Industry Updates 30.06.2012


30 June 2012

Hindustan copper Ltd mulls Rs. 2000 crore smelting refinery in Vizag
Hindustan Copper Ltd (HCL) is mulling a six lakh tonne per annum smelting refinery in Visakhapatnam by investing about Rs 2,000 crore, even as it is looking for a buyer for its closed plant in Rajasthan. "We are in copper business. As a way of diversification, if I find it attractive, taking into account global scenario, treatment refining charges and doing money, then we will set up a six lakh tonne per annum smelting refinery with Rs 2,000 crore investment," HCL CMD Shakeel Ahmed said today.

The company produces about 3.5 million tonnes of copper ore out of the country's total requirement of 100 million tonnes, he said, adding this would prompt HCL to set up the facility near the ports as it has to be fed with imported copper concentrate. However, he added the company does not have any immediate intention to go for the proposed smelting refinery and it may take two-three years from here only to engage a consultancy firm for preparing the feasibility report.

"But, we are open to this project," Ahmed said. Asked whether HCL would look at roping in a partner for setting up the proposed refinery, he said, "Yes, why not? However, we have not initiated talks. It is very early to say that we will have a joint venture". Ahmed said the biggest worry for the company for making the project a reality is the fact that smelting-refining facilities are not a value creator now-a-days.

"This is the reason why we have shut down Khetri project in Rajasthan and there is no plan to reopen it in the next 2-3 years. We are even open to selling the facility, but we need to have a buyer for that," he said.
(Economic Times)
Steel imports soar 69 pc in April-May
Indonesia government has projected the country's copper exports to reach 431,000 tonnes this year.

According to data from the Directorate General of Mineral and Coal at the Energy and Mineral Resources Ministry, the targets of copper production and domestic sales for 2012 are set at 674,000 tonnes and 418,000 tonnes respectively.

The government has set the targets of gold production, export and domestic sales for this year at 66 tonnes, 53 tonnes and 25 tonnes, respectively. Silver production is projected to reach 250 tonnes, exports 218 tonnes and domestic sales 25 tonnes.

Nickel production is expected to reach 71,000 tonnes and exports 72,000 tonnes. No domestic nickel sales will be recorded this year. Nickel ore output is targeted to reach 34 million tonnes, all of which will be exported.

The government also has projected ferronickel production and exports at 19,000 tonnes each, and bauxite production and exports at 10 million tonnes and iron ore production and exports at 5 million tonnes. Meanwhile, tin production and exports are projected at 72,000 tonnes respectively.
(Exim India)
Iron ore fines piles up at Paradip Port

More than a million tonnes of iron ore, mostly fines, are lying accumulated in Paradip port, awaiting shipment. The exporters are pinning hope on better days but keeping their fingers crossed. They are not sure if and when will the present situation turn for better. It is not simply the slump in global demand which is causing concern; the restrictions imposed by the Odisha Government on mining and transportation of the ore too, it is felt, has contributed to the present situation.

In the first quarter April-June 2012-13, total iron ore exports through the port were a little more than three lakh tonnes as compared to 2.6 million tonnes in the same period of last year. The major exporters were Rungta Mines, Essel Mining and the Jindals.
(Steel Guru)
Iron ore imports increasing at Paradip Port

The Paradip Port has handled 1,24,000 tonnes of pellets including 55,000 tonnes on account of Bhusan Steel alone, 23,000 tonnes of direct reduced iron and 1,48,000 tonnes of hot briquettes.

From its newly commissioned pellets plant at Paradip, Essar has started coastal shipments of pellets. The initial trial consignment of 5,600 tonnes was followed by a bigger shipment, totalling 43,000 tonnes so far.

The Steel Authority of India Limited too has started “importing” pellets by way of costal shipments and an estimated 26,000 tonnes have been handled at the port so far.
(Steel Guru)

Fertiliser sales have substantially slowed down in JUNE: RG Rajan, CMD, Rashtriya Chemicals and Fertlisers
As the rainfall has been deficient in the south and the west, the fertiliser sale has been affected substantially in this region as farmers are using fertiliser. According to RG Rajan, chairman and managing director (CMD), Rashtriya Chemicals and Fertilisers (RCF), except for urea, sale has substantially slowed down for DAP, MOP and NPK.

""The cumulative sales of urea, DAP, MOP & NPK till May 2012 was almost in tandem with the last year's trend. In the month of June, DAP, MOP & NPK sales have substantially slowed down while Urea sales are still in tandem with last year's figure. Sowing has been delayed by almost a fortnight in Maharashtra. In case the monsoon is normal, the sales may pick up to some extent,"" said Mr Rajan.

