1. business and industrial
2. energy
3. coal

Th u rs d ay 0 6 , N ove m b er 2014
News &
Report Analysis
Currency Market
Precious Metal
Base Metal
Energy Market
 Resource-rich Mongolia ousts prime
minister amid economic downturn
 Iron Drops to Lowest Since 2009 as APEC
Curbs dent demand
 Goa government renews 13 mining leases
 Govt plans to auction all minerals
 Prez confers SCOPE awards on SAIL, IOC
among others
2
Thursday 06, November 2014
Daily
MMR Landed Prices
London Metal Exchange : Wednesday 05, November 2014
Pr. Sell
(1)
Morning Session
Buy
Sell * (2)
Afternoon Session
Buy
Sell
Kerb
Change
(2) - (1)
Value
Stk(tns)
change
$/ton
Rs/ton
Copper Grade A
Spot
6705.50
6645.50
6646.00
6696.00
6697.00
6713.50
-59.5
1,60,350
MMR LP
4,41,293
3-mth
6660.50
6583.00
6584.00
6626.00
6627.00
6638.00
-76.5
-1750
14-D MA
4,49,442
PP (HCL)
4,56,624
Average
10-days - 6776.60
20-days - 6742.90
30-days - 6738.80
Tin High Grade
Spot
19605.00
19530.00
19540.00
19609.00
19610.00
19652.00
-65.0
10,270
--
--
3-mth
19605.00
19530.00
19560.00
19600.00
19600.00
19645.00
-45.0
-45
--
--
--
--
Average
10-days - 19744.50
20-days - 19746.30
30-days - 19964
Lead
Spot
2007.00
1974.50
1975.00
1978.00
1978.50
1985.00
-32.0
2,24,675
MMR LP
1,35,981
3-mth
2013.00
1979.00
1980.00
1988.00
1989.00
1994.50
-33.0
-1875
14-D MA
1,37,792
PP (HZL)
1,48,100
Average
10-days - 2004.40
20-days - 2017.70
30-days - 2038.20
Zinc Special High Grade
Spot
2286.00
2218.00
2219.00
2228.00
2229.00
2218.50
-67.0
7,02,525
MMR LP
1,56,979
3-mth
2284.00
2217.00
2219.00
2228.00
2229.00
2220.50
-65.0
7925
14-D MA
1,60,255
PP (HZL)
1,74,800
Average
10-days - 2271.30
20-days - 2270.80
30-days - 2272.80
Aluminium
Spot
2050.50
2037.00
2038.00
2056.00
2057.00
2062.50
-12.5
44,36,575
MMR LP
1,56,266
3-mth
2049.00
2033.50
2034.00
2052.00
2053.00
2060.00
-15.0
15425
14-D MA
1,54,463
PP (Nalco)
1,66,900
Average
10-days - 2011.80
20-days - 1968.40
30-days - 1947.50
Aluminium Alloy
Spot
2090.00
2010.00
2020.00
NA
NA
2086.00
-70.0
26740
3-mth
2095.00
2020.00
2020.00
NA
NA
2095.00
-75.0
-40
Average
10-days - 2081.50
20-days - 2086.50
30-days - 2084
Nickel
Spot
15155.00
14975.00
14980.00
15234.00
15235.00
15261.50
-175.0
3,85,860
--
--
3-mth
15235.00
15025.00
15030.00
15300.00
15300.00
15325.00
-205.0
0
--
--
-Copper
Aluminium
-01-Oct
01-Nov
Zinc
Lead
03-Nov
03-Nov
Average
10-days - 15209.50
20-days - 15516
30-days - 15864.50
Note: 1. MMR LP = MMR Landed Prices, excluding excise duty. 2. PP = Producer Prices ex-smelter, excl. excise
Minor Metals ($/LB)
Antimony
99.65%
9,600
Cadmium
99.80%
90.00
Cobalt HG Moly.oxide
99.80%
14.00
14.25
Tantalite
30% Ta2O5
92.00
Titanium Ferro-vana
Con. Ti02
650.00
24.90
Silicon
2,050
Week ended Avg of Steel Prices: 01/11/2014 (Incl. Excise duty)
Sponge Iron
Pig Iron
Mandi
29,600 HMS
33,200 CRP(LSLP)
Mumbai
29,800
32,600
Kolkata
29,400
-
Indicative Domestic Market Rates (Rs./kg)
Mumbai
05-Nov
Chennai
29,000
31,200
MS Ingots
Bhiwandi
38,700
Comex Copper (cents/lb)
Prev
Delhi
05-Nov
Prev
-504.0
-508.0
440.0
-
442.0
-
Alum Ingot
Zinc Slab
Lead Ingot
Tin Slab
Nickel (4x4)
Scrap
Copper Heavy
Copper Uten.
