Essar Steel: Iron Ore Sourcing Fell 21% in July'19

Essar Steel - an integrated steelmaker with steel making capacity of 10 MnT p.a. recorded 21% fall in sourcing for the month of July'19. The sourcing stood at 0.90 MnT in July'19, as against 1.13 MnT in June'19.

Iron ore procurement from NMDC (C.G.) down 12% M-o-M

Essar Steel procured 0.49 MnT of iron ore in July'19 from NMDC's Bailadila mines in Chhattisgarh via slurry pipeline, down 12% against June'19 procurement by the company at 0.56 MnT.

NMDC had rolled over prices for the month of July'19. Currently NMDC production and dispatches are negatively impacted because of monsoons.

Sourcing from Odisha merchant mines dropped 31% in July'19

Essar Steel sourced 0.39 MnT iron ore in July'19 from Odisha's merchant mines, down 31% against June'19 sourcing at 0.57 MnT. Sourcing from OMC increased significantly by 72% to 16,230 MT in Jul'19 as against 9,459 MT in Jun'19

Out of the total iron ore sourced from Odisha merchant mines in July'19, largest share contributed by Serajuddin at 0.21 MnT (down 45% M-o-M). Sourcing from KJS Ahluwalia dropped marginally 0.15 MnT. Sourcing from MGM Minerals and MG Mohanty witnessed significant rise to 26,471 MT and 2,657 MT respectively.

Essar Steel imports marked nil in July'19

Essar Steel's iron ore and pellet imports recorded nil for the seventh consecutive month in July'19. The imports were last seen in Dec'18 at 0.15 MnT.

The imports have been on the lower side amid soaring iron ore prices. The prices were hovering at five years high levels at USD 126/MT, CFR China towards early July'19. Average global iron ore fines prices witnessed rise to USD 120/MT, CFR China as against USD 108/MT, CFR China in June'19.

Essar Steel Iron ore Sourcing

Qty in MT
Provisional data
Source: SteelMint Research, Customs, Odisha govt.

Essar Steel's long-standing bankruptcy case

The Essar Steel bankruptcy case is deferred by Supreme Court till next hearing scheduled on 19th Aug so that the matter can be decided taking into consideration recent amendments to the Insolvency and Bankruptcy code. The operational creditors said they would file petitions challenging the validity of the amendments to the IBC.

Previously, the appellate tribunal (NCLAT) said secured creditors would get only 60.7% of their Rs 49,473 crore claims and the rest would be paid to the operational creditors, treating them at par with operational creditors. Following which, the financial lenders (SBI and Axis banks) were mulling various options such as moving to Supreme Court seeking amendment in Insolvency and Bankruptcy code (IBC) due to orders put forwards by NCLAT.