Essar Steel – an integrated steelmaker with steel making capacity of 10 MnT p.a. recorded fall in total iron ore & pellet sourcing for the month of Dec’18. The sourcing stood at 1.19 MnT in Dec’18, down by 4% monthly basis as against 1.24 MnT in Nov’18.
On yearly basis, iron ore & pellet sourcing increased 23% as against Dec’17 sourcing at 0.96 MnT.
Essar Steel imports increased sharply on monthly basis
Essar Steel’s iron ore and pellet imports witnessed at 0.15 MnT in Dec’18, up 82% on monthly basis as against 0.08 MnT in Nov’18.
Out of the total imports of Essar Steel in Dec’18, 0.08 MnT stood iron ore from Brazil and remaining 0.07 MnT stood pellet from Bahrain
Iron ore procurement from NMDC (C.G.) down 17% on monthly basis
Essar Steel procured 0.62 MnT of iron ore in Dec’18 from NMDC’s Bailadila mines in Chhattisgarh via slurry pipeline, down 17% against procurement in Nov’18 at 0.75 MnT.
However, NMDC had slashed iron ore price between INR 450-785/MT for Dec’18 via two successive price cuts announced.
On yearly basis, the steelmaker depicted 6% fall in Dec’18 sourcing as compared to 0.66 MnT in Dec’17.
Sourcing from Odisha merchant mines stable M-o-M
Essar Steel sourced 0.42 MnT iron ore in Dec’18 from Odisha’s merchant mines, almost in line with Nov’18 sourcing.
Domestic Iron ore prices have dropped upto 34% in last 2 months on supply pressure. Fines prices have come down by 34% while lump prices have come down by 25%.
Out of the total iron ore sourced from Odisha in Dec’18, largest share was contributed by Serajuddin at 0.23 MnT (up 31% M-o-M) followed by Indrani Patnaik at 0.09 MnT (up 20% on monthly basis) and KJS Ahluwalia at 0.08 MnT (down 34% M-o-M).
Essar Steel’s iron ore & pellet Sourcing
| Movement | Dec’18 | Nov’18 | M-o-M (%) | Dec’17 | Y-o-Y (%) |
| NMDC | 619,000 | 750,000 | -17% | 661,000 | -6% |
| Serajuddin | 226,909 | 172,864 | 31% | 10,630 | 2035% |
| Indrani Patnaik | 91,002 | 75,832 | 20% | 145,743 | -38% |
| KJS Ahluwalia | 83,675 | 126,266 | -34% | 137,184 | -39% |
| RP Sao | 14,996 | 29,927 | -50% | – | 100% |
| OMC | 5,000 | – | 100% | – | 100% |
| Rungta Mines | 1,577 | 1,720 | -8% | – | 100% |
| MGM Minerals | 50 | 3,880 | -99% | – | 100% |
| MG Mohanty | – | 999 | -100% | – | – |
| Mid East Integrated Steel | – | – | – | 10,060 | -100% |
| Import | 145,586 | 80,000 | 82% | – | 100% |
| Grand Total | 1,187,795 | 1,241,488 | -4% | 964,618 | 23% |
Qty in MT
Provisional data
Source: SteelMint Research, Customs, Odisha govt.
Essar Steel’s long-standing bankruptcy case
In Oct’18 Arcelor Mittal (AM) was selected as the preferred bidder for the insolvent asset ahead of its key competitor Numetal and other contender Vedanta Group. According to the latest update, Essar Steel creditors moved to NCLT against Arcelor takeover of Essar Steel. The shareholders of Essar Steel submitted a proposal for settlement of entire claims of Essar Steel India Ltd, however, the lenders banks and Arcelor Mittal opposed to the settlement proposal by shareholders stating it’s against the Supreme Court order as well as the provisions of the Insolvency and Bankruptcy Code (IBC).
In recent hearing, Essar steel’s leading lender in the Committee of Creditors (CoC), SBI (State Bank of India) has decided to recover its loan of INR 15,431 crore to the company by putting on sale the entire loan amount on its auction website. It has put an advertisement inviting expression of interest (EoI) from banks/asset reconstruction companies (ARCs), non-banking finance companies and financial institutions.
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