February, 25 2006
Indian Railways to spend $5 billion on freight tracks
Indian Railways minister has presented a mega plan to build new tracks as faster economic growth stokes demand for transporting goods. It plans to spend 220 billion rupees ($5 billion) to build 10,000 kilometers of dedicated freight lines by 2010, Railways Minister Mr Lalu Prasad said in his budget speech to parliament.
Railway's proposed freight corridor will link New Delhi with Mumbai and ports in the west, and with the eastern port city of Kolkata. The rail corridor, which will be built in two phases, will carry coal and steel, Mr Prasad said
The allocation of a freight corridor, especially for the coal and steel sectors, is in tune with the demand made by these two sectors for quite some time. This allocation, along with that of increased wagon manufacturing capacity, brings an additional boon for the steel sector translating into increased demand.
Mr VS Jain Chairman of SAIL said that laying of new tracks in the proposed corridor, 550 km of new lines, 1,100 km of gauge conversion projects and 25% increase in wagon manufacturing capacity, would help boost demand for steel.
Coal Iindia Limited sources said that over 51% of the present movement of coal was by rail. If coal production increased, as per projections, to 1,086 million tonnes in 2024-25 from about 370 million tonnes now, a dedicated corridor and increased wagon haulage would be required.
POSCO India MD elevated to parents board
POSCO has announced the appointment of POSCO Indias MD Mr Soung-Sik Cho, as standing director in the Posco Board. He is also promoted as senior executive vice president.
Mr Tae-Hyun Jeong, the deputy MD of POSCO India, has been promoted to vice president of POSCO.
This development reflects the significance POSCO attaches to the Indian project as this is the first time in the 38 year history of POSCO that the head of an overseas subsidiary has been appointed as a board member.
SAILs BSP makes 260 meter long rail
SAILs Bhilai Steel Plant claims to have manufactured the world's largest 260 meter long rail for supply to Indian Railways. The longest rail has been manufactured by welding together four rails of 65 meters at the BSP's flash butt rail welding unit that began production in February 2005.
Mr RP Singh MD of BSP said that it is the longest to be produced anywhere in the world. "The new rail will ensure better comfort and safety and will help reduce maintenance cost by a sizeable amount because of the superior quality steel and technology," Singh added.
Mittal Steel appoints Hatch Associates for Jharkhand DPR
Mittal Steel Company announced that it has selected Hatch Associates Limited to provide consulting and engineering services for the preparation of a Project Concept Study in support of a Detailed Project Report for the Jharkhand Steel Plant Project in the state of Jharkhand in India. Hatch will provide professional services for the analysis of the markets for steel products in India, and prepare a concept and design basis for the proposed 12 million tonne per year steel plant.
The Project would be developed in 2 Phases of 6 million metric tonnes each. It is expected that the first phase would be completed within 48 months after agreement of the DPR and the second phase within a further 54 months after completion of Phase 1.
Dr Sanak Mishra, CEO of Mittal Steel's Jharkhand Greenfield project said The appointment of Hatch is a major move forward in the plans of Mittal Steel to set up a world-class steel plant in Jharkhand."
Hatch provides consulting, engineering and project delivery services for mining and metals, energy and infrastructure projects world wide and was selected based on their worldwide network of expertise in iron and steelmaking markets, technologies and major project delivery capabilities.
Railway budget puts wagon makers back on track
This years rail budget has made a provision for 25% rise in wagon manufacturing. In order to meet the rising demand of traffic, an increase of 25% will be made in wagon manufacturing, Mr Lalu Prasad said while presenting this years rail budget in Parliament. Considering the pace of growth in freight traffic, expansion of wagon-making capacity has become essential, he said.
According to the industry estimate, the wagon industry is pegged at Rs 2,000 crore.
Titagarh Industries chairman Mr JP Chowdhury said, The hike in wagon procurement will boost the private sector in the industry.
Texmaco president and CEO Mr Ramesh Maheswari did not sound that bullish and said We welcome the announcement, but the proposed increase in procurement of wagons by 25% will be wholly inadequate if we consider the actual ordering level and off take by the railways in the last two years. In my opinion the hike should be at least 100% of the present level, Mr Maheswari said.
Jessop chairman Mr PK Ruia said the budget is expected to create substantial demand for rolling stock as the railway minister has increased the wagon manufacturing capacity by 25%. We have already been contacted by the railways and have committed a supply of 300 wagons a month. I expect a larger order for coaches too.
