December, 21 2005
Central government warns Orissa against Jatadhari port plan
POSCO can be forced to postpone its plans of setting up a port at Jatadhari in Orissa. The Centre has warned that the proposed port can lead to severe erosion along the coastline and pose serious threats to the Paradip port. Shipping Minister Mr TR Baalu told the Lok Sabha today the port at Jatadhari might not come up at all. The Government of India as well as the Paradip Port Trust have impressed upon the Government of Orissa that the Paradip Port after deepening of its channels will be in a position to develop its deep draft dock system and the facility can be made available on captive basis to POSCO, Mr Baalu said.
The Orissa government has been asked to undertake a detailed study on erosion if the plan to develop a minor port for the Korean steel giant was carried out, Mr Baalu said. Shipping ministry sources added that the port project could spell disaster for the Paradip port as erosion downstream and deposits upstream could wreak havoc on it.
The development may be a setback for POSCO's plans to build a 3 million tonne capacity steel plant between 2007 and 2010with an initial investment of $3 billion during the first phase. This investment is meant for building the necessary infrastructure and logistics such as roads, township, water, power and port in the region. The need for the Jatadhari port, estimated to cost $900 million, was felt as the Paradip port was found wanting in several respects. Jatadhari was planned as a dedicated port for the steel plant.
SAIL to set up steel melting shop in Salem Steel Plant
It is reported that SAIL will set up a steel melting shop as well as adequate cold rolling capacity in Salem Steel Plant quoting an announcement from Steel Minister Mr Ram Vilas Paswan.
The detailed proposals in this regard would be sent for appraisal to financial institutions, and thereafter SAIL Board will take a final decision.
Usha Martin to increase production
Usha Martin Ltd, the specialty steel and wire rope makers, has set a target of becoming the world's largest wire rope manufacturer by enhancing its production volume to 7,500 tonnes a month by 2007. The company, having a current production volume of 5,500 tonnes permonth, is presently ranked second after Kiswar of Malaysia.
"We have set a target of becoming the largest wire rope manufacturer in the world by 2007, when our production volume will reach about 7,500 metric tonnes per month," Mr Rajesh Sharma, senior GM Works said
The Rs 1,270 crore company, having five facilities for wire and wire-rope division in India and abroad, would strive to achieve the growth through enhancing productivity at Ranchi and other plants, with no major capacity expansion or investment planned for the division in the next two years.
The production volume at Ranchi unit, which contributes 60% of the total production, would be enhanced from current 4,800 tonnes per month to 5,500 tonnes per month by 2007, Sharma said. The combined production at Thailand, Dubai, UK and the recently acquired JCT's steel division at Hoshiarpur would be raised from current 700 tonnes per month to 2,000 tonnes per month within two years while the new manufacturing facility coming up at the US may also contribute to the growth in near future, he said.
Protest in Orissa against Posco project
It is reported that around 200 people have launched a 125 kilometer march in Orissa to protest against the POSCO steel plant, which they claim will harm the state's economy as well as ecology. Activists of the Swadeshi Jagran Manch began the march Monday from Paradeep town, in coastal Jagatsinghpur district, and went up to Kujanga village covering about 30 kilometers and the march will end in state capital Bhubaneswar on December 25.
The protest assumes significance because the state BJP unit had objected to the plant the South Korean steel major plans to build near Paradeep town by 2016 with an investment of about $12 billion.
Coal and iron ore account for almost 50% of Indian Railways earnings
Indian Railways has earned Rs 22615.53 crore in revenue earnings from freight during the first eight months of the current financial year ending on November 30, 2005 as compared to Rs 19355.47 crore in the corresponding period last year.
The earnings from freight during the month of November 2005 were Rs 2928.41 crore. Railways carried 55.03 million tonne of freight during the month as compared to 49.37 million tonne of such traffic during the corresponding period last year registering an increase of 11.46%, an official release said
Of the total earnings during the month, Rs 1234.32 crore came from transportation of 24.86 million tonne of coal and Rs 197.24 crore from 3.71 million tonne of iron ore for exports,
Mumbai Port gets stay on coal imports ban
The Mumbai Port Trust today secured a stay from the state environment appellate authority on the Maharashtra Pollution Control Boards MPCB order asking it to stop handling of coal for Tata Power on environment grounds. The authority will hear the case on January 10. Tata Power and Mumbai Port declined to comment on the issue.
Earlier the appellate authority had asked MPT to appoint an independent agency to assess whether the coal handling was affecting the quality of air at the port. In response, it appointed state-run Water and Power Consultancy Services (Wapcos), which gave it a clean chit today.
