West Indian Steel Makers Prefer Domestic Pellets over Imported Ore

Thin demand and declining prices of finished steel has kept buying interest low in western regions of India. Increasing iron ore prices in global market continues to keep Gujarat based steel makers away from importing iron ore.

A Gujarat based steel maker shared “finished steel prices have dropped by more than about INR 1,000/MT in a month’s time. Currently offer for rebar (12 mm) are at INR 24,000/MT (ex-works) in Ahmedabad which was seen at INR 25,500/MT a month back. Buying interest is dull. Steel mills here are using domestically available material rather than going for imported ore”.

Domestic pellet offers up by INR 350/MT in a month’s time

Maintaining a competitive edge over rising imported offers, Jindal SAW has raised its pellet offers by INR 350/MT M-o-M.

Since beginning of this month, the pellet maker has twice revised its prices. Presently the offers for Fe 63% pellets are at INR 5,150/MT (delivered Kandla).

Increase in global iron ore prices (up by USD 7-10/MT, M-o-M) keeps imported offers costlier. Currently prices of South African lump (Fe 64/63) are assessed at USD 67/MT, CFR China.

Jindal SAW to import two iron ore vessels- Sources

As per sources, two import vessels of Jindal SAW are expected in Jul & Aug’16. One vessel carrying Assmang fines (Fe 64%) is expected to arrive in Jul’16. While the other vessel carrying Assmang lump (Fe 65%) is expected to arrive in Aug’16. Both the vessels were heard to be booked on monthly index basis. However major part of the material would be captive usage at its blast furnace.

In the month of Jun’16, no iron ore vessel was imported by Gujarat based steel plants.

Sourcing from Karnataka remains intact

So far in this month, Electrotherm procured a single lot of lump (Fe 65%) of 4,000 MT offered by Vyasankere mines. Bids remained flat at INR 2,125/MT (basic).

In the month of Jun’16, the steel maker had procured two lots of 4,000 MT each. One comprising of fines (Fe 64%) at bid price of INR 1,975/MT (basic) and other of lump (Fe 65%) at bid price of INR 2,225/MT (basic).