VITAL INDUSTRY UPDATES – 31/03/2015

March 31, 2015 12:15 pm Published by

Copper spot prices up, but long-term demand growth may depend on India

As rapidly as flash floods inundated mines and blocked roads in Chile, the world’s largest copper mining country, copper prices spurted by about 10 per cent to breach the $6,000 a tonne levels on the LME (London Metals Exchange).

The recent torrential rains and power outage in parts of Chile have disrupted mining operations in the Atacama desert region which is home to over half of Chile’s copper mines and accounts for close to two-third of national production.

Chile accounts for close to 6 million tonnes of mined copper output annually, which is nearly a third of the global output. Disruption to communication lines has exacerbated the situation. According to experts, one week’s disruption would mean loss of 70,000 tonnes output.

On Thursday March 26, LME cash copper reached a recent high of $6,196/t before edging lower to $6,079/t on Friday close of trading. The metal was languishing at around $5,500-5,700 a tonne for several months for reasons like a stronger dollar and slowdown in Chinese industrial activity. Speculative capital went out of the market in anticipation of the unexciting demand. A year ago, the metal was trading at $6,500/t. With China moving away from an investment-driven to a consumer-led economy, consumption of metals is expected to slow. However, one sector where copper consumption will continue to remain robust is the power grid in which the Asian major continues to make huge investments.

Indeed, the world market is now looking closely at India for signs of a strong pick up in demand. Higher investments in power generation as envisaged in the recent Budget are seen as positive signals for an uptick in demand. Although for the present Indian consumption is way below that of China’s, in the next couple of years, demand growth is set to gather pace with policy emphasis and higher outlay for power generation.

Sluggish demand drags soya oil

Notwithstanding strong global cues, sluggish demand dragged soy oil in Indore mandis with soy refined on Monday here being quoted at Rs. 595-Rs 598 for 10 kg while soy solvent ruled at Rs. 570-Rs 575. Compared to last week, soy oil is down Rs. 5. Given March closing, trading sentiment as well as buying support in soy oil continue to remain poor and any fresh demand in soy oil is expected next month only, said Mr Sushil Agrawal, a local soybean broker talking to the Business Line.

With mandis remaining closed today due to March closure, soybean in private trading ruled steady at Rs. 3,200 amid negligible arrivals. Plant deliveries in soybean today rose marginally to Rs. 3,350-Rs 3,400. In futures however, soybean traded higher on strong global cues with its April and June contracts on the NCEDX today closing at Rs. 3,443 (up Rs. 61) and Rs. 3,465 a quintal (up Rs. 60) respectively.

Soy DOC gained marginally on improved domestic demand at Rs. 28,500- Rs. 29,000 a quintal on improved buying support.

BHEL bags Rs. 5,000-cr contract from Telangana power utility

BHEL’s scope of work in the project includes design, engineering, manufacture, supply, construction, erection, testing and commissioning of 4×270 MW thermal sets on EPC basis.

Power equipment manufacturer, Bharat Heavy Electricals Ltd (BHEL) has bagged an order worth over Rs. 5,000 crore from Telangana State Power Generation Corporation Ltd (TSGENCO).

This order comprises an EPC (Engineering, Procurement & Construction) order for setting up a 4×270 MW thermal power plant in the state. Earlier, in December 2014, TSGENCO had placed an order with BHEL to set up Telangana’s first Supercritical Thermal Power Plant of 800 MW rating, also on EPC basis at Kothagudem.

The current order envisages setting up a power plant at Manuguru in Khammam district of Telangana. The project is targeted to be commissioned in 24 months on fast track basis with both TSGENCO and BHEL setting up teams to expedite clearances and execution of the project.

TSGENCO has also entered into an MoU (Memorandum of Understanding) with BHEL for construction of new thermal power plants totalling 6,000 MW in the State. All these power plants are expected to commence generation in the next three years to meet the State’s increasing demand for power. With the new order, 1880 MW has already been awarded to BHEL.

To overcome the current uncertainty of coal supply, BHEL will use its in-house developed fuel flexible boiler in the proposed power plants. This boiler is capable of firing the entire range, from a 100 per cent Indian to a 100 per cent imported mix of coal. It is anticipated that the use of this boiler will provide security against variation in design coal and the coal actually available during operation, thereby, offering operational flexibility for uninterrupted generation.

The key equipment for the contract will be manufactured at the company’s Trichy, Hyderabad, Haridwar, Bhopal, Ranipet, Bangalore and Jhansi plants, while the company’s Power Sector – Western Region will be responsible for civil works and erection/ commissioning of the equipment.

 

 Bhushan Steel rallies on plans to acquire Orissa Sponge Iron

Bhushan Steel Ltd rallied as much as 10.09 per cent in trade on Tuesday, after the company said that it is in advance discussions with promoters of Orissa Sponge Iron & Steel Ltd (OSISL) and Monnet Group to acquire the company and secure raw material for their ailing Odhisa plant.

At 09:35 a.m.; Bhushan Steel was trading 8 per cent higher at Rs 66.90. It hit a low of Rs 62.50 and a high of Rs 68.20 in trade today.

Bhushan Steel Limited (BSL) plans to acquire a controlling 59 per cent stake in OSISL from its promoters, a Mohanty family and Monnet Group, said multiple sources directly involved, ET reported.

Little known OSISL has been a takeover target for long for its iron ore reserves.

The promoters own 29.05 per cent of the company which includes 5 per cent held by IPICOL, Odisha government’s industrial development agency.

Monnet Ispat & Energy has 35.17 per cent shareholding. Bhushan Energy Limited – Bhushan Group’s power arm also owns 13.17 per cent, as per the latest figures available.

 

 NMDC commences trial production of new iron ore deposit in Chhattisgarh

NMDC, one of the country’s largest mining companies, has said it has started trial production of its new Project Bailadila Iron Ore Deposit 11B.

The iron ore project, built at an investment of Rs 600 crore, will have an annual production capacity of seven million tonne. Located in Bailadila region of Dantewada in mineral-rich Chhattisgarh, the project which commenced trial runs last Sunday ( March 29, 2015) will go a long way towards meeting NMDC’s commitments towards iron ore needs of domestic steel producers

The trial run began in the presence of functional directors and officials of NMDC. On the occasion, Narendra Kothari, chairman and managing director of NMDCBSE 1.39 % Limited said: “This is a milestone in fulfilling NMDC’s dream to produce more than 100 million tonnes of iron ore and help in achieving the nation’s target of producing 300 million tonnes of steel”.

The new project has some unique features according to NMDC. It has a 3.5 km long single flight regenerative downhill belt conveying system with horizontal and vertical curves for its seven million tonne per annum production capacity.

The 11B project also features a 3,000 TPH capacity gyratory crusher and 1400 TPH capacity cone crusher.

 

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This post was written by Atlantic Admin