Steel Re-Rolling Mills Association of India - SRMA · 2015-11-07 · 49th Issue Steel Re Rolling...

49th Issue Steel Re Rolling Mills Association of India visit www.srma.co.in

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SRMA STEEL NEWSLETTER

SRMA

Steel Re Rolling Mills Association of India www.sram.co.in

Steel Re-Rolling Mills Association of India www.srma.co.in Email : [email protected]

Sl. No, Name

1. Shri B.M. Beriwala, Chairman

2. Shri Jagmel Singh Matharoo, Vice Chairman

3. Shri Ramesh Kumar Jain, Treasurer

4. Shri Sanjay Jain Committee Member

5. Shri Kailash Goyal “

6. Shri Om Prakash Agarwala “

7. Shri Sushil Sharda “

8. Shri Sandip Agarwal “

9. Shri S S Sanganeria “

10. Shri Sanjay Surekha “

11. Shri R P Agarwal “

12. Shri S S Bagaria “

13. Shri Girish Agarwal “

14. Shri Goutam Khanna “

15. Shri Suresh Bansal “

16. Shri Rajiv Jajodia

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17. Shri Bhusan Agarwal

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18. Shri Mahesh Agarwal

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19.

Shri Sita Ram Gupta “

20. Shri G P Agarwal

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21. Shri Suresh Goyal

“

22.

Shri Hari Mohan Beriwala “

23. Shri Sitaram Agarwal “

24. Shri Sonal Mittal

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25. Shri Avinash Bagla

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26. Shri Shankar Lal Agarwal

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27. Shri Sandip Gupta

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28. Shri Dilip Agarwal

Special Invitee

29. Shri Vivek Adukia

Special Invitee

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Disclaimer :

SRMA Steel News is a division of Steel Re-Rolling Mills Association of India and takes due care in preparing this

news. Information has been obtained by SRMA from sources, which it considers authentic. However, SRMA does

not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or

omissions or for the results obtained from the use of such information. SRMA is not liable for investment decisions,

which may be based on the views expressed in the News. SRMA especially states that it has no financial liability

whatsoever to the subscribers/users/transmitters/distributors of this News. And no part of this news may be

published /reproduced in any form without SRMA’s prior written approval.

Latest Steel News

Taxation/Legal (Circular/Notification)

Environment and safety

Events

CONTENTS


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Cheaper steel imports in weak demand conditions pose a challenge to Indian manufacturers

ET Bureau | 15 May, 2015, 06.58PM IST

OLKATA: A surge in cheap imports to continue to exert

pressures on domestic steel prices, especially since the near term outlook on steel demand growth in the country remains muted. Whereas steel exports shrank by 8.1% in 2014-15,

imports surged by almost 71% due to a sharper fall in international steel prices than domestic prices, leading to a widening gap between price levels. On the demand side, domestic steel consumption growth improved to 3.1% in FY15 from 0.6% in FY14. With the construction sector, which accounts for about 60% of the total steel demand in India yet to witness much on-the-ground recovery, automobile sector is expected to be the growth engine for domestic steel demand in the near term, ICRA said in a recent report. Operating margins of domestic steel industry (sample: seven large Indian companies in the steel sector, together accounting for over 40% of the total domestic capacity) witnessed a further decline in Q3FY15 due to moderate capacity utilisation levels and a fall in sales realisations. Profitability of Indian steel companies is expected to remain under pressure despite fall in raw material prices in the near term due to a significant fall in domestic and global steel prices.

International prices of iron ore touched a multi-year low in the beginning of April 2015. Consequently, on a year-on-year basis, average spot iron ore prices in April 2015 have corrected by a steep 55%. "There has been some recovery in ore prices towards April end but the possibility of a sustained recovery looks unlikely at the moment. Iron ore demand will be adversely impacted by the weakness in Chinese demand, while the global sea-borne iron ore market will witness a supply glut because of significant upcoming low cost capacities from Australia and Brazil," Jayanta Roy, senior vice-president and co-head, corporate sector ratings, ICRA said.

