This page was last modified on Thursday, February 09, 2012 07:12:04 PM
Iron Ore and Steel: 2-9-12
· After last evening’s fall in the ex-Indian prices, today could be the turn for the Indian cargoes to glide down slightly.
· Buyers have already reduced and the ones currently showing interest are very cautious about the high ore prices and unstable steel market.
· The WCI miner’s tender is likely to close today and is being quoted at $87-89 per ton CFR but not many bidders were visible in the market.
· Scattered rains and wet weather conditions likely to delay the Australian and Brazil supplies reaching China. No major disruptions in view this year as compared to 2011 so the prices are unlikely to be impacted heavily.
· Another dent to the Chinese export sector comes in the form of very harsh winters in Europe. The demand for steel in Europe has come to an immediate standstill with winter season not allowing any construction or infra projects to move ahead. The winters are likely to continue to early March, after which some respite could be seen.
· The seasonal impact has also lead to China cutting down its steel export order offer prices and scrap prices. The scrap prices have also been burdened by the oversupply in the US domestic market which is now allowing the exporters to look for buyers outside.
· Seeing the possible movement in the steel demand and the tight liquidity at the beginning of 2012, the total crude steel production for this year can be estimated to hit a high of maximum 725 million tons. The pollution controlling norms, few construction project, cut in the railway expansion plan, discount in demand for ship steel from Japan/Korea, liquidity tightness and European crisis; all together could drag this figure to 715 million tons by year end.
· Meanwhile in India, the Karnataka government on Wednesday filed an affidavit before the Supreme Court submitting that the ceiling of 30 million metric tons imposed in three districts of the state as total production of iron ore should be lifted.
· Orissa government is seeking a e-auction channel for selling iron ore to make things more transparent but the entire lobby is against the move being asked by the govt. The state exported only 83,588 tons of iron ore in January, against 467,724 tons shipped in the previous month. India altogether exported 4.761 million tons of iron ore to China in Dec’11.
· The short supply of lumps in the Indian eastern sector pushed up the lumps, DRI and pellets prices in the sector earlier this year which are now likely to tank soon as the demand for DRI is slowly reducing, coal prices have again been paused and pellet production is picking up. Market experts are expecting a correction in the prices in the coming months.
Main News from China::
· Southwest China's Chongqing Steel and the Republic of Korea's POSCO will launch an iron-making project in June in Chongqing municipality at a cost of 15 billion yuan ($2.4 billion).
· News from China has indicated that Beijing will roll out multiple measures to lower the city’s readings of PM2.5, which stands for fine particulate matter in the air, by nearly 30 percent by 2020, according to an air pollution abatement plan made by the municipal government. Monitoring results show that PM2.5 particles in Beijing’s air are mainly caused by coal burning, automobile exhaust and dust generated at construction sites.
The air quality improvement measures to be implemented this year in Beijing include the following items:
-- By the end of the year, the city will complete a network of 35 PM2.5 monitoring stations and establish a satellite remote sensing system to oversee the overall air condition.
-- By 2020, 1.6 million old automobiles designed with outdated emission standards will be weeded out.
-- By 2020, the government is expected to limit the city’s annual total consumption of coal within 10 million tons, 62 percent less than the amount estimated to be consumed by the end of 2015.
-- From now on, heavy-polluting and energy-consuming companies in oil refining, petrochemical, cement, iron and steel industries will not be allowed to open new plants or expand their current workplaces. By 2015, 1,200 factories producing asphalt, glass and ceramic will retreat from the city. By 2020, all cement plants run for profit in Beijing will be closed.
-- By 2020, the city will increase its forest area by 2 million mu (133,000 hectares) and increase water surface by 2,000 hectares, in an effort to improve the city’s environmental carrying capacity.
· Chinese companies soon to move a step ahead in making close contacts with their Canadian counterparts. Chinese enterprises have been invited to make forays into or add investment in the categories of coal, iron ore and potash manure by the visiting Canadian Prime Minister Stephen Harper.
Coal:
· European thermal coal prices edged down again, despite of prevailing cold weather in the region. The trade in the region is oversupplied as there has been a surge in the availability of US and Colombian cargoes; and also, stockpiles at ARA (Amsterdam-Rotterdam-Antwerp) are running high. A March delivery DES ARA cargo of US thermal coal was reportedly traded at $98 per ton.
· In Atlantic region, the physical delivery cargoes were reportedly being offered at the discount of $4-$5 per ton on the prevailing index prices as depicted by the bids and offers. According to one of the reports, a February delivery DES ARA parcel of mostly US origin thermal coal was bid around $92 per ton down around $5 per ton, on Wednesday. Meanwhile, Russian origin thermal coal DES ARA cargo for March delivery was bid just above $98 per ton and offered around $99 per ton, down 75 cents on the offer.
· Moreover, the South African thermal coal prices have also weakened reflecting a loosening in the tight supply seen throughout January. A March loading South African thermal coal cargo was bid just below $105 per ton, down by 25 cents (FOB Richards Bay).
· Meanwhile, the Chinese spot buying has yet not picked up despite of the Lunar New Year holidays being over, and are likely to remain sluggish for another two or three weeks. Some Chinese inquiries were observed for the Australian thermal coal. Reportedly, there was a Chinese inquiry for a Capesize Newcastle thermal coal cargo (5,500 kcal/kg NAR) on CFR China term; the buyer was reported to be offering around $105 per ton.
· Meanwhile, Indonesian thermal coal prices have depicted marginal drop as the offer prices in the region lost some cents. The inquiries have gone little silent for which the sellers have responded by lowering the offer prices which were heard to be in the range of $77 - $78 per ton (5,000 kcal/kg GAR and TM 25%) FOB MV South Kalimantan for Anchorage loading. Also, few of the higher grades offers were reported (5,800 kcal/kg GAR and TM 16%) to be around $97-$98 per ton FOB MV East Kalimantan.
Indian Steel Trade: 2-9-12
· In India, the initial session of trade saw the steel prices moving sideways marginally as both the semi-finished and finished steel products depicted some movement in the spot prices at the major trading hubs. Meanwhile, the construction steel products like rebar remained steady in the morning’s trade.
· MS Ingots gained about Rs. 100 – Rs. 200 per ton at the various trading hubs depicting a following trend; Ghaziabad (+200), Mandi Gobindgarh (+100) and Raipur (+100), however, at Alang the spot prices fell by Rs. 300 per ton. Meanwhile, LC Ingot prices gained some pace at Raigarh (+100) remaining steady at Hyderabad, Mandi Gobindgarh and Raipur as the trade began.
· However, Indian Billet prices recorded some downward movement at Raipur (-200) and Rourkela (-400), but remained stable at Kandla and Mandi Gobindgarh.
· Meanwhile, the finished steel products like Channels, Girders and WRC prices recorded a decline of around Rs. 100 per ton at Mandi Gobindgarh and Raipur. CRC and HRC remained steady at the trading hubs like Delhi, Ghaziabad, Kolkata, Ludhiana, Mandi Gobindgarh, Mumbai and Raipur during the initial session of trade. Also, the Rebar (TMT) prices remained stable at Chennai, Delhi, Ghaziabad, Indore, Jalna, Mumbai and Raipur; however, the rebar prices fell by around Rs. 200 per ton Durgapur and Mandi Gobindgarh.
· The Pig Iron prices in India depicted slight movement at Bhilai (+300), Ludhiana (+100) and Mandi Gobindgarh (+100); remaining steady at the other trading hubs like Durgapur, Keonjhar, Raigarh and Raipur. Similarly, the Cast Iron prices gained about Rs. 100 per ton at Mandi Gobindgarh. However, the Sponge Iron prices depicted a following movement at Durgapur (-300), Mandi Gobindgarh (+100), Raigarh (-100) and Rourkela (-400); remaining steady at other major trading hubs like Kandla, Kolkata and Raipur.
· Moreover, Indian Domestic Scrap price fell by Rs. 500 per ton a Chennai for melting scrap. In Mandi Gobindgarh, the spot prices of both melting scrap and old scrap shed Rs. 100 per ton again. Similarly, at Alang the ship breaking scrap prices followed the queue as the spot prices declined by another Rs. 100 per ton during the morning session of trade. However, the old scrap and melting scrap prices at Raipur and Mumbai, and shredded scrap prices at Kandla remained stable as the trade for the day commenced.
Paper Markets:
· LME Billets fell further on Wednesday, following the global queue as most of the commodity based future contracts recorded a negative movements. In the near term contracts, both current cash buyer and cash buyer/seller fell by -1.03 percent, as the contracts settled for $477 and $478 respectively. Meanwhile, 3 months contracts settled at $515 ( a gain of 0.98 percent) for buyers contract and at $517 (a gain of 1.37 percent).
· Similarly, SGX iron ore 62% Fe swaps fell as depicted in the contract prices for the month of February (-1.13), March (-0.88), April (-0.44), May (-0.53) and June (-0.87); and Q2-2012 fell by (-0.6) settling around $138.53.
· However, SHFE rebar contracts gained some pace May’s contract settled at 4308 Yuan (up by 0.13 percent) with traded volumes depicting a hike of about 2.99 percent and 648606 lots were reportedly traded. However, in October’s contract the traded volumes fell by more than 25 percent, despite of the contract settling 0.16 percent higher at 4316 Yuan.
· In India, NCDEX steel long contract for the month of February opened at Rs. 31,770, March at Rs. 32,230, April at Rs. 32,360 and May’s contract at Rs. 32,800.
Equity Markets:
· Thursday saw the stock markets closing flat in another thinly traded session on Wednesday as Greece remained in a standstill over accepting tough reforms in exchange for a bailout critical to avoiding a chaotic default. The Dow Jones industrial average was up 5.75 points (0.04 percent) at 12,883.95, Standard & Poor's 500 Index was up 2.91 points (0.22 percent) at 1,349.96, Nasdaq Composite Index was up 11.78 points (0.41 percent) at 2,915.86.
· Meanwhile, European stock markets erased early gains to close lower, as investors were once again disappointed that an agreement on a second Greek rescue had yet to materialize. The Stoxx Europe 600 index lost 0.2 percent Wednesday to end at 263.01. Although the index has fallen for three consecutive days, the combined losses have been a modest 0.6 percent. Among other indices, UK FTSE 100 index shed 0.2 percent to 5875.93, and Germany's DAX 30 index eased 0.1 percent to 6748.76, with both the indices into their third consecutive loss.
· Moving onto the Asian stocks Australian share market paredlower, after China's CPI hit 4.5 per cent, the highest inflation rate in three months. S&P/ASX 200 index had slipped 0.18 percent to 4,282.9 points and the All Ordinaries Index fell by 0.15 percent to 4,357.1 points. MSCI's broadest index of Asia Pacific shares outside Japan was down 0.33 percent, while Japan's Nikkei was down 0.14 percent. · Again in China, the markets seemed flat on Thursday, with strength in property developers outweighing losses in financial and resources sectors after higher than expected January inflation tempered expectations of a cut in banks' reserve requirements. Hang Seng Index retaliated the intra-day lows, ending down 0.5 percent at midday after briefly testing its 250-day moving average at about 21,023.
· BSE SENSEX dropped 0.4 percent on Thursday on concerns about earnings outlook and investors took profits after the main index rallied 15 percent over the past five weeks. Foreign funds have invested $3.6 billion in local equities so far this year, as depicted in the data shared by SEBI. Also, NSE index was down 0.41 percent at 5,345.75. In the broader market, losers led gainers by about 1.6:1, on volume of around 205.8 million shares.
· Meanwhile Indian share of SAIL was marginally up by +1.50 points (1.43 percent), JSW Steel was up by +24.05 points (3.17 percent), Tata Steel was down by -1.35 points (-0.27 percent), NMDC was up by +4.25 points (2.27 percent) and SESA Goa was marginally up by +1.70 points (0.75 percent). some of its earlier losses to close slightly
India, China (Iron Ore & Steel) 2-9-12
· BHP tender closes $2 per ton down as compared to the last transaction. Newman fines (62.5%) concluded at $146 per ton CFR where as Mac Fines (61%) concluded at $142 per ton CFR.
· All steel prices fall in China today by RMB 10-20 per ton. Export prices for Chinese steel products for Feb’12 are already down by $10-15 per ton on FOB basis.
· The main reason for the fall being a good steel output in the last 10 ten days of January and a combined race of reduction in the ex-works price by majority mills.
· The flats were down by more than 25 yuan per ton in some regions.
· China produced an average of 1.673 million tons of crude steel in last ten days of January, up from 1.669 million tons during the second ten days of January.
· High steel output, low sales growth and tight liquidity will now cramp down the iron ore prices further.
· Although, offers are going up the buying prices will remain under good pressure and since the second half of the week is approaching, there is good possibility of a slight fall in the Indian prices as well.
· Dalian Port iron ore stocks have reached an all-time high of 4.8 million tons.
· Due to the sluggish downstream consumption in the iron ore market, buyers have delayed their collection rates from all major ports. Deposit periods in some of the ports have exceeded the 6 months time period as compared to the normal 3 months given by the ports. There is enough stock lying at the port and some ports are now on the verge of pausing the entries of the larger vessels if the deposits are not cleared first.
· Hebei Province introduces strictest ever environmental standards. The region producers a quarter of iron and steel and is likely to face the green hurdles soon.
