Essar Steel: Iron Ore Sourcing Down 8% in June’19

Essar Steel – an integrated steelmaker with steel making capacity of 10 MnT p.a. recorded 8% fall in sourcing for the month of June’19. The sourcing stood at 1.22 MnT in June’19, as against 1.33 MnT in May’19.

Iron ore procurement from NMDC (C.G.) down 22% M-o-M

Essar Steel procured 0.65 MnT of iron ore in June’19 from NMDC’s Bailadila mines in Chhattisgarh via slurry pipeline, down 22% against May’19 procurement by the company at 0.83 MnT.

The procurement by the Steelmaker fell for the month amid price rise by the miner for June’19 deliveries. The miner had raised Baila lump and fines price by INR 250/MT (USD 3.6). However, NMDC has rolled over prices for the month of July’19.

Sourcing from Odisha merchant mines increased 22% in June’19

Essar Steel sourced 0.57 MnT iron ore in June’19 from Odisha’s merchant mines, up 22% against May’19 sourcing at 0.47 MnT.

Out of the total iron ore sourced from Odisha in June’19, largest share contributed by Serajuddin at 0.39 MnT (up 69% M-o-M). Sourcing from KJS Ahluwalia picked 10% to 0.15 MnT as compared to 0.14 MnT a month ago. Sourcing from Indrani Patnaik and MGM Minerals witnessed significant fall to 21,266 MT and 9,580 MT respectively.

Odisha merchant miners kept iron ore prices unchanged in June after receiving decent bookings at the beginning of Jun’19. On the other side, India’s domestic sponge and billet prices plunged amid weak market fundamentals.

Essar Steel imports marked nil in June’19

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

Qty in MT
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, the financial lenders (SBI and Axis banks) are mulling various options such as moving to Supreme Court seeking amendment in Insolvency and Bankruptcy code (IBC) due to orders put forwards by NCLAT. The appellate tribunal (NCLAT) said secured creditors would get only 60.7% of their Rs 49,473 crore claims and the rest would be paid to the operational creditors, treating them at par with operational creditors.

Earlier, 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.

Essar Steel eyes 7.43 MnT crude steel outputs

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.