reTeam Tracker TM

A Publication of OreTeam Research

20t h S ept emb er 2010 Vol - 55

Markets Today “2 extra pages on steel with this edition (Pg 4-5)” OreTeam Price Index
th
Iron ore prices kept stable on Monday (20 Sep) with buying interest keeping away from the FOB India (Supramax Tonnage)
markets and traders waiting to watch if the situation could improve in the days to come. As 63.5/63% Fe Fines:
said by a Managing Director of a big exporting house from Goa, “the markets are not ready Chennai:- $128/dmt
for the Goan cargoes yet and the situation will stay like this till mid October when the Chi- 58% Fe Fines:-
nese come back post vacations to purchase raw material for winter stocking.” Keeping in Vizag:- $89/dmt
view the industrialist’s statement, it can be said that the time period till mid-Oct is sufficient CFR China
enough for the major market concerns to settle down and steel prices plateau down at cer- 63/62% Fe Fines:
tain nominal levels. Tianjin:- US$137/dmt
59/58% Fe Fines:
With Chinese Autumn break from 22th -24th Sep, followed by Chinese National Day vaca- Jintang:- US$107/dmt
tions from 3rd –10th October, it is evident that some buying will certainly take place in the
Grade Differentials
short term but would not be significant enough to impact the current prices or the price trend
Grade Differential >60% : US ~$7
set by the prevailing pollution control and housing policies. Iron ore prices on Monday at
Grade Differential <60% : US ~$8
various Chinese ports scaled down USD2-4/ton for all grades reflecting the falling demand
and adequate availability at the ports. Recent Transactions
Grade Price Port Quantity
Fe % $/DMT MT
OreTeam price index remained constant amidst a quiet day at market at USD128/ton FOB
62/61 118 FOB G’ varam 60000
Chennai for 63.5/63% Fe fines and USD89/ton FOB Vizag for 58% Fe fines. OreTeam
60/59 116 CFR N China 35000
freight index also kept stable at USD16-17/wmt for super handy freight from ECI to China
and USD13-14/wmt for gearless panamax freight on the same route. A large Mine owner OreTeam Freight Index
from WCI is expecting around USD97 CFR for 56/56% Fe fines cape shipment and USD65
Super Handymax (India-China)
CFR for 52/52% Fe fines fines for Oct delivery. Meanwhile, in India steel prices slipped
USD2-3/ton in various parts of the country due to constant rains and floods eroding almost India E1.Coast-China: $16-17/wmt
all possible construction projects which normally procure steel on weekly or monthly basis. India W 2.Coast-China: $18-19/wmt
Many small trading markets in the northern and north eastern parts of the country remained (Haldia+Paradip): $18-19/wmt
closed while on the eastern side, the movement of the material is still being a big problem.
Gearless Panamax (India-China)
OreTeam Price Index & Freight Index Graph India E1.Coast-China: $13-14/wmt
India W 2.Coast-China: $15-16/wmt
(Haldia+Paradip): $15-16/wmt
1: Chennai, 2:New Mangalore;
An estimated demurrage of USD2-3 to be added on dual port
Vizag loading freight rates for Superhandy max & Panmax.

Baltic Indices
BDI:- 2628pts (-1.79%) ▼
OreTeam Research BCI:- 3389pts (-2.64%) ▼
BPI:- 2902pts (-0.89%) ▼
BSI:- 1987pts (-1.24%) ▼
C3:- USD26.369(-2.46%) ▼
C5:- USD10.588(-1.05%) ▼
Raw Material & Steel Prices at Glance, US$/Ton (all prices in USD/t, unless specified)
Commodity FOB CFR Steel Prices India (Duties as Applicable) China
Coking Coal Australia 191-193 India 216-219 Billet 618-620 575-577
Coking Coke Russia 420-425 India 470-480 Wire Rods 638-640 622-624

Scrap HMS Europe 365-368 India 410-412 HRC 710-715 646-648

DRI (Sponge Iron) INR 17,500-550 EXW Raipur Pig Iron 502-507 512-514
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Page 1
 reTeam Tracker TM