· On Wednesday, Indian iron ore prices steadied after last week’s surge in spot prices, primarily attributed by limited buying. The buyers seemed cautious as they are worried that slowing steel demand in China might not be able to justify sustained gains in prices. Meanwhile, traders are reported to be taking position in the market keeping in mind short to medium term view.
· An Industry expert indicated that some Chinese steelmakers mostly smaller mills are likely to be incurring losses with current level of iron ore prices which are close to October 2011 levels, when the Chinese steel prices were 200 Yuan/ton higher.
· Keeping supply side in mind, there is a possibility of tightness in supply from Australia due to weather issues which likely to be balanced by the weaker prevailing fundamentals in China. Iron ore exports to China through Australian Port of Hedland have gone down by 15 percent in January (month-on-month) but due to the holiday season in the country the impact was not visible.
· OreTeam Price Index stayed unchanged at $137/ton FOB Vizag for 63.5/63% Fe fines and $112/ton for FOB Goa 58% Fe fines.
· Meanwhile, construction steel prices at Guangzhou for different grades of rebar fell by around 20-30 Yuan/ton as the trade for the day ended. Elsewhere, at Shanghai Rebar (12 mm) prices fell by $2/ton. Again, the long steel product prices in Beijing held steady.
· Indian Steel prices gained marginally during the day’s trade, as depicted in the both Ingot and Billet prices which went up by Rs. 100/ton in MGG and Raipur. Also, Cast Iron prices picked up Rs. 100/ton at Mandi as the day’s trade ended.
· Indian Rebar (8 mm) prices mostly remain unchanged; however, dropped Rs. 200/ton at Durgapur and Mandi since the morning. Moreover, Sponge Iron prices shed Rs. 200/ton at Durgapur and Rourkela. Similarly, Old Scrap and MS Scrap depicted a fall of Rs. 100/ton at MGG.
OreTeam Price Indices:
· OreTeam Price Index for Indian Iron ore (OTPX)
o 63.5/63% Fe fines - $137 per ton FOB Vizag
o 58% Fe fines - $112 per ton FOB Goa
o 54% Fe fines- $92 per ton FOB Goa
o 52% Fe fines- $84 per ton FOB Goa
o 50% Fe fines- $74 per ton FOB Goa
· OreTeam Freight Index for Superhandy & Panamax Freight on India- China Route(OTFX)
o Superhandy
§ ECI – China : $12 per wmt
§ WCI - China : $14 per wmt
§ Dual Port ECI – China: $12-13 per wmt
o Panamax
§ ECI – China : $11 per wmt
§ WCI - China : $13 per wmt
§ Dual Port ECI – China: $11-12 per wmt
Paper Markets:
· SHFE rebar contracts gained some pace May’s contract settled at 4308 Yuan (up by 0.13 percent) with traded volumes depicting a hike of about 2.99 percent and 648606 lots were reportedly traded. However, in October’s contract the traded volumes fell by more than 25 percent, despite of the contract settling 0.16 percent higher at 4316 Yuan.
· In Indian NCDEX, all the steel long contracts went up by the evening as the monthly contracts of Feb’12 was at 31750 (+190) , Mar’12 at 32240 (+60) and Apr’12 at 32600 (+50).
Equity Markets:
· Asian markets rose on growing optimism over a debt deal in Greece, attributed by the upbeat outlook from Toyota (Toyota Motor rose 5 percent after the auto maker raised its full-year earnings target), helped Japanese Nikkei 225 Index in gaining 1.1 percent (98.07 points) to end at 9015.59, its highest closing in more than three months. Hong Kong's Hang Seng Index climbed 1.5 percent settling at 21018.46, its highest close in six months; and South Korea's KOSPI rose 1.1 percent to 2003.73, its highest close in more than six months.
· On the improving market sentiments and supported by offshore buying, Chinese Shanghai Composite gained 2.4 percent to 2347.53. Meanwhile, Australia's S&P/ASX 200 index rose marginally by 0.4 percent to end at 4290.7 points.
· Energy stocks also gained ground after China's National Development and Reform Commission said gasoline and diesel prices will be raised by 300 Yuan ($47.64) a metric ton, effective from Wednesday. Also, PetroChina rose by 2.2 percent and China Petroleum & Chemical, or Sinopec depicted a hike of 1.8 percent.
· Korea's shipbuilding sector extended its recent strength. Daewoo Shipbuilding & Marine Engineering added 4.8 percent, while Hyundai Heavy Industries rose by 5.9 percent and Samsung Heavy Industries gained 5.6 percent, on Wednesday.
· Indian SENSEX ended the day at Monday’s level gaining 84.87 points (+0.48 percent) to close at 17,707.32 and NIFTY ended around 5,368.15 gaining 33 points (-0.62 percent).
| Today's High | Today's Low | Previous Day Close | Previous Day Open |
Sesagoa | 231.8 | 218.65 | 221.6 | 223.8 |
NMDC | 188.5 | 185 | 186.75 | 187 |
JSW | 764.9 | 740 | 742.55 | 744.5 |
SAIL | 108.1 | 104.25 | 105.95 | 107.1 |
Tata steel | 461.95 | 442.3 | 452.35 | 454.4 |
CIL | 335.2 | 326.1 | 325.35 | 326.1 |
Adani Power | 76.15 | 72.5 | 74.4 | 74.8 |
NTPC | 178.5 | 175.25 | 175.5 | 175.8 |
Reliance Power | 102.3 | 99.6 | 98.6 | 100.25 |
TATA power | 108.75 | 105.5 | 107.15 | 106.8 |
Gujarat NRE | 24.4 | 23.6 | 23.9 | 24 |
| | | | |
| | | | |
| Today's Price | % change | | |
Rio Tinto | 71.76 | 1.06 | | |
BHP Billiton | 37.75 | -0.4 | | |
Fortesue (ASX) | 5.43 | 3.23 | | |
China Shenhua Energy Comp (SHA) | 27.75 | 2.83 | | |
China Coal Energy Comp (SHA) | 9.82 | 3.7 | | |
Iron Ore News 2-8-12
· Iron ore market sees a slow down once again after the last weekend transactions supported some rise in the market.
· Indian lower grades remain in demand while the medium grades still out of the sight as the high prices keep the buyers at bay.
· Offers have gone up from India and elsewhere this week with a premium of nearly $1-2 per ton but buyers are not showing much interest mainly due to the uncertainty in the steel sector.
· China’s steel producers are really having a tough time. The evidence of this is the second round of increase in the steel sales prices which attracted no buyers in the market ultimately forcing the mills to shed their wire rod, rebar and HRC prices for mid-Feb. The new prices are down by nearly $10-15 per ton below the end-January prices now.
· Also, the next round of market check by the Chinese steel producers has been planned. Some of the Chinese mills have increased their HRC and rebar export prices for Mar’12 by nearly $20 per ton trying to see if they could find some buyers.
· The likely possibility of any rise in steel prices either in domestic or export circuit for Mar’12 looks very thin but Apr’12 onwards there could be a slight rise in the prices, if the global economic situation doesn’t develop any new dents.
· Scrap prices likely to shift gear again. US scrap exporters are looking for export market once again as their domestic demand comes to a slowdown. The prices in the domestic circuit have cut down by nearly $30 per ton since the beginning of this year and now there is more tendency of further softening in the coming days.
SAIL announced a revision in its ex-Plant Base Prices of Representative Steel Items, which are as following. Only TMT & Angle prices have been revised in Feb’12. Region wise prices will be published soon.
| | | | | Jan'12 | Feb'12 | Change % |
1 | TMT | Bar (8mm) | BSP | IS 1786 FE 415/TMT 415 | 38500 | 40000 | 3.90 |
2 | Angle | 65x65x6mm | BSP | IS 2026 E250A SK | 36500 | 37500 | 2.74 |
3 | Channel | 200x75mm | DSP | IS 2026 E250A SK | 37500 | 37500 | 0.00 |
4 | HSM | Plates (5-10 mm) | RSP/BSL | IS 2062 E250A SK/K | 39500 | 39500 | 0.00 |
5 | Chequered | Plates (4-10mm) | RSP | IS 3502 ( IS 2062 Base) | 40500 | 40500 | 0.00 |
6 | PM | Plates (abv 10-20 mm) | RSP/BSP | IS 2062 E250A SK/K | 41000 | 41000 | 0.00 |
7 | HR | Sheets (>2.5-3.15mm) | BSL | IS 1079 Gr. O | 39100 | 39100 | 0.00 |
8 | HR | Coil (2.5-3.15mm) | BSL | IS 10748/95 Gr.II K | 38500 | 38500 | 0.00 |
9 | CR | Coil (1-2 mm) | BSL | IS 513 Gr. O K | 44500 | 44500 | 0.00 |
10 | GC | Sheets (0.63mm) | BSL | IS 277 Cl.VIII | 47900 | 47900 | 0.00 |
· On the other hand, the sanctions being imposed on Iran by US may restrict some trade of iron ore between Iran and China in the coming month. The quantities imported from Iran are nearly 0.8-1.1 million tons per month. Sanctions are likely to complicate payment, which already often go through intermediaries in the Middle East. Only a select few Chinese banks are willing to process payments for Iranian shipments, and those must be filtered to be sure none of the counterparties appears on official sanction list.
· ArcelorMittal boosts ore production, seeks 10% rise in 2012 but holds projects in India considering the projects not inline with the GDP growth.
Coal
Sea-Borne Coal Trade
· In the Atlantic region, thermal coal spot prices have hit 16 month low on Tuesday, amidst thin trade. The oversupply of cargoes in Europe has canceled out any possibility of price stabilizing at December 2011 levels due to cold weather conditions. The DES ARA cargo for February delivery was reportedly sold for $97.50 per ton.
· The FOB Richards Bay prices also lost some pace as the bid offer spread shrunk by 50 cents. According to one of the trader, a March loading South African thermal coal FOB Richards Bay cargo was bid around $105 per ton mark.
· Meanwhile, the Indonesian coal prices remained somewhat steady with coal offers going in the range of $78 - $80 per ton (5,000 kcal/kg GAR and TM 25%). Some higher grades offers were also reported (5,800 kcal/kg GAR and TM 16%) around $98 per ton mark FOB MV East Kalimantan. Also, one of the seller was reportedly offering sub-bituminous variety (5,300 kcal/kg GAD and TM 42%) at $42 per ton FOB MV Sumatra.
· BHP Billiton, the world's biggest miner, reported a 7 percent fall in first-half profit as iron ore, copper and coal prices fell, and warned markets would remain volatile due to Europe's woes and stuttering global growth.
· On Tuesday, Anglo American, Rio Tinto and Xstrata revealed that heavy rainfall in Hunter Valley (New South Wales) over the past week has not caused large-scale disruption to their coal mining operations. However, some independent reports have suggested that the loss of production could be in the range of 1 million tons.
· Earlier this week, inquiries for Australian thermal coal cargoes of GCV 5,500 kcal/kg (FOB Newcastle) increased with which the offer levels gained about $2 per ton.
Paper Trade
· On Tuesday, the European paper trade depicted sideways movement. The CME OTC DES ARA swaps (linked to API 2 index)depicted a following trend in the monthly contracts of February (-0.65) and March (-0.15); however, next quarter seems positive as April (No Change), May (+0.45) and June (+0.45) ended higher.
· Meanwhile, the South African Over-the-Counter swap future contracts, CME’s OTC FOB Richards Bay swaps (linked to API 4 index) depicted small downfall in the February contract (-0.3), and March and April contracts remain unchanged.
· Again, CME’s OTC China CFR Coal Swap Futures contracts remained steady for the months of February and March. Although, CME’s Indonesian swap futures after few days of upward movement shed some pace with monthly contracts depicting a following trend for February (No Change), March (-0.1), April (-0.15), May (-0.1) and June (-0.1).
· SGX’s OTC CFR China swaps depicted marginal downward movements in the contracts for the months of March and corresponding months; however, SGX OTC FOB Indonesia sub-bituminous swaps depicted marginal sideways movements, with little change in traded volumes.
Financial Markets
· BSE’s Metal index opened at 11,910.77, was currently trading up at 11,914.79*.
· Moreover, BSE Power index opened at 2,137.01 and was trading around 2,153.06*.
BSE Metal BSE Power
· Moreover, at NSE CNX Metal opened at 3,182.90 and was currently down at 3,180.90* and CNX Energy opened at 8,136.60, currently trading up at 8,215.05*.
Steel
Indian Steel Trade:
· Spot price for steel products in India depicted some downfall for both the semi-finished and finished products as the trade for the day commenced. Construction steel products depicted a flat trend at all the major trading hubs during the initial session of trade.
· The finished steel products like CRC, Channels, HRC, Girders and WRC remained steady at the trading hubs like Delhi, Ghaziabad, Kolkata, Ludhiana, Mandi Gobindgarh, Mumbai and Raipur during the initial session of trade. Moreover, most of the Rebar (TMT) prices remained stable at Delhi, Ghaziabad, Indore and Mandi Gobindgarh; however, the rebar prices fell Rs. 200 -400 per ton at Chennai, Durgapur, Raipur and Mumbai in the morning’s trade.
