Nickel reached fresh highs in Tuesday’s official trading on the London Metal Exchange, boosted by the activities of black-box algorithmic traders and improving fundamentals.
Three-month Nickel settled at a record price of $27,675/680, up over $350 from its opening price of $27,310.
“I have seen people talk as high as $37,000 if this momentum is maintained,” a cat I trader said.
“The market is very technically driven right now because of the sheer weight of investment money that continues to pour in to a comparatively small market,” the trader said. “It is the tail wagging the dog.”
But LME stocks are continuing to draw down and sellers have reluctantly withdrawn from the market because they believe there is more upside work to be done, the trader added.
China is continuing to import more refined nickel as there is a slowing down in the production of nickel pig iron, the trader said.
Primary nickel imports into China are likely to increase 42% year on year to more than 280,000 tonnes in 2011 because of a rise in output of stainless steel, Macquarie Bank said.
Nickel stocks in LME-approved warehouses rose by 402 tonnes overnight taking total stocks to 134,442 tonnes.
The alloying metal reached an intraday high of $27,864 per tonne and a low of $27,310.
Three-month copper broke through $9,800 in the officials to settle at $9,809/10 per tonne, up from its opening price of $9,775 per tonne.
“We are now a hop, skip and a jump away from the $10,000 mark,” the cat I trader said. “There are very few sellers out there and it would not take much to move the market”.
But the fund community would have to push the price, not traders, the trader said.
Copper stocks in LME-bonded warehouses fell 100 tonnes overnight to a total of 393,925 tonnes.
The red metal traded as high as $9,878 per tonne and as low as $9,769.75 per tonne in the early session.
Tin prices fell slightly to $29,875/900 per tonne in the officials, compared with its opening price of $30,400.
The contract traded as low as $29,800 per tonne and as high as $30,400.
A delivery into Singapore saw tin stocks in LME warehouses increase by 220 tonnes to reach a total of 17,835 tonnes.
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Saturday, February 5, 2011
Holidays highlight Asian influence on OTC iron ore market
Trading volumes in the over-the-counter market for iron ore swaps slumped this week as national holidays in China kept the physical spot market quiet.
Three trades were completed at the beginning of the week. But, since then, market participants reported no new forward business concluded.
This including a contract for March settlement at $175 per tonne cfr Qingdao on a 62% Fe content basis on Monday and a Q2 ’11 settlement contract at $162.5 on the same day.
Tuesday saw one lone trade: a Q2 ‘11 prompt at $164 per tonne.
This just goes to show how reliant the OTC market is on Asian market participants.
This wasn’t so obvious back in October 2010, when the Chinese were celebrating Golden Week.
Europeans took advantage of the Asian absence and drove down levels; securing trades at these reduced prices in anticipation of market participants coming back after the week long holiday and driving prices up.
This week though traders and brokers – the few that have even been looking at the market – are happy to sit on their positions until volatility creeps back in.
This just goes to show that the market may be more Asian-centric than it used to be.
This has been proved recently by the big banks involved in OTC trading setting up arms in Singapore and the increase of trades settled in Asia before brokers have even got to their desks in London.
Three trades were completed at the beginning of the week. But, since then, market participants reported no new forward business concluded.
This including a contract for March settlement at $175 per tonne cfr Qingdao on a 62% Fe content basis on Monday and a Q2 ’11 settlement contract at $162.5 on the same day.
Tuesday saw one lone trade: a Q2 ‘11 prompt at $164 per tonne.
This just goes to show how reliant the OTC market is on Asian market participants.
This wasn’t so obvious back in October 2010, when the Chinese were celebrating Golden Week.
Europeans took advantage of the Asian absence and drove down levels; securing trades at these reduced prices in anticipation of market participants coming back after the week long holiday and driving prices up.
This week though traders and brokers – the few that have even been looking at the market – are happy to sit on their positions until volatility creeps back in.
This just goes to show that the market may be more Asian-centric than it used to be.
This has been proved recently by the big banks involved in OTC trading setting up arms in Singapore and the increase of trades settled in Asia before brokers have even got to their desks in London.
***DAILY SCRAP REPORT
MB’s Ferrous Scrap Index cfr Turkey fell significantly on Friday when European exporters reduced their offers after several days of inaction.
The index calculated at $476.32 per tonne cfr Iskenderun on an HMS 1&2 (80:20 mix) basis on Friday, down $17.22 on Thursday’s number.
One EU recycler offered a deep-sea cargo of HMS 1&2 (70:30 mix) at $460 per tonne cfr – in line with short-sea offers of A3 material on Thursday – that failed to tempt steelmakers into the market.
US recyclers offered HMS 1&2 (80:20 mix) and shredded material at $480-485 per tonne cfr respectively. No mills responded.
The riots in Egypt have fuelled speculation on the market all week, but, following the diversion of several distressed cargoes of CIS-origin billet to Turkish ports, even Turkey’s domestic finished product trade is being hit, market participants said.
“Several mills are out of the scrap market: if they can’t sell their end products, they’re not going to be buying scrap any time soon,” a trader said.
Domestic demand is not as slack for some mills though.
“The market is slow because of Egypt, but people are still selling [billet] to certain areas,” a steelmaker said.
The index calculated at $476.32 per tonne cfr Iskenderun on an HMS 1&2 (80:20 mix) basis on Friday, down $17.22 on Thursday’s number.
One EU recycler offered a deep-sea cargo of HMS 1&2 (70:30 mix) at $460 per tonne cfr – in line with short-sea offers of A3 material on Thursday – that failed to tempt steelmakers into the market.
US recyclers offered HMS 1&2 (80:20 mix) and shredded material at $480-485 per tonne cfr respectively. No mills responded.
The riots in Egypt have fuelled speculation on the market all week, but, following the diversion of several distressed cargoes of CIS-origin billet to Turkish ports, even Turkey’s domestic finished product trade is being hit, market participants said.
“Several mills are out of the scrap market: if they can’t sell their end products, they’re not going to be buying scrap any time soon,” a trader said.
Domestic demand is not as slack for some mills though.
“The market is slow because of Egypt, but people are still selling [billet] to certain areas,” a steelmaker said.
All material subject to strictly enforced copyright laws. © Euromoney Institutional Investor PLC.
UK domestic Fe scrap falls £20-30 as overseas demand falls
UK mills have bought ferrous scrap for February delivery at £20-30 per tonne below January levels, as export prices fell away following a quiet import week in Turkey, India, and the EU, market participants said.
“Export activity has eased off; this has allowed UK steelworks to take advantage,” one scrap processor said.
One mill bought the majority of the booked scrap this week at £25-30 per tonne below January levels. The steelmaker has not yet completed its bookings for February, choosing to wait for further reductions in line with international prices next week, according to participants.
A second mill had finished its bookings, buying more scrap than January at levels £20-25 per tonne below last month.
The downward trend in scrap prices arrives at a point when mills have increased their finished product prices, citing strong scrap prices over the last four months.
Further weakening could be experienced next week before February business concludes, as offer prices into Turkey slumped $20 on Friday, and are expected to fall further in the coming week.
“Export activity has eased off; this has allowed UK steelworks to take advantage,” one scrap processor said.
One mill bought the majority of the booked scrap this week at £25-30 per tonne below January levels. The steelmaker has not yet completed its bookings for February, choosing to wait for further reductions in line with international prices next week, according to participants.
A second mill had finished its bookings, buying more scrap than January at levels £20-25 per tonne below last month.
The downward trend in scrap prices arrives at a point when mills have increased their finished product prices, citing strong scrap prices over the last four months.
Further weakening could be experienced next week before February business concludes, as offer prices into Turkey slumped $20 on Friday, and are expected to fall further in the coming week.
All material subject to strictly enforced copyright laws. © Euromoney Institutional Investor PLC.
Soaring LME nickel prices dampen consumer interest in molybdenum
Tokyo (Platts)--3Feb2011/608 am EST/1108 GMT
London Metal Exchange nickel settlement levels hitting $27,725/mt on Wednesday has dampened Japanese consumer interest in molybdenum products, market sources said Thursday.
Spot trade into Japan typically thins in the first quarter of the year ahead of the end of the Japanese financial year in March. A handful of trading houses were still expecting spot demand for March consumption among steel mills, but high nickel prices cooled such interest, local trade sources said.
One Chinese trader has indicated possible sales, not a firm offer, at $17.20-17.30/lb CIF Japan to a Tokyo trader, which was lower than offer levels above $17.50/lb in-warehouse Rotterdam for European buyers.
Spot molybdenum would not attract interest as consumers perceive current prices as too high. The boost in prices of molybdenum as well as nickel contracts on the London Metal Exchange may have been triggered by strong oil prices due to the unrest in Egypt, Tokyo traders said.
As nickel-containing stainless steel prices are pegged to LME nickel prices, the mills are wary that the rise in LME nickel levels may dampen sales of stainless steel in coming months, one Tokyo trader added.
