March, 08 2006
SAIL clears project to rebuild ISPs coke ovens
The board of Steel Authority of India Ltd has cleared an Rs 319 crore project for rebuilding coke oven battery no 10 at its IISCO steel plant. According to a SAIL statement, this is the first major project approved for the ISP since its merger with SAIL with effect from February 16 this year.
ISPs coke oven battery no. 10 was built in the early eighties and had been closed down in 1997. However, the steel plant needs to run two batteries at a time to produce the 750,000 tonne of coke a year that is needed to produce 1 million tonne of hot metal.
With the rebuilding scheduled to be completed by 2008-09, the steel plant would be able to continue the planned expansion of production capacity from the present level of 850,000 tonne a year to 2.5 million tonne a year by 2011- 12.
TATA Steel secures $500 million funds for expansion plans
TATA Steel announced that it had raised $500 million in foreign syndicated loans to fund its expansion and acquisitions plans to more than double its steel output in the next four years from the current 5.1 million tonnes.
The 7 year loan carries a coupon of 45 basis points over the London interbank offered rate. The facility is for $400 million, or its equivalent in Japanese yen currency, with a green shoe option for $100 million, the company said in a statement. Seventeen banks participated in the offering.
Tata Steel, which has set a target of making 25 to 30 million tonnes by 2015, has been following a mix of setting up new plants in India and acquiring companies overseas.
BHPB seeks skilled miners in India
Australian mining company BHPB said it is actively recruiting skilled miners in India to try to meet a shortage in Australia.
BHP Billiton Group President Mr Bob Kirkby, who is accompanying Australian Prime Minister Mr John Howard on a three day trade mission to India, said that he is eyeing a further expansion into India as well as the local labor market. "We've got a shortage of people in Australia in certain areas and India has big skilled population of project engineers and engineers in general. We're actively looking for people in that area" he told Australian Broadcasting Corp. Radio.
New mining developments have surged in Australia as miners scramble to take advantage of higher commodity prices driven by Chinese demand. As a result, demand for skilled workers has exploded and wages have skyrocketed.
Rourkela Steel sets new records for the month of February
It is reported that SAILs Rourkela Steel Plant registered its best ever production in February compared to the same month any year since inception by posting significant growth in production of hot metal, continuous cast slabs, total saleable steel and dispatch of saleable steel during the month. Hot Metal production reached 1,68,939 tonnes, continuous cast slabs reached 1,57,676 tonnes, total saleable steel reached 1,74,409 tonnes and dispatches of saleable reached 1,63,438 tonnes registering phenomenal growth of 18%, 16.5%, 26.4% and 16.9% as compared to February 2005.
For the period April to February RSP improved its performance over the corresponding period of last fiscal by producing 1.587 million tonnes of hot metal, 1.486 million tonnes of continuous cast slabs and 1.442 million tonnes of total saleable steel registering growth of 4.1%, 2.8% and 3.1% respectively. It may be noted that RSP had maintained low volumes of production during the first half due to complete rebuilding of blast furnace No4.
TATA replaces ONGC as most valued group in India
The Tata group has become the first Indian corporate house to cross the Rs 2 lakh crore ($46.1 billion) mark in market capitalization. In the process, the Tata group has replaced public sector giant Oil and Natural Gas Corporation group whose market capitalization is at $39.4 billion now.
TATA group is spread across seven sectors and has 29 listed companies under its fold.
Mr Mukesh Ambani controlled Reliance group of companies comprising of Reliance Industries, IPCL and Reliance Industrial Infrastructure is the third largest in market cap with$24.5 billion while Mr Anil Ambanis group is at $19.5 billion market cap. Indian Oil Corporation groups market capitalization is at $15 billion followed by the Aditya Birla group which has a market capitalization of $10.3 billion.
Danieli to supply 130 tonnes ladle furnace to SAIL BSP
Danieli Centro Met will supply a 130 tonnes ladle furnace to SAILs Bhilai Steel Plant for the Steel Melt shop II. The project will be executed by a consortium led by Danieli and made up of Danieli Engineering India and the Indian company Beekay Engineering. Plant commissioning is expected to take place in March 2007.
