Monday, 16 Jan 2012
ET reported that as many as 105 sponge iron units face a serious threat of being shut down amid deepening raw material crisis in Chhattisgarh.
Mr Anil Nachrani president of Chhattisgarh Sponge Iron Manufactures' Association said “Some 20 sponge iron units have been shut down since October 2011 and others have cut short production up to 60% as sponge units are just getting 4 million tonne iron ore as against the requirement of 12 million tonne per annum.”
He said “The future of sponge iron units in the state looks very bleak all of a sudden. The production has come down to a meager 2.5 million tonne per annum from the earlier figure of around 8 million tonne per annum.”
He said “I don't see any improvement in the sponge iron industry in the near future. If things do not improve fast, then all units will have to be shut down. After all, how long will industrialists run loss-making units?”
According to Mr Nachrani, Chhattisgarh accounts for nearly 30% of India's total sponge iron output.
He said the massive decline in sponge iron production was mainly due to the Odisha government's decision to close down dozens of iron ore mines since July 2009 in a bid to cleanse the state of tax evaders and those mining without licenses.
"Some two years back, the iron ore availability was satisfactory as we were getting 9 MT per annum from Odisha and 3 MT per annum from NMDC (National Mineral Development Corporation) from its mines in Dantewada district.
(Sourced from ET)
Showing posts with label sponge iron units. Show all posts
Showing posts with label sponge iron units. Show all posts
Monday, January 16, 2012
Tuesday, December 27, 2011
Indian steel ministry seeks decision to stop NMDC iron ore
Tuesday, 27 Dec 2011
The Indian Express reported that armed with the CAG’s observations that NMDC’s iron ore exports to Japanese Steel Mills and South Korea was needless in view of growing domestic demand, the Indian steel ministry has decided to ask the union cabinet to reconsider its decision on mandating NMDC to export the mineral.
The official quoted the Chattisgarh chief minister as saying that “The chief minister said if NMDC had not exported ore to these two nations, at least 3 million tonne of additional iron ore would have been available to the state’s ore-starved sponge iron units.”
The official said that “Actually, we also have been opposing these exports from the beginning and had already conveyed our concerns to the commerce ministry, at whose behest the cabinet had okayed NMDC’s continuation of exports (till 2014). We will tell firmly that exports to these two nations are unsustainable at long term prices as it amounted to subsidizing their steel production.”
The official added that “We have decided to approach the Union Cabinet soon to re consider its decision to mandate NMDC to renew its long-term agreements with these two nations, which is bereft of any logic.”
The Comptroller and Auditor General in its recent observations to the steel ministry, had said that NMDC has been mandated to exports iron ore to Japanese steel mills and South Korea but made to overlook the domestic demand for the mineral. The CAG has questioned the mandate.
The move also comes close on the heels of the I-T department who hit out the Navratna company for losing substantial revenues by exporting to Japanese steel mills on long term prices and not through a more viable spot prices. A senior steel ministry official told The Indian Express that “The Income Tax Department has also questioned NMDC’s exports to these two countries on long term prices. It says the PSU has incurred substantial financial losses by not selling the mineral on spot prices.”
(Sourced from www.indianexpress.com)
The Indian Express reported that armed with the CAG’s observations that NMDC’s iron ore exports to Japanese Steel Mills and South Korea was needless in view of growing domestic demand, the Indian steel ministry has decided to ask the union cabinet to reconsider its decision on mandating NMDC to export the mineral.
The official quoted the Chattisgarh chief minister as saying that “The chief minister said if NMDC had not exported ore to these two nations, at least 3 million tonne of additional iron ore would have been available to the state’s ore-starved sponge iron units.”
The official said that “Actually, we also have been opposing these exports from the beginning and had already conveyed our concerns to the commerce ministry, at whose behest the cabinet had okayed NMDC’s continuation of exports (till 2014). We will tell firmly that exports to these two nations are unsustainable at long term prices as it amounted to subsidizing their steel production.”
The official added that “We have decided to approach the Union Cabinet soon to re consider its decision to mandate NMDC to renew its long-term agreements with these two nations, which is bereft of any logic.”
The Comptroller and Auditor General in its recent observations to the steel ministry, had said that NMDC has been mandated to exports iron ore to Japanese steel mills and South Korea but made to overlook the domestic demand for the mineral. The CAG has questioned the mandate.
The move also comes close on the heels of the I-T department who hit out the Navratna company for losing substantial revenues by exporting to Japanese steel mills on long term prices and not through a more viable spot prices. A senior steel ministry official told The Indian Express that “The Income Tax Department has also questioned NMDC’s exports to these two countries on long term prices. It says the PSU has incurred substantial financial losses by not selling the mineral on spot prices.”