A second Tokyo trader said his customer was more focused on sourcing stainless steel scrap, and molybdenum had become a secondary issue.
"There is some interest among Asian buyers for Japanese scrap, among those who see LME nickel prices rising further," said the third trader. The Japanese mills may be competing with overseas buyers over stainless scrap, if LME nickel continued to gain. Prices of stainless steel scrap, like stainless steel products, are often pegged to LME nickel prices.
Scrap 18-8 grade (18% chrome, 8% nickel) stainless steel prices have gained 10% in the past month to trade at around Yen 200 ($2.50)/kg delivered this week, local traders said.
--Mayumi Watanabe, mayumi_watanabe@platts.com
Similar stories appear in Metals Week. See more information at http://bit.ly/MetalsWeek
Spot trade into Japan typically thins in the first quarter of the year ahead of the end of the Japanese financial year in March. A handful of trading houses were still expecting spot demand for March consumption among steel mills, but high nickel prices cooled such interest, local trade sources said.
One Chinese trader has indicated possible sales, not a firm offer, at $17.20-17.30/lb CIF Japan to a Tokyo trader, which was lower than offer levels above $17.50/lb in-warehouse Rotterdam for European buyers.
Spot molybdenum would not attract interest as consumers perceive current prices as too high. The boost in prices of molybdenum as well as nickel contracts on the London Metal Exchange may have been triggered by strong oil prices due to the unrest in Egypt, Tokyo traders said.
As nickel-containing stainless steel prices are pegged to LME nickel prices, the mills are wary that the rise in LME nickel levels may dampen sales of stainless steel in coming months, one Tokyo trader added.
A second Tokyo trader said his customer was more focused on sourcing stainless steel scrap, and molybdenum had become a secondary issue.
"There is some interest among Asian buyers for Japanese scrap, among those who see LME nickel prices rising further," said the third trader. The Japanese mills may be competing with overseas buyers over stainless scrap, if LME nickel continued to gain. Prices of stainless steel scrap, like stainless steel products, are often pegged to LME nickel prices.
Scrap 18-8 grade (18% chrome, 8% nickel) stainless steel prices have gained 10% in the past month to trade at around Yen 200 ($2.50)/kg delivered this week, local traders said.
--Mayumi Watanabe, mayumi_watanabe@platts.com
Similar stories appear in Metals Week. See more information at http://bit.ly/MetalsWeek
Steel/Scrap: Pricing Pause or Inflection Point? – UBS
Slipping scrap makes buyers skittish
Global scrap prices are falling and UBS industry contacts see more weakness ahead. Even with Turkish buying and reasonable U.S. demand, they heard shred was $440/t this wk from a peak $520/t in Jan. as “prices were just too high” and buyers had rebuilt inventory. Chinese new year’s typical pause may be part of the weakness, but spot met coal also seemed eager to slip once it was clear Australia ports were spared the brunt of the recent cyclone. Scrap is often a leading steel price indicator.
Global scrap prices are falling and UBS industry contacts see more weakness ahead. Even with Turkish buying and reasonable U.S. demand, they heard shred was $440/t this wk from a peak $520/t in Jan. as “prices were just too high” and buyers had rebuilt inventory. Chinese new year’s typical pause may be part of the weakness, but spot met coal also seemed eager to slip once it was clear Australia ports were spared the brunt of the recent cyclone. Scrap is often a leading steel price indicator.
“Steel prices will only be too high when you read it in the WSJ”
The CEO of a large distributor this week said steel prices were not too high, as the WSJ and other media had not reported on steel causing inflation. Today a top WSJ article addressed high steel costs. A 64% spike in benchmark US HRC since an Oct trough overshot most global prices and may invite import, as input prices ease.
The CEO of a large distributor this week said steel prices were not too high, as the WSJ and other media had not reported on steel causing inflation. Today a top WSJ article addressed high steel costs. A 64% spike in benchmark US HRC since an Oct trough overshot most global prices and may invite import, as input prices ease.
Supply disruptions may delay the inevitable
While pricing cycles have contracted from ~1/yr to 2.5x/yr, the firm notes they may be early in calling a peak but still think it is imminent. Praxair oxygen supply woes can limit output at 2 mills about a wk, and some other weather-related issues can support pricing or one more hike near term. Still, they think many buyers prebought into mkt strength but are now more cautious, especially in light of retreating scrap prices.
While pricing cycles have contracted from ~1/yr to 2.5x/yr, the firm notes they may be early in calling a peak but still think it is imminent. Praxair oxygen supply woes can limit output at 2 mills about a wk, and some other weather-related issues can support pricing or one more hike near term. Still, they think many buyers prebought into mkt strength but are now more cautious, especially in light of retreating scrap prices.
Steel price correction near-term prompts a more cautious view
UBS see a relatively mild retreat in steel and scrap prices in coming mos ultimately providing better buying opportunities, especially for structurally favored names, such as SCHN, ATI, and STLD. They think weaker prices are worst for AKS and X.
UBS see a relatively mild retreat in steel and scrap prices in coming mos ultimately providing better buying opportunities, especially for structurally favored names, such as SCHN, ATI, and STLD. They think weaker prices are worst for AKS and X.
Notablecalls: Timna Tanners, the UBS analyst making this call is actually pretty good.
She turned bullish on Scrap/Steel on July 20 ’10, causing quite a move in the space the same day.
Schnitzer Steel (NASDAQ:SCHN) was up 15% following her upgrade and is now 50% higher. X, AKS etc. all of these names moved big.
And now she is turning cautious again. Makes me feel we may see a pull-back in the space in the n-t.
It’s tough to make a sell call here since most of the charts look very strong (near highs) but I would definitely be more cautious on the long side.
ICEX selects TSI’s iron ore index for iron ore futures
LONDON (Commodity Online): Mumbai-based Indian Commodity Exchange (ICEX) this week launched India’s first iron ore futures contract using The Steel Index (TSI)'s iron ore reference price for settlement. It becomes the fifth major exchange/clearing house in the world to use TSI’s iron ore index, according to a TSI release.
“We are delighted ICEX has selected TSI’s iron ore index,” says Steven Randall, Managing Director of TSI. “India is the world’s third largest producer of iron ore and exported over 115 million tonnes in 2010, largely to China. It is excellent to see ICEX lead the way in the Indian financial markets, offering industry participants the hedging tools they need to manage today’s market price uncertainty," he comments.
Rory MacDonald, Head of TSI’s Iron Ore Operations, adds: “Momentum is building strongly in the iron ore derivatives market at the moment, so ICEX’s timing is excellent. Over US$3 billion of iron ore forward contracts were cleared in 2010 and January 2011 saw the highest volume of iron ore swaps cleared in a single month to date, with over 2.62 million tonnes (US$470 million) passing through the Singapore Exchange (SGX) and London-based LCH.Clearnet alone, all settled using TSI.”
ICEX’s contract lot size is 100 metric tonnes and quoted in Indian Rupees. Contracts are cash-settled using TSI’s daily 62% Fe, 3.5% alumina iron ore reference prices. The monthly expiry contracts will start from 31 March 2011.
Ashwani Sondhi, Director at ICEX, comments: “ICEX’s iron ore contract will set the benchmark for iron ore futures trading across global markets.”
In selecting TSI for its iron ore contract, ICEX follows in the footsteps of the SGX, which launched the world’s first iron ore swap clearing service on 27 April 2009, London-based LCH.Clearnet, Chicago-based CME Group and Oslo-based NOS Clearing which began trading on 1 June 2009, 11 July 2010 and 1 November 2010 respectively, the press release added.
“We are delighted ICEX has selected TSI’s iron ore index,” says Steven Randall, Managing Director of TSI. “India is the world’s third largest producer of iron ore and exported over 115 million tonnes in 2010, largely to China. It is excellent to see ICEX lead the way in the Indian financial markets, offering industry participants the hedging tools they need to manage today’s market price uncertainty," he comments.
Rory MacDonald, Head of TSI’s Iron Ore Operations, adds: “Momentum is building strongly in the iron ore derivatives market at the moment, so ICEX’s timing is excellent. Over US$3 billion of iron ore forward contracts were cleared in 2010 and January 2011 saw the highest volume of iron ore swaps cleared in a single month to date, with over 2.62 million tonnes (US$470 million) passing through the Singapore Exchange (SGX) and London-based LCH.Clearnet alone, all settled using TSI.”
ICEX’s contract lot size is 100 metric tonnes and quoted in Indian Rupees. Contracts are cash-settled using TSI’s daily 62% Fe, 3.5% alumina iron ore reference prices. The monthly expiry contracts will start from 31 March 2011.
Ashwani Sondhi, Director at ICEX, comments: “ICEX’s iron ore contract will set the benchmark for iron ore futures trading across global markets.”