The new ladle furnace, supplied on a complete turnkey basis, will process a wide range of steel grades, from low to high carbon, including high tensile, boiler grades, line pipe steel in API grades, EDD, and rail steels. The scope of supply extends from the technological equipment to the installation and commissioning, including the LF electrode regulation system and Level 2 automation by Danieli Automation, the fume treatment plant, the ferroalloy feeding and additive system, the water treatment plant, the civil works and structures.
Concast group commissions first phase of Bankura unit
Concast Group has commissioned phase one of it's steel plant to produce steel billets at Bankura in West Bengal. It is reported that the second phase of expansion project will be completed by the end of this year. The plant has facilities to produce sponge iron, an induction furnace, rolling mill and a 25MW captive power plant. It is reported that this unit will produce 200 tonnes per day of sponge and the induction furnaces will produces 60,000 tonne per annum of steel.
Concast group took over an ailing unit in 1993 and have increased production capacity to exceed last years production of 9,000MT per month of wire rods, TMT and rounds from a level of 800 MT in 1993. Concast Group has two rolling mills with installed capacity of producing 120,000 tonnes per annum as per Mr AK.Mukherjee CEO.
Pahwa Chains to set up a steel casting unit
Chandigarh based Pahwa Chains Private Ltd, which manufactures and exports bicycle and rickshaw components, plans to manufacture steel casting to cater for the growing needs of the automobile, steel, paper, petroleum, power, cement, mining, fertilizers and heavy engineering sectors.
The project will start by the end of the year with an investment of Rs 25 lakh and will have a capacity of 100 kg a day.
Pahwa Chains is a group company of Avon Cycles Private Ltd.
DM submits pre feasibility report to GMB for Navlakhi Port
Mumbai based Dharamsi Morarji chemical company has submitted a pre feasibility report with an investment of Rs 262 crore in the first phase to Gujarat Maritime Board for development of Navlakhi port. During the Vibrant Gujarat festival 2006, DM had signed a MoU with GMB to renovate Navlakhi port.
In the first phase, the company will concentrate mainly on developing the infrastructure at the port. The development plans include building a 235 m long and 30 m wide berth to accommodate panama size vessel, providing mechanized handling system and container holding facility such as gantries, cranes and trailer. It also has plans to develop storage and skating area to hold commodities and container yards. However, company officials said that the project plan being a feasibility report is subject to scrutiny and approval from the GMB.
According to the company, when the development work concludes in 2008-09, the annual shipment from the port is likely to be of 2.5 million tonnes of coal, 0.1 million tonnes of fertilizers, 0.3 million tonnes of food grains, 0.4 million tonnes of iron scrap and 0.1 million tonnes of containers.
Chinese government pressuring iron ore negotiations
According to some reports in Chinese media China is blocking iron ore imports above a price cap to put pressure on overseas suppliers during annual benchmark price negotiations. The secret regulation bans imported iron ore contracted above standard prices, according to the document issued by the Economic and Trade Commission of Jiangsu Province dated last week. A governmental source said the document was distributed by the Ministry of Commence to key port provinces with the aim of restricting the spot price of iron ore by limiting imports during the iron ore negotiations. The spot price cap for the Australian iron ore is $54 CFR and the cap for the Brazilian iron ore is $70 CFR, the same level as the 2005 long-term contract price, according to the document.
The document says customs authorities are blocked from issuing import permits for those iron ore imports, especially from the iron ore suppliers BHP Billiton, Rio Tinto and CVRD. Steelmakers or traders applying for the import permits also have been ordered to offer local authorities detailed information about the cargo suppliers, according to the document.
It is understood that the price cap policy is introduced to pressure on the iron ore suppliers during the price talks and the policy will be terminated automatically in April, the beginning of the fiscal year.
Additionally, the document also banned steel makers from feeding iron ore into the blast furnaces under 200 square meters in order to speed the elimination of the facilities. China plans to shut down all the blast furnaces under 200-square-meter in 2006 and stop production of blast furnaces under 300-square-meter in 2007, according to the CISA.
Currently, Baosteel is representing Chinese steelmakers during the iron ore price negotiations with the major iron ore suppliers. The central government is pressing for a less than 5% price hike in the long-term iron ore contract prices this year.
Spain unconvienced by Mittal Steel's plan
Spain's industry minister is reported to have said that Mittal Steel's bid to take over Arcelor and create the world's largest steelmaker lacks a good industrial plan for the merged company and will create uncertainty in the industry. He also said that Mittal Steel's ownership structure may create problems of corporate governance.