· Moving on to the semi-finished products like Ingots and Billets, both MS and LC Ingot prices fell by Rs. 200 – Rs. 300 per ton at most of the trading hubs including Alang, Durgapur, Ghaziabad, Ludhiana and Mandi Gobindgarh. Moreover, billet depicted marginal movement in prices losing around Rs. 100 per ton at Mandi Gobindgarh during the first session of trade; remained steady at Alang, Raipur and Rourkela.
· Meanwhile, the Indian Pig Iron (Blast Furnace Iron) prices remained unchanged. Also, Cast Iron prices held steady at the major trading hubs including Mandi Gobindgarh and Raipur as the trade for the day began.
· Moreover, the Sponge Iron lost about Rs. 500 per ton at Bellary and Rs. 200 per ton at Raipur; remaining steady at other major trading hubs like Durgapur, Kandla, Mandi Gobindgarh and Raigarh.
· Indian Domestic Scrap price fell further at Mandi Gobindgarh, where both melting scrap and old scrap lost about Rs. 200 per ton over the previously traded values. Also, at Alang the ship breaking scrap prices shed Rs. 100 per ton during the morning session of trade. Moreover, shredded scrap prices at Kandla, old scrap and melting scrap prices at Raipur remained stable.
Paper Markets:
· SGX iron ore 62% Fe swaps depicted a downward trend following all the major stock markets in the Asian region. The contract prices fell for the month of February (-0.2), March (-1.37), April (-1.81), May (-2.17) and June (-2.08).
· At LME, Billets contract recorded a negative movement in the price of current cash buyer (-2.23 percent) and cash buyer/seller (-2.22 percent) as the contracts settled for $482 and $483 respectively. However, , 3 months contracts gained about 3.03 percent and 0.99 percent for the buyers ($510) and sellers ($510) contract, respectively.
· SHFE rebar contracts shed some pace; however the traded volumes are going up considerably by 94.62 percent for May’s contract and 42.62 October’s contract. The May and October 2012 contract was reportedly traded around 4302 Yuan (-0.76 percent) and 4309 Yuan (-0.80 percent).
· In India, NCDEX steel long contract for the month of February opened at Rs. 31,570 and for March at Rs. 32,120.
Equity Markets:
· On Tuesday, Wall Street ended slightly up despite of uncertainties around Greece. Dow Jones industrial average (DJI) was up 33.07 points (0.26 percent) at 12,878.20, Standard & Poor's 500 Index (SPX) was up 2.72 points (0.20 percent) at 1,347.05 and Nasdaq Composite Index (IXIC) was up 2.09 points (0.07 percent) at 2,904.08. Moreover, S&P has gained about 7 percent in 2012 on better-than-expected economic data.
· The European stocks pared earlier losses and the euro climbed against the dollar as Greek lawmakers looked close to concluding an agreement needed to qualify for a second bailout. Meanwhile, European Central Bank is widely expected to keep its interest rates on hold, till the bailout plan for Greece is revealed.
· Asian stock markets went up on Thursday, as Australian benchmark S&P/ASX 200 index lifted 0.38 percent to 4,290.7 points and the broader All Ordinaries Index gained 0.43 percent to 4,363.7 points. Japanese Nikkei 225 was trading around 9,004.07 up by 86.55 (0.97 percent). Hang Seng Index was up by more than 200 points (0.97 percent) trading at 20899.82
· Following the international queue, Indian stock markets opened higher. SENSEX was up by 126.94 points (+0.72 percent) and currently trading at 17,750.90 and NIFTY was currently trading at 5,379.60 up by about 42.60 points (0.80 percent). Also, BSE Midcap and Smallcap indices depicted a hike with Midcap Index going up by 73.45 points (1.21 percent) currently trading at 6,146.56; while Smallcap was trading at 6,841.66 up 89.68 points (1.33 percent).
· On BSE, SAIL was marginally up by +1.95 points (1.84 percent), JSW Steel was up by +18.85 points (2.54 percent), Tata Steel up by +6.45 points (1.43percent), NMDC was marginally up by 1.05 points (0.56 percent) and SESA Goa was up by 9.20 points (4.15 percent).
KIOCL likely to cancel pellets tender after attaining the following results. 2-7-12
H1-$152.50 per ton
H2-$151.95 per ton
H3-$151.86 per ton
H4-151.29 per ton
The tender is likely to be cancelled because its expectations were quite high. The tender results indicate the closeness in the market price as all the four bidder’s results are squeezed in a very small range.
Comparison to the other international pellet prices –
· Chile 65% Pellets - $177 per ton
· US 65% Pellets - $179 per ton
Iron Ore 2-7-12
Markets this morning:
· Last evening the iron ore spot index moved up by $1 per ton on the back of transactions concluded through the weekend but no actual movement was visible through the day.
· On the other hand, at closing yesterday, a new tender has come up for grabs into the market from a large west coast miner. The 50/50% Fe fines 80000 dmt cargo will be of good interest as the market is currently at a very crucial point today. The laycan is between 10-20 February 2012.
· There is another Brazil pellets tender coming up in the market today but it may be postponed till Thursday.
· Brazil's Vale is also likely to begin its iron ore distribution operations in the Philippines this weekend. The transshipping process to bring iron ore from Brazil to China will incur a higher cost for Vale as per the market experts but seeing the same it is quite possible that China may allow Vale to directly supply ore to China bypassing Philippines on the condition that it sells at a cheaper prices. It’s would be quite early to introduce this move by China as the demand is low and steel production is also not going strong.
· China produced 1.669 million tons of crude steel per day in the Jan. 11-20 period, down 1.3 percent compared with the previous 10 days. Keeping this in mind it wouldn’t be wrong to say that declining margins and weak demand could force mills to slash output over the next few month.
· Low demand and higher costs are expected to further erode profits in the Chinese steel sector in 2012, China industry ministry spokesman Zhu Hongren said on Tuesday. He said many big steel enterprises suffered losses in the second half of last year, and the situation was unlikely to improve in 2012.
· Coming to the CEC report submitted to the Supreme Court, there are many issues still evading the mining lobby and resolutions are very few. Some of the issues and resolutions highlighted in the report are as following –
§ 45 leases be allowed to resume mining operations but they have to follow certain conditions first. Details of the conditions not clear yet.
§ 49 leases have been recommended for cancellation because of excessive illegalities.
§ 72 leases have been prescribed for reclamation and rehabilitation based on the ecological impact assessment report prepared by the ICFRE
§ Mining likely be resumed only after restoration work is completed and all penalties are paid out by the miners where applicable.
§ Fair and transparent medium like auctions to be in place for fresh allotments/assignments of leases, if possible on market value.
§ A boundary dispute between Karnataka and Andhra Pradesh to be resolved to conclude finding in few leases currently falling into that area.
§ An annual production cap of 25 million tons (mt) for Bellary district and 5 mt for both Tumkur and Chitradurga districts has been recommended by ICFRE.
§ Also that mining be permitted in the ecologically sensitive Western Ghats using “superior underground mining technology” as 8 billion tons out of 10 billion tons of magnetite reserves in India fall within the hill territory in Karnataka. (ICFRE)
§ After the whole process is complete some of major miners and steel plants may have to purchase ore at higher prices and smaller miners completely exiting from mining business.
§ Some major steel makers may be able to buy the leases in auctions and have their own captive mines.
§ Sesagoa’s dream plans of expansion may be limited as the Chitradurga/Tumkur district has been fixed at 5 MTPA.
§ The Supreme Court, which has accepted all of the CEC's recommendations so far, is likely to hear the matter again on Friday.
Coal
Sea-Borne Coal Trade
· In Australia, there were reports of loss of about 1 million tons of coal due to rains in the coal producing region of Hunter Valley in the last which has pushed the offers from Newcastle up by as much as $2 per ton. The offers for standard Newcastle cargoes were heard to be in the range of $120 per ton. Moreover, thermal coal cargoes (5,500 kcal/kg GAR) were reportedly offered around $99 per ton mark (FOB Newcastle) to the Chinese traders.
· Australian Bureau of Metrology has indicated that there would be more rains this week in the coal producing provinces of Queensland and New South Wales. Reportedly, there is a sudden increase in the congestion at Newcastle port, as the number of vessels waiting to load have increased to 44.
· Meanwhile, in Europe the surge in availability of US and Colombian cargoes have given some relief to the increase in the spot prices due to freezing weather conditions across Europe. The stockpiles at ARA have gone considerably up. Coal prices gained about 50 cents on Monday, following power and oil. An immediate delivery DES ARA parcel of US thermal coal, was bid at $96.75 per ton and offered at $98 per ton, up by 75 cents. Moreover, reportedly a March delivery DES ARA cargo was bid around $96.50 per ton and offered just $100 per ton.
· Moreover, the Chinese spot buying is still sluggish despite of their Lunar New Year holidays are over, but demand elsewhere in Asia has been reasonably strong especially India. However, lower freight costs had made Richards Bay thermal coal a viable option for Chinese as they reportedly booked to capesize cargoes for March delivery (specification were not divulged). The weekly average of South African thermal coal prices fell by about $1.50 per ton over the last week settling around $106 per ton mark for the week ending on 3-February.
· Moreover, heavy rains in Indonesia during the last few weeks have now started showing some impact on the spot trade. Some of the sellers were reported delaying their shipments citing that the coal production have taken a hit. Although, the offers remained somewhat steady and were reported around $98 - $99 per ton (5,800 kcal/kg GAR and TM 16%) FOB MV East Kalimantan.
Paper Trade
· On Monday, CME’s OTC China CFR Coal Swap Futures remained steady. Moreover, CME’s Indonesian swap futures gained some pace with monthly contracts depicting a following trend for February (0.1), March (0.15) and April (0.05).
· However, the European paper trade depicted downward trend on Monday. The CME OTC DES ARA swaps (linked to API 2 index)depicted a downward movements in the monthly contracts for the months of February (-0.4), March (-0.95), April (-0.65), May (-1.15) and June (-1.15).
· The South African over the counter swap contracts depicted some sideways movements for the February and March contracts and for the next quarter. CME’s OTC FOB Richards Bay swaps (linked to API 4 index) depicted a fluctuating trend in the monthly contracts for March (-0.4), April (0.05) and Q2, 2012 (-0.40); remaining steady for the month of February.
· SGX’s OTC CFR China swaps depicted some sideways movement for the months of February (-0.08) and March (0.07); and remained unchanged for all the contracts for the corresponding months. Meanwhile, the SGX OTC FOB Indonesia sub-bituminous swaps depicted a following trend for the monthly contracts of February (0.14) and March (0.07).
Financial Markets
· In the morning’s trade at the Indian financial markets, BSE’s Metal index opened at 12,183.80, was currently trading down at 12,099.22*.
· Moreover, BSE Power index opened at 2,172.60 and was trading around 2,165.28*.
BSE Metal BSE Power
· Moreover, at NSE CNX Metal opened at 3,267.30 and was currently down at 3,229.35* and CNX Energy opened at 8,125.55, currently trading up at 8,143.85*.
Steel
Indian Steel Trade:
· Indian steel prices depicted some sideways movement in spot trade as both the semi-finished and finished steel prices fluctuated during the initial session of trade.
· MS Ingot prices lost pace at Alang (-100), Ludhiana (-100) and Mandi Gobindgarh (-1000); however, gained Rs. 100 – Rs. 300 per ton Durgapur, Ghaziabad and Raipur during the morning session of trade. The LC Ingot prices gained Rs. 100 per ton at Mandi Gobindgarh; but remain unchanged at Hyderabad and Raigarh. Moreover, billet prices mostly remained steady at Alang, Kandla, Mandi Gobindgarh, Raipur and Rourkela.
· Moreover, the finished steel products like CRC, HRC and WRC remained steady at Durgapur, Kolkata, Ludhiana and Mandi Gobindgarh during the initial session of trade. However, the special purpose steel products like channels and girders lost about Rs. 100 per ton in the morning’s trade. Moreover, the TMT prices remained stable at Delhi, Durgapur, Indore, Jalna, Mandi Gobindgarh and Mumbai. However, rebar prices gained Rs. 100 per ton at Chennai and Raipur as the trade for the day commenced.
· Meanwhile, the BFI (Blast Furnace Iron) prices in India remained steady across all the major trading hubs. The pig iron prices ranged from Rs. 30,400 per ton at Mandi Gobindgarh to Rs. 25,500 at Bhilai during the initial session of trade.
· The Cast Iron prices lost some momentum at Mandi Gobindgarh (-100) as the trade for the day began. Moreover, the Sponge Iron lost about Rs. 500 per ton at Raigarh; holding steady at other major trading hubs including Bellary, Durgapur, Kandla, Mandi Gobindgarh and Raipur.
· Indian Scrap price mostly depicted flat trend as the shredded scrap prices at Kandla, Old scrap and MS Scrap prices at Mandi Gobindgarh, Mumbai and Raipur. However, at Alang the ship breaking scrap was reportedly trading around Rs. 25,200 per ton (EXW).
Paper Markets:
· LME Billets saw no movement in the price of current buyers contract; however, a small change of about -0.20 percent was observed in the buyer/sellers contract. Meanwhile, 3 months contract lost about -2.94 percent and -2.88 percent for the buyers and sellers contract which settled around $495 and $505, respectively.
