M o n d ay 0 8 , J une 2 015
News &
Report Analysis
Currency Market
Precious Metal
Base Metal
Energy Market
Event Update
 ISSDA welcomes government’s decision to
impose Anti-Dumping Duty on imports
 New ASTM Standard Provides Corrosion
Protection for Steel Bars
 Tata Steel goes green for World
Environment Day
 RINL saleable steel production
up 24% in April-May 2015
 Steel prices may stay under pressure
in FY16: Moody's
Daily
Monday 08, June 2015
Asian stock markets extended losses on
yield marked its best weekly performance in
Monday after Chinese imports declined more
two years and touched an eight-month high
than expected. Besides US dollar currency
after the jobs data.
remained higher on Friday after upbeat U.S.
China’s Exports in May fell 2.5 percent from
employment data raised bets that the U.S.
a year earlier and imports slid 17.6 percent,
central bank would raise interest rates as early
data released by the General Administration
as September. China's exports fell less than
of Customs on Monday showed. That left the
expected last month, but imports tumbled at a
country with a near record trade surplus of
greater pace, stoking concerns over a slowdown
$59.49 billion for the month.
in the world's second largest economy and
Analysts polled by Reuters had expected
giving Beijing more reason to take further
exports to fell 5.0 percent in May from a year
stimulus steps. Last week, Wall Street major
ago, following a surprising 6.4 percent fall in
indexes ended with mixed note, and nearly flat
April, and predicted imports would fall 10.7
for the week, while the U.S. benchmark Treasury
percent, versus a 16.2 percent slide in April.
2
3
Monday 08, June 2015
Daily
The dollar index moderated to 96.405 on
Currency Market
Monday having risen as high as 96.909 after the
jobs data was released on Friday, but was still
USD/INR - 05/06/15
63.75
63.79
63.83
63.87
63.91
63.95
63.99
64.03
above levels seen before the data was published.
The dollar was also strong against the euro, as
the single currency remained hostage to shifts
in sentiment over Greece's debt travails.
17:00
16:00
15:00
14:00
13:00
12:00
11:00
10:00
9:00
As the global currency speculators increased
bets against the yen, with net yen short
positions rising to the largest level in four
0.3537
USD/INR Overnight VAR
Forecast
Previous
months last week, data from the Commodities
EUR German Indust Produc m/n
0.6%
-0.5%
and Futures Trading Commission showed. The
EUR German Trade Balance
18.1B
19.3B
Australian dollar was pressured against the U.S.
Data releases today
SOURCE : MECKLAI FINANCIAL
dollar on Monday after surprisingly strong U.S.
The dollar held firm near 13-year highs
jobs data and last traded at $0.7612. Investors
against the yen in Asia on Monday after much
took Chinese trade data in their stride.
better-than-expected U.S. employment data
Precious Metal
bolstered expectations for an interest rate hike
by the Federal Reserve before the year-end. U.S.
Gold ticked up on Monday after a three-day
nonfarm payrolls jumped 280,000 last month,
losing streak, but was still hovering near an 11-
the largest gain since December, while payrolls
week low as a strong U.S. jobs report boosted
for March and April also were revised to show
expectations for a U.S. interest rate hike in
32,000 more jobs were created than previously
September. Spot gold inched up 0.2 percent
reported, the U.S. Labor Department said.
to $1,173.90 an ounce by 0307 GMT. The metal
"The payrolls data is making the case for a
had fallen to $1,162.35 on Friday, its lowest since
strong dollar doubly sure... The markets could
March 19, after data showed U.S. job growth
even think that the Fed might raise rates even
accelerated sharply in May and wages picked
twice this year," said Masatoshi Omata, senior
up. Nonfarm payrolls increased 280,000 last
manager of market trading at Resona Bank.