175.0
186.0
138.0
1,490.0
1,085.0
175.0
187.0
138.0
1,505.0
1,105.0
180.0
191.0
132.0
1,473.0
1,102.0
179.0
192.0
132.0
1,483.0
1,120.0
469.0
428.0
473.0
431.0
---
---
Copper Mixed
Brass Utensil
Brass Huny
Brass Sheet
Alum Utensil
-326.0
-339.0
136.0
-328.0
-341.0
136.0
427.0
-326.0
147.0
420.0
-322.0
147.0
Virgin Metals
Copper Pat
Copper W/Bar
Delhi
29,700
-
Nov'14
Dec'14
Jan'15
Rate
302.25
300.75
300.75
Change
-0.4
-0.4
-0.4
Kanpur
38,400
Durgapur
34,700
Comex Al (cents/lb)
Rate
-
Change
-
Precious Metals : Indicative Rates
Metal
Gold Std
Silver
Gold
Silver
Gold
Silver
Market
Mumbai
Mumbai
London
London
Comex
Comex
Unit
Rs./10g
Rs./kg
$/tr.oz.
$/tr.oz.
$/tr.oz.
$/tr.oz.
05-Nov
25,800
35,000
1,142.0
15.32
1,145.4
15.41
Prev
26,450
36,500
1,166.5
16.12
1,167.4
15.92
Forex: Nov 05, 2014 (Rs/Unit Currency)
Buy
USD
61.47
61.38
EURO
76.76
GBP
97.70
97.58
SGD
47.48
—
—
AUD
53.03
YEN
0.5371
0.5363
SFR
63.75
Sell
76.66
47.39
52.96
63.64
Buy
Sell
Customs Notified Rates: Oct 02, 2014 [Rs.(Imp/Exp)]: US$ 62.30/61.30;Pound Sterling 101.25/99.00;Euro 79.00/77.10
Daily
Thursday 06, November 2014
Asian shares and commodity currencies
policy meeting and last week's surprise move
dropped on Thursday as investor concerns
by the Bank of Japan to expand its stimulus
about a slowing Chinese economy eclipsed
measures have also provided a boost to the
optimism over the U.S. outlook, while Tokyo
greenback. The strength in the dollar also took
stocks stepped back after posting large gains in
down other precious metals. Silver firmed but
a Bank of Japan-inspired rally. MSCI's broadest
was trading close to 4-1/2 year lows of $15.13 an
index of Asia-Pacific shares outside Japan fell 0.3
ounce reached on Wednesday. The euro under
percent, led by declines in Australia and China,
pressure although the common currency could
under pressure from concerns over slower
see a rebound if European Central Bank chief
growth the world's second-largest economy.