A Publication of OreTeam Research

Vol - 55
Markets Today SGX Daily Settlement Prices
20.09.2010 (62% Fe fines)
Baltic indices saw another declining trend today with Baltic Dry Index falling 1.78% to close
Contract DSP Daily %
at 2628 points where as Baltic supramax index closing at 1987 points, down by 1.24% as Month (USD) Change Change
compared to last Friday’s closing. In terms of average time charter earnings, capesize ves- 138.75 3.25 2.40%
Sep'10
sels lost 3.5% to register USD32,634 per day against USD33,812 per day on Friday. The
Oct'10 131.5 3.12 2.43%
increasing number of new ships entering the trade towards the end of the year along with
Nov'10 130.56 3.43 2.70%
the old ones not being condemned are increasing the pressure on the Baltic Indices.
Dec'10 129.62 3.56 2.82%
Jan'11 127.5 2.25 1.80%
Interestingly, the steel futures had a good show on Monday (20 th Sep) with rebar volumes
Feb'11 127.37 2.37 1.90%
gaining 705,348lots for complete 12 months future contracts trading. The most traded
Mar'11 127.62 2.75 2.20%
Jan’11 contracts gained 35% on Monday at close with a closing price of RMB4378, up by
Apr'11 125.62 1.87 1.51%
RMB19 compared to Friday’s figures. Similarly, Oct’10 future contract settled at RMB4367
May’11 125.31 1.69 1.37%
against 4357 recorded on Friday at a volume of 4640lots.
Jun’11 125.31 1.81 1.47%
Source: SGX
Paper trade at SGX, was completely opposite to the physical trade with most of the future
LME Billet Price on 20.09.2010
contracts settling at a premium of about 3% till Dec’2010 and an average of 1.9% thereafter.
Cash Buyer:- USD460/ ton
Sep’10 contracts closed at USD138.75 with a daily change recorded as USD3.25 or 2.4%. Change: 0.0 ↔
Calculated Q4’10 contracts inched up USD3.37 through the day to average at USD130.56 Opening Volume:- 80665 tons
where as Q1’11 contracts inched up USD3.08 to average at USD129.24. Change: -0.4% ▼

Chinese Market Price on 20.09.2010

Another announcement which came to haunt the Indian east coast exporters was that the
Grade Port RMB Price USD/t ∆
Paradip Port Authorities have scheduled maintenance of the Iron ore Handling plant (IOHP)
63.5 Tianjin 1125 148.7 ▼
from 20.09.2010 to 27.09.2010 at port. Hence, there will not be any loading operation during
61 Jingtang 1000 131.2 ▼
the same time.
58 Tianjin 810 107.6 ▼
Iron ore Stockpiles on 20.09.2010
Overall, the physical markets look weak in the short term with very few offers opening or
closing but the paper trade at SGX is keeping strong conserving the optimism for the coming India:- 4.65ml tons
Change: 0.20 million tons ▼
quarter and its new prices. Chinese steel prices have also kept steady on Monday and could
China:- 70.01ml tons
likely be moving in the southward direction here-on or remain stable at current levels. Change: -0.95 million tons ▼
Iron Ore stocks at Major Indian Ports as on 20.09.2010 Vessel Waiting Time as on 20.09.2010

Port
Iron ore Stock in Tons
% share of total

Port Change % Port Change % Port Change %

Mangalore 0.0 ↔ K’patnam -21.28% ▼ Chennai -1.19% ▼

Goa 0.0 ↔ Haldia 0.0 ↔ Vizag -4.85% ▼
Paradip 0.0 ↔ Kakinada -29.29% ▼ Belekeri 0.0 ↔

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 reTeam Tracker TM

A Publication of OreTeam Research

Vol - 55

Again Central team to study environment impact in proposed POSCO port

The Central Team that studied alleged violation of Forest Rights Act in the proposed Posco site, is likely to visit the area again to
study the environment impact and coastal regulation zone CRZ adherence by the company for its proposed port.

POSCO has planned to set up a 12-million tons steel plant near Paradip with an investment of Rs 52,000 crore .The company has
also proposed to build a captive port near Jatadhari river mouth in Jagatsingpur district, about 10-km of the existing Paradip Port.

..Continued on www.oreteam.com

East Asian Scrap Imports are likely to remain weak

East Asian ferrous scrap market is finally opening for imports from US and Europe after a long Islamic holiday. The scrap market
remains calm throughout and only few transactions came into the picture.

During the holidays the shredded HMS 1:2 scrap booked at USD 410-415 per ton CFR China. Market observers believe that seeing
the trend the ferrous scrap market in East Asian countries are likely to remain calm at least for few more days as the Japanese and
US scrap markets are not showing any excitement. The ferrous scrap export prices from US and Japan are likely to weaken furth er
till the month-end.
..Continued on www.oreteam.com

Chinese pig iron production to climb by 2-3% in Aug (MoM) - Fall is expected in Sep 2010
Chinese pig iron production in August 2010 is expected to show an increase by 2-3 percent from the previous month and a fall by 1-5
percent as against August 2009, according to market intelligence.

As per market observers, the fall in Chinese pig iron production can take place during August and September 2010 because of vari-
ous norms like pollution, etc. introduced by the Chinese government in order to save the environment. Due to such norms, the pig
iron production of more than 100 steel mills in China has been affected and 18 major steel plants had to shut down its steel produc-
tion. The pig iron production is also affected by lack of raw material supply, rains and floods in many regions of China.

