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M o n d ay 3 0 , M a rc h 2015
News &
Report Analysis
Currency Market
Precious Metal
Base Metal
Energy Market
q Modi may announce Rs 36k cr
expansion plan for RSP
q Tata Steel notches 10 MTPA production
milestone from single location
q NMDC commissions 7-mtpa iron ore unit
at Bailadila
q DGS rejects plea for safeguard duty
on steel import
q Aluminium park draws proposals
for 11 units
Daily
US equity markets appreciated on last Friday
with major indices adding marginally backed by
positive data from the country. The Dow ended
Friday up 0.19 percent, while the S&P 500 gained
0.24 percent and the Nasdaq 0.57 percent. Asian
stock markets got off to sluggish start on Monday
in a week book-ended with Easter holidays across
the globe and a U.S. jobs report that could affect
the timing of the first hike in interest rates there.
Also, weakness in Asian equities along with
cautious stance ahead of approaching end of
the financial year acted as negative factors. The
currency touched a weekly low of 62.13 and
closed at 62.51 on Friday.
Among the global macro update include
Federal Reserve Chair Janet Yellen reaffirmed
that rates would likely start rising later this
year but emphasized the pace of tightening
would be gradual and data-dependent. The
conditional outlook helped nudge longerdated Treasury yields lower and left the dollar
listless for the moment.
The market reaction will be complicated
by holidays across much of the western world
on Friday. Only some U.S. markets will be open
and then only for shortened hours. Investors will
again have to keep a wary eye on Greece and
2
Monday 30, March 2015
Currency Market
The US Dollar Index weakened by 0.7
percent last week after the release of
lackluster US economic data which hit the
investor sentiment on showing slow growth
of the U.S. economy less than forecast in the
fourth quarter and another report showing
that consumer sentiment deteriorated this
month. Also tensions in Middle-East and
rapid ascent of US Dollar led to companies
pulling back their profits.
Euro continued to slide on Friday with a
minor recovery late Friday evening to trade at
1.0879. Pound had a continued appreciation
to currently trade at 1.4872 after comments
from the BOE governor indicated that rates
can only appreciate from here on. Japanese
yen remained stable at 119.23 even after
industrial production data came in negative
this morning.
The Indian Rupee depreciated by 0.2
percent in the last week on month end
demand for the American currency from banks
and importers. Also, tensions in middle-east
reduced the risk appetite, thereby hurting
the demand for the currency.
its talks with international creditors where the
parties are struggling to come up with a list of
62.48
62.56
sparse, with Japan reporting a disappointing
62.64
decline in industrial output for February. Figures
62.72
in the session. Flash inflation data for the euro
zone are due Tuesday and manufacturing surveys
on China are out the day after. That should be just
an appetizer for Friday's U.S. payrolls report.
USD/INR Overnight VAR
Data releases today
17:00
16:00
15:00
14:00
13:00
62.88
12:00
U.S. personal income and spending are due later
62.80
9:00
on German inflation, European confidence and
11:00
Besides, the data diary in Asia was rather
10:00
acceptable reforms.
USD/INR - 27/03/15
62.40
0.3519
Forecast
Previous
USD Core PCE Price Index m/m
0.1%
0.1%
USD Personal Spending m/m
0.3%
-0.2%
Source : Mecklai Financial
3
Monday 30, March 2015
Daily
6 mth
LIBOR
Major
Currencies
Today’s
Crosses
Spot
Cash
v/s INR
Forward Rates v/s INR (Export/ Import)
April
May
June
September
December
March
62.56/ 57
62.38/ 40
63.05/ 08
63.45/ 47
63.87/ 90
65.09/ 12
66.22/ 25
67.27/ 30
-
-
-
0.41/0.41
0.62/0.62
0.80/0.81
1.20/1.25
1.51/1.61
1.77/1.94
EUR / USD
1.0871
68/ 01
67.80/ 84
68.57/ 59
69.02/ 05
69.51/ 55
70.95/ 98
72.33/ 36
73.65/ 67
0.14
USD / JPY(100)
119.20
52.48/ 48
52.33/ 35
52.91/ 93
53.26/ 29
53.64/ 67
54.74/ 78
55.82/ 86
56.84/ 88
0.68
GBP / USD
1.4859
92.95/ 96
92.68/ 72
93.69/ 74
94.24/ 29
94.84/ 90
96.61/ 66
98.28/ 33
99.85/ 90
-0.72
GBP / USD
0.9623
65.00/ 01
64.82/ 83
65.52/ 54
66.07/ 09
66.60/ 64
68.17/ 20
69.66/ 73
71.04/ 15
3.06
AUD / USD
0.7732
48.37/ 38
48.23/ 26
48.68/ 70
48.90/ 92
49.15/ 17
49.86/ 88
50.52/ 53
0.40
USD / INR
-
ATM Options (put/call)
0.15
51.16/ 17
Source : Mecklai Financial
Precious Metal
looming U.S. rate hike dims the appeal of a non-
Gold prices dropped for a second straight
session on Monday, slipping further from a threeweek high, after Federal Reserve Chair Janet
Yellen signaled that the U.S. central bank may
be on course to raise interest rates later this year.