We are not convinced by Mittal Steel's industrial plan, which frankly tells us nothing,'' said Mr Jose Montilla in an interview in Madrid. It does not eliminate the doubts that trade unions and workers have regarding the takeover.'' The takeover is creating uncertainty for an industry which at the moment is working well in Spain. The lack of an industrial plan heightens this,'' Mr Montilla said.
OYAK open to others as for Erdemir in addition to Arcelor
OYAK, the new majority owner of Turkey's Erdemir, said it is open to approaches from other companies, in addition to Arcelor, to become partners in running Erdemir. OYAK is still willing to discuss a partnership with Arcelor, with which an earlier deal fell through, but is open to other entrepreneurs too, Mr Coskun Ulusoy GM of Oyak told reporters.
Oyak finalised its $2.96 billion purchase of Erdemir on February 28 through a company called Atear. Any potential partnership in Atear would depend on circumstances, he added.
Mr Ulusoy also tried to allay fears in the Turkish steel industry over the future of Erdemir when he said at the press conference: "We have no intention of leaving the wheelhouse", referring to the bridge on a ship from where the captain would steer the ship, according to local press reports.
Oyak said on February 23 that it was assessing the possibility of pursuing exclusive talks with Arcelor to explore partnership possibilities, but "presently there exists no such agreement in this regard". Arcelor and Oyak reached an agreement in December under which Arcelor would have acquired 41% of Atear, paying part of the $2.96 billion price for Erdemir and co managing the integrated steel mill. But the agreement was cancelled after the Turkish regulatory authorities expressed competition concerns about Arcelor's galvanizing joint venture with Borusan in Borlic.
Algoma Steel reaches agreement with Paulson
Algoma Steel Inc has settled a fierce proxy battle with its biggest shareholder by agreeing to make a special C$200 million cash payment to shareholders. In addition to the C$200 million payout, which will be made by the end of the second quarter, Algoma has agreed to put two directors acceptable to Paulson on the steel maker's board.
After it makes the C$200 million payment, Canada's third-largest steelmaker will have distributed C$476 million to its shareholders in less than a year.
Algoma had earlier rejected a proposal from Paulson which outlined how Algoma should pay out more than $400 million in cash to its shareholders. In response, Paulson launched a proxy battle to replace Algoma's board. That battle was to have been decided at a March 22 meeting, where Algoma's shareholders were to vote on whether to replace the board. That meeting has been cancelled as a result of Tuesday's deal.
But the deal has angered the United Steelworkers union, which had gone to the Ontario Superior Court in an effort to stop Paulson, whose actions they fear will weaken the company's finances.
Rio's iron ore delivery concern may drive prices up
Rio Tinto, CVRD and BHPB may seek higher iron ore prices as supplies may be cut after cyclones dumped rain into Rio's mines, Macquarie Bank Ltd said. Miners may press for price increases of between 15% and 20% compared with previous forecasts of 15% for the year starting April 1, Macquarie analyst Mr Brendan Harris said.
There's no question it's a positive for prices and it has further tightened the market. There's a risk of prices running toward the higher end of forecasts to between 15% and 20%. We've seen spot prices in China rising'' Mr Harris is reported to have said.
The force majeure just highlights that the miners don't have any spare capacity,'' said Mr Mark Pervan, head of research at Daiwa Securities SMBC, in Melbourne. ``It puts another dimension into the price talks.'' Mr Pervan expects iron ore prices to rise 20% this year.
It's a short-term phenomenon, and it does tighten the market a little, but it happens every year,'' said UBS AG analyst Mr Glyn Lawcock in Sydney.
Rio, which supplies a quarter of China's iron ore imports, on March 2 declared force majeure for its Western Australian iron ore mines to alert customers that it may miss some sales. Annual production from the nine mines in Rio Tinto's Hamersley Iron unit and Robe River iron venture in the Pilbara region of Western Australia totaled 142 million metric tons in 2005. Force majeure is a legal clause that allows a company to miss contracted deliveries because of circumstances beyond its control.
The north west of Western Australia has had three tropical cyclones so far this season, with the Bureau of Meteorology forecasting as many as five in the season from October to April.