In selecting TSI for its iron ore contract, ICEX follows in the footsteps of the SGX, which launched the world’s first iron ore swap clearing service on 27 April 2009, London-based LCH.Clearnet, Chicago-based CME Group and Oslo-based NOS Clearing which began trading on 1 June 2009, 11 July 2010 and 1 November 2010 respectively, the press release added.
Iron ore prices remain stable while China slumbers
SINGAPORE (REUTERS) -
Spot iron ore prices were little changed on Friday with top buyer China out of the market for the Lunar New Year break, although hopes prices would rise next week kept Indian futures firm.
"Exporters from Orissa have started stockpiling material so they can sell at a higher price if the Chinese buying sentiment is good after the holiday," said Dhruv Goel, managing partner at iron ore trader Steelmint in India's eastern state of Orissa.
Restocking by Chinese steel mills and tight global supplies lifted spot-based indexes to record highs until Chinese buying stalled because of the week-long Lunar New Year holiday that began on Wednesday.
Chinese markets are scheduled to resume trading on Feb. 9.
The recent rally in spot prices is likely to push up second-quarter contract rates to a record $165 a tonne for Australian fines with 62 percent iron content, free on board, a Reuters poll showed.
The Steel Index 62 percent iron ore benchmark .IO62-CNI=SI was steady at $185.60 a tonne, cost and freight, on Thursday. Metal Bulletin's 62 percent gauge .IO62-CNO=MB was also unchanged at $183.36.
But expectations of further price gains in the spot market buoyed iron ore futures in India.
At 0622 GMT, 62 percent ore for March delivery on the Indian Commodity Exchange rose 0.6 percent to 8,061.50 rupees ($177) a tonne, including freight cost to northern China.
On the Multi Commodity Exchange, March 62 percent ore was up 0.3 percent at 7,496 rupees a tonne, free on board.
Volumes have yet to pick up since the two Indian exchanges introduced the world's first futures market for the steelmaking raw material, with trading limited to domestic players.
Indian exporters are eyeing a court ruling in mid-February on whether a ban on iron ore exports from the southern Karnataka state will be lifted.
Forward swaps also gained, with the Singapore Exchange-cleared February contract up 25 cents to $183.25 a tonne and March also 25 cents higher at $174.25.
($1 = 45.565 rupees)
(Reporting by Manolo Serapio Jr.; Editing by Michael Urquhart)
Chinese steel mills diversifying sources for iron ore supply
Indian iron ore spot prices in recent days kept surging due to iron ore supply shortage in the market, triggered by the news about Indian government hiking iron ore exports duty, flooding situation in Australia, Iran also contemplating 50% duty tax on iron ore fines and 35% on pellet exports.
With the expectation of housing project, railway project and underground projects undertaking in 2011 and many experts believe the Chinese steel demand will continue to see rapid growth in the next few years. The supply of the main source for steelmaking, iron ore has long been controlled by the three major supplying countries, Brazil, Australia and India. It has become a serious concern that China needs to diversify the sources of iron ore supply in the future in order to secure the necessary resources for the steel industry.
In fact, the recent data from China Custom have revealed the efforts. China imported 617 million tonnes of iron ore in 2010, down 1.4% than the previous year.
However, imports from smaller miners have showed significant growth in the past year. Between January to November in 2010, China imported 6.68 million tonnes of iron ore from Peru up by 22%, 4.41 million tonnes from Venezuela up by 77%, 12.88 million tonnes from Iran, up by 128%, 6.9 million tonnes from Indonesia up by 19%, 1.84 million tonnes from North Korea up by 167%, 1.72 million tonnes from Vietnam up by 10% and 6.10 million tonnes from Chile up by 17%.
Apparently, the surging iron ore spot prices and profitability of iron ore encourage smaller suppliers to jump into the iron ore market, thus pushing the imports from these countries to go up. Meanwhile, the overall decreasing in total imports and increasing amount from non-traditional iron ore suppliers indicated the Brazil, Australia and India market share have dropped in 2010.
Analysts pointed out that their market shares drops might be result from the economic recovery in Europe market and Vale have distributed quite a great deal of stock to the region. Traders revealed that importing iron ore from the major suppliers meant accepting the high cost at the market, and importing from smaller miners could mean the prices could be more flexible and thus more attractive.
The high iron ore spot prices have been pushing the index base quarterly contract prices to go up in the quarter one of 2011 as well. Sensing the huge demand from Chinese steel industry, major supplier like Rio, BHP and Vale have planned to expand production in 2011 and the onwards years.
(Sourced from MySteel.net)
Visit www.Mysteel.net for real time access to China steel news
With the expectation of housing project, railway project and underground projects undertaking in 2011 and many experts believe the Chinese steel demand will continue to see rapid growth in the next few years. The supply of the main source for steelmaking, iron ore has long been controlled by the three major supplying countries, Brazil, Australia and India. It has become a serious concern that China needs to diversify the sources of iron ore supply in the future in order to secure the necessary resources for the steel industry.
In fact, the recent data from China Custom have revealed the efforts. China imported 617 million tonnes of iron ore in 2010, down 1.4% than the previous year.
However, imports from smaller miners have showed significant growth in the past year. Between January to November in 2010, China imported 6.68 million tonnes of iron ore from Peru up by 22%, 4.41 million tonnes from Venezuela up by 77%, 12.88 million tonnes from Iran, up by 128%, 6.9 million tonnes from Indonesia up by 19%, 1.84 million tonnes from North Korea up by 167%, 1.72 million tonnes from Vietnam up by 10% and 6.10 million tonnes from Chile up by 17%.
Apparently, the surging iron ore spot prices and profitability of iron ore encourage smaller suppliers to jump into the iron ore market, thus pushing the imports from these countries to go up. Meanwhile, the overall decreasing in total imports and increasing amount from non-traditional iron ore suppliers indicated the Brazil, Australia and India market share have dropped in 2010.
Analysts pointed out that their market shares drops might be result from the economic recovery in Europe market and Vale have distributed quite a great deal of stock to the region. Traders revealed that importing iron ore from the major suppliers meant accepting the high cost at the market, and importing from smaller miners could mean the prices could be more flexible and thus more attractive.
The high iron ore spot prices have been pushing the index base quarterly contract prices to go up in the quarter one of 2011 as well. Sensing the huge demand from Chinese steel industry, major supplier like Rio, BHP and Vale have planned to expand production in 2011 and the onwards years.
(Sourced from MySteel.net)
Visit www.Mysteel.net for real time access to China steel news
Global iron-ore output to increase by 50%-plus by 2015 – Vale
One of the world’s largest mining companies, Brazilian mining giant Vale, reports that it expects total iron-ore production to rise by at least 50% by 2015.
The company adds that this will be driven by strong commodity demand from China and India, which are showing robust recoveries from the worst financial crisis to rock the world since the great depression in the 1930s.
Speaking at a financial forum in Hong Kong, Vale Minerals China Co president Luiz Meriz said the company was making large investments to increase iron-ore production to satisfy growing Chinese demand.
"At the height of the expected demand increase, Vale should be producing about 450-million tons of high-quality iron-ore," says Meriz, adding that, basically, all additional production was likely to serve the Chinese market.
Meanwhile, Vale has announced that it has finalised negotiations on a new two-year collective labour agreement with the workers union representing employees at the company's mining and processing operations in Indonesia.
This marks the fourteenth labour agreement successfully negotiated between the company's Indonesian operations PT International Nickel Indonesia and the Workers Union.
Iron Ore to China May Gain After Holiday, Deutsche Bank Says
Prices for iron ore delivered to China, unchanged over the past week as the country began a weeklong break yesterday to celebrate the Lunar New Year, may gather pace after the holiday, Deutsche Bank AG said.
The price of the steelmaking material with 62 percent iron content was $185.60 a metric ton yesterday, the same as on Jan. 26, according to Steel Business Briefing. Prices have risen 9.1 percent this year and reached $186.50 on April 21, the highest for the data going back to November 2008. China made 44 percent of the world’s crude steel in December, according to the World Steel Association.
“Iron-ore spot-trading activity is likely to be quiet during the Chinese New Year holiday period,” Thomas Baldwin, an iron-ore, freight and steel trader with Deutsche Bank in London, said in an note e-mailed late yesterday. Prices may rise toward records after the break when Chinese steel mills restock iron ore, he said.
Lower iron-ore supplies from India, the third-largest exporter that mainly ships to China, may push up global prices in 2011 along with adverse weather in Australia and Canada, BNP Paribas SA analysts Alok Rawat and Karan Gupta said on Jan. 12. Output in India’s Orissa state fell 46 percent last year, the state’s Deputy Director of Mines Umesh Chandra Jena said on Feb. 1. Orissa’s government has cracked down on illegal mining.
To contact the reporter on this story: Alistair Holloway in London ataholloway1@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter atccarpenter2@bloomberg.net.
Friday, February 4, 2011
Iron ore prices remain stable while China slumbers
SINGAPORE (REUTERS) -
Spot iron ore prices were little changed on Friday with top buyer China out of the market for the Lunar New Year break, although hopes prices would rise next week kept Indian futures firm.