Bullion may be set to give up recent gains fueled
by the Fed's March policy statement that was
prepared to move more slowly in hiking U.S. rates
than the market expected.
The metal rose for seven consecutive
sessions after the Fed's meeting this month in its
longest rally since 2012. On Friday, Yellen said an
increase in the Fed's benchmark rate "may well
be warranted later this year" given sustained
improvement in U.S. economic conditions.
Spot gold prices also followed the southward
trends after rising for a second week in a row
last week. It touched $1,219.40 on Thursday, its
loftiest since March 2. Bullion is headed for a
second consecutive monthly drop in March as a
Market Highlights - Gold (% change)
Gold
Gold (Spot)
Gold
(Spot -Mumbai)
Comex Gold
MCX Gold
(Apr’15)
Unit
Last
Prev.
day
as on March 27, 2015
WoW MoM
YoY
$/oz
1198.8
-0.43
1.4
-0.8
Rs/10
gms
26500.0
-0.75
2.3
-0.4 -11.1
$/oz
1193.6
-0.52
0.5
-0.9
-7.8
Rs /10
gms
26569.0
-0.87
1.5
1.3
-7.0
-8.0
Source: Angel Broking
interest bearing asset.
Investors
remained
wary
over
gold's
outlook, with continuing outflows from SPDR
Gold Trust, the world's largest gold-backed
exchange-traded fund. The fund's holdings fell
0.2 percent to 743.21 tonnes on Wednesday.
Physical demand was also slowing, hit by the
rally in prices. On today’s intra-day session gold
prices to trade lower.
Base Metal
Base metals on the LME apart from
Aluminium and Nickel traded higher last
week owing to weaker dollar Federal Reserve
Chair Janet Yellen said rates would likely start
rising later this year though she reinforced
her point that the pace of tightening would
be gradual and would depend a lot on data.
However, concerns over China’s growth
coupled with uncertainty in Greece restricted
sharp gains. On the MCX, base metals except
Aluminium and Nickel traded higher in line
with international trends.
Last week, LMEX hit its highest level since 12
Jan on Monday and then three metals spiked on
Thursday. Yet the sector ended the week down
1% on average. Although gyrations of the USD
and geopolitical tension (Yemen) played a role,
Daily
the price moves and divergence among metals
showed once again that it is not always all about
the macro picture.
4
Monday 30, March 2015
crude supplies.
Crude prices had a blast last week as geopolitical tension in Middle-east region along
Copper’s spike owed much to heavy rain in
with fall in US Dollar and lesser than expected
Chile, which now looks unlikely to have a large
increase in US oil production drove prices
impact on supply, while nickel’s losses owed
higher. Crude prices had a blast last week as
most to a growing sense that Indonesia will
geo-political tension in Middle-east region
ease its ore export ban (we still think not, but it
along with fall in US Dollar and lesser than
is a close call). The two key data releases in the
expected increase in US oil production drove
coming week are China’s NBS PMI and US NFPs.
prices higher.
