Iron Ore X May'21

[Pages:8]IRONORE X

Monthly Iron Ore Insight



XMay 2021

Qty in mn t

India's iron ore export shipments down 7% in May'21 on lower Chinese buying

7.00 6.00

China

Indian iron ore export

Japan

South Korea

Malaysia

Indonesia

Others

5.00

4.00

3.00

2.00

1.00

Jun'20 Jul'20 Aug'20 Sep'20 Oct'20 Nov'20 Dec'20 Jan'21 Feb'21 Mar'21 Apr'21 May'21 Source: SteelMint Research

Indian iron ore export shipments were recorded at 3.69 million tonnes (mn t) in May'21, a 7% month-on-month (m-o-m) decline as compared to 3.99 mn t in Apr'21, according to vessel line-up data maintained with SteelMint. Apart from uncertainty prevailing amidst quarantine measures in China for Indian cargoes and port delays, subdued interest for low-grade ore in China resulted in a fall in exports. China's top steel-making city, Tangshan, had imposed mild-to-medium air pollution curbs from 18-22 May'21.Sintering machines, rotary kilns of cement plants and foundry (except for EAFs), brick/tile furnaces were ordered to suspend operations from midnight to 10 a.m. This resulted in preference for high-grade ores. Low-grade ore prices fall sharply:A major Australian miner also significantly increased the discount on low-grade ore for May'21 shipments. SteelMint learned from market participants that the miner increased the discount of SSF low-grade fines (Fe 56.7%) from 10.5% in Apr'21 to 18%for May'21 deliveries. As per SteelMint's assessment, Fe 57% Indian iron ore fines prices fell from $102/tonne FoB east coast of India around mid-May'21 to $87/t towards the end of the month. Indian iron ore export prices declined in the second half of May after global iron ore prices plunged from 10-year high levels following a steep decline in futures.

Indian iron ore exports to China down China continued to remain the largest importer of Indian iron ore in May'21 with 3.65 mn t, down 7%as against 3.93 mn t seen in Apr'21. Kenya was the second-largest importer at 0.05 mn t. Exports to Japan and Korea remained nil as NMDC's long-term export contract is yet to be renewed. NMDC's long-term iron ore export contracts with Japanese steel mills (JSMs) and South Korea's POSCO, which were to be renewed on 31 Mar'21, have been delayed. As a result, its exports rake movements from Chhattisgarh mines, collated on a monthly basis, show nil since Apr'21.

Rungta largest exporter Rungta Mines was the largest iron ore exporter at 0.66 mn t, in May'21, down 39% as against 1.08 mn t seen in Apr'21. Fomento was the second-largest exporter at 0.42 mn t, followed by SM Niryat at 0.30 mn t and Animesh Ispat at 0.22 mn t.

Key Prices

Prices

Currency

Odisha Index, 5-18 mm, Fe 63%

INR

Odisha Index, 10-30 mm, Fe 63%

INR

Odisha Index Fines, Fe 63%

INR

Karnataka, Lumps Fe 63%

INR

Karnataka, Fines Fe 60%

INR

NMDC C.G, DRCLO, 10-40mm, Fe 67%

INR

NMDC C.G, 6-40mm, Fe 65.5%

INR

NMDC C.G, Fines Fe 64%

INR

India Low-grade fines Fe 58/57 (FOB, East coast) $

Pellet Index (DAP, Raipur)

INR

India Pellet FOB (East coast)

$

Spot iron ore Index fines Fe 62% ( CNF China) $

Prices as on May'21

10th Jun'21

Avg

14,000 13,750 9,450

11925 11650 9175

6770

6770

4270 8,880

4270 8880

7650

7650

6560

6560

16,300 229 214

16,150 221 207

Apr'21 % Change Avg

10425 10013 7750 6180 3650 7430 6400 4810

14% 16% 18% 10% 17% 20% 20% 36%

13,575

19%

200

11%

179

15%

Prices

Currency

Pig iron (Steel grade, Ex-Durgapur)

