February, 20 2006
Steel ministry for status quo in import duty on steel
It is reported that ahead of the forthcoming budget the steel ministry has refused to send a revised memorandum to the finance ministry recommending higher import duty of 10 to 15% on steel causing a major setback to expectations of the domestic integrated steel companies.
The reason citied in the report is that the strong expectation of steel prices firming up globally resulting in higher domestic prices.
Luxembourgs Ambassadors asks - Is SAIL for sale?
Mr Paul Steinmetz, Luxembourgs Ambassador to India, is suddenly finding himself and his country in a controversy and is reported to have taken an offensive stand citing historical, cultural and economic attachment to Arcelor. A news report said that Mr Steinmetz noted that the Luxembourg government treated the company as a Public Sector Undertaking although it was not. He wondered what India would do if Mittal Steel made a similar bid to acquire SAIL.
The news report further said that Mr Steinmetz asked If we would allow Mittal to take over Arcelor, which is like our PSU, why wouldn't India allow Mittal to take over SAIL. Is SAIL for sale? Would it be sold to Mittal? And if Mittal would bid for TATA would India allow it?
Das committee to submit recommendations for iron ore policy
There was no dearth of iron ore in the country and the series of MoUs being signed with state governments needed to be implemented on priority basis, Union Minister for Steel, Chemicals and Fertilizer Mr Ram Vilas Paswan said. Mr Paswan said the country had iron ore deposit of 23 billion tonnes presently. The government targeted to achieve 110 million tonne steel production capacity, including public and private sector by 2020. Mr Paswan also said currently India produces 38 million tonnes of steel and the government had plans to increase the capacity to 65 million tonnes by 2011-12.
He said that the state governments including Jharkhand, Chattisgarh and Orissa, have engaged in competition of signing MoUs in view of the iron ore availability in those states and that the government has formed Das committee to look into the availability of raw materials as well as the implementation of MoUs on priority basis to avoid the delay in implementing the MoUs.
Mr Paswan said the recommendations of the Das committee would help the Centre frame a policy that would allow keeping for domestic use reserves of good quality iron ore, while allowing export of only low-grade iron ore containing less than 65% iron in them. We are thinking of putting a ban on iron ore exports for all good grades of ores containing iron above 65%, said the steel minister, adding that the country possessed several grades of iron ore.
The Das committee would detail the various types and grades of iron ore available in the country. It would also look closely into the number of MoUs signed by states for steel projects of various sizes that were to come up in the next few years, and whether there was any mismatch between demand and supply of iron ore for them. It would study and suggest as to who should be given what sort of iron ore reserves.
The committee is expected to submit its recommendations in three months time from now. Thereafter, the ministry of steel and that of mines together with the respective state governments would thrash out issues and notify the policy on iron ore, said Mr Paswan
ISA asks for policies to ban asbestos sheets for roofing
Latching on to the debate on the French aircraft carrier Clemenceau carrying hazardous asbestos, the Indian steel sector has demanded that galvanized corrugated steel sheets be promoted in the country, particularly in the rural sector.
The Indian Steel Alliance ISA and the Cold Rolled Steel Manufacturers Association CORSMA has also asked for a reduction in excise duty on galvanized sheets from the present 16% to at least 8% in the coming Budget. It is also reported that to boost domestic production of GC Sheets, the inverted duty structure due of 10% customs duty on imported zinc has to be also corrected.
In addition steel sector wants a penalty rate of 45% duty on asbestos as imports have increased by 18% to over Rs 60 crore annually. 795 tonnes of asbestos was produced in the country, while 136,016 tonnes were imported in '04-05. "Consumption is growing at an alarming rate of 12% per annum and over 30 asbestos cement plants and 673 small scale units are engaged in finished product manufacture," ISA is reported to have said. It wants a ban on asbestos mining, reclassification of imports under restricted list and labeling as well.
SC order on overloading effects transportation rates
The Supreme Courts recent judgment banning overloading of trucks to prevent accidents and damages to highways and bridges has led to a drastic reduction in supply of industrial commodities like cement, steel and chemicals. It has also resulted in an unprecedented 35% rise in truck rentals on trunk routes though traditionally these rentals are on a downward curve this time of the year.
This bucking of the normal trend is due to rising operating expenses and shortage of trucks in the aftermath of the November 9 order of the apex court banning issuance of special gold cards by state governments against a monthly fee of Rs 4,000-6,000, which permits overloading of trucks above prescribed limit.
An official from JSW Steel, which has a manufacturing facility at Vashind near Mumbai, said the company, move over one lakh tonnes of steel per month from the plant to the Mumbai Port. He said the company will need double the number of trucks to move the same load.
