reTeam Tracker

A Publication of OreTeam Research

1 J u ly 2011

TM

Vol - 104 OreTeam Price Index FOB India (Supramax Tonnage) 63.5/63% Fe Fines: Vizag:- $159/dmt 58% Fe Fines:Vizag:- $126/dmt

Is it hard to take decisions in trade today? Turn to Page 2 to let SentiMeter assist U!

Bargain Hunting Phase Coming Up, Physical Market Remains Silent

Iron ore market is calm and silent with very little activity visible from the Indian side. Indian traders are certainly struggling to push their cargoes as a deadlock situation has arisen in the markets. Indian sellers are not willing to pull down their offers and mills are not in a position to purchase at current levels where as some floating interest has been visible from the mills side trying to bargain with Indian suppliers to discount cargoes on referred prices.

CFR China The price war is on and the ultimate winner would be decided as soon as steel mills run out 63/62% Fe Fines: Tianjin:- US$170-171/dmt
of inventory and make a final decision as the ball stands in their court. Definitely, the momentum in the market/trade has cut down with signs of further weakening but Chinese mills 59/58% Fe Fines: Jintang:- US$146-147/dmt can not sit quietly for a long time, they have to start their purchasing so keep the production running or else cut down production and remain in the same state. Recent Transactions On the Indian side, the railways busy season surcharge of 7% on iron ore exports expired Fe % $/DMT (CFR) yesterday but the traders feel that it wouldnt make a big difference as their costs have al63.5/63 177.5 S China ready gone up due to the hike in fuel charges and increase in wages for the labors. A well KIOCL Pellets 170.48 (FOB) known trader had a firm view that for the Indian iron ore industry participants, the incurred Newman (63%) 174 N China costs have only one direction to follow and that is upward. There will never be a chance or a reason when the participants will be able to enjoy any discounts in the incurred costs. OreTeam Freight Index Talking on inflation as a reason for the rise in the incurred costs another miner from Orissa said that inflation today has risen to levels higher than what RBI had expected, then how can a small trader remain unaffected. Few traders from east coast also highlighted issues like increase in electricity tariffs, road taxes and obtaining permits have become difficult now. Moreover intermittent heavy rains in the area have already caused enough damage in the last few days. Few delays were also seen at the Goa port due to electricity failure but the latest reports say that the supply has been restored and shipments were going on at moderate pace.
Grade Price Port Quantity MT 50000 50+10% 100000+

Super Handymax (India-China) India E1.Coast-China: $14-15/wmt India W 2.Coast-China: $15-15.5/wmt (Haldia+Paradip): $15/wmt Gearless Panamax (India-China)
India E1.Coast-China: $12-13/wmt

India W 2.Coast-China: $13-14/wmt (Haldia+Paradip): $13/wmt

1: Vizag, 2:Goa; An estimated demurrage of USD1-2 per ton to be added for WCI loading.

OreTeam Price Index & Freight Index Graph

Baltic Indices
Index BDI BCI BPI BSI C3 C5
($1=Rs45.00 & $1=6.6 CNY)

Points / Rate

1413 Points 2036 Points 1604 Points 1308 Points USD 20.773 USD 8.238

-0.49 -0.59 -1.78 -0.38 -0.30 -1.84

Raw Material & Steel Prices at Glance, US$/Ton

FOB
Australia Russia Europe 268-270 430-435 445-448

(all prices in USD/t, unless specified) (^Tangshan, *Shanghai)

Commodity
Coking Coal (HCC 64 Mid Vol) Coking Coke Scrap HMS (80:20) DRI (Sponge Iron)

CFR India
289-291 465-470 475-478

Steel Prices
Billet Wire Rods HRC Pig Iron

India (MGG)
702-703 816-818 888-890 565-567

China (EXW)
634-636^ 710-712* 726-727* 565-567^

INR 20,700-800 EXW Raipur

Corporate Office: OreTeam Exim Private Limited, Newbridge, 1st Floor, Tower B, INOX Towers, Film City, Plot No.17,Sector-16A, Noida-201301. India. Delhi NCR. For more Info - contact Prakash (prakash@oreteam.com) & For Subscriptions contact- Monica (subscription@oreteam.com) Copyright- OreTeam, India.