"Exporters from Orissa have started stockpiling material so they can sell at a higher price if the Chinese buying sentiment is good after the holiday," said Dhruv Goel, managing partner at iron ore trader Steelmint in India's eastern state of Orissa.
Restocking by Chinese steel mills and tight global supplies lifted spot-based indexes to record highs until Chinese buying stalled because of the week-long Lunar New Year holiday that began on Wednesday.
Chinese markets are scheduled to resume trading on Feb. 9.
The recent rally in spot prices is likely to push up second-quarter contract rates to a record $165 a tonne for Australian fines with 62 percent iron content, free on board, a Reuters poll showed.
The Steel Index 62 percent iron ore benchmark .IO62-CNI=SI was steady at $185.60 a tonne, cost and freight, on Thursday. Metal Bulletin's 62 percent gauge .IO62-CNO=MB was also unchanged at $183.36.
But expectations of further price gains in the spot market buoyed iron ore futures in India.
At 0622 GMT, 62 percent ore for March delivery on the Indian Commodity Exchange rose 0.6 percent to 8,061.50 rupees ($177) a tonne, including freight cost to northern China.
On the Multi Commodity Exchange, March 62 percent ore was up 0.3 percent at 7,496 rupees a tonne, free on board.
Volumes have yet to pick up since the two Indian exchanges introduced the world's first futures market for the steelmaking raw material, with trading limited to domestic players.
Indian exporters are eyeing a court ruling in mid-February on whether a ban on iron ore exports from the southern Karnataka state will be lifted.
Forward swaps also gained, with the Singapore Exchange-cleared February contract up 25 cents to $183.25 a tonne and March also 25 cents higher at $174.25.
($1 = 45.565 rupees)
(Reporting by Manolo Serapio Jr.; Editing by Michael Urquhart)
Türkiye inşaat demiri piyasası yönünü arıyor
Türkiye inşaat demiri piyasası bu haftaya oldukça sakin başladı. ABD dolar kurunun güçlü olmasına rağmen iç piyasada talepsizlik nedeniyle fiyatlar toparlanamadı. Hafta sonuna doğru yerel piyasada kaygı yükseldi ve inşaat demiri fiyatları KDV dahil 1.200 TL/mt seviyesine kadar geriledi. Uluslararası pazarda hammadde ve mamuldeki belirsizlik inşaat demiri ihracatını yavaşlattı; yerel piyasada tüccarlar stoklarını azaltmaya başladı.
Türk inşaat demiri üreticileri bu haftayı da talep anlamında sakin geçirdi. Kuzey Afrika pazarında yaşanan siyasi belirsizlik nedeniyle işlem hacminin iyice düşmesi ve sorunların bazı Orta Doğu pazarlarına da yansıması alıcıların alımlarını bekletmeyi tercih etmesine neden oluyor. Şubat ayında Türk menşeli eski bağlantıların Birleşik Arap Emirlikleri pazarına girecek olması nedeniyle alıcılar fiyat ve istikrar oluşmadan piyasada olmayı tercih etmeyecek gibi görünüyor. Genel olarak Türkiye'den Birleşik Arap Emirlikleri'ne 690-705$/mt CFR aralığından çeşitli inşaat demiri teklifler olduğu biliniyor.
Türk üreticilerin en son Kuzey Amerika'ya yaptıkları satışların ardından, Orta Amerika'dan da çeşitli talepler alındı. Hammadde piyasasındaki belirsiz durum hem üreticileri inşaat demiri fiyatlarını belirlemede hem de alıcıları alım yapma konusunda zorluyor. Türk üreticilerin inşaat demiri teklifleri bu hafta boyunca genel olarak $685-690/mt FOB seviyesinde yer aldı.
Kuzey Afrika'daki siyasi belirsizlik, Çin'in yeni yıl tatilinde olması nedeniyle hammadde piyasasının netleşmemesi, bu hafta Türk çelik üreticilerinin hurda alımlarına yine ara vermeleri piyasalardaki belirsizliğin devam etmesine yol açıyor. Bir yandan üreticilerin hurda ihtiyacına göre tekrar alım yapmaları beklenirken, diğer yandan da yeni alımlara nihai mamul piyasasında alıcıların pazara dönüp dönmemelerine göre yön vermek istedikleri tahmin ediliyor. Çelik üreticilerinin yeni hurda alımları ile nihai mamul fiyat seviyesini de yeniden oluşturmaları bekleniyor.
Türk inşaat demiri üreticileri bu haftayı da talep anlamında sakin geçirdi. Kuzey Afrika pazarında yaşanan siyasi belirsizlik nedeniyle işlem hacminin iyice düşmesi ve sorunların bazı Orta Doğu pazarlarına da yansıması alıcıların alımlarını bekletmeyi tercih etmesine neden oluyor. Şubat ayında Türk menşeli eski bağlantıların Birleşik Arap Emirlikleri pazarına girecek olması nedeniyle alıcılar fiyat ve istikrar oluşmadan piyasada olmayı tercih etmeyecek gibi görünüyor. Genel olarak Türkiye'den Birleşik Arap Emirlikleri'ne 690-705$/mt CFR aralığından çeşitli inşaat demiri teklifler olduğu biliniyor.
Türk üreticilerin en son Kuzey Amerika'ya yaptıkları satışların ardından, Orta Amerika'dan da çeşitli talepler alındı. Hammadde piyasasındaki belirsiz durum hem üreticileri inşaat demiri fiyatlarını belirlemede hem de alıcıları alım yapma konusunda zorluyor. Türk üreticilerin inşaat demiri teklifleri bu hafta boyunca genel olarak $685-690/mt FOB seviyesinde yer aldı.
Kuzey Afrika'daki siyasi belirsizlik, Çin'in yeni yıl tatilinde olması nedeniyle hammadde piyasasının netleşmemesi, bu hafta Türk çelik üreticilerinin hurda alımlarına yine ara vermeleri piyasalardaki belirsizliğin devam etmesine yol açıyor. Bir yandan üreticilerin hurda ihtiyacına göre tekrar alım yapmaları beklenirken, diğer yandan da yeni alımlara nihai mamul piyasasında alıcıların pazara dönüp dönmemelerine göre yön vermek istedikleri tahmin ediliyor. Çelik üreticilerinin yeni hurda alımları ile nihai mamul fiyat seviyesini de yeniden oluşturmaları bekleniyor.
İtalya hurda piyasası yön değiştiriyor
2011 yılına girdiğimiz ilk haftalarda İtalya piyasasında hurda fiyatları artış eğilimine girmişti. Fakat ocak ayının son on gününden başlayarak bu artış eğilimi tersine dönmeye, tekliflerde düşüş gözlenmeye başlandı. Başka bir deyişle, iki hafta öncesinin nispeten daha iyimser bir tablo sergileyen pazar tablosu bugün itibariyle daha farklı bir görüntü sergilemekte. Hurda fiyatlarının gelecek haftalarda düşmeye devam edeceği, 2010 sonundaki seviyelerine geri dönebileceği tahmin ediliyor.
İtalya piyasası, uluslararası piyasa dinamiklerinden de etkilenmekte: son dönemde Kuzey Afrika ve özellikle de Mısır'daki gelişmeler bu çerçevede önem arz ediyor. Bu piyasalar inşaat demirinde olduğu kadar, hurda ticareti açısından da önemli birer merkez konumunda bulunmaktadır.
Bugün itibarıyla İtalya'da müşteriye teslim bazında HMS hurda teklifleri 310-340€/mt (422-462$/mt), değirmen hurdası teklifleri €360-370/mt (489-503$/mt) aralığında yer almaktadır. Fiyatlar alıcıya ve ürün kalitelerine göre değişiklik göstermektedir.
1€ = 1,359$
İtalya piyasası, uluslararası piyasa dinamiklerinden de etkilenmekte: son dönemde Kuzey Afrika ve özellikle de Mısır'daki gelişmeler bu çerçevede önem arz ediyor. Bu piyasalar inşaat demirinde olduğu kadar, hurda ticareti açısından da önemli birer merkez konumunda bulunmaktadır.
Bugün itibarıyla İtalya'da müşteriye teslim bazında HMS hurda teklifleri 310-340€/mt (422-462$/mt), değirmen hurdası teklifleri €360-370/mt (489-503$/mt) aralığında yer almaktadır. Fiyatlar alıcıya ve ürün kalitelerine göre değişiklik göstermektedir.
1€ = 1,359$
Thursday, February 3, 2011
RAISE YOUR VOICE OR RISK COAL MINING BAN , MICHAEL COSTA SAYS
Former Finance Minister Michael Costa has warned the New South Wales mining industry that it is up against potentially damaging political games and said it needs to raise its voice against opposition groups.
Industry experts, employers, and politicians both past and present turned out last night to discuss why mining matters in New South Wales.
At the event, hosted by the NSW Minerals Council, the former finance minister said calls to ban mining by political parties including the Greens, were not a new idea.