Copper sharp upside was restricted after
Crude
oil
registered
strong
weekly
data showed that Chinese manufacturing
performance though gains were trimmed
activity swung into contraction this month,
down by around 5% loss on Friday. Oil fell as
underlining concerns over the health of the
markets started looking at other supply related
world's second largest economy. Also, orders
variables excluding the problems going in the
for durable goods unexpectedly dropped in
Yemen region whereas speculation over the
February, a sign the slowdown in global growth
deal between Iran and western counterparts
may be weighing on American manufacturers.
too weighed the commodity. Oil commodity
As per Angel Broking, LME Copper prices to
recorded good gains in Thursday after Saudi
trade lower today as Chile's Codelco, the world's
Arabia said it did air strikes in Yemen along with
No 1 copper producer, said it was gradually re-
its Gulf Arab allies. Risk of supplies getting hit in
opening mines in the north of the country that
the region pushed prices higher internationally
were closed on Wednesday due to heavy rains.
and locally in India. However, on actual ground,
Also, estimates of weakness in Pending Home
investors note that total contribution from
Sales data will exert pressure.
Yemen on supply is almost negligible, just
Among the other base metal update, Japan's
matching 125,000 BPD last month as per data
aluminium product demand, including for
from Bloomberg against world supply of over 90
exports, is expected to grow 1.8 percent in the
MBPD. Prices rise is backed by fears that Yemen
financial year starting April 1, backed by rising
being a major trade centre could see shipments
demand for cans for coffee beverages and a
getting hit.
rebound in construction market, an industry
body said on Friday.
Energy Market
Oil prices traded higher on both sides of the
Atlantic with a U turn in WTI as well as Brent
crude. Air strikes in Yemen by Saudi Arabia and
its Gulf Arab allies sparked fears that escalation
of the Middle East battle could disrupt world
Market Highlights - Crude Oil (% change)
as on March 27, 2015
Crude Oil
Unit
Last Prev.
day
WoW
MoM
YoY
Brent (Spot)
$/bbl
56.3
-1.0
6.0
-9.2 -47.0
Nymex Crude
(Apr’ 15)
$/bbl
48.5
-0.9
2.1
-4.1 -52.3
ICE Brent Crude
(Apr’15)
$/bbl
56.4
-4.7
2.0
-6.1 -47.3
MCX Crude
(Apr ’15)
Rs/bbl
3152.0
-3.1
6.9
3.2 -47.8
Source: Angel Broking
Daily
Monday 30, March 2015
News & Report
Analysis
deliberate upon the need and his government's
Modi may announce Rs 36k cr
expansion plan for RSP
of RSP on April 1," a source said.
Prime Minister Narendra Modi is expected to
announce a Rs 36,000-crore capacity expansion
plan for SAIL's Rourkela steel plant when he
inaugurates the modernised unit of the stateowned firm on April 1.
During his maiden visit to the Odisha-based
plant, where a Rs 12,000 crore modernisation
and expansion programme has recently been
completed to raise capacity to 4.5 million tonne
per annum from 2 mtpa earlier, Modi may also
unleash SAIL's "Vision-2025".
Sources said SAIL has finalised its blueprint
for future expansion which envisions raising
the capacity of the company further to 50 mtpa
by 2025 with an approximate investment of Rs
1.5 lakh crore in sync with the country's plan to
treble its installed capacity from 100 mtpa now.
This is over and above the ongoing Rs 72,000
crore investment that will take its capacity to
23.46 mtpa from 13.8 mtpa now. This phase will
be completed by the middle of the next year.
"The Prime Minister is very hopeful of the
potential that can be tapped in the iron and
steel sector of the Eastern region. He may
commitment to unfurl that potential in his
speech after inaugurating the expanded facility
As per Vision-2025, SAIL plans to enhance
RSP's capacity further to 10.8 mtpa entailing a Rs
36,000 crore investment in the plant in Odisha.
After completion of this phase, RSP will be SAIL's
second largest after Bokaro. Work on the next
phase of expansion will also immediately start.
The state-run steel maker also plans to
undertake further expansion in its two other
integrated steel-making facilities in the eastern
region taking the cumulative capacity to 25.8
mtpa taking into account company's plan to raise
capacity of the Durgapur unit to 9.3 mtpa and
IISCO at 5.7 mtpa.
SAIL also plans to enhance capacity of its
Bokaro unit to 14.1 mtpa and Bhilai's to 10.5
mtpa in its Vision-2025.
