Falling prices of global iron ore have made imported lump offers attractive following which Gujarat based steel mills were heard to book two vessels. Apart from this, they are also seen sourcing iron ore from NMDC (Chhattisgarh), Karnataka e-auctions and domestic pellets from Jindal SAW.
A market participant in conversation with SteelMint shared “Rebar prices in western regions of India have moved up on the backdrop of increasing raw material costs. Rebar (20 mm) prices in Ahmedabad are presently seen around INR 30,000 – 30,500/MT (including all taxes). Though demand is not so strong currently but it is anticipated that the demand will gradually pick up in the coming months.”
Following are the current sources of iron ore/pellet for west Indian steel makers :
1. Domestic pellets – Jindal SAW pellet offers have moved down. Current offers for Fe 63% pellets are INR 5,450/MT (delivered Kandla). Prior to this, domestic pellet offers were at INR 5,600/MT (delivered Kandla).
2. Lumps from NMDC (Chhattisgarh) – SteelMint had earlier reported that Gujarat based steel makers participated in NMDC e-auction. Gallant Metal and Welspun Steel booked around 12 rakes (6 rakes of DR CLO and 6 rakes of Baila lump). The steel makers are seen making railway movement from NMDC’s siding to Vizag siding. And then moving it to Kandla port via coastal movement. Vessel named “Jag Rahul” carrying 47,250 MT iron ore of Gallant Metal and Welspun Steel was seen at berth on Vizag port on 19 Sept’16.
3. Imported South African lumps – Fall in global iron ore prices has made imported lump offers attractive to India. Prices of South African lump (Fe 64/63%) have fallen by USD 7/MT M-o-M to USD 69/MT, CFR China.
As per report of market participants, two iron ore import vessels booked by Gujarat based steel mills are expected to arrive shortly. 1st vessel carrying around 80,000 MT Assmang lump is expected to arrive at west India port on 30 Sept’16. Another vessel carrying Assmang lump of similar quantity 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.
4. Iron ore from Karnataka e-auctions – West India based steel maker – Electrotherm India participated in Karnataka iron ore e-auction held on 7 Sept’16 and procured single lot of 4,000 MT fines (Fe 64%) offered by a private miner at bid price of INR 1,900/MT (basic) against base price of INR 1,830/MT (basic).
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