Sesa Goa reaches a summit on price hike hopes
Iron ore exporter Sesa Goa jumped nearly 9% to Rs 1688 following reports it will start negotiations on annual price contracts with major global customers from February 2007.
The stock pared gains after it had risen as much as 13.3% to a high of Rs 1758 at 11:55 IST. Today’s high is a lifetime high for the scrip. 6.4 lakh shares changed hands in the counter on BSE.
The stock had risen 3.6% on Thursday (4 January 2007) to Rs 1551.55 following reports L N Mittal's Arcelor Mittal has submitted a non-binding bid for a controlling stake in the company. The scrip spurted in the past few days, partly due to hopes of higher iron ore prices for the next year and partly due to reports that had first surfaced on 22 December 2006 that Japan’s Mitsui & Company had put its 51% stake in the company on the block. From Rs 1186.35 on 20 December 2006, the stock surged 26% in a short while to Rs 1497.55 by 3 January 2007. On 26 December, Japan’s Mitsui & Company had declined to comment on an Indian newspaper report that it plans to sell its entire 51% stake in Sesa Goa. Mitsui said it was not in a position to comment on market rumours.
As per reports, Sesa Goa is planning to start negotiations on annual price contracts with major global customers from February 2007. Sesa Goa is likely to ask for a 9.5% increase in iron ore prices as part of its negotiations on annual supply contracts, reports add. There was no announcement from the company in this regard so far.
It may be recalled that Brazil's CVRD, the world's biggest iron ore producer, last month, struck an early agreement with Chinese steel mills for the 9.5 per cent upward benchmark (iron ore fines) price revision for 2007-08 (April-March). The ore price had increased by 18 per cent in 2004-05 and a record hike of 71 per cent was extracted by the exporters from steel makers for 2005-06.
Sesa Goa supplies iron ore to China, Japan and Europe and is also the sole supplier of ore to Pakistan Steel Mill, Pakistan’s only steel manufacturing unit. The company’s annual exports amount to around five million tonnes out of Marmagao, Chennai and Paradip port.
Sesa Goa reported 18% fall in net profit to Rs 25.66 crore for Q2 September 2006, versus Rs 31.28 crore in Q2 September 2005. Net sales rose 37.6% to Rs 226.24 crore (Rs 164.4 crore).
The stock pared gains after it had risen as much as 13.3% to a high of Rs 1758 at 11:55 IST. Today’s high is a lifetime high for the scrip. 6.4 lakh shares changed hands in the counter on BSE.
The stock had risen 3.6% on Thursday (4 January 2007) to Rs 1551.55 following reports L N Mittal's Arcelor Mittal has submitted a non-binding bid for a controlling stake in the company. The scrip spurted in the past few days, partly due to hopes of higher iron ore prices for the next year and partly due to reports that had first surfaced on 22 December 2006 that Japan’s Mitsui & Company had put its 51% stake in the company on the block. From Rs 1186.35 on 20 December 2006, the stock surged 26% in a short while to Rs 1497.55 by 3 January 2007. On 26 December, Japan’s Mitsui & Company had declined to comment on an Indian newspaper report that it plans to sell its entire 51% stake in Sesa Goa. Mitsui said it was not in a position to comment on market rumours.
As per reports, Sesa Goa is planning to start negotiations on annual price contracts with major global customers from February 2007. Sesa Goa is likely to ask for a 9.5% increase in iron ore prices as part of its negotiations on annual supply contracts, reports add. There was no announcement from the company in this regard so far.
It may be recalled that Brazil's CVRD, the world's biggest iron ore producer, last month, struck an early agreement with Chinese steel mills for the 9.5 per cent upward benchmark (iron ore fines) price revision for 2007-08 (April-March). The ore price had increased by 18 per cent in 2004-05 and a record hike of 71 per cent was extracted by the exporters from steel makers for 2005-06.
Sesa Goa supplies iron ore to China, Japan and Europe and is also the sole supplier of ore to Pakistan Steel Mill, Pakistan’s only steel manufacturing unit. The company’s annual exports amount to around five million tonnes out of Marmagao, Chennai and Paradip port.
Sesa Goa reported 18% fall in net profit to Rs 25.66 crore for Q2 September 2006, versus Rs 31.28 crore in Q2 September 2005. Net sales rose 37.6% to Rs 226.24 crore (Rs 164.4 crore).
posted by SY at 3:51 PM
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