Essar Steel: Iron Ore & Pellet Sourcing Up 13% in May’19

Essar Steel – an integrated steelmaker with steel making capacity of 10 MnT p.a. recorded 13% rise in sourcing for the month of May’19. The sourcing stood at 1.33 MnT in May’19, as against 1.18 MnT in Apr’19.

Iron ore procurement from NMDC (C.G.) down 11% M-o-M

Essar Steel procured 0.83 MnT of iron ore in May’19 from NMDC’s Bailadila mines in Chhattisgarh via slurry pipeline, up 11% against Apr’19 procurement by the company at 0.75 MnT.

The miner had rolled over prices for May’19 deliveries. Prices of Baila lump ore stood at INR 2,850/WMT and Baila iron ore fines are at INR 2,610/WMT. FoR prices mentioned are excluding Royalty, DMF, NMET and other taxes. Prior to this the miner had cut iron ore fines and lump prices by INR 150/MT for April.

Sourcing from Odisha merchant mines increased 21% in May’19

Essar Steel sourced 0.47 MnT iron ore in May’19 from Odisha’s merchant mines, up 21% against Apr’19 sourcing at 0.39 MnT.

Out of the total iron ore sourced from Odisha in May’19, largest share contributed by Serajuddin at 0.23 MnT (up 34% M-o-M). Sourcing from KJS Ahluwalia picked 37% to 0.14 MnT as compared to 0.10 MnT in Apr’19.

Major Odisha miners had increased prices in the month of May’19 on the back of rising global prices.

Essar Steel imports marked nil in May’19

Essar Steel’s iron ore and pellet imports recorded nil for the fifth consecutive month in May’19. The imports were last seen in Dec’18 at 0.15 MnT.

Essar Steel Iron ore Sourcing

Qty in MnT
Provisional data
Source: SteelMint Research, Customs, Odisha govt.

Essar Steel’s long-standing bankruptcy case

In the latest update on Essar Steel’s insolvency case, Arcelor Mittal conveyed to NCLAT that it would pay INR 42,000 crore including a minimum INR 2,500 crore as working capital for acquiring debt laden Essar Steel. However, the case remains pending until any decision unveiled by National Company Law Appellate Tribunal (NCLAT).

Earlier, Standard Chartered bank and Essar’s operational creditors challenged ArcelorMittal’s resolution plan for Essar Steel in the Supreme Court. After the Ahmedabad bench of NCLT (National Company Law Tribunal) approved the Arcelor Mittal’s bid on 8 March 2019 to takeover Essar Steel, the company’s three ex-directors challenged NCLT’s order stating that their INR 54,389 crore was superior to Arcelor Mittal’s bid as it clears 100% outstanding of both financial and operational creditors.

Essar Steel eyes 7.43 MnT crude steel output

Essar Steel is planning to increase its steel output and has set target of producing 7.43 MnT of crude steel and 7.2 MnT of finished steel by end of FY’20.