Arcelor acquires 38.41% stake in Laiwu Steel Corporation
Chinese steelmaker Laiwu Steel Group agrees to sell to Arcelor 38.41% stake in Laiwu Steel Corporation, a listed subsidiary of Laiwu Steel Group Ltd. Under the terms of the share purchase agreement, Arcelor will acquire 354,236,546 legal person shares from Laiwu Steel Group Ltd at a price of RMB 5.888 per share for a total consideration of RMB 2.085.760.530,86 ($261 million). The all cash consideration is subject to adjustment based on the net asset value at a date close to the closing of the transaction. Closing of the transaction is subject to the regulatory and governmental approvals and waivers of the competent authorities in the Peoples Republic of China.
Laiwu Steel Corporation will benefit from the technology and innovation leadership, powerful sourcing and extensive global commercial network of Arcelor to further boost its operational excellence. Laiwu Steel Corporation will for instance gain access to Arcelor's product and process technology as well as to its expertise in environmental protection and management systems.
At the signing ceremony in Jinan, province of Shandong, Arcelor Senior Executive VP Mr Roland Junck said: "This move comes as a result of Arcelor's global long term growth strategy. This partnership with Laiwu gives us an opportunity to contribute to the tremendous development potential of China; the worlds largest and fastest growing steel market. The investment in Laiwu Steel Corporation will become a key operational platform to better serve our Chinese customers.
Laiwu Steel Group Ltds VP Mr Zhao Yanbin said "This transaction will deliver synergies and offer future opportunities that we expect to further enhance the long-term competitiveness and shareholder value of Laiwu Steel Corporation".
Active in the production of long and flat carbon steel products, Laiwu Steel Group Ltd. employs a total of 41,000 associates. In 2005, the Group produced over 10 million tons of steel, its turnover is RMB 39.14 billion. With the addition of its recently commissioned heavy section mill, Laiwu Steel Corporation is China's largest producer of sections and beams.
CSC to raise steel prices for HR, longs and HDG
Kaohsiung based Taiwan's largest steelmaker China Steel Corp said that it will raise the prices of three products in the second quarter, being the first hike in three quarters, as demand recovers from last year's slump.
The price increases in the quarter beginning April will range from NT$300 ($9.2) to NT$430 ($13.2) a tonne, the company said in a statement. CSC, which lowered prices about 20% in the last two quarters, will keep the prices of three other products unchanged and cut the price of one product.
CSC announced following changes
Hot rolled steel up by an average NT$430 ($13.2)
Bars and wire rods up by NT$300 ($9.2)
Hot dipped galvanized sheets up by NT$400 ($12.3)
Cold rolled steel remains unchanged
Plates remain unchanged
Electro galvanized remains unchanged
Electrical steel down by an average of NT$950 ($29.2)
All miners safe after explosion in Shoal Creek Coal Mine
Gas exploded at the Shoal Creek Coal Mine, about 45 miles west of Birmingham and operated by Drummond Co on Friday but all miners got out safely. The company said the explosion was caused by ignition of methane gas near a rock face where a longwall machine mines coal. The statement did not say how many miners were underground at the time, but said everyone was evacuated.
The company describes the coal mine as Alabama's biggest and one of the US's largest. It produced 2.2 million tons of coal last year.
EU opens investigation into merger of Inco & Falconbridge
The European Commission has opened a detailed investigation under the EU Merger Regulation into Incos acquisition of Falconbridge. Both companies are Canadian and both are active in the mining, processing and refining of various metals. The Commissions initial market investigation has found that the proposed transaction gives rise to competition concerns on certain nickel and cobalt markets.
A decision to open an in depth inquiry does not prejudge the final result of the investigation. The Commission now has 90 working days until 12 July 2006 to take a final decision on whether the concentration would significantly impede effective competition within the European Economic Area or a significant part of it.
It is crucial that the Commission carefully analyses the impact of this merger on competition on the EU market, in a context of strong demand for raw materials and rising prices. commented Competition Commissioner Neelie Kroes.
Inco is a Canadian mining company principally active in the mining, processing, refining and sale of nickel, copper, cobalt and precious metals.
Falconbridge is a diversified Canadian mining company active in the mining, processing, refining and sale of various metals, including nickel, copper, cobalt, lead, zinc, aluminum and precious metals.
