Tue Jan 3, 2012
* Exports seen at 5 mln T for Jan-March quarter
* 2011/2012 exports seen at 50 mln T vs 97 mln T pvs year
* Concerns policy volatility may hurt India's supplier image
NEW DELHI, Jan 3 (Reuters) - India's iron ore exports are likely to be 75 percent lower than previously expected in the quarter ending in March as a rise in export duties kicks in as part of the government's push to conserve supplies for domestic steelmakers.
Asia's third-largest economy announced a 50 percent jump in export duties on Monday to 30 percent, prompting traders to slash their forecasts for exports for the year to March 2012 to around 50 million tonnes from 65 million. That was already down from 97 million tonnes last year.
Given that India had exported about 45 million tonnes in the nine months to December, it is likely to ship only another 5 million tonnes in the three months to March 31, top industry body, Federation of Indian Mineral Industries, said on Tuesday.
India is one of the world's biggest exporters of iron ore, with much of it bought by China, which has the world's largest steel industry. The shortage is expected to push up global prices by 7 to 10 percent over the current $140 a tonne, traders said.
"We are shocked at the decision to hike export tax on iron ore as such volatility in policy does not promote India's image as a reliable supplier," said Glen Kalavampara, secretary of the Goa Mineral Ore Exporters' Association. Goa is India's biggest exporter of iron ore.
"Absence of supplies from India will help Australian and Brazilian suppliers to consolidate their domination of the global market."
Indian exports were already down around a third from last year primarily due to legal wrangling over stalled shipments from a key producing state and efforts to conserve supplies.
Shares in Indian exporters Sesa Goa and NMDC slid on Monday after the announcement of the tax hike but closed up on Tuesday on fund buying at lower levels.
Deutsche Bank sharply reduced its earnings estimates for Sesa Goa -- by 29 percent this fiscal year and by 24 percent for 2012/13 -- on Tuesday, factoring in the increase in iron ore export tax among other reasons.
Steel companies continued Monday's gains. Tata Steel Ltd rose 6.1 percent to 361.85 rupees. Credit Suisse upgraded the world's No. 7 steelmaker to 'neutral' from 'underperform', citing valuation comfort at current levels.
The government has shown an inclination to conserve resources, though it does not support a blanket ban on exports, largely because the domestic steel industry does not have the technology to use ore fines. India mostly ships fines to China.
New Delhi also hopes that sustained Chinese demand means buyers would be willing to pay a slightly higher price.
"We think global demand will be able to absorb a slight adjustment in prices on the upside, which leaves a bit of room for us to adjust duties," an Indian ministry official said.
GLOBAL PRICES
Chinese steel mills had been expected to replenish stockpiles before their New Year holidays, which start on Jan. 22. Chinese markets are closed on Jan. 2.
China's iron ore imports are expected to rise 6 percent to a record 720 million tonnes in 2012, according to a Reuters poll conducted in December.
India's government is trying to cut down on illegal iron ore mining and shipments but favours better tracking and monitoring along with higher taxes rather than blanket bans on exports. It last raised the export duty in February 2011.
In April, the Supreme Court overturned an export ban imposed by Karnataka's state government in July 2010, but shipments have yet to pick up because of administrative delays.
The court has itself banned mining in some parts of the state due to environmental worries and allegations of illegal mining, allowing only state-run NMDC to mine in the areas.
Such regulatory uncertainty deflates industry confidence of India being a stable supplier.
Indian exports could slump below 10 million tonnes within three years as more ore is earmarked for domestic consumption, according to David Flanagan, managing director of Australian iron ore miner Atlas Iron.
Indian ore exporters say the government policy makes little sense as domestic steelmakers can hardly use fines.
Moreover, India's steel demand is likely to grow by only 6 percent in the current fiscal year, nearly half the earlier forecast, as higher interest rates squeeze demand from the automobile and construction sectors.
"Low-grade iron ore should have been free for exports," Kalavampara said.
