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India Equity Research Reports, IPO and Stock News
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Steel prices moving up across some markets: Some US mills have
announced a follow up $40/st increase in HRC prices over and above the
$66/MT announced in early August. JPM European steel analyst Alessandro
Abate estimates that ‘while only $50/st of the $66/st has stuck in the US
market, the second price increase was not surprising given the sharp
decline in US steel imports’. In India media reports (ET) have indicated that
steel mills are likely to increase prices by up to Rs1000/MT (~3%). We do
not find this surprising and have highlighted this possibility in our previous
Lodestone. A depreciating INR, seasonal pick up in demand (as the
rains give way to the festival season), increase in iron ore costs for JSW,
and modest pick up in import prices, should allow most of the
Rs1000/MT price increase to go through.
India Iron ore- Update: In what could possibly be a precedent for the
future, the Supreme Court allowed iron ore auctioning for domestic users in
the state of Karnataka from the 25MT iron ore reserves. So far the only
details available on the auctioning process is that the reserve prices would be
based on NMDC prices.We are not sure if the entire 25MT of the stated iron
ore inventory is saleable and whether all mine owners would participate in
the auction process. We expect iron ore costs for the Karnataka based steel
mills to increase. There is still no update and when production at the shut
mines would start. Exports are still banned from Karnataka. Spot iron ore
prices remain firm at $189/MT .
Views from China on steel and aluminum: JPM China mining analyst
Daniel Kang, in his update on BaoSteel highlights that ‘Baosteel
management forecasts growth in Baosteel's key end-user demand segments
(automobiles, home appliances and machinery) to slow down in 2H11’. As
per Daniel, Chalco management believes global aluminium prices will
fluctuate between USD2,400 and 2,700/t, while domestic aluminium prices
will range from RMB16,600 to 18,100/t. The company sees alumina import
prices ranging from USD380-420/t, while domestic alumina prices are likely
to be in between RMB2,700/t and 2,900/t.’
Base Metals- What to expect from MB aluminum week: JPM Global
metals analyst, Michael Jansen highlights that while ‘Ally bulls will point
towards the rapidly dropping ingot stocks in China (down from 500k to 100k
this year) and the escalating costs in the production side as reasons to be
bullish, along with the fact that the ongoing sinkhole in Detroit will act to
keep the cash market tight. While these factors are definitely real, the other
reality is that the market is now beginning to show more signs of surplus
even taking into account warehousing / financing deals, and the MW
premium has softened accordingly. Additionally this year with so much new
capacity in China (esp brownfield) we should indeed see a very strong
production increase in H2 that loosens the market materially in China and
averts the trend lower in ingot stock’.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Steel prices moving up across some markets: Some US mills have
announced a follow up $40/st increase in HRC prices over and above the
$66/MT announced in early August. JPM European steel analyst Alessandro
Abate estimates that ‘while only $50/st of the $66/st has stuck in the US
market, the second price increase was not surprising given the sharp
decline in US steel imports’. In India media reports (ET) have indicated that
steel mills are likely to increase prices by up to Rs1000/MT (~3%). We do
not find this surprising and have highlighted this possibility in our previous
Lodestone. A depreciating INR, seasonal pick up in demand (as the
rains give way to the festival season), increase in iron ore costs for JSW,
and modest pick up in import prices, should allow most of the
Rs1000/MT price increase to go through.
India Iron ore- Update: In what could possibly be a precedent for the
future, the Supreme Court allowed iron ore auctioning for domestic users in
the state of Karnataka from the 25MT iron ore reserves. So far the only
details available on the auctioning process is that the reserve prices would be
based on NMDC prices.We are not sure if the entire 25MT of the stated iron
ore inventory is saleable and whether all mine owners would participate in
the auction process. We expect iron ore costs for the Karnataka based steel
mills to increase. There is still no update and when production at the shut
mines would start. Exports are still banned from Karnataka. Spot iron ore
prices remain firm at $189/MT .
Views from China on steel and aluminum: JPM China mining analyst
Daniel Kang, in his update on BaoSteel highlights that ‘Baosteel
management forecasts growth in Baosteel's key end-user demand segments
(automobiles, home appliances and machinery) to slow down in 2H11’. As
per Daniel, Chalco management believes global aluminium prices will
fluctuate between USD2,400 and 2,700/t, while domestic aluminium prices
will range from RMB16,600 to 18,100/t. The company sees alumina import
prices ranging from USD380-420/t, while domestic alumina prices are likely
to be in between RMB2,700/t and 2,900/t.’
Base Metals- What to expect from MB aluminum week: JPM Global
metals analyst, Michael Jansen highlights that while ‘Ally bulls will point
towards the rapidly dropping ingot stocks in China (down from 500k to 100k
this year) and the escalating costs in the production side as reasons to be
bullish, along with the fact that the ongoing sinkhole in Detroit will act to
keep the cash market tight. While these factors are definitely real, the other
reality is that the market is now beginning to show more signs of surplus
even taking into account warehousing / financing deals, and the MW
premium has softened accordingly. Additionally this year with so much new
capacity in China (esp brownfield) we should indeed see a very strong
production increase in H2 that loosens the market materially in China and
averts the trend lower in ingot stock’.
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