November, 03 2005
Steel companies cut HR prices for November
Following heavy pressure on global steel prices four domestic primary steel makers including the SAIL have reduced the selling price of hot rolled steel with effect from November. The other companies that have cut prices are Essar Steel, Ispat Industries and JSW. Industry sources said that though Tata Steel has not yet announced price cuts, they have already informed their customers about an imminent reduction in prices.
However, no formal communications from higher officials of these companies were available because of the holidays. It is understood that prices of HRC have been reduced by Rs 500PMT n the spot market to approximately Rs 21,000 but what will happen to contracts with monthly adjustment clauses would be clear in a day or two. This would mean that for the customer, the purchase price would be in the range of Rs 26,000 per tonne including 16% excise duty and freight charges.
The international CR grade HRC prices had eased about $25 in the past month alone to $425-435 per tonne, and softening prices were encouraging imports.
Indian Steel policy to be discussed by Cabinet committee
The national steel policy, which calls for a massive Rs 2.5 lakh crore investment over the next 15 years to treble Indias steel-making capacity to 110 million tonne by 2020, will be taken up for discussion by the Cabinet committee on economic affairs on Thursday.
According to government sources, the steel ministry has circulated a fresh cabinet note on the policy following changes suggested by other participating ministries and departments. The draft policy has targeted increasing the capacity of iron ore by an additional 200 million tonne a year, the sources said.
The draft policy, which presents a roadmap for the Indian steel industry, seeks to remove supply-side constraints for supporting its growth, in an open, globally integrated and competitive environment. Going beyond steel capacity issues, it focuses on mining of coking coal and development of infrastructure around steel projects.
Tribals to oppose steel projects in Jharkhand
A group representing tribal in Jharkhand said on Wednesday that it would stage protests against the foundation stone laying ceremony of two new steel plants in the state on November 14, claiming that the projects would displace several villages. The Adivasi Adhikar Morcha (AAM), which said it would observe a "people's curfew" in Saraikel-Kharswan and East Singhbhum districts, said strong resentment was brewing among the people in the two districts since the government signed agreements with Jindal Steel and Power Ltd and Tata Steel Ltd for the projects.
AAM's in-charge, Kolhan region, said 14 villages in Asanboni panchayat would be displaced after land was acquired, while 23 villages would be affected in Tentaposi panchayat in Saraikela-Kharswan district.
Mr Soy claimed that the MoUs were in violation of constitutional provisions under the 5th Schedule as well as the 1997 Supreme Court judgment on Samatha, a NGO, versus Andhra Pradesh government on similar grounds.
As per constitutional provisions, AAM chief convener Salkhan Murmu said no tribal land or even government land coming under 5th schedule area could be acquired without the approval of the gram pradhan for development projects.
JSP would invest about Rs11,000 crore to set up a five million tonne steel plant and a 1,000 MW captive power plant in Asanboni panchyat of East Singhbhum district. TATA Steel will invest Rs53, 000 crores phase wise to set up a 12 million tonne new greenfield integrated steel plant in Tentaposi in adjoining Saraikela-Kharswan district.
SAIL & TATA Steel in Forbes Top 2000 list
Thirty Indian companies led by Oil and Natural Gas Corp, have found a mention in the list of Forbes Global 2000 "corporate titans." ONGC has secured 265 ranks with $9.78 billion sales and $2.16 billion profits.
SAIL stood at 831st position with $5.14 billion sales and $0.6 billion profits and TATA Steel came 1302 with $2.57 billion sales and $0.41 billion profits.
The companies were evaluated according to four criteria, sales, profits, assets and market value.
Kanishk Steel Q2 net surges
Kanishk Steel Industries Ltd, the Chennai-based manufacturer of structural and TMT steel, has reported a net profit of Rs 524.62 lakh for the quarter ended Sept. 2005 as against Rs 122 lakh a year ago. The turnover for the company in Q2 was Rs 6,236.85 lakh, a growth of 21.68 per cent over the same period last year.
The operating profits increased to Rs 667.38 lakh this quarter in comparison to Rs 171.95 lakh in the corresponding quarter last year. The net income for the half year ended 30 Sept., 2005 was Rs 858.71 lakh, up from Rs 130.08 lakh in the H1 of 2004-05.
China to play a major role in iron ore price negotiations for 2006
Iron ore price negotiators from iron ore majors like BHP, Rio and CVRD will soon begin formal contract talks with Japanese steel mills in Tokyo, but this year's outcome will not be E decided in Tokyo but in Beijing and Shanghai.
