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Research
PINC Sector Report – Metal Monthly Update - Metallon Monitor
Posted On : 2011-12-28 11:32:53( TIMEZONE : IST )
US steadies, but uncertainty in EU, EMs rise
US steadied during Nov, Dec'11 with a +ve inflow of data (rising PMI, IIP). However, the uncertainty in EU persisted and that in India increased with Oct'11 IIP declining by 5.1% YoY, a 31-mth low. China, where concerns of hard landing have surfaced after a dismal set of data, has reversed its monetary policy stance by reducing reserve requirement by 50bps.
Key Developments
Ferrous: World steel output declined 6.8% MoM in Nov'11, a 12-mth low, led by 8.8% MoM decline in China's output. Global CU declined to 73.4%, down 280 bps from Oct'11. HRC prices contined their decline in Dec'11, with prices declining by 2-3% globally, sans US, where HRC prices rose 8.2% MoM on improved outlook.
Steel RMs: Coking coal contract prices for Q4FY12 settled at USD235/t, down 17.5% QoQ. Iron ore spot prices declined 6.2% MoM to USD140/t, indicative of settlement of Q4FY12 contract prices at lower rate.
Non-Ferrous: While LME zinc prices declined 3.5% MoM in Dec'11, LME copper (up 5.9%), aluminium and lead (up 1% each) benefited from re-opening of the arbitrage window between LME and Shanghai. China's refined copper imports rose 16.5% MoM (and 48% YoY) to 344kt in Nov'11, the 2nd-highest after a record of 379kt in Jun'09. Copper TcRc for 2012 rose 12.4% YoY to USD63.50/t and USc6.35/lb, indicative of an improvement in the supply of copper concentrate.
Indonesia plans to introduce export taxes for coal and base metals in 2012 to encourage more investment in its mining sector. This is in line with the plan of the government to impose a total ban on exports of unprocessed metals by 2014.
INR reached a new all time intraday low of 54.22 against USD on 14th Dec. Consequently, RBI intervened by selling USD in the market. Further, RBI announced upto 75% cuts in the currency open position for banks to reign-in slide in INR.
Sesa Goa acquired an additional 1.5% stake in Cairn India Ltd. taking its total holding to 20%.
Monnet Ispat's board approved share buy back from open market at a price not exceeding Rs500/share, up to a maximum amount of Rs1bn.
JSW Steel forfeited the initial payment of Rs5.23bn from a promoter.