Market observers fear that in September 2010, Chinese pig iron production might go down on average of 15 percent from August
2010. Hebei, Liaoning, Jiangsu, Shandon and Shanxi regions are expected to contribute over 80 percent to Chinese pig iron produc-
tion in August 2010.
..Continued on www.oreteam.com

Other Main News Today

GoM likely to agree to captive mining material to be used by Advertise on
the Tracker!
associates & JV.
Book this Space!
OMC restricts supply of iron and chrome ores to new projects
in Orissa.
Essar steel signs 10 year supply contracts with Orissa private
miners.
GPI to invest USD75.4 million on Forging & pelletization pro-
ject in West Bengal.
KSK Energy ties up $3.6 billion for thermal power project in
Chhattisgarh.
Daily Indian & Chinese Price
SAIL to finalize its JV with Posco in Nov. Japan’s Kobe Steel Updates only on OreTeam.
to make iron nuggets.
Check out our newly launched
Indian Power Minister woos Canadian investors in Power OreTeam Market Pulse
sector. at www.oreteam.com

For recent transactions, FOB prices from major Indian ports, research & market analysis, complete news articles, statistics on Indian
and global commodities, sms & email alerts, instant quotes on prevailing prices & transactions and much more... log onto
www.oreteam.com

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 reTeam Tracker TM

A Publication of OreTeam Research

STEEL SPECIAL Vol - 55

Chinese Steel production Jan– Aug 2010

China’s August crude steel production figures for 2010 represent a mar- 2010 Crude Steel Production
ginal fall or 0.21% as compared to the month before. Top 5 Provinces
The fall could be largely attributed to the to the mills engaging is de- Province Liaoning
stocking and the steel prices keeping volatile through out the month.
YOY change for the period of Jan-Aug 2010 stands 15% up as com- Rank 3
pared to the same period in 2009. Jan-Aug Production 35.7 ml tons

Though towards the end of August the pollution norms implemented Share on Total 8.4%
took stage whose affect on production will be visible in the September Aug vs Jul Change -0.6% ▼
2010 production figures.

Province Hebei
Rank 1
Jan-Aug Production 104.7 ml tons
Share on Total 24.6%
Aug vs Jul Change -0.2% ▼

Province Shandong
Rank 4
Jan-Aug Production 34.5 ml tons
Share on Total 8.1%
Aug vs Jul Change 0.5% ▲

Province Shanxi
Rank 5
Jan-Aug Production 21 ml tons
Share on Total 4.9%
Aug vs Jul Change 0.1% ▼

Province Jiangsu
CHINA 2010
Rank 2
Total Jan - Aug Production 425.8 ml tons
Jan-Aug Production 41.3 ml tons
Total Jan - July Production 375.5 ml tons
Share on Total 9.7%
Aug vs July Change -0.2% ▼ Aug vs Jul Change -0.8%▼

© 2010 OreTeam Research. Strictly Confidential

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 reTeam Tracker TM

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Vol - 55

Chinese Steel Prices Aug-Sep 2010

Steel prices in August were completely volatile but driven primarily because of the following issues-

Rising iron ore spot prices squeezing the margins of the steel mills concerning the small sized mills more
Steel inventories holding strong through the month
A stable but a gentle demand keeping the steel prices alive
Domestic iron ore production holding strong through the whole month
Government orders to shut down outdated mills to control pollution
Export tax levied on various steel products.

Taking into account all the above reasons the volatility in steel prices can be easily deduced in the month of August. HRC an d bil-
lets kept primarily flat through the beginning and end of the month mainly due to slow growth in automobile sector and export limita-
tions forcing the HRC to be shifted back into the domestic market squeezing the prices and cutting down the production. Billets on
the other hand were dependent on rebar and wire rod demand. The graph below clearly indicates the sync in the prices of billets,
rebar and wire rod though August.

Iron ore prices kept low towards the 3rd week of August due to Chinese mills scaling down production numbers and government
announcing the closure of almost 25 million capacity to control pollution. This in-turn saved the iron ore prices from falling more and
pushed the steel prices to scale the Everest. 7 th-8th September saw the peak of the steel prices with rebar and wire rod scaling al-
most USD70/ton and USD55/ton respectively as compared to 1 st August prices.

Closure of the mills for controlling pollution is set to haunt the steel production only for a short term, likely till the end of the October
vacations in China. Already the market seems to have cooled down now (20 th Sep), as the iron ore supply problems have caused
some concern and the steel demand is yet to scale good heights for the produced inventory to be dished out to the end users.

Although, many small steel mills have increased their September steel prices for the domestic and international customers, the
main questions still burdening the market space are :-

Whether the increased prices by the steel mills are sufficient enough to cover their loses caused due to production cuts
How long are the iron ore traders going to remain crippled with their small margins

Steel prices in China (Aug –Sep 2010)

Dotted lines indicate August 2010

beginning prices

All steel product prices are at

a premium to the beginning
August rates, as shown in the
graph.

Premium remains highest for

Rebar (Rb) & Wire rod (Wr)
where as HRC and Billets
slowly seem to be coming
back to their earlier prices.

© 2010 OreTeam Research. Strictly Confidential

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