changed the prices of Re-bar gauge difference to make a balance in conversion. In Muzaffarnagar, Jaipur and Durgapur the prices on Re-bar gauge difference are increased to about INR 300-500 in various sizes.

Gauge Difference

JSW hopes that 2014 will be a better year

Business Standard reported that with the possibility of iron ore prices coming down and steel prices remaining stable, leading domestic firm JSW Steel said that things are looking up for the industry next year.

Mr Seshagiri Rao Joint MD and Group CFO of JSW Steel said that On iron ore, analysts have a lot of expectations. Huge supply will be there in market next year. At the same time, demand from China is likely to come down. Based on these 2 factors, iron ore price may not go up next year.

Mr Rao said that Steel demand this fiscal is flattish as the consuming industries are not growing. That is also getting reflected in flattish consumption of steel. The demand has to revive to see the growth in the steel sector.

He said that steel prices in India, which are often linked to international prices, would remain stable as demand for steel would be better next year with recovery happening in the US and the bottoming out of the European economy. He added that Recovery happening in the US market and consumption will go up there. Europe is already at the bottom, so there can be some recovery there. Japan is reasonably doing well and Korea is quite okay. So, only thing we need to watch is China, which is expected to slow down next year. These would keep steel prices stable next year, when raw material prices are expected to come down. 2014 is expected to be better for steel industry.

Source Business Standard

(www.steelguru.com)

Majority of steel units in North India running below 50% capacity CII

CII Accenture report said that majority of iron and steel units in northern India are running at below 50% of their capacities primarily because of power shortage and spiralling input cost.

The report said that Most steel mills are running at less than 50% of their respective rated capacities because of poor supply and rising input cost. The power outages in northern states are resulting in production losses and forcing many mills to work only single shifts.

The report on Indian Steel Industry-An overview and growth prospects of steel industry in north India further pointed out that rupee depreciation against the US dollar has not only raised industrys input cost but also dealt a severe blow to industry as it faced cancellation of export orders.

It said that Depreciation of rupee resulted in significant increase in cost of imported steel melting scrap, a major input in secondary steel production. Further due to rupee depreciation, export orders have been cancelled or deferred, which is another set back for the steel industry in north India.

Suggesting measures for de-bottlenecking steel sector in north, the report said that the steel suppliers should play a major role in implementation of mega investment projects, including USD 100 billion Delhi Mumbai Industrial Corridor, export zones and industrial parks across Rajasthan, Haryana and western UP as these projects will continue to drive sustained demand for long steel.

Presenting potential growth constraints, the report said the growth in steel market is expected to be muted in short term on account of poor growth in core consumer sectors.

It said that The demand is expected to rebound in later half of 2015 with growth in infrastructure as announced in 12th 5 year plan. Growth in automobile and consumer durable sectors will also support demand growth in long run.

Regulatory hurdles and land acquisition challenges remain the largest supply side constraint for Indian steel market.

Indias northern steel hub contributes about 16% to countrys annual steel output with hub comprising multiple small and medium units primarily induction furnaces and steel re rolling mills located in and around Punjab and Haryana. These units cater to construction and light engineering sector including bicycle and auto parts. Uttar Pradesh is the largest producer and consumer of steel in north India with production of 5.6 million tonne per annum.

Source - PTI

(www.steelguru.com)

Steel producers urge Punjab govt to slash entry tax

Business Standard reported that perturbed over the high entry tax in Punjab, as compared to states like Uttar Pradesh, Haryana, Rajasthan and Delhi, iron and steel producers located outside the state feel that it is detrimental to the iron and steel based industry in the state and urged the government to bring it on a par with the neighbouring states.

It is worth mentioning that Haryana charges 1% entry tax on iron and steel. Recently, Uttar Pradesh has also brought it on a par with that of Haryana by reducing it to 1% from 5%, whereas Punjab has imposed 5% as entry tax, the highest among the neighbouring states. Further, states like Delhi and Rajasthan have no entry tax on iron and steel produced outside the state.

