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M o n d ay 0 2 , Fe b r ua r y 2015
News &
Report Analysis
Currency Market
Precious Metal
Base Metal
Energy Market
 Govt to build 4 steel plants at an
investment of Rs 1,50,000 cr
 Usha Martin reports Rs. 44 cr
loss in Oct-Dec qtr
 RINL proposes to market steel
products from NMDC plant
 SAIL to raise capacity of
RSP: Narendra Singh Tomar
 NMDC cuts iron ore prices by
5-10% for Feb
Daily
2
Monday 02, February 2015
US equity markets declined by 1.3% on
"The combination of softer U.S. data, the
Friday, following the lower than expected Q4
disappointing China PMI and the fact that
GDP data, though overall cues about broader
Greece is now very much on a collision course
economy as depicted from consumer spending
with the rest of Europe over its budget should
front stayed positive. Asian shares languished on
continue to weigh on risk sentiment in Asia,"
Monday, after the latest gauge of China's factory
Westpac Global Strategy Group said in a note to
sector activity raised concerns about the world's
clients.
second-largest economy. MSCI's broadest index
Currency Market
about 0.1 percent, while Japan's Nikkei stock
17:00
16:00
15:00
49.7 on a seasonally adjusted basis, just below
14:00
Managers' Index (PMI) for January came in at
13:00
includes the final HSBC/Markit Purchasing
12:00
Among the regional economy update
11:00
Composite Index lost 1.2 percent.
USD/INR - 30/01/15
61.70
61.74
61.78
61.82
61.86
61.90
61.94
61.98
62.02
9:00
average dropped 0.6 percent. The Shanghai
10:00
of Asia-Pacific shares outside Japan was down
the 50.0 level that separates growth from
contraction. The figure released on Monday
USD/INR Overnight VAR
Data releases today
0.3504
Forecast
Previous
was slightly lower than a preliminary "flash"
USD Personal Spending m/m
-0.1%
0.6%
reading of 49.8. The official PMI released on
USD Final Manufacturing PMI
54.1
53.7
Source : Mecklai Financial
Sunday fell to 49.8 in January, a low last seen in
September 2012 and below the 50-point level.
The weaker China PMI is likely to reinforce
The unexpected contraction was the first in
the market's current negative bias towards
nearly 2-1/2 years, and firms see more gloom
commodity
ahead. The latest batch of downbeat data added
closely to the China growth story. Adding to
to the debate over how and whether Beijing
the downbeat mix, Wall Street is increasingly
will accelerate its policy easing, with most bank
worried about corporate earnings and Greece is
economists calling for a combination of rate
yet to persuade a sceptical Europe to accept a
cuts and increased liquidity.
new debt agreement.
currencies
and
those
linked
Global investors remained cautious with
The risk-averse mood initially weighed on
Greece development, where the country's new
the dollar, which dropped to a two-week low
leftist government began its drive to persuade a
of 116.64, as investors preferred the perennial
skeptical Europe to accept a new debt agreement
safe-haven appeal of the Japanese currency. But
while it starts to roll back on austerity measures
the greenback clawed back early losses and was
imposed under its existing bailout agreement.
last up 0.2 percent at 117.79. The euro also took
It seeks to end the existing arrangement with
back some lost ground after touching a one-
the European Union, the European Central Bank
week low of 130.11, and was last up 0.4 percent
and International Monetary Fund "troika" when
at 133.13 yen. Against the dollar, the euro edged
its aid deadline expires on Feb. 28.
up 0.2 percent to $1.1305.