(Sourced from www.indianexpress.com)
Sunday, November 6, 2011
Orissa tightens rules for iron ore sales
Sunday, 06 Nov 2011
Sponge iron units and other consuming industries dependent on supplies of iron ore from Orissa face uncertainty after a government order virtually froze movement of ore from mines in the state to other states.
The order by the Deputy Director Mines Joda Keonjhar district comes close on the heels of the detection of alleged irregularity in utilization of iron ore by Rashmi Metaliks and Rashmi Cement a few weeks ago.
The Orissa government order requires iron ore consuming units located outside the state to submit a plethora of documents confirming proper utilization of the mineral from 2007-08 to 2009-10. According to an Orissa government source, the verification of the entire procurement in last four years has to be complete first.
But then verification is not easy. The exercise has proved to be tardy. More than 100 firms that have submitted documents for verification over two weeks ago are yet to receive clearance. Another 100 or so, due to submit their documents shortly, keep their fingers crossed.
This is important to prevent repetition of Rashmi Metaliks and Rashmi Cement like situation wherein large quantities of iron ore meant for domestic consumption were sent to ports by road for exports, thus depriving various government departments of their legitimate revenue earnings.
(Sourced from BL)
Sponge iron units and other consuming industries dependent on supplies of iron ore from Orissa face uncertainty after a government order virtually froze movement of ore from mines in the state to other states.
The order by the Deputy Director Mines Joda Keonjhar district comes close on the heels of the detection of alleged irregularity in utilization of iron ore by Rashmi Metaliks and Rashmi Cement a few weeks ago.
The Orissa government order requires iron ore consuming units located outside the state to submit a plethora of documents confirming proper utilization of the mineral from 2007-08 to 2009-10. According to an Orissa government source, the verification of the entire procurement in last four years has to be complete first.
But then verification is not easy. The exercise has proved to be tardy. More than 100 firms that have submitted documents for verification over two weeks ago are yet to receive clearance. Another 100 or so, due to submit their documents shortly, keep their fingers crossed.
This is important to prevent repetition of Rashmi Metaliks and Rashmi Cement like situation wherein large quantities of iron ore meant for domestic consumption were sent to ports by road for exports, thus depriving various government departments of their legitimate revenue earnings.
(Sourced from BL)
Wednesday, January 26, 2011
Sponge iron prices rise 20% in a month
January 26, 2011
sourced Business standard by Dilip Kumar Jha & Shubhashish
The prices of sponge iron rose by nearly 20 per cent in the past month in line with similar rises in the prices of other steel making raw material, including iron ore and scrap.
On Friday, sponge iron prices in Raipur, Chhattisgarh, India’s largest producing hub, is quoted at Rs 21,000 a tonne, from Rs 16,500 a tonne about a month earlier. The commodity slipped marginally from its peak at Rs 22,000 a tonne yesterday. Producers and traders attribute this price rise to an all-round appreciation in finished steel products and raw materials.
Post-monsoon construction activity began with a lag of a month due to an extended rainy season. So, projects in this sector are behind schedule, creating a rush for completion. As a result, demand for construction-grade steel has suddenly surged. Vipul Agarwal, director (finance), Prakash Industries, said, “Sponge iron prices have spiked by over 20 per cent in the past month or so and looks likely to continue to move upwards.”
The cost of production of sponge iron for Prakash Industries is around Rs 12,000 a tonne due to captive iron ore mines.
The company sells it at a profit margin of a massive 75 per cent, at Rs 21,000 a tonne. Agarwal said, “We have our own coal mines. That is why our cost of production is lower than other sponge iron makers.”
On the other hand, a number of small sponge iron producers in Chhattisgarh have shut shop due to inability to procure raw materials like steel scrap and iron ore at such a high price. Imported steel scrap is quoted today at Mumbai port at $450-480 a tonne, a significant rise from $360-400 a tonne about a month earlier.
Similarly, the benchmark iron ore (with 63.5 per cent of Fe content) perked to $190 a tonne from $155-160 a tonne a month before.
“Though the flood in Australia did not impact supply of iron ore or coking coal, it created a sentimental boost to the entire steel sector,” said Vimal Kumar Somani, director of Topworth Group, a Mumbai-based sponge iron manufacturer which runs its plant in Raipur.
Prices of finished steel have also surged in line with hot-rolled coil, up to $760 a tonne today from $580 a tonne a month before. Shredded scrap is currently quoted at $500 per tonne, a significant rise from $440-450 a tonne, while heavy melting scrap (HMS) is sold at $450-480 a tonne today, as compared to $360-400 a tonne a month earlier.