(sourced Reuters)
Showing posts with label Deutsche Bank. Show all posts
Showing posts with label Deutsche Bank. Show all posts
Tuesday, January 3, 2012
Tuesday, November 1, 2011
Winsway and Marubeni to acquire Grande Cache Coal
Tuesday, 01 Nov 2011
China’s Winsway Coking Coal Holdings Ltd and Japan’s Marubeni Corp. agreed to acquire Canadian metallurgical coal producer Grande Cache Coal Corp. for about CAD 1 billion.
Winsway and Marubeni will pay CAD 10 a share in cash, 112% more than its 20 day volume weighted average trading price. As per report “Winsway and Marubeni are offering CAD 9 a ton of coal reserves, which is more than the average of CAD 2.91 a ton for comparable North American metallurgical coal transactions and less than the CAD 17.86 a ton Walter paid for Western Coal.”
Grande Cache, which mines in west central Alberta, forecast sales of 2.2 million tons to 2.4 million tons in the year ended March 2012.
Winsway imports metallurgical coal into China and Marubeni is Japan’s fifth largest trading company.
The Grande Cache agreement includes a break fee of CAD 50 million payable by Grande Cache if the deal isn’t completed. Winsway and Marubeni will pay Cad 100 million if they scrap the deal.
The acquisition, which requires approval by two-thirds of Grande Cache shareholders and a majority of Winsway shareholders, is expected to close in February.
Deutsche Bank AG and UBS AG are advising Grande Cache and Burnet Duckworth & Palmer LLP is the company’s legal counsel. The acquirers are being advised by Toronto-Dominion Bank and law firm Osler, Hoskin & Harcourt LLP.
(Sourced from Bloomberg)
China’s Winsway Coking Coal Holdings Ltd and Japan’s Marubeni Corp. agreed to acquire Canadian metallurgical coal producer Grande Cache Coal Corp. for about CAD 1 billion.
Winsway and Marubeni will pay CAD 10 a share in cash, 112% more than its 20 day volume weighted average trading price. As per report “Winsway and Marubeni are offering CAD 9 a ton of coal reserves, which is more than the average of CAD 2.91 a ton for comparable North American metallurgical coal transactions and less than the CAD 17.86 a ton Walter paid for Western Coal.”
Grande Cache, which mines in west central Alberta, forecast sales of 2.2 million tons to 2.4 million tons in the year ended March 2012.
Winsway imports metallurgical coal into China and Marubeni is Japan’s fifth largest trading company.
The Grande Cache agreement includes a break fee of CAD 50 million payable by Grande Cache if the deal isn’t completed. Winsway and Marubeni will pay Cad 100 million if they scrap the deal.
The acquisition, which requires approval by two-thirds of Grande Cache shareholders and a majority of Winsway shareholders, is expected to close in February.
Deutsche Bank AG and UBS AG are advising Grande Cache and Burnet Duckworth & Palmer LLP is the company’s legal counsel. The acquirers are being advised by Toronto-Dominion Bank and law firm Osler, Hoskin & Harcourt LLP.
(Sourced from Bloomberg)
Thursday, September 15, 2011
Banks muscling in on physical iron ore trading and lured by volume
Thursday, 15 Sep 2011
It is reported that an increasing number of investment banks are poised to muscle into the trading of physical iron ore a business long dominated by trading houses lured by the market’s huge size and its shift to a more transparent pricing system.
Mr Colin Hamilton Macquarie analyst said “The global market volume is a major incentive, the iron ore market dwarfs any other metals and now they have a functioning financial market.”
He said that “The majority of the commodities banks including Macquarie are looking at physical iron ore.”
About 1bn tonnes of sea borne iron ore are traded every year with about 20-30% sold on the spot market and the rest sold in long-term contracts. The banks may never match trading houses in this market, because their risk limits will curb both speculative trading and deals in some risky parts of the world.
Even so banks will build their physical iron ore businesses for several reasons. Involvement in this market will help them to limit risk in their burgeoning iron ore derivatives businesses as well as to forge deals to finance companies in the booming mining business.
