Declining prices of finished steel goods has resulted in production cut of many steel sponge iron units in western regions of India. Following which iron ore procurement has also witnessed a fall.
Towards the beginning of May’16, it was learnt that Gujarat based parties are looking out for iron ore sourcing options from Odisha merchant mines. However market participants shared that owing to some license issue with the traders the Odisha iron ore sourcing route could not materialize.
A Gujarat based steel maker also told SteelMint that many steel plants in Gujarat have reduced production on the back drop of declining prices of finished steel products. Rebar prices have fallen by around INR 1,400/MT in a month’s time and are currently seen at INR 24,500/MT in Ahmedabad, he added.
Currently western India steel plants are seen procuring domestic pellets of Jindal SAW or are going for imported lump.
Two iron ore import vessels to arrive in Kandla
As per trade sources, two iron ore import vessels are expected to arrive in Jun’16 at Kandla port.
As per sources, first vessel carrying nearly 90,000 MT South African lump is heard to be brought by JSW International. The material was heard to be booked by Gujarat based steel plants at USD 65/MT, CFR Kandla.
Another vessel carrying about 90,000 MT South African lump is expected to reach Kandla Port which was also booked at USD 65/MT, CFR Kandla. Market sources mentioned that the vessel was booked by a trading company.
Apart from this, the steel mills are also using the previously imported cargoes available with them.
Jindal SAW cuts pellet offers by INR 900/MT M-o-M
Bhilwara (Rajasthan) based pellet maker – Jindal SAW has cut pellet offers sharply over shrinking demand and comparatively lesser prices of imported ore. Current offers for Fe 63% pellets are assessed at INR 4,800/MT (delivered Kandla). Domestic pellet offers have dropped by INR 900/MT M-o-M.
Sourcing from Karnataka remains thin
In the month of May’16, Electrotherm procured a single lot of lump (Fe 65%) offered by Vyasankere mines at bid price of INR 2,175/MT (basic). Apart from this no sourcing by west India parties has been noticed so far.
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