63.5% Fe iron ore prices down USD5 WoW; power shortage forces FeCr production cuts in South Africa  :: Motilal Oswal

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63.5% Fe iron ore prices down USD5 WoW; power shortage forces
FeCr production cuts in South Africa
 Indian long steel prices increased marginally (up 0.7% WoW), while flat
steel prices remained flat. Sponge iron prices were up 0.8% WoW to
INR23,800/ton. Scrap prices also increased 2.4% WoW to INR25,903/ton.
 European HRC prices continue to increase and rose 0.8% WoW. Prices
also increased in China (0.3% WoW), Turkey (3.4% WoW) and the Middle
East (0.4% WoW). Prices declined in North America (down 0.7% WoW)
and Russia (down 0.1% WoW).
 63.5% Fe iron ore prices declined by USD5 WoW to USD144/ton, posting
their biggest weekly decline in a year.
 According to ILZSG, the zinc market continues to remain in surplus for
the fifth consecutive year. Production exceeded consumption by 353kt
in 2011. Similarly, the lead market turned into surplus from a balanced
market in 2010 with an excess of 156kt in 2011.
 Xstrata to take out of operation 0.1mtpa of charge chrome capacity in
South Africa. State power group Eskom has asked large FeCr producers
to cut production due to power shortage. Increasing power costs and
limited power availability in largest FeCr producer country will push
second-quarter benchmark higher.