November, 13 2005
Indian NSP outlines iron ore industry vision
As part of its plans to boost domestic steel production to 100 million tonnes by 2019-20, the National Steel Policy has said that the Government would encourage iron ore trading to make the raw material available throughout the country. "Though local value addition would be given priority, the Government would encourage iron ore trading in order to make this raw material available to the iron and steel industry throughout the country. The Government would encourage investments in adding value to iron ore fines," the National Steel Policy 2005 has said.
The policy envisages domestic iron ore consumption will touch at least 190 million tonnes in 2019-20 from the present level of 54 million tonnes to back up steel production of 100 million tonnes from the present 38 million tonnes. During 2004-05, production of iron ore was around 145 million tonnes, of which 54 million tonnes was domestically consumed and 78 million tonnes was exported.
The policy says that Government would encourage investments in creation of an additional modern iron ore mining and beneficiation capacity of 200 million tonnes for which an additional investment of Rs 20,000 crore would be required during the period. The Government has said that captive mining leases for the private sector would continue, but it was necessary to put in place investment plans for idle mining leases. The policy says that State Governments would recommend renewal of existing leases only against credible mining investment plans in a specified period. "The Government would lay down priorities and guidelines for the State Governments to fresh recommend fresh mining leases, having regard to the entrepreneur's mining investment plans and technical and financial capabilities," the policy has said.
On export of iron ore, the policy has said that long-term export supply of iron ore would be confined to a maximum of five-year contracts. "A judicious balance between export and domestic availability would continue to be maintained between exports and domestic supply of iron ore". The policy document estimates iron ore exports to touch 100 million tonnes by 2019-20 from the present 78 million tonnes. Iron ore export that had remained virtually stagnant at around 35 million tonnes during 1991-02 to 1999-2000, has shown a major growth since then. However, it is felt that with domestic consumption increasing, the rate of growth of exports would come down.
"As investments are made into beneficiation, sintering and pelletization in the country, which will use these iron ore fines, the growth in exports of iron ore is likely to decline," the policy said.
Indian steel production predicted to reduce by 0.2% - CMIE
The cumulative production growth may see a decline from 6.2% in April-August 2005 to around 6% by the end of this year, the Centre for Monitoring Indian Economy (CMIE) said in its monthly review. Growth and profitability are likely to remain under pressure in the September quarter and prices are not likely to firm up in the near future, it said.
The slide in steel prices also led to record declines in sales and profits in the quarter ended September 2005. Aggregate interim results of 26 steel companies for this quarter reflected a marginal 1.7% decline in net sales, while operating and net profits recorded 15.3% and 24.3% decline respectively, the analysis said.
Two killed in Ghaziabad steel factory blast
Two people were killed in an accidental blast at a steel factory in Ghaziabad on the outskirts of Delhi Saturday morning triggered by an overheated furnace, police said. The explosion took place at DVS Steel and Alloy Private Limited at around 5 am. There were about 30 people in the unit at the time of explosion and more than 7 persons are injured. The explosion was so powerful that it has punched thousands of holes in 50 feet high steel roofing
The authorities are suspecting the cause behind the incident to a cylindrical object filled with gas but are not ruling out an unexploded shell from war scarp. We can not rule out anything until the probe is over as DVS often imports scrap said City Magistrate
The blast has come in face of repeated warnings by Customs department following the continued series of live shells and rockets from imported steel scrap. Large quantities of steel scrap, reported to be almost 5,000MT per day are being purchased by steel units and traders on high seas sales basis through middle men without having any direct contact with the seller overseas.
Indian Government has imposed several restrictions in last one year like banning imports from war torn areas and Pre Shipment Inspection, but the war laden scrap continues to trickle in endangering lives
Mr VC Shukla supports TATA steel plant in Bastar
Mr VC Shukla, a 9 time Congress MP and who is trying hard to rejoin the Congress after a stint with BJP, says that his elder brother's Mr SC Shuklas objection is "unwarranted". "The decision to protest the TATA deal with the government for setting up a plant in India's most backward region, Bastar, is not justified. Politicians should work for accelerating the pace of development in Bastar, which has been left out of the mainstream of development for decades." He is reported to have told press
Mr SC Shukla has recently asked the BJP ruled state government to scrap its deal with TATA Steel. He said it would destroy the natural beauty of the Bastar region, which is rich in forests, hills, caves and waterfalls. He also felt the steel plant would reduce the tribal population to a minority as the company would bring in outsiders as settlers.