Speaking to Business Standard Mr V R Sharma deputy MD and CEO of Jindal Steel & Power Limited said

that With annual consumption of 5 million tonne of iron and steel, Punjab features among the states where there is high consumption. But the imposition of five% entry tax on iron and steel produced outside the state is detrimental to the iron and steel based industry located within the state. According to him, this makes the input cost higher as compared to other manufacturers which based in other states.

Sharing his views, Mr A S Cheema director of Cheema Boilers said that Its important that the manufacturers using iron and steel as raw materials procured from outside the state, should do value addition in their finished goods in order to sustain, otherwise its very difficult to survive in this price-sensitive market. Therefore, manufacturers need to improve their understanding of buyer values and create innovative products targeted at different customer segments.

However, responding to industrialists request, Mr Karan Avtar Singh principal secretary of industries & commerce Punjab said that The imposition of entry tax on iron and steel was done in order to promote the industry located inside the state. We expect new capacity addition will happen in this sector and it will attract new investments.

According to the state government officials, if the sale of goods is within the state, the entry tax is adjusted but if it is outside the state, it cannot be reimbursed by the state.

Experts are of the view that the imposition of entry tax on iron and steel makes the input cost higher and the goods manufactured in the state become non competitive as compared to the goods produced in other states.

Source Business Standard

(www.steelguru.com)

Foundation stone of POSCO steel project unlikely next month

The Statesman reported that speculation over the foundation stone for the much delayed POSCO steel plant project being laid next month has died down as local people here feel that it is highly unlikely.

Reliable source said that Setting a date for the foundation stone laying ceremony is difficult but given the pace of progress of work and the activities of the district officers , it now seems unlikely that the ceremony will take place next month.

Reliable sources said that both the district collector and SP will be on a foreign tour from 3 to 23 January. Hence, the foundation stone laying ceremony will not take place next month.

The talk of a January deadline for the ceremony started ever since South Korean diplomat Mr Joon gyu Lee met chief minister Mr Naveen Patnaik in October and said that he was hopeful of an early ground breaking ceremony. He had also stated that the South Korean President was scheduled to visit India in January and the foundation stone laying ceremony for the project could be lined up accordingly.

As on date the company has possession of 1703 acres of land as against its minimum requirement of 2700 acres. The company has repeatedly said that it will start work only after it gets the entire 2700 acres need for the first phase of the plant. The National Green Tribunal which stayed felling of trees in the project site villages is yet to dispose the case.

The district administration has acquired 2858 acres at the project site, out of which 2700 acres will be given to POSCO with rest being earmarked for establishment of ancillary industries.

Source - The Statesman

(www.steelguru.com)

India: Re-bar Prices increased up to 1-2% from Yesterday

Re-bar prices are fluctuating in the range of INR 200-400/MT from last one week. Today, its pric es inched up by INR 200-300/MT across India.

Sources say that the major reasons behind the increment are:

Raw material shortage: Transporters strike in Gujarat has created shortage of Scrap in Gujarat and Mandi Gobindgarh.

High Ingot/Billet prices: Due to scrap shortage in North India, Ingot/Billet manufacturers have kept their offers higher up to INR 200-300/MT.

Improving demand: According to a Re-bar manufacturer based in Raipur Inquiries for Re-bar have increased from yesterday. Now, our offerings are increased by INR 200-300/MT from last traded figures.

Although, the demand for finished goods is not much encouraging in other cities, but above mentioned reasons have made the Re-bar sellers to keep the high offers.

Source - www.steelmint.com

Fewer Chances of downfall in Re-bar Prices: Market Participants

Buying interest in Re-bars is quite stable but manufacturers dont see any major downfall further in prices.

Market participants views are positive for finish market as Iron ore and Ingot/Billet prices improved in this week.

