NEWS UPDATE
Wednesday, August 19, 2015
Top Headlines for the Day
*** Turkish HMS 1/2 80:20 Scrap import prices continue to advance to $236 a ton
*** Chinese stainless scrap price stable
*** Magnesium ingot market in Europe sees prices maintained
*** Russian ferromolybdenum price decreases
*** Russian ferrotungsten price stable
*** Europe Mn flake price continues to slide on lack of buying, more offers
*** Ferrovanadium prices drop once again as pressure mounts even further
*** Ferrotungsten drops marginally in Europe
*** European ferrotitanium prices stable
*** European high carbon ferrochrome market quiet
*** Sluggish demand continues within US ferrosilicon market
*** Trading activity mum in North American silicon metal market
*** European low carbon ferrochrome prices firm
*** Higher grade silicon metal market sees lower price in China
*** Chinese titanium sponge offers decrease slightly
*** Bismuth ingot price sees little fluctuation in China
*** Chinese manganese flake price sees slight uptick
*** Chinese silicon market struggles on weaker yuan, static demand
*** Antimony export prices soften on RMB devaluation
*** Chinese ferromolybdenum price moves down
*** Chinese tin ingot price continues to slid
Hero MotoCorp plans to develop Gujarat plant into an export hub
Firm targets sale of 1.2 million units a year by 2020 with most of the export needs met from the
Halol plant.
India’s largest two-wheeler maker Hero MotoCorp Ltd will develop its Halol plant in Gujarat into an
export hub, said chairman Pawan Munjal in the company’s annual report. The company plans to sell
1.2 million units a year by 2020 and most of the export requirements will be met from the Halol
plant. “The plant at Halol in Gujarat will not only help support the western market more efficiently, it
will help Hero reach global destinations faster, since it is within close proximity of ports,” Munjal
said.
Investment in Hero’s proposed plant at Halol, its fifth in India, is about Rs.1,100 crore. They have
been allotted about 215 acres, as per the state support agreement with the government of Gujarat.
The plant is about 20km from General Motors Co.’s factory in Halol, which the US firm wants to shut
down and sell, as per a Mint report on 30 July. Hero is also commissioning a plant at Villa Rica in the
state of Cauca, Colombia. The plant will help meet demand for the company’s products in South
Compiled by: IIF-Foundry Informatics Centre, New Delhi
America. Similarly, a production facility in Bangladesh will help it serve the needs of that region.
The company aims to export to 50 countries by 2020. It sold a little over 200,000 units in global
markets during 2014-15. But Hero MotoCorp’s domestic business is under tremendous stress due to
a slowdown in the rural market. Demand for its motorcycles in urban areas has seen stiff
competition from the scooter segment, dominated by the local arm of its erstwhile joint venture (JV)
partner Honda Motor Co. Ltd.
During the April-July period, sales of Hero declined 5.90% to 2.06 million units while the sales of the
two-wheeler industry rose marginally to 5.27 million units —up 0.52%. According to a 6 August
report by ICICI Securities Ltd, a Mumbai-based brokerage firm, apart from the slowdown in demand,
intensifying competition is also impacting Hero’s growth. “HMCL (Hero MotoCorp Ltd) undoubtedly
continues to dominate the space and has a strong flagship brand like Splendor/Passion in its
portfolio. However, its key challenge remains to protect its market share. In the motorcycle
segment, its share has declined from 58% in FY10 to 53% in FY15,” ICICI Securities said in the report.
Between 2009-10 and 2014-15, Hero MotoCorp’s domestic two-wheeler volume growth lagged
industry growth, where industry posted growth at 11.3% CAGR (compound annual growth rate) and
HMCL grew 7.3%, the report added. In the same period, HMCL’s market share declined from 48.1%
to 40.2% in the domestic two-wheeler (motorcycles and scooters) market.
“Thus, we believe that with competition intensifying, HMCL needs to realign its product mix and
strategy to capture changing consumer preferences,” added the report. Munjal said that this
scenario is likely to change soon. India’s agricultural prospects are comparatively better, and the
country is poised for viable recovery, he said. “In this fiscal itself, I anticipate a rebound in the capital
goods production, which is usually the harbinger of revival in the manufacturing sector. Once the
business cycle turns more positive—as it should, by the second half of this fiscal—I expect an uptick
in demand across multiple consumer verticals. In turn, this should create a second order impact
across many tertiary sectors,” he added.
Rural demand has been more muted than urban because of last year’s delayed and deficient
monsoon rainfall, unseasonal rains that damaged standing crops and forecasts of another deficient
monsoon this year. Still,better-than-expected rainfall so far during the April-June monsoon has
raised hopes that rural demand may pick up. Also, a turnaround in consumer sentiment typically
portends a new investment cycle. Earlier this month, Foxconn Technology Co Ltd, best known as the
manufacturer of Apple iPhones and iPads (and also for its dorm-style facilities for workers in its
town-sized campuses), announced a $5 billion investment in Maharashtra over the next five years.