Bangladesh Government likely to firm TATA deal by year end
It is reported that the Bangladesh Cabinet is likely to give the green signal to the Tata Group's three billion dollar investment plan in the country by December 2005.Representatives of TATA are expected to arrive in Dhaka for a fourth and final round of talks with a Government-appointed negotiating committee and sub committees on November 27 or 28 to settle the remaining issues, Board of Investment sources were quoted, as saying.
Gas security for the TATA projects, pricing of gas to be supplied to the TATA enterprises, purchase of electricity from the planned TATA power plant, and the awarding of the 'readymade' coalmine in Barapukuria to TATA are the four pending issues likely to come up at round four at the end of the month.
There is a view that the government wants hassle-free agreement with TATA, and to ensure it, an economist, Professor Wahiduddin Mahmud of Dhaka University, has been appointed to carry out an independent study on the likely economic benefits to be had from the Tata projects. By December 15, a separate 'economic impact' report by an Asian Development Bank (ADB) consultant will also be available to the cabinet for it to take a final decision on whether to sign or not to sign the agreement with the TATA.
If the agreement on the investment proposals passes muster, TATA expects to begin work on the steel, power, fertilizer and coalmine projects by January 2006.
CVRD encounters organized resistance from steel makers on prices
CVRD has encountered organized resistance from steelmakers in negotiations for 2006 iron ore price contracts, the company's chief financial officer said Thursday. Quoted by a local news agency, CVRD CFO Mr Fabio Barbosa said "there is a degree of unheard of organization."
CVRD began negotiations for 2005 price contracts earlier this month. "There exist a synchrony in (steelmakers') declaration of their direction, which doesn't capture the essence of what the market is indicating," Mr Barbosa said.
Mr Barbosa disagreed with comments made earlier this week by Arcelor CEO Mr Guy Dolle, who said that an increase in iron ore prices in 2006 was not justified after the 71.5% hike CVRD won in 2005 negotiations. "There exists disequilibrium evident between supply and demand for these products in the world," Mr Barbosa noted.
According to Mr Barbosa, iron ore prices on the spot market are 50% higher than long term price contracts.
In light of surging demand driven by China's modernization, Mr Barbosa pointed out that the market is undergoing a structural change. "People need to understand that the growth of demand is not a short cycle without interruption," he said.
Corus to increase flat steel prices from 1st January
Coruss strip products division will increase prices in the UK on a range of products, including hot-rolled strip steels and hot dipped galvanized steel, from January 1.
A Corus spokeswoman said, "UK demand for strip is steadily improving and stock levels throughout our major supply chains are well in balance.Moreover, given the continued cost increases incurred in 2005, Corus Strip Products UK feels the need to recover these increases.
Dofasco stock climbs 14% on iron mine plan & takeover speculation
Plans to roll out a $175 million iron ore mine income trust, plus takeover speculation, lifted shares in steel maker Dofasco Inc. by 14% yesterday
Dofasco, Canada's biggest steel maker, announced late Thursday that it will sell a stake in its recently acquired Quebec Cartier Mining Co. unit as a trust, to be called QCM Income Fund
The QCM trust follows a trail blazed by one of Canada's oldest trusts, the 10-year-old Labrador Iron Ore Royalty Income Fund. The Labrador trust has been a strong performer in the face of soaring prices for iron.
"There's talk that Dofasco moved quickly on QCM because it was hearing footsteps," said one institutional investor. "Nucor took at look at a bid prior to 9/11, and is rumored to be looking again."
Nucor Corp is among the biggest steel producers in the United States, and boasts a $10.1-billion market capitalization.
Gerdau Ameristeel planning investment in Wilton facility
A year after Gerdau Ameristeel acquired the former North Star Steel here, the plants new owners are eyeing a future expansion of the mini mill. We finally have an owner that is interested in growing the business, said Mr Carl Czarnik, GM of the 28 year old Wilton plant said.
