Gujarat based steel makers are majorly sourcing iron ore from NMDC (Chhattisgarh),domestic pellets from Jindal SAW. Falling global prices has made imported lump offers attractive. However Essar Steel which is seen procuring iron ore fines from Odisha, NMDC (Chhattisgarh).
A Gujarat based steel maker shared that finish long prices have remained firm however demand is still not strong. A vessel of imported South African lump is expected in mid of May’17 and if global iron ore prices remain low, we might book a vessel for Jun’17 delivery.
1. Iron ore sourcing from NMDC (Chhattisgarh) remains intact – West India steel makers continue to procure iron ore from NMDC’s Bailadila mines in Chhattisgarh. Welspun Steel & Gallant Metal loaded a vessel of 30,000 MT iron ore from Vizag port. The vessel “Parvathy” arrived was seen at anchorage in Vizag port on 21 Apr’17.
2. Jindal SAW pellet offers reduced sharply- Bhilwara (Rajasthan) based pellet maker – Jindal SAW has reduced pellet offers by INR 1,100/MT M-o-M. Presently offers for Fe 63% grade pellets are at INR 5,400/MT (delivered Kandla).
3. Iron ore imports turn viable on falling global prices- Iron ore prices in China have fallen by about USD 15/MT M-o-M. Falling Chinese steel futures and declining steel prices have resulted in drop in iron ore prices making imports lucrative. Presently prices for South African lump (Fe 64/63%) are assessed at USD 73/MT, CFR China.
An import vessel carrying about 90,000 MT South African lump is expected to arrive at Kandla port on mid of May’17.
Apart from this, no procurement has been seen so far in this month from Karnataka e-auctions.
The steel maker 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 3,300/MT.
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