MPCB member secretary Mr DB Boralkar, the board has pointed certain lacunas in Wapcos report and has informed the same to authority. Industry sources said MPCB had not raised the issue of pollution for last eight months.
MPT is also handling coal imports for Maharashtra State Electricity Board (MSEB). The port is set to handle over 1 million tonne of coal for MSEBs Nasik plant from Indonesia and South Africa, a source said. Tata Power was importing coal via Daramtar Port for last six to seven years.
Wuhan Steel forms a JV for Luiuzhou Steel to reach 20million tonnes
Wuhan Iron & Steel Group, based in the central province of Hubei, has announced signing of an agreement to form a JV by acquiring 51% of the state owned Liuzhou Iron & Steel Group by paying 6.5 billion yuan ($805 million). The government will take the remaining 49% stake in the JV, which will control Liuzhou's mills and plants
The acquisition will increase Wuhan Steel Group's annual production capacity to 20 million metric tons from about 15 million tons and will remain the China's third biggest producer after Baosteel Group Corp and Anben Iron & Steel Group. "The move enables Wuhan Steel to access a bigger market in exchange for taking over less profitable rivals to help ease a domestic glut," said Mr Lin Hai, a steel analyst at Guotai Asset Management Co in Shanghai.
Wuhan Steel also bought the controlling stake in Guangxi-based Liuzhou Steel to help win central government approval to build a steel plant at Fangchenggang in southern China's Guangxi. It wants to beat Baosteel Group's proposal to build a similar project in the neighboring Guangdong Province to tap demand from local units of carmakers such as Toyota Motor Corp. Baosteel plans to build a plant in Zhanjiang, Guangdong Province to produce as much as 20 million tons. Wuhan Steel and Liuzhou Steel want to build a plant at Fangchenggang to make 10 million tons of steel a year.
The government has said it is unlikely to give the go-ahead for all of the projects planned in southern China. China is restricting lending to smaller players to rein in excessive investment. Capacity expansions must combine with the closing of obsolete facilities, the government said in July. Wuhan Steel may close part of Liuzhou Steel's existing facilities to gain approval to expand in the neighboring Fangcheng Port, analysts have said.
POSCO announces price cuts
South Korean steel maker POSCO said on December 20 it would cut domestic prices for its steel products next year to fend off the surge from China. Starting next year, the domestic price of POSCO's steel products will be lowered by as much as 17%, the company said. POSCO sells about 75% of its output at home.
POSCO will lower the price of high-end hot-rolled steel coil, used in auto manufacturing, to 500,000 won ($492) a ton, from the current 550,000 won, the company said. Prices per ton will be lowered to 480,000 won from 550,000 won for ordinary hot rolled coil and 450,000 won from 535,000 won for mini mill hot-rolled coil, POSCO said.
As for cold-rolled coil, prices per ton will be cut to 600,000 won for high-end products and to 580,000 won for ordinary products, the company said. The price cut is a result of POSCO's strategy to defend the domestic market from the "indiscriminate exports of Chinese steel makers", the company said.
Global Steel Philippines to start HR Mill and tin mill in early 2006
It is reported in a local daily that Global Steel Philippines Inc. said that it has notified the Department of Trade and Industry that it had started commercial operation and was seeking certification from the Board of Investments. Officials of Global Steel said in a statement that Global Steel was also expecting to start the operation of its hot rolled mill in the southern city of Iligan early next year.
The hot rolled mill can produce 1.2 million metric tons annually of hot rolled coils. Global Steel also said it could put on line before April its tin plate mill, which can produce 150,000 metric tons annually. Officials said trial runs of the hot-rolled mill had been completed and the rehabilitation of the tin plate line was underway.
Since taking over National Steel two years ago, Global Steel has been asking the government for support, including increased tariffs on steel products and tax incentives. Officials of the Department of Trade and Industry said Global Steel needed to start commercial operation before it could enjoy any such support.
A subsidiary of Indian owned Global Steel Holdings Ltd, Global Steel has infused a total of $59 million into the former National Steel, $22 million for acquisition and about $37 million for rehabilitation and operational support.
Russia increases pipe output by 8.8% in 11 months
Russia increased steel pipe output 8.8% YOY in January to November to 6.06 million tonnes, the Federal State Statistics Service said. The total included 2.54 million tonnes of seamless pipe up by 3.7% and 3.33 million tonnes of ERW pipes up by 12.6%. Russian pipe production rose 29.6% YOY in November to 590,000 tonnes, which was 2.8% less than in October 2005.