Its always been a good plant, but were a small plant compared to what you see coming up today. Its getting harder and harder to compete against the other mini-mills. But in the next three to five years, he said Gerdau Ameristeel is planning a major capital investment in the Wilton operation in the tens of millions of dollars. The fact of the matter is it is a global economy and you have to compete. With a parent company in the steel business, Czarnik said the plant now has the opportunity to improve its operation and ultimately better compete against the domestic and imports.
Gerdau Ameristeel, the North American subsidiary of Brazil-based Gerdau Ameristeel Corp., bought the Wilton mill as part of a $266 million deal with Cargill Inc. The move included four Cargill long steel product mini-mills, of which Wilton is one. The purchase strengthened Gerdau Ameristeels Midwestern presence.
The Wilton plant produces long steel products, including rebar, angles and flat products.
Seven killed in Inner Mongolia coal mine gas explosion
At least seven miners were killed and nine others remained trapped in a colliery gas explosion occurred yesterday in north China's Inner Mongolia Autonomous Region, an official report said today. The explosion occurred in a coal mine in Wuhai city yesterday afternoon, Xinhua news agency reported.
China, the world's largest coal producer, has witnessed a series of major coal mine accidents this year as the nation faced an acute power shortage. Officials often blame the growing number of accidents to lax safety standards.
South Africa to invest in Iranian mining sector
South African Ambassador to Tehran Mr Yousuf Salouji said in Tehran that his country intends to invest in Iran's mining sector. Speaking at the closing ceremony of a specialized workshop dubbed South Africa, Your Partner in Industries and Mines, he hoped for broader cooperation, given Iran's potentials and his country's expertise in the field.
The diplomat declared South Africa's readiness for making investment in Iran's various mines and for further expansion of economic cooperation in the domain. He called upon those involved in Iran's state and private mines sectors to visit South Africa in order to get an idea on its capacities for mine extraction. According to him, a number of South African enterprises in the sector have already invested in transfer of mines extraction technology to various mines in Iran.
Dubai commodities exchange hope for steel futures contract soon
It is reported in a local daily that Dubai's new commodities exchange expects to launch the world's first exchange traded steel futures contract in the second quarter of 2006. "In the second quarter (of 2006) we are looking at various products like steel, fuel oil, freight rates and cotton. The first two would be steel and fuel oil," Mr Framroze Pochara, CEO of the Dubai Gold and Commodities Exchange, said.
Mr Colin Griffith, ED of the government's Dubai Metals and Commodities Centre, said he expected the steel contract to be a pioneering venture. "The LME announced that there will be an index. We will introduce a steel contract or contracts that will have maturity at the end. Buyers and sellers can lead to maturity if they don't wish to close their position out," he said. "I am confident we can a get a steel contract up in the second quarter of next year."
The London Metal Exchange (LME) announced last month that it was to start developing price risk management tools for the steel industry, although it has not committed to launching a contract in steel futures. The LME made abortive attempt in 2003 to launch the world's first exchange-traded steel futures, but the industry was then in poor shape and the venture got bogged down in product specification, storage and delivery issues.
Pakistan Steel gets ISO certificate
Pakistan Steel has been awarded ISO-17025: 1999 certificate by Pakistan Steel National Accreditation Council (PNAC), Islamabad, which pertains to laboratory accreditation.
According to a press release on Saturday, the process laboratories of Pakistan Steel are the first to get said certification in steel sector among 14 other laboratories. With this achievement Pakistan Steel has unique position of simultaneously holding four certificates on Quality Management System, Social Accountability System, Environmental Management System and Laboratory Quality Management System.
SA Argents steel business reports dip in earnings in H1
South African diversified industrial group Argents steel business, operating under the Phoenix Steel brand, has been adversely affected, the group announced. The contribution of steel business, to the groups attributable earnings fell 11%, compared with the corresponding period last year.
But the groups overall performance was not affected as the revenue increased 32.2%, from the previous corresponding periods R380.3m to R502.6m.
Argent CEO Mr Treve Hendry said the group expected a strong performance in the first half of the year to continue in the next six months. There are no indicators, economic or otherwise, to suggest that this will not be the case, he said.