With the enactment of the 'The Mines And Minerals (Development And Regulation) Amendment Act, 2015' ( MMDR Act, 2015), mining leases which had expired after their first renewal stand automatically extended till March 31, 2020 (for merchant miners), and till March 31, 2030 (for captive miners). This will help increase the output from Odisha and Jharkhand, where a number of mines remained closed in FY15 following the expiry of their first renewal period. Additionally, mining is expected to resume in Goa in the current financial year after a gap of 2 years. "Given these developments, we expect domestic iron ore production to increase by 20-25% in FY16" states Mr. Roy.

Government plans to hold exclusive coal auction likely for steel, cement plants ET Bureau | 15 May, 2015, 03.39AM IST

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EW DELHI: The government plans to hold an exclusive round of coal mines auction for steel and cement

plants, considering a huge demand supply gap for coal.

The coal ministry could offer about 12 coal blocks in the next round of auction to the two sectors classified as

unregulated, government officials said. "We are considering if we can meet the demand of steel and cement sectors

first this time. We did not realise that there is so much demand for coal in the unregulated sector," a senior coal

ministry official said. "So far, power sector was our priority. But the sector is already getting 75% of Coal India

supply and has been getting priority so far in mines allocation," the official said.

In the first two auction rounds, when coal blocks were offered simultaneously to the regulated power sector as well

as unregulated sectors, aluminium and cement companies won most of the blocks that were earlier attached to steel

plants.

Steel plants, which collectively owned 83% of the coal reserves present in the 31 auctioned blocks, now hold just

32%. Prior to the auctions, aluminium plants had 1% of the coal reserves; they now own 36%. Coal reserves with

cement companies have doubled to 33% from 16% earlier. Experts said this has happened because the government

clubbed three different industries under one category of end-use, called the "unregulated sector", while power plants,

where the output price is regulated, were offered a separate set of mines with different rules.

For example, Hindalco Industries has bagged three mines that earlier belonged to Monnet Ispat & Energy, Jayswal

Neco and Nilachal Steel. The company has won Gare Palma IV/5 coal block at .`3,502 per tonne and another Gare

Palma IV/4 at .`3,001 per tonne, inching close to imported coal prices.

The Current Market Scenario of Ferroalloys & Mn Ore Silico manganese prices, after coming down are now stable, increasing slightly by range of INR 1,000-2,000/MT. The demand

for silico manganese is dented as buyers retreated due to diminishing steel margins.

omestic Market: After witnessing a downfall, Silico manganese prices are now slightly stable; and

increased by INR 1,000-2,000/MT with

demand dented as buyers were retreating due

to diminishing steel margins. Silico manganese

producers are clamoring to offload stock. The Indian

ferroalloys producers are reportedly cutting down their

Manganese alloy production and would like to exhaust

stocks to enable steady cash flows amid thin price

margins. Due to cutting down in production of ferro

alloys, prices may increase further in a short period.

The manganese alloys market is witnessing sporadic deals and stable prices at the moment. The producers are also

facing pressure of lower profit margins, selling close to production cost. It has also been reported that many

producers have reduced production due to high input cost and low price of finished goods in the market. Many

market participants are of the opinion that cutting down production would support falling manganese alloy prices, as

they expect market sentiments to be better in near future. Manganese alloy producers are adopting a cautious

approach and are not willing to take strong positions due to various factors. The factors include the demand-supply

mismatch of manganese alloys market and the inherent fear about the future prices of manganese alloys, which still

remains unclear.

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http://news.steel-360.com/manganese/the-current-market-scenario-ferro-alloys-mn-ore/


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Current Indian SiMn prices may remain the same, only slightly changed at INR 47,500/MT for 60/14% grade and

INR 48,000/MT for 60/15% grade, Ex-plant basis at Raipur. In West Bengal, prices are assessed at INR 46,500/MT

for 60/14% grade and INR 47,000/MT for 60/15% grade Ex-plant basis at Durgapur. The 70/75 % grade ferro

manganese is being traded at INR 47,000/MT in Raipur, due to weak demand. Moreover, there are only few

producers in the market. The price levels may slightly change in near future.

Export Market: The producers are quoting/trading export price for SiMn. 60/14% grade SiMn is at USD 730-

740/MT, FoB basis. 65/16% grade is trading at about USD 820-830/MT, FoB basis. And, export price of Ferro

Manganese with 75% Mn is at about USD 800/MT, FoB basis.