“The reality is that at least two times in my position in government, there were serious proposals to rule out coal mining in this state,” he said.
“That’s how frightening it got.
“I criticised the mining industry then for being silent.”
Costa said the mining industry is still remaining too quiet on their issues regarding land use in New South Wales and they need to be proactive, because if something like a mining ban was introduced, it would be immensely difficult to turn around.
“You need to be making a lot of noise to support your industry.”
Minority groups, he said, get attention and funding because they are so vocal on their views.
“A squeaky wheel gets oiled.
“Misallocation of funds are linked to coal minority groups.”
He said the main reason the Greens have supporters is because they have taken an official and definitive stance on the environment and mining.
“They stand for something.
“Other parties need to come up with their policies and the Greens will disappear, like the Australian Democrats, like One nation.”
The Shadow Finance Minister, Mike Baird agreed that the balance is not right between the environmental concerns and the necessity for mining in New South Wales.
He said if elected in March, the state Liberals will aim to find the balance and consult people from the different sides of the debate.
NSW Minerals Council Deputy CEO Sue-Ern Tan told Australian Mining they welcomed the invitation to be a part of the advisory board for the state government.
“We clearly a need to balance what is growth of industry because of the economical benefits it brings, but also need to balance what environmental concerns and health concerns that are legitimate by farmers and land users.
The most important thing the council will be doing first is listening to community concerns.
We need to hear what they are to understand them properly.”
Paul Ruthven, from IBISWorld said at the forum that New South Wales faces some unique challenges in its quest to mine in the state.
“What’s different about New South Wales as compared to Western Australia and Queensland, for example, is those states see mining as a positive thing and they welcome it for their state and economy.”
Because the bulk of the New South Wales population resides in Sydney, there is a different attitude towards to mining issues in regional centres, he said.
Tan agreed with his comments and said it was difficult for people in urban environments to comprehend the importance of mining.
“You can afford to be in Sydney making decisions on mining when your son or father or whoever isn’t dependant on the mining industry and it’s not affecting your hip pocket,” she told Australian Mining.
“New South Wales is unlike Western Australia and Queensland, and quite unique in the world, because mining occurs on top of and close to land users so conflicts arise.
She said the industry needs to listen to concerns and inform people in New South Wales about mining.
“We try to always put our side of story through and portray the good things, but it’s up to media to tell it.
“Sometimes better to tell David and goliath story rather than one on how beneficial mining is.”
Industry experts, employers, and politicians both past and present turned out last night to discuss why mining matters in New South Wales.
At the event, hosted by the NSW Minerals Council, the former finance minister said calls to ban mining by political parties including the Greens, were not a new idea.
“The reality is that at least two times in my position in government, there were serious proposals to rule out coal mining in this state,” he said.
“That’s how frightening it got.
“I criticised the mining industry then for being silent.”
Costa said the mining industry is still remaining too quiet on their issues regarding land use in New South Wales and they need to be proactive, because if something like a mining ban was introduced, it would be immensely difficult to turn around.
“You need to be making a lot of noise to support your industry.”
Minority groups, he said, get attention and funding because they are so vocal on their views.
“A squeaky wheel gets oiled.
“Misallocation of funds are linked to coal minority groups.”
He said the main reason the Greens have supporters is because they have taken an official and definitive stance on the environment and mining.
“They stand for something.
“Other parties need to come up with their policies and the Greens will disappear, like the Australian Democrats, like One nation.”
The Shadow Finance Minister, Mike Baird agreed that the balance is not right between the environmental concerns and the necessity for mining in New South Wales.
He said if elected in March, the state Liberals will aim to find the balance and consult people from the different sides of the debate.
NSW Minerals Council Deputy CEO Sue-Ern Tan told Australian Mining they welcomed the invitation to be a part of the advisory board for the state government.
“We clearly a need to balance what is growth of industry because of the economical benefits it brings, but also need to balance what environmental concerns and health concerns that are legitimate by farmers and land users.
The most important thing the council will be doing first is listening to community concerns.
We need to hear what they are to understand them properly.”
Paul Ruthven, from IBISWorld said at the forum that New South Wales faces some unique challenges in its quest to mine in the state.
“What’s different about New South Wales as compared to Western Australia and Queensland, for example, is those states see mining as a positive thing and they welcome it for their state and economy.”
Because the bulk of the New South Wales population resides in Sydney, there is a different attitude towards to mining issues in regional centres, he said.
Tan agreed with his comments and said it was difficult for people in urban environments to comprehend the importance of mining.
“You can afford to be in Sydney making decisions on mining when your son or father or whoever isn’t dependant on the mining industry and it’s not affecting your hip pocket,” she told Australian Mining.
“New South Wales is unlike Western Australia and Queensland, and quite unique in the world, because mining occurs on top of and close to land users so conflicts arise.
She said the industry needs to listen to concerns and inform people in New South Wales about mining.
“We try to always put our side of story through and portray the good things, but it’s up to media to tell it.
“Sometimes better to tell David and goliath story rather than one on how beneficial mining is.”
Coking coal price may jump to US$270/t in Q2
The Indian unit of Standard & Poor’s Ratings Services predicted that coking coal price may jump by 15~20% to US$260~270/ton from previous level in the second quarter due to severe flood in Queensland State, Australia.
Rally in coking price definitely undermined the margin of steel industry, since the coking coal accounts for nearly 45% of raw material costs for steel producers.
The Australian government said that about 85% of mines have been affected by the flood and the estimated loss is about US$9.45 billion.
News Date 2/2/2011 12:00:00 AM reported by Dan Wu
Rally in coking price definitely undermined the margin of steel industry, since the coking coal accounts for nearly 45% of raw material costs for steel producers.
The Australian government said that about 85% of mines have been affected by the flood and the estimated loss is about US$9.45 billion.
News Date 2/2/2011 12:00:00 AM reported by Dan Wu
Russia to impose export duty on iron ore, steel products
MOSCOW (Scrap Monster): Russia has plans to impose 30% export duty on iron ore and 10% duty on steel flat products including hot rolled and cold rolled steel, tentative according to the steel prices at global market.
The Ministry of Economic Development of the Russian Federation has also planned to increase the produce tax of iron ore to 8.8% from 4.8% at present.
Market analysts indicates that the imposition of export duty would decrease the export volume, consequently, Russian mills would be forced to cut prices and may lose margin to compete against the offers from the US and Europe, Yieh Corp reports.
Tata Steel to raise plate prices in UK
LONDON (Scrap Monster): Tata Steel will raise its UK reversing mill plate prices on high demand.
The steel producer will boost its heavy plate prices by 95 pounds ($143.1) in the United Kingdom for all orders placed from Feb. 1 as steel demand was higher than expected in 2010 and is forecast to continue to grow in 2011, it said in a statement.
Steel raw material prices also registered a steep increase in recent weeks due to extreme weather conditions in Australia and Brazil, the world's largest producers of key steel making ingredients iron ore and coking coal, Reuter reports.
India, Brazil steel producers to hike flat steel product prices
MUMBAI (Scrap Monster): Major steel companies in India and Brazil have decided to hike the prices of flat steel products for shipments in February, following the price rise in global markets.
The quantum of hikes by Indian steel makers is different as some of them had increased prices several times in January 2011. The hike is also different for HR, CR and HDG.
Brazil’s mills have increased the export quotes of steel flat products by US$100~US$150/ton average in comparison of that in last December.
Russia Kosaya Gora Iron Works increases pig iron sales in 2010
It is reported that Russia Kosaya Gora Iron Works has announced that in 2010 it was among the leaders in pig iron supplies to the Russian and Belarusian markets with sales for the year increasing by 2.5%YoY to 272,220 tonnes constituting 26.9% of the total volume sold in these markets.
In addition, in 2010, Kosaya Gora Iron Works supplied 45,120 tonnes of ferromanganese to the Russian and CIS markets of which 11,460 tonnes were delivered in Q4 2010 up by 6.6%QoQ.
In 2010, the sale of secondary products per month was over USD 1 million. Kosaya Gora plans to maintain this pace of sales in early 2011.
In addition, in 2010, Kosaya Gora Iron Works supplied 45,120 tonnes of ferromanganese to the Russian and CIS markets of which 11,460 tonnes were delivered in Q4 2010 up by 6.6%QoQ.
In 2010, the sale of secondary products per month was over USD 1 million. Kosaya Gora plans to maintain this pace of sales in early 2011.
Wednesday, February 2, 2011
Chinese Iron Ore Demand Increases With Steel Prices
The Steel Index (TSI)’s reported that "daily iron ore spot reference price for 62% Fe fines finished the month at US$185.6 per dry metric tonne.
TSI’s January 62% Fe content fines reference prices averaged US$179.63/dmt, up 6.7% from December’s average of $168.31/dmt.
