West India (Gujarat) based steel mills have heard to have booked around 3-4,00,000 MT South African lumps owing to reduced domestic availability of pellets and iron ore. As per market sources, in Dec’17 and Jan’18 vessels containing Kumba lump are expected to arrive at west India ports. Also in Feb’18 a vessel of Assmang lump is expected to arrive at west India ports.
Why are Gujarat based sponge makers aggressively booking import vessels ?
1. Jindal SAW to go for maintenance shutdown – Jindal SAW which is a major supplier of pellets to Gujarat mills is undergoing maintenance shutdown towards Jan end/early Feb affecting supplies to Gujarat steel mills. The pellet maker is also in exports apart from domestic sales. According to customs data maintained with SteelMint, Jindal SAW exported 51,000 MT pellets from Mundra port on vessel name ‘Menalon’ in beginning of Nov’17. The cargo is likely to be shipped to China.
2. Reduced movement from NMDC, Chhattisgarh over K-K line disruption – The disruption of Kottavalasa-Kirandul line connecting Andhra Pradesh and Chhattisgarh, has resulted a decline in iron ore sourcing from NMDC leading to scarcity of raw material availability in Gujarat based steel mills. Henceforth the mills are looking forward to other alternatives to compensate for the availability. As per reports, K-K line will take around a month’s time more to resume operations
3. Falling lump premium – Softening seaborne lump market, rising port stocks and reduced lump usage in China’s blast furnace has resulted in decline in lump premiums. This has reduced iron ore lump import price. The iron ore lump premium has reduced to USD 0.18 per dmtu supporting increased imports to India. Towards the beginning of week, lump premium was assessed at USD 0.195 per dmtu.
Iron ore inventory at Chinese major ports have further increased this week by 2.04 MnT to 140.52 MnT.
4. Indian iron ore imports Nov’17 – vessel line up – So far in Nov’17, a vessel containing 60,500 MT South African lump has been reported and it is expected to arrive at Kandla port on 27 Nov’17. The vessel has been booked by Gujarat based steel mills.
Another import vessel from South Africa carrying 89,500 MT lump is expected to arrive at Mormugao port. The vessel is being imported by Shraddha Ispat.
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