The export prices have been established after export incentive cuts by the government. The prices are being accepted

by the buyers. Furthermore, the dollar is expected to be settled at 64. One one hand, Indian producers currently face

pressure to sell (export) due to sluggish domestic market conditions. While, on the other hand, it is reported that

overseas buyers have no interest for import of Indian origin material because Indian producers are not price

competitive compared to Chinese & other counterparts at this time. However, recently, the Government of India

announced the FTP; in which it scrapped the FPS and introduced the MEIS reward scheme of 2%. Nevertheless,

Indian export market prices are more compared to other foreign players.

Manganese Ore

On the manganese ore price front, MOIL has reduced prices for Q1 (April-June, 2015) across its products by 20%

for silico grade ore and 10% for ferro manganese grade ore. This announcement comes as a relief to manganese

alloy industry, which was hopeful of a price cut, as the alloy market has corrected itself considerably in past months.

The current price of imported high grade manganese ore is about USD 3.2/DMTU and medium and low grade ore is

at USD 3.2/DMTU due to low demand and softening of prices. The industry expects that manganese ore prices

would soften again.

Making in India is tough, say steel manufacturers ovt continues to dither on anti-dumping duty against cheap Chinese steel imports; risk of steel sector NPAs looms large as production is unviable

Mumbai April 24, 2015 Last Updated at 00:42 IST

The central government's Make-in-India initiative is making waves abroad. But in India, the story is different. Steel

makers in the country are finding it difficult to make products in India.

The country imported 9.31 million tonnes (mt) of steel in FY15, an increase of 71 per cent over the previous year, as

producers are capping production. Indian steel prices are quoting higher than global prices, because raw material

costs are significantly higher in the country. A ban on iron-ore mines has pushed production down to 115 mt in

FY15 from 218 mt in FY10. While iron ore prices globally have dropped to $50 per tonne, from a peak of $152 per

tonne in 2013, Indian iron ore prices have declined by merely Rs 650 per tonne over the period.

Crude steel producers are choosing to run plants at low utilisation levels, as it is not viable to produce or sell steel at

prices which are higher than imported steel prices. Seshagiri Rao, joint managing director and group chief financial

officer of JSW Steel, says: "This time there is a peculiar situation. Domestic slowdown has resulted in China turning

into a big exporter of steel. Also, globally all other currencies have depreciated, making their exports more viable.

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In India, the situation is compounded, because costs remain high and there is no tariff or non-tariff barriers against

cheaper steel imports." Also, the rupee has depreciated by merely four per cent against a sharp drop in other

currencies.

Other than India, several countries have raised trade barriers against cheaper Chinese steel imports. With a total

annual capacity of 1.16 billion tonnes, China accounts for nearly 50 per cent of the world's steel capacity. In order to

offset the slowdown at home, Chinese steel mills have been flooding world markets with steel products at

throwaway prices. In November 2014, the US imposed anti-dumping duties of up to 100 per cent on Chinese steel

wires. In February 2015, the European Union imposed a 25.2 per cent duty on sheet, coil, and strip from China and

up to 12 per cent duty on Taiwanese products. In India, there is an import duty of five per cent on long products and

7.5 per cent on flat products. Due to free trade pacts, there is negligible duty on steel from Korea and Japan.

The steel sector has been crying for a solution but the government has done nothing to prevent the dumping of

Chinese, Russian, and Korean steel into India. Ankit Miglani, deputy managing director, Uttam Galva Steel, one of

the largest manufacturers and exporters of value-added steel, says: "Steel plants in India are shutting due to a lack of

ore. Though steps have been taken to ease the situation, there is no clarity on when the iron-ore mines will open and

supplies will improve. Until the domestic issues are resolved, the government will need to support the sector to tide

over this crisis." In Karnataka, 54 sponge iron units have shut. Bigger companies are running plants at low

utilisation levels. Vishal Agarwal, managing director, Visa Steel, says: "Given what China is doing, the Indian

government needs to act fast, if it is serious about its Make-in-India campaign as far as the steel sector is

concerned."

The shortage of iron ore and coal in India has pushed up prices of key raw materials, pushing Indian steel prices

higher than global prices of crude steel. For instance, hot rolled coil in India is upwards of Rs 30,000 per tonne,

while an import, after duty, is not more than Rs 28,000 per tonne. China is exporting steel at an annualised rate of

120 million tonnes, which has put pressure on steel prices globally.