RSP is the country's first integrated steel plant
in the public sector. It was set up in 1960 with
German collaboration. It is SAIL's only plant that
produces silicon steels for power sector, pipes
for the oil and gas sector and tin plates for the
packaging industry.
Among the new facilities that are installed as
part of the RSP's modernisation and expansion
plan in the current phase is a blast furnace, named
"Durga", with a capacity of 4,060 cubic metres.
5
Daily
Tata Steel notches 10 MTPA
production milestone from
single location
Monday 30, March 2015
NMDC commissions 7-mtpa
iron ore unit at Bailadila
The
National
Mineral
Development
Tata Steel has achieved a milestone by
Corporation (NMDC) has commissioned Bailadila
producing 10 million tonne per annum (mtpa) of
iron ore deposit 11B in Dakshin Bastar district of
hot metal from a single location. In a statement
Chhattisgarh on Sunday. This has a production
issued on Saturday, the company said it has
capacity of 7 million tonne per annum (MTPA). The
become the first Indian plant to do so, adding
corporation put an investment of Rs. 600 crore.
that it was a significant achievement in its iron
making journey which started in 1911.
Starting from a capacity of only 0.16 mtpa ('A'
With the launch of the new front, the production
capacity of the corporation has gone up to 32
MTPA from 25 MTPA from Bailadila Sector.
Blast Furnace) in 1911, the company today stands
After inaugurating the project NMDC Chairman
at 10 mtpa, a growth of 63 times in its production
and Managing Director Narendra Kothari has said
capacity since inception.
that this was an important milestone in achieving
The modernisation journey in 1992 began
the dream of producing 100 mt of iron ore and
with the commissioning of G Blast Furnace, which
realising the nation’s dream of producing 300
increased the rated capacity from 2.4mtpa to 3.15
million tonnes of steel.
mtpa. The working volumes of C, D and E Blast
The new project has a 3.5-km long single flight
Furnaces were also increased in the following
regenerative downhill belt conveying system with
years. The capacities of F and G blast furnaces
horizontal and vertical curves, NMDC said here in a
were augmented soon after from 0.6 mtpa to 1
statement on Sunday.
mtpa and 1 mtpa to 1.8 mtpa, respectively.
Meanwhile, the company has set a production
The commissioning of H and I Blast Furnace
target of 35 million tonne (mt) and sales target
in 2008 and 2012, respectively, took Tata Steel's
of 38 mt for 2015-16 and a three-fold increase in
hot metal production to 2.5 mtpa and 3 mtpa,
production by 2021-2022.
respectively. The hot metal production in this
The miner, which is in the process of
phase (since 1992) took a quantum jump from
diversifying into couple of new areas, including
2.4 mtpa to 10 mtpa.
steel production, coal mining and manufacture of
potash for fertilisers, through joint venture entities,
is planning a major production boost targeting
volumes of 65-75 mt by 2018-19 and 100 mt by
2021-22.
Narendra Kothari, Chairman and Managing
Director, NMDC, said that the sales target of 38 mt
planned during 2015-16, includes 3 mt of iron ore
produced during the current financial year. NMDC
has recently entered into a memorandum of
understanding with the Ministry of Steel pertaining
to its performance for 2015-16.
6
7
Monday 30, March 2015
Daily
on imports of cold rolled flat product of stainless
steel of chromium type, 400 Series to "protect the
domestic producers against serious injury caused
by the increased imports".
However, DSG has said: "The applicant industry
has presented no credible evidence to make out a
case of serious injury. Furthermore, it has withheld
crucial injury information on a number of factors
apart from the fact that the facts presented in the
Referring to the perspective plan for its growth
application itself do not make out a case of serious
and expansion, the NMDC CMD said that a Vision
injury." The DSG order dated March 23 said that
Document is being readied and is likely to be
"injury" to JSL is not because of increase in imports
completed by April-May and submitted to the
but several internal factors like new plant set up in
Government. The state owned iron ore major
Odisha -- leading to high startup costs and excess
will complete the construction of its 3-million
capacity leading to extra inventory and sales at
tonne per annum (mtpa) integrated steel plant at
lower price.
It further said that "India has already imposed
Nagarnar in Chhattisgarh by 2016.