Mario Draghi scales back his readiness for more
The Australian dollar flirted with a four-year low
stimulus given reports of internal opposition to
of $0.8606 hit on Wednesday while the Canadian
quantitative easing. The Australian dollar fell to
dollar stood near five-year lows of C$1.1466 to
a four-year low of $0.8553 against the U.S. dollar,
the U.S. dollar. Many other commodity exporters
with a solid domestic jobs report doing little to
took an even bigger hammering The Brazilian
arrest the slide.
real flirted with its six-year trough hit last week
Precious Metal
while the Russian rouble tumbled to record low
after the central bank effectively abandoned the
Gold languished near its lowest level since
trading corridor for the currency, by halting the
April 2010 on Thursday as investors dumped
multi-billion dollar daily interventions.
the safe-haven metal amid strength in the dollar
Currency Market
and on fears that $1,000 an ounce is the next
target. Silver, under pressure from the dollar
The dollar surged to a seven-year high
and sliding gold, was trading close to its lowest
against the yen and global equity markets rallied
since February 2010 after losing 4percent in the
on Wednesday after the Republican Party seized
previous session. The sell-off in gold began last
control of the U.S. Senate in midterm elections,
Friday, when the metal broke through $1,180 -
auguring well for pro-energy and other business
the lowest level hit during last year's 28 percent
policies. The dollar kept marching higher on
plunge. Since then, dollar strength and breaks
Thursday in anticipation of a strong U.S. payrolls
below other technical levels have built the case
report, while the euro dangled just above a two-
against gold.
year trough with investors waiting to see how
Technical analysts have said a test of the
European Central Bank chief Mario Draghi deals
$1,000 level could be on the cards following
with dissent.
a break of support at $1,150 an ounce, a key
Disappointing surveys of euro zone business
retracement level. Spot gold ticked up 0.3
growth and a surprise decision by the Bank of
percent to $1,143.80 an ounce by 0419 GMT.
Japan last week to enhance its already massive
It tumbled over 2 percent to a 4-1/2 year low
monetary stimulus have added pressure on
of $1,137.40 on Wednesday, following sharp
the ECB to ease more. Weakness in the euro
losses after falling through support at $1,160
as investors eyed the European Central Bank's
and $1,150.Gold fell as low as $1,137.40 per
3
Daily
Thursday 06, November 2014
ounce on Wednesday, down 2.3 percent and its
construction fell for third third time in four
second-largest one-day drop so far this year. It
months, Markit Economics said today.
last traded at $1,143.80. Silver fetched $15.31
“Weaker Chinese PMI validates the view
per ounce after a 4.1 percent fall on Wednesday.
that the economy is in a soft patch,” Tai Wong,
Prices on the Shanghai Gold Exchange were
the director of commodity products trading at
trading at a discount or on par with the global
BMO Capital Markets Corp. in New York, said in
benchmark on Thursday. They have been at
a telephone interview, “There are certainly not
a discount for most of this week, hinting at
strong signals of consistent growth coming out
sluggish demand. India, the second biggest
of China at the moment, and they are still by far
buyer, hasn't seen any fresh buying either at
the largest marginal user of base metals.”
lower price levels.
Lead 3 months delivery lost 0.6 percent to
"One of the possible explanations of such a
settle at $1,994.50 a metric ton at 5:50 p.m. on
lack of physical support could be that investors
the London Metal Exchange, after touching
are waiting on the sidelines for further pullbacks
$1,955.50, the lowest since May 16, 2013.
in the price or price stability," Societe Generale
The Bloomberg Dollar Spot Index climbed
analyst Robin Bhar said. Weakness in local
for four straight months as a diverging global
currencies could also be a factor, he said.
growth outlook is increasing demand for
Base Metal
the greenback. While the U.S. gains traction,
The stronger US dollar rally kept the
base metal rally at three weeks lower. US
Chinese manufacturing is slowing and the
European Central Bank is buying bonds to spark
expansion.
dollar reduces the appeal of commodities as
While base metal traded at New York, copper
alternative assets. Aluminum, copper and zinc
futures for December delivery fell 0.4 percent
also declined in London. Nickel and tin gained.
to $3.0075 a pound on the Comex, capping the
An index of the six main metals traded on the
fourth decline in five sessions.