Yesterday, Ingot prices in Mandi Gobindgarh went down by INR 100-200/MT in morning trade followed by other cities who also cut offers by INR 100-200/MT for Ingot as well as Re-bars. But, as few of the miners in Odisha hiked up offers for Iron ore by INR 200/MT; rates went up by INR 200-300/MT by the evening.

According to a Re-bar manufacturer in Rourkela, There is a labor shortage in Rourkela as labors have gone for harvest. Re-bar prices may improve only towards the end of next week as harvesting season should end. At present, 12 mm Re-bar offers in Rourkela are in the range of INR 30,900-31,400/MT.

A Re-bar trader based in Jaipur, Rajasthan said, According to the Ingot price fluctuation, we reduced Re-bar prices yesterday. Today, Ingot prices moved up by INR 300/MT but since the demand is not strong enough, that we can improve our offers. We are offering 12 mm Re-bar at the same level at INR 34,000/MT.

Note: Prices are Basic.

Indian 12mm TMT prices (in INR/MT) as on date 06-Dec-2013

Region Particular Price (Basic) Price#(All

Tax) Change W-O-W M-O-M

North

India

Ghaziabad 33,600 39,600 0 - 600 + 600

Mandi

Gobindgarh 36,100 42,600 0 - 400 + 700

Delhi/NCR 33,800 39,900 0 - 600 + 600

Muzaffarnagar 33,200 39,200 0 - 600 + 600

East India

Rourkela 30,900 36,500 0 - 500 + 400

Durgapur 31,500 37,200 + 200 - 700 + 500

Patna 35,200 41,500 0 NA NA

Giridih 32,600 38,500 0 NA NA

Central

India

Raipur* 31,300 36,200 + 200 - 400 + 400

Indore 36,300 42,800 0 - 400 NA

Raigarh 30,700 36,200 0 - 700 + 600

West

India

Jalna 34,600 40,800 0 - 200 + 800

Mumbai 34,800 41,100 + 200 0 + 1,650

Latur 35,100 41,400 0 NA NA

Ahmedabad 33,400 39,400 0 - 200 + 100

Goa 35,900 42,400 0 0 + 1,100

Jaipur 34,000 40,100 0 - 700 + 1,100

South

India

Chennai 34,000 40,100 0 0 + 400

Hyderabad 33,250 39,200 0 - 650 + 1,250

Bangalore 35,700 42,100 0 + 300 + 1,500

Daily Assessment Grade-415/500 Fe Excise Duty @ 12.36%; VAT as applicable. *Payment next day # Prices including all taxes


Sponge iron prices in Eastern region of India, which contributes almost 60 percent of total installed sponge iron capacity, have fallen down by INR 400-500/MT in a weeks time. However sponge prices in Western region firm up on limited supply of imported scrap

Indian sponge iron prices have shown some resistance after an increment last week. Prices are down by almost INR 400-500 per tonne in this week largely owing to weak demand in finished steel.Current offers are prevailing in the range of INR 18,200-20,200/MT (USD 290-320) on ex works basis.

Chhattisgarh is the largest sponge iron producing state in India with an installed capacity of over 11 million tonnes per annum. Prices have come down by INR 500 and currently being offered at around INR 20,200/MT on ex- works basis.

Sponge prices have come down marginally, however there is no reason for prices to correct. There is shortage of iron ore in the market. Matter of the fact is miners like Rungta, Essel and NMDC have raised their ore prices by INR 200/MT. Downside looks limited. said Mr G. Agarwal, senior executive, with one of the sponge iron unit based in Raipur, Chattisgarh.

On the other hand, sponge iron prices in Indias western region is firm due to consistent fall in imported scrap. At some places prices have also gone up by INR 200-300/MT. Induction furnaces in western region which are largely dependent on imports of scrap have been facing short fall due to weak Rupee and rising global prices.

