Essar Steel: Iron Ore & Pellet Sourcing Down 36% in Jan19
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Essar Steel - an integrated steelmaker with steel making capacity of 10 MnT p.a. recorded fall in total iron ore & pellet sourcing for the month of Jan'19. The sourcing stood at 0.76 MnT in Jan19, down by 36% monthly basis as against 1.19 MnT in Dec'18.
On yearly basis, iron ore & pellet sourcing dropped 29% as against Jan18 sourcing at 1.08 MnT.
Essar Steel imports dropped to nil in Jan19
Essar Steel's iron ore and pellet imports dropped to nil as against 0.15 MnT in Dec'18.
Iron ore procurement from NMDC (C.G.) down 8% on monthly basis
Essar Steel procured 0.57 MnT of iron ore in Jan'19 from NMDC's Bailadila mines in Chhattisgarh via slurry pipeline, down 8% against procurement in Dec'18 at 0.62 MnT.
However, towards the beginning of Jan19 NMDC, Chhattisgarh had reduced the iron ore prices by INR 300-465/MT.
On yearly basis, the steelmaker depicted 19% fall in Jan'19 sourcing as compared to 0.70 MnT in Jan'18.
Sourcing from Odisha merchant mines stable M-o-M
Essar Steel sourced 0.20 MnT iron ore in Jan19 from Odisha's merchant mines, down 52% M-o-M as against 0.42 MnT.
Few major merchant miners are heard to have utilized their EC limits for FY'19 owing to which they do not have much material to offer in the market till March. Recently in this month Odisha merchant miners increased iron ore offers sharply in both fines and lumps.
Out of the total iron ore sourced from Odisha in Jan19, largest share was contributed by Serajuddin at 0.13 MnT (down 42% M-o-M) followed by KJS Ahluwalia at 0.04 MnT (down 47% on monthly basis) and Indrani Patnaik at 0.02 MnT (down 83% M-o-M).
Essar Steel's iron ore & pellet Sourcing
| Movement | Jan'19 | Dec'18 | M-o-M (%) | Jan'18 | Y-o-Y (%) |
| NMDC | 567,000 | 619,000 | -8% | 697,300 | -19% |
| Serajuddin | 132,116 | 226,909 | -42% | - | 100% |
| KJS Ahluwalia | 44,588 | 83,675 | -47% | 225,609 | -80% |
| Indrani Patnaik | 15,281 | 91,002 | -83% | 128,889 | -88% |
| OMC | 4,918 | 5,000 | -2% | - | 100% |
| Rungta Mines | - | 1,577 | -100% | 9,501 | -100% |
| RP Sao | - | 14,996 | -100% | - | - |
| MGM Minerals | - | 50 | -100% | - | - |
| Kaypee Enterprises | - | - | - | 19,027 | -100% |
| MG Mohanty | - | - | - | 1,999 | -100% |
| Import | - | 145,586 | -100% | - | - |
| Grand Total | 763,904 | 1,187,795 | -36% | 1,082,325 | -29% |
Qty in MT
Provisional data
Source: SteelMint Research, Customs, Odisha govt.
Essar Steel's long-standing bankruptcy case
In Oct'18 Arcelor Mittal (AM) was selected as the preferred bidder for the insolvent asset ahead of its key competitor Numetal and other contender Vedanta Group. Later, Essar Steel creditors moved to NCLT against Arcelor takeover of Essar Steel. The shareholders of Essar Steel submitted a proposal for settlement of entire claims of Essar Steel India Ltd, however, the lenders banks and Arcelor Mittal opposed to the settlement proposal by shareholders stating it's against the Supreme Court order as well as the provisions of the Insolvency and Bankruptcy Code (IBC).
As per the latest updates, Ahmedabad bench of NCLT (National Company Law Appellate Tribunal) has deferred its verdict on the resolution plan of Arcelor Mittal to 19 February and the subsequent hearing of NCLAT (National Company Law Appellate Tribunal) has been postponed to 28 February.
Apart from this, on 11th Feb, Supreme Court has dismissed the petition by operational creditors of Essar Steel seeking a share in the resolution pie. There were more than 30 operational creditors who have objected to the committee of creditors (CoC) approving ArcelorMittal's resolution plans because all their claims have not been fulfilled.