PESB selects Mr Daga as next director marketing of IOC
The Public Enterprises Selection Board PESB has selected Mr Gyan Chand Daga to assume the office of Director Marketing of Indian Oil Corporation Ltd. Mr Daga, who had previously served IOC, is now the Director Finance of SAIL.
IOC sources said the PESB recommendations were now being reviewed by the Union Administrative Ministry. The latter will forward its recommendations to the Union Ministry of Personnel, which is the designated authority to take the final decision on such recruitments.
The current Director Marketing, Dr N.G. Kannan, will retire in June. He joined IOC in 1969 and handled several key positions in HR and marketing before assuming the office of director marketing.
US recognizes Ukraine as market economy
The United States has recognized Ukraine as a market economy, officials said yesterday, in a step seen as a boost for President Mr Viktor Yushchenko's administration ahead of a parliamentary poll next month. Yushchenko, a liberal who rose to power after the Orange Revolution, saw market status as a critical stage in his drive to push the ex Soviet state closer to the West. He said the decision confirmed his administration was on the right course.
US Commerce Deputy Secretary Mr David Simpson said "I congratulate all Ukrainians for making positive changes and achieving market economy status," he said in a statement. "This determination reflects the impressive positive economic developments that have occurred in Ukraine over the past several years."
The government said in a statement the US decision recognizing it as a market economy will help Ukraine's talks with the World Trade Organization. It will also help stop antidumping investigations against Ukrainian steel makers, the major exporters and a key driver behind economic recovery but now struggling due to lower world prices for steel and more expensive Russian natural gas.
The European Union also declared Ukraine a market economy in December, making it easier for the country with its export-led economy to trade with the bloc.
66 trapped in Mexican coal mine after blast
66 miners were trapped two miles underground in a remote, semi desert region of in the northern part of Coahuila state of Mexico which borders Texas on Sunday after an explosion ripped through a coal mine, rescue workers said. "The information that we have is that 66 people are trapped and seven others, who were outside the mine but affected by the explosion, are injured," said Mr Miguel Angel Beltran of the civil protection agency in Saltillo, capital of Coahuila state.
The explosion occurred in the early morning hours and was caused by gases that ignited Coahuila Red Cross spokesman Mr Sergio Guajardo told Reuters. Because of the depth of the mine, he said it was not known if the trapped miners were dead or alive. "Right now we are working on getting out the gas," Mr Guajardo said. "The ventilators are working at full speed."
Soldiers and civil protection staff were working with specialist mine teams to free those trapped in the mine.
The mine is owned by Grupo Mexico, the worlds No. 3 copper miner, which also works other mineral deposits.
Japanese mills high grade steel sales to cross 50 million
Shipments of steel by Japanese manufacturers are expected to top 50 million tons in the year to March 2007, which would be a 16 year high, due mainly to strong demand for high grade steel materials from automakers and shipbuilders, the Nihon Keizai Shimbun reported, citing projections by major steelmakers.
Major steelmakers forecast demand for ordinary steel from automakers to increase 2% from a year earlier to about 13.5 million tons in the year to March 2007. Domestic automobile production, including auto parts for use in assembling vehicles overseas, is expected to rise 5%, while steel demand from shipbuilders is projected to rise two pct to some 5.8 million tons, the newspaper reported.
The Nihon Keizai said supplies to automakers and shipbuilders, major users of high-grade steel, are forecast to account for 30.8%t of overall ordinary steel shipments in the year to March 2007, up 9% over the past decade.
BlueScope H1 slides by 38%
Australia's largest steel maker, BlueScope Steel Ltd posted a 38% first half profit slide on weaker export prices and higher raw material costs and reaffirmed guidance for a weaker second half. The company posted a net profit after tax of A$312 million for the six months to December 31, down from A$502 million a year ago
BlueScope was hit by higher iron ore and coal costs, while a plant fire forced it to put more basic steel product into export markets under pressure from increased supply from China.
Magang in merger talks with Hefei Steel
It is reported in a daily that Ma'anshan Iron and Steel Group (Magang), China's fifth largest steelworks, is in merger talks with Hefei Iron and Steel Group (Hefei Steel), citing a senior official with Hefei Steel. "The negotiations just started recently and are now at very early stage," a senior official with financial department of Hefei Steel, who asked to remain anonymous, said. "Actually, the talks were arranged by the Hefei government."