Internal demand for steel is also bullish, especially from the automobile, construction and consumer durables’ sector, said Somani. Mega projects like power and national highways require a lot of steel. Therefore, prices of steel and its raw materials are likely to remain firm for at least the next two months, he added.
Tuesday, January 25, 2011
Ghadir DRI plant ready for formal inauguration - IMDRO
Tuesday, 25 Jan 2011
Mr Hasan Pelarak chief of Iranian Mines and Mining Industries Development & Renovation Organization said that "Iranian Ghadir direct reduced iron plant is ready for formal inauguration."
He also pointed out that the plant has been constructed within less than 3 years and that it started trial production on November 25th 2010. An investment of IRR 1,700 trillion was spent on the project.
The plant will be fed by 1.2 million tonnes per year of pellets, which will be supplied by the neighboring palletizing plant in Ardakan. Iranian Ghadir direct reduced iron plant has a designed capacity of 800,000 tonnes per year of sponge iron.
(Sourced from SteelOrbis, visit www.steelorbis.com)
Mr Hasan Pelarak chief of Iranian Mines and Mining Industries Development & Renovation Organization said that "Iranian Ghadir direct reduced iron plant is ready for formal inauguration."
He also pointed out that the plant has been constructed within less than 3 years and that it started trial production on November 25th 2010. An investment of IRR 1,700 trillion was spent on the project.
The plant will be fed by 1.2 million tonnes per year of pellets, which will be supplied by the neighboring palletizing plant in Ardakan. Iranian Ghadir direct reduced iron plant has a designed capacity of 800,000 tonnes per year of sponge iron.
(Sourced from SteelOrbis, visit www.steelorbis.com)
Thursday, January 20, 2011
Steel and sponge iron units demand rationalisation of power tariff
Courtsey by BS Reporter
Kolkata/ Bhubaneswar January 20, 2011, 0:16 IST
The small and medium sized steel plants and the sponge iron units in Orissa, currently grappling with the problem of steep prices of raw materials, have called for rationalization of the power tariff. They have demanded that the power tariff for these industrial users be reduced by half.
Addressing media persons here, P L Kandoi, president of the All Orissa Steel Federation said, “The power tariff for the industrial users which now stands at Rs 3.75 paise per unit is going to be raised to Rs 4.25 paise per unit from April 1 this year. The state government is going for an abnormal hike in power tariff and the units are not in a position to operate at such a high tariff. Our demand is that the power tariff should be reduced by half. The Madhya Pradesh government has brought down the power tariff for industries to Rs 1.55 per unit and there is no reason why the Orissa government cannot do the same.”
The All Orissa Steel Federation has also pointed out that the water tariff, which has been increased by 30 times recently by the state government, is also unbearable for these units. To make matters worse, the water cess is payable even if the plant is closed or water is partly used.
The federation is also sore over the exorbitant costs of ore transportation in the state.
"The ore transportation cost in Orissa is much higher compared to other states. For example, the cost of transportation of ore from Keonjhar to Kalinga Nagar is Rs 1100 per tonne while from Daitari to Paradeep is Rs 1500 per tonne. The state government should ensure that there is no exploitation in logistics cost”, Kandoi added.
Another area of concern is the inadequate availability of raw materials and the steep hike in prices of iron ore and chrome ore.
Kolkata/ Bhubaneswar January 20, 2011, 0:16 IST
The small and medium sized steel plants and the sponge iron units in Orissa, currently grappling with the problem of steep prices of raw materials, have called for rationalization of the power tariff. They have demanded that the power tariff for these industrial users be reduced by half.
Addressing media persons here, P L Kandoi, president of the All Orissa Steel Federation said, “The power tariff for the industrial users which now stands at Rs 3.75 paise per unit is going to be raised to Rs 4.25 paise per unit from April 1 this year. The state government is going for an abnormal hike in power tariff and the units are not in a position to operate at such a high tariff. Our demand is that the power tariff should be reduced by half. The Madhya Pradesh government has brought down the power tariff for industries to Rs 1.55 per unit and there is no reason why the Orissa government cannot do the same.”
The All Orissa Steel Federation has also pointed out that the water tariff, which has been increased by 30 times recently by the state government, is also unbearable for these units. To make matters worse, the water cess is payable even if the plant is closed or water is partly used.
The federation is also sore over the exorbitant costs of ore transportation in the state.
"The ore transportation cost in Orissa is much higher compared to other states. For example, the cost of transportation of ore from Keonjhar to Kalinga Nagar is Rs 1100 per tonne while from Daitari to Paradeep is Rs 1500 per tonne. The state government should ensure that there is no exploitation in logistics cost”, Kandoi added.
Another area of concern is the inadequate availability of raw materials and the steep hike in prices of iron ore and chrome ore.
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