Essar Steel: Iron Ore & Pellet Sourcing Fell Marginally in Apr'19

Essar Steel - an integrated steelmaker with steel making capacity of 10 MnT p.a. recorded slight decrease in total iron ore & pellet sourcing for Apr'19. The sourcing stood at 1.18 MnT in Apr'19, marginally down as against 1.20 MnT in Mar'19.

Iron ore procurement from NMDC (C.G.) down 13% M-o-M

Essar Steel procured 0.75 MnT of iron ore in Apr'19 from NMDC's Bailadila mines in Chhattisgarh via slurry pipeline, down 13% against Mar'19 procurement by the company at 0.87 MnT.

Sourcing from Odisha merchant mines increased 22% in Apr'19

Essar Steel sourced 0.39 MnT iron ore in Apr'19 from Odisha's merchant mines, up 22% against Mar'19 sourcing at 0.32 MnT.

Out of the total iron ore sourced from Odisha in Apr'19, largest share contributed by Serajuddin at 0.17 MnT (down 6% M-o-M). Sourcing from KJS Ahluwalia picked 55% to 0.09 MnT as compared to 0.06 MnT in Mar'19.

Towards the beginning of April'19 major Odisha merchant miners (including Rungta Mines & Serajuddin) offered discount amid increased supply after getting fresh EC limit for the new fiscal year. However, later at the end of month they had raised iron ore prices, on the back of strong export bookings of low-grade iron ore fines made to China.

Essar Steel imports nil in Apr'19

Essar Steel's iron ore and pellet imports recorded nil for the fourth consecutive month in Apr'19. The imports were last seen in Dec'18 at 0.15 MnT.

Essar Steel's long-standing bankruptcy case

In the latest update on Essar Steel's insolvency case, Arcelor Mittal conveyed to NCLAT that it would pay INR 42,000 crore including a minimum INR 2,500 crore as working capital for acquiring debt laden Essar Steel. However, the case remains pending until any decision unveiled by National Company Law Appellate Tribunal (NCLAT).

Earlier, Standard Chartered bank and Essar's operational creditors challenged ArcelorMittal's resolution plan for Essar Steel in the Supreme Court. After the Ahmedabad bench of NCLT (National Company Law Tribunal) approved the Arcelor Mittal's bid on 8 March 2019 to takeover Essar Steel, the company's three ex-directors challenged NCLT's order stating that their INR 54,389 crore was superior to Arcelor Mittal's bid as it clears 100% outstanding of both financial and operational creditors.