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| MARKET OVERVIEW |
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GLOBAL IRON ORE MARKET |
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According to Trade Data International the world Iron Ore Exports increased from 966 Million tonnes in 2009 to 1,081 Million tonnes in 2010, an increase by 12%. In the first 6 months of 2011, exports of Iron Ore were 334 million tonnes.
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World Iron Ore Exports by Area |
Million metric tons |
2004
|
2005
|
2006
|
2007
|
2008
|
2009
|
2010
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CAGR 2004-20
|
Country |
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|
|
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|
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Australia |
210.5
|
238.8
|
247.4
|
266.0
|
309.3
|
366.4
|
427
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10.63%
|
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Brazil
|
236.8
|
225.1
|
242.5
|
267.9
|
281.7
|
266.5
|
311
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3.97%
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India
|
62.7
|
80.9
|
86.4
|
93.7
|
101.4
|
115.2
|
85
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4.44%
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C.I.S *
|
46.4
|
47.0
|
58.1
|
69.4
|
64.2
|
53.8
|
65
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4.95%
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Total
World
|
646.0
|
735.9
|
761.7
|
833.5
|
891.7
|
939.6
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1068
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7.45%
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Source : Trade Data International & Bloomberg
(*)
Includes Russia, Ukraine, Armenian, Kazakhstan etc. |
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As a result, China has been the principal driver of iron ore seaborne trade with China's share of world iron ore imports increasing from 38% in 2008 to 44% in 2009.
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|
2004
|
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
|
Australia |
37.6% |
40.8% |
38.9% |
38.0% |
41.4% |
41.7% |
41.5% |
| India |
24.1% |
24.9% |
22.9% |
20.7% |
20.5% |
17.1% |
16.5% |
| Brazil |
22.1% |
19.9% |
23.4% |
25.6% |
22.7% |
22.7% |
21.2% |
| South Africa |
5.3% |
3.8% |
3.8% |
3.2% |
3.3% |
5.4% |
6.5% |
| Peru |
1.7% |
1.2% |
1.4% |
1.3% |
1.2% |
1.0% |
1.5% |
| Venezuela |
1.2% |
0.9% |
0.8% |
0.9% |
0.7% |
0.5% |
0.9% |
| Russia |
1.0% |
1.6% |
0.8% |
1.4% |
1.3% |
1.5% |
2.0% |
| Others |
7.0% |
6.9% |
7.9% |
8.9% |
8.9% |
10.1% |
9.9% |
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Source : Iron Ore Manual |
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China's reliance on iron ore imports is expected to continue in the future with the:
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 Continued Chinese trend of urbanisation expected to drive steel demand and growth in steel production |
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Anticipated increase in substitution of low quality Chinese Iron Ore with higher quality imported iron ore. |
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India's geographic proximity to China could position it well to further leverage the anticipated demand for Iron Ore by China.
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MSPL Market |
The principal market for our iron ore products is currently China. In the fiscal 2005, approximately 99% of our iron ore products, by volume, were sold for export. The remainder of our sales was made domestically. |
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Over
the Year |
Year ended March 31st
(INR) |
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2010 |
2009 |
2008 |
2007 |
2006 |
2005 |
|
Iron Ore Sales
(Million Rs.) |
|
|
|
|
|
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| Direct
Exports |
6.418.54 |
1,644.59 |
23,453.07 |
12,242.65 |
4,783.25 |
5,657.17 |
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Deemed Exports* |
48.70 |
0.21 |
854.65 |
883.42 |
1090.64 |
0 |
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Domestic |
149.08
|
23.62
|
6.5 |
83.84 |
391.61 |
105.40 |
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TOTAL |
6,616.32
|
16,470.41
|
24,314.22 |
13209.91 |
6,265.50 |
5,762.57 |
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| (*) Deemed exports consist of iron ore products sold to MMTC for export by MMTC
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Pellet
Plant MSPL LIMITED has made a foray into Pellets with a modest start of 1.2 million tons per annum plant near Hospet through a process of value addition. We are catering to the requirements of sponge Iron manufacturers in South India as well as all upcountry markets with supply of high grade Pellets, which has benefited the customers in getting a high metallization and reduction in production cost of Sponge Iron. MSPL PELLET SPECIFICATION:
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CHEMICAL
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GUARANTEED
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FE (Test Method: ISO 2597-1:2006)
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64% MIN
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AL2O3(Test Method: ISO 4688-1)
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2..5% MAX
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AL2O3+SIO2(ISO 2598-1 for SiO2)
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6.50% MAX
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P (ISO 2599)
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0.050% MAX
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S (ISO 4690)
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0.002% MAX
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CaO
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0.10% MAX
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MgO
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0.10% MAX
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Na2O
|
0.08
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K2O
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0.09
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TiO2
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TRACES
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II) MOISTURE
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1.00% MAX
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III) SIZE
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8-16MM
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ABOVE 16 MM
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10% MAX
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BELOW 5MM
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5% MAX
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COLD CRUSHING STRENGTH
|
220 KG/PELLET MIN
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TUMBLE INDEX (ASTM) +6.35MM
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94% MIN
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ABRASION INDEX (ASTM) -0.60MM
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4% MAX
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POROSITY
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>24%
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BULK DENSITY
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2.10 T/M3
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| Logistics |
MSPL's processing facilities are relatively near the Vyasanakere railway station. We have the rights to use two dedicated railway lines at the station, which have the capacity to load four to five rakes per day. Each rake consists of 58 train cars with a total capacity of 3,500 – 3,700 tons. |
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The ore processed at the Ingligi processing plant is transported to the railway siding at Ingilgi, which has been developed and is owned by MSPL for its exclusive use. This siding has sufficient capacity to load two rakes simultaneously and five rakes per day. Each rakes consists of 58 train cars with a total capacity of 3,500 – 3,700 tons. |
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With far sight and vision to overcome the hurdles of poor infrastructure and increasing freight cost, MSPL procured Six railway rakes to move iron ore to the ports for export. This in turn will enable us to move approximately 3.20 Million MT of Iron Ore per year.
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| We currently sell iron ore from ports including Chennai, Panjim, Marmagoa, New Mangalore, Karwar, Kakinada, Vishakhapatnam, Ennore, Paradeep & Haldia. We have exclusive rights to storage plots at most of these ports. At Marmagoa and Panjim, we have three self-propelled barges of 2,000 dead weight tons each that we own and operate. |
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Competition |
We compete with both domestic Indian producers of iron ore for domestic customers and with Iron Ore exporters for exports. We believe that we are able to compete effectively with international players from Brazil and Australia in the Chinese market through closer geographic proximity to China than our Brazilian competitors, and by providing a better grade of iron ore than is provided by many of our other competitors.
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