Mr Abe Ulusal a trader at Mitsui Bussan Commodities said “Having access to the physical material will give banks more leverage and will limit their risk on the derivatives side.”
After pioneering iron ore derivatives trading, Deutsche Bank started trading physical iron ore in 2010. Other banks such as Citi and Goldman Sachs are now following.
Iron ore swaps trading started in 2008 but began to gain more traction in 2010, when iron ore miners dumped a decades old annual price benchmark system and moved to pricing in the shorter term.
Iron ore swaps allow producers, consumers and financial market participants to hedge or bet on prices in the future.
The volume of swaps cleared on the Singapore Exchange reached a record annualised level of almost 50 million tonnes last month and although it is still small compared with the physical market and it is growing quickly.
(sourced from Gulf-Times)
It is reported that an increasing number of investment banks are poised to muscle into the trading of physical iron ore a business long dominated by trading houses lured by the market’s huge size and its shift to a more transparent pricing system.
Mr Colin Hamilton Macquarie analyst said “The global market volume is a major incentive, the iron ore market dwarfs any other metals and now they have a functioning financial market.”
He said that “The majority of the commodities banks including Macquarie are looking at physical iron ore.”
About 1bn tonnes of sea borne iron ore are traded every year with about 20-30% sold on the spot market and the rest sold in long-term contracts. The banks may never match trading houses in this market, because their risk limits will curb both speculative trading and deals in some risky parts of the world.
Even so banks will build their physical iron ore businesses for several reasons. Involvement in this market will help them to limit risk in their burgeoning iron ore derivatives businesses as well as to forge deals to finance companies in the booming mining business.
Mr Abe Ulusal a trader at Mitsui Bussan Commodities said “Having access to the physical material will give banks more leverage and will limit their risk on the derivatives side.”
After pioneering iron ore derivatives trading, Deutsche Bank started trading physical iron ore in 2010. Other banks such as Citi and Goldman Sachs are now following.
Iron ore swaps trading started in 2008 but began to gain more traction in 2010, when iron ore miners dumped a decades old annual price benchmark system and moved to pricing in the shorter term.
Iron ore swaps allow producers, consumers and financial market participants to hedge or bet on prices in the future.
The volume of swaps cleared on the Singapore Exchange reached a record annualised level of almost 50 million tonnes last month and although it is still small compared with the physical market and it is growing quickly.
(sourced from Gulf-Times)
Thursday, September 1, 2011
Mongolia seeks coking coal IPO in three cities
Thursday, 01 Sep 2011
According to the people familiar with the matter that Mongolia aims to list simultaneously in three cities the company that controls one of the world's largest coking-coal deposits.
The people said the multibillion-dollar initial public offering of a government owned stake in Erdenes-Tavan Tolgoi Co may take place in Ulan Bator, Hong Kong and London if Mongolia can overcome technical and logistical hurdles remaining.
Goldman Sachs Group Inc., Deutsche Bank AG, BNP Paribas SA and Macquarie Group Ltd are handling the sale of a stake in state-owned Erdenes-TT as it is known. The company controls the coal deposit in the South Gobi desert near China's northern border.
sourced from online.wsj
According to the people familiar with the matter that Mongolia aims to list simultaneously in three cities the company that controls one of the world's largest coking-coal deposits.
The people said the multibillion-dollar initial public offering of a government owned stake in Erdenes-Tavan Tolgoi Co may take place in Ulan Bator, Hong Kong and London if Mongolia can overcome technical and logistical hurdles remaining.
Goldman Sachs Group Inc., Deutsche Bank AG, BNP Paribas SA and Macquarie Group Ltd are handling the sale of a stake in state-owned Erdenes-TT as it is known. The company controls the coal deposit in the South Gobi desert near China's northern border.
sourced from online.wsj
Monday, August 29, 2011
Credit Suisse in first coking coal swap
Mon Aug 29, 2011
MANILA Aug 29 (Reuters) - Credit Suisse said on Monday it had completed the first ever coking coal swap transaction via a new over the counter contract cleared by the CME Group .
