Mill Scale offers step down in India’s eastern region, where about 40% of country’s total generation takes place. Other regions that contribute to the balance, saw no alteration in prices. While, exports remain non-profitable.
Raipur based rolling mill owners have corrected offers to INR 3,100-3,200/MT (ex-plant); last booking was done at INR 3,500/MT. One of the largest buyers has closed down its plant on maintenance reasons, thus off-take slows down in East.
SteelMint mentioned last week that offers have been lowered to INR 3,200/MT (delivered) at Kandla but buyers are looking to purchase Mill Scale at INR 2,800/MT. In the start of this week, traders sold the material at INR 2,800-2,900/MT. Prices in Vizag and Chennai remain unaltered at INR 2,800/MT (delivered). In last 3 months, Mill Scale prices have weakened by INR 1,150/MT in Kandla and by INR 1,200/MT and INR 1,400/MT in Chennai & Vizag respectively (prices are delivered).
Stock accumulates at Rolling Mills
On production cut by Pellet manufacturers and Blast furnace operators, the material has been accumulated at various rolling mills. In addition, exporters aren’t purchasing the material presently. Thus, prices continue to remain under pressure.
Traders foresee further fall in domestic Mill Scale prices. They mentioned, “If domestic consumers continue to hold buying on anticipations of further price fall, plants may have to clear stockpile for export purpose, though at losses, which happened in the month of September”.
India’s Mill Scale production is about 1.5 MnT pa. Out of this, domestic requirement stands at nearly 35%. Thus, the balance has to be exported. Though, domestic usage of Mill Scale has increased as Iron ore is quite expensive and hardly available, limitation in utilization of only 10% Mill Scale with fines in Pellet plants i.e. maximum to their kiln size, restricts domestic consumption.
Region Wise Mill Scale Generation in India
Source: SteelMint Research
Plants operational capacity assumed@80%
India’s Mill Scale Export slips by 42% in Apr-Nov’14
According to SteelMint statistics, India has exported 0.3 MnT Mill Scale in Apr-Nov’14 on an average price of USD /MT FoB in contrast to 0.8 MnT on an average price of USD 111.8/MT FoB in the same period last fiscal year. China has imported 0.29 MnT and Kandla port has exported 0.2 MnT in Apr-Nov’14 .
Mill Scale export prices, which are directly impacted by China’s spot Iron ore fines (Fe 62%) prices, are around USD 72-73/MT CFR China; FoB India prices are in the range of USD 56-58/MT considering today’s sea freight. Therefore, exports remain non-profitable and outlook remains negative.
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