Sugar seen gaining on retail demand

Retail offtake of sugar is expected to rise the next two days as Maharashtra traders are likely to intensify their strike against the local body tax.
Sources said that the traders, including those in sugar, dry fruits, spices, gur, colour and chemicals, coconut and others business, have decided to join the strike from May 1.
The trend was reflected in the futures market, where prices were up by Rs 23-24 on expectation of higher physical demand ahead of the indefinite bandh from Wednesday, said sources.
On Monday, sugar prices on the Vashi wholesale market ruled steady with the fine quality gaining marginally and the fair quality dropping a tad as local demand was thin.
In the spot market, prices dropped by Rs 5-10, while naka rates showed a mixed trend. Mill tender rates ruled unchanged due to subdued demand. In the Vashi market, new arrivals were about 62-63 truckloads, while local off take was about 63-64. On Saturday evening, 8-10 mills offered tenders and sold 25,000-30,000 bags at Rs 2,900-2,970 (Rs 2,900-2,970) for S-grade and Rs 2,980- 3,060 (Rs 2,980 - 3,090) for M-grade.

Steel mills push exports through discounts

India’s steel exports surged more than 14% in the fiscal year ended March, not so much by capturing new markets than clearing inventory though discounts.

The discounts were pegged at 2-3%, more on bulk sales, to countries in West Asia, South-East Asia, the South Asian Association for Regional Cooperation (Saarc) and Africa, mainly on steel used in construction, white goods and electrical applications, company executives and analysts said. “It is not very remunerative to export…this is an export made in desperation,” saidNarendra Chaudhary, a mining and metals consultant and former executive vice-president and chief executive for Asia, Africa and East European countries for ArcelorMittal, the world’s biggest steel maker. “You can’t compare exports of pre-2008 to exports now.”
Inventory at three companies—Steel Authority of India Ltd (SAIL), Tata Steel Ltd and Rashtriya Ispat Nigam Ltd—stood at 1.39 million tonnes (mt) at the end of December, double the 691,000 tonnes from a year ago, according to data from Oreteam, a steel and iron ore information website.

“All of them are seeing low sales in India so they are looking here and there trying to find new markets,” said Prakash Duvvuri, head of research at Oreteam. “This fiscal year, exports could rise and there could be some discounts again.”

Steel exports in 2012-13 rose 14.3% to 5.246 mt, according to official data. Exports form a small part of India’s total annual steel production of 78 mt, but are significant given the big plans for capacity expansion by all top companies that hope to cater not just to the domestic market but the neighbourhood as well.

Apart from this, rising imports of cheaper steel from China and increasing competition from foreign companies such as South Korea’s Posco and Japan’s Nippon Steel and Sumitomo Metal Corp.and JFE Steel Corp. that are entrenching themselves in India, mean local firms have to gain markets outside the country.

Tata Steel in strategic tie-up with Labrador Iron Mines

Tata Steel Ltd, India’s largest private sector steel maker, said on Tuesday that it has entered into a strategic tie-up with a Canadian iron ore company Labrador Iron Mines Holdings Ltd(LIM), whereby Tata Steel’s Canadian subsidiary will get access to greater iron ore resources.

Tata Steel’s subsidiary Tata Steel Minerals Canada Ltd (TSMC) has iron ore reserves in the Labrador Trough region in Canada through its 27.7% stake in a Canadian company called New Millenium Iron Corp. (NMI).

As a part of the arrangement, LIM will transfer 51% interest in the Howse deposit (which contains 28 million tonnes of iron ore resources) to TSMC and the two companies will cooperate in the  area of logistics .
(including development of a rail line) and potential off-take agreements. For this, TSMC will pay LIM C$30 million. In return, TSMC will transfer its Timmins 4 iron ore deposit with 1.7 million tonnes of resources to LIM, at a consideration of C$3 million, which will be recoverable from sales. TSMC also has an option to further increase its ownership of Howse deposit to 70% for a consideration of C$25 million .

“Tata Steel’s raw material strategy focuses on adding value accretive assets to its portfolio to increase its raw material security,” H.M. Nerurkar, Tata Steel’s managing director, said in the statement. The proposed arrangement with LIM is expected to enhance the raw material security for the group and streamline logistics, Nerurkar said.Tata Steel had established its presence in this region by acquiring a 19.9% stake in NMI in 2008, subsequently increasing its stake. Tata Steel Minerals Canada was formed as a joint venture between New Millennium and Tata Steel to develop projects.

The Labrador Trough has delivered more than 2 billion tonnes of ore in the past 50 years and has attracted mining investments of $15 billion from leading global companies, the company said.

SAIL to foray into titanium sector in Kerala

PTI reported that Steel giant SAIL is looking at entering the titanium sector and has joined hands with the Kerala government for exploring the possibility of a project in the state, the government that April 29th 2013.

Steel Minister Mr Beni Prasad Verma informed the Lok Sabha in a written reply said that "Steel Authority of India Ltd has signed an MoU with Kerala State Industrial Development Corporation and Kerala Minerals & Metals Ltd on behalf of Government of Kerala for exploring the possibility of setting up a Titanium project in Kerala.”

He said that "Strategies such as backward and forward integration will be explored subsequently. The project, for which techno economic feasibility report is under preparation by MECON, will be set up in phases.”

Mr Verma said that a detailed project report would be prepared after completion of TEFR and establishing the financial viability of the project.

The state run PSU had inked a pact for the joint venture with KSIDC and KMML earlier this month.

SAIL Chairman Mr C S Verma had said then that the first phase of the project envisages setting up a 10,000 tonne annual capacity plant to produce titanium sponge.

The estimated cost of the unit, proposed at Chavara in Kollam district where KMML's plant is located, is around INR 2,500 crore and MECON, the unit under the Steel Ministry, had already prepared a brief on the project.
Chinese steel market likely to stay weak in May

Shanghai Daily reported that China's steel market may remain weak next month although it is a peak consumption season traditionally.

According to China Iron and Steel Association, although it's a peak season for the steel industry, demand remains lukewarm, with housing starts falling and the overall manufacturing sector remaining weak.

China's first-quarter economic growth slowed to a disappointing 7.7% year on year, compared with 7.9% in the fourth quarter of last year. The association said that "This means China's economy faces many uncertainties to bounce back steadily.”

According to the National Bureau of Statistics, still, steel production remained at a high level. China's crude steel output reached 191.89 million tonnes in the first three months of this year, an increase of 9.1% from a year earlier.

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