LME dropped the most in almost three weeks
yesterday as the European Union cut growth
Energy Market
forecasts for the region, damping the outlook
West Texas Intermediate held gains from the
for metals demand. The U.S. is the second-
biggest advance in two weeks after government
biggest copper buyer, followed by Germany.
data showed crude stockpiles fell at the largest
The Bloomberg Commodity Index (BCOM) of
U.S. storage hub. Brent was steady as Libya shut
22 raw materials dropped to the lowest since
its main oil field. Futures were little changed
July 2009 as the dollar rose to a five-year high
in New York after rising 1.9 percent yesterday.
against a 10-currency basket.
Crude supplies at Cushing, Oklahoma, the
Lead fell to a 17-month low in London after
delivery point for WTI contracts, shrank by
a private gauge of economic activity indicated
551,000 barrels last week, the first decline in four
growth slowed during October in China, the
weeks, the Energy Information Administration
world’s biggest metals consumer. A composite
reported. Libya halted its Sharara field that
index of Chinese services, manufacturing and
had been disrupted by strikes and violence in
4
Daily
Thursday 06, November 2014
the past, according to two people with direct
knowledge of the matter.
Oil is trading in a bear market amid signs that
global supply is outpacing demand. Leading
OPEC producers have resisted calls to cut output
as they compete with the U.S., which is pumping
at the fastest pace in more than 30 years.
The price collapse is a “concern for everyone,”
Venezuela’s Foreign Minister Rafael Ramirez said
as he met Saudi Arabia’s Oil Minister Ali Al-Naimi
yesterday.
“This is a turning point for U.S. crude
stockpiles to expand less and start to drop as
foreign direct investment slump. Out of 66
refiners increase their operating rates to meet
members of parliament who voted, 34 were
heating demand in the winter,” Kang Yoo Jin,
in favour of ousting Altankhuyag, Mongolian
a commodities analyst at Woori Investment &
television showed. Ten members of parliament,
Securities Co. in Seoul, said by phone today. “Oil
including eight members of his own coalition
will probably recover in the next three months
government, did not show up.
as lower prices can start causing issues for shale
players and Canadian producers.”
It will now be up to the coalition government
to select a new candidate, who will have to
WTI for December delivery was at $78.86 a
be approved by the president and confirmed
barrel in electronic trading on the New York
by parliament. The government has been
Mercantile Exchange, up 18 cents, at 1 p.m.
in turmoil over the past month, as seven
Singapore time. The contract climbed $1.49
ministers, including the ministers of mining and
to $78.68 yesterday. The volume of all futures
foreign relations, resigned after Altankhuyag
traded was about 43 percent below the 100-day
won parliamentary approval to consolidate
average. Prices have decreased 20 percent this
ministries from 16 down to 13.
year.
News & Report
Analysis
Resource-rich Mongolia
ousts prime minister amid
economic downturn
That led to calls from the opposition
Mongolian People's Party for the prime minister
to stand down, and finally people from his own
government demanded his resignation. The
political fight has distracted the government of
the resource-rich country, landlocked between
Russia and China, from passing a budget.
Parliament rejected a budget proposal for
Mongolia's parliament voted on Wednesday
the second time on October 31 amid criticism
to remove Prime Minister Norov Altankhuyag
of exorbitant spending and overly optimistic
amid concerns about a serious economic
economic projections. Mongolia's Fiscal Stability
downturn as gold, copper and coal prices and
Law takes full effect next year, which will cap
5
Daily
Thursday 06, November 2014
debt at below 40 percent of gross domestic
product.
“Steel mills in north China should be working
at a reduced rate due to the APEC meeting,” said
"It's quite clear that whoever will run next
Christian Lelong, an analyst at Goldman Sachs
year will have big, big troubles, with even paying
Group Inc. in Sydney. “That should be playing a
state employees' salaries," said Luvsanvandan
role” in iron ore’s drop, he said by e-mail before
Sumati, head of the Sant Maral Foundation
the price was released.
polling group.