· SHFE rebar trade depicted a positive trend in the morning with traded volumes are going up by more than 24 percent. The May and October 2012 contract was reportedly traded around 4335 Yuan and 4334 Yuan. Moreover, October contract saw a volume change of about 88 percent.
· On Monday, SGX iron ore 62% Fe swaps moved up last evening depicting the gains in the monthly contracts for the current and next quarter. The following trend was observed in the contracts for the month of February (+0.91), March (+0.58), April (+0.58), May (+1.0) and June (+1.25).
· In India, NCDEX steel long contract for the month of February opened at Rs. 31,730 and for March at Rs. 32,350.
Equity Markets:
· Asian stock markets were mostly trading low on Tuesday, as Australian S&P/ASX 200 index depicted a fall of 21.8 points currently trading at 4274.2. Also, in Japan Nikkei 225 was down by 30.77 points (-0.35%) and was reportedly trading at 8,898.43.
· Similarly, Hang Seng Index was down trading at 20676.98 depicting a loss of -32.96 points (-0.16%).
· However, South Korean index was up as depicted on KRX 100 was trading up by 9.32 points (0.22%) and was currently trading at 4,208.96. Also, KOSPI was up by 5.73 points trading around 1,978.86.
· Meanwhile, the Indian stock markets opened with a rise on Tuesday. SENSEX was up by 44.77 points (+0.24%) currently trading at 17,750.06 and NIFTY was currently trading at 5,412.95 up by about a percent or 51.30 points. Also, BSE Midcap and Smallcap indices depicted marginal movements with Midcap Index going up by 2.33 points at 6,124.90; while Smallcap was trading at 6,798.05 up 16.12 points.
· On BSE, SAIL was marginally up by +1.35 points (0.75%,) JSW Steel down by -1.15 points (-0.15%), Tata Steel down by -0.95 points (-0.20%,); however, NMDC stocks remained flat.
At Closing: 2-6-12
· Ore Price Index inches up this evening as few transactions take lead in the market by $1 per ton.
· Number of transactions was very low in the market today although the rise in the prices was mainly due to the Indian lower grade and Brazil medium grade cargo concluded over the weekend.
· Offers are again up after the delayed rise in the prices. Freight is low and is the key to the offers going up today.
· Buyers are still not keen to step into the buying mode, they are mere spectators. The offers levels are likely to go up by $1 per ton again in the next few days and only the desperate buyers or optimistic traders willing to take positions may become the baits in the current trading scenario.
· Port stocks are running high which are likely to hold some high prices cargoes in the coming days as weakness in steel will prevent importers from taking huge volumes.
· Brazil pellets tender is likely to be introduced tomorrow and the price is likely to be keen interest for the market.
· The intensity is building up in the market now as more mills are running out of raw material and have to take a call on whether to purchase iron ore at the current levels to run the prevalent capacities or cut down production and wait for some cooling in prices. Steel prices are picking up very slowly which is the main concern for the steel makers.
· Construction steel prices were up by 10-20 yuan per ton this evening in parts of China.
Iron Ore Trade This Morning: 2-6-12
· Iron ore trade opens relatively better this morning. There is some rise visible in the offers and the inquiries have also started rising in China but the port stocks have now reached nearly 101.5 million tons.
· Freight is weakening now for the iron ore vessels. Both Superhandy and Panamax have witnessed a drop in the freight levels through the weekend. Current freight from ECI to China is $13 per ton (dmt basis).
· There is an expectation that some good volumes may pick up from India this week due to the weakening freight but again the heavy tonnage at the Chinese ports along with the uncertain steel demand will keep the buying sentiments in check.
· China’s pollution concerns are again mounting up and the steel sector is being aimed as the culprit. The cost of environmental and ecological damage to the country soared to almost 1.4 trillion yuan ($222 billion) in 2009, an increase of 9.2 percent on the previous year. China spent 3.8 percent of that year's GDP to clean up the environment.
· In India, the Supreme Court appointed, Central Empowered Committee, in its report submitted on Saturday, has recommended the cancellation of leases of 49 mines that have violated the terms of their licence. It is also believed to have recommended the auction of these leases which produce nearly 10 million tons per annum.
· The government stated it will finalise fresh royalty rates for major minerals like iron ore other than coal, lignite and sand by August this year, which will boost its revenues considerably.
· In Dec’11 the total export volume to China was 4.76 million tons from India with exports from Goa registering 2.62 million and Panjim 1.27 million tons. In Jan’12, Goan exports have moved up to 2.78 million tons where as eastern side the exports seem to have stayed flat according to the provisional figures received till date.
Trade Feels:
· Mills are inquiring now in good number and they have a need to buy now said a large trader from Shanghai but the liquidity is the major problem.
· Steel demand or product sales haven’t improved so far in 2012. It’s the same situation today as it was before the vacations in January. Moreover the disruption in supply through the initial months of the year has been less this year as compared to 2011 which has kept the prices under control. It may not be easy to witness any hike in iron ore or steel prices before April 2012.
· Indian exports are not favorable from the eastern sector due to the high logistics costs and export tax hike where as western side, the exporters have almost completed their yearly quotas. So only small tonnages are visible from both end.
· There could a $1-2 per ton increase in this week as the market looks slightly better and the number of buyers inquiring in the market has also gone up.
Paper Markets:
· SGX iron ore swaps were down on Friday evening. The Feb’12 contract was down -0.92% to $143.67 where as the highest loser for the evening was Sept’12 with -1.92% at $133.5. The sentiment is fluctuating at the exchange mainly due to the hike in the contract prices earlier through the week when the spot market was down and secondly the scenario in the steel sector. Any cut in the reserve rates or a slight hike in the steel prices will see the momentum back in the paper market.
· SHFE rebar contracts have moved up through the morning hitting high at nearly 1.2% premium but the closing hours have seen the premiums discounting and volumes moving up slightly. The closing is likely to witness a marginal increase today.
· SSEC is also in green this morning but the movement has been short term and marginal. The gains were limited to 5-6 yuan per ton with the most traded Mar’12 at 4299 yuan with an increase of 6 yuan.
· LME billets are looking good after the positive data from US but the steel sentiment is hitting back hard. Investors are not confident in the steel sector and there is a bearish sentiment building up for steel billets.
· At NCDEX, Saturday closing saw the steel long contracts contracting by nearly 1% for all contracts. The in-demand Mar’12 was at Rs32360 per ton with a fall of -1.04%. This morning the steel longs have moved up nicely by Rs360 per ton.
Trade This Morning: 2-3-12
· Weekend chillness is visible in the market. Inquiries move up where as buying stays low.
· Offers are inching up gradually for ex-Indian iron ore at the rate of $1 per ton instead of $2-3 per ton as visible for Indian cargoes.
· After yesterday’s rise in the ex-Indian iron ore prices at Chinese ports, today Indian sellers are more active seeking for better rates.
· On the other hand, the more optimistic section of the market participants are holding on to their cargoes for availing better rates at a later stage as they feel that steel prices will pick up soon.
· Policy easing expectations re-entered the market yesterday giving some hopes to the paper and physical markets.
· Drop in volumes in steel rebar lead to small gains of 20-30 yuan per ton in Shanghai and Guizhou regions whereas all other product prices remained intact.
· Port prices remained stable yesterday but some gains were visible early today.
Trade Feels:
· The market is slightly up due to the policy news but buying hasn’t picked up yet. We will try to put our offers next week only. – WCI trader who was planning to introduce a tender today.
· Mills are not in the race right now as they have very little cash in hand. Stockpiles are still above 97 million so it wouldn’t be easy to sell our cargoes. – WCI miner
· Next week could be slightly better with a new round of buying. Those mills and traders who wanted to watch the opening week performance before diving into it, will come back as well. Right now the number of buyers is less and with the mill inventory slowly depleting, there could be more buyers next week. – Indian Trader From China
· We will buy some good volumes in the coming week. We don’t see a big rise in the steel sales in near future so we might have to pick up iron ore soon. Indian cargoes are costly and we are not sure how much can we get from there. So we will be looking at the BHP tenders next week.
Ore Price Indices:
· Ore Price Index for Indian Iron ore (OTPX)
o 63.5/63% Fe fines - $134 per ton FOB Vizag
o 58% Fe fines - $110 per ton FOB Goa
o 54% Fe fines- $90 per ton FOB Goa
o 52% Fe fines- $81 per ton FOB Goa
o 50% Fe fines- $71 per ton FOB Goa
· Ore Freight Index for Superhandy & Panamax Freight on India- China Route(OTFX)
o Superhandy
§ ECI – China : $12 per wmt
§ WCI - China : $14 per wmt
§ Dual Port ECI – China: $12-13 per wmt
o Panamax
§ ECI – China : $11 per wmt
§ WCI - China : $13 per wmt
§ Dual Port ECI – China: $11-12 per wmt
Paper Markets:
· SHFE rebar trade opens slightly positive this morning although the traded volumes are still light. Most traded May’12 contract is trading at 4310 yuan after an opening of 4305 yuan.
· SSEC has also turned positive this morning. Mar’12 contract has gained 11 yuan this morning which is a good increase as compared to a continuous fall over the last 8 sessions. The contract is currently trading at 4294 yuan.
· SGX iron ore 62% Fe swaps moved up last evening with marginal gains of about 0.2% in the monthly contracts of February, March and April. A February swap ended at $145 and settled just below $144 per ton for the April contract following the some rise in the steel prices in China a day earlier.
· LME steel billets settled cash buyer contract at $485 depicting a change of 1.04 percent and cash buyer and seller contract at $486 up by 0.82 percent. Three months buyer contract settled around $510 up by about 0.99 percent.
Equity Markets:
· On Friday, Asian stock markets depicted varied trend as S&P/ASX 200 index lost about -16.6 points ending at 4251.2, KRX 100 losing more than 27 points with currently trading at 4,193.44; while Hang Seng Index gained about 1 point was currently trading at 20740.44.
· The Japanese stock market inched lower in sync with the drop all across the Asian markets with benchmark Nikkei 225 index shedding -44.89 points (-0.51 percent), settling around 8,831.93 at the end of the day’s trade.
· Indian stock markets opened flat, as depicted in the SENSEX. Moreover, the BSE MIDCAP and SMALLCAP indices recorded hike of 49.07 and 50.34 trading at 6,018.83 and 6,659.31 respectively.
· SAIL was up 8.48 (0.19%,), NMDC up by 0.60 (0.33%,), SESA GOA up by 0.25 (0.11%), JSW Steel down by 0.35 (-0.64%) and Tata Steel down by 10.05 (-2.12%).
2-3-12
THE KURUM HOLDINGS REPORT
Domestic scrap quotations are staying stable in the US market, though being about to drop. Local suppliers will not be able to avoid reductions in view of lower export prices. Moreover, supply is currently well above demand, though in the past years the market saw an acute shortage of the material in winter.
[2/3/2012 3:42:44 PM] KÜRÜM HOLDING CORP.: Export scrap quotations are forecast to remain unchanged in the USA until mid February. Scrap suppliers do not need to keep on cutting offers to the Turks as sales have started to improve. Besides, buying interest has increased in Asian countries. In particular, deals with Indian, South Korean and Chinese importers were done in the last days of January.
[2/3/2012 3:43:07 PM] KÜRÜM HOLDING CORP.: However, domestic scrap prices may soon go down in the US market by $15-25/t (depending on the grade
[2/32012 3:43:24 PM] KÜRÜM HOLDING CORP.:
Product Price type Delivery terms Price W-o-w
HMS 1&2 (80:20) Export FOB east coast 415-420 -5
Shredded Export FOB east coast 420-425 -5
P&S Export FOB east coast 425-430 -5
HMS 1 Domestic Delivered 430-435 0
HMS 2 Domestic Delivered 380-390 0
[2/3/2012 3:44:42 PM] KÜRÜM HOLDING CORP.: Far East: prices for scrap, $/t
Origin Grade Delivery terms Shipment Price D-o-d**
USA HMS 1&2 (80:20) C&F Taiwan Containerized 430* -5-10
USA HMS 1&2 (80:20) C&F South Korea Containerized 430-435 -5
USA HMS 1 C&F South Korea Bulk 453-454* 0
Japan HMS 2 FOB Bulk 407 +7
Japan HMS 2 C&F Taiwan Bulk 435-440 +5
Japan HMS 2 C&F South Korea Bulk 433 +7
Russia A3 C&F South Korea Bulk 440-450 0
* – deal price
** – including currency fluctuations
Market This Morning 2-2-12
· Markets turns slightly cautious after yesterday’s stall in trade. High prices, tight liquidity and unmoved steel market has kept the market silent.
· The weekend effect is also visible with mills now postponing their purchasing plans to next week.
· Traders are also reluctant to pick up material at the prevailing prices mainly due to the unstable steel appetite in the market.
· Liquidity issues will persist until there is a definite direction available for the sales and market volumes to grow in the near future.
· Automobile sector in China is the only positive hope for the steel market for the near future as sales and production volumes in this sector alone are likely to increase in H1’12. Housing and infra projects are likely to pick up only in the 2nd half of 2012 giving some support to the ore and steel prices.