Indian Sponge Iron Prices in INR/MT (Ex-Works) as on date 4th Dec 2013

Region Particular Grade Price (Basic) Change W-O-W

North India Mandi Gobindgarh 78-80 FeM 22,500 0 + 200

East India Rourkela 78-80 FeM 18,200 - 100 - 400 Durgapur* 78-80 FeM 19,100 - 200 - 500

Central India Raipur* 80 FeM 20,200 - 100 - 300 Raigarh* 79-80 FeM 19,300 - 300 - 600

South India Bellary 75 FeM 19,000 0 + 400


India: NMDC hikes Iron ore Prices the 2nd Time in Q3 FY14

NMDC, a state owned and Indias largest Iron ore miner, has raised Iron ore offers by INR 200/MT for Dec 2013. The miner has an installed capacity of 32 MnT pa and produces about 27-28 MnT.

The company revises Iron ore prices on a monthly basis. This is the 2nd time that NMDC has been able to lift offers in Q3 FY14. In October, offers had increased by INR 100/MT, after a years time.

On what grounds is NMDC charging high for Iron ore?

For December bookings, miners in Odisha increased offers amid low output and better buying volumes.

NMDCs Iron ore production (2.56 MnT) and sales (2.44 MnT) increased M-o-M in November 2013. In October, it produced 1.9 MnT and sold 2.26 MnT. In November, numbers were lower than expected because of unavailability of required number of rakes, issues with equipment, loading problems and impact of post monsoon, said sources.

Sponge iron market is looking up because of shortage of Scrap in domestic market and landed cost of imported Scrap is still high. INR is at 62 against USD, pushing up domestic prices of Sponge iron and Scrap.

What CGSIMA has to say?

Our cost of production has gone up by INR 500/MT because of NMDCs Iron ore price rise. Therefore, Sponge iron makers will prefer to place bookings as per requirement only, remarked President of Chhattisgarh Sponge Iron Manufacturers Association (CGSIMA).

Iron Pellet makers in Karnataka worry on expensive Ore

Buying volumes in lumps might come down further in NMDCs Iron ore e-auction in Karnataka because of price rise. Also, Pellet producers are likely to lift offers in the current month in line with high Iron ore prices, said a Pellet manufacturer located in Karnataka.

On the other hand, Steelmakers in Karnataka cheer as the state government has requested Supreme Court to increase capped Iron ore output (at 30 MnT now) to 40 MnT. Sources said that Supreme Courts hearing is expected to take place in the week ahead.


Indias Largest Re-bar Producers keep Prices Unchanged for Dec13

RINL, Indias first shore based integrated Steel plant located at Visakhapatnam in Andhra Pradesh produces approx 2.5 MnT Bars and Rods every year, has kept its Re-bar prices untouched for Dec13. On

the other hand a negligible increment of INR 200/MT is made in Wire Rod prices. Other primary steel producers like Tata and SAIL have also kept their Re-bar prices unaffected for Dec13

RINL is offering its Re-bar (8 mm) at below mentioned price:

At Vizag: INR 44,350/MT At Mumbai: INR 45,050/MT At Kolkata: INR 45,050/MT Note: All prices include ED.

Respective dealers are also kept Re-bar offers unchanged as buying interest for finish long went down from last few days.

According to the dealers Company roll over the Re-bar prices for Dec13. They had kept their Re-bar offers unchanged for Nov13. Despite of this, we had raised our offers for few sizes like 12mm, 10mm in month ending on account of low inventory and hike in secondary Re-bar prices. We dont have any kind of reasons this time so we are also keeping it same.


Primary Steel Producers are Likely to keep Finish Long Prices Unaffected

Primary steel producer had kept their finish long offers unchanged for November13 and it seems that they are likely to keep it same again for December13 as finish long market need some more improvements in demand.

On the other hand in secondary Re-bar market premium brands prices increased by INR 1,300-1,900/MT.

In Maharashtra Guardian TMT a Mumbai based brands prices increased by INR 1,900/MT from 1 Nov, to till date. 20mm TMT is offered at INR 35,300/MT exclude taxes.

Anant TMT manufacturer, based at Indore, MP has increased its prices by INR 1,300/MT in same period (from 1 Nov to till date). Presently its offer is at INR 36,100/MT for 20mm. (Basic Price)

High Raw material and Semi finish products prices are the reasons behind these increment in prices.

