Delayed monsoon lifts soyabean
Cashing in on continued delay in monsoon, speculators have pushed up soyabean prices in mandis across Madhya Pradesh despite slack demand in soya oil. In the past one week, soyabean prices in Indore mandis have almost gone up by ₹100 to ₹3,350-3,450 a quintal amid arrival of 55,000 bags. Delay in rains has also prompted farmers and stockists hold up soyabean stock with them, leading to rise in its prices. Plant deliveries were quoted lower at ₹3,450-3,460 on sluggish demand in soya oil. Soyameal also declined to ₹30,000 a quintal (down ₹1,000 from last week) on weak demand. Soya oil dipped with soya refined being quoted at ₹600-602, while soya solvent declined to ₹575-580 for 10 kg.
China’s faltering economy may hit Indian metals industry
Adverse economic developments in China, which accounts for 40 per cent consumption of major metals globally, will negatively impact the metals industry in India, says a rating agency.
“Adverse economic developments in China may have a directionally negative impact on the Indian metals industry as well as on sectors with an export focus,” India Ratings and Research (Ind-Ra) said in a statement.
Given the soft demand scenario in China, base metals prices declined in the range of 2-21 per cent in the first six months of 2015, said the domestic arm of global credit rating agency Fitch.
On an year-to-date basis, Chinese domestic hot roll coiled steel prices have declined by 21 per cent, London Metal Exchange (LME) nickel prices by about 12 per cent, LME copper metal prices by 9 per cent and China alumina prices by about 10 per cent.
In the last one month, iron ore prices have fallen by 20 per cent, Shanghai steel prices by 16.4 per cent, zinc prices by 7 per cent, copper prices by 5.6 per cent and aluminium prices by 2.9 per cent, it said.
“The Indian non-ferrous base metal industry is somewhat oligopolistic and commands a strong physical premium. In the event of a sharp fall in metal prices as well as in metal import from Chinese players, the physical premium is likely to fall, impacting industry margins,” it has predicted.
If the metal prices do not recover in the short term, the industry may incur an inventory loss and a 2-5 per cent fall in operating profits, it said.
On steel sector in India, Ind-Ra said that imports from China grew 18.4 per cent y-o-y in 2014-15 and iron & steel imports rose the most among the top 10 imports from China.
“While the government increased import duty last month with a lag, it may not be sufficient to increase the competitiveness of Indian steel manufacturers,” it has warned.
Indian manufacturers are struggling with low capacity utilisation. With a lukewarm domestic demand scenario, the fall in commodity prices is unlikely to benefit the margins of manufacturing units in the short term.
They may pass on the benefit to customers in an effort to garner higher volumes. Besides, Indian manufacturers may face increased competitive pressure from Chinese manufacturers, it said.
Kerala govt hands over LoI to APSEZ for developing Vizhinjam Port
The Kerala government has handed over a letter of intent (LoI) to Adani Ports and Special Economic Zone Ltd (APSEZ), announcing its decision to appoint the company to develop a new port at Vizhinjam, it is learnt.
This was confirmed to the media by the Kerala Chief Minister, Mr Oommen Chandy, on Monday. He stressed that there was no controversy associated with the project.
A final agreement would be signed in 45 days, sources said.
An order asking the Adani Group to start work on the project will soon be issued and it is expected to reply within seven days of receiving the order, sources said.
Vizhinjam is to be developed as a container transhipment facility.
Industrial output growth shows moderate gain of 2.7 pc in May
Industrial output growth slowed in May and rose by just 2.7 per cent as against 3.4 per cent in April, and 5.6 per cent expansion in the year-ago period due to sluggish manufacturing sector expansion following interest rates cuts, sources said.
The manufacturing sector has a weightage of 75 per cent in the Index of Industrial Production (IIP).
However, mining and electricity sectors displayed healthy growth, while the consumer goods sector remained sluggish when the consumer durables segment tapered by 3.9 per cent in May as compared to an expansion of 3.6 per cent in May 2014. Consumer goods dropped by 1.6 per cent year-on-year in May 2015 as against a growth of 4.6 per cent in May 2014.
Reacting to the poor growth, Mr Chandrajit Banerjee, Director-General of Confederation of Indian Industry (CII), said, “Industry growth, which clocked a growth of 2.7 per cent during May on account of the slow growth of the mining and manufacturing sectors, is below potential.”
“Nevertheless, we believe that industrial growth is on the path of recovery as is evident by strong core sector growth in May, the fastest in six months, as many of the stalled projects have started to move,” he added.
This post was written by Atlantic Admin