Belgium to decide on Mittal Steels bid by April
Belgium will decide on Mittal Steel's offer for Arcelor after its investment bankers wrap up a full analysis by the end of March or early April, Belgian Prime Minister Mr Guy Verhofstadt said Tuesday.
Mittal Steel CEO Mr LN Mittal handed Mr Verhofstadt the company's business plan running more than 100 pages at a meeting on Tuesday, making Belgium the first government to receive such details on what Mittal plans to do after it buys Arcelor. Mr Verhofstadt refused to outline the details of the plan
Unlike France, Luxembourg and Spain, Belgium has not criticized the deal. Mr Verhofstadt said last month he would take "a rational approach" and carefully analyze the deal before he gave his opinion. "We want to understand the role that Belgium will play in future in this very important sector," he said.
Shanxi puts brakes on expansion of coal mining
Shanxi, China's largest coal-producing province, plans to put the brakes on the further expansion of coal mining in the next five years. The move is part of tough measures to clean up the sector's record of contributing to environmental damage, the wastage of resources and mine disasters. Shanxi Governor Mr Yu Youjun made the pledge at a press conference on Sunday night
Mr Yu added that the provincial government aims to upgrade the region into a "new energy and resource base." "We cannot continue the rough way of development any more and must limit coal production strictly with the guidance of the scientific concept of development," Mr Yu said.
North China's Shanxi Province produced 600 million tons of coal last year, accounting for 26% of China's coal output. Mr Yu said Shanxi can guarantee an annual output of 700 million tons in the next five years, about a quarter of the country's predicted coal demand, by increasing the coal recovery rate. It is currently shutting down the mines with an annual output below 90,000 tons and pushing those producing less than 200,000 tons per year to introduce more advanced, environmentally friendly technologies. "We will also introduce strategic partners to establish large-scale coal mine groups with highly competitive and advanced technologies," he said.
The government will promote merger and acquisitions to reduce the number of mines to 2,500 by 2010 and ensure 80% of the province's coal output comes from mines with an annual capacity above 1 million tons, said Mr Yu. Shanxi has shut down 4,876 illegal mines since last September and punished about 1,200 people.
Global Steel starts to sell HRC from Philippines unit
Global Steel Philippines Inc announced that it has achieved full commercial operation and started selling hot rolled coils. The hot strip mill was last operated in November 1999 by National Steel and underwent full revamp under Global Steel management starting in May last year.
Mr Sangram Mohanty chief of corporate communications said this was a big achievement, as the company moved toward full integration of the Philippine steel industry and the country moved a step closer to self-sufficiency in steel products.
SMS Demag to supply SS pickling line to ThyssenKrupp Acciai
ThyssenKrupp Acciai Speciali Terni and SMS Demag signed the contract for the construction of a new annealing and pickling line for stainless hot-rolled strip in Terni. The line will be built in the direct vicinity of the existing wide hot strip mill to ensure optimum logistics. Commissioning is scheduled to take place in the 3rd quarter of 2007. The investment volume totals approximately Euro 50 million.
This production line will have a capacity of around 650,000 tonnes per year, allowing it to replace several existing lines. The end product of this line, ie hot rolled pickled stainless steel strip with a maximum width of 1,570 mm and thicknesses of 1.5 to 7mm, will be used as feedstock for the group's own cold rolling mills and for the supply to the tube and pipe industry.
The design of the line places particular emphasis on high productivity, first class product quality and on the use of environmentally friendly pickling methods. It draws on experience gained during the construction of 4 new annealing/pickling lines for the Stainless group in the last 5 years.
This investment is a continuation of the restructuring and modernization of AST at Terni which was resolved at the beginning of 2005 in connection with the closure of electrical steel production. Already last year a EUR 124 million investment program was launched with measures aimed at strengthening the stainless business of ThyssenKrupp AST, especially at the Terni location. The largest single project, a state-of-the-art 20-high cold-rolling stand, was ordered for the Terni plant in mid-2005 which after commissioning in October 2006 will replace two outdated stands. Another focus of the investment program is the establishment of a finishing shop at Terni which will enable AST to meet customer service requirements and add product value.
ThyssenKrupp Acciai Speciali Terni is the Italian subsidiary of ThyssenKrupp Stainless AG. ThyssenKrupp Stainless is focused on the production and distribution of flat-rolled stainless products as well as high-performance materials such as nickel-based alloys and titanium.