Asia’s biggest economy will host the APEC
Key to reviving foreign investment, which has
gathering in the capital from tomorrow to
slumped 59 percent this year, is a resolution of a
Nov. 12, prompting authorities to order factory
long-running dispute over the huge Oyu Tolgoi
shutdowns to try to ensure clean air and blue
copper mine that Mongolia shares ownership
skies during the event. The provinces of Hebei,
with mining giant Rio Tinto's Turquoise Hill
the country’s biggest steel-producing region
Resources arm.
that surrounds the capital, and Shandong, the
Iron Drops to Lowest Since
2009 as APEC Curbs dent
demand
third-largest, will bear the brunt of the losses.
Goa government renews 13
mining leases
Iron ore fell to the lowest level in more than
In a respite to iron ore mining players in Goa,
five years as China ordered some mills to curb
the state government on Wednesday renewed
output to cut pollution before hosting a global
13 mining leases, who can now begin tapping
summit, hurting demand in the biggest user
the ore after getting necessary clearances from
just as rising supplies exacerbate a glut. Ore
agencies concerned.
with 62 percent content delivered to Qingdao
Directorate of Mines and Geology issued
lost 2 percent to $76.46 a dry metric ton, the
renewal order to 13 mining leases under
lowest price since September 2009, according
section 8 (3) of MMDR (Mines and Minerals
to data from Metal Bulletin Ltd. yesterday. The
[Development and Regulations]) Act, read with
drop extended two weeks of losses at the end of
24 (A) of mineral concession rule 1960 and rule
October and deepened a bear market.
63 (A) (C) and section 20 of MMDR act.
The raw material lost 43 percent this year,
The individual orders of renewal were issued
underperforming all 22 members of the
to V M Salgaocar & Bros Pvt Ltd, Sociedade de
Bloomberg Commodity Index, as producers
Fomento Industrial Pvt Ltd, Chowgule & Co Pvt
including BHP Billiton Ltd. expanded supplies
and spurred the surplus. Some mills in the
largest buyer were ordered to suspend or reduce
output before the summit of leaders at the AsiaPacific Economic Cooperation forum in Beijing
as the authorities sought to improve local air
quality. A recovery in prices may take as long as
18 months, according to Anglo American Plc.
6
Thursday 06, November 2014
Daily
Ltd, Rajaram Bandekar Pvt Ltd, G N Agarwal
for allocating natural resources and minerals.
Mining Pvt Ltd, Smt Geetabala Manohar Naik
Jaitley indicated that after coal and spectrum
Parulekar Mines, Smt Kunda Gharse Mines, Sesa
other natural resources would be allocated
Goa and M/s Letho Ferro.
in a fair and transparent manner through the
Of the 13 renewals, Salgaocar company
auction route as the government moves to end
has four mining leases renewed, Fomento two,
discretion and crony capitalism. He cited the
while others got renewed one lease each.
measures undertaken by the government to
Director of Mines and Geology Prasanna
clean up the mess in the coal mines sector. The
Acharya confirmed the move and said that
government has earlier said it would amend the
extraction (of iron ore) can start only after
MMDR act to allow auction of other minerals.
companies
Prez confers SCOPE awards on
SAIL, IOC among others
obtain
necessary
Environment
Clearance from Union Ministry of Environment
and Forest, Air and Water pollution Act clearance
from Goa State Pollution Control Board and
mining plan approval from Indian Bureau of
Mines.
The Supreme Court had lifted order of
mining suspension in April 2014 asking the
state government to form proper policy before
renewing the mining leases.
According to the order, the renewal orders
were based upon state's policy decision which
is in accordance with the MMDR Act and Indian
constitution and also as per orders of Supreme
Court and Goa bench of Bombay High Court.
The iron ore which is already extracted and
piled up at the mining leases continues to be
a property of the state government as per the
order of the apex court and government will
continue with its process of e-auctioning it.
The government has also made it mandatory
for the mining lease holders to pay 10 per cent
of the sale value for Goa Iron Ore Permanent
Fund, a coffer set up by the state.
Central public sector enterprises SAIL, HAL,
BPCL and IOC were among the PSUs conferred
with the SCOPE Meritorious Awards for 2012-13
by President Pranab Mukherjee on Wednesday.
