iron ore analysis
TRANSCRIPT
Volume 6 / Issue 47 / March 9, 2012
Today in raw materials
Coking coal market
Impasse emerging in Asia-Pacific
coking coal market 3
Scrap market
Turkish mill procures deep-sea scrap
cargoes from US 4
East Asian scrap importers pause
to assess market 4
Exchanges
Iron ore swaps trading subdued,
prices drift slightly 6
Other News
Tata Steel calls on UK government to
act on energy 6
Ferroalloys market
Japanese ferromoly prices fall,
Chinese FeSi price up 11
Marketplace
12
The McGraw-Hill Companies
www.twitter.com/PlattsSBBSteel
Platts raw material assessments, March 9
Close/Midpoint Change % Chg
IODEX Iron ore fines 62% Fe ($/dmt)
CFR North China 144.75-145.75 145.25 1.25 0.87
Please see Platts complete iron price/netbacks table, p.3
Coking coal, premium low vol ($/mt)
FOB Australia 208.50 208.50 +0.00 0.00
CFR China 223.50 223.50 +0.00 0.00
Please see full metallurgical coal price/freight table, p.4
Ferrous scrap ($/mt)
HMS FOB Rotterdam 404.00-408.00 406.00 0.00 0.00
A3, FOB Black Sea 414.00-416.00 415.00 -1.00 -0.24
HMS CFR Turkey 439.00-441.00 440.00 0.00 0.00
Ferrous scrap ($/lt)
Shredded del Midwest US 440.00-445.00 442.50 0.00 0.00
Shredded del dock East Coast 420.00-425.00 422.50 0.00 0.00
HMS del dock East Coast 395.00-400.00 397.50 0.00 0.00
TSI raw material indices, March 9
Frequency Change % Chg
Iron ore fines 62% Fe
Chinese imports (CFR North China port), $/dmt 142.60 Daily 0.00 0.00
Please see TSI’s complete iron ore price table, p.2
Ferrous scrap
HMS 1&2 80:20, Turkish imports (CFR port), $/mt 442.00 Daily -3.00 -0.67
Shredded, US domestic (del Midwest mill)*, $/lt 443.00 Weekly (Fri) -1.00 -0.23
Shredded, Indian imports (CFR port)*, $/mt 484.00 Weekly (Fri) 1.00 0.21
* Latest index March 9
Singapore—Seaborne iron ore prices destined
for Asia rebounded Friday after a two-day losing
streak as stronger rebar futures and a revival in
market confidence led to higher spot deals.
The Platts 62% Fe IODEX assessment was up
$1.25 Friday to $145.25/dry mt CFR North China.
On Friday, Rio Tinto sold a 165,000 mt
cargo of 61% Fe Australian Pilbara Blend fines
at $143.50/dmt CFR China main port, loading
March 20-29.
Earlier in the day Rio was heard to be
offering the cargo at $145/dmt CFR China
main port, after being absent almost the
entire trading week. Most market participants
said the settlement suggested the market
had indeed recovered ground Friday.
A Singapore-based trader said $143.50/
dmt CFR was an acceptable price because
“PB fines are well-valued and mills like them
for steelmaking. I think they might pay more
Iron ore rebounds on improved steel market
for it.” Another trader said buying interest and
inquiries were increasing for medium grades
of iron ore, lending support to prices.
A Singapore-based trader said the increased
Rio Tinto tender suggested buyers were getting
“buoyant” on demand for iron ore as construction
activity picked up due to warmer weather in China.
Meanwhile, Australian miner BHP Billiton
sold a Capesize cargo of 61% Fe Mining Area
C fines at $140.50/dmt CFR Shanghai, several
dollars lower than the PB fines trade.
However, a number of traders said they had
not received this offer, indicating it may have
been restricted to mills.
Vale back in the spot market
Brazilian miner Vale was back in the spot market
Friday after seven consecutive days of offering
iron ore cargoes. The miner was heard to have
Coking coal market
ArcelorMittal refutes coking
coal Q2 settlement report
Singapore—ArcelorMittal, the world’s
biggest steelmaker, said Friday it had not
reached an agreement to buy hard coking
coal from Anglo American at $210/mt FOB
for the April-to-June quarter.
“This suggestion of us reaching a settlement
at that price of $210 is incorrect,”
Giles Read, a London-based spokesman
for the company, said by e-mail.
Platts reported earlier this week (SBBSMD,
March 7, page 1) that Anglo
American reached an agreement with a
European mill for its premium hard coking
coal, German Creek, at that price, with
widespread market chatter pointing to
(continued on page 2) (continued on page 3)
SBB Steel Markets Daily March 9, 2012
2 Copyright © 2012 The McGraw-Hill Companies
TSI Dai ly Iron Ore Price Indices
TSI’s indices reflect average daily iron ore spot prices. Full price histories are available to TSI
subscribers on its website. Details of TSI’s methodology and product specifications, together with
general information about TSI and its full range of steel indices and subscription services, can also be
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SBB Steel Markets Daily
General Manager, Metals
Andrew Goodwin
The McGraw-Hill Companies
TSI daily iron ore indices, March 9
$/dmt Change % Chg Low* High*
62% Fe fines, 3.5% Al, CFR Tianjin port 142.60 0.00 0.00 116.90 183.30
58% Fe fines, 3.5% Al, CFR Tianjin port 132.90 -0.10 -0.08 102.90 163.70
62% Fe fines, 2% Al, CFR Qingdao port 144.40 0.00 0.00 119.20 186.60
63.5/63% Fe fines, 3.5% Al, CFR Qingdao port 146.10 0.10 0.07 122.70 190.00
* Past 12 months
Per 1% Fe differentials, $/dmt
$/dmt Change
Range: 61-64% Fe 3.00 0.00
Range: 56-59% Fe 4.00 0.00
FOB netback per route / basis TSI 62% Fe, 3.5% Al fines
Origin Vessel Type FOB ($/dmt) Change % Chg
W.Australia Capesize 134.79 0.08 0.06
India Supramax 128.90 -0.06 -0.05
Brazil Capesize 122.22 0.02 0.02
Rolling Averages, $/dmt
5-day Monthly Quarterly
62% Fe fines, 3.5% Al, CFR Tianjin port 142.88 142.97 140.74
58% Fe fines, 3.5% Al, CFR Tianjin port 133.12 133.01 127.71
62% Fe fines, 2% Al, CFR Qingdao port 144.68 144.77 142.52
63.5/63% Fe fines, 3.5% Al, CFR Qingdao port 146.30 146.39 144.66
sold 220,000 mt of 63.13% Fe Standard
Sinter fines Guaiba at $143.75/dmt CFR
China main port, market sources who received
the tender said. The cargo will pass Singapore
March 14 and contains 1.47% alumina, 5.22%
silica, 0.055% phosphorus and 8.5% moisture.
This trade was normalized and reflected
in the Plat`ts assessments.
Penalties were factored, because
sources pointed out that the size of this
cargo restricted the number of ports and
buyers that could receive it. Additionally,
there was a penalty due to the cargo’s silica
content of over 4.5%.
Separately, sources said the improvement
in market sentiment could also be attributed to
China’s consumer price index slipping to a
20-month low of 3.2% in February.
“With the worries on inflation easing, markets
are getting buoyant that the Chinese government
may adopt a more loose monetary
policy to spur spending, such as lowering interest
rates; that will lower capital costs and the
injection of more liquidity into the economy will
spur steel consumption and inevitably lift the
price of iron ore,” a Shanghai trader said.
Meanwhile, among the lower-Fe grades,
a Guangdong-based trader sold an 80,000-
90,000 mt cargo of 54% Fe Indian lump
ore Thursday at $109/dmt CFR main China
port. “Buying mood is gaining traction,” the
trader said.