· PMI’s Figures for January–
o India: 57.5 as compared to 54.2 in Dec’11
o China: 50.5 as compared to 50.3 in Dec’11
o Poland: 52.2 as compared to 48.8 in Dec’11
o Turkey: 51.7 as compared to 52.0 in Dec’11
o Euro Zone Jan Final PMI Manufacturing: 48.8
o Greece Jan PMI Manufacturing: 41.0
· Steel markets opens soft in India this morning. Prices in various regional markets opened soft with a dip of Rs100-200 per ton which are likely to recover in the next hours.
· Scrap supply in the domestic market is witnessing issues as imported scrap volumes drop into India on the back of appreciating Rupee against the dollar. The supply in the domestic market is likely to tighten soon as the volumes floating into the country are light.
· The Baltic Dry Index, a measure of costs for shipping commodities, fell to the lowest level in more than 25 years as sagging demand prompted owners to idle vessels amid a glut of new carriers. The gauge slid 2.6 percent to 662, the lowest reading since August 1986 and the 31st retreat in a row. Hire costs for Capesizes, the largest carriers of iron ore and coal, have plunged 84 percent from the 2011 high reached Dec. 12.
· Chinese ports will no longer accommodate vessels exceeding approved capacities, according to a statement released by the Ministry of Transport on its website on Tuesday. It’s an official ban on entry of Vale’s large ships into the country carrying more than 300,000 dwt of iron ore.
Ore Price Indices:
· OreTeam Price Index for Indian Iron ore (OTPX)
o 63.5/63% Fe fines - $134 per ton FOB Vizag
o 58% Fe fines - $109 per ton FOB Goa
o 54% Fe fines- $89 per ton FOB Goa
o 52% Fe fines- $80 per ton FOB Goa
o 50% Fe fines- $70 per ton FOB Goa
· OreTeam Freight Index for Superhandy & Panamax Freight on India- China Route(OTFX)
o Superhandy
§ ECI – China : $13 per wmt
§ WCI - China : $14 per wmt
§ Dual Port ECI – China: $13.5 per wmt
o Panamax
§ ECI – China : $12 per wmt
§ WCI - China : $13 per wmt
§ Dual Port ECI – China: $12.5 per wmt
Paper Trade:
· SHFE rebar prices slide marginally this morning but the trade has kept very low. The most traded May’12 marched up to 4307 yuan, the highest traded number this morning but then slipped back to 4291 yuan after the opening at 4290 yuan. The traded volumes are down till this minute by almost 50%. The sentiment is very weak and now a bearish trend is visible which may shadow the market till the coming week.
· SSEC has the same view but the fall has consolidated slightly. Yesterday’s double digit fall has now consolidated to a single digit figure. Most traded Mar’12 contract is down by 6 yuan as compared to 14 yuan yesterday at the same time.
· SGX had a bad day again as all the contracts shifted into the red zone supporting the no trade taking place in the physical market. It is evident that till the steel market doesn’t pick up in China, the iron ore trade will not prosper. The sentiment is clearly unstable and the bids being put forward by the investors are down by $1-2 per ton. Feb’12 contract slipped nearly 0.34% last evening to close at $144.75 as compared to $145.25 recorded on Tuesday.
· LME billets were the next to be hit hard at the exchange. Although the EU PMI was seen good, the manufacturing PMI still stayed in red at 48.8. Along with almost certain negative sentiment in steel sector in Europe, the billets fell to $480 on the cash buyer platform from $505 seen on Monday.
· In India, NCDEX steel long had a negative closing with all the contracts except Jun’12 shedding close to 0.50%. May’12 was the highest loser recording a loss of nearly -0.80% at Rs 33360 per ton. Even this morning the index has opened with a very soft trade and has already slipped down nearly Rs50 per ton.
Equity Markets:
· Asian stock markets are mostly trading notably higher on Thursday, tracking cues from Wall Street where stocks ended on a strong note overnight amid renewed optimism about the global economy following the latest batch of reports from the U.S., China and parts of Europe.
· The benchmark S&P/ASX 200 index, which rose to 4,284.8, is currently trading at 4,267, up 41.3 points or 1 percent over its previous close.
· The Japanese stock market moved higher with the overnight positive close on Wall Street on the back of impressive economic data triggering some strong buying in several front line stocks. The benchmark Nikkei 225 index was up 69.9 points or 0.8 percent at 8,879.7 when the morning session ended.
· The MSCI Asia Pacific Index gained 1.2 percent to 124.62 as of 10:30 a.m. in Tokyo, poised for its highest close since Oct. 28.
· Indian stock market opened with a rise on Thursday. BSE Midcap and Smallcap indices were recorded in the position of the edge. Midcap Index was up by 63.56 points at 6000.75 while Smallcap was trading at 6638.19 up 64.61 points.
· SAIL was up 0.19%, JSW Steel down -0.79%, Tata Steel down by -0.48%, NMDC down -0.35% and Sesagoa up 0.92%.
Market At Closing 2-2-12
India China Iron Ore & Steel:
· Once again expectations of policy easing by Beijing lifted the markets towards closing. The expectations have been entering and exiting the market since mid-Dec last year rising hopes of the traders.
· Steel prices in Shanghai and few smaller markets rose by 30 yuan per ton. The prices in these regions were unmoved. Participants regard this as a technical adjustment rather than an actual increase.
· OreTeam Price Index holds steady at $134 per ton FOB Vizag for 63.5/63% Fe fines.
· India exporters are in a mixed sentiment with 50/50 chances of further hike in the prices as they believe the port stocks are quite high and steel mills are not able to increase their product prices in the market.
· Large trading houses in China are currently selling the port stocks rather than picking up fresh inventories. The fresh cargoes from Australia were delayed earlier due to rains which had tightened the supply to China.
· Offers from India are still for the buyers not allowing much movement from the country. Although the number of offers is up from India as compared to Jan’12, the inquiries and bids for these offers has reduced in the market. Only the known established miners and traders are able to trade directly with the buyers to gain a good price.
· Majority of the buyers are holding a “wait and watch” attitude as they do not have much cash to purchase fresh raw material and their wait for the policy easing has also not helped them yet.
· Except Vizag and Goa (mechanical loading), vessel waiting times at all major ports has dropped below 2 days. Vizag and Goa are currently posting 3 days waiting time.
Ore Price Indices:
· OreTeam Price Index for Indian Iron ore (OTPX)
o 63.5/63% Fe fines - $134 per ton FOB Vizag
o 58% Fe fines - $110 per ton FOB Goa
o 54% Fe fines- $90 per ton FOB Goa
o 52% Fe fines- $81 per ton FOB Goa
o 50% Fe fines- $71 per ton FOB Goa
· OreTeam Freight Index for Superhandy & Panamax Freight on India- China Route(OTFX)
o Superhandy
§ ECI – China : $12 per wmt
§ WCI - China : $14 per wmt
§ Dual Port ECI – China: $12-13 per wmt
o Panamax
§ ECI – China : $11 per wmt
§ WCI - China : $13 per wmt
§ Dual Port ECI – China: $11-12 per wmt
Indian Steel:
· In India, steel ingots saw a variance of Rs100 per ton between 10am-5pm. The variance in the domestic scrap from Alang was close to Rs 300 per ton.
· Sponge iron prices in the eastern belt saw a minor correction of Rs100-150 per ton today but the experts believe the correction should have been nearly Rs500 per ton. Sponge iron prices have swung between Rs21500 and Rs24000 per ton between Oct’11 and Feb’12.
· India’s NCR region (National Capital Region) has seen the metal scrap industry growing by nearly 10% in the last year. The average production of metal scrap in this region is close to 1300-1500 Kgs per month which reaches about 16 million tons per year. The scrap is supplied to various TMT producers stationed near the capital for production of TMT bars used in construction.
Scrap:
· India scrap importers are now finding it difficult to find scrap in the imported market. US suppliers after having cut down their prices for Turkey are shying to supply at the same quotations to the Indian buyers.
· Indian buyers have stepped into the market as rupee dipped low and even breached Rs 49 against the dollar at one point. Some of the importers requiring heavy volumes are looking to grasp the opportunity below rupee falls back.
· Current availability from Middle East and Europe is quite weak as some of the importers had already bought good volumes earlier towards Jan-end.
· OreTeam had earlier predicted that the scrap prices would come down further in February as Turkey had almost bought quite a load and other eastern buyers have dropped their purchasing prices due to the which buyers could hold on for some time and take advantage of the opportunity. Today rupee is down to almost 49 against dollar and scrap prices are down by nearly $10-15 per ton as compared to last week when rupee was still around Rs50 against the dollar.
Paper Markets:
· SHFE rebar contracts move up marginally this afternoon on the back of the policy easing news which flooded the market. Out of the 12 contracts traded at the exchange, 6 contracts didn’t trade today and 1 closed marginally down by 8 yuan where as the highest gains were seen May’12 contract. May’12 contract gained 28 yuan to close at 4318 yuan against an opening of 4290 with a traded volume of 349826 lots.
· SSEC changed course as well. Marginal gains were visible in the second half of the day with the May’12 leading the lot with an increase of 8 yuan at 4320 yuan.
· NCDEX steel long contracts gain slightly this evening. Feb’12, Mar’12 and Apr’12 contracts were up Rs80, 170 and 110 per ton respectively at Rs32440, 32830 and 33110 respectively.
Equity Markets:
· The rupee was higher on Thursday, supported by gains in the local share market, but it was off the three-month high hit earlier due to a fall in the euro. At 3:02 p.m. (0932 GMT), the rupee was at 49.10/11, after touching 48.9425 its highest since November 1.
· Markets rose 0.8% on Thursday to their highest close in nearly three months after strong manufacturing data in India and other major economies from China to Germany eased growth concerns and bolstered risk appetite.
· Similar was the case in all other Asian stocks which advanced for a third day today, as manufacturing gained in the U.S. and Europe, boosting confidence the global economy is recovering.
· Japan’s Nikkei 225 Stock Average gained 0.8 percent, while the broader Topix Index advanced 0.6 percent. Hong Kong’s Hang Seng Index and China’s Shanghai Composite Index both advanced 2 percent.
· Also, Shares in Glencore International and Xstrata soared on Thursday as the two companies said they were in talks over a $35bn merger.
| Today's High | Today's Low | Previous Day Close | Previous Day Open |
Sesagoa | 234 | 223 | 222.45 | 223.5 |
NMDC | 189 | 182 | 185.15 | 189 |
JSW | 719 | 696.8 | 710.6 | 713 |
SAIL | 106.5 | 101.1 | 104.6 | 105.7 |
Tata steel | 479.65 | 463.75 | 469.55 | 475.9 |
CIL | 324.8 | 319.6 | 317.15 | 319.6 |
Adani Power | 84.8 | 82.1 | 82.85 | 84.45 |
NTPC | 173.4 | 170.75 | 170.75 | 172.45 |
Reliance Power | 103.25 | 98.15 | 101.45 | 102.4 |
TATA power | 115.4 | 110.15 | 110.1 | 111.25 |
Gujarat NRE | 23.65 | 22.8 | 22.85 | 22.7 |
| | | | |
| | | | |
| Today's Price | % Change | | |
Rio Tinto | 70.72 | 2.88 | | |
BHP Billiton | 37.62 | 1.92 | | |
Fortesue (ASX) | 5.01 | 0.6 | | |
China Shenhua Energy Comp (SHA) | 27.27 | 2.63 | | |
China Coal Energy Comp (SHA) | 9.59 | 2.46 | | |
Trade at Closing:2-1-12
· As predicted by SMPI, the market moved up yesterday(Tuesday) and stayed cold through Wednesday. There were very few transactions and mostly all were within China.
· After the BHP tender, the offers shot up expecting a good rise in the buying activity which wasn’t the case as steel prices and demand stayed stable. Infact, steel billets in China dipped by 10 yuan per ton in some markets today.
· The main reasons for the dullness in the trade today were the high offer levels being quoted by all sellers, unmoved steel markets and liquidity issues which are not seeing an end in the near future.
· Ore Price Index for Indian iron ore registered an average price of $131.69 per ton FOB Vizag for 63.5/63% Fe fines in January 2012 as compared to $165.50 per ton FOB Vizag registered in January 2011. The fall in the price is nearly 21% which indicates the extent of damage the slowness in steel demand can make in the iron ore trade.
· Every participant in the trade today is judging the recent hike in the iron ore prices in order to retrieve whether it was a technical or a fundamental increase. The sustainability of this hike is a question as after every peak in the market, there is always a slowdown followed by a second wave of transactions.
· Industry body ASSOCHAM today urged the Indian government to remove 2.5 per cent import duty on iron ore lumps, fines and pellets to increase supply options for the steel industry.
· Earlier in January, the same body had requested for raising import duty on steel products from the prevailing five per cent to a minimum of ten per cent so that domestic manufacturers can withstand growing imports from China and CIS countries.
· All steel products like ingots, billets, angles etc in India moved down Rs200 per ton this evening. The fluctuation in the daily trade is keeping the sentiments soft in the steel market. Sponge iron and scrap are still holding stable this evening.
· Scrap prices into India have paused their downfall now. Indian importers are staying away from large purchases in February, following the depreciation of the rupee against the US dollar and mediocre sales of finished steel products.
· Also, U.S. ferrous scrap export prices have come down on the East Coast mainly due to the fall in the freight levels and slow buying interest from India and Turkey. A decrease of nearly $10-12 per ton is visible between the offers and the prevailing prices.