TSI’s daily iron ore reference price for 58% Fe content fines reached an all time high on 21 January, hitting $158.5/dmt and surpassing the previous high of $150.5/dmt seen on 23 April 2010. TSI’s January 58% Fe content fines reference prices averaged US$152.69/dmt, up 9.6% from December’s average of $139.27/dmt..
Chinese demand for iron ore firmed across the month as steel prices rose. Chinese steel prices have risen on a spate of speculative buying, as the market anticipates further increases when demand returns after the Lunar New Year holiday. 'Rising prices have encouraged mills to ramp up output in an attempt to capitalize on the rebound,' says Oscar Tarneberg Deputy Editor at SBBii China and contributor to SBB’s Analytics China (SAC).
SACiii recently surveyed 29 Chinese mills (accounting for 45% of national output) on their outlook for Q1 and 37% of respondents believed crude steel output will increase in Q1 relative to Q4’10. 39% expected rates of output to remain level and only 15% expected output to fall, suggesting a bullish February for the iron ore market.”
Platts reported that "Seaborne iron ore prices inched lower Friday, as trading activity took a back seat with most Chinese participants out of the market. The Platts 62%-Fe fines assessment was down 25 cents at $186.75/dmt CFR North China, and 63.5/63%-Fe was down 25 cents at $191.75/dmt. 'Sentiment is softer following today's announcement by the Chinese government to restrict the buying of 3rd properties,' a trader in Hong Kong said.
Traders said Indian miners were still offering 63.5/63%-Fe cargoes upwards of $195/dmt CFR North China, but a Hong Kong trader said he would sell at $192-193/dmt CFR North China an Indian 63.5/63%-Fe cargo that was loading in the next few weeks. No deals were reported done Friday…
Market participants told Platts that steel mills in China have received rosy orders for steel products in the February to March period but their profits margins will be greatly diminished if the spot price of iron ore soars above $200/dmt after the lunar new year holiday…
A mining source said “Prices should drop to about $185-188/dmt CFR China...[ ] referring to medium-grade ore. A further factor cited was the possible lifting of Karnataka's export ban in February, which would ease physical supply."
Trading in iron ore futures on day one at Rs 19.5 cr on ICEX
Mumbai, Jan 29 (PTI) Mumbai based Indian Commodity Exchange (ICEX) today said it has successfully launched the world's first iron ore futures contract. Total volume of all the three contracts- March, April and May 2011- was 246 lots (24,600 tonnes) valued at Rs 19.50 crore on the first day of trading.ICEX iron ore March 2011 contract prices were up 1.20 per cent to trade at Rs 8,069 per tonne while April 2011 contracts traded at Rs 7,628 per tonne, ICEX said in a statement here.The contract will be on monthly expiry basis with a trading unit of 100 dry metric tons (DMT). The delivery unit is 5,000 DMT.In the international markets, the spot Australian benchmark iron ore price hit USD 185 per tonne on Friday while Indian iron ore price with 63.5 per cent iron content was quoted at USD 190 per ton including cost and freight."Based on the run up to launch of iron ore contract, trade volumes on first day of trade on ICEX were robust with good participation and liquidity seen in its March and April contracts," ICEX Chief Executive Officer (CEO) Sanjay Chandel said.
Steel Index adds two new iron ore reference prices
SINGAPORE Feb 2 (Reuters) - Data provider Steel Index said on Wednesday it has launched two more reference prices for iron ore that reflect specific grades of the raw material to aid long-term contract pricing.
The new reference prices include one for iron ore fines with 62 percent iron content and 2 percent alumina content while the other is for 63.5/63 percent grade with 3.5 percent alumina, Steel Index said in a statement. Both are priced with freight delivered to Qingdao port in China.
"The addition of the new reference prices will make it easier for parties using long-term supply contracts to index-link to a relevant spot series," said Rory MacDonald, head of iron ore operations at Steel Index.
MacDonald said the 2 percent alumina content grade is in line with ores mined in Western Australia's Pilbara belt and in southern Brazil which are mostly sold via quarterly contracts. The 63.5/63 grade references ore mined in India, he added.
This brings Steel Index's iron ore reference prices to four, including the existing 62 percent and 58 percent benchmarks .IO62-CNI=SI .IO58-CNI=SI, both with 3.5 percent alumina priced with freight for delivery to China's Tianjin port.
Global miners like Vale and Rio Tinto have been using iron ore price indexes as basis in determining rates for quarterly contracts with buyers of the steelmaking ingredient following the collapse of decades-old annual pricing arrangement in April.
Tight supplies have lifted index-based iron ore prices to record highs last month, suggesting second-quarter contract rates are likely to rise again after an estimated 7-8 percent increase in the first quarter. (Reporting by Manolo Serapio Jr.; Editing by Ed Lane)
Iron Ore-Prices steady, China shut for holidays
* China tightening could sap iron ore strength
* Indian futures mixed, swaps fall (Adds swaps, Indian futures)
By Manolo Serapio Jr
SINGAPORE, Feb 2 (Reuters) - Spot iron ore prices hovered around record levels on Wednesday with slower market activity with top buyer China off for the week-long Lunar New Year holiday.
The key price indexes, which global miners like Vale and Rio Tinto use in setting rates for quarterly contracts, were mostly flat on Tuesday but stayed near recent record highs as tight supplies remained a key concern.
The Platts 62 percent iron ore index IODBZ00-PLT was unchanged at $186.75 a tonne, cost and freight delivered to China. The Steel Index's 62 percent benchmark .IO62-CNI=SI was also steady at $185.60.
Metal Bulletin's 62 percent gauge .IO62-CNO=MB eased 23 cents to $183.36, but still near the record $184.43 hit last week.
"I'm still bullish about prices after the Chinese New Year, especially in February and March. It's highly possible that the market will continue to go up," said Destiny Guo, an iron ore physical and derivatives broker at Market Securities.
"I think end-user demand in China is picking up, although the downside risk is what China will do to address inflation."
China has been tightening monetary policy to tame inflation and analysts expect further tightening ahead if the rise in consumer prices quickens to a 30-month high in January.
Rising raw material cost had buoyed Shanghai's steel reinforcing bar futures to a record high on Tuesday, a day before Chinese markets shut for the Lunar New Year Break.
Chinese markets will reopen on Feb. 9.
In India, iron ore futures edged higher on Wednesday, riding on firmer spot prices, although volumes were expected to remain thin.
India's Multi Commodity Exchange (MCX), its largest by turnover, and the Indian Commodity Exchange (ICEX), on Saturday launched the world's first iron ore futures. But volumes have been modest since with trading limited to domestic players.
At 0500 GMT, March 62 percent fines on ICEX gained 0.8 percent to 8,011.50 rupees ($176) per tonne, including freight cost for delivery to northern China.
On MCX, 62 percent fines for March delivery slipped 0.3 percent to 7,473 rupees per tonne, free on board.
Before India's futures contracts, trading in iron ore derivatives were mostly done through forward swaps with exchanges from Singapore to the United States and Europe offering clearing services, hoping to draw steelmakers into hedging price risks.
The Singapore Exchange clears the bulk of global swaps and prices fell on Tuesday as investors locked in recent gains.
The February contract eased 67 cents to $182.13 a tonne, March fell $1.50 to $173.50 and April dropped 20 cents to $166.
($1 = 45.45 rupees) (Editing by Ed Lane)
Iron Ore-Shanghai rebar hits record as costs rise
* Iron ore prices steady near record highs
* Cyclone threatens coal mining areas in Queensland
* Indian futures gain (Updates Shanghai rebar price, adds Indian futures)
By Manolo Serapio Jr
SINGAPORE, Feb 1 (Reuters) - Shanghai steel rebar futures edged up to a record for the second straight session on Tuesday, buoyed by higher costs of raw materials like iron ore and coking coal.
Tight supplies have been boosting prices of the steelmaking ingredients, and a massive cyclone is threatening coal mining areas again in the key producing Queensland state of Australia, still reeling from the impact of flooding last month.
The most active reinforcing bar, or rebar, contract for October delivery on the Shanghai Futures Exchange closed up 0.5 percent at its intraday peak of 5,124 yuan per tonne.
But volume was relatively thin, with just over 157,000 lots traded versus a peak of nearly 400,000 lots last week as activity winds down ahead of China's Feb. 2-8 Lunar New Year holiday.
Spot iron ore prices hovered near record highs, with offers stuck around $188-$190 per tonne for Indian ore with 63.5 percent iron content, said Chinese consultancy Umetal.
Key indexes, up 9-10 percent in January, and which global miners use in determining prices for quarterly contracts, are expected to be mostly steady until Chinese players return middle of next week.
"It will be tricky to organise and get the paperwork through for a whole new contract at this time," said Cameron Hunt, director of Metal Bulletin's iron ore index.
"Chances are with zero business going on, markets will be flat."
Metal Bulletin's 62 percent benchmark .IO62-CNO=MB slipped 17 cents to $183.59 a tonne on Monday, cost and freight delivered to China, still less than a dollar away from the record $184.43 hit last week.
