Essar Steel: Iron Ore Sourcing Stable in Aug'19

Essar Steel - an integrated steelmaker with steel making capacity of 10 MnT p.a. recorded stable iron ore sourcing for the month of Aug'19 at 0.90 MnT, in line with July'19 sourcing.

Iron ore procurement from NMDC (C.G.) down 33% M-o-M

Essar Steel procured 0.33 MnT of iron ore in Aug'19 from NMDC's Bailadila mines in Chhattisgarh via slurry pipeline, down 33% against July'19 procurement by the company at 0.49 MnT.

Amid heavy rains, NMDC iron ore production and dispatches were learned to have remained adversely impacted.

Sourcing from Odisha merchant mines up 42% in Aug'19

Essar Steel sourced 0.55 MnT iron ore in Aug'19 from Odisha's merchant mines, up 42% against July'19 sourcing at 0.39 MnT. Sourcing from OMC dropped 17% to 13,411 MT in Aug'19 as against 16,230 MT in July'19.

Out of the total iron ore sourced from Odisha merchant mines in Aug'19, largest share contributed by Serajuddin at 0.35 MnT (up 67% M-o-M). According to the market sources, Serajuddin has increased its iron ore production sharply by 38% to 1.5 MnT in Jul'19, reaching over four years high as against 1.09 in Jun'19.

Sourcing from KJS Ahluwalia and KN Ram picked up to 0.16 MnT, and 0.02 MnT respectively. Procurement from MGM Minerals and MG Mohanty witnessed fall to 9,930 MT and 1,953 MT respectively.

Essar Steel imports marked nil in Aug'19

Essar Steel's iron ore and pellet imports recorded nil for the eighth consecutive month in Aug'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. Monthly average global iron ore fines (Fe 62%) prices in Aug'19 witnessed at USD 92/MT, CFR China.

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 kept pending 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 INR 49,473 crclaims 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.