Sluggish demand continues within US ferrosilicon market
Sources indicated that the mainstream price of ferrosilicon 75%min has remained flat within the US
market. Figures for the material can be found at USD0.79-0.82lb Si d.p. in warehouse. The market
remained has remained quiet as the summer slowdown persists. Sources anticipate that the market
will remain inactive over the coming days, and prices should maintain this course over that time
period.
India's scrap imports surged in May
The scrap imports by India during the month of May this year increased sharply when compared
with the previous month. The cumulative imports during the initial five-month period too were up
year-on-year. According to trade data, India’s scrap imports totaled 604,000 tons in May ‘15. This is
higher by 4.2% when compared with the imports during the month before. The country’s scrap
imports had totaled 580,000 tons during April this year.
Compiled by: IIF-Foundry Informatics Centre, New Delhi
During May ‘15, the US was the main exporter of scrap to India. The scrap imports from the US
totaled 103,000 tons, accounting for nearly 17% of the total imports by India during the month. The
scrap imports from the US during May this year surged higher by 374% when compared with the
same month in previous year.
The second largest source of scrap imports by India was the UK. The scrap imports from the UK
during the month totaled 84,000 tons, up by over 11.5% when compared with the previous year. The
scrap imports from the UK constituted nearly 14% of the total Indian imports during May ‘15.
South Africa was the third largest ferrous scrap exporter to India during the month. The scrap
imports from the country dropped significantly by 16.10% during the month. South Africa exported
81,000 tons of scrap into India during May ‘15.
The cumulative scrap imports by the country during the initial five-month period of the year totaled
2.63 million tons, significantly higher by 36.8% when compared with the imports during the
corresponding period last year. The annual scrap imports by the country during entire 2015 are
projected at around 6.30 million tons.
Chinese copper scrap prices decline
The Chinese copper scrap prices witnessed sharp downfall on ScrapMonster Price Index as on
Monday, August 17th.
#1 Copper Bare Bright prices were down by CNY 200 per MT over the previous day. The price of #1
Copper Wire and Tubing and #2 Copper Wire and Tubing too tumbled by CNY 200 per MT each.
#1 Insulated Copper Wire 85% Recovery was down CNY 100 per MT to CNY 29,050 per MT. The price
of #2 Insulated Copper Wire 50% Recovery fell CNY 50 per MT to touch CNY 24,750 per MT.
Copper Transformer and Cu Yokes prices remained flat over the previous day.
Cu/Al Radiator scrap prices witnessed decline of CNY 50 per MT.
Harness Wire 35% Recovery prices held steady.
Heater Cores were down by CNY 100 per MT on Monday, August 17th.
Meantime, Scrap Electric Motors and Sealed Units prices remained unchanged when compared with
the previous day.
Honda Activa becomes first scooter in India to achieve 1 cr sales mark
Honda Motorcycle and Scooter India's Activa has achieved 1 crore mark in sales. It is the first scooter
in India to achieve this landmark, the company said in a statement. Launched in 2001, Activa
features four-stroke engine, automatic gearless transmission and Honda Eco Technology which
delivers a mileage of 60kmpl. In June 2015, Activa by selling 1,96,913 units became the top selling
two wheeler in India.
Expressing delight on this landmark, Keita Muramatsu - President and CEO, HMSI said, "From
reactivating the scooter segment in India in 2001 to leading the scooterization of industry today,
Honda's iconic Activa has changed the way Indians ride to fulfill their dreams."
Compiled by: IIF-Foundry Informatics Centre, New Delhi
Elaborating on how Activa is changing the Indian two Wheeler industry, Yadvinder Singh Guleria,
Senior Vice President, Sales and Marketing, HMSI said, "First, it is only automatic scooter which has
become India's no 1 selling two wheeler (in June - July 2015). Secondly, backed by its demand,
Honda has become the first manufacturer to sell more than 2.5 lakh scooters in a single month ever
in July 15. To further extend its undisputed market leadership and meet the future demand, Honda
will continue to innovate its products and services."
Amtek Auto shares skid over 11% on Q3 loss
Shares of auto component maker Amtek Auto tumbled over 11 per cent after the company reported
a net loss of Rs 157.76 crore for the quarter ended June 30.
The stock plunged 10.82 per cent to settle at Rs 133.10 on the BSE. During the day, it dipped 14.53
per cent to Rs 127.55 - its 52-week low. At NSE, the shares of the company ended 11.25 per cent
lower at Rs 133.25. The company's market valuation fell by Rs 355.57 crore to Rs 2,932.43 crore.
The firm had posted a net profit of Rs 86.08 crore in the same period of the previous fiscal, Amtek
Auto said in a BSE filing. Net sales during the period under review stood at Rs 854.22 crore as against
Rs 978.8 crore in the year-ago quarter. The company's finance cost increased to Rs 236.54 crore in
the quarter as compared to Rs 114.73 crore in the same period previous fiscal. Amtek Auto follows
October-September financial year.
Compiled by: IIF-Foundry Informatics Centre, New Delhi