Steel output in Oct. 2011 was lowest YTD and Nov. 2011
witnessed sharp decline in prices of ferrous metals, caused by
uncertainty in resolution of the sovereign debt crisis in Europe, said PINC Research. Following is the performance
review of various sectors during the period of Oct-Nov 2011:
Global Steel: The world capacity utilization at 76.5% was also the
lowest YTD with a decline of 2.2% MoM. Global and Chinese crude steel output
declined to a 10 month low in Oct 11. Global steel output of 124kt though up 6%
YoY was the lowest YTD. This was mainly led by a 4% MoM decline in China's
crude steel output of 54kt.
HRC: World HRC prices continued their downtrend and
declined by 5% MoM in Nov. While HRC prices in China and Europe fell
by 6-7% MoM and those in the US remained flat and in India it increased by 1%
MoM as Rs depreciated 7% MoM in Nov against USD. INR registered an
all-time intra-trade low of 52.73 against USD on 22nd Nov 2011.
Iron ore fines: Spot Iron ore prices in China had hit a
16-month low of USD 130/t in the first week of Nov but they recovered more than
9% by end of the month.
Iron Ore Supply in India:
Supply of raw material especially
Iron ore, still remained a big issue in India with uncertainties hovering over
key supplying states.
Karnataka: The Supreme Court also postponed its hearing on appeal
against its partial ban of iron ore mining in Karnataka till 20th Jan 12. The
Supreme Court-appointed committee gave clearance to 2 mines out of the 42 under
survey, in Chitradurga and Tumkur, for resumption of operations and is expected
to decide on a third in a few weeks. Further, the Karnataka government has
agreed to increase the time limit for transporting the iron ore purchased at e-auctions from
the present 12 hours to 16 hours.
Regular iron ore e-auctions continued
in Karnataka with auctioning of 6.61mnt of iron ore in 7 rounds in the month
of November, However, concerns on high reserve price remain evident as in one
of the auctions NMDC was unable to sell the entire quantity put on
auction due to high reserve price.
Odisha: Government has served show cause notices to 57 mines on
charge of violating norms under Mines and Mineral Development Regulation (MMDR)
Act. The 57 mines include Orissa Mining Corporation (OMC), Orissa Mineral
Development Corporation (OMDC), Tata Steel, SAIL amongst others.
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