Amid continued strong demand and high spot prices, the miners are gunning for another annual price rise on top of February's massive 71.5% hike. But it is the Chinese steel mills that have made the early rhetorical riposte, arguing that prices need to fall back.
China's soaring steel production has seen it overtake Japan as the world's biggest iron ore importer. And while its booming economy was the main driver of last year's price rise, it was still shocked at the extent of the increase, agreed to between the Japanese and Brazil's CVRD that set the market benchmark.
Now, led by Ms Xie Qihua, chairwoman of Baosteel, the Chinese industry plans to present a united front to the miners and leverage its status as the world's largest iron ore growth market to apply the pressure.
Some centre on CVRD seeking a 20 per cent hike, or even 40 per cent, partly as compensation for its fast appreciating currency. Brazil's real has risen about 20 per cent against the US dollar this year, raising its costs and reducing revenues from US-dollar sales.
Despite pressure from the Chinese steel mills in the face of falling steel prices, Indian spot suppliers are maintaining prices at around $US55 a tonne or $US65 after freight costs. Australian contract ore sells at around $US50 a tonne after freight.
Analysts have upgraded iron ore price forecasts, tipping a 5-10% rise; some foresee a 20% climb.
Steel scrap market outlook
Indian government had agreed to relax import control procedures applied to US and European steel scrap after inspections had been tightened after accidents and loss of life resulting from the inclusion of explosive materials, including ammunition, in imported heavy melting scrap. The Indian government had now accepted that US and EU scrap should be subject to less rigorous customs procedures since it was not arriving from a war zone, although scrap from the Middle East and Africa would continue to undergo closer scrutiny. An outright ban on HMS imports was being applied to Iran as a war zone
In the first six months of this year, India took over from Turkey as the leading buyer of EU scrap by importing 1.357 million metric tons from the region, equivalent to an increase of 257% over the first half of 2004, according to the European report delivered by Mr Anton Van Genuchten of Germany-based TSR GmbH & Co. KG during Ferrous Division and Shredder Committee Joint Round-Table in Milan. Turkish imports slid 35.8% to 1.062 million metric tons over the same comparative periods while EU steel scrap shipments to China fell 14.2% to around 200,000 metric tons.
High export duties imposed by the Ukraine had almost eliminated the countrys overseas shipments of scrap, according to Mr Denis Ilatovskiy of Mair Joint Stock Company in Russia. In his home country, meanwhile, scrap collection had increased by 8% this year and was likely to total around 30 million metric tons for 2005 as a whole. Sales to domestic scrap buyers had risen 11% to 12.4 million metric tons in the first nine months of the year while exports had edged 3% higher to 10.3 million metric tons.
Ferrous scrap market prospects for the coming months appeared more positive than negative, added Mr Van Genuchten. Key factors included good orders from the steel industry, available demand from outside of the EU, and the potential for winter weather to disrupt the supply of scrap.
The majority of US scrap traders were anticipating an upturn in prices of around US$ 30 per metric ton for November, according to Mr John Neu of Hugo Neu Global Trade. An increase of this magnitude seems justified, he said, as it will restore scrap collection rates, yet not cause short selling. The anticipated increase in iron ore prices for 2006 would represent another positive factor for the scrap sector, he added.
Mr Antonio Gozzi, MD of Duferco Group predicted that scrap prices would remain above $ 200 per metric ton in 2006, before adding that the age of cheap scrap is finished once and for all. He also speculated that some 60 percent of world steel demand would be emanating from Asia by the year 2010.
A report on BIR Shredder Committee activities confirmed the commissioning of at least 12 new shredders over the previous five months: six of these units had been installed in North America, four in Europe and two in Australia. Worldwide shredder capacity currently stood at between 75 million and 90 million metric tons per annum and will probably pass 100 million metric tons in the next few years, said Mr Jim Schwartz of Texas Shredder Inc. of the USA.
Ore stockpiles at port may help Chinese steelmakers in negotiations
Some of the steelmakers in China have planned to cut iron ore imports in the next few months to trim inventories built up at local ports as stockpiles have risen to 28 million tonnes as per Mr Ding Shouhu of Baoshan Iron & Steel Co. Mr Tan Yixin of Shougang Corp, Chinas fourth-largest producer, confirmed the plan.
