December, 06 2005
JSPL to invest $5.4 billion in steel sector
Jindal Steel and Power Limited JSPL will invest over $5.4 billion in the steel industry in the country over the next 10 years, Mr Naveen Jindal, Vice Chairman of JSPL announced or setting up a 5 million tonne plant in Jharkhand and a 6 million tonne plant in Orissa
JSPL has also invested Rs.30 billion to raise its steel production from 1.3 million tonne to 2.9 million tonnes at its Raigarh plant. The Raigarh expansion project is expected to be complete by June 2006.
Tata Steel reported to be in talks to buy Millennium
It is reported in news daily that Tata Steel is in talks with Siam Cement, the largest shareholder in Millennium Steel with a 39% to buy out the cement companys stake in the steel firm. The cement companys share is worth about Rs 3,100 crore.
Millennium Steel has three manufacturing facilities with a production capacity of 1.7 million tonne of finished products every year. The products, such as special bars and wire rod, are mostly sold in the domestic market.
Tata Steel is also reported to be in talks state owned TUSCO a Thai steel manufacturer and South African Highveld Steel
SAIL likely to buy methane from ONGC for BSL & DSP
Steel Authority of India (SAIL) may buy coal-bed methane (CBM) from Oil and Natural Gas Corporation (ONGC) for use a substitute of expensive coking coal to cut SAILs coking coal requirement by one million tonne and will save Rs 619 crore. The proposal is to partially replace coking coal at Bokaro and Durgapur steel plants.
ONGC has nine CBM blocks in five states and expects to begin commercial production by 2006-07.
According to reports SAIL has said that its daily requirement of CBM would be 3.5 million cubic meter. The yearly requirement would go up to 1.28 billion cubic meters (BCM).
The problem with coking coal is its inadequate supply, which makes it expensive. Though CBM can not be a complete substitute to coking coal, it is cost-effective and saves money, said SAIL.
Orissa High Court strikes down ORSED Act
Orissa High Court today struck down the Orissa Rural Infrastructure and Socio Economic Development (ORSED) Act, 2004, introduced by the state government to collect tax from mineral bearing land. The court observed that the subject matter of the legislation under ORISED Act 2004 is ''no longer available to the state legislature for legislation as a Central Legislation had ''taken over the regulation of development of mines and mineral development in public interest.'' The Court further said the regulation of mines and mineral development is no longer available to the State Legislature for levying fee and the field is fully occupied by the Parliament.
The division bench while striking down the Act directed the state government to refund the taxes or any cess that had been collected from mine lease owners, consumers and buyers.
Several companies including Nalco, MCL, Tata Refractory, JSPL and Eastern Zone Mining Association had filed petitions in the High Court challenging the legislative competence of the Orissa government to pass the ORISED Act, 2004.
Mukand sells Kurla property to Pantaloon for Rs 221 crores
Alloy steel maker Mukand has sold its Kurla property to a consortium of real estate developers, Offbeat Developers and Graceworks Technologies, for a consideration of Rs 221 crore. According to the MoU signed the buyers will make the entire payment in installments to Mukand. The transaction will be completed by the end of January 06.
Offbeat Developers and Graceworks Technologies are jointly held by real estate funds, Kshitij Venture Capital Fund and Horizon Venture Fund, controlled by Pantaloon Retail India headed by Mr Kishore Biyani.
Mukands MD Mr Niraj Bajaj told that the amount is much more than what the company had expected to get. He added that the cash generated from the sale of land will speed up the debt reduction process and strengthen the company further. Mukand stated in a release that the proceeds from the sale of Kurla property will be used to repay part of the debt and part-finance the ongoing expansion plans of the company. The company is investing Rs 120 crore to increase its capacity and create further downstream facilities at its Ginigera and Dighe plants.
TATA steel to host symposium on knowledge management
TATA Steel is organizing a 2 day symposium to share views on the field of knowledge management and 150 delegates from 45 companies representing almost all sectors of industry are likely to take part
Tata Steel VP Mr HM Nerurkar said chief knowledge officers of all seven Most Admired Knowledge Enterprise MAKE would participate to interact with the delegates directly. The speakers would consist of eminent experts and proponents of KM form various sector of industry spanning the IT sector, service industries, manufacturing industries, chemical sector, R&D and engineering firms
Top Chinese economic planner NDRC reconfirms steel overcapacity
China issued new estimates of enormous overcapacity in the steel industry on Monday, adding that the country also had too much plant for making aluminium, copper, coke and automobiles.