· EU Manufacturing PMI was slightly better than expected at 48.8 against a forecast 48.7, although it was still below the 50 level. Atleast some good signs for the continent but still a long way to go.
Paper Markets This Evening:
· SHFE rebar trade has witnessed a drop of nearly 27% in the traded volumes today with the most traded May’12 contract closing marginally down by 1 yuan. The unstable steel market is not allowing the paper market to pick up at all. The last three session at the exchange have been in red and the outlook is also bullish as no light is visible in terms of any reduction in the CRR rates which could ease liquidity in the market and allow some sentiment to rise in this market. The short term buying at low range is visible at the exchange but volumes are dipping on a daily note.
· SSEC is moving in the similar direction. Reasoning is same and keeping in mind that the steel plate and HRC prices may drop nearly $25-30 per ton on an yearly average basis in 2012, even the forward contracts are not showing any positive clues to the participants.
· NCDEX steel long contracts in India have come down again. The softness in the physical steel market is pulling down the paper market on the similar lines like in China. Only Feb and Mar contracts witnessed some trading today with last traded prices seen down by nearly Rs150 and Rs160 per ton respectively.
Equity Markets:
· The rupee touched its highest level against the dollar in nearly three months on Wednesday, supported by strong dollar inflows and a recovery in the local stock market. At 4:34 p.m. (1104 GMT), the rupee was at 49.27/28 to the dollar after touching 49.26, a level not seen since Nov. 8. It closed at 49.44/45 on Tuesday.
· The 30-scrip sensitive index (Sensex) of the BSE, which opened at 17,179.64 points, closed at 17,300.58 points, 107.03 points or 0.62 percent up from its previous close at 17,193.55 points.
· Asian markets ended mixed as traders awaited China's decision on easing interest rates.
· The Japanese Nikkei closed flat at 8,809.79 points, while Hong Kong's Hang Seng shed 0.28 percent to end at 20,333.37 points.
· The Chinese Shanghai Composite index moved down 1.07 percent and closed at 2,268.08 points.
· European markets were ruling in the green with investors taking hope from latest data which showed factory output in the Euro zone not slowing as much as expected.
· Britain's FTSE 100 was ruling 1.38 percent up at 5,760.27 points. The German DAX was similarly trading 1.93 percent higher at 6,583.71 points.
| Today's High | Today's Low | Previous Day Close | Previous Day Open |
Sesagoa | 224 | 211.5 | 217.65 | 218.7 |
NMDC | 186.4 | 179.95 | 178.85 | 181 |
JSW | 714 | 692.65 | 698.45 | 700.55 |
SAIL | 105.5 | 101.5 | 101.7 | 102 |
Tata steel | 472.3 | 450.85 | 451 | 452 |
CIL | 327 | 315.65 | 325.65 | 326.6 |
Adani Power | 83.8 | 80 | 80.3 | 80.9 |
NTPC | 173.5 | 170.1 | 171.85 | 172.15 |
Reliance Power | 102.9 | 99 | 101.45 | 102.3 |
TATA power | 110.9 | 104 | 103.85 | 104.1 |
Gujarat NRE | 22.9 | 22.05 | 22.35 | 22.25 |
| | | | |
| | | | |
| Today's Price | % changes | | |
Rio Tinto | 68.74 | -0.61 | | |
BHP Billiton | 36.91 | -1.52 | | |
Fortesue (ASX) | 4.98 | -1.39 | | |
China Shenhua Energy Comp (SHA) | 26.56 | -1.08 | | |
China Coal Energy Comp (SHA) | 9.36 | -0.43 | | |
IRON ORE SPOT PRICES 2-1-12
(OTPX) | Reference Prices | Offers |
% Fe ($/t) | FOB | Mid Point | Daily Δ | CFR | Mid Point | Daily Δ | Current Offers |
63.5/63 (OTPX) | 133-135 | 134 | 0 | 148-150 | 149 | 0 | 153-154 |
63/62 | 127-129 | 128 | 0 | 142-144 | 143 | 0 | - |
62/61 | 121-123 | 122 | 0 | 136-138 | 137 | 0 | - |
61/60 | 117-119 | 118 | 0 | 132-134 | 133 | 0 | - |
60/59 | 112-114 | 113 | 0 | 127-129 | 128 | 0 | - |
58/58 (WCI-OTPX) | 108-110 | 109 | 0 | 125-127 | 126 | 0 | 130-132 |
56/56 | 99-101 | 100 | 0 | 116-118 | 117 | 0 | - |
54/54 (WCI- OTPX) | 88-90 | 89 | 0 | 105-107 | 106 | 0 | 110-111 |
52/52 (WCI) | 79-81 | 80 | 0 | 96-98 | 97 | 0 | - |
50/50 (WCI- OTPX) | 69-71 | 70 | 0 | 86-88 | 87 | 0 | - |
48/48 (WCI)00 | 57-59 | 58 | 0 | 74-76 | 75 | 0 | - |
Market This Morning: 2-1-12
· After yesterday’s transactions, two battle fronts have opened in the market. Sellers with offers up by almost $2-4 per ton and buyers still trying to puzzle out the increase and sitting in dilemma. The extent of the dent yesterday’s transactions caused can be seen from the fact that some Indian medium grade cargoes have breached the $150 per ton barrier and ex-Indian cargoes like Pb Fines and pellets have moved up by $2 per ton on CFR basis.
· Like OreTeam has been forecasting that the market will see an upside of $1-2 per ton in the opening week with a small peak followed by a plateau of stability or concern, the same phenomenon is now visible in the trade. Majority steel mills are not keen in buying at the prevailing rates and are instead planning to wait and see if the steel prices move up. Else they would cut down their production and only buy smaller tonnage of raw material.
· OreTeam price Index gained $2 per ton yesterday at closing. The movement was visible in the index almost after a long 15 days drought which included a week of vacations in China.
· On the other hand, there are few cargoes of premium miners on the east coast India which are seeking a huge premium and very little interest is coming up at these levels. Both Chinese and Hong Kong are keeping distance from these levels as they feel the price is way too high for them at this point of time. If the steel demand moves up in China, then they might consider negotiating further for these cargoes.
· Vale’s mega ships are said to arrive with huge volumes of material and the market is checking whether there would be a price war coming up once the frequency of the shipments increases from Philippines. Participants believe that the volumes will remain the same but with the increased frequency the price will definitely be more competitive.
· Also, a very important point which has come to light from the Eurozone crisis discussion is that ff the growth of project finance lending continues to slow down in the continent, fewer natural resources projects will see the light in the next five years which would reduce the expected supply growth. The most capital intensive projects, including iron ore and oil, may suffer in near future. This situation may work either-ways for China.
Trade Feels: (Quotes from Steel traders, mill representatives & ore traders)
· The upside in the market is more psychological rather than an actual market based hike. Those fearing that once steel demand will increase the spot market will go up are picking up the cargoes. Mills are not included in the current buying spree which shows that the actual market demand is still quite low. – Trader from Shanghai
· Liquidity is the biggest problem. With no sale or little sales taking place in the steel sector, the mills don’t have enough capital to invest in procuring raw material. The ball is still in the hands of the steel mills and they can always buy whenever they want. They are not in any hurry at this moment.
· There is certainly some demand in the market but the extend of this demand to meet the high prices being offered by the buyers is very uneven. Till a good demand doesn’t not build up the mills or the traders will remain on the sidelines. The outlook is still not entirely positive but yes some growth is coming up. – A large trader from China
· We are not going to buy any material till Friday. If in case on Friday the market moves up then we would purchase 60-80,000 tons and sit on sidelines for another week or so. We don’t want to jump into the mad race – Steel Mill representative, China
· The financial year ending has is not allowing many WCI miners to move much material and with the cap on the production/exports, the limitations are in place for the export purpose. Small quantities are sailing from WCI.
· The current offers from India are very high and many miners are now directly contacting us with their material whom we don’t even know personally. So it’s not easy to business with them. We have to wait and watch for their material first and prices and then only take a decision.
· The entire global economy is fluctuating and the so is the iron ore market. How is the market accepting this hike in the spot prices is just unknown. – Steel market analyst, India
· The extend of the dullness in the demand comes from the fact that there is approximately 12-15% capacity currently under maintenance in China since early Jan’12 and still the prices have not rebounded in the market which would have been a normal phenomenon otherwise.
News From China:
· As of January 29, distributor stocks of the five steel products (rebar, wire rod, hot rolled coil, cold rolled coil and medium plate) stood at 15.84 million tons in 26 big cities, up 1.47 million tons from the pre-holiday level. This indicated the fifth consecutive weekly growth, although the gain was the most modest since 2008.
· Steel billets lost RMB 10 per ton this morning in few Chinese markets.
· The official PMI data, which tracks manufacturing activity in the larger state-owned enterprises in China, came in at 50.5 for January, marginally higher than in December.
· The final HSBC China Manufacturing Purchasing Managers Index, a gauge of nationwide manufacturing activity, rose slightly to 48.8 in January compared with 48.7 in December.
Ore Price Indices:
· Ore Price Index for Indian Iron ore (OTPX)
o 63.5/63% Fe fines - $134 per ton FOB Vizag
o 58% Fe fines - $109 per ton FOB Goa
o 54% Fe fines- $89 per ton FOB Goa
o 52% Fe fines- $80 per ton FOB Goa
o 50% Fe fines- $70 per ton FOB Goa
· Ore Freight Index for Superhandy & Panamax Freight on India- China Route(OTFX)
o Superhandy
§ ECI – China : $13 per wmt
§ WCI - China : $14 per wmt
§ Dual Port ECI – China: $13.5 per wmt
o Panamax
§ ECI – China : $12 per wmt
§ WCI - China : $13 per wmt
§ Dual Port ECI – China: $12.5 per wmt
Paper Markets:
· Over the last two sessions, there has been a modest change at the SGX as the January contracts near settlement. The Jan’12 contract was the only one moving in red and dragging the exchange down where as the other contracts are all looking good. The calculated Q1’12 was marginally down due to the Jan’12 again but Q2’12 has seen a good increase of 0.58% after previous fall of -1.89%. seen on Monday.
· NCDEX India steel long contracts on the other hand revived yesterday on the back of reentry of the north Indian traders after a long weekend. The Feb’12 contract was down -0.18% at Rs32,460 where as the May’12 saw the highest increase of nearly 1% at Rs33,630 per ton. This morning the index has opened slightly down but the possibility of a good trade through the day can’t be neglected.
· More bad news at the paper rebar market in China. SHFE was down this morning by a bigger margin with the most traded May’12 falling by half of its traded volume as seen at the same point yesterday. Very few contracts have witnessed any healthy trading till this point today. May’12 was at 4284 yuan last recorded after an opening of 4291 this morning.
· All contracts at SSEC are down today. Mar’12 was the biggest dented contract with a loss of over 12 yuan trading at 4283 yuan.
· LME steel billets had a rough session again with the cash buyer/settlement going down to $505/506 against the earlier close at $509/511 on 31st Jan. The price consolidation towards the month end and the likely fact that Greece could close to an agreement with bond holders may give some room to the market today.
Equity Markets:
· Australian shares fell for a third consecutive day with resources stocks providing the main drag. BHP lost 1.5 per cent, Rio lost 0.6 per cent and Fortescue shed 1.4 per cent today.
· Asian stocks were fluctuating this morning after weaker earnings and U.S. economic data dampened the spirits of the investors but then some reports from China showed the manufacturing industries unexpectedly expanded last month. The fluctuation is continuing. The MSCI Asia Pacific Index slipped 0.1 percent to 122.74 as of 1:57 p.m. in Tokyo.
· The Bombay Stock Exchange's Sensex was range bound with negative bias as investors were seen in a profit booking mode this morning.
· SAIL was up 1.47%, Tata Steel 1.05% up, JSW Steel up by 0.67%, NMDC was up 2.35% where as Sesagoa was down -1.91% as last seen.
Trade Today: 1-31-12
· Few good transactions and some more inquiries are building up a highway for the hike in the spot prices but the traffic (volume of trade) is very light right now.
· Chinese buyers are still swinging in whether to buy iron ore right now or hang on for some more time to assess the steel direction.
· The uncertainty in steel demand is not allowing the trade to prosper and it might take some time before a good pick up is visible supporting the iron ore spot market.
· The transactions concluded yesterday and this morning indicate a rise of nearly $2 per ton in various grades originating from Australia and India. Brazil’s material is still to reach the Chinese buyers and is likely to draw premium over the current market.
· Steel prices today have risen by 10 yuan per ton in some markets in China but the extent of the rise is concentrated in very small regions not impacting the entire pricing chain.
· There is some news coming in from North China that certain furnaces have temporarily suspended production for repair and maintenance. The main reasons of the closure being already prevailing high raw material prices, softening demand for construction steel, declining property market and delays in new projects announcements/execution.
Coal Update:
· A revision of a new price mechanism will nullify a projected 12.5 percent rise in coal prices, Coal India Chairman N.C. Jha said on Tuesday, allaying fears of input cost rise for user industries such as power, cement and steel makers.
