Essar Steel: Iron Ore & Pellet Sourcing Down 22% in August
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Essar Steel - an integrated steelmaker with steel making capacity of 10 MnT p.a. recorded decline in total iron ore & pellet sourcing for the month of Aug'18. The sourcing stood at 0.80 MnT in Aug'18, fall of 22% M-o-M as against 1.03 MnT in July'18.
However, on yearly basis iron ore & pellet sourcing witnessed increase of 25% in Aug'18 as against 0.64 MnT in Aug'17.
Iron ore procurement from NMDC (C.G.) down slightly on monthly basis
Essar Steel procured 0.42 MnT of iron ore in Aug'18 from NMDC's Bailadila mines in Chhattisgarh via slurry pipeline, down slightly against procurement a month before.
The miner had increased iron ore prices by INR 150-370/MT on 7th Sept'18. On yearly basis, the steelmaker depicted 9% decrease in Aug'18 sourcing as compared to 0.46 MnT in Aug'17.
Sourcing from Odisha merchant mines stable M-o-M
Essar Steel sourced 0.32 MnT iron ore in Aug'18 from Odisha's merchant mines, almost in line sourcing in July'18.
Odisha merchant miners had raised prices by INR 1,000-1,100/MT in both lump and fines via three price hikes. Currently, Odisha iron ore prices trading at six years high.
Out of the total iron ore sourced from Odisha in Aug'18, largest share was contributed by Serajuddin at 0.17 MnT (up 59% M-o-M) followed by KJS Ahluwalia at 0.07 MnT (down 36% M-o-M) and Indrani Patnaik at 0.05 MnT (down 20% on monthly basis).
Essar Steel imports down 79% M-o-M
Essar Steel's iron ore and pellet imports witnessed at 0.06 MnT in Aug, down 79% monthly basis compared to 0.29 MnT in July'18.
All the imports from Bahrain for the month were pellets.
Essar Steel's iron ore & pellet Sourcing
| Seller | Aug'18 | July'18 | M-o-M (%) | Aug'17 | Y-o-Y (%) |
| NMDC | 417,950 | 422,600 | -1% | 464,000 | -10% |
| Serajuddin | 165,174 | 103,714 | 59% | - | 100% |
| KJS Ahluwalia | 71,382 | 111,655 | -36% | 127,826 | -44% |
| Import | 60,670 | 289,000 | -79% | - | 100% |
| Indrani Patnaik | 51,792 | 65,077 | -20% | 37,026 | 40% |
| RP Sao | 22,944 | 34,424 | -33% | - | 100% |
| Kaypee Enterprises | 7,261 | 3,867 | 88% | 8,482 | -14% |
| MG Mohanty | - | 2,988 | -100% | - | - |
| Rungta mines | - | - | - | 3,765 | -100% |
| Grand Total | 797,174 | 1,033,324 | -23% | 641,099 | 24% |
Qty in MT
Provisional data
Source: SteelMint Research, Customs, Odisha govt.
Debt laden Essar Steel is currently undergoing insolvency resolution process. Two rounds of bidding were considered by NCLT. Arcelor mittal and Numetal stood the major bidders in the insolvency process.
Arcelor Mittal, has offered INR 42,000 crore to repay the creditors of Essar Steel under the insolvency and bankruptcy process, as informed by the market sources. This offer is higher than its previous offer of INR 30,000 crore. ArcelorMittal's offer for Essar Steel is higher than what VTB Capital-led Numetal had offered in the second round of bidding. Numetal's offer stands at around INR 37,000 crore as repayment to financial creditors.
The committee of creditors is now expected to take a call on which bidder they find most suitable.