Page 1

reTeam Tracker
A Publication of OreTeam Research
OreTeam Indian Iron Ore Market SentiMeter
OreTeam introduces its new tool SentiMeter for your quick & correct decision making when dealing with Indian iron ore. SentiMeter would assess the market conditions and give you an idea of the market sentiment prevailing today - whether the buyers are interested in buying, are good number of offers available in the market today and much more. SentiMeter will assist you in every direction whether you are trader, miner, seller or a buyer. It will be available shortly on www.oreteam.com to help you build your own market perception based on the prevailing sentiment. Its the sentiment that has to be correct while trading

TM

Vol - 104
Reference FOB Prices of Indian Fe Fines
Grade
63/62% 62/61% 61/60% 59/58%

Port
Vizag Paradip ECI (Avg) Vizag

$/t
151-153 144-146 137-138 126-127

Iron Ore Lumps 55/54% 50/50% WCI*(Avg) WCI*(Avg) 93-95 59-61

Prices for Superhandy Tonnage, *Berth Loading

China Market Price Of Indian Iron Ore

Grade 63.5% 63.5% 62% 62% 61% 61% 58% Port Jingtang Tianjin Jingtang Rizhao Tianjin Rizhao Tianjin Jingtang RMB Price 1290 1300 1200 1195 1160 1145 1010 1000 USD/t 177.50 179.00 165.00 164.00 159.00 157.00 138.00 136.50

1 July 2011

58%

SentiMeter reads the current sentiment of the market nearing a Bargain Hunting phase Imported Iron Ore Prices into China Country Of CFR China which is just few points above temporary pause mainly due to the following reasons Grade
Origin USD/t

Chinese Steel markets are in a lull with domestic demand slowing down. Construction
activity has also slowed down and steel export quantities are following a descent. Data reveals that even the sales prices of newly constructed and second hand residential buildings has gone down in many cities across the country.

61.5% 61.5% 64.5% 63.5% 61/60% 62/61% 64.5%

Australia Australia (lumps) Brazil Brazil (Crude) Iran (Contract) Vietnam Mexico (Contract)

170.50 183.00 174.50 173.50 150-152 152-154 146-148

Chinese buyers have to contend with tight monetary flow or capital in hand along with
the fear of another interest rate hike by the banks in near future which is not allowing them to purchase Indian high priced cargoes. Although, some signs of interest are coming up now with mills trying to acquire at discounts to the current reference prices.

Steel prices in China have fallen in the last few days and steel traders/dealers are still Indian Domestic Iron Ore Prices
not active in the market which was preventing the mills to purchase raw material. Mills are awaiting for the market to bottom out both in terms of iron ore and steel. Last 2-3 days the prices have somehow stabilized.
Grade
62% Lumps 64% Lumps

Quality
5-18 mm 10-30 mm Blue Dust Pellets Fines

Rs/t
7300-7500 7200-7400 2100-2200 7800-8000 2200-2500

Huge inventory piled up at various Chinese ports giving the mills an opportunity to purchase directly from the ports instead from Indian traders at a later stage.

62-63% 64-65% 63%

Further rise in freight rates in India not allowing the Indian traders to discount their offers further. Number of offers from India also considerably cut down.

All Prices Orissa Based (Average) :: Weekly Change

Australia & Brazil sweeping the markets with 1000s of tons of spot supplies at competi- CCCMC Ref Price for Indian Iron Ore
tive rates as compared to equivalent Indian grades.
For recent transactions, FOB prices from major Indian ports, research & market analysis, complete news articles, statistics on Indian and global commodities, sms & email alerts, instant quotes on prevailing prices & transactions and much more... log onto www.oreteam.com

Date 27.06.2011 27.06.2011

Price Base
FOB ($/t) CIF ($/t)