Trading company PT Resources was still
offering its Panamax cargo of 52/52% Fe fines
at $102/dmt CFR North China. It first made
the offer Tuesday, but said it had yet to award
Iron ore rebounds on improved
steel market ... from page 1
SBB Steel Markets Daily March 9, 2012
3 Copyright © 2012 The McGraw-Hill Companies
Platts Dai ly Iron Ore Price Assessments
Platts daily iron ore assessments, March 9
$/dmt Midpoint Change % Chg
IODEX 62% Fe CFR North China 144.75-145.75 145.25 1.25 0.87
63.5/63% Fe CFR North China 148.75-149.75 149.25 +1.25 +0.84
65% Fe CFR North China 156.50-157.50 157.00 +1.25 +0.80
58% Fe* CFR North China 128.25-129.25 128.75 +1.00 +0.78
52% Fe CFR North China 99.50-100.50 100.00 +1.00 +1.01
*Al = 4.0% max
Per 1% Fe differential (Range 60-63.5% Fe), $/dmt
$/dmt Change
Range 60-63.5% Fe 3.75 0.00
FOB netbacks per route / basis IODEX 62% Fe
Route Vessel Type Freight rate ($/wmt) Moisture (%) IODEX ($/dmt)
Australia Capesize 7.80 8.03 136.77
India West Panamax 13.25 8.11 130.83
India West Handymax 15.50 8.11 128.38
India East Handymax* 16.25 8.00 127.59
Brazil Capesize 20.70 9.00 122.50
South Africa Capesize 14.25 3.00 130.56
* Typical two-port co-loadings from Haldia and Paradip
Freight differentials to major import ports, $/wmt
From Qingdao on a Free Out basis
To North China: Caofeidian, Tianjin & Xingang 0.25
To East China: Beilun -0.25
To South China: Zhanjiang & Fangcheng -0.75
Rolling monthly average, $/dmt
IODEX 62% Fe 144.57
IODEX 62% Fe CFR North China OTC swaps assessment, March 9
switch
IODEX 62% $/dmt Change % Chg TSI 62
Apr 12 138.000 -0.500 -0.36 1.500
May 12 137.000 0.000 0.00 1.500
Jun 12 136.000 0.500 0.37 1.500
Q2 2012 137.000 0.000 0.00 1.500
Q3 2012 133.500 0.000 0.00 1.500
Q4 2012 131.500 1.000 0.77 1.500
Calendar 2013 127.500 0.500 0.39 1.500
Detailed methodology and specifications are found here: www.platts.com/IM.Platts.Content/
MethodologyReferences/MethodologySpecs/ironore.pdf
ArcelorMittal as the buyer.
Contacted by Platts SBB, Read would not
say whether or not ArcelorMittal had agreed
a settlement with Anglo American at another
price. “If a European steelmaker has agreed
a deal at that price, it wasn’t us,” he said
over the phone without elaborating further.
Both companies were unable to comment
at the time of Wednesday’s report.
— Keith Tan
Impasse emerging in Asia-
Pacific coking coal market
Singapore—The spot market for hard
coking coal destined for Asia was steady
Friday, with buy- and sell-side indications
not alluding to movement in any direction.
Spot trade remained rather limited, especially
on second-tier hard coking coals,
the tender at a price it found satisfactory. The
cargo had 8% alumina and 8% silica and was
for prompt loading in Goa. Meanwhile, Radiant
World was still offering a 75,000 mt 52/52%
Fe cargo with 8% alumina and 9% silica.
The most active October rebar futures in
Shanghai gained traction for the second
straight day Friday, increasing Yuan 38 to Yuan
4,319/mt, from Thursday’s last trade. The
spot price of square billet in Northern
Tangshan was up Yuan 10 to Yuan 3,760/mt
ex-stock, according to mill sources in Hebei.
Iron ore freight rates were stable at
$13-13.50/wet mt for a Panamax from
Goa to China, shipping sources reported.
The slightly firmer numbers seen earlier
this week were due to high bunker costs,
and more demand for vessels.
“There has been an increase in
demand for coal and this is pushing rates
up,” a shipping source in India said.
Outlook pessimistic for Japanese steel
While steel prices in China took a positive
turn Friday, Japanese mills were heard
to be struggling with poor margins and consequently
kept production levels low.
A Tokyo-based steelmaker said its output
levels were being maintained at 70-80%, with
no immediate plans to ramp up production.
“The first quarter of the Japanese fiscal year
[April to June] will not see any recovery for the
Japanese steel industry,” the mill source said,
adding, “I think we can only expect some good
news in July, so we will aim to go back to higher
production between July and September.”
The source added that he was asking
suppliers to lower their long-term contract
tonnage and some have already agreed.
— Celestyn Wong and Melvin Yeo
with Annalisa Jeffries, in London
Coking coal market
...from page 1
where no cargoes were heard offered.
Platts premium low-vol coal was
assessed at $208.50/mt FOB Australia,
while HCC 64% CSR mid-vol also was
unchanged at $186.50/mt.
In the premium category, on top of offers
heard this week for Illawara and German
Creek, on Friday Xstrata’s Oaky Creek was
said to have been offered to China at $210/
mt FOB although this could not be verified.
Chinese buy-side interest for top-tier
coals could be found in the $215-220/mt
CFR North China range.
For non-premium HCCs, an Indian trader
expressed buying interest for a coal
such as Vale’s Carborough Downs at
$180-185/mt FOB Australia.
All buyers surveyed sensed weakness
in the market. “If monetary policy in China
improves, then the market could rise briefly,
but otherwise the overall trend is
down,” a Chinese trader said.
“I still think the market is going down.
People have tons to move,” a European
SBB Steel Markets Daily March 9, 2012
4 Copyright © 2012 The McGraw-Hill Companies
Platts Daily Metallurgical Coal Assessments, March 9
Coking coal price assessments ($/mt)
FOB CFR CFR Change
Australia China India Australia China India
HCC Peak Downs Region 208.00 223.00 226.00 +0.00 +0.00 +0.00
Premium Low Vol 208.50 223.50 226.50 +0.00 +0.00 +0.00
HCC 64 Mid Vol 186.50 201.50 204.50 +0.00 +0.00 +0.00
Low Vol PCI 145.00 160.00 163.00 +2.00 +2.00 +2.00
Low Vol 12 Ash PCI 127.00 142.00 145.00 -3.00 -3.00 -3.00
Semi Soft 134.00 149.00 152.00 -1.00 -1.00 -1.00
Met Coke - - 385.00 - - +11.00
HCC Assessed Specifications
CSR VM Ash S P TM Fluidity
HCC Peak Downs Region 74% 20.7% 10.5% 0.60% 0.030% 9.5% 400
Premium Low Vol 71% 21.5% 9.3% 0.50% 0.045% 9.7% 500
HCC 64 Mid Vol 64% 25.5% 9.0% 0.60% 0.050% 9.5% 1,700
Penalties & Premia: Differentials ($/mt)
Within % of Premium Low Vol FOB Net Value
Min-Max Australia assessment price ($/mt)
Per 1% CSR 60-74% 0.50% 1.04
Per 1% VM (air dried) 18-28% 0.50% 1.04
Per 1% TM (as received) 8-11% 1.00% 2.09
Per 1% Ash (air dried) 7-10.5% 1.25% 2.61
Per 0.1%S (air dried) 0.3-1% 1.00% 2.09
The assessed price of HCC Peak Downs® originates with Platts and is based on price information
for a range of HCCs with a CSR > 67% normalized to the standard of HCC Peak Downs® (CSR 74%).
Peak Downs® is a registered trade mark of BM Alliance Coal Operations Pty Limited “BMA”. This price
assessment is not affiliated with or sponsored by BMA in any way.
Dry bulk freight assessments
Route Vessel Class Freight rate ($/mt) Moisture (%)
Australia-China Panamax 15.00 9.50
Australia-India Panamax 18.00 9.50
East Australia: basis Hay Point port. North China: basis Qingdao port. East India: basis Paradip port.
Detailed methodology and specifications are found here: http://platts.com/IM.Platts.Content/
MethodologyReferences/MethodologySpecs/metcoalmethod.pdf
Source: Platts
steelmaker commented.
A Japanese mill had a similar point of
view. “Obviously it’s a buyer’s market. I
don’t have to buy spot, but if I did, I would
probably bid below $200/mt FOB [for premium
low-vol coal],” he said.
A Mediterranean steelmaker added
that with the global economy “not getting
any better,” there was “room to go down a
little more.”
Asked to forecast the Asian HCC outlook,
a mining executive said he foresees
some pressure in coming months, because
traders had recently taken substantial long
positions of US coals for resale in Asia,
including high-quality low-vols.
Met coke jumps on tight supply
There appeared to be a divide in India’s
met coke market with strong supply of lowerquality,
lower-priced material from the Black
Sea, but a tightness for higher-quality met
coke with over 62% CSR, sources reported.
Highlighting this split, Ukrainian 62% CSR
coke was heard offered mid-week at $345/mt
CFR India, while an Australian 70% CSR cargo
was said to have been sold closer to $390/mt
CFR in the last week, and a high-quality Asianorigin
62% CSR at $385/mt CFR.
Market participants in India highlighted
that because of inconsistent quality, material
from the Black Sea, even when of a
similar CSR, was not as valued as
Japanese or Australian coke.