6 mth
LIBOR
Major
Currencies
Today’s
Crosses
Spot
Cash
v/s INR
0.42
USD / INR
-
ATM Options (put/call)
0.15
Forward Rates v/s INR (Export/ Import)
June
July
August
November
February
May
64.01/ 02
63.99/ 00
64.29/ 29
64.68/ 68
65.07/ 08
66.21/ 21
67.33/ 33
68.48/ 48
-
-
-
0.41/0.41
0.63/0.63
0.80/0.81
1.22/1.26
1.54/1.62
1.81/1.96
EUR / USD USD /
JPY(100) GBP / USD
1.1104
71.07/ 09
71.05/ 07
71.40/ 41
71.87/ 87
72.34/ 34
73.72/ 72
75.13/ 11
76.59/ 58
0.14
USD / CHF AUD / USD
125.42
51.03/ 04
51.01/ 02
51.27/ 28
51.61/ 61
51.94/ 94
52.93/ 94
53.97/ 97
55.03/ 04
0.71
GBP / USD
1.5265
97.71/ 73
97.68/ 70
98.14/ 15
98.71/ 71
99.28/ 28
100.97/ 97
102.66/ 65
104.42/ 41
-0.70
USD / CHF
0.9411
68.01/ 02
67.98/ 99
68.30/ 31
68.82/ 83
69.34/ 35
70.84/ 87
72.35/ 43
74.93/ 00
3.06
AUD / USD
0.7614
48.74/ 75
48.72/ 73
48.95/ 95
49.26/ 25
49.55/ 55
50.42/ 42
51.27/ 27
52.15/ 14
Source : Mecklai Financial
Monday 08, June 2015
Daily
Market Highlights - Gold (% change)
Gold
Unit
Gold (Spot)
Prev.
day
WoW MoM
YoY
1171.3
-0.41
-1.5
-1.1
Rs/10
gms
26550.0
-0.75
-0.7
-1.1 -10.9
$/oz
1175.2
0.63
-1.1
-0.7
-6.1
Rs /10
gms
26555.0
-0.23
-0.5
-1.4
-0.3
Comex Gold
nearly flat while total exports tripped by 2.5.
China was at record highs, up by around 35%
yoy, which is likely to cap the gains in the metal.
$/oz
Gold
(Spot -Mumbai)
MCX Gold
(Aug’15)
Last
as on June 05, 2015
-5.8
Japan revised its first quarter’s GDP to 1%,
up from the expectations of 0.7%, indicating
economic recovery. Overall, we recommend
buying Al, Lead and Nickel from lower levels
Source: Angel Broking
whereas expect Cu and Zinc to remain range
month, the largest gain since December.
bound for the day.
The report, indicating signs of strong
It should be noted that exports of Al from
momentum in the U.S. economy, bolstered
China was at record highs, up by around 35%
expectations the Federal Reserve will begin
yoy, which is likely to cap the gains in the metal.
to raise rates in September and sent the dollar
Japan revised its first quarter’s GDP to 1%,
rallying to a 13-year peak against the yen.
up from the expectations of 0.7%, indicating
Higher U.S. rates could diminish demand for
economic recovery. Overall, we recommend
non-interest-paying bullion, while a stronger
buying Al, Lead and Nickel from lower levels
dollar makes gold more expensive for holders of
whereas expect Cu and Zinc to remain range
other currencies and reduces the metal's safe-
bound for the day.
haven appeal.
Copper tripped further in the dark tunnel
Gold ETF holdings are near their 2015 lows
of the losses this week and ended up at $5937
and seem to be contributing to gold's gradual
MT, down by around 1.3% from its previous
decline since mid-May," said MKS Group trader
week’s close. Fundamentally, the inventories
James Gardiner. "Higher bond yields and a
for the metal at LME have declined by 7025 MT,
stronger dollar are also continuing to put
while the cancelled warrants for the metal rose
pressure on the metal."
by 3500 MT or 3.26% from previous week. In
Benchmark 10-year U.S. Treasury yields
addition to this, the contango for the metal at
posted their steepest weekly jump in nearly two
LME has shifted a tad upwards to $10 MT, giving
years on Friday after the jobs report.
a positive cue for the metal. LME Nickel was
Base Metal
the best performer amongst the base metals
sector last week, settling at $13175 Mt, up by
Base Metal prices ended with mixed note
around 4.4% from its previous week’s close.
on a weekly basis as the trimming of the global
Fundamentally, the contango for the metal at
growth rate by IMF and OECD triggered concerns
LME declined further from $32 to $30 MT, giving
over economic health. Nickel, however was the
a positive cue for the metal.
star performer last week gaining around 4% as
Zinc declined by 2.65% from its previous
the rise in the cancelled warrants supported the
week’s close and settled around $2130 MT,
metal prices to remain in the positive territory.
while lead tumbled down by around 2.49% and
China’s trade data showed a slump in the
settled at $1902 MT. Fundamentally, in case of
imports by 17.6% with Copper imports being
lead, the inventories at LME declined by 2775
4
Monday 08, June 2015
Daily
MT while the cancelled warrants rose by around
of the year. Russia, on the other hand is about
1700 MT. The contango for the metal at LME
to buy less than 500,000 barrels crude from Iran.
