With onset of festive seasons, finished steel manufacturers are likely to raise their offers in Sept’16. Sponge iron prices have also gained momentum. Will prevailing positive sentiments in semi-finished and finished steel market lead to hike in domestic iron ore prices?
SteelMint in talk with some market participants received mixed responses. Odisha iron ore prices are expected to remain firm as sources shared that dispatches are still not at par with the increasing production. Iron ore production as well as dispatches through rakes remained impacted because of monsoons.
However ,market sources in central and southern India looked optimistic over increasing sponge prices.
Key highlights to govern iron ore prices for Sept’16:
1. JSW Steel sourced 48 rakes in Aug’16 – JSW Steel procured 48 rakes of iron ore from NMDC (C.G.) in Aug’16*. It had sourced 65 rakes last month. Thus its procurement is down by 26% M-o-M.
2. RINL’s iron ore sourcing from NMDC (C.G.) falls further in Aug’16 – Vizag Steel sourced 84 rakes of iron ore from NMDC, Chhattisgarh mines in Aug’16* compared to 102 rakes in Jul’16.
3. West coast based steel makers sourcing iron ore from NMDC (C.G.) – Gallant Metal – a Gujarat based steel maker has participated in the recently conducted iron ore e-auction for NMDC’s Chhattisgarh region and is likely to procure 12 rakes of iron ore. West coast based steel makers kept themselves away from booking any new shipment over costly imported offers.
4. KIOCL resumed purchases from NMDC (C.G.) – KIOCL has also resumed purchases of iron ore fines from NMDC (Chhattisgarh) for its upcoming pellet export shipment. In Aug’16*, it has procured nine rakes from NMDC (C.G.).
5. Sponge iron prices rally and hit 5-month high – Domestic sponge iron prices have moved up sharply in Aug’16 and touched 5-month high. Lesser production owing to monsoons, increasing prices of coal and increase in freight have led to rise in prices. Price movements of C-DRI across major markets were as follows: Durgapur – INR 12,950/MT (+ INR 650/MT M-o-M), Raipur – INR 12,950/MT (+ INR 550/MT M-o-M) and Bellary – INR 12,650/MT (+ INR 750/MT M-o-M).
6. Global iron ore prices up by USD 4/MT M-o-M – Monthly average iron ore fines (Fe 62%) index moved up from USD 57/MT, CFR China in Jul’16 to USD 61/MT, CFR China in Aug’16. Amid increase in steel prices in China, iron ore prices have also moved up. Towards the mid-Aug’16, prices touched USD 62/MT, CFR China and later towards the end of the month it fell to USD 59/MT, CFR China over thin trade activities.
Note-* indicates data updated till 30 Aug’16
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