The contract was between Credit Suisse and an unnamed coal industry participant involving 60,000 tonnes of the steelmaking raw material and settled against the Platts Australian coking coal index, the investment bank said.
The Platts index stood at $289 per tonne, free on board Australia on Friday, Credit Suisse said.
The transaction comes more than three years after Credit Suisse and Deutsche Bank (DBKGn.DE: Quote) co-launched an over the counter iron ore paper market by offering cash-settled swaps settled against index-based reference prices.
"This is the missing piece of the jigsaw puzzle that enables mills to hedge all of their variable costs," Kristian Thunes, Credit Suisse's global head of freight and iron ore, said in a statement, adding the company expects the swap volumes to increase rapidly.
Officials at CME and Credit Suisse did not disclose the price, saying it was a private transaction.
Prices of hard coking coal are around $300 a tonne from about $200 a tonne a year ago, because of logistical bottlenecks and tighter supply due to flooding which hit top producer Australia earlier this year.
The size of the first swap trade "bodes well for future activity," said CME spokesman Jeremy Hughes.
The volume of iron ore swaps cleared globally rose to an all-time high of more than 4 million tonnes in July, valued at more than $700 million. The bulk of that, or 3.92 million tonnes, was cleared by the Singapore Exchange.
Spot iron ore prices climbed to record highs above $190 a tonne in mid-February, aided by booming demand from top steel producer China.
MANILA Aug 29 (Reuters) - Credit Suisse said on Monday it had completed the first ever coking coal swap transaction via a new over the counter contract cleared by the CME Group .
The contract was between Credit Suisse and an unnamed coal industry participant involving 60,000 tonnes of the steelmaking raw material and settled against the Platts Australian coking coal index, the investment bank said.
The Platts index stood at $289 per tonne, free on board Australia on Friday, Credit Suisse said.
The transaction comes more than three years after Credit Suisse and Deutsche Bank (DBKGn.DE: Quote) co-launched an over the counter iron ore paper market by offering cash-settled swaps settled against index-based reference prices.
"This is the missing piece of the jigsaw puzzle that enables mills to hedge all of their variable costs," Kristian Thunes, Credit Suisse's global head of freight and iron ore, said in a statement, adding the company expects the swap volumes to increase rapidly.
Officials at CME and Credit Suisse did not disclose the price, saying it was a private transaction.
Prices of hard coking coal are around $300 a tonne from about $200 a tonne a year ago, because of logistical bottlenecks and tighter supply due to flooding which hit top producer Australia earlier this year.
The size of the first swap trade "bodes well for future activity," said CME spokesman Jeremy Hughes.
The volume of iron ore swaps cleared globally rose to an all-time high of more than 4 million tonnes in July, valued at more than $700 million. The bulk of that, or 3.92 million tonnes, was cleared by the Singapore Exchange.
Spot iron ore prices climbed to record highs above $190 a tonne in mid-February, aided by booming demand from top steel producer China.
Thursday, August 25, 2011
GFI Group launches iron ore swaps trading on EnergyMatch platform
Thursday, 25 Aug 2011
Dow Jones reported that GFI Group Inc has launched iron ore swaps trading on its EnergyMatch platform in Europe amid a broad move to expand its product offerings on the platform.
According the company, it has now successfully traded a number of iron ore swap products on EnergyMatch Europe, GFI's online energy trading platform.
The move follows the July 2011 introduction of fuel oil trading on EnergyMatch Europe amid an increasing push by regulatory authorities to move trade onto electronic screens.
Mr Dorian Benson head of GFI Dry Freight Group said that "Iron Ore Swaps is another example of our focus on adding new products to EnergyMatch. We look forward to making further announcements as we continue expand our offerings."
An iron ore swap involves buying or selling at a fixed price against a floating price, like an index and is a relatively new feature of the iron ore industry. Liquidity is still an issue for the iron ore swaps market, which Credit Suisse and Deutsche Bank AG pioneered a couple of years ago.