The Platts 62 percent iron ore index IODBZ00-PLT was flat at $186.75 a tonne.
The Steel Index 62 percent gauge .IO62-CNI=SI gained 30 cents to $185.60, near its all-time high of $185.70 reached on Jan. 21.
Tight Indian supplies will continue to support iron ore prices and traders are eyeing a court ruling in India later this month on an export ban at the southern Karnataka state, enforced since July.
India's Supreme Court is due to decide mid-February on whether to lift the ban, a ruling analysts say could influence a plan by another Indian state, top iron ore producer Orissa, to ban exports as well and should help set the direction for prices.
But worries about tight supplies kept the market in backwardation, with spot prices trumping forward swaps and futures.
The Singapore Exchange-cleared February contract rose $3.30 to $182.80 a tonne on Monday, March was up 75 cents at $175 and April gained $1.70 to $166.20.
Indian iron ore futures rose modestly on the third day of trading since the country launched the world's first futures market for the raw material on Saturday.
At 0800 GMT, 62 percent Indian iron ore fines for March delivery rose 0.8 percent to 7,530 rupees ($164) per tonne on the Multi Commodity Exchange, free on board.
A similar 62 percent grade for March delivery on the Indian Commodity Exchange gained 0.8 percent to 8,109 rupees a tonne, including freight cost to China.
Trading volumes have been lean since the weekend launch and analysts say the contracts are unlikely to be considered global benchmarks anytime soon unless liquidity picks up strongly and with trading limited to domestic players. ($1 = 45.92 rupees) (Reporting by Manolo Serapio Jr.; Editing by Himani Sarkar)
Steel Prices Rise
By
Published: February 1, 2011, 9:50 PM
UX FALLS, SD - You may not think of Sioux Falls as being part of the global economy. But when you look at the price of steel, you'll find that KELOLAND is directly tied to what's going on around the world.
Sioux Steel in Sioux Falls makes grain bins and storage systems and a host of other agriculture equipment made out of steel. The cost of the raw material has taken a sudden jump.
"I think we're going to see anywhere from 10 to possibly 20 and 30 percent increases depending on how situation in US plays out to the world. 70 percent of coking coal is in Australia. You've heard about flooding in Australia, so you know there's been damage to mines and infrastructure there and that has a lot to do with what we do here today," Sioux Steel CEO Scott Rysdon said.
When it comes to steel, the market is affected by supply and demand and that demand is at an all-time high in China.
It's a world market. China was pulling in a lot of Australian demand with contracts. If that slows, with their economy almost being a double digit growth every year, has got to expand. And that makes it difficult so they have to look for other places. It puts pressure on supply and demand of iron ore and coking coal," Rysdon said.
That means farmers will pay more for building grain storage this year, but Rysdon expects plenty of business for Sioux Steel anyway.
"We're at the tightest stocks of grain we've been in last 20 years. We've got some huge opportunities for farmers to get storage early, get it now, and get it put up. They'll be paid handsomely for that crop," Rysdon said.
Car manufacturers are the biggest users of steel and while car production numbers are down, Rysdon says steel plants cut back on production to manipulate the market and keep demand high.
Published: February 1, 2011, 9:50 PM
UX FALLS, SD - You may not think of Sioux Falls as being part of the global economy. But when you look at the price of steel, you'll find that KELOLAND is directly tied to what's going on around the world.
Sioux Steel in Sioux Falls makes grain bins and storage systems and a host of other agriculture equipment made out of steel. The cost of the raw material has taken a sudden jump.
"I think we're going to see anywhere from 10 to possibly 20 and 30 percent increases depending on how situation in US plays out to the world. 70 percent of coking coal is in Australia. You've heard about flooding in Australia, so you know there's been damage to mines and infrastructure there and that has a lot to do with what we do here today," Sioux Steel CEO Scott Rysdon said.
When it comes to steel, the market is affected by supply and demand and that demand is at an all-time high in China.
It's a world market. China was pulling in a lot of Australian demand with contracts. If that slows, with their economy almost being a double digit growth every year, has got to expand. And that makes it difficult so they have to look for other places. It puts pressure on supply and demand of iron ore and coking coal," Rysdon said.
That means farmers will pay more for building grain storage this year, but Rysdon expects plenty of business for Sioux Steel anyway.
"We're at the tightest stocks of grain we've been in last 20 years. We've got some huge opportunities for farmers to get storage early, get it now, and get it put up. They'll be paid handsomely for that crop," Rysdon said.
Car manufacturers are the biggest users of steel and while car production numbers are down, Rysdon says steel plants cut back on production to manipulate the market and keep demand high.
Forecasted Record Highs in Steel Production Jan 31 2011
January 31, 2011
MEPS estimates world steel output, in 2010, at just over 1.4 billion tonnes. This equates to a rise of over 190 million tonnes (16 percent) compared with 2009. China, Japan and the US have contributed over 50 percent of the growth. Steel production in Germany and South Korea has also shown significant expansion.
The majority of countries have recorded double-digit percentage rises in 2010 relative to 2009. The largest of these are found in the more economically developed regions – European Union, North America and Oceania – whose markets declined the most in the downturn of 2009.
The economic outlook for 2011 is cautiously optimistic. In the West, certain sectors of the economy are performing well. However, the construction market remains depressed and this continues to dampen demand for steel, especially long products. Government spending cuts and the fragile financial situation could pose further negative risks.
In 2011, strong growth in steel production is expected in South America and the Middle East. Although the impact of this will be relatively small on the world total when compared to the dominance of China. Gains in the industrialised nations are likely to be modest. MEPS forecasts a year-on-year increase of approximately 4.4 percent for global steel production in 2012.
MEPS Global Crude Steel Production Forecast (Million Tonnes)
| Region | 2010 (e) | 2011 (f) |
| EU 27 | 172.9 | 178.2 |
| Americas | 155.3 | 162.1 |
| Asia | 900.2 | 948.3 |
| Others | 186.7 | 196.5 |
| World Total | 1415.0 | 1485.0 |
(e) Estimate (f) Forecast *Figures may not be arithmetically correct due to rounding
News Source MEPS
Turkish steel export value may reach USD 15 billion in 2011
Hurriyet Daily News reported that Turkey's total steel export value is expected to reach USD 15 billion in 2011, up by 20% YoY.
Turkish iron and steel producers are not content with the rise in the country’s production and exports in 2010, as the increase was mainly dependent on price hikes in global markets. The fact that the total volume of production and exports has been falling for the last two years, despite a rise in value in 2010, backs the local producers’ thesis.
Still, professionals have slight hopes for a better year due to the global recovery, rise in demand and the condition's in leading economies being directed toward an inevitable price hike.
Mr Veysel Yayan head of Turkish Iron & Steel Producers Association said that "Turkey's total steel export value increased by 11.5% mainly because of price increases compared to 2009."
He said that Turkey's crude steel production might rise to 33 million tonnes and iron and steel prices could jump as the industry reacts to a surge in raw material costs.
The country's total steel export value is expected to reach USD 15 billion in 2011, up by 20% compared with last year, mainly thanks to an apparent growth in crude steel production capacity, recovery in international markets and increasing product prices triggered by the rising cost of raw materials.
Mr Peter Marsh journalist at Financial Times said that steel prices are set to jump by up to 66% in 2011, top executives and analysts have said, with a burst of inflation that the market has suffered only once in the last 70 years.
Talking about the predictions of foreign experts and analysts, including Mr Michael Shillakeri of Credit Suisse and Mr Eiji Hayashida of JPE of Japan commenting to FT, Mr Yayan said that "It is hard to predict how much iron and steel prices could rise and that the prices were already on an upward trend. Flat steel prices were around USD 450 but last year rose to nearly USD 700."
He said that the hike in iron and steel prices mostly triggered by high demand in the Middle East and a global surge in raw material prices such as for iron ore and coal. He added that "The scrap metal prices were floating around $300 per tons and rose to USD 520 recently."
He said that it is normal to think that such an increase would be reflected in the iron and steel prices in all sectors. Its is likely for steel prices to hit USD 900 per tonne by the end of 2011, like when the market experienced rocketing prices in 2008 flat iron prices reached USD 1,500 per tonne.
Mr İsmail Durak sales and marketing chief for Kardemir said that "The peaking prices for steel could be because of the rising demand for steel sheets used in the automotive industry. As the global markets recover, consumption is on rise and this could reflect on steel and iron prices, as they are the main components of many fields of manufacturing. One of the main reason for the rising price for scrap metal is the harsh weather conditions in the US and Russia."
Mr Ç Kerem Vaizoğlu export manager of Ekinciler Iron & Steel Ind said that "I do not expect a rise by 60% in steel prices in 2011. Prices could rise due to rising demand caused by the automotive industry and construction sector."
Representatives of the world's steel and iron giants met at the first Regional Mining, Metals and Minerals Summit held in Istanbul and agreed on a great number of deals.