declined from $16.25 MT to $15 MT, giving a
Chinese trade data cues put a negative effect on
positive signs for the metal.
industrial metal, virtual ray of hope aligns with
Energy Market
the fact that more stimulus would be added
Market Highlights - Crude Oil (% change)
over medium-term.
as on June 05, 2015
Crude Oil
Unit
Last
Prev.
day
WoW
MoM
YoY
Brent (Spot)
$/bbl
60.0
0.2
-4.2
-7.4 -45.4
Nymex Crude
(July’ 15)
$/bbl
59.0
-0.3
-2.1
0.0 -43.5
ICE Brent Crude
(July’ 15)
$/bbl
63.3
2.1
-2.4
-3.4 -41.6
MCX Crude
(June ’15)
Rs/bbl 3742.0
0.6
-2.3
-1.3 -38.7
News & Report
Analysis
ISSDA welcomes
government’s decision to
impose Anti-Dumping Duty
on imports
Source: Angel Broking
Crude prices last week slumped significantly
during the earlier half of the week as markets
awaited the important OPEC’s 167 meeting
which was held on 5th June, 2015. On Friday
though as the OPEC didn’t stated any fresh
negativity, we saw some good pullback in the
commodity with WTI gaining 1.95% closing at
$59.13/ barrel whereas Brent gained more than
2% closing at $63.31/ barrel for the July contract
respectively.
Looking over the major cues last week,
N C Mathur, President - ISSDA
crude prices went on ultra bearish side before
ISSDA applauds government’s decision to
the OPEC meeting. Daily losses on Wednesday
impose Anti Dumping Duty on Hot Rolled (HR)
and Thursday counted more than 5%. However,
flat products of stainless steel Grade 304 with
post OPEC meeting the prices on Friday gained
all its variants. The government has imposed
almost 2% as the outcome from the meeting
Anti Dumping Duty on all HR flat products of
were in line with the expectations. OPEC
stainless steel of Grade 304 originating from
members decided maintaining their current
China at US$309/MT, Malaysia at US$ 316/
30MBPD levels for at least next 6 months, which
MT and Korea at US$ 180/MT. “It’s a welcome
may also go up if production and exports from
move and a necessary one to save the domestic
Libya, Iraq and Iran rises significantly. OPEC has
industry which at the suffering end. This
predicted an increase in demand of crude oil
measure will definitely give some respite to the
from the non- OECD countries in the second half
industry”, said N. C Mathur, President - ISSDA.
5
Daily
Monday 08, June 2015
The Ministry of Finance notification dated
imports have threatened the huge investments
5th June, 2015 acknowledges the findings
and resulted in underutilization of capacities.
of the Directorate General of Anti-Dumping
The surge in imports can be mainly attributed
(DGAD) that HR 304 grade stainless steel flat
to China. Many stainless steel players have
products were being dumped from China,
either approached BIFR (Board for Industrial
Korea and Malaysia. DGAD has pointed in its
and Financial Reconstruction) or are under CDR
findings that the domestic industry has suffered
mechanism.
both material injury in volume and pricing as
New ASTM Standard Provides
Corrosion Protection for Steel
Bars
a result of dumping. ISSDA reinstates its stand
that domestic stainless steel industry is well
equipped to produce all HR 304 grade variants
and imports were result of dumping by China,
Korea and Malaysia.
Apart from glut of imports from China,
stainless steel industry is plagued with imports
from countries like Malaysia, Korea and Japan
under the Free Trade Agreement. Apart from this
ISSDA has also written to the government on
issue of abuse of India – Malaysia Comprehensive
Economic Cooperation Agreement (CECA). In
this case, Cold Rolled Stainless Steel Flat rolled
products from Malaysia are being imported
in India through preferential tariff benefit,
thereby abusing the provision related to Rules
of Origin by claiming the 35% value addition
criteria. Since Malaysia does not have any
Hot Rolling or melting capacities 35% value
addition is not possible at cold rolling stage. In
this context, ISSDA has also written to Ministry
of International Trade and Industry, Malaysia to
probe into the misuse of CECA. ISSDA reiterates
its stand that significant dumping of Cold Rolled
(CR) stainless steel flat products should also be
noted by the government and Anti Dumping
Duty on CR stainless steel flat products should
be announced by the government at the earliest.