The large differentials between higher
and lower-CSR coke also were apparent in
India’s domestic market. Indian 65% CSR
was heard being sold around Rupees
21,000/mt ($419) ex-works East India, while
57-60% CSR blast furnace coke was pegged
at Rupees 19,000/mt, or $381 CFR India.
— Julien Hall
Scrap market
Turkish mill procures deep-sea
scrap cargoes from US
London—A Turkish mill booked two cargoes
from a US supplier containing HMS I/II
(80/20), market participants said Friday.
One of the bookings is believed to be for
March shipment and both were heard at a
price of $443/mt CFR Iskenderun by a longrolled
steelmaker. This price was confirmed to
a number of participants close to the sell side.
But, an offer from a major US recycler
— not a regular exporter — at $445/mt
CFR for the same grade to be loaded in
Tampa, Florida attracted demand from
Turkish mills at about $435/mt CFR. The
Platts daily HMS I/II (80/20 blend) import
assessment therefore remained flat at
$440/mt CFR Turkish ports Friday.
The reason for the unusual entrance of
the US recycler offering this cargo was
viewed differently by market players.
Market bulls believe it shows the recycler’s
desire to push down global benchmark prices,
such as CFR Turkey, for positional reasons,
while bears argue that it indicates there is too
much scrap on the ground in the US, which,
unlike Europe, did not undergo the same cold
snap that limited collection in February.
US contracts being settled for March procurement
showed no change on-month and
were inked on February 13-14 last month. In
that period, the Turkish HMS I/II (80/20
blend) assessment basis Platts was
between $425-430/mt CFR. Since then,
freight has hardened on many of scrap’s
main Handysize routes though, and is rendering
much of the Black Sea A3 supply
uncompetitive at current market levels.
However, with Turkish mills feeling more
strain on their finished product prices now that
domestic buyers have filled their stocks, export
offers will have to return to international levels.
A French recycler that is rarely heard
dealing with Turkish mills was also in the
market this week with its own HMS cargo
on offer. While shred and other higher-graded
scrap is in scarce supply on the continent,
HMS blends are being offered; one
such cargo was heard at $428/mt CFR
Turkish ports for HMS I/II (70/30 blend).
— Ciaran Roe
East Asian scrap importers
pause to assess market
Singapore—The scrap import market in
East Asia was quiet with thin buying activity
this week, sources told Platts.
“Scrap prices appear to be close to the
top,” a regional trader told Platts. Without
much support from rebar prices, with the
regional rebar markets sluggish, there was
not much room for scrap prices to rise further,
he added.
“The market may be softening a little but
SBB Steel Markets Daily March 9, 2012
5 Copyright © 2012 The McGraw-Hill Companies
SBB-SMD raw materials reference prices
$/mt Change % Chg
Coke and coal
Coke 10.5-12.5% ash - China export, FOB Tianjin 480.00 10.00 2.13
Charcoal - Brazil domestic 238.19 2.87 0.01
Iron
SGX 62% Fe Iron Ore cash-settled swaps (dry mt) - front month 139.00 0.67 0.48
Iron ore concentrate 66% Fe wet - China domestic 171.60 2.38 0.01
Vale blast furnace pellet 65.7% Fe, Europe, FOB Tubarão ($ cent/mtu) 295.85 -65.38 -18.10
Pig iron - FOB - Black sea export 470.00 10.00 2.17
Pig iron - FOB Ponta da Madeira - Brazil export 485.00 -5.00 -1.02
Pig iron - Hebei - China domestic 521.15 -4.77 -0.01
HBI - Venezuela export 360.00 20.00 5.88
SBB-SMD ferrous scrap reference prices
Price Change % Chg
Scrap, Europe/Turkey ($/mt)
Auto bundles - Turkey domestic, delivered 430.64 0.00 0.00
OA (plate & structural) - UK domestic, delivered 412.69 -3.97 -0.01
Shredded - delivered - N. Europe domestic, delivered 446.98 -13.44 -0.03
Shredded - delivered - S. Europe domestic, delivered 432.86 -6.61 -0.02
Scrap, Asia ($/mt)
H2 - del Olayama - Tokyo Steel purchase price, at works gate 417.29 -37.37 -0.10
H2 - del Utsunomiya - Tokyo Steel purchase price, at works gate 411.06 -18.68 -0.05
Heavy - Shanghai - China domestic 542.92 0.00 0.00
HMS 1/2 80:20 CFR - East Asia import 467.50 0.00 0.00
Shindachi Bara - del Okayama -
Tokyo Steel purchase (list) price 442.20 -37.37 -0.09
Shindachi Bara - del Utsunomiya -
Tokyo Steel purchase (list) price 435.98 -18.68 -0.04
Shredded scrap A (auto) - del Okayama -
Tokyo Steel purchase (list) price 427.26 -37.37 -0.10
Shredded scrap A (auto) - del Utsunomiya -
Tokyo Steel purchase (list) price 421.03 -18.68 -0.05
Scrap, Americas ($/lt)
#1 Busheling - N. America domestic, del, Midwest US 472.50 0.00 0.00
HMS 1/2 - N. America domestic, del Midwest US 397.50 0.00 0.00
Plate & Structural - N. America domestic, del Midwest US 427.50 0.00 0.00
($/mt)
HMS 1/2 - Brazil S.E. domestic 261.87 14.55 0.05
there is still demand among the mills,” another
trader noted. Limited offers for bulk HMS I/II
(80/20) were at $470-480/mt CFR East Asia.
In Taiwan, fresh offers for containerized
80/20 fell to $450/mt CFR, from $455/mt
earlier last week. However, Taiwanese importers
were largely absent during the week.
Taiwan’s scrap import market was flat after
three weeks of rising prices since mid-February.
“Many mills are adopting a wait-andsee
approach,” a local trader said.
Taiwanese mills were trying to book local
scrap at lower purchase prices. “The mills
also want to adjust inventories and average
costs for imported scrap cargoes
booked in the last round,” he added.
Traders reported that a few deals
involving small tonnages were booked at
$445-450/mt CFR Taiwan, down from
$450-455/mt CFR the week before. Offers
of containerized 80/20 to Southeast Asia
were prevailing at $450-455/mt CFR.
— Anna Low
Japanese scrap export
prices rise in Kanto auction
Singapore — Prices of Japanese scrap
exported through Tokyo Bay seem set to
rise following Friday’s auction for H2 grade
material, sources told Platts.
The regular monthly auction held by the
Kanto Tetsugen grouping of scrap dealers serving
the Chiba-Yokohama-Tokyo areas selected
four winning bids for shipments during April.
The winning bids were awarded 5,000 mt
each at Yen 32,700/mt ($399/mt) FAS, Yen
32,500/mt FAS and Yen 32,410/mt FAS while
the last, which secured 10,000 mt, was at Yen
32,400/mt. The winning tender was Yen
1,800/mt ($22/mt) higher than that last
month for material for export during March.
Industry sources said the first bid was
submitted by Sangyo Shinko, the second
and fourth by JFE Shoji Trade, and the third
by Marubeni Tetsugen.
It is understandable that bids were
higher this month than last as prices have
risen, a Tokyo-based trader said. But prevailing
export prices of Japanese H2 for
Korea are around Yen 33,000/mt FOB or
equivalent to Yen 31,500-32,000/mt FAS.
“As the winning (Kanto Tetsugen) bids
were higher than current export prices, export
prices may climb again,” the trader told Platts.
Another Tokyo-based scrap trader said
domestic prices have been weakening but
deliveries to mini mills were still smooth
despite the recent cuts.
Last Thursday Tokyo Steel
Manufacturing cut its scrap purchase prices
by Yen 500/mt, the leading mini mill’s
first cut since end-January. Its buying price
for H2 material at its Okayama works in
western Japan became Yen 34,500/mt
($421/mt) for seaborne delivery and Yen
34,000/mt for truck delivery, as reported.
Japanese scrap exports to Korea were currently
quiet but as soon as the Korean mills
start booking for April delivery, scrap collectors
will begin accumulating scrap around the Tokyo
Bay area in preparation for export.
“The Japanese mini mills will then have
to lift prices again to ensure they get deliveries,”
a trader added.
— Yoko Manabe
China’s scrap prices hold
stable, steel market shaky
Singapore—Domestic scrap prices
were generally stable in the majority of
China’s regions this week as the finished
steel market remained unsettled. However,
the buying prices of major mills have fluctuated,
sources told Platts SBB.