China's annual steel capacity would hit 470 million tonnes by the end of 2005, up 10.6% from the end of 2004, the official People's Daily reported, quoting the head of the National Development and Reform Commission, the country's top economic planner. But demand in 2005 would be only about 350 million tonnes, said commission Chief Mr Ma Kai.
Mr Ma's forecasts, implying a capacity surplus of about 120 million tonnes a year, were close to those published last week by a think-tank attached to the cabinet. That earlier forecast, from the Development Research Centre, put 2006 surplus production at 116.5 million tonnes.
China's steel industry association dismissed the earlier forecast as "rubbish", saying 2006 output of 380 million tonnes would be balanced by demand. Mr Ma told a national conference that steel production capacity would reach 600 million tonnes if all the plant under construction or planned was included. In general, the government would not approve new steel plants from next year, he said. The paper did not say when that policy would end.
CVRD iron ore business to surpass 250 million tonnes in 2005
CVRD's iron ore and pellet sales could reach 250 million tonnes in 2005 as per CFO Mr Fabio Barbosa. "This year's output could come at 233 million tonnes while ore purchase could reach 18 million tonnes, totaling an estimate of 250 million tonnes in 2005 sales. Last year's sale was at 231 million tonnes. "Sales have increase almost 50% in the last three years, due to CVRD's efforts to invest in production increase," Mr Barbosa added.
Mr Barbosa said that roughly 20 million tonnes could be added to 2005 figures in 2006 as the iron ore market is currently unbalanced and demand surpasses iron ore supply
Bekaert to close Michigan wire plant
Bekaert today announced plans to close its manufacturing facility for advanced wire products in Muskegon, Michigan, where Bekaert produces high carbon specialty steel wires mainly used in various applications for the automotive industry.
"Both the softening of the domestic automotive market and the increasing competition of low cost offshore importers are an ongoing trend in North America," said the company in a statement. "As a small manufacturing facility, the indirect regulatory and environmental costs of operations at the Muskegon plant have become burdensome," explained the company.
Bekaert operates seven manufacturing facilities in the United States for advanced wire products and five for advanced materials and coatings. It is not clear how these other U.S. plants will be affected, although the company issued a statement late last month talking of the need to 'further invest' in China, albeit without disclosing financial details.
The statement followed Bekaert's opening, in early November, of a new 20 million Chinese production unit, for advanced materials and coatings. Bekaert last year increased production capacity for steel cord products for tire reinforcement in China to 120,000 tonnes annually. The Belgian company is working on the implementation of a further increase of its production capacity in China by at least 50%. Bekaert is now the largest Belgian investor in China with production facilities in advanced wire products in Shanghai and in the provinces of Jiangsu, Liaoning and Shandong.
Dofasco and ThyssenKrupp announce mailing of bid circular
Dofasco Inc and ThyssenKrupp jointly announced that ThyssenKrupp has mailed to Dofasco shareholders its bid circular in connection with its previously announced offer to acquire all of Dofasco's outstanding common shares in a friendly, all-cash transaction for total consideration of approximately C$4.8 billion (Euro 3.5 billion), or C$61.50 per common share.
Included in the package mailed to shareholders today is the Directors' Circular prepared by the Dofasco Board of Directors which unanimously recommends that shareholders accept the ThyssenKrupp offer.
The offer price represents a 40% premium over Dofasco's closing share price on November 22, 2005, the day prior to the announcement by Arcelor of its intention to make a hostile bid for Dofasco of C$56.00 per share. ThyssenKrupp's offer of November 28 also represents a 9.8% premium over the Arcelor bid.
USs ITC will conduct full sunset review on SS pipes from Korea & Taiwan
The US International Trade Commission ITC has voted to conduct full five year "sunset" reviews concerning the antidumping duty orders on imports of certain welded stainless steel pipe from Korea and Taiwan. As a result of today's votes, the Commission will conduct full reviews to determine whether revocation of these orders would be likely to lead to continuation or recurrence of material injury within a reasonably foreseeable time.
The Uruguay Round Agreements Act requires the Department of Commerce to revoke an antidumping or countervailing duty order, or terminate a suspension agreement, after five years unless the Department of Commerce and the ITC determine that revoking the order or terminating the suspension agreement would be likely to lead to continuation or recurrence of dumping or subsidies (Commerce) and of material injury (ITC) within a reasonably foreseeable time.