(Sourced from Dow Jones Newswires)
Dow Jones reported that GFI Group Inc has launched iron ore swaps trading on its EnergyMatch platform in Europe amid a broad move to expand its product offerings on the platform.
According the company, it has now successfully traded a number of iron ore swap products on EnergyMatch Europe, GFI's online energy trading platform.
The move follows the July 2011 introduction of fuel oil trading on EnergyMatch Europe amid an increasing push by regulatory authorities to move trade onto electronic screens.
Mr Dorian Benson head of GFI Dry Freight Group said that "Iron Ore Swaps is another example of our focus on adding new products to EnergyMatch. We look forward to making further announcements as we continue expand our offerings."
An iron ore swap involves buying or selling at a fixed price against a floating price, like an index and is a relatively new feature of the iron ore industry. Liquidity is still an issue for the iron ore swaps market, which Credit Suisse and Deutsche Bank AG pioneered a couple of years ago.
(Sourced from Dow Jones Newswires)
Thursday, February 24, 2011
Mongolia shortlists 4 banks for massive coal IPO
Thu Feb 24, 2011 6:11am GMT* Four banks shortlisted for Tavan Tolgoi IPO
* IPO, Mongolia's largest, planned for H1 2012
* Mongolia set to overtake Australia as China's top coking coal supplier
By David Stanway
ULAN BATOR, Feb 24 (Reuters) - Mongolia has shortlisted BNP Paribas , Deutsche Bank , Goldman Sachs and Macquarie Group to manage the initial public offering (IPO) of Erdenes-Tavan Tolgoi, the world's largest untapped coking coal deposit.
The IPO, which will be Mongolia's biggest, is planned for first half of 2012, Mining Minister Dashdorj Zorigt told reporters on Thursday.
The size of the IPO is still unclear with bankers estimating the offer to be in the range of $1.5-$5 billion. It has attracted huge interest from global banks to win the coveted mandate, with some 150 bankers converging on the frozen capital of Ulan Bator earlier this week to pitch for the deal.
The Mongolian government plans to distribute shares in the company free to all citizens and another chunk to Mongolian corporations, according to officials, bankers and analysts working on the transaction.
Mongolia plans to keep 50 percent of state-owned holding company Erdenes-Tavan Tolgoi, which controls the deposit, located in the South Gobi desert near China's northern border.
The resource rich country, which lingered in isolation for 70 years as a Soviet satellite state, serving as a sleepy buffer zone between its giant neighbours, Russia and China.
Now the democratic government, in power since the early 1990s, is trying to pull its 3 million citizens out of poverty by exploiting its largely untapped mineral wealth.
Mongolia exported 16.6 million tonnes of coal to China in 2010, up nearly three-fold from the preceding year and just 2.5 million tonnes in 2005.
The country, expected by some analysts to be one of the fastest growing economies of the next decade, is poised to overtake Australia to become China's largest coking coal supplier this year. (Writing Denny Thomas; Editing by Lincoln Feast, sourced:Thomson Reuters)
Tags:Mongolian Government, Russia, China, Australia, raw material
Saturday, February 19, 2011
SAIL plans public issue by March subject to market conditions
Saturday, 19 Feb 2011
Steel Authority of India said that it will attempt to launch the INR 8,000 crore follow on public offer before the fiscal end though submission of prospectus within February seems to be a difficult proposition.
Mr CS Verma chairman of SAIL told PTI that “We will definitely attempt to launch the FPO before the end of the current fiscal. Filing the red herring prospectus, however, within February seems to be a tall target.”
However, he said the attempt to launch the offer would entirely depend upon the market conditions and liquidity situation in the system. Mr Verma added that “We will attempt it depending upon the market condition. We have to see which are other issues that are hitting the market. We have to make assessment of the market conditions.”
Drawn his attention to the forthcoming FPO of State run Oil and Natural Gas Corporation, he said that “We will also have to see when ONGC is entering the market and when the refunds of the ONGC issue will go back to the investors. There has to be enough liquidity.”