In eastern China’s Jiangsu province,
Wuxi Xuefeng Iron & Steel — a subsidiary
of the Shagang Group — raised its scrap
prices by Yuan 50/mt ($8) on Tuesday.
This took its buying price for heavy melting
scrap to Yuan 3,270/mt including 17% VAT.
In central China’s Hubei province, leading
steelmaker Wuhan Iron & Steel lifted its
buying price for HMS to Yuan 3,360/mt on
Thursday from its previous Yuan 3,350/mt.
This was done to catch up with the buying
prices of neighboring mills to ensure its supply,
a local source told Platts.
Meanwhile, in southern China’s Fujian
province, Sangang Steel — the region’s largest
steelmaker — lifted its scrap prices Yuan 50/
mt to Yuan 3,300/mt with VAT effective Friday.
SBB Steel Markets Daily March 9, 2012
6 Copyright © 2012 The McGraw-Hill Companies
However, another major mill in the region,
Sanbao Iron & Steel, reduced its prices by
Yuan 30/mt on the same day, taking its buying
price to Yuan 3,360/mt including VAT.
“Mills that had been paying relatively low
prices are hiking their prices to improve deliveries,
while those that had been paying higher
prices are shaving them to avoid possible
risks, given the uncertain steel market,” a
Shanghai-based market observer said.
She added that market prices have
not seen obvious change, despite these
small fluctuations.
Market prices for HMS were prevailing
at Yuan 3,250-3,350/mt in the country’s
east regions, Yuan 3,250-3,430/mt in the
central and Yuan 3,250-3,360/mt in the
south. All prices include 17% VAT.
— Della Fu
US shredded scrap prices
maintain month-long stability
Pittsburgh—After volatile price swings from
October through mid-February, shredded scrap
pricing in the US has remained relatively flat for
the past four weeks. The latest price from The
Steel Index of $443/lt delivered Midwest mill
for the week ending March 9 is down just one
dollar from the prior two weeks.
After averaging $463/lt in January, the
index has remained in the range of $443-
444/lt for the prior four weeks, moving up
or down in only $1 increments. As previously
reported, early March bookings by US
mills of obsolete and shredded grades had
been settled at February levels.
“Market direction is still unclear as we
move further into March,” TSI noted. TSI, is a
separate price-specialist unit owned by Platts.
“Mills were trying to hold off [the anticipated]
increase,” one Midwest scrap dealer said.
The TSI index price fell close Friday to the
Platts shredded scrap assessment midpoint
price of $442.50/lt delivered to Midwest mills.
“Scrap yards seem pretty full,” a US
east coast (USEC) scrap yard source said.
“The market is quiet, very quiet. There is
not a lot of business taking place.”
The Platts assessment for shredded scrap
delivered to USEC docks held at a midpoint of
$422.50/lt, while the HMS price delivered to
USEC docks was at a midpoint of $397.50/lt
— down $5 compared to the prior week.
— Nicholas Tolomeo
Exchanges
Iron ore swaps trading
subdued, prices drift slightly
London—Iron ore swaps slipped marginally
over the course of the Asian trading
day on weaker tender results, despite a
firmer start on the back of rebar futures
moving up, brokers told Platts on Friday.
Q2 traded down to $135.50/mt while
April was done at $136/mt, slightly below
the SGX daily settlement level for Thursday.
Q4 traded at $130/mt and the Q2/Q3
spread remained unchanged at $3.50/mt.
Swaps trade was relatively quiet with people
looking to the physical market for direction,
brokers said. “It feels like a few people were
interpreting tender results as negative,” one
said, adding that everyone seemed “ambivalent”
to the rangebound market.
The SGX daily settlement price for April
slipped 33 cents to $136.17/mt, with May
down 58 cents to $134.92/mt. Its settlement
price for June was down $1.50/mt at
$133.33/mt, while July was off $1.16/mt
at $132.67/mt.
The Steel Index’s reference price for
62% Fe material, CFR North China, was
unchanged at $142.60/dry mt. TSI, a separate
specialist price unit owned by Platts,
cited some trades done at higher levels
and others at lower marks.
One options broker said he did a 150,000
mt Q3 zero-cost collar at $118-$149.50/mt —
where one counterparty buys the $118/mt put
option and sells the $149.50/mt call, a common
hedging strategy.
Coking coal and scraps swaps markets
were quiet.
Chinese market in for ‘long winter’
Despite some policies from Beijing,
such as increasing liquidity, offering temporary
respite, the Chinese steel industry
is still in for a “long winter” amid a gloomy
macroeconomic environment, Fan Jianping,
head of economic protection of China’s
State Information Center said at the Global
Coking Coal Resource & Market Summit
2012 Thursday.
“Q1 is not the bottom,” he said.
“Unlike what has happened in China in the
past, mills will not be able to get out of
trouble when they succeed in destocking,
as Beijing will continuously clamp down on
real estate.”
— Colin Richardson
Other News
Tata Steel calls on UK
government to act on energy
London—Tata Steel Europe believes
high electricity costs in the UK are eating
into its competitiveness, the company told
Platts Friday.
It has calculated that its facilities in
the UK are paying 50% more for electricity
than its site in France, and 25-30% more
than its site in Germany. On Thursday,
Karl-Ulrich Kohler, head of Tata Steel
Europe, said the disadvantage for producing
steel in the UK could be calculated at
GBP5/mt ($7.84/mt) of steel, according to
local press reports.
The company wants the UK government
to apply a mitigation package for heavy energy
users (worth GBP250 million) announced
in November 2011 and discuss further
measures to mitigate the disadvantage compared
with other continental markets.
In March 2011, the UK government
announced measures on carbon credits,
affecting energy prices. This April the
impact on prices is expected to increase
further as subsidies for renewable energy
will be introduced.
Comments from other crude steel producers
in the country, such as the Spanish
electric arc furnace producer, Celsa, were
not immediately available.
According to Platts data, continental
European wholesale power prices for delivery
next year are around 20% below the
comparable UK wholesale power prices
(Platts ContiCal 13 at Eur53.12/MWh
($69.64/MWh) vs. UK Year-Ahead at
Eur64.50/MWh, as of March 8).
French heavy-energy users benefit from
generous tariffs. In the spring of 2010, the
local Exeltium industrial consortium comprising
electricity intensive industrial power users,
including ArcelorMittal, entered into a 15-year
supply contract with state-controlled EDF. The
consortium said the deal would provide its
members with “long-term visibility.”
German steel manufacturers, on the other
hand, have to pay part of the renewable energy
subsidies, according to a market analyst. Last
July, the German longs steelmaker Saarstahl
announced its intention to acquire a 310 MW
coal-fired power plant from RWE as “rising
energy costs in Germany represent a real competitive
disadvantage.”
— Andreas Franke and Emanuele Norsa
Shuttered Pike River Coal’s
mine sold to Solid Energy
Perth—Pike River Coal, the owner of a
New Zealand coking coal mine that closed
after an underground explosion that killed
29 miners in Nov 2010, has been sold to
the country’s state-owned coal producer
Solid Energy for an undisclosed sum, said
PricewaterhouseCoopers, receivers for Pike
River Coal, in a statement Friday.
John Fisk, a receiver appointed to oversee
the sale of Pike River Coal, said he
was unable to disclose the price paid by
Solid Energy, or the identities and number
of potential buyers who had expressed an
interest in acquiring the company.
