Weekly Update Sector: Steel Date: 12- 18 July 2011

Weekly Highlights
Ingot

Ingot Prices
33,000 32,250 31,500 Chennai Hyderabad Mandi Gobindgarh Mumbai Raipur

Prices/MT

30,750 30,000 29,250 28,500 27,750 27,000

Ingot Prices as on 16-July Place 16-Jul-11 11-Jul-11 w-o-w (%) m-o-m(%) Alang 29,400 29,900 -1.67 -2.33 Chennai 29,300 29,500 -0.68 1.03 Durgapur* 32,100 31,800 0.94 1.26 Ghaziabad 30,600 30,700 -0.33 -1.29 Hyderabad 29,200 28,700 1.74 3.55 Jamshedpur* 31,100 31,250 -0.48 -1.89 Mandi Gobindgarh 31,150 30,900 0.81 -0.80 Mumbai 29,600 28,850 2.60 0.00 Muzaffarnagar 30,500 30,600 -0.33 -1.29 Indore 29,400 28,900 1.73 -2.97 Raipur 29,100 28,900 0.69 1.04 Rigarh* 31,500 31,500 0.00 0.64 Rourkela* 31,500 31,550 -0.16 0.32 NCDEX - JULY 30,290 30,400 -0.36 -2.26 Basic prices ED & taxes extra * All inclusive prices

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How it was Steel Ingot gains ground on short-supply of short-supply of raw material & power shortages Market lacks buyers confidence and trading volumes continued to be low 4-day power cut at Mandi Gobindgarh subdued the trading activities Ingot in Ghaziabad, which was trading at premium to Mandi Gobindgarh by Rs.300-600/MT from the last 2 quarters, is currently trading at discount of Rs.300-400/MT, major reasons being availability of skilled labor & ongoing land accusation dispute in the NCR region Severe shortage of iron ore in Goa lead to closure of 2 plants in the state and most of the other plants reduced their production levels. Steel Long on NCDEX remained volatile as expiry July contract is due on 20th July.

How it looks Looking at the current situation of tight supply of raw material & power shortages, Ingot prices in the spot market is likely to remain firm in the present week. Short- supply of sponge iron is making it dearer day by day. Buyers are finding it difficult to procure sponge iron at these levels as demand for finished products normally remains weak in the monsoon period. Market participants are now of the point of view that even though the problems in the iron ore & sponge iron persists, Ingot manufacturers would not go beyond a certain point to procure sponge, and they believe that prices of DRI will consolidate at these levels or may even come down in coming days.

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Scrap

Scrap Prices
27,500 26,500 Hyderabad Jamshedpur* Mandi Gobindgarh* Mumbai Raipur*

Prices/MT

25,500 24,500 23,500 22,500 21,500

HMS Scrap Prices as on 18-July Place 18-Jul-11 11-Jul-11 w-o-w (%) m-o-m(%) Alang 23,000 22,900 0.44 -1.29 Chennai* 24,500 24,500 0.00 2.08 Goa 22,550 22,000 2.50 0.22 24,000 24,000 0.00 0.00 Hyderabad 23,000 23,000 0.00 -4.96 Indore 25,100 24,000 4.58 0.40 Jamshedpur* Mandi Gobindgarh* 26,550 26,600 -0.19 -0.19 25,500 25,500 0.00 1.19 Raipur* Basic prices ED & taxes extra * All inclusive prices

How it was Domestic market for Scrap showed a mixed trend last week. Prices moved in between Rs 100-1000/MT at most of the mandis like Jamshedpur, Goa, Raipur due to Scarcity of Iron Ore and Sponge Iron. While prices either went down or remained unchanged at mandis like Chennai, Hyderabad & Mandi Gobindgarh due to following reasons:

Lower buying interest from primary manufacturers due to monsoon Lowering down of production capacities by most of the Induction furnaces 3 www.steelmint.com

Availability of Imported Scrap at cheaper rates

In the Imported scrap market, deals for Imported Scrap were concluded last week at $465-468/MT CFR Nhava Sheva; i.e. down by $10-15 from the previous week due to a global slowdown in Scrap market. Whereas, Imported Scrap for Turkey was held at the same level seen last week at $470/MT CFR.

How it looks So far as the domestic market for Scrap is concerned, until availability of sponge iron improves, scrap prices will remain firm. However, prices may not go up a lot from the current levels as most of the Induction furnaces are operating at lower capacities. In the International market, prices are expected to fall further to $450-452 /MT CFR Nhava Sheva for HMS 1&2 (80:20) due to tight liquidity and slowing down of buying activities. However, the surge of buying activities that often occurs prior to Ramzaan is yet to occur.

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TMT

Re-bar prices
35500 34500 Chennai

Prices/MT

33500 32500

Hyderabad

Mumbai 31500 30500 Raipur

TMT (12MM) Prices as on 18 July Place 18-Jul-11 11-Jul-11 w-o-w (%) m-o-m(%) Chennai 33,500 34,000 -1.47 -1.47 Durgapur* 36,600 36,600 0.00 -1.61 Goa 34,000 33,500 1.49 -0.58 Hyderabad 33,000 32,000 3.13 3.13 Indore 34,400 34,000 1.18 -3.91 Jalna 32,700 31,700 3.15 -1.80 Jamshedpur* 37,000 37,000 0.00 -2.63 Mumbai 33,200 32,500 2.15 -1.78 Nagpur 33,700 33,700 0.00 -1.75 Raipur 31,200 31,200 0.00 -3.11 Basic prices ED & taxes extra * All inclusive prices

How it was Rise in prices of raw material & semi-finished goods pushed up Re-bar prices at mandis in West & South The seasonal slowdown has subdued the Construction activities and demand for Steel Re-bar is low Production levels have also reduced as nobody wants to take the risk of stocking up goods when its offtake is low

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How it looks? The market for finished good is likely to remain in range. Prices will not correct further as the cost of production has gone up but the prices of finished goods has not gone up in the same proportion. If one has to take a call on the direction of prices, it looks like that the prices will remain flat to positive during the course of the week, as the current margins are unsustainable. Or there is an outside chance that the price of raw materials will fall during the week.

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ABOUT US: SteelMint Info Services is an ISO 9001:2008 certified Steel Research Company which provides current prices, news & logistical updates on Steel raw materials (domestic and international), semi-finished and finished products covering almost all major mandis' in India along with Steel Long on NCDEX. It helps people take informed decisions, who are in the business of Steel. The organizations motive is to provide current prices, market view, steel news and demand - supply situations at various locations across country; of iron ore, semi-finished and finished Steel products. The idea is to keep people aware of what is happening in the world of Steel. Services offered are: Steel Prices Steel Reports Iron ore prices and related updates /sentiments India /China Shipping and Logistics Reports (Freight, Vessel line up, Railway freight) Stock levels at different ports of India

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