March, 09 2006
SAIL Chairman see 9% growth in steel demand
SAIL is likely to see a 9% growth in steel demand as per SAIL Chairman Mr VS Jain.He also told, during an interview with CNBC-TV18, that the recent upturn in steel prices is likely to sustain.
Mr Jain believes that the Indian economy did very well with GDP growth of 8.1% in the year 2005 and in the next couple of years the expectation is that the economy should remain quite buoyant has a very strong feeling that the steel sector should remain good.
Mr Jain also confirmed that SAIL has increased prices of both flat and long steel products in March beginning, as there are signs of improvement not only in domestic prices but also in international prices and it looks like that prices shall remain stable and in fact there is a slight upturn now.
Indian steel ministry suggests cap on iron ore exports
India's Ministry of Steel has recommended stopping iron ore supplies to China in the wake of strong domestic demand, the Hindustan Times reported Wednesday, without quoting any source. The ministry has also suggested reducing iron ore supplies to South Korea and Japan. The recommendation awaits Cabinet approval, said the report.
The government may scale down export commitments under fresh long-term agreements with Japanese steel mills and South Korea's Posco, said the report.
Indian iron ore exporters seek 10% increase for China market
It is reported that officials from the China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters and China Iron and Steel Association are negotiating with Indian suppliers and the price may be up by 5% to 8% higher this year as against expectation of 10%. CCCMC and CISA are the representative bodies of Chinese ministry of steel. It is the responsibility of these bodies to negotiating iron ore prices with exporting countries. The negotiations are likely to be prolonged further as a consensus has not yet been arrived at.
"Several rounds of talks have taken place but a final decision has not been taken yet. However, I am confident that the prices will go up by at least 8% this year," an official with an iron ore export house said.
"I don't think the exports will be less than last year," Mr DK Sahni, president of Federation of the Indian Mineral Industries, told Reuters. "This financial year ending March, it should be around 80 million tonnes. People are expecting this to increase to 100 million tonnes in 2006-07," he added. Mr Sahni said iron ore exporters expected a price rise of about 10 percent, though Chinese buyers were haggling for lower prices. Mr Sahni said Chinese buyers wanted to buy Indian iron ore at around last year's level of $58, and were keen on signing a long-term supply contract. "They want us to commit to long-term prices and bring down spot prices. But nobody is willing to take the bite," Mr Sahni said. "We should get on par with Australia 65% grade ore, as our quality is as good."
Indian iron ore exports had surged to 78 million tonne in 2004-05 or an eighth of the total world iron ore trade of 605 million tonnes after stagnating at 35 million tonne for about a decade. India is the second largest exporter of iron ore to China, at 68 million tonnes last fiscal year, while Australia takes first place at 112 million tonnes.
POSCO reiterates commitment for Orissa project
POSCO said it was committed to setting up its 12 million tonne per annum capacity steel plant in Orissa. "I stand to reiterate that POSCO is committed to its Orissa project," POSCO India MD Mr Cho Soung Sik said.
"The Orissa project is the most important overseas venture of the company. We are taking it very seriously ... We wish to share our benefits with the state as well as the country through this project,'' he said at a media interactive.
A POSCO delegation is scheduled to meet Orissa CM Mr Naveen Patnaik to brief the state government on the status of the project and request to expedite different administrative procedures for land acquisition, clearance of prospective license to gauge iron ore deposits and comprehensive studies on infrastructure.
OMC gets 3 star export house status
Orissa Mining Corporation, the country's largest state PSU in the mining sector, has become the first of its kind to win a three star export house status by the Director General of Foreign Trade under the ministry of commerce for its performance in mineral export.
OMC has been a consistent exporter since 1966-67 and had export turnover of Rs 341 crore during 2004-05, its MD Mr Sanjeev Chopra said. It had a total turn over of more than Rs 758 crores. ''We have been in mineral export from 1966-67. With the demand of minerals going up, we hope to make raise the turnover to another height by next fiscal,'' he said.
With the three star export house status, OMC would be entitled to customs clearances in both exports and imports on self declaration basis, Mr Chopra said. Other benefits included 100% retention of foreign exchange in exchange earners foreign currency, customs duty concessions in imports of spares, office equipment and capital goods, he said.
Indian National Mineral Awards for 2004
Twenty-two geo-scientists, engineers and technologists were on awarded with the National Mineral Awards 2004 for their outstanding contribution in the field of mines. Union Minister of Mines Mr Sis Ram Ola presented the awards at a function held.