“We, as the receivers, are pleased with
this agreement as we consider it the best
way forward for all parties. No further
details of the transaction or any related
matter can be released until the agreement
is unconditional,” Fisk said in a
SBB Steel Markets Daily March 9, 2012
7 Copyright © 2012 The McGraw-Hill Companies
Platts steel industry assessments, March 9
Close/Midpoint Change % Chg
Asia
Hot-rolled coil $/mt
FOB Shanghai* 630.00-640.00 635.00 5.00 0.79
Reinforcing bar $/mt
FOB China* 630.00-640.00 635.00 20.00 3.25
* Assessed March 08, 2012
Europe
Hot-rolled coil Eur/mt
Ex-works, Ruhr 565.00-570.00 567.50 0.00 0.00
CIF Antwerp 540.00-550.00 545.00 0.00 0.00
$/mt
FOB Black Sea 625.00-635.00 630.00 0.00 0.00
Plate Eur/mt
Ex-works, Ruhr 615.00-625.00 620.00 0.00 0.00
CIF Antwerp 545.00-555.00 550.00 0.00 0.00
Reinforcing bar Eur/mt
Ex-works, NW Eur 550.00-560.00 555.00 0.00 0.00
$/mt
FOB basis Turkey 670.00-680.00 675.00 -5.00 -0.74
Billet $/mt
FOB Black Sea 600.00 600.00 -5.00 -0.83
North America
Hot-rolled coil $/st
Ex-works, Indiana 690.00-700.00 695.00 0.00 0.00
CIF, Houston 650.00-670.00 660.00 0.00 0.00
Plate $/st
Ex-works, US SE 940.00-960.00 950.00 0.00 0.00
CIF, Houston 850.00-870.00 860.00 0.00 0.00
Reinforcing bar $/st
Ex-works, US SE 730.00-750.00 740.00 0.00 0.00
CIF, Houston 650.00-660.00 655.00 0.00 0.00
Europe and US cold-rolled coil assessments, March 9
Eur/mt Close/Midpoint Change % Chg
Ex-works, Ruhr 635.00-640.00 637.50 0.00 0.00
CIF Antwerp 595.00-600.00 597.50 0.00 0.00
$/mt
FOB Black Sea 735.00-745.00 740.00 0.00 0.00
$/st
Ex-works, Indiana 790.00-800.00 795.00 0.00 0.00
CIF, Houston 760.00-770.00 765.00 0.00 0.00
statement posted on PwC’s New Zealand
website on Friday.
Over the telephone, Fisk said the sale
of Pike River Coal to Solid Energy was subject
to the satisfactory conclusion of due
diligence checks by the end of March, and
that financial settlement for the deal would
likely follow in May.
He said Solid Energy was interested in
restarting coking coal mining at Pike River
Coal’s mine, which had only been in production
for a short time when the underground
explosion occurred, leading to the mine’s
immediate closure.
Pike River’s receivers PwC would continue
with their operation to reclaim the mine’s
main tunnel, and in the next few weeks it
was expected the top end of the mine’s
underground drift would be sealed and the
tunnel re-ventilated, Fisk told Platts.
“As part of the agreement, negotiations
will continue with the Crown to establish a
trust that will help oversee efforts to enter
the main area of the mine and facilitate body
recovery if it is safe and technically feasible,”
he said in the PwC statement.
Several overseas companies were
speculated by market sources to have
expressed an interest in acquiring Pike
River Coal, including possibly one of its
two Indian shareholders Gujarat NRE
Coking Coal with a 7% stake, and some
Chinese companies.
A Solid Energy spokesman confirmed
Friday the sale of Pike River Coal to the stateowned
company, which owns several mines in
New Zealand, adding that the deal was subject
to certain undisclosed conditions.
The spokesman declined to go into
detail about the specifics of the deal
including price, and said the company
would be making a fuller statement after it
had completed its due diligence of Pike
River later this month.
Pike River Coal’s underground mine is
located on New Zealand’s South Island
and has a coal resource of premium, high
fluidity hard coking coal of 58.5 million mt,
according to the company’s website.
New Zealand Oil & Gas, another stateowned
company, was Pike River’s largest
shareholder with a stake of 29.4% and
was also its biggest creditor being owed
NZ$40 million ($33 million), most of which
it has recouped in insurance payments.
— Mike Cooper
Indian iron ore export
volumes declined in February
Singapore — India exported some 4.079
million mt of iron ore through major central
government-controlled ports in February, a
5.8% drop from 4.329 million mt exported
the previous month, according to provisional
data from the Indian Ports Association.
Although the market has been sluggish
for Indian exporters for several months
now, transaction levels in January declined
further owing to the Chinese Lunar New
Year holidays that month, Indian market
participants said.
Ore export volumes from ports on the
east coast remained largely stable last
month. The Paradip port of Odisha (formerly
Orissa) state shipped 133,000 mt of ore
last month, slightly up from 125,000 mt in
January but down 91% year on year.
Similarly, shipments from the
Vishakhapatnam port in Andhra Pradesh
state totaled 973,000 mt in February, up
from 921,000 mt the previous month but
down 52% y-o-y from some 2.03 million mt
exported in February 2011.
On the west coast, the Mormugao port
in Goa state saw export volumes slipping
to 2.433 million mt last month from 2.679
million mt in January. February shipment
volumes were also down some 47% y-o-y.
So far this fiscal year Indian iron ore
exports from major ports have dropped
28.6% y-o-y to 56.226 million mt from
78.754 million mt exported during April
2011-February 2012.
“We look set to complete the fiscal
year with some 60-62 million mt of ore
SBB Steel Markets Daily March 9, 2012
8 Copyright © 2012 The McGraw-Hill Companies
exports (from major ports),” a New Delhibased
analyst told Platts.
The major ports covered by the data
are conduits for 80-90% of India’s total
iron ore export shipments.
— Anitha Krishnan
Rogesa sees seaborne coking
coal demand growing
London—Global seaborne coking coal
demand will rise by more than a third to
over 363.5 million mt by 2015, compared to
2011, Hans-Joachim Welsch, CEO of German
pig iron producer, Rogesa, told Platts.
Welsch was talking at the Handelsblatt
Stahlmarkt conference in Düsseldorf.
Worldwide seaborne coking coal demand
in 2010 was 278 million mt, slipping to 265
million mt last year, he said, based on figures
from banking group Credit Suisse.
The largest growth in demand over the
next five years will come from China, followed
some way behind by India, and Central
and South America, he noted (see table).
Turkish demand will level off over the
next year or so, rising from 5 million mt/y
last year to 6.5 million mt/y in 2015, while
annual EU-27 demand will also increase by
over 2.5 million mt.
“This shows that while there are no
particular problems [for EU producers] to
secure coking coal at present, the problems
of the past might return in the
future,” Welsch told Platts. The biggest
issue will be the shortage of particular
qualities, he added.
— Victoria Glasson
BofA still bearish on China’s
lagging steel output vs 2011
New York—China’s daily production
of crude steel declined to an annualized
rate of 612.7 million mt in late February,
according to an industry overview published
Friday from Bank of America/Merrill
Lynch’s Hong Kong research team, which
also forecast short-term “price risk for iron
ore and coking coal.”
The report cited CISA estimates that
daily crude steel production declined to 1.68
million mt in late February, down by 1.22%
from the previous 10-day period. February
average daily production was 1.7 million mt,
9.3% below average production in 2011 of
1.87 million mt/day, BofA-ML noted.
The annualized rate of nearly 613 million
mt is about 70 million mt less than
2011’s total crude steel output from China
of 683.3 million mt, based on World Steel
Association data.
“We remain bearish on the steel sector
for the following reasons 1) weak steel
demand 2) high raw material cost,” wrote
Yongtao Shi, research analyst in Hong
Kong, who added: “We also see downside
risk for iron ore and coking coal price in
Q2, due to a slower than expected steel
production recovery.”
Nonetheless, BofA-ML forecast a
“V-shape recovery” is likely to occur in the
second half of 2012.
“Even assuming flat steel production
growth in 2012, we will expect 582 million
mt crude steel production in the next 10
months, equivalent to daily production of
1.94 million mt, on average15% higher
than current level,” said Shi.
“The ground check has indicated a
weak steel demand outlook near-term,
caused by slowing property investment and
infrastructure activities. Hence, we would
expect a V-shape rebound in 2H12, driven
by increasing infrastructure investment and
social housing kick-off,” the analyst added.
— Joe Innace
Perth firm expects iron ore
sales from Indian project
Melbourne — Perth-based commodity
developer, NSL Consolidated, expects to
make the first sales of iron ore from its
Kurnool beneficiation plant in India before
the end of June, the company said in a
statement on Friday
All the main structures for the first
phase of the project have been erected
and commissioning on individual equipment
components was underway Friday.
NSL expects to produce 200,000 mt/
year of hematite ore in the first phase of
the project and remains on track to generate
sales revenue from its Kurnool operations
in the first half of 2012.
The second phase of the project will
see a 200,000 mt/y wet beneficiation
plant beginning operations later this year.
An official from NSL told Platts the focus
for phase one output would be to sell into
the Indian domestic market.
Subsequently, NSL will consider exporting
material to China. “We have the agreements
and infrastructure in place to
export, so obviously China is a potential
market,” the official said.
The Kurnool project is located in southeast
India’s Andhra Pradesh state and
includes the Mangal mine. NSL also has
another mine, the Kuja iron ore mine,
which lies adjacent to Kurnool. It is also
the only foreign company to own and operate
iron ore mines in India.
Rio Tinto could follow suit after it realises
plans to invest US$2 billion in India’s
iron ore industry as the miner announced
last week.