Navratna Companies such as Engineers
India Ltd, National Buildings Construction
Corporation Ltd and Container Corporation
of India were also felicitated. The CPSEs which
were conferred awards have been selected for
performing well in various fields such corporate
governance and CSR among others.
Referring to Prime Minister Narendra Modi’s
Govt plans to auction all
minerals
Make in India campaign aimed at transforming
the country into a global manufacturing hub,
Finance minister Arun Jaitley said on
Mukherjee said, “I believe that our CPSEs have
Wednesday the government will unveil reforms
a vital role in making this dream a reality.” He
7
Daily
Thursday 06, November 2014
noted that green shoots of recovery were
are the other alleged applicants for the mining
already visible, with the economy growing at
lease.
5.7% in the first quarter.
JSL plea against granting
chromite mining lease to Tata
Steel dismissed by SC
Contrary to TSL, which manufacturers only
intermediate products like ferro chrome and
chrome concentrate for trading and doesn’t
consume the minerals for captive use, JSL’s need
for steady supply of minerals is essential to keep
the 1.6 MTPA integrated stainless steel plant
operational, JSL said. It said the plant requires
6,25,000 MTPA of chrome every year.
According to JSL, if no hearing is granted at
the second or subsequent renewals, then the
intent of the MMDR Act will be lost as it would
result in automatic renewal after every 20 years
even without objective consideration of the
criterion of interest of mineral development.
The Supreme Court on Wednesday dismissed
Jindal Stainless’ (JSL) appeal seeking to restrain
Highest bidder to pay 10% of
NPV upfront to govt on coal
block auctions
the Odisha government from granting third
The government has decided to auction
renewal of Tata Steel’s (TSL) mining lease till
74 coal blocks, on the basis of the amount of
2033 for chromite ore in the Jajpur district of
money a bidder is willing to pay the Centre for
the state.
every tonne of the fuel produced.
A bench headed by Chief Justice HL Dattu
The floor price for each tonne of coal, specific
while rejecting JSL’s plea observed: “Where is
to each block, will be calculated on the basis
the question of hearing a third party to consider
of their net present value (NPV) — the current
someone’s renewal… the renewal is between
valuation of future earnings from each coal
the authorites and TSL.”
block.
Senior counsel P Chidambaram argued that
The highest bidder needs to pay 10% of the
the Odisha government “appears to be acting in
total NPV for a block upfront to the government.
haste to grant a renewal of the mining lease to
The rest will be paid over the life of the block
TSL without considering and taking into account
depending on the volume of coal it is expected
the relevant factors so as to form a balanced,
to produce each year and the price the company
reasonable and unbiased opinion that would be
had quoted for each tonne.
in the interest of mineral development and also
in the interest of the society at large”.
The coal ministry had asked a public sector
unit to calculate NPVs for 32 blocks that have
Apart from JSL, Indian Metal & Ferro Alloys,
not started production. These blocks have stage
Ferro Alloys Corporation and Ballasore Alloys
1 and stage 2 environmental clearances from
8
Daily
Thursday 06, November 2014
the government. However, eventually, all blocks,
by evaluating total revenue the block will
including 37 producing blocks and another five
earn over its life by selling coal over the next
that are ready to produce will be auctioned
30 years, minus expenses it incurs, including
under the same model.
infrastructure cost and costs involved in moving
"We have been asked to submit the data for
the coal.
the non-producing 32 blocks to the government
This value will be discounted by an
by November 10. It is a mammoth task and
estimated inflation rate for the next 30 years,
all our officials are burning the midnight oil
and its present value will be arrived at. The NPV
to collate data and compile them," a senior
will then be divided by the volume of coal that
company executive stated.
the block is expected to produce in its life time
"We are in touch with the Coal Controller
and a per-tonne net present value of coal will
for collating data. The ministry has also asked
be arrived at. Ninety percent of the NPV of one
previous block owners to provide data."
tonne of coal will be the floor price for auction
The net present value will be arrived at
for each block.
9