INR

HMS Scrap (Ex-Mumbai)

INR

Sponge iron (C-DRI, 80 FeM) Exw Raipur INR

Billet index, Exw Raipur

INR

HRC (Exy Mumbai)

INR

Prices as on 10 Jun'21 39,700 34,400 32,000 43,100 67,500

May'21 Avg 38,715

35,654 29,790 42,198 66,300

Apr'21 Avg 38,612

32,842 30,538 41,392 63,400

% Change

0% 9% 2% 2% 5%

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Prices in INR/t

NMDC rolls over iron ore prices for June'21 deliveries

India's largest merchant and govt-owned iron ore miner, NMDC has kept prices unchanged for June'21 deliveries, SteelMint learned from credible sources. The price announcement may give some relief to Indian steel mills and sponge players who were worried about the sharp hike in Odisha iron ore prices which rose by upto INR 2,000/t w-o-w.

The Chhattisgarh government is ready with a shortlist of 16 limestone and iron ore blocks that it hopes to auction in 2-4 months. These are largely virgin areas, some of which had been explored in the past by private companies whose claim may have lapsed after recent amendment to the mining laws.

Karnataka iron ore e-auction sales up 7% m-o-m in May'21

Karnataka registered a 7% rise in its monthly e-auction sales volumes in May'21. The total allotted iron ore quantity in May'21 was recorded at 2.94 million tonnes (mn t) compared to 2.76 mn t in Apr'21. JSW Steel, India's major private steel mill and the largest buyer of Karnataka's auctioned iron ore, increased its purchases by 10% in May '21.

Fig in mn t

Karnataka Iron Ore E-Auction

4

Quantity Sold

Lumps(Fe 63%)

Fines (Fe 60%)

8000

3.5

7000

3

6000

2.5

5000

2

4000

1.5

3000

1

2000

0.5

1000

0

0

Apr'20 May'20 Jun'20 July'20 Aug'20 Sept'20 Oct'20 Nov'20 Dec'20 Jan'21 Feb'21 Mar'21 Apr'21 May'21

Over 0.5 mn t of iron ore sold at SAIL auctions in May'21

PSU steel major Steel Authority of India Ltd (SAIL) sold over 530,000 t of iron ore at auctions in May'21 from mines under the company's Raw Materials Division in Odisha and those under the Bhilai Steel Plant in Chhattisgarh, as per data available with SteelMint.

May'21 iron ore sales rose manifold compared to just 40,000 t in Apr but edged lower vis-a-vis more than 850,000 t in Mar.

In mid-May, the Odisha government issued directions to SAIL to halt all merchant dispatches of iron ore owing to discrepancies in mining operations of dump fines, while allowing the state-owned steelmaker to continue ore dispatches for captive consumption.

However, the MoM later issued a clarification reconfirming the permission granted to SAIL for sale of 25% of total mineral production recorded in the previous year under MMDR Act, 1957. Also, the company was allowed to sell 50% of its current year's iron ore production, as per the provisions of the newly-introduced section 8A (7A) of MMDR Act. For mineral sales taking place after 28 Mar'21, however, SAIL was asked to pay the applicable additional charge, as per the Sixth Schedule of the MMDR Amendment Act. Following this order, the steel major resumed iron ore auctions from its Odisha mines on 25 May.

900,000

Bolani

Barsua

SAIL iron ore auction

Rajhara Dalli kiruburu Meghahatuburu

Bhadravati

Taldih

800,000

700,000

600,000

500,000

400,000

300,000

200,000

100,000

0 May'20

June'20

Aug'20

Sep'20

Oct'20

Nov'20 Dec'20

Jan'21

Feb'21

Mar'21

Apr'21

May'21

Fig in t

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Iron ore lump prices hit record high in OMC's auction

State-owned Odisha Mining Corporation's (OMC) e-auction for 619,000 t of iron ore lump was concluded at an average of 42.8% over the set base price and entire quantity offered got booked. The state-owned miner had increased the quantity to be put under the hammer to 619,000t against 522,000 t declared on 25 May'21, as per SteelMint reports. Few of the key buyers in today's auction were - Tata Steel, JSPL etc.