— Marnie Hobson
Hegang’s receives approval
for Tianxing iron ore mine
Singapore — Hebei Iron & Steel Group
(Hegang), China’s top steel producer in
north China’s Hebei province, has secured
approval for a 15 million mt/year iron ore
mining project in Tianxing, Hebei, which it
says will be the country’s largest underground
mine.
In a posting on its website Thursday,
Hegang said the National Development
and Reform Commission granted formal
Global seaborne coking coal demand 2010-2015 (million mt)
2010 2011 F 2012 F 2012 F 2014 F 2015 F % change % change
2010-2015 2011-2015
EU-27 40.5 39.3 39 40 41 42 4% 7%
Asia* 100 95 100 103 106 110 10% 16%
India 34 34 36 38 42 50 47% 47%
China 49.1 43.3 58.5 70.2 82 92.8 89% 114%
North America 7.5 7.5 7.5 7.5 7.5 7.5 0% 0%
Central/South America 14.9 16 19.8 20.8 22.3 23 54% 44%
Turkey 4.6 5 6 6.5 6.5 6.5 41% 30%
Rest of World 27.3 25.7 28.2 30.7 31.2 31.7 16% 23%
TOTAL 277.9 265.8 295 316.7 338.5 363.5 31% 37%
*excluding India and China
Source: Credit Suisse
SBB Steel Markets Daily March 9, 2012
9 Copyright © 2012 The McGraw-Hill Companies
approval late last month for mine development
to proceed.
Although the steelmaker plans to invest
Yuan 4.2 billion ($666 million) in the project,
the present status is unknown as Hegang
officials could not be reached for comment.
Construction on mine projects in
China sometimes start before formal
approval is given.
Hegang hopes to commission the
Tianxing mine by 2015 as the project
has a major role in the steelmaker’s target
of lifting its iron ore concentrate
capacity to 35 million mt/year within
three years.
Located at the southern part of Hegang’s
core Sijiaying iron ore tenement in Luxian
County of Tangshan city, the mine is said to
boast 843 million mt of iron ore resources at
an average 30.8% Fe.
Just 60km from Hegang’s Tangshan
steelworks, the Tianxing mine may dip to
850 metres underground and is being
designed to have a concentrate capacity at
66% Fe of 5.1 million mt/y.
Sijiaying, with 2.3 billion mt of resources,
is Hegang’s core iron ore mining development
region and hosts large mines such
as Yanshan and Dajiazhuang.
Hegang expects to develop Sijiaying
into Asia’s top iron ore mining area supporting
42 million mt/y of mining or 14.2
million mt/y of concentrate capacity,
according to its website.
— Hongmei Li
Australia approves second
foreign takeover in a week
Melbourne — Australia’s Foreign
Investment Review Board (FIRB) has
approved the acquisition of Gloucester
Coal by China’s Yanzhou Coal subsidiary
Yancoal Australia, making it the second
takeover of an Australian resources company
by foreign owners in a week.
The other takeover approved by the
FIRB last week was Russia’s Magnitogorsk
Iron & Steel Works’ (MMK) acquisition of
iron ore miner Flinders Mines.
The approval of the Gloucester deal
comes after the original offer was revised, to
allow Gloucester a smaller stake in Yancoal
of 22% down from 23% with Yanzhou retaining
78% in the merged companies.
The combined company will operate
seven mines producing around 12.8 million
mt/year of coking, PCI and thermal coal.
Production is planned to increase to
25 million-30 million mt/year by 2016, as
previously reported.
Gloucester said in a stock exchange
statement on Friday that meetings with
shareholders to vote on the merger are
scheduled to be held next month.
— Marnie Hobson
Indonesian miners to gain
from new ownership law
Jakarta—Indonesia’s new mining regulation,
which paves the way for domestic
mining companies to retain a 51% stake
while foreign ownership will be limited to
49%, will boost the growth of local miners
and government revenue but may pose an
obstacle for foreign investment, industry
sources told Platts.
“The government aims for domestic mining
companies to grow and be able to be as
good as foreign companies, therefore we are
increasing the divestment obligation [of foreign
companies] to 51%,” deputy minister of
energy and mines minister Widjojono
Partowidagdo told Platts Friday. “What the
government does is always to help the public’s
welfare,” he added.
Indonesian President Susilo Bambang
Yudhoyono signed the decree on February
21, but the announcement was made on
Wednesday. The ruling states that a foreign-
controlled mining company has an
obligation to divest 51% of its share in a
company to Indonesian parties — including
the central government, regional government,
state enterprise or other domestic
investors — by the time it completes 10
years of production.
The divestment should reach 20% in
the sixth year of production, 30% in seventh
year, 37% in the eighth year, 44% in
the ninth year and 51% in the tenth year,
according to the regulation. This ruling
applies to companies mining for coal, minerals
and metals.
In the previous 2010 regulation, the government
said foreign-controlled mining companies
were required to divest at least 20%
of shares after five years of operation.
Government to renegotiate contracts
The director of mineral business development
at the energy and mines ministry
Dede Ida Suhendra said Friday the new
51% divestment regulation would be discussed
with various foreign mining companies
under a renegotiation of contracts.
“The negotiations are still going on,”
Suhendra said.
There are seven points that the government
will renegotiate, including the divestment
clause and royalty, he added: the
government earlier said it wants to
increase the royalty received from the mining
contracts.
Mixed reaction from China nickel players
Those with existing mining interests in
Indonesia said it will discourage fresh investments
while analysts reckoned it is not a
huge deterrent for Chinese nickel investors.
“With the ban on ore exports and restriction
on majority ownership of mines by foreigners,
foreign companies will be reluctant to
invest in mining in the country,” a senior official
with Shanghai Tsingshan Mineral Co told
Platts SBB. The company is still confirming
details of the new rule, he said. Tsingshan’s
parent company, Shanghai Dingxin
Investment Group, has a 55:45 joint venture
covering nickel mining, ferro-nickel and stainless
production with Indonesia’s
Bintangdelapan Group.
Another senior official with a Chinese
state-owned miner holding nickel mining
investments in Indonesia said the latest
regulation is a huge departure from existing
rules that allow mining projects to be
wholly foreign-owned. “We will now need to
proceed with more caution with any new
investments in Indonesia,” he said. A
Beijing-based nickel analyst, however,
believed Chinese investors will continue to
invest in nickel resources there. “China
needs the nickel resources. Chinese companies
do not necessarily have to take a
majority share in projects,” he said.
Analysts also argus that Chinese investors
mulling mining investments in
Indonesia are more likely to consider other
existing hurdles to investing there, such as
confusing regulations and conflicting rules
followed by central and local governments.
“Building a plant there is not easy as it
is,” a Shanghai-based nickel analyst said.
— Anita Nugraha and Vivian Teo
Tata Steel could sell some
Canadian Fe ore to market
London—India’s Tata Steel could
become a player in the merchant iron ore
market if proposed expansions at its New
Millennium joint venture in Canada begin production,
according to a local media report.
“To make a project viable of that
nature, we may have to produce 10-15 million
[mt] of iron ore but we can’t use all of
that. So, we may then look at selling some
on merchant basis to others,” Tata Steel’s
managing director H.M Nerurkar told the
Business Standard Thursday.
An initial feasibility study on a project to
produce 22 million mt/year of taconite ore
products from either its LabMag or KeMag
deposits near the Quebec-Labrador border is
due within the next few months, a source
within New Millennium said earlier.
Once the initial feasibility study is completed,
Tata will have four months to
decide whether to invest an estimated
$4.85 billion in the project. Production
could begin by 2016, New Millennium
sources have said.
Other vertically integrated steel and
mining groups, such as ArcelorMittal, have
indicated a willingness to sell surplus iron
ore to other steelmakers in North America.