The official said both the Anhui provincial government and Hefei government want Hefei Steel to be taken over by Magang, the largest steel maker in the province. She said Magang was the only company talking with Hefei Steel about a merger deal. "The two companies are neighbors in Anhui Province, and there is a possibility in future the two companies will merge," she said.
However it is also reported that Magang's representative said that talks are on about general cooperation but the talks did not include any merger plan.
Hefei Steel has an annual capacity of 1.2 million tons of iron, 1.3 million tons of steel and 1.25 million tons of rolled steel.
Atticus Capital asks Arcelor to negotiate with Mittal Steel
As per reports published in a daily, Atticus Capital LP has sent a letter to Mr Guy Dolle CEO of Arcelor requesting for carrying out negotiations with Mittal Steel on the bid.
The text of the letter is reported to be as under
As one of Arcelor's large shareholders, we were very disappointed by the Board's initial reaction to the tender offer made by Mittal Steel on January 27th and by your continued refusal to meet with them to discuss their offer for our company. We believe in the compelling industrial and financial merits of the transaction, which would offer synergies and strategic benefits to all participants in an industry in need of consolidation. For these reasons, we believe that a transaction with Mittal Steel would be in the best interests of Arcelor shareholders and stakeholders.
We urge you to objectively consider the merits of a transaction with Mittal Steel and to engage in negotiations in order to maximize their offer, which stakeholders should then be able to judge on its merits. A recommended deal would be of value to all parties and could surely lead to an improved offer.
We would like to remind you of the Board of Directors' obligations and fiduciary duty to your shareholders, and we reserve the right to protect our interests through voting at the April 28th AGM and/or through the courts. We look forward to hearing back from you so that we might discuss the matter soon
Atticus Capital LP is an investment management firm, with in excess of $10 billion of assets under management. Atticus' managed funds and advisory clients own and or have the right to acquire an aggregate of 8.2 million voting shares or approximately 1.3% of Arcelor.
Hebei province the largest steel producer in China in 2005
China's Hebei Province produced 73.86 million tons of crude steel in 2005, making it the largest steel producing province in China for the last five years, the Hebei Metallurgical Association announced.
Hebei produced 64.65 million tons of steel product and 67.66 million tons of pig iron last year. Steel sheet and strip output in Hebei accounted for 57.45% of all steel product output up by 11.4% over 2004
The province's steel sector's industrial value was RMB 104.06 billion ($13.01 billion) in 2005, up by 25.41% YOY. Sales revenue climbed up by 32.9% to RMB 372.613 billion ($ 46.577 billion) and profit reached RMB 23.714 billion ($ 2.964 billion) up by 27.49% from last year
Japan to support Thailand for developing steel industry
Ms Atchaka Brimble, Director General of the Japans Ministry of Industry's Industrial Economics Office said that Japan will consider Thailand's request for technical assistance for its steel industry. Ms. Atchaka said that Japanese officials would inform Thai officials regarding their decision during the next meeting of the Japan-Thailand Steel Cooperation Program Expert Committee to be held here in June or July.
Officials of the two countries discussed cooperation in the steel industry when they met in Tokyo recently.
BHP supports Murrurundi rail tunnel in NW New South Wales
The Australian Rail Track Corporation says BHP Billiton's search for coal in north-west New South Wales is the strongest indicator yet that the Murrurundi rail tunnel could be viable. The company has been granted an exploration license for an area near Gunnedah. It has also announced plans to expand coal loading facilities at the Port of Newcastle and a joint feasibility study with the ARTC into a rail tunnel through the Liverpool Ranges.
ARTC CEO Mr David Marchant says without BHP the tunnel would have little hope of going ahead. "This is the type of engagement that was required to make it real," he said. "There is a lot of coal up there - the reality is will the coal be exploited, will it be able to be shipped out and that really required a commitment of someone big enough to be actually exploit the reserves and to do so on an ongoing basis."
Coalmine cave in traps 7 miners in Liaoning
Seven miners were trapped underground following a cave-in in a colliery in Northeast China's Liaoning Province Saturday night, rescuers said on Sunday. The cave in occurred at around 7:45 PM Saturday in the Aiyou Colliery affiliated to the Fuxin Mining Group. A neighboring tunnel collapsed when miners were digging a new one. The cave in blocked the way for the seven miners to go out.
However rescuers said on Sunday that trapped miners may survive as rescue work is going on smoothly. The rescuers have shortened their distance to the trapped miners from 33 meters to 25 meters by 8 p.m. Sunday after nine hours of digging.
The trapped miners have the chance to survive, the rescuers said, as they were not buried under piles of stones and ventilation remained normal inside the shaft.
