The Supreme Court’s verdict on coal blocks de-allocation case has come as a setback for companies including Sponge iron, which is highly dependent on coal as a fuel. Indian Sponge iron manufacturers are worried because this will lead to rise in e-auction prices and imports. There’s still lack of clarity on how these blocks will be auctioned. Major highlights of the verdict are as follows:
- The Supreme Court de-allocated 214 coal blocks out of 218, which were termed illegal
- The Supreme Court directs to re-auction these blocks in a transparent manner
- Total coal production estimated from Iron & Steel sector is expected to be 13 MnT in FY15
- JSPL will be affected majorly
- The Supreme Court gives 6-month time to wind up operations
- Lack of clarity on how these blocks will be auctioned
- Market expects e-auction prices to go high; leading to more imports
- South African RB-2 prices assessed at USD 74-76/MT CIF India
- Port congestion may get worse with increasing imports
- Sponge manufacturers blame delay in getting rakes for transport of imported coal
List of Coal Blocks operated by Iron & Steel Companies
|
S. No. |
Company Name |
Block Name |
Production Start Month |
Production Capacity |
Pvt Block |
End Use Project |
Production FY14 |
Production FY15 (E) |
|
1 |
Jindal Steel |
Gare Palma IV/1 |
Feb-99 |
6.0 |
1 |
Iron & Steel |
6.0 |
6.0 |
|
2 |
Monnet Ispat |
Gare Palma IV/5 |
Jun-04 |
1.1 |
1 |
Iron & Steel |
0.9 |
1.0 |
|
3 |
Jayswal Neco |
Gare Palma IV/4 |
Sep-06 |
0.5 |
1 |
Iron & Steel |
0.4 |
1.0 |
|
4 |
Prakash Industries |
Chotia |
Jul-06 |
1.0 |
1 |
Iron & Steel |
1.0 |
1.0 |
|
5 |
Sunflag Iron |
Belgaon |
Dec-07 |
0.3 |
1 |
Iron & Steel |
0.1 |
0.2 |
|
6 |
Usha Martin |
Kathautia |
Dec-08 |
0.8 |
1 |
Iron & Steel |
0.8 |
0.8 |
|
7 |
Electro Steels Castings |
Parbatpur |
Dec-08 |
1.2 |
1 |
Iron & Steel |
0.5 |
0.6 |
|
8 |
Raipur Alloys (Sarda Energy) |
Gare Palma IV/7 |
Mar-09 |
1.2 |
1 |
Iron & Steel |
1.2 |
1.2 |
|
9 |
B S Ispat |
Marki Mangli-I |
Mar-11 |
0.3 |
1 |
Iron & Steel |
0.1 |
0.1 |
|
10 |
Shree Virangana Steel |
Marki Mangli-II |
Dec-11 |
0.2 |
1 |
Iron & Steel |
0.3 |
0.4 |
|
11 |
Shree Virangana Steel |
Marki Mangli-Ill |
May-13 |
0.3 |
1 |
Iron & Steel |
0.3 |
0.4 |
|
12 |
Sova Ispat & Jai Balaji Industries |
Ardhagram |
Nov-12 |
0.4 |
1 |
Iron & Steel |
0.3 |
0.3 |
|
|
Total |
|
13.3 |
12 |
11.9 |
13.0 |
Indian Sponge Iron Prices Stable
Indian Sponge iron prices are more or less stable, prices fluctuating in the range of INR 200-300/MT from last few trades. Trade sources mentioned that low demand and irregular supply of Iron ore & coal are supporting C-DRI & P-DRI prices at current levels of INR 20,200-22,200/MT and INR 18,900-19,700/MT ex-works respectively.
In central & eastern India (Raipur, Raigarh & Durgapur), rise in production of P-DRI against C-DRI has increased price gap between P-DRI & C-DRI. Sponge pellet is cheaper than Sponge iron by INR 2,000-2,200/MT. However, earlier 2 months back, it was at around 1,500-1,700/MT.
Current Offers for C-DRI & P-DRI
|
City |
Remarks |
C-DRI (78-80 FeM) |
P-DRI |
|
Raipur |
Around 3,000-4,000 MT Pellet sponge sold to Mandi at INR 19,700/MT (as per loaded to wagon) |
21,700 |
19,700 |
|
Rourkela |
Prices likely to come down. Sources said that re-opening of few big Sponge units will increase the availability of Sponge in the local market |
20,200 |
19,000 |
|
Durgapur |
Shyam SEL offering C-DRI at 21,400/MT and P-DRI at INR 19,400/MT |
21,350 |
19,350 |
|
Bellary |
Limited sellers of C-DRI (lumps) owing to low availability of Iron ore |
20,700 |
19,000 |
Ex-works prices; all taxes applicable
Payment next day/advance
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