Range 158-159 174-175

Corporate Office: OreTeam Exim Private Limited, Newbridge, 1st Floor, Tower B, INOX Towers, Film City, Plot No.17,Sector-16A, Noida-201301. India. Delhi NCR. For more Info - contact Prakash (prakash@oreteam.com) & For Subscriptions contact- Monica (subscription@oreteam.com) Copyright- OreTeam, India. Page 2

reTeam Tracker
A Publication of OreTeam Research
Lack of demand killing upward movement in Indian steel {Rebar & HRC}
Indian steel market is currently sitting steady with no hopes of any upward movement in the near future. The slacking demand from the domestic construction sector in the midst of monsoons is certainly haunting the steel mills. The increase in the interest rates by the banks is another worrying factor for the demand in the reality sector. Somewhere, we can compare India and China to be on similar lines in terms of steel production, demand and consumption when it comes to discussing about the prevailing problems and the reasons for movement whether upwards or downwards. Indian steel traders and mills who had increased their export offers for HRC (Hot Rolled Coils) in Feb 2011 are currently facing a tough time as the same offers have sliced by over USD 120 per ton in mere 4 months. The gap between the import and export has again shrunk to a level where traders are not able to make enough profits and the demand from the western countries has also reduced considerably. Moving away from HRC even rebar demand in the domestic market has just caused a marginal increase in steel prices since Feb 2011 reflecting the slowing demand and growth. The prices of commodities were the main cause of the hike during that time but since then there has been a change in the raw material prices which hasnt yet reflected in the steel prices. Hopefully, in Q311 we should see either same levels or some correction in the steel prices. Demand may not come back till the end of monsoons in India.

TM

Vol - 104
SGX Daily Settlement Prices 30 June 2011 (62% Fe Fines)
Contract Month
Jun11 Jul11 Aug11 Sep11 Oct11 Nov11 Dec11

DSP (USD)
170.88 164.63 163.31 162.75 162.25 161.69 161.19

Daily Change
-0.37 -0.87 -0.94 -0.25 -0.50 -0.31 -0.31

% Change
-0.22% -0.53% -0.57% -0.15% -0.31% -0.19% -0.19%
Source: SGX

SGX Swap Curve

SHFE Rebar on 30 June 2011

Month
Settlement Price (RMB)

Traded Volume (lots)

Jul11 Aug11 Sep11 Oct11 Indian Domestic Rebar Prices (Rs per ton) Indian HRC Export vs Import Price Graph (USD per ton) Total Traded

5232 4959 4853 4733

0.96 -0.24 -0.06 -0.23

174 8 16 324670 339438

-40.00 -92.31 -73.33 -18.30 -18.92

OreTeam Poll Results :: Poll 22 (17-29 June 2011)

OreTeam last poll results for the question - Will the liquidity tightening in China pull down the iron ore prices below USD175/t CFR for 63.5/63% Fe fines before 1-Jul-2011? are shown in the graph on the right side. Although, the poll results predicted the market to witness CFR prices below USD 175/t as on date, the situation seems to be drifting slowly than anticipated by many participants. Thank you & please cast your vote in our next poll.

LME Billet Price on 30 June 2011

Contract Cash Buyer Cash Buyer & Seller 3 Months Buyer 3 Months Seller Price ($) 575 585 565 571 Change %

0.70 1.74 1.80 1.96

Source: LME

Multi Commodity Exchange of India Limited is proposing, subject to market conditions and other considerations, a public offer of equity shares by way of an offer for sale and has filed a Draft Red Herring Prospectus ("DRHP") with the SEBI. The DRHP is available on the websites of SEBI at www.sebi.gov.in and the book running lead managers at www.edelcap.com, http://www.online.citibank.co.in/rhtm/citigroupglobalscreen1.htm and www.morganstanley.com/indiaofferdocuments. Investors should note that investment in equity shares involves a high degree of risk and for details in relation to risk factors, please see the section titled "Risk Factors" in the DRHP. This advertisement may not be published or distributed in the U.S., Canada or Japan and is not an offer or solicitation of an offer for sale of securities in the U.S. These securities have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the U.S. absent registration or an exemption from registration under such act.