Any drop in imports would help as Chinese mills prepare for annual price talks with suppliers. If they want to run down stocks, now would be a sensible time to do it going into negotiations to make demand look weaker, Mr Rob Clifford, mining analyst with ABN AMRO Australia Ltd said in Melbourne. Any slowdown in Chinese imports may reduce spot iron ore prices in India, bolstering the steelmakers in the talks and helping them argue for lower prices, Mr Clifford said.
China may increase iron ore imports by 25 per cent to 250 million tonnes this year, the Government has said. Imports will rise by as much as 15 per cent in 2006, according to the China Iron and Steel Associations former chairman Mr Wu Xichun.
Stelco to sell three non core assets to Mittal Steel
Stelco Inc has signed a letter of intent to sell some of its non core assets to the Canadian unit of Mittal Steel. No financial terms were disclosed for the sale of Norambar Inc., Stelfil Ltee and Stelwire Ltd.
The deal needs to meet certain conditions, including the negotiation of a definitive agreement and winning court approval. If all conditions are satisfied, the sale is expected to close early next year.
Stelwire and Stelfil both produce wire and wire products. Norambar produces spring flats and T-rail for the railway industry.
Stelco has been under bankruptcy protection since January 2004 and is currently undergoing a court-monitored restructuring. The steelmaker had previously announced its intention to sell some assets to focus on its core integrated steel business.
Russia to limit large diameter pipe imports
Russia wants to limit the imports of large diameter pipe from the beginning of 2006. Russian producers have continuously been loosing market share in the local pipe market due to imports and have been complaining about Ukrainian pipes being dumped in Russia. Ukrainian pipe producers will be hardest hit by import restrictions.
According to local data, large diameter pipe sales has increased by 8 percent in 2004, while imports increased by 45% for large diameter pipe. Imported products are around 40% cheaper than the domestic products.
Vietnam to levy 7% import tax on CR
Vietnam will be imposing a 7% tax on imported CR from the middle of November. The Vietnam government announced this step in order to protect their local mills. The action will benefit local mills such as Phu My Flat because there is currently no tax on imported CR.
At present, the Philippines, China and Taiwan are all exporting CR to Vietnam at very low prices. The average price is around US$540 to 550 PMT CFR.
Russia and EU to sign an agreement on trade in steel
Russia and the EU will probably sign an agreement on steel on November 3rd 1005 as per a spokesman of the Russian Ministry of Economic Development and Trade.
The agreement stipulates increase in deliveries of some of the steel products to the EU countries from 1.8 million tones in 2004 up to 2.2 million tones this year. In 2006 it is planned to increase deliveries by 2.5%.
The new agreement with the European Union will be in effect until year-end of 2006 or before joining of the Russian Federation to WTO. The Russian iron and steel industry will likely benefit from Russia's joining the World Trade Organization, head of the trade negotiations department of the Russian Economic Development and Trade Ministry as per Mr Maxim Medvedkov.
He stressed that Russia is now suffering discriminative measures, losing around $2.5 billion a year, and the iron and steel industry accounts for $1.5 billion of this amount. When Russia joins the WTO these measures will be lifted, Mr Medvedkov said.
PSM to donate corrugated sheets to quake victims
The Pakistan Steel Mill will donate more than 100,000 corrugated galvanized sheets for the construction of temporary shelters for earth quake victims.
PSM is the only industrial organization in Pakistan which can produce 100,000 tons of galvanized coils a year. PSM has indigenously designed some machines to produce corrugated sheets. PSM will also be able to manufacture galvanized corrugated sheets in 950mm width in thickness range of 0.55mm to 0.6mm into 2440mm to 3000mm length.
PSM Chairman along with Army Generals involved in relief work have decided that initially approximately 2,000 sheets of 24 to 26 gauges would be produced a day which would be increased to 4,000 sheets a day in few weeks.
Reduced real estate activity hits ReBar sales in Vietnam
Vietnam steel producers sold 200,000 tonnes of construction steel last month, down 17.5% over the previous month, Vietnam Steel Association VSA reported yesterday. The association attributed the poor figure to a sudden slump of demand seldom seen in October, the start of the construction season.
"The frozen real estate market in the last several months has consequently slowed down the construction market as less and less people are building houses this year," VSAs chairman Mr Pham Chi Cuong told. Meanwhile, natural disasters such as typhoons and floods, which ravaged the countrys coastal provinces last month, also slowed down the demand for steel, Mr Cuong said.
