INDUSTRY UPDATES ON 15.10.2013

Bulk buyers keep away from rice market

Paddy arrivals dropped to around 1 lakh bags on Monday compared with the levels witnessed last week.
Arrivals have dropped mainly for PR varieties as most of the kharif crop has arrived in markets, said Tara Chand Sharma, proprietor of Tara Chand and Sons.
The inflow is likely to remain sluggish while arrivals of pure basmati paddy are likely to start by month-end, he said.
In the physical market, sluggish domestic demand coupled with arrivals of new rice pulled the prices down by nearly Rs 500 a quintal, said Amit Kumar, proprietor of Ginni Rice.
Bulk buyers are still keeping out of the market as they are expecting prices to fall further. Rice market is likely to rule range-bound for a next few days, he added.
Pusa-1121 (steam) dropped by Rs 400 to Rs 7,500-7,550 a quintal, while Pusa-1121 (sela) eased by Rs 300 to Rs 7,000-7,100. Pusa-1509 (sela) decreased by Rs 500 to Rs 6,000.
Pure Basmati (Raw) quoted at Rs 11,000. Prices of Duplicate basmati (steam) decreased by Rs 400 to Rs 6,000-6,100.

For the brokens of Pusa-1121, Dubar quoted at Rs 3,700, Tibar sold at Rs 4,400 while Mongra was at Rs 3,100.
In the non-basmati section, Sharbati (Steam) sold at Rs 4,500 while Sharbati (Sela) quoted at Rs 4,200-4,250.
Permal (raw) went down by Rs 100 and sold at Rs 2,250-2,300 while Permal (sela) dropped by Rs 50 and went for Rs 2,300 .
Prices of PR-11 (sela) eased by Rs 150 and sold at Rs 2,750 while PR-11 (Raw) quoted at Rs 2,700-2,750 .
PR14 (steam) sold at Rs 2,750 , Rs 100 down.
Paddy arrivals
More than one lakh bags of different paddy varieties arrived at the Karnal grain market terminal.
About 70,000 bags of PR paddy arrived and quoted at Rs 1,350 , around 10,000 bags of Pusa-1509 arrived and sold at Rs 3,250.
2,000 bags of Sugandha at Rs 2,450, while 15,000 bags of Sharbati arrived and sold at Rs 2,300.
Around 3,000 bags of Duplicate Basmati arrived and went for Rs 3,150 a quintal.
Higher arrivals likely to crush soyabean, oil

With arrivals dropping on account of another spell of scattered rains in Madhya Pradesh, soyabean prices have gained over the last couple of sessions.
Though mandis in Madhya Pradesh were closed on Monday on account of Dasara, soyabean prices in private trading were firm at Rs 3,450-3,500 a quintal.
Besides weak arrivals, bullish trend in soyameal which currently quotes at Rs 34,500 a tonne free-on-rails Kandla, has also resulted in soyabean prices firming up.
Soyabean prices may drop to some extent on Tuesday after the mandis open after three days of holidays as arrivals are likely to higher, said a trader.
On the other hand, bullish trend continued in soyabean futures for the second consecutive week on fears of damage to the crop and fast deadline for October contracts.
Due to lack of availability of best quality soyabean, soyabean plant deliveries have also gained Rs 100 at Rs 3,590-3,700 a quintal.
Amid arrival of poor quality of soyabean and rise in plant deliveries, soya oil prices have increased by Rs 20 for 10 kg with soya refined prices quoting currently at Rs 670-75 for 10 kg.
Soya solvent is ruling at Rs 650-55.
Prospect of higher output keeps sugar on leash

The sentiment in the sugar market ruled weak on Monday as the festival demand has got over. Prices on the Vashi wholesale market declined by Rs 2 for S-grade and improved by Rs 10 for M-grade. Naka rates were mixed on limited buying-selling.
Good quality was sold slightly higher while fair quality was sold slightly lower. Mill tender rates were unchanged on subdued volume, said sources.
A Vashi-based wholesaler said that demand for Dussehra got over and for Diwali it is lower than expected. This pulled down prices in the physical market.
Continuous supply from mills in local markets, absence of upcountry buying in Maharashtra’s mills and more than sufficient stocks (about 120- 125 truckloads) in Vashi market kept stockists away from fresh bet.
Bleak chances of sugar exports are forcing the domestic industry to depend on local markets.
New crushing season has begun with optimism of higher sugar production for the fourth consecutive year.
Arrivals at Vashi market were 61-62 truckloads (100 bags each) while local dispatches were lower at 58-60 loads.
On Saturday, only 7-8 mills sold about 11,000-12,000 bags at steady price Rs 2,730-2,830 for S-grade and Rs 2,880-2,980 for M-grade.
The Bombay Sugar Merchants Association's spot rates were: S-grade Rs 2,920-3,090 (Rs 2,922-3,090) and M-grade Rs 3,092-3,246 (Rs 3,082-3,246).
Naka delivery rates were: S-grade Rs 2,870-2,920 (Rs 2,860-2,960) and M-grade Rs 2,970-3,140 (Rs 3,000-3,130).
Coal Ministry to seek CCEA nod for supply to power projects