Primary TMT prices (in INR/MT) as on month Nov 2013

Region Particular Price (Basic) Price#(All Tax) M-O-M

North India Delhi/NCR 38,000 44,800 - 250

West India Mumbai 37,200 43,900 - 350

South India Chennai 38,800 45,800 - 250

Hyderabad 37,800 44,600 - 350

Monthly Assessment Size 12MM Grade- 500 Fe Excise Duty @ 12.36% ;VAT as applicable. # Prices including all taxes


Steel minister update on SAIL VISL

The Minister of Steel, Mr Beni Prasad Verma has said that at Visvesvaraya Iron and Steel Plant, Bhadravati, Steel Authority of India Limited is continually investing for overall growth & improving profitability of the Plant.

SAIL has already implemented a 350x350 mm single strand bloom caster with 1,25,000 T annual capacity at an investment of around INR 80 crore. Further, one 30T Pusher type Reheating Furnace for Primary Mill costing about INR 10 crore has also been implemented.

In a written reply in the Lok Sabha Mr Verma said that SAIL has invited Expression of Interest from interested parties willing to enter into a JV with Steel Authority of India Limited for manufacture of steel and related products at VISP, Bhadravati. Karnataka, India. SAIL, intends to induct a Strategic Alliance Partner to form a JV Company which shall carry on the business relating to VISP. VISP has been incurring losses for the last few years. In view of the above, feasibility of revival of VISP by induction of a JV partner is being explored for which EoI has been issued.

The Minister said that Letters/Representations have been received from some MPs, MLAs and the unions of employees of VISP, after issuance of the EOI. The concerns raised have been taken note of by the management.

Mr Verma said that the total finished saleable stock of VISP materials as on November 1st 2013 is 31,517 tonne of which 30,639 tonne is lying at the Plant and balance 878 tonne at the Warehouses. Due to the high production cost at VISP owing to the lack of linkages of iron ore and coal as well as inefficient technology, the overall sales performance of VISP materials has

declined during the first 6 months of this financial year. Poor demand from units consuming alloy steels materials has aggravated the situation for this industry as a whole, wherein overall capacity utilization has been at the level of 55 to 60%.


(www.steelguru.com)

Research and Development in Indian Steel Sector - Mr Beni Prasad

The Minister of Steel Mr Beni Prasad Verma has said that major steel companies like Steel Authority of India Limited and Rashtriya Ispat Nigam Limited in the public sector and Tata Steel Limited, JSW Steel Limited, Essar Steel Limited and Jindal Steel & Power Limited in the private sector are engaged in Research and Development work in the iron and steel sector in the country.

In a written reply in the Lok Sabha today Mr Verma said that there have been substantial achievements from the R&D programmes pursued by the companies during the past which inter-alia covers:-

1. Raw Materials upgradation, 2. Improvement in Process/ Technology, Products and Productivity, 3. Development of New products & improvement in Quality, and 4.Improvement in Energy consumption & Environment Management.

The Minister said that according to information available from RINL, total budget allocation earmarked for R&D in the 12th Five Year Plan is INR 335 crore. No such budget allocation has been earmarked for the 12th Five Year Plan by other companies. The total budget allocated and expenditure incurred on R&D activities during the first 2 years of the 12th Five Year Plan period by the 2 public sector steel companies are given hereunder:

Company 2012-13 2013-14

Budget Expenditure Budget Expenditure

SAIL 145 156 69.00* 86.00*

RINL 30 31.13 50 30.52**

(In INR crore)

Mr Verma said that a new scheme Promotion of R&D in Iron & Steel Sector was introduced by the Government in the 11th Five Year Plan which has been continued in the 12th Five Year Plan. Government has allocated INR 200 crore on R&D during the 12th Five Year Plan Period. A New Component is being added in the aforesaid scheme for development of technology for Cold Rolled Grain Oriented electrical steel sheets and other value added innovative steel products


(www.steelguru.com)

30% export duty on iron ore pellets needed - ASSOCHAM Apex industry body ASSOCHAM has urged the centre to impose 30% export duty on iron ore pellets, fines and lumps with immediate effect to discourage circumvention of export duty and increase iron ore availability for domestic steel industry.