Production rose 7.8% at the Vyksa Metals Plant, which is controlled by United Metallurgical Company OMK and 5.8% at OMK's Almetyevsk plant.
It rose by 1.6% at the ChTPZ Group's Chelyabinsk Pipe Rolling Plant and by 4.3% at the group's Pervouralsk Novotrubny Pipe Works
Pipe Metallurgical Company's Volzhsky Sinara, Taganrog and Seversky mills raised output 24.5%, 1.9%, 11.4% and 14.4% respectively.
Brazilian court backs CVRD in iron ore dispute
A Brazilian federal court on Tuesday upheld an existing injunction giving mining giant CVRD purchase preferences at an iron ore mine owned by steelmaker Companhia Siderurgica Nacional CSN. The ruling, which can still be overturned by a higher court, ensures CVRD's right to continue buying excess ore output at the Casa de Pedra mine in Minas Gerais state.
In a landmark decision earlier this year, Brazil's market regulator ordered CVRD to relinquish its rights over excess production at the mine, saying the arrangement violated anti-trust laws.
But CVRD managed to obtain a court injunction preserving its rights over the mine while it appealed the decision. The dispute is widely expected to drag on for months, if not years.
Drever to supply SeverCorr annealing furnace for HDG line
Drever Intl, a subsidiary of LOI Inc, Pittsburgh, reports that it has taken a contract to supply the furnace segment of the hot dip galvanizing line to be built at SeverCorr, in Columbus by SMS Demag with an annual capacity of 400,000 tonnes
As detailed by Drever, the furnace will be equipped with pulse-fired radiant tubes for fuel efficiency and flexibility over a range of products... The strip will be conveyed through the furnace with precision by specially profiled rolls and a specially designed strip-tension and -steering system. The furnace will include Drevers rapid cooling system and a mathematical furnace model for dynamic control.
SeverCorr is an $880-million venture of JSC Severstal, the largest steelmaker in Russia, and SteelCorr, a company established by mini-mill veteran Mr John Correnti. SeverCorr plans to build a flat rolling mini mill to start up in the second half of 2007, producing hot rolled, cold rolled and galvanized strip, for automotive customers, among others.
Russian stainless steel production down 34% in 11 months
Russian SS makers have cut production of stainless steel by 34.1% YOY to 66,020 tonnes in January-November, the Federal State Statistics Service said. Russia produced 7,890 tonnes of SS in November, down 17.1% from October and down 17.1% YOY.
The Mechel Steel Group's Chelyabinsk Iron & Steel Works reduced SS output by 69.2% YOY to 13,680 tonnes. The Serp I Molot plant in Moscow reduced its output by 38.2% to 4,170 tonnes, and the Krasny Oktyabr plant in Volgograd reduced it by 12.4% to 6,840 tonnes. Stainless steel production rose 2% to 10,880 tonnes at Elektrostal near Moscow and 49.3% to 12,850 tonnes at Mechel's Izhstal plant in Udmurtia.
Production of stainless sheet has become unprofitable due to negative trends produced by dumping by European producers and a switch in consumer preferences to low-cost imported steel.
In 2004, Russia produced 109,730 tonnes of stainless steel roll, down 15.6% on 2003.
Japanese steel production to top 112 million tons
Japans steel production this year is expected to pass the 112 million ton mark on solid shipments of high quality steel for cars and ships, marking the second straight year that output exceeds a previous high in 1990, according to industry data released.
Preliminary figures provided by the Japan Iron and Steel Federation show that total production as of November was 103.38 million tons, up 0.2% on the year, with December output estimated at about 9.1 million tons. This tops the 110.33 million tons recorded at the end of Japan's bubble economy in 1990.
Annual steel production reached an all-time high of 119.32 million tons in 1973. The second-highest output was recorded in 1974.
Metso to supply a shredder line to Yamanaka in Japan
Metso Minerals will supply a metal shredder line to Yamanaka & Co Ltd for its metal recycling plant in the city of Sendai, Japan. The delivery will be completed by the end of 2006 and the production is scheduled to start during the first quarter of 2007.
The value of the order is not disclosed. The delivery will play a significant part in Yamanaka's total investment, which is approx. Euro 10 million.
Metso's delivery comprises a 3000 horse power shredder line including complete downstream options with steel infeedbelt, dedusting, transport belting, ferrous, non-ferrous and shredder light fraction separation, plant control system, rotor cooling, site monitoring system and related equipment.