Dilip Oommen, chief executive and managing director of Essar Steel, says: "Ore prices internationally are down 60

per cent, but in India, this has not happened. Also, gas prices are still very high and we hope the government will

look at gas pooling for the steel sector, too. Currently, there is a provision to increase the duty to 15 per cent for steel

imports, but duties have not been increased. We require some quick action." India imported 15 million tonnes of

iron ore in FY15.

Ideally, iron ore prices should not be more than Rs 1,000-1,500 per tonne in India, but they have remained between

Rs 3,000 per tonne and Rs 4,000 per tonne. This has resulted in the cost structure for Indian steel producers without

captive iron ore mines staying higher than imported steel products.

The skewed sectoral dynamics and weak demand will have an impact on the financials of the steel makers. Deutsche

Bank Research says weak demand and weak steel pricing have affected volume off-take and forced capacity

shutdowns in the secondary steel sector, which may manifest themselves in the form of continued stress on non-

performing assets (NPAs) of small and medium-sized enterprises. Currently, 23 per cent of restructured assets in the

banking system are from the steel sector. These will fall back into the NPA basket if the situation persists.

Integrated steel companies have been insulated from cheaper imports as they have captive coal and iron-ore mines,

which have kept their production costs low. But, with royalties and duties going up and pricey bids of cancelled coal

blocks, the going is getting difficult for all steel makers.

http://www.business-standard.com/article/companies/making-in-india-is-tough-say-steel-manufacturers-115042400047_1.html


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TAXATION/ LEGAL NEWS

Government issues clarification circular for CENVAT credit New proviso to CENVAT Credit Rule announced in Budget 2015, effective from 1 Mar’15, got businessmen worried over eligibility of CENVAT invoice issued by the manufacturer and registration of dealers in transit sale. The government circular clarifies these issues pertaining to the additions in CENVAT Credit Rule. As announced in Budget 2015, the insertion of new provisos in the CENVAT credit rule for transit sale via

dealers has created a confusion about their applicability in compliance with the existing rules. The new

provisos to avail CENVAT credit based on CENVAT invoice issued by dealers in transit sale came into

effect on 1 Mar’15.

As such, in clarification to Notification No. 8/2015 – Central Excise (NT) dated 1 Mar’15 amending Central

Excise Rules, 2002 (CER), the government has issued a circular of clarification to the new proviso

inserted in sub-rule (2) of rule 11 particularly with reference to procedural requirement after the

amendment where an indenting or unregistered dealer negotiates transit sale.

The provisos inserted to the CENVAT credit rule are:

“Provided also that if the goods are directly sent to any person on the direction of the registered dealer,

the invoice shall also contain the details of the registered dealer as the buyer and the person as the

consignee, and that person shall take CENVAT credit on the basis of the registered dealer’s invoice.”

“Provided also that if the goods imported under the cover of a bill of entry are sent directly to buyer’s

premises, the invoice issued by the importer shall mention that goods are sent directly from the place or

port of import to the buyer’s premises. “

The government in its circular clarifies that the new provisos are an addition to the existing rules and do

not withdraw or amend rule 9 of the CENVAT Credit Rules, 2004 which prescribes the document on the

basis of which CENVAT Credit can be availed. No amendments have been made regarding registration

requirements also.

The new provisos to the CENVAT credit rule are added to enhance ease of doing business and reduce

transportation costs and time to deliver the consignment. CENVAT Credit can be availed by the

consignee on the basis of CENVAT invoice issued by the manufacturer or registered importer, when the

transit deal is negotiated by an un-registered dealer.

VS Datey, Excise Consultant based in Pune, in an interview with Steel 360 May’15 issue, discussed

about the new provisos and their applicability to the CENVAT Credit Rules. The discussion had reached

the same implications as clarified in the government circular.

View original notification at the link below:

http://www.cbec.gov.in/excise/cx-circulars/cx-circ15/circ1003-2015cx.htm

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http://news.steel-360.com/business/government-issues-clarification-circular-for-cenvat-credit/

http://www.cbec.gov.in/excise/cx-circulars/cx-circ15/circ1003-2015cx.htm


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ENVIRONMENT & SAFETY

About climate change and carbon emissions

Climate change is real, we are all responsible for it and we all must

be part of the solution!