The Associated Chambers of Commerce and Industry of India in a communication addressed to the union finance minister, Mr P Chidambaram said that The iron ore production in India has plummeted significantly by 14% to 70 million tones in the first half (H1) of 2013-14 from the level of 82 million tones in the corresponding period last year, said

ASSOCHAM said that The rampant exports of iron ore from India have made it a rare commodity for the

domestic iron and steel industry as exports of iron ore surged by a whopping 129% to 5.33 million tones in the second quarter of the ongoing financial year 2013-14 from 2.33 million tones in the first quarter. Ironically, while the domestic iron and steel industry is facing severe shortage of iron ore and is operating at very low capacity utilization, at the same time the exports of iron ore are registering a triple digit growth on sequential quarter basis.

It added that The growth in exports of iron ore is being achieved due to massive difference in exports duty of pellets and iron ore as there is 30% duty on iron ore lump and fines whereas pellet exports do not attract any duty.

ASSOCHAM said that Iron ore producers in India are taking an advantage of zero export duty on pellets and circumventing exports of iron ore through pellets, more so as there is hardly any value addition in conversion of iron ore fines to pellets.

While the crude steel production in India has grown by three per cent in H1 of 2013-14 as against the same period of 2012-13, there has been a continuous growth in demand for steel in India and to fulfill the same there has been significant upsurge in imports of steel and its related commodity like scrap, direct reduced iron (DRI) and pellets.

ASSOCHAM said that Almost USD 3.5 billion of precious foreign exchange have already been spent on imports of commodities like steel, scrap, sponge iron and iron ore pellets in the H1 of current financial year.

ASSOCHAM has thus appealed to the government to take an immediate action to restrict export of iron ore pellets from the country which is bleeding Indias economy by contributing to rising current account deficit.

Even Indian Railways considers pellet export as indirect way of exporting iron ore as it considers export of iron ore and pellets in same category and impose railway freight even in case of export of pellets, highlighted ASSOCHAM.

Source Strategic Research Institute (www.steelguru.com)

KIOCL slams Assocham demand on imposing duty on pellet exports

Economic Times reported that state owned pellet manufacturer KIOCL slammed industry body Assocham for proposing imposition of export duty on the value added product of iron ore, terming the claim that it would improve availability as baseless and incorrect.

Mr Malay Chatterjee CMD of KIOCL said that "As the largest state owned pellet manufacturer in the country, we strongly oppose any move to impose export duty on pellets. The claim made by Assocham that export duty would improve availability of pellets within the country is baseless and incorrect."

Mr Chatterjee said countering Assocham claims said that "Very little pellet export has taken place subsequent to levy of Distance Based Charge by railways on iron ore transported through railway network meant for manufacture and export of pellets. This levy has rendered pellets produced in India totally unviable in the international market."

Last week, Assocham wrote to Finance Minister Mr P Chidambarm alleging that domestic iron ore producers were taking advantage of zero export duty on the key steel making raw material and circumventing exports through pellets as there was hardly any value addition in conversion of iron ore fines to pellets.

While both fines and lumps varieties of iron ore currently attract 30% export duty, there is nil duty on pellet exports.

India had exported 2.1 lakh tonne of pellets during 2011-12 and did not make any exports during 2012-13. In fact, India imported pellets as the price of imported pellets were more attractive. India imported 8 lakh tonne of pellets during 2011-12 and 14.7 lakh tonne during 2012-13.

Source Economic Times (www.steelguru.com)

India steel output in November at 14 month low

Business Standard reported that Indias steel production fell to 14 month low in November at 6.25 million tonne due to subdued demand from sectors such as white goods and automobiles.