ONGC is likely to enter the market with its proposed INR 13,000 crore FPO on March 15.
The SAIL FPO was earlier slated to hit the market in February, but got delayed due to some issue with the book running lead managers which has now been solved. However, fearing a repeat of sorts, the steel major is now keen on taking legally binding undertakings from the four investments bankers SBI Caps, Kotak Mahindra, Deutsche Bank and HSBC. It has though agreed to keep the banks for managing its issue.
Mr Verma said that “There were some conflict with BRLMs. Now, we have taken the legal opinion of the Attorney General of India. We are to take the legally binding undertaking from them. And, then we will decide on the future course of action and about the timing of the FPO.”
The government has so far garnered about INR 23,000 crore by divesting its stakes in Coal India, Engineers India, MOIL and some other PSUs against its target of INR 40,000 crore. It is banking on big ticket FPOs of ONGC and SAIL to meet the target.
(Sourced from PTI)
Steel Authority of India said that it will attempt to launch the INR 8,000 crore follow on public offer before the fiscal end though submission of prospectus within February seems to be a difficult proposition.
Mr CS Verma chairman of SAIL told PTI that “We will definitely attempt to launch the FPO before the end of the current fiscal. Filing the red herring prospectus, however, within February seems to be a tall target.”
However, he said the attempt to launch the offer would entirely depend upon the market conditions and liquidity situation in the system. Mr Verma added that “We will attempt it depending upon the market condition. We have to see which are other issues that are hitting the market. We have to make assessment of the market conditions.”
Drawn his attention to the forthcoming FPO of State run Oil and Natural Gas Corporation, he said that “We will also have to see when ONGC is entering the market and when the refunds of the ONGC issue will go back to the investors. There has to be enough liquidity.”
ONGC is likely to enter the market with its proposed INR 13,000 crore FPO on March 15.
The SAIL FPO was earlier slated to hit the market in February, but got delayed due to some issue with the book running lead managers which has now been solved. However, fearing a repeat of sorts, the steel major is now keen on taking legally binding undertakings from the four investments bankers SBI Caps, Kotak Mahindra, Deutsche Bank and HSBC. It has though agreed to keep the banks for managing its issue.
Mr Verma said that “There were some conflict with BRLMs. Now, we have taken the legal opinion of the Attorney General of India. We are to take the legally binding undertaking from them. And, then we will decide on the future course of action and about the timing of the FPO.”
The government has so far garnered about INR 23,000 crore by divesting its stakes in Coal India, Engineers India, MOIL and some other PSUs against its target of INR 40,000 crore. It is banking on big ticket FPOs of ONGC and SAIL to meet the target.
(Sourced from PTI)
Tuesday, February 8, 2011
Ukraine's Metinvest sells $750 mln Eurobond
Tue Feb 8, 2011 8:52am GMT
KIEV Feb 8 (Reuters) - Ukrainian steelmaker Metinvest has placed a $750 million seven-year Eurobond with a yield of 9.0 percent, Thomson Reuters service IFR said on Tuesday.
The bond, arranged by Credit Suisse, Deutsche Bank, ING, RBS and VTB Capital, pays a coupon of 8.75 percent and came at a reoffer price of 98.722 percent of face value, equivalent to 598.8 bp over Treasuries, IFR said. (Writing by Olzhas Auyezov; Editing by Richard Balmforth,sourced:Reuters)
KIEV Feb 8 (Reuters) - Ukrainian steelmaker Metinvest has placed a $750 million seven-year Eurobond with a yield of 9.0 percent, Thomson Reuters service IFR said on Tuesday.
The bond, arranged by Credit Suisse, Deutsche Bank, ING, RBS and VTB Capital, pays a coupon of 8.75 percent and came at a reoffer price of 98.722 percent of face value, equivalent to 598.8 bp over Treasuries, IFR said. (Writing by Olzhas Auyezov; Editing by Richard Balmforth,sourced:Reuters)
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