Daily
6 mth
LIBOR
3
Monday 02, February 2015
Major
Currencies
Today’s
Crosses
Spot
Cash
v/s INR
0.36
USD / INR
-
ATM Options (put/call)
0.15
Forward Rates v/s INR (Export/ Import)
February
March
April
July
October
January
61.92/ 93
61.89/ 91
62.22/ 25
62.63/ 66
63.05/ 09
64.14/ 18
65.19/ 23
66.13/ 17
-
-
-
0.00/0.49
0.00/0.72
0.00/0.90
0.00/1.33
0.00/1.66
0.00/1.95
EUR / USD
1.1308
70.02/ 03
69.99/ 01
70.38/ 41
70.85/ 89
71.36/ 40
72.67/ 72
73.99/ 03
75.21/ 24
0.14
USD / JPY(100)
117.76
52.58/ 59
52.55/ 57
52.85/ 88
53.22/ 25
53.60/ 63
54.60/ 63
55.58/ 62
56.51/ 56
0.68
GBP / USD
1.5078
93.36/ 38
93.31/ 35
93.82/ 74
94.39/ 26
95.01/ 71
96.60/ 95
98.14/ 01
99.55/ 92
-0.76
USD / CHF
0.9252
66.89/ 94
66.86/ 92
67.24/ 28
67.87/ 89
68.43/ 45
69.91/ 92
71.41/ 34
72.75/ 70
3.06
AUD / USD
0.7771
48.12/ 13
48.10/ 11
48.36/ 38
48.67/ 69
49.00/ 03
49.85/ 88
50.66/ 70
51.39/ 43
Source : Mecklai Financial
The yen firmed broadly early on Monday,
global economy preserved bullion's safe-haven
while commodity currencies softened as worries
draw. Bullion is likely to maintain its safe-haven
about the health of the Chinese economy dealt
appeal amid renewed concerns over the global
a fresh blow to sentiment already unsettled by
economy with data showing China's factory
a selloff on Wall Street. The dollar slid to a two-
sector shrinking for the first time since 2012.
week low of 116.64 yen, down from around
Weekend data showed China's factory sector
117.52 late in New York on Friday. It has since
shrinking in January for the first time since 2012.
steadied at 117.17. The euro reached a one-
This report came shortly after Friday's U.S. gross
week trough of 132.00 yen, while the Australian
domestic product number that marked a sharp
dollar plumbed an 11-month low of 90.64 yen.
slowdown in the fourth quarter. Spot gold was
The yen firmed broadly early on Monday, while
off 0.3 percent at $1,279.18 an ounce by 0240
commodity currencies softened as worries
GMT after rising 2 percent on Friday. It ended
about the health of the Chinese economy dealt
January with a gain of 8.4 percent, its largest
a fresh blow to sentiment already unsettled by a
monthly increase since January 2012. Gold's
selloff on Wall Street.
firm tone is also backed by strong inflows into
The dollar slid to a two-week low of 116.64
exchange-traded funds. Holdings at SPDR Gold
yen, down from around 117.52 late in New
Trust, the world's largest gold-backed exchange-
York on Friday. It has since steadied at 117.17.
traded fund, stood at 24.4 million ounces as of
The euro reached a one-week trough of 132.00
Thursday, the highest since mid-October.
yen, while the Australian dollar plumbed an
Oil prices fell as unions called a strike at U.S.
11-month low of 90.64 yen. USDINR opened
oil and chemical plants on the weekend, cutting
at 61.99, up against Friday close of 61.87 levels.
The pair is expected to remain in the range of
61.80-62.30levels for the day.
Precious Metal
Gold steadied near $1,280 an ounce on
Monday, after posting its biggest monthly
gain in three years, as a shaky outlook for the
Market Highlights - Gold (% change)
Gold
Gold (Spot)
Gold
(Spot -Mumbai)
Comex Gold
MCX Gold
(Feb’15)
Unit
Last
Prev.
day
as on January 30, 2015
WoW MoM
YoY
$/oz
1282.8
2.09
-0.9
7.9
3.2
Rs/10
gms
27625.0
-0.99
-1.2
3.9
-7.3
$/oz
1280.0
0.12
0.0
6.3
3.0
Rs /10
gms
27895.0
1.74
0.1
4.4
-5.0
Source: Angel Broking
Daily
4
Monday 02, February 2015
some of the gains made late last week when
prices roared more than 8 percent on a sharp
drop in U.S. drilling.