The Commission's notice of institution in five-year reviews requests that interested parties file with the Commission responses that discuss the likely effects of revoking the order under review and provide other pertinent information. Generally within 95 days from institution, the Commission will determine whether the responses it has received reflect an adequate or inadequate level of interest in a full review. If responses to the ITC's notice of institution are adequate, or if other circumstances warrant a full review, the Commission conducts a full review, which includes a public hearing and issuance of questionnaires.
Malaysia to abolish tariffs on most Japanese steel products
The Japanese and Malaysian governments have unofficially decided to sign an economic cooperation pact centering on a bilateral free trade agreement in mid-December, Asian diplomatic sources said. It will be Japan's third FTA after agreements with Singapore and Mexico, which have already been implemented.
The FTA talks with Malaysia were difficult, particularly over automobiles and steel products, due to Kuala Lumpur's policy of protecting its national carmakers. Malaysia has promised to abolish tariffs on most mining and manufacturing products, including steel and automobiles, within 10 years of the FTA's implementation.
Kryvorizhstal board changes all members
Kryvorizhstal supervisory board has dismissed the chairman of the mill's board, Mr Anatoliy Sokurenko, and all the board members who were appointed at a Kryvorizhstal stockholders' meeting on June 30
The supervisory board appointed Mittal Steel's Mr Narendra Chaudhary as acting chairman of the board and 11 representatives of Mittal Steel were also appointed acting board members. A general stockholders' meeting of Kryvorizhstal is set for January 12.
Slovenian Steel privatization to conclude in 2006
The commission overseeing the sale of the Slovenian Steel Group has recently sent its proposed privatization model to the Economics Ministry and according to a ministry official, the first phase of the privatization should be concluded by the end of 2006.
Mr Peter Puhan, head of the internal market directorate at the Economics Ministry, has told that the proposal calls for the Slovenian Steel Group to be sold in its entirety; however individual companies within the group might also be sold separately. He stressed that reaching the highest possible price is only one of the aims of the procedure. Yet he gave no estimates on the price, which will become known once the appropriate public tender is concluded.
Mr Puhan explained that the state became a majority owner of Slovenian steel works through legislation with which it took on the steelworks' liabilities and translated them into ownership shares. The bulk of the liabilities were transformed into bonds issued by the steelworks, which means that the money the state gets by selling its stake could be used for debt repayment, according to Mr Puhan.
He added that the privatization would be gradual, with the state retaining a controlling share for some time to come. Puhan explained that the state is interested in bringing in a strategic partner, as only such a buyer can guarantee the ongoing development of the steelworks.
The group reported sales revenues of SIT 91.4 billion (Euro 381.3 million) in 2004, an increase of 30% over the previous year, while profit amounted to SIT 2.59 billion (Euro 10.8 million). It generated exports of Euro 267 million last year
Chinese iron ore imports set to slow in 2006
China, the world's top importer of iron ore, is expected to import 264 million tonnes of the raw material in 2005 to make steel, the Ministry of Commerce said Monday. The 2005 forecast is higher than the ministry's estimate in August at 240 million tonnes for the year.
The country imported 221 million tonnes of iron ore in the first 10 months of this year, exceeding the 208 million tonnes it imported in the full year 2004, as its steel industry expanded output by more than 20%.
It forecast imports would rise by about 35 million tonnes in 2006, less than the estimated 56 million tonnes increase this year, as a slump in domestic steel prices discourages mills from importing more iron ore.
The ministry said it expects the international iron ore market to show a 12 million tonne surplus next year as producing countries increase supply while China, the major driver of growth in iron ore demand, slows down its steel production. "The change in the supply and demand pattern will push down international iron ore prices in 2006," the ministry said.
Its comments come as mainland steel mills are campaigning to restrict likely in 2006 in iron ore prices from the world's top miners, including Brazil's Companhia Vale do Rio Doce, Australia's BHP Billiton and Rio Tinto after a 71.5 percent rise this year.
Heilongjiang to limit coal output
Northeast China's Heilongjiang Province will limit its coal output of next year to the scale of this year in a bid to ensure safety in production, provincial governor Mr Zhang Zuoji said here Monday. A deadly coal mine blast on November 27 this year is considered the outcome of over-production.
The blast occurred at Dongfeng Coal Mine, which had a designed annual production capacity of 500,000 tons. However, the mine turned out more than its capacity, thus leading to the blast.
As a leading coal producer, Heilongjiang Province produced 95.46 million tons of coal last year, ranking sixth in the country. The governor called on all coal mines to control production quota, ensure safety in production and make sustainable development.