It is the lowest monthly production since September last year, when it was 6.299 million tonne. As per the World Steel Association the previous low was in October at 6.461 million tonne.

Steel production started declining since August when the country produced 6.578 million tonne compared to 6.668 million tonne in the previous month. It further fell to 6.540 million tonne in September.

India had produced 6.766 million tonne steel in January, 6.414 million tonne in February and 6.836 million tonne in March, so far the best month in terms of production during the current year. In April, Indias steel production was at 6.512 million tonne, 6.785 million tonne in May, 6.528 in June and 6.668 million tonne in July.

The cumulative production during the 11 month period of the year stood at 72.338 million tonne a growth of 1.9% over the corresponding period last year.

Source Business Standard - (www.steelguru.com)

Business Standard reported that the rising prices of iron ore, the key raw material to make steel, is adding to the misery of steel industry, which is already facing acute shortage of iron ore in Karnataka. The steel industry margins have come under pressure owing to the high cost of iron ore.

The landed cost of iron ore purchased at Karnataka e auctions have gone up an average 54% to INR 5,700 per tonne for 61 to 62% Fe grade compared to INR 3,700 per tonne a year ago. Similarly, the prices of 63% Fe grade iron ore are currently sold at a base price of INR 3,800 to 4,000 per tonne. In addition to base price, the buyers will have to pay 22% taxes in the form of royalty and forest development tax and transportation cost to their steel mills.

Mr Seshagiri Rao joint MD of JSW Steel said that Compared to Karnataka, the prices of similar grade iron ore is available at INR 1,800 to 2,000 per tonne in Odisha, where there is no forest development tax and the royalty is paid by miners. Earlier, miners in Karnataka paid the royalty and FDT too. But, now it is transferred to steel mills, which is adding to our cost of operation.

The NMDC is charging INR 2,610 to 2,800 per tonne for their 62.5 to 63% Fe grade iron ore in Chhattisgarh.

He said that The miners are charging around 40% premium on the base price for their ore sold in the e-auctions. As it is we are facing severe shortage of iron ore in Karnataka and over that the miners are charging hefty premium for their ore. Unless the market forces come into operation, it is very difficult to procure iron ore in Karnataka.

Mr R K Goyal MD of Kalyani Steel said that they are forced to operate at little over 50% of the capacity due to shortage of iron ore. He said that The situation of steel companies is terribly bad in Karnataka as they are faced with multiple problems like lack of iron ore and high prices at e-auctions. The landed cost of iron ore purchased at e-auctions works out at INR 5,700 per tonne as against INR 4000 a year ago. We are operating at lower capacity to manage the situation. - Source Business Standard

India: 4 Major Reasons for recent Price rally in secondary Steel

Secondary steel makers see a price rally as demand witnessed across the value chain.

1) High Iron ore prices (in Odisha and Karnataka) resulted in Sponge prices increase: Odisha prices are up by INR 200-300/MT. NMDC Karnataka price up by INR 400/MT. These has inflated the cost of Steel production in the region for approximately INR 500/MT

2) Low availability of Scrap (Imported and Domestic): India imports are down by 30%. Imported Scrap offers remained high at USD 355-365/MT CNF Mumbai (INR 22,500/MT) whereas domestic prices stand at around INR 23,800/MT

3) Low production of MS Ingot/Billet: Production was at 40-50% level owing to low conversion especially in North and West India.

4) Pan India Re-bar buying improved.

Market Comment:

Raipur: Re-bar sales were excellent yesterday; on an average every Re-bar manufacturer sold about 400-600 MT, said well know trader based in the region. This translated to high MS Ingot and Billet prices which were increased by INR 300-500/MT.

Durgapur: High input cost and low inventory triggered the demand, said Rebar manufacturer based in Durgapur.

Maharashtra: Buying on an average is good and there is no scope for any correction, said Re-bar trader based in Mumbai

Gujarat: There is a shortage of melting Scrap owing to low arrival of ships for breaking and seasonal demand is the main reason for the price hike, commented a Broker based in Gujarat.

