Essar Steel: Iron Ore Sourcing Up 12% in Oct'19

Essar Steel - an integrated steelmaker with steel making capacity of 10 MnT p.a. recorded rise in iron ore sourcing for the month of Oct'19 at 1.05 MnT, up by 12% as against 0.94 MnT in Sep'19.

Iron ore procurement from NMDC (C.G.) up 44% M-o-M

Essar Steel procured 0.68 MnT of iron ore in Oct'19 from NMDC's Bailadila mines in Chhattisgarh via slurry pipeline, up 44% against Sep'19 procurement by the company at 0.47 MnT.

On 19th Sep, NMDC Ltd announced cut in its iron ore prices. Prices of iron ore fines and lumps were reduced by INR 200/MT and in DR-CLO price cut was by INR 230/MT. Also, last week on 14th Nov, the miner reduced prices for fines and lumps by INR 100/MT and in DR-CLO price cut was by INR 120/MT and ROM by INR 90/MT.

Sourcing from Odisha merchant mines down 18% in Oct'19

Essar Steel sourced 0.37 MnT iron ore in Oct'19 from Odisha's merchant mines, down 18% against Sep'19 sourcing at 0.45 MnT. Sourcing from OMC decreased by 41% to 10,889 MT in Oct'19 as against 18,473 MT in Sep'19.

Out of the total iron ore sourced from Odisha merchant mines in Oct'19, largest share was contributed by Serajuddin at 0.20 MnT (down 12% M-o-M).

Sourcing from KJS Ahluwalia and KN Ram dropped to 97,849 MT, and 33,558 MT respectively.

Towards early Oct'19, few Odisha based major merchant iron ore miners had decreased offers on bulk quantity purchase of fines. Serajuddin on 11th Nov'19 has increased iron ore lump offers for 5-18 mm (Fe 63%) by INR 300/MT to INR 3,700/MT (ex-mines, including Royalty, DMF, & NMET).

Essar Steel imports marked nil in Oct'19

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

The imports have been on the lower side amid high iron ore prices. Monthly average global iron ore fines (Fe 62%) prices in Oct'19 witnessed at USD 89/MT, CFR China.

Essar Steel Iron ore Sourcing in Oct'19 & Sep'19

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

Essar Steel bankruptcy case updates

Arcellor Mittal expects to complete Essar Steel acquisition by the end of 2019 following the Supreme Court verdict on Essar Steel resolution plan.

ArcelorMittal India Private Limited's (AMIPL) resolution plan for Essar Steel India Limited ('ESIL') has been unconditionally approved by the Supreme Court of India and the approval of AMIPL's resolution plan is the final procedural step in ESIL's corporate insolvency process. After completion of transaction, ArcelorMittal will jointly own and operate ESIL in partnership with Nippon Steel Corporation, Japan's largest steel producer, in-line with the joint venture formation agreement signed by the two companies.