Sharp increase in global iron ore prices have turned import lump offers dearer. Presently prices for South African lump (Fe 64/63%) are seen at USD 86/MT, CFR China. Imported lump prices have moved up by USD 15/MT M-o-M amid sharp hike in iron ore prices in China.
Gujarat based steel makers have shown resistance in booking any further import shipments and are eyeing for previously booked vessel to arrive or are going domestic material – lump from NMDC (C.G.) ore domestic pellets of Jindal SAW.
“Rebar prices in Ahmedabad continue to remain stable (at INR 24,700/MT for 12 mm rebar) amid dull demand over currency demonetization. Most of the steel plants have curtailed production amid limited inquiries from buyer’s end, shared a Gujarat based steel maker”.
1. Jindal SAW pellet offers up by INR 950/MT M-o-M – Following sharp increase in global iron ore prices, imported lump offers turned further costlier. Bhilwara (Rajasthan) based pellet maker – Jindal SAW further raised domestic pellet offers by INR 300/MT W-o-W. Presently offers for Fe 63% pellets are assessed at INR 6,400/MT (delivered Kandla).
As per market participants report, Jindal SAW is looking up for iron ore fines sourcing options from Odisha merchant mines as it will be cost effective compared to imported one. Fe 62% fines index yesterday touched USD 72.7/MT, CFR China.
2. Two previously booked iron ore import vessels to arrive this month – According to market sources, two iron ore import vessels are likely to arrive in west coast of India by end of this month. 1st vessel carrying nearly 90,000 MT iron ore lump which was booked by Gujarat based steel makers – Electrotherm India, Mono Steel and Varrsana Ispat is expected to arrive at Kandla port by 24 Nov’16. However no fresh vessels have been booked recently amid increased prices in global market.
The 2nd vessel which was heard to be booked three months back in Aug’16 by Goa Sponge Power is expected to arrive this month. As per sources report, the vessel carrying nearly 90,000 MT iron ore is expected to reach Panaji/Mormugao port by 20-23 Nov’16.
3. Lump from NMDC (Chhattisgarh) – Gujarat based steel makers – Gallant Metal and Welspun Steel continue to procure iron ore lump from NMDC (Chhattisgarh). In Nov’16, both the steel makers combiningly moved a vessel named “Defiant” of 48,000 MT from Vizag port to Kandla port.
A market participant also highlighted that they are also procuring iron ore fines (Fe 63%) in smaller quantities from Madhya Pradesh for their sinter plant. The landed cost to their plant is roughly around INR 3,200/MT.
Iron ore sourcing of west-India based steel makers from Karnataka e-auctions has remained nil so far in this month (till e-auctions held on 14 Nov’16).
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