Source : www.steelmint.com

India: Sponge Iron in Bengal improve by 4%

Sponge Iron prices in Durgapur (West Bengal) improved by almost INR 800/MT in a Weeks time

Domestic prices for Sponge is showing an uptrend, with prices rising by INR 100-200/MT daily. In Durgapur higher offers from Pellet manufacturers forced Sponge pellet manufacturers to increase their offers by INR 800/MT on a W-o-W basis. Present offer for Sponge pellet is at INR 19,000/MT and for sponge iron is INR 20,000/MT. Whereas, basic price for MS Scrap (Heavy Melting) in Durgapur remained stable at INR 24,200/MT.

In South India as well, high Iron ore bids by JSW has increased the domestic prices by INR 400-500/MT. Sponge Pellet offer at around INR 18,500-18,800/MT.

Raipur (Central India): In contrary to East and South Market, prices in Raipur are under pressure owing to oversupply as compare to limited MS Ingot/Billet production. Current offers for Sponge Iron at around INR 20,100-20,200/MT FeM 80 in advance payment. Similarly, Sponge Pellet offers at around INR 18,900-19,000/MT.

This sentiment may reverse any time. SteelMint learned that good conversion from Sponge Iron to MS Ingot (INR 8,500/MT) and improved availability of Sponge Iron in the region can trigger the Ingot/Billet production.

Source : www.steelmint.com

India: VAT on Iron, steel items reduced in Punjab

To provide some relief to secondary steel makers, Punjab government today announced to slash VAT rate from 4.95 per cent current to 2.5 per cent on iron and steel items.

Punjab Deputy Chief Minister Sukhbir Singh Badal gave nod in this regard after holding a meeting with the delegation of furnace, iron and steel rolling mills here today. The new proposed VAT regime on iron and steel industry is aimed to enable it to compete with neighboring states and increase in revenue, an official release said.

As per decisions taken, the rate of VAT on scrap (melting and rolling), ingots/billets/blooms or other semi finished goods and finished goods, inter-state sales would be reduced to 2.5 per cent from 4.95 per cent with surcharge of 10 per cent. To prevent a practice of bogus input tax credit claim, it was decided to restrict the claim to maximum two stages.

Introducing restructured VAT regime for this sector, the state government has also decided to calculate VAT on the basis of energy consumption by unit. After the implementation of new system, there should be a minimum commitment of production of 1 tonne of finished items with 250 units of consumption of electricity, whereas for furnace units, a minimum commitment of 1 tonne of ingot production with 750 units of electricity has been made, an official said.

This new system (of calculating VAT) will eliminate tax evasion and also lead to increase in production by encouraging flow of scrap and raw material into the state, release said. - Source : www.steelmint.com

Indian Secondary Steel Manufacturers switch to Sponge over Scrap

Shortage of Melting Scrap has forced induction furnaces based in Maharastra to use more of Sponge Iron and Pig Iron

Maharashtra furnaces, which majorly consume melting scrap for steel making, has switched to sponge iron over lower imports owing to lower imports.

Industry participants highlight that, over couple of months, it is noticed that Sponge Iron consumption has increased. SteelMint learned 60-70% of Sponge Iron and Sponge Pellet is melt along with the 30% mix of Cast Iron, Pig Iron and Scrap to make 1 MT MS Ingot. Earlier it was the other way round.

Some of the manufacturers in Wada (Mumbai) have mentioned that, they have increased their purchases of sponge iron from Raipur and Bellary. However due to lower freight cost, Bellary, is preferred over Raipur sponge iron. They also added current mix to make steel is 30% scrap and rest sponge and pig iron.

Earlier it was reported that, imports of scrap to India have been consistently down since Rupee has crossed over 60 per USD. India which imported around 7 million tonnes of melting ferrous scrap in 2012-2013 is expected to import 5 million tonnes in 2013-2014.

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