It is important to note that domestic
stainless steel industry has started showing
signs of being a sick industry, as excessive
A new ASTM International standard supports
corrosion protection for steel reinforcing
bars galvanized by zinc or zinc-alloy coatings
for protection from corrosion. The standard
(A1094/A1094M, Specification for Continuous
Hot-Dip Galvanized Steel Bars for Concrete
Reinforcement) provides a high-performance,
low cost option for building and protecting
concrete structures.
ASTM member Gary Dallin is the director
of the GalvInfo Center, a program of the
International Zinc Association. Dallin notes that
in addition to protection, the unique fabrication
properties of the bars covered by the standard
will help minimize installation and long-term
maintenance costs.
“Galvanizing is a proven and effective way
to protect reinforcing bar from corrosion, as it
provides both barrier and galvanic protection to
the steel substrate,” says Dallin. “It also increases
the chloride threshold of the reinforcing bar.”
According to Dallin, the new standard will
be useful to several entities:
 State and federal specifying bodies for
bridge and road infrastructure;
 Engineering and contracting firms;
 Producers of precast concrete products;
Manufacturers that will use the standard to
6
Monday 08, June 2015
Daily
confirm that product parameters meet the
theme for this month is resource efficiency and
specification; and
sustainable consumption and production. Tata
 Laboratories that will use it for product
Steel organized a string of activities to celebrate
World Environment Day, across its locations
testing requirements.
Corrosion
and divisions to spread awareness about
Organization, the worldwide cost of corrosion
environment protection, sustenance and eco-
is currently in the same order of magnitude
conscious growth.
“According
to
the
World
as the cost to produce and distribute food
The celebrations for World Environment
worldwide,” says Dallin. “This standard will make
Day kicked off at the Shavak Nanavati Technical
a positive impact in reducing these huge costs
Institute, Jamshedpur with a tree plantation
while improving the sustainability of global
drive by Chief Guest for the occasion Mr TV
infrastructure.”
Narendran, MD, Tata Steel India & SEA and
Tata Steel goes green for
World Environment Day
Guest of Honor, Mr Anand Sen, President, TQM
Tata Steel is celebrating the month of June
as ‘Tata Sustainability Month’, a Tata Group
initiative under which various initiatives are
being undertaken across the Tata Group. With
the slogan ‘Conserve to Preserve’ Tata Steel’s
& Steel Business, Tata Steel. The plantation drive
was followed by an address to the gathering
by Mr SK Singh, Chief, Capability Management,
Tata Steel and Mr SK Pati, Chief, Environment
Management, Tata Steel.
Mr Shio Kumar Singh, Chief Capability
Development, Tata Steel welcomed all the
7
Daily
Monday 08, June 2015
invitees and shared his views on the subject.
in crude steel and saleable steel were also the
Mr Srikant Kumar Pati, Chief Environment
highest in the months of April and May compared
Management, Tata Steel briefed about various
to previous years. VSP Chairman and Managing
events lined up to celebrate World Environment
Director P Madhusudan expressed confidence
Day during the month of June. Mr Anand Sen,
that the production would be ramped up
President TQM & Steel Business, Tata Steel
further with stabilisation of expansion units and
rewarded all the winners of Online Environment
efforts its RINL staff.
Quiz Competition, EHS lead auditors and
RINL registered a growth of 15 per cent in
Environment article contest. Mr T V Narendran,
its turnover till May, 2015. During the period,
Managing Director, Tata Steel, India & South East
exports grew threefold to Rs 395 crore against
Asia rewarded all the children for winning the
Rs 131 crore of corresponding period of last year
Environment Poster competition.
(CPLY). Sales volume also jumped by 49 per cent
A pioneer in adopting Sustainability as a
Policy, Tata Steel is guided by the approach
that wealth created must be given back to the
society. The responsibility of combining the
three elements - social, environmental and
economic – is of utmost importance to the way
of life at Tata Steel. It is the combination of these
three elements that ensures that business is
sustainable for all stakeholders.
during the first two months, it added.
India's steel & power project
in Afghanistan face hurdles
State-run SAIL-led consortium's ambitious
multi-billion dollar steel and power project in
Afghanistan is believed to have hit a roadblock
due to security as well as operational and
economic feasibility concerns.
While a top-ranking source in the Steel
RINL saleable steel
production up 24% in AprilMay 2015
Ministry said that the project has been put in "cold
storage", SAIL Chairman C S Verma maintained
that the project was still "officially on".