South Korean shipbuilders & Japanese steel mills in deadlock
South Korean shipbuilders and Japanese steelmakers remain deadlocked in their latest round of negotiations on the import price of steel plates, a spokesman at Hyundai Heavy Industries confirmed. Despite the two parties' negotiations having continued for more than a month there is still a gaping divide over an acceptable price for the contract period April to September 2006.
According to the spokesman at Hyundai Heavy, Korean shipbuilders are pushing for a price of $500 per tonne. On the other hand Japanese suppliers of steel plate are insisting on more than $650 per tonne. Under the previous seasonal contract, one tonne of Japanese steel plate costs about $680.
South Korean shipbuilders are pointing to the fact that their counterparts in Japan receive domestic supplies of steel plate at no more than $500 per tonne. But Japanese suppliers have countered that South Korean steel manufacturers such as POSCO are charging $610 per tonne.
Integer Research says global steel industry enjoys big profits
Global steel industry profits are soaring amid mergers and booming growth in China. Britain's Integer Research Ltd said that almost all of the world's leading 55 steel producers showed operating and net profits in their latest annual financials. Strong profits and much healthier balance sheets were key drivers toward industry consolidation. The steel industry was at its most profitable for many years with average operating margin reaching nearly 16% in 2004, more than double the level of the downturn in 2001.
The research profiles the leading 55 steel companies in the world, with combined production of 623 million tons of crude steel. The Steel Financial Insight service is the most comprehensive survey of the world's biggest steel producers and the only report that ranks the steel industry on revenues rather than volume.
Integer Research is a leading supplier of steel market analysis and consultancy.
Shandong mine blast kills 15
A coal mine in east China's Shandong Province exploded killing 15 people and injuring 12, Xinhua news agency reported. The blast happened at 6:50 PM in the unidentified colliery in Zaozhuang City, owned by Zaozhuang Mining Group, 27 workers were underground, Xinhua said.
Experts said after a preliminary investigation, that the cause of the accident was a coal dust explosion. A further probe is still underway.
Rio Tinto sees Chinas steel demand strong in 2006
World number two iron ore miner Rio Tinto said that Chinese demand for steel remained strong, countering some forecasts for a decline in consumption. "Concern that weak steel prices reflect poor demand in China is misdirected, they are a reflection of supply side factors," said Mr Ian Bauret MD marketing and sales, at Rio Tinto's Iron Ore division.
Citigroup commodities analyst Mr Alan Heap said a global deficit of iron ore would swell to 14 million tonnes in 2006 from a 1 million tonne deficit in 2005 as global steel production rises. "The risk is that China does not slow its steel production as much as we expect and if that is the case, the deficit will be higher," Mr Heap said.
Hexavalent chromium risks withheld
According to a paper by George Washington University and Public Citizen, published in Environmental Health, the chromium industry submitted incomplete data last year on the links between hexavalent chromium and lung cancer. The new findings come one week before the US Occupational Safety and Health Administration OSHA was scheduled, by court order, to issue a new standard on acceptable workplace levels of chromium. A federal appeals court set the February 28 deadline after Public Citizen sued over delays in issuing a rule.
Public Citizen and the paper's lead author, Mr David Michaels of George Washington University's School of Public Health and Health Services, said they stumbled upon evidence that key data was withheld in documents disclosed last year following Industrial Health Foundation's bankruptcy. Public Citizen says it has submitted the complete four site data to OSHA. But it's unclear whether OSHA is considering the information because it came after the agency stopped accepting material for its rule making process, the watchdog group said.
Currently, OSHA regulations cap chromium levels at work to 52 micrograms per cubic meter. It supports restricting levels to 1 microgram per cubic meter, which is slightly lower than "intermediate" exposure levels of 1.2 to 5.8, according to the paper. Public Citizen is urging OSHA to restrict the level to 0.25 microgram per cubic meter.
Hexavalent chromium is used in chrome plating, chromating of galvanized steel, stainless steel welding and the production of chromate pigments & dyes.
POSCO announces new management structure
POSCO launched a new management structure to strengthen the decision making process and to make management more responsible and transparent. Now under Chairman Mr Lee Ku-taek, five senior executives will fully take charge of five divisions of operation, marketing, stainless steel, finance and technology.
Mr Yoon Seok-man and Mr Lee Youn, both promoted to president, will be responsible for marketing and the stainless steel division, respectively. Mr Choi Jong-tae, senior executive vice president, will be mainly involved in operations. Mr Lee Dong-hee and Chung Joon-yang will each handle finance and technology division.