· India's new coal price mechanism will be reviewed after March and current prices calculated under the system will hold until then, Coal Minister Sriprakash Jaiswal said on Tuesday. He also said the assessment of the new mechanism will be done after assessing Jan-Mar quarter revenues of state-run miner Coal India, which produces about 80 percent of India's coal.
Paper Markets:
· SHFE is down app 1% while SGX last night dipped 1.8% for calc Q2'12. Volumes at SHFE have increased today and at closing the contracts lost the same margins. Most traded May’12 contract lost nearly 40 yuan to finish the day at 4291 yuan.
· SSEC is completely down under with all contracts in red by almost 10-15 yuan.
· NCDEX steel long contracts closed with max gains at 0.6% last evening. Steel ingot and billets prices at the exchange are up this afternoon where as futures markets is still very slow. Raipur and the eastern belt is moving in the positive direction where as Mumbai and MGG are at a halt with a stable outlook.
· The Chinese return hasn’t impacted the LME yet. Traders believe last week's rally was unsustainable considering wider financial market and the gains from last week will be short lived. Steel billets were seen at $509/511 for cash buyer/settlement terms at the exchange.
Equity Markets:
· Starting with China, steel companies stocks are fluctuating in red as they are burdened with a high input cost pressure. The physical market weakness has lead to the stocks of some these companies to dip in the last 2 days. Angang Steel is down nearly 4.5% where as Maanshan down by nearly 1%. Shares of Angang Steel, whose market capitalization halved in 2011, tumbled as much as 12% to an intraday low of HK$5.48 (US$0.72) in early morning session trade.
· In Australia, the benchmark S&P/ASX 200 index ended the session down 0.2 per cent at 4262.70, paring year-to-date gains to 5.1 per cent.
· Asian stocks rose, heading for the first back-to-back monthly gain since October 2010, after factory output in Japan climbed the most in seven months and Greece’s Prime Minister said debt-swap talks have made progress.
· The rupee strengthened by 20 paise to Rs 49.59 a dollar in early trade on the Interbank Foreign Exchange market today on increased foreign capital inflows.
· In India, Sensex was at 17018.32, up 155.02 points or 0.92 per cent. The 30-share index touched a high of 17081.54 and low of 16965.58 in trade so far. Mainly being led by a range bound growth, the investor confidence is not so high in the market and profit booking is visible at every peak.
· Sesagoa was up by 4.1%, NMDC up 0.89%, JSW Steel up 1.23% where as Tata Steel down by -0.15% at mid day.
Trade This Morning: 1-31-12 · China opens stable. No change in the spot iron ore or steel prices yet.
· Inquiries are steadily increasing and the number of inquiries is going up mainly out of curiosity to learn about the offers. Interested buyers are heard checking the market.
· Offers from India are up by $1-3 per ton this morning. There is a steady rise in the number of offers as well and Indian sellers are testing the conditions for a favorable deal.
· The dilemma lies in the fact that the steel prices have also opened stable and the steel inventories are running high at the mills, in this situation expecting an immediate rise in the spot iron ore prices would not be right. The demand and the price of iron ore will slowly improve only after the steel inventories start drying up and mills come back into a good buying mode.
· The port prices of Indian iron ore are also stable on opening. There is no change visible till now.
· In Australia, scattered squally showers and thunderstorms are expected in the north and west, tending to rain areas in the west. Moderate NE/NW winds, fresh and gusty in the northwest, possibly stronger in the far west may disrupt/delay some shipments in the coming days.
· Brazil on the other hand, as already indicated by OreTeam will be depositing heavy cargoes of iron ore in Philippines in the next few days which would be shipped to China. Its more to do with the freight costs and timing for Brazil rather than the volume. Brazil miners also had the disadvantage of the huge distance to China which they are now overcoming by using this route.
· China's daily crude steel output rose 3.9 percent to 1.691 million tons in the first 10 days of January.
· Vale gets license to operate new high-grade iron ore site
· In India, The Ministry of Environment and Forests (MoEF) has rejected clearance to one of the iron-ore mines of state-owned NMDC in Bailadila district
· The head of Iran’s state oil company on Sunday said that the price of crude will reach $ 120 to $ 150 per barrel, as officials in Tehran prepare to discuss a ban on crude sales to European Union countries
Trade Feels:
On the opening day we spoke to few Indian and Chinese traders and attained a very mixed and laid back view of the market.
India
· Indian offers are up by $1-2 per ton this morning but the actual buying is still not visible. We had calls inquiring about our current offer prices but no actual buying interest is visible till now.
· East coast movement is completely at a halt. There is a virtual ban on Orissa material being shipped from any other ports outside Orissa. Most of the movement is only happening from Paradip and Haldia for the Orissa material. Rest of the eastern material is moving either from Vizag or Kakinada. In this situation selling ore below the prevailing prices is not possible.
· A large WCI miner/trader concluded a transaction at nearly $81 FOB for 52% Fe fines. Considering that cargo, the prices should move up further but there are no indications till now. It’s too early to predict the movement in the market.
Hong Kong
· We have offers from India and Brazil but the buyers are not yet prepared. It’s just the first day and any movement will be visible only by mid week.
· We cannot expect a similar opening like last year or the year before when the prices shot up immediately. This time the demand is thin for steel and iron ore prices will not show any movement till the steel prices wouldn’t move up.
China
· There are very few buyers in the market for our steel products and we have enough inventory in hand. So till this lot is not sold we will not be purchasing more raw material.
· We might have to cut down our production if the steel is not sold soon. We are inquiring about the current spot prices but buying from India may not be cheap.
· Liquidity is the biggest problem. Till we don’t sell steel we can’t buy iron ore. Interest rates are still the same and so is the demand. We might buy some material around the 2nd week of Feb.
· Some of our steel buyers have informed us that they wouldn’t be reducing the volume of inventory they normally buy from us. We are still confirming this, so till then we may not buy more ore.
Definitely there is a sense of optimism in the market but equal shadow of uncertainty is also visible. So there is hardly any evidence of an immediate increase but it’s still too early to voice out an exact direction. Any policy change or hike in the steel prices will immediately show results in the market. Market can expect $1-2 per ton hike in this week, even if its towards the weekend or early next week opening. Some premium material is likely to be sold at a higher price but for the market as a whole, it is time to wait and watch.
Paper Markets:
· SGX iron ore 62% Fe swaps rose by 0.35% on Friday evening. The trade is optimistic about the opening views and the calculated Q1’12 inched up under the same expectations. Q2’12 also moved up 0.48% to record $121.93. All contracts closed in green except for the Jan’12 which is almost due closing.
· LME steel billets had another dull day. There was good profit booking visible on the last day of the week. This morning the market is yet to open up but the firmness in the prices has softened not just in steel but also in copper and tin at the exchange. US GDP data had supported the initial movement last week with gains staying for nearly 5 straight sessions but then Friday gave way to a good selling. Cash buyer/settlement prices for steel billets closed at $505/506 respectively down from $517/518 recorded on Thursday.
· At SHFE, which opened today after the week long break, rebar contracts are slowly dragging up trying to consolidate on the gains but the stiff physical market is posing great challenges. Investor confidence is still quite naïve after the market opening but the bullish sentiment is likely to draw in better volumes through the week ahead. Most traded May’12 contract was up mere 4 yuan this morning trading at 4319 yuan.
· Similar scenes were visible at SSEC which gained small margins this morning.
· At NCDEX India, the steel long contracts settled with some gains on Friday evening. Feb’12 contract for steel longs was up by 0.43% at Rs 32,500 where as Jun’12 saw the biggest jump of 0.91% closing at Rs33,380 per ton. This morning the Feb’12 contract opened flat where as Mar’12 has gained Rs50 in the first hour of trading.
Equity Markets:
· Asian stock markets fell Monday, with slower-than-expected growth in the U.S. and uncertainty about a tentative deal to resolve Greece's debt crisis weighing on investor sentiment.
· Benchmark oil slipped to near $99 per barrel while the dollar rose against the euro but fell against the yen.
· Japan's Nikkei 225 index shed 0.6 percent to 8,789.04. South Korea's Kospi was 1.3 percent lower at 1,939.90 and Hong Kong's Hang Seng dropped 0.5 percent to 20,401.32. Australia's S&P/ASX 200 lost 0.4 percent at 4,272.70.
· Benchmarks in Singapore, Indonesia, India and the Philippines also fell. Shares in mainland China were mixed after being closed for a week for Chinese New Year holidays. Taiwan and New Zealand rose.
· After a slightly weak start and a subsequent recovery, the Australian stock market faltered on Monday with investors treading cautiously ahead of the earnings reporting season. Fortescue Metals and Newcrest Mining are trading modestly higher and BHP Billiton is up marginally, while Rio Tinto is trading in negative territory with a loss of over 1 percent.
· The Indian rupee eased on Monday as oil import payments picked up and uncertainty about a deal to help debt-ridden Greece drove most Asian equity markets down. The 30-share BSE index was down 0.9 percent as profit-taking emerged after an 11.5 percent rally this month.
· Sail was down -1.95% at Rs 103.15, NMDC down 1.25% at Rs180.45, Tata steel at Rs451.95 down -1.48%, JSW Steel at Rs685.15 up by 3.61% and Sesagoa down -0.35% at Rs213.
After Markets 1-30-12
· Curiosity building up in the market as optimism is driving expectations of better market conditions in the coming days. Offers are already up by $1-2 per ton from all corners.
· Indian exporters are in deep discussions but no talks reached conclusion today.
· One tender of BHP Newman fines is likely to close tonight. Final price might be up by nearly $2.5 per ton as market conditions indicate.
· Some Chinese and HK traders are in the process of acquiring cargoes from India but only to take positions for a short term. They are planning to buy from Indian exporters today and sell by week-end to mills when there is a better chance of earning $1-3 per ton premium. There is a minute chance of a downside at this stage.
· Few transactions have taken place inside China where – Pb fines has been transacted at $141.75 per ton CFR bought by a north eastern big mill. Another Pb fines consignment is also being discussed at $142.5 per ton and may even reach $143 if strong market conditions prevail.
· Downside of all is that the Chinese steel prices, port prices and domestic iron ore prices continue to be stagnant but stable. No change was observed today which is not very good for the market.
OreTeam Price Indices:
· OreTeam Price Index for Indian Iron ore (OTPX)
o 63.5/63% Fe fines - $132 per ton FOB Vizag
o 58% Fe fines - $106 per ton FOB Goa
o 54% Fe fines- $86 per ton FOB Goa
o 52% Fe fines- $77 per ton FOB Goa
o 50% Fe fines- $66 per ton FOB Goa
· OreTeam Freight Index for Superhandy & Panamax Freight on India- China Route(OTFX)
o Superhandy
§ ECI – China : $14 per wmt
§ WCI - China : $16 per wmt
§ Dual Port ECI – China: $14-15 per wmt
o Panamax
§ ECI – China : $13 per wmt
§ WCI - China : $15 per wmt
§ Dual Port ECI – China: $13-14 per wmt
· A contrasting feature in the market is the SWAPS versus our 62% Fe CFR China prices. The SGX paper market curve is moving with a good optimism while OTPX line was silent and stable since China closed for vacations. Now the big question would be whether physical market would guide the paper market and pull the swap contracts down or whether the physical market will follow the optimism in the paper market and rise by itself, at a point when the steel is not so strong likewise last few years at the same period in time.
$/ton, CFR | OreTeam OTPX Spot, 62% Fe | SGX Feb'12, 62% Fe |
3-Jan | 138 | 137.5 |
4-Jan | 138 | 139.42 |
5-Jan | 139 | 141 |
6-Jan | 140 | 142 |
9-Jan | 140 | 143.42 |
10-Jan | 140.5 | 144.19 |
11-Jan | 141.5 | 144.25 |
12-Jan | 141.5 | 140.88 |
13-Jan | 140.5 | 142.42 |
16-Jan | 140 | 142.83 |
17-Jan | 140 | 144 |
18-Jan | 140 | 143.67 |
19-Jan | 140 | 144.12 |
20-Jan | 140 | 143.75 |
23-Jan | 140 | 143.67 |
24-Jan | 140 | 143.69 |
25-Jan | 140 | 144.81 |
27-Jan | 140 | 144.44 |
Paper Markets This Evening:
· Paper markets haven’t yet reacted much in China today. SHFE was up marginally by 15-20 yuan but the volumes are still low and picking up slowly. Being the 1st day post –vacations the laziness surrounding the trade hasn’t subsided altogether.
· SSEC on the other hand has had a dull day with all contracts looking down by nearly 2-5 yuan. Only the Mar’12 contract was up by 1 yuan. Most traded Mar’12 was trading at 4305 yuan.
· NCDEX had a mixed day for steel long. Feb’12 was down by Rs10 at 32490 per ton this evening while April was up by Rs40 at Rs32980 per ton. The sentiment is not so strong in here.
Equity Markets:
· Indian stock markets lose further ground. The BSE Sensex is down by 272 points. Power stocks are the biggest losers.
· The BSE-Sensex is down by 272 points, while the NSE-Nifty is down 87 points. Both BSE Mid Cap index and the BSE Small Cap index are down by 0.83% each. The rupee is trading at 49.48 to the US dollar.
· Australian shares ended lower as investors took profits ahead of the February profit reporting season.
· Weaker consumer staples and bank stocks helped to pull the bourse back from earlier slight gains after the market opened slightly stronger in defiance of a weaker Wall Street over the weekend.
