July 25th (Steel Guru) – China Chamber of Commerce of Metals, Minerals and Chemicals Importers & Exporters has released the average reference prices for import transactions of ferrous 63.5% Indian iron ore concluded last week on July 21st 2008 as under

Delivery This week Last week
FOB Indian port 135 to 143 135 to 155
CIF Chinese port 182 to 199 185 to 190
     

Price in USD per tonne
The change is with reference to that posted on July 14th 2008

The reference price practice is intended to regulate the domestic trading of Indian iron ore and avoid speculation on the raw material for China’s booming steel industry. The China Chamber of Commerce of Metals, Minerals and Chemicals Importers & Exporters are the largest trading association in China.

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July 24th (Steel Guru) – Indian iron ore major Sesa Goa Limited has announced the following unaudited results for the quarter ended June 30th 2008.

Sesa Goa Limited has posted a profit after tax of INR 6447.20 million for the quarter ended June 30th 2008 as compared to INR 1188.60 million for the quarter ended June 30th 2007. Total Income has increased from INR 4643.10 million for the quarter ended June 30th 2007 to INR 13109.30 million for the quarter ended June 30th 2008.

Sesa Goa Limited has posted a net profit of INR 6330.70 million for the quarter ended June 30th 2008 as compared to INR 1313.30 million for the quarter ended June 30th 2007. Total Income has increased from INR 5283.10 million for the quarter ended June 30th 2007 to INR 13411.60 million for the quarter ended June 30th 008.

July 24th (Business Standard) – Country’s largest iron ore producer NMDC is seeking up to 97 per cent increase in iron ore prices from foreign steel makers, a move that could have similar repercussions on the domestic market, which may result in higher steel prices.

Other than sponge iron makers, steel players like Essar, Ispat and RINL have long-term contracts with NMDC for iron ore supply.     

 

Ahead of an Indian delegation’s visit to Japan and Korea to settle long-term contract prices with the steel mills there, NMDC has informed Steel Ministry, seeking nearly 80 per cent increase in prices of iron ore fines and over 96 per cent on lumps from the international clients.     

 

This is significant for steel industry here, as domestic iron ore prices are determined on the basis of the percentage increase accepted by Japanese steel mills for NMDC’s products duly adjusted to rupee-dollar parity.     

 

“If iron ore prices shoot up by 100 per cent, it will substantially add to our input costs, which may ultimately have a reflection on steel prices,” an industry official said.     

 

Of its total 30 million tonnes annual production, NMDC exports around 3.5 million tonnes to Japanese steel mills and South Korea’s steel giant Posco under long-term contracts.     

 

In a letter to Steel Ministry, NMDC said its finalisation of prices between Japanese steel mills and Posco has been guided by global price settlement of iron ore every year.     

 

NMDC plans to go by the recent price-settlement by mining majors Rio Tinto and BHP Billiton with Chinese buyers.     

 

Rio Tinto and Bao Steel had on June 25 agreed for price increase of 79.88 per cent on iron ore fines and 96.5 per cent on lumps.

 

Subsequently, BHP Billition settled its prices at the same level with Chinese buyers on July 4.

July 18th (Steel Guru) – It is reported that Ispat Industries Limited is poised to get the much awaited iron ore mining lease in Jharkhand. The company is believed to have already received letter of allotment from the government a few days back for a mining lease at Latua in Chaibasa, in West Singhbhum district.

As per report, the mine is estimated to contain reserves of over 100 million tonnes of iron ore with iron content of 64% to 65%. State mining department officials maintained that the company s name has been recommended for allotment of iron ore mines at Latua.

July 16th (Steel Guru) – It is reported that, amid strong demand, due to supply side constraints, domestic spot prices for iron ore would go up from today by 6% to 7%.

Product Grade Size 14-Jul 15-Jul Change %
Iron ore – BF Fe 65% 10-40 5500 5900 400 7.3%
Iron ore – Sponge Fe 63% 5-18 6600 7000 400 6.1%
             

1. Rates are in INR per tonne
2. Rates are Ex mines but include loading into rakes
3. VAT or CST is in addition
4. Royalty is INR 19 per tonne for Fe content of 63% and INR 27 per tonne for Fe content of 65%

The price trend for last one month has been as under

Product Grade Size 23-Jun 1-Jul 15-Jul
Iron ore – BF Fe 65% 10-40 5000 5500 5900
Iron ore – Sponge Fe 63% 5-18 6100 6600 7000
           

Change over last 1 month has been 15% to 20%

Product Grade Size Change %
Iron ore – BF Fe 65% 10-40 900 18.0%
Iron ore – Sponge Fe 63% 5-18 900 14.8%

July 15th (Steel Guru) – The China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters has released the average reference prices for import transactions of Fe 63.5% Indian iron ore concluded last week on July 14th 2008

Delivery Price Change
FOB Indian port USD 135-USD 155 Up by USD 10
CIF Chinese port USD 185-USD 190 None
     

The change is with respect to prices posted on July 7th 2008

The CCCMC reference prices are average prices for import transactions of Fe 63.5% Indian iron ore concluded the week prior to issuance date of such reference prices. The reference price practice is intended to regulate the domestic trading of Indian iron ore and avoid speculation on the raw material for China’s booming steel industry.

July 4th (Economic Times) – South Korean steel giant Posco’s $12 billion project in India, one of the largest investments proposed by an overseas company, may finally get going with the government expected to give nod to its proposal for iron ore mining lease and forest diversion clearance plan almost simultaneously next month. The project has been awaiting formal clearances for almost three years now.

Grant of the two clearances would be major step forward in salvaging the steel major’s 12 million tonne (mt) steel project that has been in the midst of controversy ever since an MoU was inked in 2005. The company hopes to begin work on the first phase of 4 mt capacity immediately after getting land and mining clearance and targets to complete it ahead of original schedule of 36 months.

“The government is according utmost priority to the Posco project. In this regard its proposal for prospecting licence for Khandhadhar iron ore block in Orissa would be given as soon as the state sends its recommendations to the Centre. The Supreme Court’s Central Empowered Committee (CEC) on environment has also said that it would recommend for land diversion clearance once there is clarity on mining lease for the project,” an official source connected with the project told ET.

The project requires captive iron ore mines with reserves of about 600 mt. While the state has identified three blocks at Khandhadhar, Melang Toli and Thakurani for the project, only Khandhadhar is close to be being offered to the steel maker. The state is conducting a public hearing from other applicants for the same block and expects to conclude the process by July 26, before finalising the name of Posco as the most deserving applicant for the iron ore block with a firm investment commitment and project development plan. Though the mining block has a reserve of about 200 mt of iron ore, sufficient to meet just one-third of Posco’s total requirement, it could support entire first phase of the steel project.

On the forest diversion plan clearance, the matter has reached the final stages as both state and the Centre have cleared the application and CEC is waiting for clearance of mining rights before recommending PL for Khandhadhar in favour of Posco. The company has submitted its application of forest diversion plan for changing the land use of 3,093 acre of forest land on its project site of 4,004 acres. This clearances would mean that Posco would be in possession of over 3,500 acre of government land soon. It would then begin the process to acquire the remaining about 450 acre of private land.

“We could begin work on the project even if we get a portion of the total project land,” a Posco spokesperson said. Anticipating final lot clearances for the project soon, the company has already finalised a rehabilitation and resettlement plan that has even bettered the one finalised by the state government.