Nerurkar also told the newspaper that
Tata Steel could work closely with other
SBB Steel Markets Daily March 9, 2012
10 Copyright © 2012 The McGraw-Hill Companies
Platts steel assessments currency and unit comparisons, March 9
Prior assessment
Eur/mt $/mt $/st $/CWT $/mt $ change % change
Hot-rolled coil
Ex-works, Ruhr* 567.50*** 743.65 674.64 33.74 752.62 -8.97 -1.19%
FOB Black Sea* 480.77 630.00*** 571.54 28.58 630.00 0.00 0.00%
CIF Antwerp* 545.00*** 714.17 647.89 32.40 722.78 -8.61 -1.19%
Ex-works, Indiana** 584.15 766.09 695.00*** 34.75 766.09 0.00 0.00%
CIF, US Gulf states, basis Houston** 554.73 727.51 660.00*** 33.00 727.51 0.00 0.00%
Cold-rolled coil
Ex-works, Ruhr* 637.50*** 835.38 757.86 37.90 845.45 -10.07 -1.19%
FOB Black Sea* 564.71 740.00*** 671.33 33.58 740.00 0.00 0.00%
CIF Antwerp* 597.50*** 782.96 710.30 35.52 792.40 -9.44 -1.19%
Ex-works, Indiana** 668.20 876.32 795.00*** 39.75 876.32 0.00 0.00%
CIF, US Gulf states, basis Houston** 642.98 843.25 765.00*** 38.25 843.25 0.00 0.00%
Plate
Ex-works, Ruhr* 620.00*** 812.45 737.05 36.86 822.24 -9.79 -1.19%
CIF Antwerp* 550.00*** 720.72 653.84 32.70 729.41 -8.69 -1.19%
Ex-works, US Southeast** 798.47 1047.18 950.00*** 47.50 1047.18 0.00 0.00%
CIF, US Gulf states, basis Houston** 722.83 947.97 860.00*** 43.00 947.97 0.00 0.00%
Reinforcing bar
Ex-works, Northwest Europe* 555.00*** 727.27 659.78 33.00 736.04 -8.77 -1.19%
East Mediterranean, basis Turkey* 515.11 675.00*** 612.36 30.63 680.00 -5.00 -0.74%
Ex-works, US Southeast** 621.97 815.70 740.00*** 37.00 815.70 0.00 0.00%
CIF, US Gulf states, basis Houston** 550.53 722.00 655.00*** 32.75 722.00 0.00 0.00%
*LN 16:30 Eur/$ ex rate = 1.3104; **NY 16:30 $/Eur ex rate = 0.7625. ***the primary assessments and have not been converted
Tata group firms, such as Tata Power, to
source coal. Coal deposits frequently contain
different qualities of coal suitable for
steelmaking and power generation.
— Nick Edstrom
Downpours dampen Brazil’s
early 2012 iron ore output
Sao Paulo—Brazil’s January deluges
that saw mining giant Vale declare force
majeure resulted in a 15% reduction in iron
ore production versus the year-ago period,
according to the Brazilian institute of geography
and statistics (IBGE).
As previously reported by Platts Steel
Business Briefing, Vale blamed heavy
rains in three states for hampering operations,
resulting in a 2 million mt decline
in production.
According to IBGE’s industry coordination
manager. André Macedo, production
had increased throughout 2011, with output
up 5.1% year on year in H1 and 3.6%
and 2.6% in Q3 and Q4, respectively.
Data from the Brazilian Mining
Association (Ibram) shows January iron ore
exports fell 20% year-on-year to 22.7 million
mt from 18.2 million mt. National iron ore
output reached 420 million mt in 2011, of
which 330 million mt was sent abroad.
“There was a slowdown in the growth
dynamic as 2011 progressed because of
Villacero takes full control of Coutinho & Ferrostaal
Villacero has taken full control of Germany-based trading jv Coutinho & Ferrostaal as
the Mexican firm looks to strengthen and consolidate its overseas operations, Platts
Steel Business Briefing learned from a well-positioned executive involved in the merger.
See more steel news at www.sbb.com
��Prices rise only slowly as economic doubts continue
��China’s daily output continued to slide in late-February
��Alfa Acciai invests in its scrap yard
��Algeria pays slightly more for S. European rebar
��Anglo American says Minas-Rio output may reach 80 mil mt/y
��Brazil opens AD case on stainless pipe from China, Taiwan
��DOC rescinds AD review on Taiwanese HRC
��China to discuss tower dumping allegations with US
��US flats service center expands into Indiana
��US sheet import prices up in Gulf, buying sluggish
��Chinese lift plate export prices to Korea for May shipment
��East Asian importers baulk at higher Chinese HRC prices
��Flats trade in Turkey picks up on end-user restocking
��US Steel Kosice in talks on future workforce
��Egyptian flats trade remains sluggish, outlook uncertain
��Posco to start building plant in Vietnam from July
��China billet prices flat, market outlook positive
��Rebar prices firming up in northern China
��UK structural steel demand fell in 2011, no recovery in 2012
��CIS billet’s tentative recovery on pause as buying halts
��Sidor ramps up longs production after latest stoppage
��Syrian traders offer ready-load Black Sea rebar to Lebanon
��Precision Castparts to buy US tubemaker RathGibson
��New power projects lift Chinese welded pipe demand
��China’s OCTG demand forecast to keep rising
��Pipemaker in Turkey delivers spirally welded pipe
Steel headlines
SBB Steel Markets Daily March 9, 2012
11 Copyright © 2012 The McGraw-Hill Companies
Weekly Ferroalloy Prices
Ferrochrome
cts/lb change/date assessed
US Charge 50-55%/Impt. 117.000 / 118.000 +2.000 / 03-07-12
US 60-65%/Impt. 117.000 / 118.000 +2.000 / 03-07-12
US Low-Carbon 0.05% Imported 233.000 / 235.000 +1.000 / 03-07-12
US Low-Carbon 0.10% Imported 210.000 / 213.000 03-07-12 / 03-07-12
US Low C 0.15% Imported 202.000 / 207.000 03-07-12 / 03-07-12
Charge Chrome 52% DDP NWE 103.000 / 110.000 +3.000 / 03-08-12
65% 6-8% High-Carbon DDP NWE 115.000 / 120.000 03-08-12 / 03-08-12
Low Carbon 0.10% DDP NWE 212.000 / 216.000 03-08-12 / 03-08-12
High Carbon 60% FOB China 100.000 / 104.000 03-08-12 / 03-08-12
50-55% Regular CIF Japan 123.000 03-08-12
60-65% Spot CIF Japan 105.000 / 106.000 03-08-12 / 03-08-12
Ferromanganese
$/gt change/date assessed
MW 78% Mn/Impt. 1300.000 / 1350.000 +50.000 / +50.000
cts/lb change/date assessed
Medium Carbon 93.000 / 95.000 -1.000 / 03-07-12
$/mt change/date assessed
High Carbon 75% FOB China 1200.000 / 1210.000 03-08-12 / 03-08-12
Ferromolybdenum
$/lb change/date assessed
MW US FeMo 16.500 / 17.000 -0.200 / -0.200
$/kg change/date assessed
MW Europe FeMo 34.800 / 35.300 -0.700 / -0.500
FOB CHINA FEMO 34.800 / 35.000 -1.000 / -1.200
Spot CIF Japan 34.800 / 35.000 -1.000 / -1.200
Ferrosilicon
cts/lb change/date assessed
MW 75% Si Imported 96.000 / 97.000 03-07-12 / 03-07-12
$/mt change/date assessed
Chinese CIF Japan 1400.000 / 1410.000 -20.000 / -20.000
$/mt change/date assessed
75% FOB China 1390.000 / 1400.000 +10.000 / 03-08-12
Eur/mt change/date assessed
75% Std DDP NWE 1180.000 / 1220.000 03-08-12 / 03-08-12
Ferrovanadium
$/lb change/date assessed
Free Market V205 5.800 / 6.200 03-08-12 / 03-08-12
US Ferrovanadium 14.250 / 14.750 +0.250 / +0.250
$/kg change/date assessed
Europe Ferrovanadium 26.000 / 26.300 03-08-12 / 03-08-12
Manganese
$/mt change/date assessed
99.7% FOB China 3100.000 / 3150.000 03-08-12 / 03-08-12
Molybdenum
$/lb change/date assessed
MW Dealer Oxide 14.250 / 14.550 -0.350 / -0.250
Oxide Trans 14.250 / 14.550 -0.350 / -0.250
Silicomanganese
cts/lb change/date assessed
MW 2% Free Market 74.000 / 77.000 +2.000 / +2.000
$/mt change/date assessed
65% FOB China 1480.000 / 1500.000 03-08-12 / 03-08-12
Chinese CIF Japan 1400.000 / 1500.000 03-08-12 / 03-08-12
Eur/mt change/date assessed
65:16 DDP NWE 970.000 / 1000.000 +50.000 / +30.000
Same-date references indicate there was no price change.
[falling] international demand. But at the
start of 2012, there was a complete inversion
of the trend,” Macedo said, citing
heavy rains in Minas Gerais as the main
culprit. “It was a production problem, not a
demand one.”
— Jose Guerra
Ferroalloys market
Japanese ferromoly prices
fall, Chinese FeSi price up
Tokyo—Spot prices of ferromoly imported
into Japan softened to $34.80-35/kg CIF
Japan from $35.80-36.20/kg a week ago,
tracking overseas moly oxide prices lower.