OMC Iron ore auction

Mines

Size (mm)

Gandhamardan Koira Daitari Tiring Pahar Guali

Jilling Total

10-40 10-180 10-40 10-40 10-40

5-18 18-40 5-18 18-40

Fe (%)

62% 65% 62% 62% 62% 62% 62% 62% 62%

Base Price as on

02nd Jun'21 (INR/t)

7,500 7,300 8,400 7,800 9,000 9,100 8,400 9,600 8,400

Bid Price as on

02nd Jun'21 (INR/t)

10,600-11,350 10,550 11,600 11,550 12,900 12,700 12,050 13,000 12,000

Quantity (t)

420,000 5,000 10,000 50,000 17,000 55,000 10,000 12,000 40,000

619,000

Crude steel output up 3% m-o-m

During May '21, crude steel output was 8.52 mn t, marginally up by 3% from 8.30 mn t in Apr '21. However, Indian crude steel production edged up by 36% y-o-y against 6.26 mn t in May '20. The domestic steel output has been driven by increased exports and higher capacity utilisation levels than last year.

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Iron Ore Movement in mnt

India Iron Ore Production-State wise

30

Odisha Chhattisgarh Karnataka Jharkhand Others

25

Production in mn t

20

15

10

5

0 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21

Source: SteelMint

Iron ore movement increases as Crude steel production improves

Indian Iron Ore Movement vs Crude Steel Prod.

Chhattisgarh

Jharkhand

Karnataka

Odisha

Goa

Import

Export

Crude steel

20

12

18 10

16

14 8

12

10

6

8 4

6

4 2

2

0

0

Apr'20 May'20 June'20 July'20 Aug'20 Sep'20 Oct'20 Nov'20 Dec'20 Jan'21 Feb'21 Mar'21 Apr'21

Crude Steel Production in mnt

Iron ore sourcing pattern of India major mills

JSW Iron ore

Sourcing Vs Crude Steel Production

2.40 2.20 2.00 1.80 1.60 1.40 1.20 1.00 0.80 0.60 0.40

Apr'20

Iron Ore Sourcing

Crude Steel Production

June'20 Aug'20 Oct'20 Dec'20 Feb'21

1.60 1.40 1.20 1.00 0.80 0.60 0.40 0.20 -

Apr'21

Source: SteelMint Research

Crude Steel Production in mn t

Iron Ore Sourcing in mn t

AM/NS : Iron Ore

Sourcing v/s Crude Steel Production

Iron Ore Sourcing

Crude Steel Production

1.80 1.60 1.40 1.20 1.00 0.80 0.60 0.40 0.20

-

Apr'20

June'20 Aug'20

Oct'20

Dec'20

Feb'21

0.70 0.60 0.50 0.40 0.30 0.20 0.10 -

Apr'21

Source: SteelMint Research, Customs, Odisha govt

Crude Steel Production in mn t

Iron Ore Sourcing in mn t

Copyright ? 2020 SteelMint. All rights reserved. Unauthorised distribution is strictly prohibited.

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World's major countries export data

Exports in mnt

85 80 75 70 65 60 55 50

May'20

Australia Iron Ore Export

Jul'20

Sep'20

Nov'20

Jan'21

Mar'21

May'21

Source: SteelMint Research

Exports in mn t

7 6 5 4 3 2 1 0

May'20

Indian Iron Ore Exports

Jul'20

Sep'20

Nov'20

Jan'21

Mar'21

May'21

Source: SteelMint Research

Exports in mn t

Quantity in mn t

40 35 30 25 20 15 10

May'20

Brazil Iron Ore Export

Jul'20

Sep'20

Nov'20

Jan'21

Mar'21

May'21

Source: SteelMint Research

7 6.5

6 5.5

5 4.5

4 3.5

3

Apr

South Africa Iron Ore Export

Jun

Aug

Oct

Dec

Feb

Apr

Source: SteelMint Research

World's major countries import data

120.00 100.00 80.00

China iron ore prices vs Imports vs inventories

Australia (LHS)