Corporate Office: OreTeam Exim Private Limited, Newbridge, 1st Floor, Tower B, INOX Towers, Film City, Plot No.17,Sector-16A, Noida-201301. India. Delhi NCR. For more Info - contact Prakash (prakash@oreteam.com) & For Subscriptions contact- Monica (subscription@oreteam.com) Copyright- OreTeam, India. Page 3

reTeam Tracker
A Publication of OreTeam Research
Chinas PMI projects the impact of tightening liquidity

TM

Vol - 104
Indian Domestic Rebar Prices
Size
8-10mm 10-12mm 12-16mm

China today unveiled another set of numbers proving their monetary measures have actually caused some damage to the domestic manufacturing industry which includes steel in a large proportion. China's official version of the Purchasing Managers' Index which monitors the economic

Rs/t (DELHI) (MRP with Tax)

42,400 - 42,600 41,900 - 42,100 40,900 - 41,100 41,200 - 41,400

health of the countrys manufacturing sector based on five major indicators namely new Size Rs/t (BRANDED AVERAGE) orders, inventory levels, production, supplier deliveries and the employment environment, 8mm 39,000 - 43,500 slipped to 50.9 in June from 52.0 in May, down by 1.1 points. New export orders fell to 50.5 10mm 38,300 - 42,800 from 51.1 in May. This fall is a result of Chinas aggressive monetary tightening policy 12mm 37,700 - 42,100 stance which is actually signaling its fierce struggle to fight inflation and in turn is denting 16-25mm 37,500 - 42,300 the sectors sustainability in terms of long term growth. The market was expecting the figure Indian Export/Import Prices - Weekly to be around 51.3. One good point to be noted here is that as compared to the fall in June Product USD/ton 2010 of -3.34%, June 2011 has recorded only -2.12%. Probably this fall could be regarded Import HRC 710-720 as a mix effect of seasonal and tightening measures.
16-25mm Export Export Import HRC Billet CRC 735-745 665-675 810-820

HRC: Hot Rolled Coil, CRC: Cold Rolled Coil

China Domestic & Export Rebar Prices

Size
12mm 12mm Chinas PMI (LHS) vs Change in PMI month on month basis (RHS) Export

Place
Shanghai Nanjing Average

RMB/ton
4,800 5,090 4,520

For our readers who are new to PMI, a PMI of more than 50 represents expansion of the manufacturing sector, compared to the previous month. A reading under 50 represents a contraction, while a reading at 50 indicates no change . Highlights

China Domestic Iron Ore Prices (Dry)

Grade
65% 63%

Province
Anhui Hubei

RMB/t
1370 1250

China Domestic Iron Ore Prices (Wet)

Grade
66% 65% 65%

Farmers agitation against Posco in Karnataka politically motivated Orissa Govt developing e-governance in mining sector. Orissa HC rejects CBI probe into coal scam. On similar lines of China, The European Central Bank signaled it would raise interest rates again next week.

Province
Tangshan Shanxi Benxi

RMB/t
1030 960 940

China Market Price Of Iron Ore Pellets

Grade
63% 62% 62%

Factory activity in the U.S. Midwest accelerated in June, giving hopes of a good pick
up in economic growth Q311

Province
Shandong Anhui Hebei

RMB/t
1580 1540 1630

The Greek parliament approved detailed austerity & privatization bills on Thursday to
secure emergency funds and avert imminent bankruptcy.
(log onto www.oreteam.com to read the complete article as a trial user. Our News section is free for all users) Please Note :: Some websites are using our name or look-alike names to market themselves. We would like to inform all are readers and clients that OreTeam has no other publication division except OreTeam Research in India or China. All information published on www.oreteam.com, OreTeam Research reports and OreTeam News is solely through OreTeam Exim Pvt Ltd, with Corporate Office located in Noida (NCR) & China Office in Shanghai. Also, OreTeam does not have any MoU or partnership with any commodity portals for data sharing.

Average Daily Charter Rates

Category
Capesize Panamax Superhandy

Rate ($/day)
12,732 12,823 13,682

Change %
0.54 -1.84 -0.34

Source: Baltic Dry Index

Corporate Office: OreTeam Exim Private Limited, Newbridge, 1st Floor, Tower B, INOX Towers, Film City, Plot No.17,Sector-16A, Noida-201301. India. Delhi NCR. For more Info - contact Prakash (prakash@oreteam.com) & For Subscriptions contact- Monica (subscription@oreteam.com) Copyright- OreTeam, India. Page 4