Base Metal
Energy Market
Market Highlights - Crude Oil (% change)
as on January 30, 2015
Crude Oil
Unit
Last Prev.
day
WoW
MoM
YoY
Brent (Spot)
$/bbl
46.9
2.0
1.8
-15.6 -57.6
Nymex Crude
(Mar ’ 15)
$/bbl
48.2
8.3
5.8
-8.4 -50.9
ICE Brent Crude
(Mar’15)
$/bbl
53.0
7.9
8.6
-6.1 -50.9
MCX Crude
(Feb ’15)
Rs/bbl
2855.0
3.7
0.6
-15.8 -53.6
The three months copper contract continued
to decline by around 0.4% to settle at $5495 MT
from its previous week’s close. The decline in the
metal has been mainly due to the firmness in
the US Dollar which has been trading above the
crucial 94.5 marks on Fed’s upbeat economic
Source: Angel Broking
outlook and better than expected labor data.
Aluminum retrieved from trading in negative
Crude oil prices fell on Monday after U.S.
for most part of the week and managed to close
unions called a refinery strike and traders cashed
positive at 1.8% above the previous close. The
in on strong price gains last week when the
advanced GDP QoQ from US was disappointing
market soared on a sharp drop in U.S. drilling.
at 2.6% however later On Friday; Chicago PMI
Despite the decline, analysts said that record
landed much above the expected levels at 59.4
open interest - the number of outstanding
and dragged upwards most of the metals from
futures contracts - indicated that prices may
their lows. Nickel was best performer during the
have bottomed out. Brent crude oil futures were
week and rose around 5.7% to settle at $15166
trading at $51.60 a barrel at 0440 GMT, down
MT from its previous close. Fundamentally, the
$1.39, while U.S. WTI futures were at $46.96,
inventories continued to rise to record highs
down $1.28 a barrel. The declines followed a
by 0.6% but the cancelled warrants rose by
jump back from six-year lows on Friday, as a
7.88% and LME Cash to 3M forward contango
record weekly decline in U.S. oil drilling fueled a
remained flattish, indicating demand spurring
frenzy of short-covering.
up for the metal.
The better performer continues between
"Oil production in the shale basins will
inevitably decrease as weaker, higher-cost
Lead and Zinc with Zinc metal managing to
producers
shutter
their
operations.
This
surpass Lead once again on a weekly basis. Zinc
supports our view that oil prices will recover
closed on a positive note at $2125 MT, up by 1.5%
this year and average $60 per barrel for Brent,"
from its previous close whereas Lead also closed
Nomura said.
positive but the gains were limited to 0.8% or
While the potential drop in U.S. oil output
$1859 MT. Fundamentally, the inventories fell by
could lift markets in the mid-term, analysts
around 1.95% and the cancelled warrants fell by
said Monday's declines were a result of profit-
5.20% for Zinc whereas the cancelled warrants
taking after last week's gains, as well as rising
jumped by around 52.9% or 2700 MT followed
output by OPEC that was offsetting lower U.S.
by a tad decline in the inventories by 0.02% in
drilling. Asian oil markets also opened to news
case of Lead.
of a strike at U.S. refineries, potentially denting
Daily
5
Monday 02, February 2015
crude demand in coming days. The United
plant and mining companies. We are already
Steelworkers union called strikes at nine U.S.
holding discussion with state governments. I
refineries on Sunday to bring about a new
had positive discussion with the Chattisgarh and
national agreement that covers workers at 63
Odisha and shortly we will talk with Karnataka
refineries, accounting for two-thirds of U.S.
and Jharkhand governments," Tomar said.
refining capacity, said a source familiar with the
He said the plan for new capacity has been
union's plans. The walkouts would be the first in
envisaged to boost 'Made in India' focus and
support of a national accord since 1980.
take the steel capacity of the country to 300
News Update &
Analysis
million tonnes by 2025 from 80 odd tonne.