Brazil (LHS)

South Africa (LHS)

India (LHS)

Other (LHS)

Average China spot index (RHS)

Iron ore inventory (LHS)

200 180 160 140

60.00

120

100 40.00

80

20.00 60

-

Apr'20

May'20

Jun'20

Jul'20

Aug'20 Sept'20 Oct'20

Nov'20

Dec'20

Jan'21

Feb'21

Mar'21

40

Apr'21

Source: SteelMint Research

Imports in mn t

11 10 9 8 7 6 5 4

Apr

Japan Iron Ore Imports

Jun

Aug

Oct

Dec

Feb

Apr

Source: SteelMint Research

Imports in mn t

8 7.5

7 6.5

6 5.5

5 4.5

4 3.5

3

Apr

South Korea Iron Ore Imports

Jun

Aug

Oct

Dec

Feb

Apr

Source: SteelMint Research

Prices in $/t (RHS)

Quantity in mn t (LHS)

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SteelMint's pellet index records sales at 85,000 t in May'21

SteelMint's bi-weekly domestic iron ore pellet index, PELLEX, recorded total sales of 85,000 t of pellets (Fe 63%) in the Raipur market in May'21 against 163,000 t in Apr ? a drop of over 47% on month. High domestic pellet prices and falling semi-finished steel prices dampened buying interest, especially since mid-May, SteelMint notes. As per PELLEX assessments throughout the month, the weighted average price for Fe 62.5-63% material stands at INR 16,150/t in May ?over 14% higher compared to INR 14,106/t in Apr.

Indian Pellet Prices

Trade terms Prices as on 10th Jun May Avg

PELLEX

DAP Raipur

Barbil

FOR

Bellary

EXW

Durgapur

EXW

Jamshedpur

EXW

Jharsugda

EXW

Kandla

DAP

India Pellet exports FOB

16,300 15,650 14,000 15,500 15,500 15,700 16,200

229

16,150 14,390 13,185 14,590 14,631 15,265 16,100

221

Apr Avg

% Change

14,106

14%

12,875

12%

12,500

5%

12,775

14%

12,700

15%

12,925

18%

14,750

9%

199.6

11%

Note-: India domestic prices in INR/t

300000

Steelmint Pellet Index

Quantity sold

Average Monthly Price

18000

250000

16000 14000

200000

12000

150000

10000 8000

100000

6000

50000

4000 2000

0

Apr'20 May'20 Jun'20

Jul'20

Aug'20 Sep'20 Oct '20 Nov'20 Dec'20

Jan'21

0

Feb'21 Mar'21 Apr'21 May'21

Average index price in INR/t

China Pellet Imports vs Inventories

16.0

India (LHS)

Ukraine (LHS)

Brazil (LHS)

Russia (LHS)

Other (LHS)

Total Imports

Inventories (RHS)

12.0

14.0 10.0

12.0 8.0

10.0

8.0

6.0

6.0 4.0

4.0 2.0

2.0

-

-

Jan'20 Feb'20 Mar'20 Apr'20 May'20 Jun'20 Jul'20 Aug'20 Sept'20 Oct'20 Nov'20 Dec'20 Jan'21 Feb'21 Mar'21 Apr'21

Source: SteelMint Resdearch

Quantity in t

Quantity in mnt

Quantity in mnt

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Disclaimer

SteelMint has taken due care and caution in compilation of content. Information is just for reference not intended for trading purpose or to address your particular requirement. The content includes facts, views, and opinions are of individuals and not that of the SteelMint management. We and our content licensors do not guarantee or warrant the accuracy, completeness or timeliness of, or otherwise endorse these views, and opinions. SteelMint and its affiliates, or their employees, directors or agents shall not be liable or responsible for any loss or costs or any action whatsoever arising out of use or relying on the spot prices disseminated.



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