Yamanaka's net sales were approximately EUR 250 million in 2004 and it is one of the leading companies in automobile recycling and one of the largest metal scrap processors Japan. It is also the pioneer in Japan in Auto Shredder Residue Pyrolysis. Headquartered in Kawasaki City, Yamanaka has approximately 16 scrap yards and is processing more than 1.3 million tons of ferrous scrap annually.
Vietnam Steel Corp to invest in eight key projects
The Vietnam Steel Corporation VSC will give priority to investment in eight key projects between now and 2010 to raise its production output, especially production of steel ingots from domestic ores and products that have not yet been produced in the country such as steel plates.
VSC said that three projects will be implemented in 2006 and are planned for completion in 2008. They will include the second phase of the expanded Thai Nguyen Iron and Steel Co project, Quy Xa Mine Exploitation Co a JV with Chinese partner and a 2 million tonne steel rolling JV
The corporation will invest in some other projects to raise its production capacity of construction steel and industry serving steel, such as 250,000 tonne Da Nang steel rolling plant, 500,000 tonne northern steel plant and a project to raise the capacity of the Phu My cold rolling mill to 600,000 tonnes per year.
VSC is mapping out a feasibility study of a project to exploit iron ore in the Thach Khe Mine in central Ha Tinh province with an annual capacity of 5 million tonnes. The project is scheduled to start in 2007 and to be completed two years later. Then, the corporation will continue to pour VND55 trillion into a 4.5 million-tonne steel complex, which will use iron ore from the Thach Khe Mine to produce steel ingots and steel plates and boards, serving construction and other industries. The project is expected to be completed in 2015.
Macmahon wins $250m BHP Billiton iron ore contract
Perth based Macmahon Holdings Ltd has been awarded a $250 million mining and crushing contract for BHP Billiton's new "Orebody 18" open cut iron ore mine. The new satellite mine is located 34 kilometres east of Newman, in Western Australia's Pilbara region. Mobilisation and site establishment activities are scheduled to commence in February 2006 in preparation for plant commissioning. The award of this contract complements the existing open cut contract mining work that Macmahon has undertaken at BHP Billiton's Mt Whaleback iron ore mine, since November 2003.
Macmahon CEO Mr Nick Bowen believes this contract demonstrates how the growing strength and size of the Macmahon group can deliver major benefits to its key clients. He said that "This contract builds on Macmahon's strong relationship with the world's largest mining group. We now provide services for BHP Billiton mining operations at Mt Whaleback, Leinster, Olympic Dam, Cannington and Phosphate Hill. This four year contract also allows Macmahon the opportunity to showcase the wide range of skills and resources available within our group. In fulfilling this contract we will also ensure that we work hard to maximize the opportunities, in terms of both employment and other benefits, for the local community.
He added that "Macmahon will undertake the full range of mining services including drilling, blasting, loading and hauling of iron ore and waste materials.The ore processing services will include crushing and train loading of iron ore, in addition to the maintenance of the BHP Billiton owned ore processing infrastructure."
When fully operational, the new mine is expected to employ close to 140 people and produce up to 8 million tonnes per annum of iron ore for the duration of the contract.
South Vietnamese steel makers allege dumping from north
Steel makers in southern Vietnam are accusing their rivals in the north of dropping steel prices and have urged the Vietnam Steel Association VSA to impose fines for those enterprises exercising in this unfair practice.
According to the association, many northern manufacturers are selling steel at less than VND7 million ($437) a tonne, which is below the factory cost given the currently high import price of ingot of $360 a tonne. Southern makers also said that their rivals intentionally maintained the dumping policy despite an association consensus to raise the price by VND200,000 a tonne in November.
VSA general secretary Mr Pham Chi Cuong said that the association would not fine those enterprises who apply the dumping practice. He added that VSA would ask northern steel makers to raise their prices in accordance with that of southern makers so as to ensure the same price level in the domestic market. Mr Cuong said it would consider appropriate measures against these enterprises only if the dumping was proven to hamper southern manufacturers business.
VSA argued that the reason for the dumping practice by northern makers is that the consumption for steel is relatively low and has reduced by 30000MT to 190,000MT during November YOY, with inventories levels of over 300,000 tonnes of steel and 350,000 tonnes of ingots
NEMI commences operations at Trend Small mines
NEMI Northern Energy & Mining Inc NEMI has announced that the Company has received all regulatory approvals and has commenced mining operations at its Trend Small Mine. NEMI received a Mines Act permit in May 2005 approving the TSM mine plan and reclamation program. The mine permit was followed in the fall of this year by the approval of an effluent permit under the Environmental Management Act. Most recently, NEMI received its air quality permit and final water license, the final permit and license under the Environmental Management Act and Water Act required commencing mining operations.