Govt to build 4 steel plants at
an investment of Rs 1,50,000 cr
As per the plan, SAIL will invest in Chattisgarh,
Rastriya Inspat Nigam Ltd in Odisha, NMDC Ltd
in Jharkhand and Karnataka.
SAIL Chairman C S Verma said the details
of SPVs are yet to be worked out but for each
project, two SPVs will be floated, one for mining
and another for plant.
Tomar was confident that new reforms and
transparency in mining sector will help the steel
sector come out of the current crisis.
He said all mines will now will be auctioned
for sake of transparency.
The Centre said it will pump Rs 1,50,000 crore
for building four new steel plants of 20-24 million
tonne combined capacity in collaboration with
the governments in four states.
Usha Martin reports Rs. 44 cr
loss in Oct-Dec qtr
Steel and wire rope manufacturer Usha
Martin Ltd reported a standalone loss of Rs. 44
"We have decided to build four new steel
crore for the period ended December 31, 2014.
plants and four dedicated mining companies to
The company had reported a net profit of Rs. 99
feed these plants in four states partnering the
lakh in the same period last year.
respective state governments. We aim for six
million tonne capacity for each plant," Union
Steel and Mines Minister Narendra Singh Tomar
said in Rourkela on the sidelines of an expansion
review meeting.
Based on investment of Rs 6,000 crore for
each million tonne of steel and associated cost
for mining, the total investment will be in excess
of Rs 1,50,000 crore.
"We have decided to form SPVs for each
The
total
income
from
operations
Daily
Monday 02, February 2015
(standalone) during the period stood at over Rs.
at the synergy that can be brought between
888 crore; a 7 per cent increase over the Rs. 828
both the companies," Madhusudan on the
crore it reported in the year-ago period.
sidelines of National Cost Convention - 2015,
According to a company release, dumping
by Chinese steel makers along with subdued
steel demand impacted its bottomline.
organised by Institute of Cost Accountants of
India in Hyderabad.
"But, it will be two-three years down the
On a consolidated basis it reported a loss of
line where plant of NMDC would be ready. So,
Rs. 36 crore and a total income (from operations)
the marketing would start thereafter. In the
of Rs. 1,077 crore. During the quarter, Usha
meantime, we are trying to work out a strategy
Martin had made a provision of approximately
through which they need not perhaps invest
Rs. 8 crore for paying the coal cess imposed by
in the marketing network and RINL could step
the Centre. The company has also dissolved its
in as we already have a national network (for
wholly-owned subsidiary EMM Caspian, during
marketing)," he added.
the quarter.
SAIL to raise capacity of RSP:
Narendra Singh Tomar
RINL proposes to market steel
products from NMDC plant
Steelmaker Rashtriya Ispat Nigam Ltd (RINL),
Visakhapatnam said it in talks with PSU major
NMDC for marketing steel products through its
strong marketing network.
Sail has decided to ramp up capacity of
Rourkela Steel Plant (RSP) to 10.8 million tonne
(mt) by 2025 from the present 4.5 mt.
This was stated by steel and mines minister
Narendra Singh Tomar during his maiden visit
RINL CMD P Madhusudan said NMDC is
to the plant on Sunday. The expansion will be
going to commission a new steel plant and the
done in two phases, he added. RSP has already
idea is that RINL will undertake the marketing as
operationalized the new integrated steelmaking
it has a strong network for it across the country.
facilities under the ongoing modernization and
"NMDC going to commission a new steel
expansion programme.
plant. The idea is that they need not open out
With commencement of country's second
their own marketing offices. We already have
biggest Blast furnace 'Durga' in August 2013,
our marketing network across the country. This
RSP more than doubled its hot metal capacity
is for marketing steel products. We are looking
from a level of 2 mt to 4.5 mt. Mr Tomar was
accompanied by Chairman SAIL, CS Verma, and
joint secretary, steel, Sunil Barthwal among
others. The minister inaugurated the rolling
facilities of the new 4300 mm wide state-of-theart Plate Mill.