At Fridays shareholder meeting, they agreed to abolish the stock option system because of questions over its advantages at home and abroad. Shareholders set the salaries for six executive directors and nine non executive directors at 6 billion won, up from the current 4.5 billion won.
High domestic coal prices to reduce exports from China
Chinese domestic spot thermal coal prices rallied to a record high this week as small mines shut down and power plants restocked supplies, threatening to scupper Japanese utilities' hopes for sharply lower annual price deals. The benchmark Qinhuangdao Datong has traded at 465 yuan ($58) a ton, the highest ever, a price that will encourage more producers to sell supplies domestically this year, curbing exports from the world's biggest coal producer and consumer.
"Demand is still very strong and China is shutting small mines, which has an impact on coal supply," said Zhang Feng, analyst at JP Morgan Securities (Asia Pacific) Ltd. "For the next two to three years, China's coal prices should remain strong. China's net export of coal should fall dramatically," Mr Zhang said, adding China's net exports could to drop by 15% this year and another 15% in 2007. Official data showed China's 2005 coal exports fell by 17.2% to 71.72 million tons, while imports jumped 40% to 26.17 million tons.
Analysts said the strong demand from China, coupled with a cold winter in Japan and South Korea, had already jacked up spot coal prices from Australia to $47 to $48 a ton FOB, recovering sharply from lows of $37 to $38 in December. This has added to complications in prices for 2006, starting in April, which analysts in January said they expected to fall by 20% from last year's $52 to $54.
Benchmark Japanese buyers as well as Australian suppliers are yet to hammer out the rates for thermal coal.
Stemcor takes control of Georgias Zestafoni ferro plant
As per reports in a local daily Georgias Zestafoni ferroalloy plant, has been taken over by Stemcor. Three companies Fontwell, DCM and ACREMAR merged to form Selromex Holdings Limited in 2005 and it is reported that Stemcor bought all of Fontwell and Acremar's shares last week and it now owns 73.2% of Selromex. Austria based DCM continues to hold its 26.8%. Selromex owns of 96.3% of the Zestafoni ferroalloy plant.
Stemcor announced its eagerness to improve the factory's performance. It said that it will start by resolving inventory matters and a hunger strike being carried out by a group of employees.
Mr David Faktor MD of International Trading is reported to have said "A few years ago we never considered becoming involved in business in Georgia, however recent economic development and the new government have changed our views. Zestafoni should bring benefits to Georgia, its government and its people, to the workers and to the shareholders." Mr Faktor is also quotes as saying that the company wants to use local staff to manage the factory however he added that several foreign managers will be appointed on a temporary basis.
Zestafoni plant produces ferromanganese and silicon manganese and is a major customer of the Chiatura Manganese Mine which is also located in Imereti.
Arcelor Brazil may buy Manchester Tubos e Perfilados SA
According to unconfirmed reports published in a daily, Arcelor Brasil is currently in negotiations to Manchester Tubos e Perfilados SA, a steel service center and distributor is based in the Minas Gerais state.
Manchester has a processing capacity of 10,000 tonnes per month of long and flat products.
Mexico rescuers find no sign of miners & hope dwindles
Rescuers searching for 65 trapped coal miners broke through an enormous wall of debris on Thursday, finding high levels of methane gas but no sign of two workers who were thought to be there. The discoveries dimmed hopes for the miners trapped since a Sunday morning explosion, but authorities refused to rule out the chance of survival.
Officials said the levels of toxic gas were increasing as rescuers advanced deeper into the mine, but they stopped short of saying they thought the miners were dead. "The air as the rescue advances is increasingly lacking in oxygen and more laden with methane, which makes it less breathable," federal Labor Secretary Mr Francisco Salazar told family members and news reporters gathered outside the gates of the Pasta de Conchos mine.
"The conditions are becoming increasingly adverse," added mine administrator Mr Ruben Escudero. "It is grave, and being realistic, we think the situation is difficult." He declined to elaborate.
Ukraine to sell remaining 1.74% of Kryvorizhstal
It is reported that Ukraine government is likely to sell balance 1.74% of Mittal Steel Kryviy Rih, previously known as Kryvorizhstal, on international stock markets, citing State Property Fund Chairwoman Ms Valentyna Semeniuk.