The prices of DAP have almost doubled if we compare the levels of May-June 2012 vs the same period last year as a result of depreciation in rupee value, lesser subsidy fixed by the Govt., higher price in the international market etc. The prices of other P & K fertilisers have also gone up proportionately.

The farmers are using fertilisers judiciously. ""The most affected set of farmers seem to be the small & marginal farmers. Although, for now, "wait & watch" seems to be the mood, farmers have not lost hope of a good monsoon this year,"" said Mr Rajan.
(Economic Times)
RCF buys 100,000 tonnes of Chinese DAP/MAP
Rashtriya Chemicals and Fertilisers Limited (RCF) is bracing to oversee shipment of 100,000 tonnes of diammonium phosphate (DAP) and mono-ammonium-phosphate (MAP) from China. It has invited bids from surveyors for undertaking draft survey, hatch inspection, cargo supervision and product analysis etc at any load port in China for the contracted phosphates import.
Each parcel is expected to comprise 20,000 to 22,000 tonnes of DAP/MAP. The first vessel is expected to load during late June 2012 and the rest of the vessels from July onwards.
(Steel Guru)

Macroeconomic indicators - Crude oil imports sucked over half of India export earnings – ASSOCHAM

More than half of India’s total export earnings went into buying petroleum, particularly, crude imports in 2011-12, thereby seriously impacting the country’s overall economy.

Mr Rajkumar Dhoot president of The Associated Chambers of Commerce and Industry of India said that “However, with the crude prices falling in the international market, the equation is expected to change in the on-going financial year of 2012-13.”

Mr Dhoot said that “Every fall in the crude oil prices is a good news for the Indian economy and the government‘s fiscal situation. Of course, the slowdown in the global economy is weighing on these prices evidently as from a recent high of USD 120 a barrel, the crude is trading between USD 80 to 85 a barrel.”

The situation during the course of past 12 to 16 months has been quite burdensome for the Indian economy. Highlights the ASSOCHAM paper said that “For the past five years, the petroleum imports have been equivalent to almost 40% of the total exports made by India in the past six years. For the year, 2011-12, the figure is at an astonishing high of 51.2%.”

The ASSOCHAM paper on “Austerity in oil Consumption in India suggested that “Austerity in oil consumption will address a plethora of problems faced by India such as a rising trade deficit, a bulging fuel subsidy bill and other macro imbalances.”

The ASSOCHAM chief said that “Widening fiscal deficit and increasing of the current account deficit are among the main problems faced by the national economy as these two issues have had their impact on some of the recent ratings outlook downgrades done by the global agencies like Standard and Poor’s and the oil austerity will surely help.”

Looking from the imports angle and the impact on the trade deficit, crude oil along with gold imports accounted for 44.4 per cent of India’s total imports in 2011-12. The Paper said that “Such high level of imports exert paramount pressure on India’s external payments.”

The share of these two imports, crude oil and gold has been increasing constantly for the last five years. These, together, accounted for 38.8% of the country’s total import bill in 2007-08, which shot up to over 44% in the previous financial year.

Crude alone was responsible for over 31% of the country’s imports, while gold imports accounted for 12.6%. The crude oil imports have not increased only because of price increase in the last several years. In quantitative terms also, these imports have shown a rising trend.

The paper said that “The quantity of petroleum imports has increased from 82 million tonnes in 2002-03 to 164 million tons in 2010-11. Simultaneously, the average price of crude oil has also been rising over the years barring 2009-10.”
(Steel Guru)
Uruguay to build iron ore seaport
Uruguay’s government is going forward with plans to build its first deepwater port which it wants to use as a platform to begin exporting iron ore to China. Construction of the port on the country’s Atlantic coastline will begin in 2014, according to a decree signed by President Jose Mujica and published on his website today expropriating land where the port will be built.

China has expressed interest in investing in the port, Vice President Danilo Astori said over the weekend following a meeting in Montevideo with Chinese Premier Wen Jiabao.

Minera Aratiri since 2007 has been developing a project to export an estimated 18 million metric tonnes a year of iron ore that the Montevideo based company says would convert Uruguay into the world’s eighth largest producer of the mineral.

Aratiri said that it would create 1,500 permanent jobs and contribute USD 1.4 billion to Uruguay’s USD 39 billion economy over the life of the 20 to 30 year project.
(Steel Guru)

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