Gujarat based steel makers are majorly sourcing iron ore from NMDC (Chhattisgarh), imports and domestic pellets from Jindal SAW.
Except Essar Steel which procures iron ore fines from Odisha, NMDC Chhattisgarh and through imports.
West India based steel makers in talk with SteelMint shared that rebar prices in Ahmedabad have fallen nearly INR 1,000/MT M-o-M and are presently at INR 25,000/MT (ex-Ahmedabad for 12 mm rebar). Weak demand has pulled down finished steel prices. However participants are anticipating better demand post festive season. For west India parties following are the sources of iron ore/pellets –
1. Jindal SAW pellet offers move up – After witnessing stability across major part of the month, Jindal SAW has raised pellet offers by INR 150/MT M-o-M. Presently pellet offers for Fe 63% pellets is at INR 5,600/MT (delivered Kandla). Amid increase in Chinese iron ore prices (up by USD 3-4/MT in last two weeks) post national week holidays, west India pellet offers have also increased.
2. Lumps from NMDC (Chhattisgarh) – Gallant Metal moved three rakes of iron ore from NMDC (Chhattisgarh) mines to Vizag siding in Oct’16 (till 23 Oct’16). Thereafter the steel maker will carry the material to Kandla port via coastal vessel movement.
3. Single iron ore import vessel arrived in Oct – SteelMint had reported last month that two iron ore import vessels booked by Gujarat based steel mills. 1st vessel was expected to arrive towards end of Sept’16 or early Oct’16 Another vessel carrying Assmang lump is expected to arrive in Nov’16. As per market sources report to SteelMint, the vessel was booked at USD 75-76/MT, CFR India.
According to customs data maintained with SteelMint, vessel named “Bottiglieri Sophie Green” carrying 91,000 MT South African lump arrived at berth on Kandla port at 07 Oct’16. The vessel has been jointly imported by SAL Steel, Varrsana Ispat and Electrotherm India.
Presently South African lump (Fe 65%) offers are hovering at USD 73-74/MT, CFR India but no fresh import vessels were heard to be booked by west India parties.
4. Souring from Karnataka e-auctions – West India based steel maker – Electrotherm India participated in Karnataka iron ore e-auction held on 14 Oct’16 and procured single lot of 4,000 MT lump (Fe 65%) offered by a private miner at bid price of INR 2,540/MT (basic) against base price of INR 2,530/MT (basic). It is to be noted that iron ore base prices in Karnataka e-auctions have noticed an increase of INR 200-400/MT M-o-M.
A market participant also highlighted that they are also procuring iron ore fines (Fe 62-63%) in smaller quantities from Madhya Pradesh for their sinter plant. The landed cost to their plant is roughly around INR 3,200/MT.
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