Rashtriya Ispat Nigam Ltd said it has
"The AFISCO project has been put in cold
registered 24 per cent growth in saleable steel
storage. There are several issues. First, it is
production in the first two months of the current
about the security of the personnel in that
financial year.
country. Then there is a question of economic
Production of hot metal, liquid steel and
captive power generation also recorded a
growth of 10 per cent, 13 per cent and 24 per
cent respectively, Visakhapatnam Steel Plant
(VSP), said in a statement. RINL, the corporate
entity of VSP, registered the best monthly
performance since inception in May this year
in areas of coke production and average power
generation.
The monthly production levels achieved
8
Monday 08, June 2015
Daily
feasibility as it is difficult to operate there due
to a continuous conflict hurting the basic
infrastructure," the source said.
For a project of this proportion, the investors
need
assurance
from
Afghan
authorities
on safety of the project, personnel and the
infrastructure and all that is taking a lot of time,
he added. The Afghan Iron and Steel Consortium
(AFISCO), which won bids for three iron ore
mines at Hajigak in war-torn Afghanistan in
November 2011, planned to set up a 6.2 MTPA
steel plant along with a 800 MW power plant,
besides creating the necessary infrastructure.
Later the plans were revised downward to
reduce the vulnerability of the project.
an estimated reserve of 1.28 billion tonne. The
consortium has state-owned firms SAIL, RINL
and NMDC holding a combined 56 per cent
stake with the remaining held by JSW, JSPL and
Monnet Ispat & Energy among others.
Amar Sinha had also denied reports that the
project was being scrapped.
(Strengths, Weaknesses, Opportunities and
Threats) analysis of the opportunities and
strengths. No decision of this sort," he had
tweeted following such reports. A senior Steel
Ministry official said the Afghanistan government
has passed the mining act, but India is waiting for
more clarity on the policy front.
administrative
issues,
regarding how to deal with the provisional
government and clarity on the mining law.
Another issue is corruption, which has led to
several other foreign funded projects being
stalled," he added.
nearly 10 times the reserves of mines bid out so
far to captive miners, for commercial mining.
Setting up a platform where the miners will
have to sell the coal is also being explored, sources
in the government said. The blocks auctioned
so far to private firms have reserves of up to 170
million tonne. Bigger blocks with about 700-900
million tonne capacity have been allotted to stateowned power companies, such as NTPC.
explored blocks under the commercial mining
category to attract Indian and foreign companies
with good track records. Mines like Chendipada
I & II with geographical reserves over 1,800
million tonne and Mahanadi-Machhakata with
coalfields in Odisha can be considered for
commercial use," a government official said. The
Chendipada I and Chendipada II were separate
"Not correct. Meeting only did a SWOT
also
big partially explored coal blocks in Odisha, with
around 1,400 million tonne coal in the Talcher
Earlier, India's Ambassador to Afghanistan
are
The government is considering auctioning
"We are exploring putting up bigger and
The three iron ore mines at Hajigak have
"There
Govt mulls auctioning of big
partially explored coal blocks
in Odisha
blocks but were combined by the government
before the auctions.
Mahanadi and Machhakata were also two
blocks, which were clubbed into one. These
blocks have been categorised under ScheduleIII, meaning non-operational coal blocks for
auction for captive use.
9
Daily
Steel prices may stay under
pressure in FY16: Moody's
Steel prices in India are expected to remain
under pressure in the current fiscal, but the
demand is expected to pick up with an uptick in
commercial vehicle sales, ratings agency Moody's
said. Sounding upbeat on the performance of
two major players in the domestic market -- Tata
Steel and JSW Steel -- in 2015-16, it said that the
worst phase for the two is over.
"We do not foresee steel imports coming
down anytime soon and so there may be
pressure on the prices in 2015-16 fiscal, but
the worse for Tata Steel and JSW Steel is over,"
Moody's Senior Analyst Kaustubh Chaubal said.
Subdued domestic demand and rise in
imports from China, Russia and Korea had
Monday 08, June 2015
10
exerted pressure on steel realisations in the last
fiscal, he added.
However, Moody's expects steel demand to
pick up in 2015-16 on the back of an uptick in
commercial vehicles sales, particularly the medium
and heavy commercial vehicles (M&HCV).
"We expect the uptick in activity in the
M&HCV segment to continue and if you look
at the light commercial vehicles' space, the degrowth is now coming down, which is also a
good sign. LCV market may turn in the second
half of this fiscal. These aspects will help steel
demand," Chaubal said.
Besides, declining prices of iron ore and
cooking coal as well as the government's
decision to resume mining will aid in reducing
pressure on the companies, Moody's said.