TopRepublic Engineerings new caster commissioned
Danieli & C SpA reported that the Republic Engineered Products melt shop upgrade in Canton Ohio reached the start up stage on January 22 with the production of the first billets on the new five strand FastCast billet-bloom caster. Just over two weeks later, on February 9, the project's new single tank vacuum degasser processed it first heat.
The new high speed caster is designed with the latest technology, including stopper rods, hydraulic oscillators, mold electromagnetic stirring, air mist cooling, and a complete process automation platform. The machine casts square billets from 170 mm up to 250x190 mm rectangular blooms, at a maximum rate of 155 metric tons per hour.
Republic ordered the new caster and degasser as part of an expansion of the steelmaking operation at Canton. Danieli is leading the project, which also includes a new 200 mt ladle furnace and modernization of the 200 mt EAF. Those operations will be started in the coming months. Startup of these units will take place in the next few months.
Romanian authorities put Laminorul Braila up for privatization
Romanian State Assets Realization Authority AVAS will start procedures again to privatize the Laminorul Braila and put up a stake of 68.80% for sale.
This would be the sixth attempt for privatization. So far, none of the investors that have shown interest in the deal have met the prerequisites for negotiations.
Bayou Steels Q1 earnings drop
Bayou Steel saw a drop in its first-quarter earnings despite enjoying an increased demand for its products. For the first quarter of 2005-06, which ended December 31st, Bayou posted a profit of $3.2 million on revenue of $67.2 million, down from the previous first quarter's earnings of $4.2 million on revenue of $63.a million. Bayou Steel said it was dealing with high energy prices and a labor shortage on the Gulf Coast.
The company said it had its highest backlog of orders in almost five years at the end of December and expected to enjoy a strong market for the rest of its fiscal year.
Aker Kvaerner Subsea awarded deep water contract
Aker Kvaerner has been awarded a contract by Chevron, with partner Kerr McGee, to deliver an advanced dynamic umbilical, including engineering and project management, for the Blind Faith deep water development in the Gulf of Mexico. Aker Kvaerner will supply a 9500 meter dynamic steel tube umbilical, including all surface and subsea terminations to be installed in 2100 meters water depth.
The engineering and manufacturing of the umbilical will be done in Mobile, USA, for delivery in January 2007. Aker Kvaerner's deepwater business unit will perform detailed dynamic analysis of the umbilicals.
This follows the earlier award of contracts to Aker Kvaerner for the supply of the semi submersible hull and mooring system and activities related to transportation and installation of the Blind Faith platform.
"Aker Kvaerner has been involved with Blind Faith, a key asset in Chevron's deepwater portfolio, since the concept phase this affords us valuable synergies as we deliver the umbilical technology," says Raymond Carlsen EVP of Aker Kvaerner Subsea.
Blind Faith is located approximately 260 kilometers southeast of New Orleans, on Mississippi Canyon blocks 695 and 696. Chevron holds a 62.5% working interest in the field, while Kerr-McGee Corp. holds the remaining 37.5% interest.
Arch Coal announces succession plan
Arch Coal Incs board has approved a succession plan that will ensure strong and continuous leadership at Arch Coal in the years ahead. Following Arch Coal's annual meeting on April 28, President and CEO Mr Steven F Leer will become Chairman and CEO. Executive VP and COO Mr John W Eaves will become President and COO. Mr Eaves will continue to report to Mr Leer.
Also effective April 28, current Chairman of Arch Coal's Board of Directors Mr James R. Boyd will become Chairman of the Nominating and Corporate Governance Committee, as well as the corporation's Lead Director.
Arch Coal also announced that they had increased the size of the board to 11 members and elected Mr Eaves to fill the newly created position effective immediately.
Arch Coal is the USs second largest coal producer, with subsidiary operations in Wyoming, Utah, Colorado, West Virginia, Kentucky and Virginia. Through these operations, Arch provides the fuel for approximately 6% of the electricity generated in the US.
Steel Technology Park opens in Isfehan
Steel Technology Park was inaugurated in Isfehan Iran. "The steel technology park, as the Middles East first steel technology park, was established so to gather and absorb steel private, governmental and leading research and develop centers," said park's manager, Mr Korosh Khosravi.
"The steel industry, which is known as a base industry in the world, plays an effective role in Iran's development and preserving it requires investment in the research field and utilizing research results," he added. "This park as a comprehensive unit will try to gather various industrial sections related to steel," he said.
