Iron ore commodity (1)


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Iron ore commodity (1)

  1. 1. IRON ORE
  2. 2. Extracted & Refinedby:-AFTAB.MULLA
  3. 3. AGENDA Introduction  Development History  Demand and Supply Current Scenario  Impact on Economy Price forecast  Contract Specification Uses of Iron Ore  Conclusion Relation Between Iron  Recommendations and Steel  Bibliography
  4. 4. INTRODUCTION Iron Ore is the Heart of Steel. Classification – More than 54% – Less than 54% Consists of Rocks and Minerals from which metallic iron can be economically extracted. Raw Material for Pig Iron.
  5. 5. HISTORY The first iron production started in the Middle Bronze Age but it took several centuries before iron displaced bronze. Iron working was introduced to Greece in the late 11th century BC. The spread of ironworking in Central and Western Europe is associated with Celtic expansion In 1960s and 1970s due to high demand with upgraded Technology in Japan, it marked the Bench mark in Production.
  6. 6. GLOBAL SCENARIOTop 5 iron ore Producing Countries 1.China 2. Australia 3. Brazil 4. India 5. South AfricaTop 5 Consuming Countries 1.China 2. Japan 3. India 4. USA 5. RussiaTop 5 Exporting Countries 1.Australia 2. India 3. brazil 4. Canada 5. South AfricaTop 5 Importing Countries 1.China 2. Japan 3. South Korea 4. Germany 5. Taiwan
  7. 7. INDIAN SCENARIO Steel Prices (influencing factors)  Domestic demand  Supply conditions  International prices  Import and Export Duties Government and different producer and consumer associations regularly monitor steel prices. India Reserves 25 billion tons (6% of Global) Ranked 5th – High Quality Reserves 4th Largest Producing country 2nd Largest Exporting country
  8. 8. Price IndexMonth Price ($) Change (%)Mar-11 169.36 -9.52%Apr-11 179.26 5.85%May-11 177.1 -1.20%Jun-11 170.88 -3.51%Jul-11 172.98 1.23%Aug-11 177.45 2.58%Sep-11 177.23 -0.12%Oct-11 150.43 -15.12%Nov-11 135.54 -9.90%
  9. 9. Per Capita Steel Consumption Place Kgs India 45 China 350 World Average 150
  10. 10. PRICE FORECAST• Prices are currently high due to over capacity build up and it expected to come down to more economic level.• The cost of new potential iron ore systems (e.g. West Africa and Australia) has increased recently due to the current commodity price boom and the consequent equipment and skill shortages.• Demand for Steel: Steady growth of steel demand is expected until 2025
  11. 11. USES OF IRON OREAbout 98% of iron ore is used to make steelA very small amount of the consumption – used in magnets, metallurgy products, auto parts, tracer element in biochemical research. Iron blue: in paints, printing inks, plastics, cosmetics (eye shadow), artist colors, paper dyeing, fertilizer ingredient, industrial finishes, etc.
  12. 12. RELATION BETWEEN IRON AND STEEL Steel is an Alloy. Iron is an Primary element. Iron ore being primary raw material for Iron and steel making constituents 53% by weight but 11% only by cost.
  13. 13. DEVELOPMENT India, Asias 2nd Largest economy announced a 50% jump in export duties to 30% from 20%, to conserve supplies for domestic steelmakers. Improved Performance due to; – High volume – Government Policies – Increased operating efficiency – Financial restructuring
  14. 14. Consumption Pattern of Iron Ore• Domestic Consumption 45%• Exports 55% 17
  15. 15. DEMAND AND SUPPLY• Indias iron ore exports are likely to be 75% lower than previously expected in the quarter ending in March as a rise in export duties kicks in as part of the governments push to conserve supplies for domestic steelmakers.• No immediate ‘boom’ in demand in the Indian economy is expected, but a rather moderate short-term and medium-term growth path, only taking off beyond 2015.
  16. 16. IMPACT ON ECONOMY• Exports were declined to 50 million tons from 97 million tons in current financial year(2011- 2012).• Given that India had exported about 50 million tons in the 9 months to December, it is likely to ship only another 5 million tons in the three months to March 31.
  17. 17. Contract specificationSymbol IRONOREContract start day 1st working day of contract launch month.Last trading day Last calendar day of the contract expiry month. If last day is holiday or Saturday then preceding working day.Trading period Mondays through SaturdaysTrading session Monday-friday:10.00 a.m. to 11.30 p.m. Saturday :10.00 a.m. to 02.00 p.m.Trading units 100 DMTQuotation/Base value Rs/DMTMaximum order size 5000 DMTTick size(minimum Re 1/DMTprice movement)Initial margin Minimum 8%/based on SPAN whichever is higher
  18. 18. CONTRACT LAUNCH CALENDAR OF IRONORE CONTRACT LAUNCH MONTHS CONTRACT EXPIRY MONTHSOctober 2011 January 2012November 2011 February 2012December 2011 March 2012January 2012 April 2012February 2012 May 2012March 2012 June 2012April 2012 July 2012May 2012 August 2012June 2012 September 2012July 2012 October 2012August 2012 November 2012September 2012 December 2012
  19. 19. CONCLUSION• Sustained and economical supply of iron ore with consistent quality is must for being competitive.• It is a key product and raw material as well required in manufacturing of Iron, Steel and stainless steel.• It costs less and at a same time it weighs more comparatively.• Government’s focused approach and interventions are facilitating fast track growth.
  20. 20. Bibliography••••