· European stock markets and the euro are sliding down today on stubborn fears over the plight of debt-ridden Greece, before a key EU summit that will seek to focus on restoring economic growth.
Paper Markets This Evening:
· Paper markets haven’t yet reacted much in China today. SHFE was up marginally by 15-20 yuan but the volumes are still low and picking up slowly. Being the 1st day post –vacations the laziness surrounding the trade hasn’t subsided altogether.
· SSEC on the other hand has had a dull day with all contracts looking down by nearly 2-5 yuan. Only the Mar’12 contract was up by 1 yuan. Most traded Mar’12 was trading at 4305 yuan.
· NCDEX had a mixed day for steel long. Feb’12 was down by Rs10 at 32490 per ton this evening while April was up by Rs40 at Rs32980 per ton. The sentiment is not so strong in here.
Equity Markets:
· Indian stock markets lose further ground. The BSE Sensex is down by 272 points. Power stocks are the biggest losers.
· The BSE-Sensex is down by 272 points, while the NSE-Nifty is down 87 points. Both BSE Mid Cap index and the BSE Small Cap index are down by 0.83% each. The rupee is trading at 49.48 to the US dollar.
· Australian shares ended lower as investors took profits ahead of the February profit reporting season.
· Weaker consumer staples and bank stocks helped to pull the bourse back from earlier slight gains after the market opened slightly stronger in defiance of a weaker Wall Street over the weekend.
· European stock markets and the euro are sliding down today on stubborn fears over the plight of debt-ridden Greece, before a key EU summit that will seek to focus on restoring economic growth.
Trade This Morning: 1-30-12
· China opens stable. No change in the spot iron ore or steel prices yet.
· Inquiries are steadily increasing and the number of inquiries is going up mainly out of curiosity to learn about the offers. Interested buyers are heard checking the market.
· Offers from India are up by $1-3 per ton this morning. There is a steady rise in the number of offers as well and Indian sellers are testing the conditions for a favorable deal.
· The dilemma lies in the fact that the steel prices have also opened stable and the steel inventories are running high at the mills, in this situation expecting an immediate rise in the spot iron ore prices would not be right. The demand and the price of iron ore will slowly improve only after the steel inventories start drying up and mills come back into a good buying mode.
· The port prices of Indian iron ore are also stable on opening. There is no change visible till now.
· In Australia, scattered squally showers and thunderstorms are expected in the north and west, tending to rain areas in the west. Moderate NE/NW winds, fresh and gusty in the northwest, possibly stronger in the far west may disrupt/delay some shipments in the coming days.
· Brazil on the other hand, as already indicated by OreTeam will be depositing heavy cargoes of iron ore in Philippines in the next few days which would be shipped to China. Its more to do with the freight costs and timing for Brazil rather than the volume. Brazil miners also had the disadvantage of the huge distance to China which they are now overcoming by using this route.
· China's daily crude steel output rose 3.9 percent to 1.691 million tons in the first 10 days of January.
· Vale gets license to operate new high-grade iron ore site
· In India, The Ministry of Environment and Forests (MoEF) has rejected clearance to one of the iron-ore mines of state-owned NMDC in Bailadila district
· The head of Iran’s state oil company on Sunday said that the price of crude will reach $ 120 to $ 150 per barrel, as officials in Tehran prepare to discuss a ban on crude sales to European Union countries
Trade Feels:
On the opening day we spoke to few Indian and Chinese traders and attained a very mixed and laid back view of the market.
India
· Indian offers are up by $1-2 per ton this morning but the actual buying is still not visible. We had calls inquiring about our current offer prices but no actual buying interest is visible till now.
· East coast movement is completely at a halt. There is a virtual ban on Orissa material being shipped from any other ports outside Orissa. Most of the movement is only happening from Paradip and Haldia for the Orissa material. Rest of the eastern material is moving either from Vizag or Kakinada. In this situation selling ore below the prevailing prices is not possible.
· A large WCI miner/trader concluded a transaction at nearly $81 FOB for 52% Fe fines. Considering that cargo, the prices should move up further but there are no indications till now. It’s too early to predict the movement in the market.
Hong Kong
· We have offers from India and Brazil but the buyers are not yet prepared. It’s just the first day and any movement will be visible only by mid week.
· We cannot expect a similar opening like last year or the year before when the prices shot up immediately. This time the demand is thin for steel and iron ore prices will not show any movement till the steel prices wouldn’t move up.
China
· There are very few buyers in the market for our steel products and we have enough inventory in hand. So till this lot is not sold we will not be purchasing more raw material.
· We might have to cut down our production if the steel is not sold soon. We are inquiring about the current spot prices but buying from India may not be cheap.
· Liquidity is the biggest problem. Till we don’t sell steel we can’t buy iron ore. Interest rates are still the same and so is the demand. We might buy some material around the 2nd week of Feb.
· Some of our steel buyers have informed us that they wouldn’t be reducing the volume of inventory they normally buy from us. We are still confirming this, so till then we may not buy more ore.
Definitely there is a sense of optimism in the market but equal shadow of uncertainty is also visible. So there is hardly any evidence of an immediate increase but it’s still too early to voice out an exact direction. Any policy change or hike in the steel prices will immediately show results in the market. Market can expect $1-2 per ton hike in this week, even if its towards the weekend or early next week opening. Some premium material is likely to be sold at a higher price but for the market as a whole, it is time to wait and watch.
Paper Markets:
· SGX iron ore 62% Fe swaps rose by 0.35% on Friday evening. The trade is optimistic about the opening views and the calculated Q1’12 inched up under the same expectations. Q2’12 also moved up 0.48% to record $121.93. All contracts closed in green except for the Jan’12 which is almost due closing.
· LME steel billets had another dull day. There was good profit booking visible on the last day of the week. This morning the market is yet to open up but the firmness in the prices has softened not just in steel but also in copper and tin at the exchange. US GDP data had supported the initial movement last week with gains staying for nearly 5 straight sessions but then Friday gave way to a good selling. Cash buyer/settlement prices for steel billets closed at $505/506 respectively down from $517/518 recorded on Thursday.
· At SHFE, which opened today after the week long break, rebar contracts are slowly dragging up trying to consolidate on the gains but the stiff physical market is posing great challenges. Investor confidence is still quite naïve after the market opening but the bullish sentiment is likely to draw in better volumes through the week ahead. Most traded May’12 contract was up mere 4 yuan this morning trading at 4319 yuan.
· Similar scenes were visible at SSEC which gained small margins this morning.
· At NCDEX India, the steel long contracts settled with some gains on Friday evening. Feb’12 contract for steel longs was up by 0.43% at Rs 32,500 where as Jun’12 saw the biggest jump of 0.91% closing at Rs33,380 per ton. This morning the Feb’12 contract opened flat where as Mar’12 has gained Rs50 in the first hour of trading.
Equity Markets:
· Asian stock markets fell Monday, with slower-than-expected growth in the U.S. and uncertainty about a tentative deal to resolve Greece's debt crisis weighing on investor sentiment.
· Benchmark oil slipped to near $99 per barrel while the dollar rose against the euro but fell against the yen.
· Japan's Nikkei 225 index shed 0.6 percent to 8,789.04. South Korea's Kospi was 1.3 percent lower at 1,939.90 and Hong Kong's Hang Seng dropped 0.5 percent to 20,401.32. Australia's S&P/ASX 200 lost 0.4 percent at 4,272.70.
· Benchmarks in Singapore, Indonesia, India and the Philippines also fell. Shares in mainland China were mixed after being closed for a week for Chinese New Year holidays. Taiwan and New Zealand rose.
· After a slightly weak start and a subsequent recovery, the Australian stock market faltered on Monday with investors treading cautiously ahead of the earnings reporting season. Fortescue Metals and Newcrest Mining are trading modestly higher and BHP Billiton is up marginally, while Rio Tinto is trading in negative territory with a loss of over 1 percent.
· The Indian rupee eased on Monday as oil import payments picked up and uncertainty about a deal to help debt-ridden Greece drove most Asian equity markets down. The 30-share BSE index was down 0.9 percent as profit-taking emerged after an 11.5 percent rally this month.
· Sail was down -1.95% at Rs 103.15, NMDC down 1.25% at Rs180.45, Tata steel at Rs451.95 down -1.48%, JSW Steel at Rs685.15 up by 3.61% and Sesagoa down -0.35% at Rs213.
1-27-12
Weekly Trade Update:
Brazilian main miner is preparing 2 huge vessel loads of iron ore for Philippines from where they would be shipped into China in smaller vessels. This process would start as early as the next week. With Australia’s supplies likely to be delayed and disrupted in the coming weeks due to rains and cyclones, it seems the miner has well planned the new move to take full advantage of the market conditions.
| | 20th January 2012 | 27th January 2012 | Weekly Change % |
OTPX 63.5/63% FOB Vizag | FOB Vizag {OreTeam Price Index} | 132 | 132 | 0 |
OTPX 58% FOB Goa | FOB Goa | 106 | 106 | 0 |
| | | | |
China Domestic Iron Ore | Fines, RMB wmt (avg) 66% | 870 | 870 | 0 |
China Domestic Iron Ore | Fines, RMB wmt (avg) 63% | 1030 | 1030 | 0 |
| | | | |
Indian Domestic Iron Ore | Fines, EXW 63.5/63% Orissa | 3000 | 3000 | 0 |
Indian Domestic Iron Ore | Lumps, EXW 10-30 mm 63% Orissa | 2400 | 2400 | 0 |
Indian domestic Iron Ore | Pellets, EXW Orissa | 8800 | 8800 | 0 |
| | | | |
Pb Fines Australia | 61.5% | 142 | 142 | 0 |
Mac Fines | | 140 | 140 | 0 |
Yandi Fines | 58% | 129 | 129 | 0 |
Brazil Fines | 64% | 152 | 152 | 0 |
| | | | 0 |
*since closing is after 17:00 IST, the previous day closing is taken into consideration; All Values in $/ton except where mentioned |
OreTeam’s Poll Results on “Will iron ore spot prices touch $155/t CFR (63.5/63% Fe) post Chinese vacations in early Feb?” indicate ::
· 56% participants optimistic about the post-vacation levels to touch $155 per ton from the current $148 per ton CFR levels, which is an increase of nearly $7 per ton.
· 36% believing that the prices will not touch the $155 per ton levels but may move up few dollars.
· 8% not holding a definite view.
o OreTeam’s view sits in between the 56% and 36% where the price might move up by $1-3 per ton but may not touch $155 per ton CFR in the opening week.
Steel::
| | 20th January 2012 | 27th January 2012 | Weekly Change % |
Steel India | Billets, Raipur (Rs/ton) | 31200 | 31200 | 0 |
| Rebar, New Delhi (Rs/ton) | 44100 | 44600 | 1 |
| HRC, Mumbai (Rs/ton) | 39600 | 39600 | 0 |
| Wire Rod, MGG (Rs/ton) | 38800 | 38800 | 0 |
| Sponge Iron, Raipur (Rs/ton) | 23500 | 23900 | 1.70 |
| Pig Iron, MGG (Rs/ton) | 32200 | 32200 | 0 |
| | | | |
China Steel | Rebar (avg) RMB/ton | 4120 | 4120 | 0 |
| Wire rod (avg) RMB/ton | 4315 | 4305 | 0 |
| Billet (avg) RMB/ton | 3710 | 3710 | 0 |
| HRC (avg) RMB/ton | 4385 | 4385 | 0 |
| | | | |
International Scrap | CFR WCI, HMS (1&2) | 470-480 | 470-480 | 0 |
| CFR WCI, Shredded | 485-495 | 485-495 | 0 |
| Turkey, HMS (1&2) | 465-470 | 465-470 | 0 |
| Turkey, Shredded | 475-480 | 475-480 | 0 |
| | | | |
SHFE Rebar (RMB) | May 2012 | 4315 | 4315 | 0 |
| Oct 2012 | 4329 | 4329 | 0 |
| | | | |
SSEC | Mar 2012(Open) | 4300 | 4300 | 0 |
| | | | |
LME Billet* | Cash Buyer | 509 | 517 | 1.57 |
| Cash Seller | 511 | 519 | 1.56 |
*since closing is after 17:00 IST, the previous day closing is taken into consideration; All Values in $/ton except where mentioned |
Freight::
| | 20th January 2012 | 27th January 2012 | Weekly Change % |
OTFX Superhandy Freight | ECI to China {OreTeam Freight Index} | 14 | 14 | 0 |
| WCI to China | 16 | 16 | 0 |
OTFX Panamax Freight | ECI to China | 13 | 13 | 0 |
| WCI to China | 15 | 15 | 0 |
| | | | |
Freight (Points) | Baltic Dry Index (BDI) | 893 | 753 | -15.67 |
| Baltic Cape Index (BCI) | 1559 | 1477 | -5.25 |
| Baltic Superhandy (BSI) | 858 | 721 | -15.96 |
| | | | |
Bunker Prices Singapore | IFO 138 | 725 | 725 | 0 |
| IFO 190 | 742 | 738 | -0.53 |
| MGO 150 | 950 | 950 | 0 |
*since closing is after 17:00 IST, the previous day closing is taken into consideration; All Values in $/ton except where mentioned |