In addition, a number of buyers last month were waiting for the further price reduction predicted for this month, a discount of about 3-4 per cent. However, the association said the price of steel will go up slightly this month as the import price of steel ingot, the raw material used in steel production, is forecasted to go up to US$370 $380 per tonne compared to $355-$365 per tonne last month.
Viet Nam consumed 2.2 million tonnes of construction steel in the first 10 months of the year, up over the corresponding period last year. VSA had previously forecasted the demand of construction-grade steel to increase by 3.4 million tonnes this year, a 20% increase over 2004. The forecasted increase accounted for the large number of projects slated for 2005. Viet Nam produced 2.8 million tonnes of construction steel in 2004.
Russia ups steel pipe production 5.8% in 10 months
Russia increased steel pipe production tentatively 5.8% YOY in January-October to 5.42 million tonnes. "Production is likely to rise 2.8% to 6.2 million tonnes in 2005 as a whole," said Mr Alexei Pinchuk, head of the ministry's Department for Metallurgy and Resource Policy.
Mr Pinchuk said Russia produced approximately 550,000 tonnes of pipe in October. He said September production was 605,000 tonnes, which was 0.6% higher than in August.
Baosteel and WISCO establish partnership
Baosteel and Wuhan, China's first and third largest steel makers, hammered out a partnership agreement yesterday, according to a joint statement released today. The two companies signed an agreement to share market information, cooperate on product research and development, project investment and management.
According to Baosteel's announcement, the agreement does not cover cooperation on raw material supply. Chinese steel makers have faced challenges recently due to low steel product price and increasing raw material costs.
Harris Steel Q3 profit down
Harris Steel Group Inc reported lower third-quarter profit despite higher sales. The company earned C$14.68 million ($12.4 million) down from C$21.14 million in the same quarter last year. Sales rose to C$284.5 million from C$216.8 million.
Inventory liquidation hurt Harris's industrial products and steel trading and distribution segments in the quarter. "These conditions reversed in September, and we have seen a marked improvement. We are expecting that the third quarter will be the worst quarter in 2005 for both of these segments," company chairman and CEO Mr John Harris said in a statement.
Genco Shipping Q3 up
Genco Shipping & Trading Limited has recorded net income of $12.3 million and adjusted net income of $16.4 million for the three months ended September 30, 2005.
Mr Robert Gerald Buchanan, President, commented, "Genco's strong results for the first nine months of 2005 highlight both the Company's favorable time charters and cost effective operations. With freight market indices up approximately 75% since their lowest point in August, Genco is poised to increase near-term earnings on its spot vessels, while benefiting from attractive time charter rates. Longer term, Genco's modern fleet will serve the Company well for taking advantage of positive industry fundamentals and any future rate increases."
Genco Shipping & Trading Limited transports iron ore, coal, grain, steel products and other drybulk cargoes along worldwide shipping routes. Genco Shipping & Trading Limited currently owns a fleet of 17 drybulk carriers, consisting of five Panamax, seven Handymax and five Handysize vessels, with a carrying capacity of approximately 839,000 DWT.
Nucor Steel holds meeting on manufacturing job losses
The president of North Carolina-based Nucor Steel says lawmakers and business leaders need to help the manufacturing job loss crisis across the country. Nucor President Mr Dan DiMicco said 3 million manufacturing jobs have been lost in the United States since 1998.
"We need you to stand up for American jobs," he told lawmakers and the audience. He also blamed the businesses in China as well as America's corporate leadership. "The CEOs and business leaders of this country have got to stand up and say enough is enough," he said. "Tell the politicians to give us a level playing field, and we'll compete against any nation in the world."
Mittal Steel US welcomes deal with unions in Indiana & Minnesota
Mittal Steel has welcomed ratification of new collective bargaining agreements by members of the United Steelworkers at former Ispat Inland Inc. locations in Indiana and Minnesota. The agreements are similar to those at the former International Steel Group plants, which joined Ispat Inland this year to form Mittal Steel US.
They run through September 1, 2008, as do those at the former ISG plants, said the Chicago-based company. The agreements apply to about 5,000 members of Local 1010 and 1010-06 at Mittal Steel USs Indiana Harbor in East Chicago, Indiana; Local 9231 at IN Tek and IN Kote, Mittal's joint ventures with Nippon Steel Corp. in New Carlisle, Indiana; and Local 6115 at Mittal Steel USs Minorca Mine in Virginia, Minnesota.
Since the acquisition of ISG in April, Mittal Steel has been integrating ISG's operations with those of Ispat Inland, which the company has owned since 1998.