The new facility is one of the widest plate
mills in the country with latest features enabling
it to roll plates of very high strength. The mill
includes advanced features like computerized
6
Daily
Monday 02, February 2015
control system for Plan View Rolling (PVR)
3.4% higher as compared to November 2013.
process to maximize yield and high capacity
The cumulative growth for the period April -
levellers with hydraulic control to produce
November 2014-15 over the corresponding
distortion free plates. The mill has a capacity of
period of previous year stands at (+) 2.5%.
1 mt with provision for expansion.
NMDC cuts iron ore prices by
5-10% for Feb
The total value of mineral production
(excluding atomic and minor minerals) in the
country during November 2014 was Rs. 19066
crore. The contribution of coal was the highest
at Rs. 7099 crore (37%). Next in the order of
importance were petroleum (crude) Rs. 5713
crore, iron ore Rs. 2363 crore, natural gas
(utilized) Rs. 2236 crore, lignite Rs. 379 crore
and limestone Rs. 410 crore. These six minerals
together contributed about 95% of the total
value of mineral production in November 2014.
Production level of important minerals in
November 2014 were as followed- coal 546 lakh
tonne, lignite 34 lakh tonne, natural gas (utilized)
2704 million cu. m., petroleum (crude) 31 lakh
State-run NMDC has reduced iron ore prices
by Rs 200-300 per tonne for the current month
as weak global prices, which nosedived to fiveand-a-half-year lows, are putting pressure on
domestic rates.
"Our pricing committee has decided to
reduce the price by 5-10 per cent for the current
month. The decision has been taken in a meeting
on January 31," a senior company official said.
tonne, bauxite 1203 thousand tonne, chromite
160 thousand tonne, copper conc. 9 thousand
tonne, gold 132 kg., iron ore 86 lakh tonne, lead
conc. 17 thousand tonne, manganese ore 174
thousand tonne, zinc conc. 135 thousand tonne,
apatite and phosphorite 86 thousand tonne,
dolomite 524 thousand tonne, limestone 224
lakh tonne, magnesite 26 thousand tonne and
diamond 2836 carat.
The country's largest producer of steelmaking
raw material, NMDC rolled over the December
price in January at Rs 4,200 per tonne for lumps
SBI Capital Markets to suggest
rules for mines auction
and Rs 3,060 per tonne for fines. In December,
Moving expeditiously to resume the process
the PSU had reduced the price of lumps by Rs
of mines allocation, the Mines Ministry has
200 per tonne and Rs 100 per tonne for fines.
appointed investment banker SBI Capital
Mineral production during
Nov 2014 announced
Markets to suggest rules for auctions and the
The index of mineral production of mining
and quarrying sector for the month of November
(new Series 2004-05=100) 2014 at 127.9, was
bidding parameters for selection.
SBI Capital Markets is the investment
banking arm of the state-owned lender State
Bank of India.
7
Daily
Monday 02, February 2015
The move, which comes around 15 days after
The Centre is also supposed to lay out the
the President promulgated the mines ordinance
bidding parameters for the selection which may
paving the way for introduction of auction
include a share in the production of the mineral
system for allocation of mines, will help the
or any payment linked to the royalty payable or
Centre to fulfil its role laid out in the ordinance.
a combination of the two.
The Mines and Minerals (Development
"The Centre has appointed SBI Capital Markets
and Regulation) Amendment Ordinance, 2015
to suggest the rules and the terms and conditions
prescribes that the Centre would stipulate
based on which auctions would be conducted. It
the terms and conditions and the procedures
has also been asked to submit the report soon so
subject to which the auction would be
that the process can be started after consulting
conducted for allocation of all mines.
stakeholders," a source in the Mines Ministry said.
8