The source said that Iranian state officials are seeking opportunities in Turkey, claiming that state officials attending a meeting with a member of the Iranian Industrialist and Businessmen’s Association signed a deal to purchase 170,000 tonnes of rail from Turkish group Kardemir AŞ.
According to the source, Egyptian state officials also placed an order with Kardemir to produce 100,000 tonnes of rail after July 2011.
(Sourced from www.hurriyetdailynews.com)
Turkish iron and steel producers are not content with the rise in the country’s production and exports in 2010, as the increase was mainly dependent on price hikes in global markets. The fact that the total volume of production and exports has been falling for the last two years, despite a rise in value in 2010, backs the local producers’ thesis.
Still, professionals have slight hopes for a better year due to the global recovery, rise in demand and the condition's in leading economies being directed toward an inevitable price hike.
Mr Veysel Yayan head of Turkish Iron & Steel Producers Association said that "Turkey's total steel export value increased by 11.5% mainly because of price increases compared to 2009."
He said that Turkey's crude steel production might rise to 33 million tonnes and iron and steel prices could jump as the industry reacts to a surge in raw material costs.
The country's total steel export value is expected to reach USD 15 billion in 2011, up by 20% compared with last year, mainly thanks to an apparent growth in crude steel production capacity, recovery in international markets and increasing product prices triggered by the rising cost of raw materials.
Mr Peter Marsh journalist at Financial Times said that steel prices are set to jump by up to 66% in 2011, top executives and analysts have said, with a burst of inflation that the market has suffered only once in the last 70 years.
Talking about the predictions of foreign experts and analysts, including Mr Michael Shillakeri of Credit Suisse and Mr Eiji Hayashida of JPE of Japan commenting to FT, Mr Yayan said that "It is hard to predict how much iron and steel prices could rise and that the prices were already on an upward trend. Flat steel prices were around USD 450 but last year rose to nearly USD 700."
He said that the hike in iron and steel prices mostly triggered by high demand in the Middle East and a global surge in raw material prices such as for iron ore and coal. He added that "The scrap metal prices were floating around $300 per tons and rose to USD 520 recently."
He said that it is normal to think that such an increase would be reflected in the iron and steel prices in all sectors. Its is likely for steel prices to hit USD 900 per tonne by the end of 2011, like when the market experienced rocketing prices in 2008 flat iron prices reached USD 1,500 per tonne.
Mr İsmail Durak sales and marketing chief for Kardemir said that "The peaking prices for steel could be because of the rising demand for steel sheets used in the automotive industry. As the global markets recover, consumption is on rise and this could reflect on steel and iron prices, as they are the main components of many fields of manufacturing. One of the main reason for the rising price for scrap metal is the harsh weather conditions in the US and Russia."
Mr Ç Kerem Vaizoğlu export manager of Ekinciler Iron & Steel Ind said that "I do not expect a rise by 60% in steel prices in 2011. Prices could rise due to rising demand caused by the automotive industry and construction sector."
Representatives of the world's steel and iron giants met at the first Regional Mining, Metals and Minerals Summit held in Istanbul and agreed on a great number of deals.
The source said that Iranian state officials are seeking opportunities in Turkey, claiming that state officials attending a meeting with a member of the Iranian Industrialist and Businessmen’s Association signed a deal to purchase 170,000 tonnes of rail from Turkish group Kardemir AŞ.
According to the source, Egyptian state officials also placed an order with Kardemir to produce 100,000 tonnes of rail after July 2011.
(Sourced from www.hurriyetdailynews.com)
Steel price could rise by two thirds this year
Steel prices could go up by two-thirds as raw material costs rocket and suppliers look to recoup profits hit by the recession.
Big rises in iron ore and coking coal used to produce steel are being blamed as well as increasing demand as the world economy begins a recovery from recession which led to a record world production of 1.4 billion tonnes last year.
Yesterday, Tata Steel said it was adding £95 a tonne to the cost of structural sections from March 6, blaming the increase in raw material prices accelerated by the recent flooding in Queensland, Australia.
This has seen the mines that supply coking coal, used to produce steel, unable to operate.
The producer’s commercial manager for sections, Mick Maloney, said demand for steel was recovering.
“The recent extreme flooding in Queensland has led to spot prices in coal and other raw materials markets,” Maloney added.
But Derek Tordoff, the director general of the British Constructional Steelwork Association, which represents suppliers and contractors, said the expected figure of £700 per tonne over the summer would still be less than summer 2008 prices when demand was at its peak.
“It’s forecast to drop to autumn 2010 prices this autumn so it will be a temporary hike over the summer,” he said. “I think it’s only going up to reflect the shortage of coking coal.”
Macroeconomic indicators - Global GDP to grow more than 4pct in 2011 - IMF
Argus reported that the global economy continues to recover from the financial crisis but growth in the advanced economies remains subdued, while activity in emerging nations shows some signs of overheating.
According to IMF's January World Economic Outlook, world GDP will grow 4.4% in 2011 and another 4.5% in 2012. IMF economists had been looking for world output to slow from the 5% growth rate seen in 2010.
But their new projection for 2011 is slightly more robust than the 4.2% they were estimating just three months ago, spurred upwards by stronger than anticipated activity in the second half of 2010 and a sizeable tax cut in the US.
Oil prices are expected to rise by 13% in 2011, with an average of Brent, WTI and Dubai crude benchmarks expected to fetch USD 89.50 per barrel, up from USD 78.93 per barrel in 2010. The IMF is looking at oil prices to rise only slightly higher next year, to USD 89.75 per barrel.
information from www.argusmedia.com
According to IMF's January World Economic Outlook, world GDP will grow 4.4% in 2011 and another 4.5% in 2012. IMF economists had been looking for world output to slow from the 5% growth rate seen in 2010.
But their new projection for 2011 is slightly more robust than the 4.2% they were estimating just three months ago, spurred upwards by stronger than anticipated activity in the second half of 2010 and a sizeable tax cut in the US.
Oil prices are expected to rise by 13% in 2011, with an average of Brent, WTI and Dubai crude benchmarks expected to fetch USD 89.50 per barrel, up from USD 78.93 per barrel in 2010. The IMF is looking at oil prices to rise only slightly higher next year, to USD 89.75 per barrel.
information from www.argusmedia.com
Japanese nickel production in 11 months up by 32pct YoY
| TEX reported that the production activities of nickel metal and ferronickel in Japan in January to November 2010 period as well as in a single month of November 2010 were known in last week. Accordingly, the quantities produced in Japan for the calendar year of 2010 are estimated to be 39,800 tonnes of nickel metal by an increase of 32% from that in the preceding year of 2009 and 65,500 tonnes of nickel in ferronickel by an increase of 11% from that in 2009. In November of 2010, Japan produced nickel metal: 2,699 tonnes and ferronickel: 5,119 tonnes on nickel content base (corresponding to 26,987 tonnes on material base). Reflecting the facts that Sumitomo Metal Mining increased their production of nickel metal in 2010 and Pacific Metals also increased their production of ferronickel in 2010, which had been supported by the revived demand for ferronickel from domestic market and the high level of its exports. information from TEX Report Limited |
Brazil Increases Export Prices of Steel Flat Products
February 1, 2011
Driven by rising steel prices in global market, Brazil’s ArcelorMittal and Usinas Siderurgicas De Minas Gerais S.A. (USIMINAS) have announced to lift export quotes of steel flat products.
It’s known that Brazil’s mills have increased the export quotes of steel flat products by US$100~US$150/ton averagely in comparison of that in last December.
However, Brazil’s major steel mills still offered the products to local market mainly; moreover, Companhia Siderúrgica Nacional (CSN) has no plan to offer products to overseas market due to the tight supply in Brazil’s domestic market.
News Source www.yieh.com
India’s Steel Mills to Increase Steel Prices
February 1, 2011
Tata Steel, JSW Steel and Essar, the major steel mills in India, have indicated that they would soar the steel prices by INR1, 000~INR1, 500/ton for February due to price up on raw material costs.
Indian steel mills have increased the prices for two times since this January. If they do increase the prices further in February, the price hike will reach INR4, 500/ton equal to US$100/ton.
Meanwhile, the steel prices have soared as well in global market. It’s said that the steel flat product prices in Europe and U.S. have hiked by 10% and 37% respectively. Also, the prices in Russia have increased by 30% since last November.
News Source www.yieh.com
Posco of South Korea to Increase HRC Domestic Prices
February 1, 2011
Reportedly, South Korea’s Posco has decided to cancel the discount offers to local buyers and raised its domestic prices of hot rolled coil (HRC).
At the same time, the company has also informed the overseas distributors to cancel the discount offers; while, as the terms of supply contract are different, Posco hasn’t confirmed when to realize the price hike of HRC.
Besides, market participants predicted that South Korea’s major steel mills would increase the prices as well. It’s known that a rolling mill has hiked the export offers by US$100/ton.
News Source www.yieh.com
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