Morgoil bearings for Laiwu Iron and Steel Company
The Morgoil Bearing Division of Morgan Construction Company has received a contract to manufacture its bearings for Laiwu Iron and Steel Company, Ltd., Shandong Province, the People's Republic of China, for a new flat mill the company is building. Delivery is scheduled for summer 2006.
Mr Gabriel Royo, VP of Morgoil, told that "Engineering and technical support for this contract will be supplied by the company's headquarters facility in Worcester, Mass., while the equipment and manufacturing components will be manufactured at the company's fully owned subsidiary: Morgan-Shanghai manufacturing facility in China."
Owner of disaster-stuck China mine disappears
The owner of a Chinese mine where flooding has trapped 42 miners underground has disappeared, state media reported on Monday, highlighting China's struggles to clean up the world's deadliest mining industry. Mr
Jin Changsong, owner of the Sigou Coal Mine in the central province of Henan, went missing after Friday's accident along with several of his managers, Xinhua news agency reported. The mine had been operating without a safety license.
There was no word on the fate of the trapped men. Mr Zhao Weimin, director of the Coal Industry Bureau in Henan's Xin'an County, said they might have had some chance of survival if they had been able to get to parts of the mine above water level.
Murchison Metals raises $28 million or Jacks hill project
Junior iron ore developer Murchison Metals Ltd says it will raise $28 million from an institutional share placement. Murchison executive chairman Mr Paul Kopejtka said the company had placed 87.5 million shares at 32%s per share with institutional investors from Australia, North America and Europe. The issue had been two times oversubscribed, he said, which was a strong endorsement of the company and its key Jacks Hill iron ore project in Western Australia.
"It is also recognition of the sustained demand for high quality iron ore from overseas customers that can be sourced from the mid-west region of Western Australia," he said. The funds will be put into the Jack Hills project, which the company said was on track to begin production in the first quarter of 2006.
Webco Industries reports Q1 of 2006 fiscal results
Webco Industries Inc has reported results for its fiscal 2006 first quarter ended October 31, 2005. For its fiscal 2006 first quarter, the Company reported net income of $1.651 million compared to $6.614 million for the same quarter in fiscal 2005. Net sales for the first quarter of fiscal 2006 were $73.0 million, a 1.8% increase over the $71.7 million in last year's first quarter.
Mr F William Weber, Webco's Chairman and CEO commented, "We are pleased with first quarter earnings in light of the current dynamics of the steel tubing industry. The six quarters preceding the current quarter was an excellent period in the Company's history, enabled by a positive pricing environment which was primarily created by the lack of availability of carbon steel along with selling prices being matched with lower average-cost inventories. As we have indicated in previous releases, the level of earnings during that period was not sustainable.
Mr. Weber continued, "Our future performance will be dependent on changes in the cost of steel, which has recently increased for carbon sheet coil, and the demand characteristics of the markets we serve. We expect some short-term margin pressure as a result of the recent volatility in the cost of carbon steel. Future changes in the cost of steel are very difficult to predict beyond the next four months due to, among other things, the potential for increased world trade imbalances with China, the small number of producers in the United States, volatility in the supply and demand for steel products, the price and availability of the components used in steel-making and the status of the industrial economy. We continue to monitor changes in the cost of steel and how they might affect customer demand for our products."
Webco is a manufacturer and value added distributor of high-quality carbon steel, stainless steel and other metal tubular products designed to industry and customer specifications. Webco's tubing products consist primarily of pressure tubing and specialty tubing for use in durable and capital goods including heat exchangers, boilers, automobiles and trucks and home appliances. Webco has three production facilities in Oklahoma and Pennsylvania and five value-added distribution facilities in Oklahoma, Texas, Illinois, and Michigan, serving more than 1,000 customers throughout North America.
Algoma Steel statement on Paulson court action
Algoma Steel Inc announced today that, on January 5, 2006, the Ontario Superior Court of Justice will hear arguments on the application by US based hedge fund, Paulson & Co Inc to advance the date of the meeting of Algoma shareholders.
Algoma's board of directors has set the meeting date of March 22, 2006 for shareholders to consider the resolutions proposed by Paulson. Late last week, Paulson filed a notice of application with the Ontario Court for a hearing to seek to change the March 22 date to an earlier date.