Since the Industrial Revolution started in the middle of the 19th

century, carbon dioxide emissions in our atmosphere have increased

steadily and dramatically from the burning of fossil fuels, namely

coal, oil and gas, and to a lesser degree from methane and industrial gases.

This increase in CO2 from roughly 280 parts per million (ppm) prior to the Industrial Revolution to about

392 ppm today is having a dramatic impact on our climate, both warming our climate and altering our

weather with more droughts and more very extreme weather events. Our sea levels are rising and entire

countries are at risk of disappearing. If the Greenland glaciers fail, global sea levels could rise by 20 feet,

swamping low level areas around the world, including Florida and Manhattan, causing global catastrophe.

The cause of climate change is manmade.

And we must solve the problem by reducing our emissions by 50-85% globally by mid century. Breaking

down the problem, this does not need to be an insurmountable task. Reducing our emissions just 2% per

year would do it. Carbonfund.org helps individuals and businesses understand climate change and

develop practical and cost-effective solutions to slow, stop and reduce our climate crisis.

How to reduce your carbon footprint Reduce What You Can, Offset What You Can’t.™ That’s our motto, and we’re proud of it. Everyone has a responsibility to reduce their individual carbon

footprint, and there are lots of ways to do so. We encourage everyone to think about their lifestyle

decisions and find opportunities to reduce their climate impact.

Reduce the Carbon Footprint of Your Office Enable your power management - so your computer and monitor shut down.

Consider using ePlusGreen’s PC energy-saving technology - The system monitors/minimizes

computer and printer energy usage.

Do you need to print?- Consider saving a file on your computer, in a flash drive or emailing it.

Double-side print - Saves paper too.

Can you carpool or transit or bike to work? See above.

Open up - If you have windows you can open, use them to intelligently save energy.

Turn ‘em off - Only use the lights you need. If you’re using your computer you may not need your

office lights on too.

Occupancy sensors - Shut off lights in unused rooms. Better, get your building to install occupancy

sensors.

Bring your lunch - Or walk to the local eatery instead of driving. http://www.carbonfund.org/reduce

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http://eplusgreen.com/carbonfund.html

http://www.carbonfund.org/reduce


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EVENTS Steel Success Strategies Date: 08 - 10 June 2015

Location: Sheraton New York Times Square Hotel, NY. Organised by Metal Bulletin.

Covers world steel markets, steel industry, iron ore derivatives, steel derivatives, raw materials, logistics,

steel technology.

INTERNATIONAL INNOVATION AND TECHNOLOGY EXHIBITION (INOTEX)

9-12 June 2015, Tehran

TEHRAN PERMANENT INTERNATIONAL EXHIBITION FAIRGROUND

Companies interested to participate are requested to send their pre-registration form

(attached) to Mr Amit Tyagi [email protected]. INOTEX 2015 evaluation committee

will assess the registrations and confirm final acceptance or rejection.

10th Asian Stainless Steel Conference

3 - 4 June 2015 - Marina Mandarin - Singapore

Metal Bulletin Events mailing address

Metal Bulletin Events Nestor House Playhouse Yard - London, EC4V 5EX, UK

Minerals, Metals, Metallurgy, Materials (MMMM Expo) Date: 10 - 12 August 2015

Location: Pragati Maidan, New Delhi, India.

One of the most significant events in the Indian minerals, metals and materials market and claimed to be

an ideal B2B platform for entrepreneurs, CEOs, consultants, senior government officials, decision makers

and trade delegations looking to network, brainstorm and forge meaningful business partnerships.

CIMIE 2015 – the 11th Metallurgy Expo 2015, China Date: 08 - 10 September 2015

Location: New China International Exhibition Centre, Beijing. Organised by Beijing Hiven Exhibition Company. Sponsored by the

Beijing Society of Metals, the Non-Ferrous Metals Society of China, the Beijing Mechanical Engineering Society and the China

Association of Plant Engineering, CIMIE 2015, which stands for China International Metallurgy Industry Exhibition is recognised as

one of the four largest global metallurgy exhibitions.

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Steel Re-Rolling Mills Association of India - SRMA · 2015-11-07 · 49th Issue Steel Re Rolling...

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Transcript of Steel Re-Rolling Mills Association of India - SRMA · 2015-11-07 · 49th Issue Steel Re Rolling...