Severstal disposes it's stake in Orel-Ruda iron ore asset
It is reported that the Russian steel major Severstal has disposed of its 51% interest in Orel-Ruda.
Severstal and the Oryol regional administration set up Orel-Ruda in 2001 to carry out additional exploration at the Turgenyevskoye and Vorontsovskoye iron ore fields, which are thought to contain 7.5 billion tonnes and 1.5 billion tonnes of iron ore respectively.
Shougang plans for 5% increase in steel production in 2006
Shougang Corp plans to increase steel production by 5% during 2006 as per Chairman Mr Zhu Jimin.
Shougang Corp is China's 6th biggest steelmaker in 2005 with crude steel production of 10.44 million tons. Beijing Shougang Co, the listed unit of Shougang Corp, is the Chinas biggest maker of wire rods.
Mechel announces CAPEX with increased focus on mining
Mechel announced that following an internal review process, it has optimized its capital expenditure program, allocating substantial additional funds for the continuing development and expansion of its mining segment. This rebalancing reflects Mechel's overall strategy of seeking strong growth in its mining segment, both through organic growth as well as acquisitions. The revised overall CAPEX program for the five year period of 2006 2010 is $1.1 billion. It is targeted at expansion of the mining segment and increasing the efficiency of the steel segment. The split of approximately $750 million in mining and approximately $350 million in steel shows the continuing importance of the strong-performing mining segment for Mechel.
In the mining segment, in line with its target to produce 25 million tonnes of coal in 2010, Mechel will direct approximately $100 million to the development of the Erunakovskaya deposit, which will together produce approximately 3 million tonnes of coking coal annually; and $100 million will be directed to the development of Brownfield license areas of approximately 1 billion tonnes of predominantly coking coal. Other major mining projects are also aimed at improving quality and include the construction of Sibirginskaya coal washing plant for approximately $60 million. In the iron ore segment Mechel will invest approximately $70 million in Korshunov Mining Plant.
Steel segment projects are targeted at improving efficiency while maintaining existing output, and will be mainly directed to Chelyabinsk Metallurgical Plant, Mechel's core steel producing facility. This includes completion of the construction of an additional continuous caster for approximately $50 million, in line with Mechel's target to raise the proportion of steel produced through continuous casting from the current 38% to 60% in 2007. Other projects include a new coking battery and reconstruction of rolling facilities.
"The revised CAPEX program reflects our consistent strategy of further expansion of the mining segment. Across both segments we will focus on major projects that will further enhance our solid performance, increase production of higher-margin products, and improve our efficiency", Mechel's COO Mr Alexei Ivanushkin, said.
Fortescue upgrades Cloud Break iron ore estimate by 4%
Fortescue Metals said that infill drilling has boosted the size of the estimated resource at its Cloud Break deposit by about 4%. Fortescue said a recent study by its advisor Snowden Mining Industry Consultants had estimated total mineral resources at Cloud Break at 850 million tonnes, up 34 million tonnes on the estimate made in February. The company also said that the latest study from Snowden had seen the quality of the iron ore grade at Cloud Break rise by 0.07% with the silica grade dropping 0.05% and alumina down 0.04%
The Cloud Break deposit, at the company's iron ore tenements in the remote north west of Western Australia, now has 144 million tonnes classified in the highest JORC resource category of Measured Mineral Resource, the company said. When combined with the estimated 6 million tonnes of Measured Mineral Resource at the Christmas Creek deposit, this brings the project's total to 150 million tonnes. Fortescue said it now had 1,800 million tonnes available for reserve consideration of which 150 million tonnes could be considered for proved reserve classification. The estimate of resources in the high grade domain, that is with an in ground average iron grade exceeding 60 per cent, had also increased to 363 million tonnes from 344 million tonnes.
Fortescue said the study had shown the infill drilling program had the ability to improve confidence in the resource estimate and increase iron ore quality and tonnage and that this reinforced the company's exploration model.
Ryerson plants facing steel workers strike
Workers at Ryerson's Chicago and Burns Harbor facilities, who have been without a contract since February 1, have authorized a strike.