The Coal Ministry has decided to approach the Cabinet Committee on Economic Affairs to allow fuel supplies to power companies that are facing delays in developing their captive coal blocks.
Official sources said that the Ministry has decided to get CCEA nod to extend tapering linkages ‘beyond three years or till such time when coal production actually starts’ for such projects.
This proposal, if granted clearance by CCEA, would immediately benefit power plants of 4,350 MW being set up by Sterlite Energy, Chhattisgarh State Electricity Board, GMR Energy and Gujarat Mineral Development Corporation Ltd, a Coal Ministry official told Business Line.
Tapering linkage is a mechanism whereby coal is supplied on a temporary basis to power projects that have been allotted coal blocks but mining of which is yet to commence. This arrangement is monitored by the Standing Linkage Committee headed by Additional Secretary in the Coal Ministry.
Generally, fuel supplies based on tapering arrangement is provided only for three years (75 per cent in the first year; 50 per cent in the second year and 25 per cent in the third year).
This arrangement is to ensure that all project developers with tapering linkages are treated equally. “It would also mitigate the problem of power deficit in the country to a certain extent,” said the official.
However, the Coal Ministry has opposed the Power Ministry’s plea to convert some of the tapering linkages into long-term fuel supply agreements (FSA). “It would create additional demand of coal for an indefinite period, which Coal India would not be able to meet in view of heavy demand,” added the official. The Power Ministry informed the Coal Ministry that projects could not start mining in blocks due to delay in environmental clearances.
For instance, in 2006, the Mahan coal block was awarded to a joint venture between Essar Power and Hindalco Industries for captive use for their planned 1,200 MW and 900 MW projects.
The block was stuck for several years over regulatory differences on go and no-go area. Now, the block at Singrauli in Madhya Pradesh is expected to commence production only by the end of 2014.
Currently, the first unit of 600 MW of Essar’s power plant, attached to this coal block, is running on fuel bought through an e-auction by Coal India.
In addition, there are about 15 power projects with 10,785 MW and requiring 18 million tonnes per annum (mtpa) that have received tapering linkages.
Their captive mines are expected to be operational by March 2015. These projects are outside the 60,000 MW of power projects envisaged during the 12{+t}{+h} Plan period.
Paradip Port, Rlys resume operations

Railways and port operations have resumed in coastal Odisha on Monday, as the cyclone Phailin crossed the State.
East Coast Railways, which resumed most of the train services after a gap of two days, will shortly restart freight loading operations as well.
Similarly, Paradip Port, which had suspended vessel operations since Friday, has also re-started operations on Monday. “We handled four vessels today (Monday) including one with imported coal. We are handling vessels of up to 13 metre draft (depth) instead of the usual 14.5 metre. Train operations in the port have started,” the Port Chairman Sudhanshu Shekhar Mishra told Business Line.
The two-day disruption of the East Coast Railways will have a potential revenue loss of about Rs 100 crore for the zone, according to back-of-the envelop calculations. Paradip Port has not yet made any assessment of financial loss.
Due to cyclone Phailin, train services in Howrah-Visakhapatnam section of the East Coast Railway were disrupted and cancelled on October 12 and 13, said an official release.
The machinery of the East Coast Railway, set up for cyclone management, was functioning for the restoration of traffic and was reviewing the situation continuously.
HRC and CRC offers from China and Russia into Europe
Chinese HRP Mills are offering price around USD 590 - 595 per tonne effective CFRFO Europe for HRP in quality S275JR (B added).
Quality S355J2+N is offered with an extra of USD 20 to 25 per tonne i.e. USD 610 to 620 per tonne.

Russia
One major Russian mill is booking November rolling, December shipment HRC at Euro 400 per tonne FOB St Novo and CRC at Euro 465 - 475 per tonne FOB ST Novo.

Another mill is booking HRC to Antwerp at around Euro 440 - 445 CFRFO (big coils) and CRC at around Euro 465 per tonne Fob St Petersburg.
Steel input material prices remains on onward course in India
Post Puja festivities pencil ingot price levels kept climbing without any let up. Touching four figure rally at most locations (INR 1000-1200 per tonne) became sparkling fire play amidst gloomy clouds all round. It is noteworthy that the finished steel market viz., TMT and WRC remains stolid all through with only minor flickers clearly indicating no movement in demand.

More shockingly any hopes of credit loosening have been doused with an alarming hike in WPI and CPI in September.

Consumer price inflation quickened more than expected to 9.84 per cent in September from 9.52 p

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