Corus commissions large dia pipe mill in Hartlepool
Corus has commissioned their new large diameter pipe mill in Hartlepool, England. The mill can produce pipes with an outer diameter of 84 inches. The Hartlepool pipe works is now the main base for the Corus groups pipe and tube production.
These tubes are mainly used in gas transportation projects and Corus would sell these pipes to clients all across the globe
Irans Mobarakeh reports takeover offer from Mittal Steel
As per report in an Iranian daily, Mittal Steel had expressed an interest in buying state run Iranian producer Foulad-e Mobarakeh for $5-6 billion, but the bid is highly unlikely to succeed. Foulad-e Mobarakeh, which has annual steel production of 4.2 million tonnes, said Mittal Steel made the approach two months ago, but the state was unlikely to surrender control of the firm while it was cranking up output.
It goes back to two months ago and the amount discussed was between $5-6 billion, Foulad-e Mobarakeh spokesman Mr Sadeq Abtahi said. I do not think it would be a practical proposal. I do not think the government has any reason to sell as we are doing very well.
EU & China to sign pact on clean coal technology
The European Union and China will sign a MoU on near zero emissions coal technology next week, the European Commission announced. The pact will be signed by EU Energy Commissioner Mr Andris Piebalgs and Ms Ma Songde, China's Vice Minister for Science and Technology during Piebalgs' visit to China next week.
The MOU builds upon and strengthens work on such programs or areas as the Action Plans on clean coal technologies, energy efficiency and renewable energy, the EU-China Dialogue on Energy and Transport Strategies, the Scientific and Technological Cooperation Agreement and the EU-China Energy and Environment Program, according to the EC.
The MOU will encourage the development of technology allowing the capture and underground storage of carbon dioxide emitted from coal fired power stations, a matter of potential significance in the fight against climate change.
Zaporizhiya ferroalloy output down by 23% in January
Ukraine's Zaporizhiya Ferroalloy Works ZZF reduced output tentatively 22.6% YOY in January to 38,400 tonnes of ferroalloys. Production fell by 8.4% to 28,200 tonnes of silicon manganese, by 32.9% to 5,700 tonnes of ferromanganese and by 61.2% to 4,000 tonnes of ferrosilicon. ZZF had reduced ferroalloy output by 11.2% to 513,000 tonnes in 2005 over 2004.
ZZF, one of Ukraine's three ferroalloy plants, produces all of the country's medium and high carbon ferromanganese and all of its 90% metallic manganese. Dnipropetrovsk based Privatbank controls ZZF as well as Ukraine's Stakhanov ferroalloy plant, and manganese concentrate producers Marganetsky GOK and Ordzhonikidze GOK.
Aker Kvaerner to supply deepwater umbilicals for Tahiti project
It is reported that Chevron North America Exploration and Production Company has awarded Aker Kvaerner Subsea a contract for the design, fabrication, inspection and testing of steel tube umbilicals for the deepwater Tahiti project. The value of the contract was not disclosed. The contract was signed and booked by Aker in the 4Q 2005, and the umbilicals are scheduled to be delivered by the end of 1Q 2007 to Tahiti.
The umbilical order includes four dynamic, steel tube umbilicals totaling 21,300 m in length and one static umbilical 2,865 m in length with all required topside and subsea terminations. A-K Subsea will manufacture the umbilicals at their facility in Mobile, Alabama, after which they will hand them over to Aker Kvaerner's deepwater business unit for detailed dynamic, fatigue, and interference analysis work.
Bangladesh bans entry of SS Norway
Bangladesh government has banned SS Norway a derelict European ship from being dismantled on its beaches after environmentalists complained that scrapping the vessel would endanger workers. The move comes just days after India yielded to environmentalist concerns that an aged French aircraft carrier contained too much asbestos for workers to safely dismember it.
It is reported that a Bangladeshi scrap merchant Mr Lokman Hossain had agreed to pay $12 million for the SS Norway.
Solgas US protests over Ajakuta deal with Global Infrastructure
It is reported in a local daily that Solgas USA, the parent company of Solgas Energy Limited, which was previously granted a 10 year Concession Agreement by the Nigerian Federal Government to manage the Ajaokuta Steel Company Limited has protested transfer of the concession to Indias Global Infrastructure Holding, saying that the new Concession Agreement was fraudulently conceived. In a statement the Solgas management said Global Infrastructure Holdings, Minister Mr Liyel Imoke, and Dr Gbenga Obasanjo, son of President Olusegun Obasanjo were integral parts of a conspiracy that led to the wrongful termination of the governments agreement with Solgas on the Ajaokuta Steel Company.