The 540 employees, represented jointly by United Steelworkers and Teamsters Local Union 714, want to end a concession made to management in the last three year deal that had employees cross trained for jobs and allowed management more flexibility in shifting employee job assignments without regard for seniority, a Ryerson spokesman said.
Argentina's Siderar Q4 net profit drops
Argentine steelmaker Siderar a part of the Techint posted a smaller fourth quarter net profit in 2005 than 2004 due to greater operating and financial costs. In a statement to the Buenos Aires Stock Exchange the company said it posted a quarterly net profit of 232.6 million pesos ($75.6 million), well below the 487.3 million pesos earned in the same period of 2004.
Siderar posted a 2005 net profit of 1.16 billion pesos, down from 1.34 billion pesos in 2004. Siderar's operating profit in 2005 reached 1.45 billion pesos, practically unchanged from 2004, despite the fact that sales rose by 20%.
The financial impact included the increase in financial debt due to the purchase of Hylsamex and the payment of dividends and income taxes," the company said. The company also cited higher wages and more costly raw materials, such as iron ore and coal, as affecting its costs.
Iranian Esfahan Steel close $70 million financing deal
Bahrain based ABC Islamic Bank and Emirates Islamic Bank have successfully closed syndication for a 3 year $70 million amortizing syndicated Murabaha financing facility for Iran's Esfahan Steel Company. The bank syndicate for the facility includes many of the leading regional Islamic and conventional institutions.
The 11 strong syndicate comprises the following banks: Arrangers, ABC Islamic Bank and Emirates Islamic Bank; senior lead manager, Commercial Bank of Qatar, Dubai Islamic Bank, Melli Bank; lead manager Bahrain Islamic Bank; co-lead manager Amlak Finance, British Arab Commercial Bank, Jordan International Bank; manager Banque Intercontinentale Arabe, The Arab Investment Company.
ABC Islamic Bank chairman Mr Abdulmagid Breish stressed Esco's position as a leading steel manufacturer in Iran and the strong support received from the participants. "ABC Islamic Bank and Emirates Islamic Bank, the arrangers, are delighted to have been given the opportunity to arrange this financing, which will form the basis of a long standing partnership with Esco and IMIDRO," he said.
Venezuelan Sidor completes hot rolling mill repair in January
Venezuelan steelmaker Sidor invested $1.7 million last month in technological upgrades, maintenance and repairs of its hot rolling mill, the company said in a statement. The investment is designed to "ensure the operational continuity and reliability of our lines in order to face a new period of productivity," Mr Carlos Herndez said.
Under the special planned repair program, the initiative lasted for four days and took place along the continuous train, furnace no.4 and other sectors of the plant.
Based in the city of Puerto Ordaz in southeastern Venezuela's Bolar state, Sidor is controlled by Italian Argentine group Techint and is part of the newly created steelmaking group Ternium. Sidor is the largest steelmaker in Venezuela.
Baotou Steel to explore the iron ore mine in Mongolia
Chinas Baotou Steel has signed an agreement for iron ore exploration with Mongolias Montear Co Ltd after negotiations which lasted for almost a year.
The mine is in northern Mongolia and has rich quality iron ore and will help Baotou secure a stable supply of iron ore.
Zlatoust to invest 184 million RUR in 2006
Metallurgical plant of Zlatoust will receive 184 million RUR worth of investments from ESTAR Ltd in 2006, the plants GD Mr Alexander Rybkin announced for installation of new equipment, replacement and innovation of hoisting gears, environmental protection schemes.
The acquisition of a bar wire mill with the capacity of 250 tons is currently under consideration from Tanaka of Japan at a cost of $ 28 million.
The next stage is to improve the steel-making production in terms of installing the new electric furnace steelmaking shop and the stove-baskets as well as continuous casting machines. The plant is also going to construct its own power-generating stations. The investment project is going to increase the output up to 800,000 tonnes and the final scheme is to be adopted by ESTAR.
Fujian provinces iron ore import up in January
South Eastern China's Fujian Province imported 375,900 tons of iron ore concentrate in January 2006, up 62.73% from the previous year. The total import value was $23.5 millin up by 160% from the same period of last year, according to statistics released from Fuzhou Customs.
Fujian imported 240,000 tons of iron ore concentrate from India, 68,100 tons from Russia and 67,800 tons from Australia. The average import price was $62.5 per ton in January, less by 36.8% from the same period last year.