Mining operations will continue through December in preparation for the start of coal processing in January 2006. The TSM initial production rate is targeted at 40,000 - 60,000 tonnes per month. Lomak Bulk Carriers Corp. is ready for the coal haul from the plant site to the load out with new tractors and trailers arriving. Installation of the 16 km rail along the Tumbler Ridge Branch Line and the 3.5 kilometers within the NEMI rail loop is complete and ready for coal shipments. NEMI has completed a Transportation Agreement with CN Rail to ship its coal product to Ridley Terminals near Prince Rupert, BC.
NEMI has appointed ITOCHU Corporation, a Japanese trading company, as its exclusive marketing agent in certain key markets. NEMI is working with ITOCHU to optimize the allocation of NEMI's metallurgical coal within the international steel industry. In addition to its role as marketing agent, ITOCHU has entered into an Agreement for the sale and purchase of coal with NEMI to purchase certain guaranteed tonnages of NEMI's coal product over a five year period.
NEMI Northern Energy and Mining Inc. is a western Canadian based coal company with strategically located metallurgical coal properties in northeast British Columbia. The Company owns a 100 % interest in the Trend Property located near the town of Tumbler Ridge. NEMI also has a 50 % interest in the Belcourt Saxon Limited Partnership that covers over 50,000 hectares of known and highly prospective coal bearing land in northeast British Columbia.
Brazilian steel sales down 9% in 2005
Brazilian domestic steel sales are on track to reach 16.2 million tonnes in 2005, a 9% decrease from 17.8 million tonnes registered in 2004, according to the country's steel association IBS. "These results reflect Brazil's economic policy of high interest rates and high stocks among distributors," an IBS spokesperson told press. IBS forecasts a 4% decrease in Brazil's crude steel production in 2005 to 31.6 million tonnes while steel use is expected to shrink 8% to 16.9 million tonnes.
"The consuming sector saw the higher prices of iron ore and coal early this year as a sign that steel prices would increase, therefore investing in stock increase" early in the year. While the stock increase helped sales early on this year, it hurt demand later in 2005. The automobile industry was the only sector that showed signs of increased demand for flat steel in 2005, according to IBS.
Flat steel sales in the domestic market are expected to decrease 8% in 2005 to 9.7 million tonnes, while long steel sales could fall 10% to 5.9 million tonnes and semi-finished steel sales are on track to drop 12.5% to 603,000MT in 2005.
Paulson announces Mr Hirtz on Algoma Board
Paulson & Co Inc, a major shareholder of Algoma Steel Inc, which had requisitioned for a special shareholder meeting to replace a majority of current Algoma directors, announced a substitution on its slate of nominees for the board.
Mr John Hritz will replace Mr. Wareham on the Algoma slate. Mr. Hritz has a broad background in the steel industry and has served as President, Executive VP Operations and Commercial, General Counsel and VP Employee Relations of AK Steel. He also worked for seven years at US Steel
Eldorado provides iron ore resource on Vila Nova Project
Mr Paul N Wright, President and CEO of Eldorado Gold Corporation has announced that an Inferred Mineral Resource of 8.7 million tonnes has been estimated with an iron content of 61.5% at the Company's Vila Nova Iron Ore Project in Amapa State in Brazil.
The Inferred Resource is based on 19 diamond drill holes located on section lines 100 meters to 200 meters apart over a strike length of 1,400 meters
Eldorado will hold 50% interest in the Project as part of a JV agreement with DSI Consult & Mineracao Amapari.
Official investigation on coal mine flooding begins in China
A team under China's State Council was set up on Tuesday to investigate the coal mine flooding accident which claimed at least 35 lives. The team, led by Mr Liang Jiakun, deputy director of the State Administration of Work Safety, is composed of officials from the national and Henan provincial safety production supervision departments.
The group is responsible for identifying the cause of, and losses and culpability in, the flooding of the Sigou Colliery in central China's Henan Province. A total of 76 miners were working in the pit, only 34 of who escaped. Rescuers have not yet found seven trapped miners.
Ten officials of the mine suspected of being responsible for the accident have been detained.
Irans Khuzestan Steel Co.'s annual production to hit 2.3million
The annual production capacity of Khuzestan Steel Complex is expected to reach 2.3 million tons by the end of the Fourth Development Plan 2005-10 said MD Mr Verdinejad.
The company is now working at a 2.2 million annual output rate.