The management of the Solgas pointed out that it was pursuing Global Infrastructure Holdings in litigation in the United States based on breach of a Confidentiality Agreement with Solgas.
On the other hand Global Infrastructure Holdings claims that the relationship between the Federal Government and Solgas was properly terminated by agreement
Pervouralsk mill could reduce pipe output 5%-7%
Pervouralsk New Pipe Plant PNTZ expects to reduce pipe output by 5% to 7% during 2006 s per a report citing Mr Melik Mori MD. "Last year was fairly successful for our product mix and we increased output approximately 8%. The same sort of growth can hardly be predicted in 2006 and, taking all factors into consideration, we have planned for a drop in production," Mr Mori said.
Pervouralsk increased pipe production by 7.9% to 731,600 tonnes in 2005. Pipes sales rose 10.2% to 743,300 tonnes.
The Pervouralsk mill makes a range of 25,000 pipes and pipe sections from 200 grades of carbon, alloyed and stainless steels. Pipes are exported to 25 countries.
Union authorizes strike against AK Steel
The union representing 2,600 hourly workers at AK Steel's Middletown Works has overwhelmingly authorized its leaders to call a strike, less than two weeks before their contract expires. "We have heard our members," Mr Brian Daley, president of the Armco Employees Independent Federation, said Saturday. "We hope that AK Steel begins listening." The union said that 2,424 of its 2,645 members voted on Friday and Saturday. Only 56 of them voted against a strike authorization, the union said.
The union's labor agreement expires on March 1. The company is seeking concessions, saying it needs to reduce legacy costs such as pensions to be competitive. The steelmaker has cut about 400 hourly jobs at the southwest Ohio plant in the last two years.
"All we can say is regardless of the AEIF vote, the company's focus remains on negotiating a new cost-competitive agreement by Feb. 28," company spokesman Mr Barry Racey said. "Negotiations are continuing. AK Steel remains hopeful."
Australia's Excel 1H soars
Australia's Excel Coal Ltd said that first half net profit rose to A$52.9 million from A$24.5 million a year before. Citing a cost blowout at the Millennium project, the company said annual net profit is now expected to be about A$95 million to A$100 million.
It said in August that it expected earnings of A$150 million but subsequently revealed a cost blowout at the project. Excel said the overall capital cost of the project is now expected to be about A$160 million from an earlier A$95 million.
Beitai Steel's output rises in 2005
The Beitai Steel Group Co Ltd produced 5.26 million tonnes of crude steel in 2005, up by 42.7% from last year and saw export volume increase by 56% to $330 million, the company announced.
Beitai Steel, based in northeastern China's Liaoning Province, saw industrial output value in 2005 rose by 41.8% to RMB 14.35 billion ($ 1.79 billion). The company predicts profit for 2005 will reach RMB 1.38 billion ($ 172.5 million), which should be released in March.
Beitai Steel is a state owned company established in 1971. Its products include pig iron, CC slabs, wires, coke and chemical products.
BlueScope Bulter China expects same profit as last year
BlueScope Bulter China, a subsidiary of Australian BlueScope Steel Ltd., anticipates that profits this year will be the same as last year despite a major falloff from its parent, a senior company official Wednesday. "Although China's steel glut pulled down the average level of the world's steel price, the subsidiary will still see a good balance sheet this year due to our high value added steel structural products," Mr Ding Fubao, the vice general manager of the company, said.
"China's oversupply may impact BlueScope Bulter China on two fronts. On one hand, we can purchase steel wires and plates for processing at a lower price but on the other hand we cannot offer our structural steel for more money because of the sluggish market," he said.
Mr Ding comments follow BlueScops's announcement that profit will fall as much as 53% in 2006 because of Chinese oversupply.
BlueScope Steel Ltd makes steel product and steel structures, with manufacturing facilities in Guangzhou, Chengdu of Sichuan Province, Shanghai, Tianjin and Langfang of Hebei Province.
Austral interim net at $6.9 million
NSW coal miner Austral Coal has made an interim net profit of $6.9 million due to higher export prices. Austral Coal, which is 85.8% owned by Centennial Coal, said the $6.9 million net profit compared to a $31.44 million loss made in the previous half. Sales revenue was $71.55 million.
"The profit improvement reflects higher export prices together with lower operating costs at the Tahmoor coal mine following a number of initiatives to improve the mines productivity," the company said on Monday.
Centennial took control of Austral in a friendly $350 million merger last year, but its bid for full control was stymied when Glencore took a 14% stake in Austral.