Algoma Steel's Board of Directors reiterated today that it will continue to focus on the best interests of the Company in dealing with the various demands of Paulson & Co Inc. This includes ensuring that shareholders have full and accurate information with respect to matters on which they vote.
Algoma Steel Inc. is an integrated steel producer based in Sault Ste. Marie, Ontario manufacturing hot rolled steel, cold rolled steel and plate.
Bay Bridge considers ship breaking at Yaquina Bay
Bay Bridge Enterprises LLC, owned by an Indian firm with offices in the United Arab Emirates, is moving rapidly to set up a ship recycling yard just a mile from the tourist-oriented Newport waterfront. Bay Bridge plans to invest $3.9 million in Newport for startup costs.
News of the industry surfaced in the past two weeks, as the Port of Newport kept negotiations quiet at the request of the company. This is their site of choice, said Mr Don Mann, general manager of the Port, which would lease the land to Bay Bridge. The Port commission is now deliberating and trying to make a decision.
A public hearing on the proposal is set for Tuesday in Newport, and a final deal between the Port and Bay Bridge could be signed in January. Toxic spills and workplace accidents at salvage yards have brought controversy to the ship breaking industry. Ship recyclers have struggled to clean up their reputation and business under the state and federal threat of shutdowns.
MPCA approves EIS on US Steels Minntac discharge
The Minnesota Pollution Control Agencys Citizens Board has approved an environmental impact statement on US Steels proposed discharge of up to 7.2 million gallons per day of chemically tainted water from the companys Minntac tailings basin, north of Virginia. The company is seeking to discharge the water into the Dark River and the Sandy River-Pike River system
The approval completes the first phase of the US Steels effort to obtain a new discharge permit. Company officials have indicated they need to draw down water in the Minntac basin and replace it with fresh water, in order to reduce chemical concentrations. The water in the basin is currently recycled for plant operations and the concentration of some chemicals has reached the point where it is corroding plant equipment and increasing maintenance costs.
Company spokesperson John Armstrong said recently that US Steel plans to move forward with the permitting request. That effort will require a new public process and hearings, which likely would not be completed before fall of 2006.
Court extends Stelco protection by 1 day
The judge presiding over Stelco Inc.'s crawl through bankruptcy protection shortened the leash Monday, extending the steel maker's court protection for only one more day. "I would think stakeholders having a financial interest in this matter should refrain from playing chicken," Ontario Superior Court Justice James Farley said in a Toronto court. "They should do what is right rather than completely self-serving," said the judge, who had harsh words for lawyers representing many of Stelco's investors.
His comments came after investors began fighting over the stock Stelco will issue when it finally emerges from court protection. Lawyers said that desire for equity was sparked when two global steel giants began a bidding war for Stelco's Hamilton neighbor and rival, Dofasco Inc.
Justice Farley's one day extension wipes out a threat from Stelco's lenders, who said Friday that they would push Stelco into receivership if protection was not extended Monday.
Foundation Coal awarded ''2005 Coal Company of the Year'' at Platts
Foundation Coal Holdings Inc took home "Coal Company of the Year" honors at the seventh annual Platts Global Energy Awards held at New York. Recognized for leadership in mining safety, environmental stewardship, and technical and financial innovation, Foundation received this prestigious award in its first year as a nominated company.
"Winning 'Coal Company of the Year' honors is a tremendous accomplishment for Foundation Coal," said company president and CEO Mr James F Roberts. "This award further validates the success of our business strategy over the course of our first year as a public company. Our commitment to operational excellence as a low-cost producer, focus on excellence in safety and environmental stewardship, and management of risk through geographic, operational, and market diversity continues to generate strong returns for our shareholders, provide a safe workplace for our employees, and yield high-value products for our customers," Roberts continued. "I am pleased that Platts has chosen to recognize the hard work of Foundation's approximately 2,900 employees."
Platts Global Energy Awards, established in 1999, honor exceptional achievement and vision displayed by energy companies throughout the world and across various industry sectors. The 2005 review panel consisting of international energy experts, energy ministers, regulators, corporate leaders, leading legislators, and academics chose winners in 16 categories. The judges evaluated nominees in the coal category in the areas of advanced technologies, productivity, innovative market or technology strategy, shareholder value, and commercial success.
Foundation Coal Holdings, Inc., through its affiliates, is a major U.S. coal producer with 13 coal mines and related facilities in several states including Pennsylvania, West Virginia, Illinois, and Wyoming. Through its subsidiaries, Foundation Coal produces approximately 67 million tons annually, largely for utilities generating electricity.
