Essar Steel – an integrated steelmaker with steel making capacity of 10 MnT p.a. recorded decline in iron ore & pellet sourcing for the month of June’18. The sourcing stood at 1.22 MnT in June’18, fall of 8% M-o-M as against 1.33 MnT in May’18.
The Y-o-Y iron ore & pellet sourcing recorded increase of 25% in June’18 as against 0.98 MnT in June’17.
On quarterly basis, the procurement in first quarter FY’19 witnessed at 3.48 MnT, in line with Q4 FY’18. However, on yearly basis the procurement for Q1 FY’19 stood up by 14% as against Q1 FY’18 which stood at 3.06 MnT.
Iron ore procurement from NMDC (C.G.) fell 22% M-o-M
Essar Steel procured 0.66 MnT of iron ore in June’18 from NMDC’s Bailadila mines in Chhattisgarh via slurry pipeline, stood 22% down as against 0.85 MnT in May’18. On yearly basis, the company depicted 19% increase in June’18 sourcing as compared to 0.55 MnT in June’17.
Sourcing from Odisha merchant mines increased 16% in June’18
Essar Steel sourced 0.45 MnT iron ore in June’18 from Odisha’s merchant mines, increase of 16% M-o-M compared to 0.39 MnT in May’18. Out of the total iron ore sourced from Odisha in June’18, largest share was contributed by KJS Ahluwalia at 0.20 MnT (down 8% M-o-M).
Essar Steel’s sourcing from Serajuddin depicted significant rise by around eight folds on monthly basis at 0.17 MnT against 0.02 MnT a month before. Odisha based merchant miners were seen offering discounts of INR 300-400/MT on bulk purchases attracting the steel mills.
Essar Steel imports remain stable on monthly basis
Essar Steel witnessed imports at 0.11 MnT from Brazil in June’18 with complete quantity being iron ore, as against 0.09 MnT of pellet imports from Bahrain in May’18.
Essar Steel’s iron ore & pellet Sourcing
| Seller | June’18 | May’18 | M-o-M (%) | June’17 | Y-o-Y (%) |
| NMDC | 660,000 | 851,000 | -22% | 553,000 | 19% |
| KJS Ahluwalia | 197,027 | 214,211 | -8% | 245,849 | -20% |
| Serajuddin | 168,059 | 21,880 | 668% | 39,009 | 331% |
| Import | 110,000 | 90,000 | 22% | – | 100% |
| Indrani Patnaik | 80,386 | 133,160 | -40% | 71,402 | 13% |
| Rungta Mines | 4,589 | 20,994 | -78% | – | 100% |
| Kaypee Enterprises | 4,155 | 2,128 | 95% | 42,626 | -90% |
| Others | – | – | – | 26,633 | -100% |
| Total | 1,224,216 | 1,333,374 | -8% | 978,519 | 25% |
Qty in MT
Provisional data
Source: SteelMint Research, Customs, Odisha govt.
Essar Steel NCLT case update
Debt laden Essar Steel is currently undergoing insolvency resolution process.
In the first round of bidding, Arcelor Mittal and Japan’s Nippon Steel had jointly bid to acquire Essar Steel.
The bids submitted by Numetal and Arcelor Mittal in first round in Feb’18 were rejected by the CoC (Committee of Creditors) and RP citing eligibility on technical grounds.
In the second round of bidding process held on 2nd Apr’18, Arcelor Mittal along with Nippon of Japan, Anil Agarwal’s Vedanta and Numetal along with JSW Steel had put in their bids.
On 22 May’18, the tribunal heard submissions from Numetal and ArcelorMittal, who are the two prominent bidders for Essar Steel. While Arcelor Mittal sticked to its stance that the company’s bid in first round of bidding should be considered and Numetal pleaded for opening of second round of bidding.
Later, Numetal and Arcelor Mittal filed cross petitions challenging each other’s eligibility to bid for Essar Steel. However, the decision is still pending and the next hearing is scheduled on 16th July.
Leave a Reply