One trader was selling to his customers
at slightly lower than $35/kg and the
price had come down due to the moly
oxide price, he said. Moly oxide overseas
was heard trading at over $14.50/lb inwarehouse
Rotterdam last week, but
there were deals this week reported at
$14.25-14.35/lb CIF Busan/in-warehouse
Rotterdam.
The negative momentum in the moly
market, spurred by talk that inventories are
inflating in Rotterdam, has forced Korean
sellers to quote ferromoly as low as $33-
34/kg CIF main ports Asia, two traders
said. They rejected the offer as they were
“suspicious” of the metal origin. Spot
trade of other ferroalloys was lackluster
due to the stronger US dollar, which was
trading at Yen 81 compared to Yen 79 a
week ago, sources added.
Chinese spot ferrosilicon prices increase
China’s spot ferrosilicon prices were
assessed at $1,390-1,400/mt FOB China
Thursday, up from $1,380-1,400/mt FOB
China a week earlier, as sellers reported
more deals and improved demand.
Chinese suppliers said they were
able to close more deals this week at
lower offer levels. A northwest Gansubased
trader sold 200 mt at $1,400/mt
to a customer in South America, to load
in April from Tianjin. An Inner Mongoliabased
producer sold to several Japanese
buyers at $1,390-1,395/mt this week,
all to load in April from Tianjin, at a discount
to the company’s offer price of
$1,400/mt FOB China.
Sellers who did not close any deals
this week said trading remained slow.
Other offer prices were heard in the
range of $1,400-1,430/mt, with most
surveyed saying they would be amenable
to selling at $1,400/mt. Prices are
unlikely to deviate much from the current
range in the near term, most suppliers
predicted.
— Mayumi Watanabe and Vivian Teo
SBB Steel Markets Daily March 9, 2012
12 Copyright © 2012 The McGraw-Hill Companies
Posco Specialty Steel issues
40 mt moly oxide tender
Tokyo—Buying interest for molybdenum
oxide powder picked up in South Korea
Friday with Posco Specialty Steel closing a
40 mt ferromolybdenum buy tender, market
sources said.
The ferromoly was for delivery by the
end of March to its Changwon plant.
Local traders said the number of inquiries
for moly oxide powder, used for ferromoly
making, increased, but deals were
not reported. An offer was heard at
$14.30-14.40/lb CIF Busan, and a bid at
$14.20/lb CIF.
Meanwhile, one Chinese trader said he
was keeping his offer at $14.60/lb CIF/inwarehouse
Rotterdam. Another Chinese
trader suspended spot offers, saying the
market was too slow.
Chinese traders, who keep inventories
at bonded warehouses in China, have told
Platts their inventories stand at 40-80 mt,
adding that they were not rushing to sell.
Meanwhile, South Korean ferromoly plants,
which typically buy from Chinese traders, hold
moly oxide inventories in a wide range of 40
mt to 200 mt, excluding moly oxide for tolling
arrangements, local sources said.
— Mayumi Watanabe
with Hongmei Li in Singapore
Silicomanganese price firms,
fundamentals weaker
London—Silicomanganese prices continued
to firm over the week on strong buying
interested, sources said Friday.
Silicomanganese 65:16 was assessed
at Eur970-1,000/mt ($1,271-1,310) DDP
Northwest Europe from Eur920-970/mt the
previous week.
“I’ve heard Eur1,020/mt delivered to a
German mill, but not higher than that,” one
Europe-based trader said. “Material is in the
hand of traders with positions or producers.”
“I wouldn’t buy material now, it’s too
risky. Material is tight now, but if we see a
rush of production, prices are back down,”
he added.
A second trader said he had been told
of an offer at $1,380/mt DDP to a mill,
but said that transactions to consumers
were lower.
“It’s dangerous at the moment, everybody
is back buying and traders are taking
positions. Factories aren’t really buying
that much material,” he said.
An Indian producer was booked out of
material for March and April, but was offering
65:16 at $1,300/mt for May shipment.
“Indians are rushing to buy ore now and
produce more alloys because the prices
are getting good again,” he said.
A second Indian producer said he was also
sold out of material until May shipment, but
was cautious on the recent price increases.
“It’s a 15% hike in prices,” he said.
“It’s difficult to understand why and whether
these prices are sustainable.”
— Jitendra Gill
Marketplace
��Iron ore, 63.13%Fe Standard Sinter Feed Guaiba — Vale sold at $143.75, 220,000
mt, passing Singapore Mar 14, Al 1.47%, Si 5.22%, P 0.055%, moisture 8.5%, market
participants who received the tender said
��Iron ore, 61% Fe Australian Pilbara Blend fines — Rio Tinto sold at $143.50/dmt
CFR China Main Port, 165,000 mt, loading Mar 20-29
��Iron ore, swaps — TSI-basis Apr traded $136/dmt, Singapore-based trader said
��Iron ore, swaps — TSI-basis Q2 traded $135.50/dmt, Singapore-based trader said
��Iron ore, 54% Fe Indian lumps — Guangdong trader sold Thursday at $109/dmt
CFR Main China port, 80,000-90,000 mt, loading from Mar 18-25, Al 8%, Si 7%, P
0.1%, S 0.03%, moisture 9%
��Steel, square billet — Spot price up Yuan 10/mt from Thursday at Yuan 3,760/mt
ex-stock Tangshan, mill source in Hebei said
��Steel futures — October Shanghai rebar up Yuan 38/mt at Yuan 4,319/mt, from
last trade on Thursday.
��Iron ore, 61% Fe Australian Mining Area C fines — BHP Billiton sold Friday at
$140.50/dmt CFR Shanghai, >45,000 mt, loading Mar 16-25
��Iron ore freight—$13-13.5/wmt Panamax Goa to China, shipping source said
��Iron ore freight—$15.5/wmt Supramax Goa to China, shipping source said
��Iron ore freight—$15/wmt Supramax east coast one port to China, shipping source said
��Iron ore 63.5/63% Fe -pegged at $148-149/dmt CFR North China
��Iron ore, 61% Fe Australian Pilbara Blend fines — Henan-based steel mill pegs at
$143/mt CFR North China
��Iron ore, 61% Fe Australian Pilbara Blend fines — Singapore-based trader pegs at
$142-143/mt CFR North China
��Iron ore, 54% Fe Indian lumps — Guangdong trader sold Thursday at $109/dmt
CFR Main China port, 80,000-90,000 mt, loading from Mar 18-25, Al 8%, Si 7%, P
0.1%, S 0.03%, moisture 9%
��Coking coal, premium HCC — Indian trader would bid for Xstrata’s Wollombi at a
maximum of $205/mt FOB Australia
��Coking coal, HCC—China mill was this week offered Australian “second-tier” HCC at
$200/mt CFR, March, either Panamax or Capesize
��Coking coal, freight—China mill pegs Panamax ECAus to East China at $15/mt
(This is a sample of trade and market information gathered by Platts editors as they
assessed the daily iron ore, coking coal, steel, scrap and freight prices. They were first
published on Platts Metals Alert earlier in the day as part of the market-testing process
with market participants. For more related information about that process and our realtime
news and price services, please request a trial to Platts Metals Alert or learn more
about the product offering by visiting http://www.platts.com/Products/metalsalert)
News in Brief
The London Stock Exchange
will take a majority stake in the
LCH.Clearnet Group, holding up
to 60% of the clearing house’s share
capital in a deal worth up to Eur463
million ($608 million), the companies
said Friday. Regulatory change and
customer demand “are creating significant
new opportunities for clearing and
risk management services globally,”
the companies said in the statement.
“Developing its post-trade capabilities,
especially in clearing, is a key priority
for the LSEG Group. This priority
recognizes the importance of providing
customers with an efficient and attractive
service offering across each stage
of the trading value chain,” the statement
added. The transaction “meets
LSEG’s strategic objectives to continue
to build upon its existing assets and
to seek new opportunities, particularly
in the post-trade arena, accelerating
diversification and growth for the LSEG
Group,” it said. Completion of the acquisition
is expected by the fourth quarter
and is subject to regulatory and other
approvals, including anti-trust clearance.
LCH clears a variety of ferrous swap
contracts, including iron ore, hot-rolled
coil and scrap, all of which are settled
against reference prices published
by The Steel Index, which is owned
by Platts. It also clears trades on the
London Metal Exchange, but the LME
plans to build its own clearinghouse
with a launch date currently targeted for
the first quarter of 2014.