“The plant is in an advanced stage of erection.
anti- dumping duty on imports of Cold Rolled
The erection will be completed by December 2016,”
Flat Products of Stainless Steel - 400 series from
Kothari, told mediapersons on the sidelines of the
Korea RP, Thailand, China PR, EU, USA, South Africa
Movement for Efficiency and Transparency (MET)
and Taiwan".
event held here recently by e-commerce company
DSG's
examination
included
written
submissions from Maruti Suzuki, Hero Motocorp,
mjunction services limited.
The country’s largest iron-ore producer and
Japan's Nippon Steel, Korean major POSCO and
exporter is setting up the steel plant as part of its
several government and industrial bodies of
expansion, value addition and forward integration
different nations from which India imports.
programme. The project, coming up some 16 km
The DSG order said that though the demand
from Jagdalpur, would be set up with an estimated
has gone up, domestic players could not increase
Rs 15,525 crore outlay.
production in spite of installing significant
DGS rejects plea for safeguard
duty on steel import
capacities as a result of which imports surged.
The
Directorate
General
of
Safeguards
Aluminium park draws
proposals for 11 units
(Customs & Central Excise) has rejected a plea for
The aluminium park at Angul being developed
imposing safeguard duty on imported stainless
jointly by navratna firm National Aluminium
steel products saying there is no credible evidence
Company (Nalco) and state owned Odisha
to show that imports have hurt domestic players.
Industrial Infrastructure Development Corporation
In November, Jindal Stainless Ltd (JSL) made a
plea to the watchdog for imposing safeguard duty
(Idco) has received 11 proposals for establishment
of downstream units.
Daily
Monday 30, March 2015
"The Industrial Promotion & Investment
power and steel plants, and higher prices in spot
Corporation of Odisha Ltd (Ipicol) and the Angul
markets. Private companies that secured 16
District Industries Centre (DIC) have received 11
such mines during auction are yet to complete
applications for setting up downstream units in the
negotiations with previous owners of the blocks for
aluminium park. A memorandum of understanding
taking over the mine infrastructure and manpower.
(MoU) has been signed between Nalco and Idco for
A senior government official admitted that
the aluminium park. For the park, 160 acres of land
there will be stoppage of work at most mines for
has been acquired," Jogendra Behera, minister,
some time despite the government's best efforts.
MSME (micro, small & medium enterprises) said in
a written reply to the state assembly.
"The procedural formalities would be done in
some time. States are expected to play a proactive
It may be noted that the department of industrial
role in mines development as they have been
policy and promotion (DIPP) under the Union
incentivised with auction proceeds," the official
ministry of commerce and industry has given final
said, requesting anonymity. "Labour, contracts,
nod for the aluminium park under the modified
transfer of equipment, their valuation, and
industrial infrastructure upgradation scheme
negotiations between previous and new allottees
(MIIUS). A sum of Rs 46 crore will be provided in
are expected to take some time. The coal ministry
four tranches for infrastructure development of
could not have moved faster than this."
the park. The hub is being developed by a special
While private firms that won producing mines
purpose vehicle (SPV) called Angul Aluminium
got vesting orders facilitating takeover on March
Park Private Ltd (AAPPL), with shareholding of
23, the staterun companies are yet to receive them.
50.50 per cent and 49.50 per cent between Idco
All the companies have to sign fresh mining
and Nalco respectively. It will come up over 450
leases with state governments and seek fresh
acres of land, out of which 160 acres will be taken
approvals for mine operation from the Director
up for development in the first phase.
General of Mines Safety. There are a number of
A wide variety of industries using aluminium
conductors, extrusions, castings, foils, powder
other procedural formalities, pending which,
mining at such blocks cannot continue.
and paste can be set up at the aluminium park.
Transfer of some mines and associated
Nalco has already agreed to supply 50,000 tonne
infrastructure also depends on the outcome of
per annum (tpa) of molten metal for promoting
cases in the Delhi High Court filed by previous
downstream industries coming up in the complex.
owners, seeking higher compensation for the
Procedural formalities to halt
output at 16 captive coal blocks
assets deployed at the blocks.
Production at captive coal blocks whose
ownership has changed after the recent auctions
will come to a halt for at least two months starting
Wednesday, as the new owners are yet to complete
procedural formalities for the takeover of mines.
This could result in lesser fuel availability for
8