Mr Ola called on geo-scientist community to evaluate the non conventional energy potential of the country to address the enormous pressure on water and energy resources posed by the ever-increasing population, and stressed on exploring more gas hydrates in ocean bed, coal bed methane and concentrate on ocean and geothermal energy conversion. The Minister said that the Government has taken a number of policy initiatives to attract private investment in the field of mineral exploration, development and mining.
The National Mineral Awards Scheme now covers 14 earth science related fields carrying award money of Rs. one lakh each with a trophy, certificate and a citation. So far, more than 500 geo-scientists have been honored with the coveted National Mineral Awards and five have received the prestigious National Mineral Awards for Excellence.
GMR Energy to set up 1,000 MW power plan
GMR Energy Ltd is planning to set up a 1,000 MW coal based thermal project shortly, at a cost of Rs 4,000 crore. The proposed power plant will be of two units of 500 MW each and the company is presently looking at Madhya Pradesh, Jharkhand and Orissa as the potential project sites.
The company is also planning to acquire stakes in coal mines in India and overseas and has firmed up plans to enter the power transmission business. We want to be in all the profitable areas of power business across all the verticals, head of strategic finance of GMR Group, Madhu Terdal told Business Standard. The GMR Group plans to invest $ 1 billion for its new projects in the energy sector in the areas of generation and transmission.
We are looking at Indonesia and Australia for half a million tonne size mine. If we have a captive mining for the power plant in India our debt to equity ratio will be 75:25, Terdal said. The company has also identified a few potential pockets in Madhya Pradesh, Jharkhand and Orissa for acquiring a coal mine stake.
Further, the company has entered into a JV with KEC International Ltd for developing transmission projects. The company will be bidding for Build Own Operate and Transfer projects. We will be entering the power distribution business as and when it opens, Terdal added.
The company has also got a power trading license and intends to venture into the power trading business shortly.
Mexican union workers accuse government
More than 20,000 union workers marched on Tuesday in the downtown Mexico City, accusing the government of meddling in the affairs of the national miners union by seeking to oust its leader. The march comes days after the 250,000 member National Miners and Metal Workers Union shut down most mining and steel operations across the country during a two day strike to support union leader Mr Napoleon Gomez Urrutia, who is being investigated by the government for alleged corruption.
Mexico's Labor Ministry said last week that it considers Elias Morales, a dissident who had been ejected from the miners union, as the union's new leader, citing documents filed by members of the union's oversight committee. The union, however, says the documents are false and that Mr Gomez Urrutia remains in charge.
Pakistans traders resume imports of Iranian steel
It is reported Pakistan's leading economic newspaper Business Recorder that Pakistani importers have resumed their imports of steel products from Iranian mills due to recent surge in international prices and advantage of less transit time. However, according to the reports, the volume of imports is likely to be mush lower than that in past.
Experts believe the majority of importers are still reluctant to import more of the items as they fear the geo political uncertainty does not allow them to continue importing Iranian steel products, the newspaper pointed out.
China Ministry says that no price directive on iron ore imports
China's Ministry of Commerce has never issued any price directive on iron ore imports, a ministry official said. The comment follows market talk that the ministry had recently issued a guideline capping prices of imported iron at $54 a ton.
'We have never issued any price directive on iron ore imports and have no plan to issue any such guidelines, said the official, with the ministry's department of foreign trade. The official added that the ministry has never hinted at or notified local steelmakers of a price cap.
Government officials have been repeatedly stressing that Chinese steelmakers wouldn't accept any price hike in iron ore imported under the 2006 term contract from three big mining companies. Representing all Chinese steelmakers, Shanghai Baosteel Group Corp. has been holding talks with the three companies since late last year to set 2006 iron ore prices. Following a 71.5% surge in prices last year, the three companies are seeking an additional 20% increase this year, due to China's huge appetite for ore. However, China has insisted on a price cut, given that domestic steelmakers can't afford another price hike because oversupply in steel has led to sharp declines in steel prices, which have mostly erased their profits.
The fourth round of talks between Baosteel and the three companies ended inconclusively in late February, and there has been no timetable for the next round of talks. New one-year term contracts are due for renewal starting April 1.
Global steel outlook looking healthier MEPS
Steel industry consultant MEPS suggests the global outlook for steel prices is now a little healthier, having lifted its global `All Products Composite` price forecast slightly to reflect improvements in some markets and the likely start of an inventory building cycle in Europe.
Breaking its forecasts down into regions, MEPS anticipates both flat and long product prices in Europe are likely to move higher in coming months given a likely increase in demand. Over the full year it sees no uplift in the average price in the region as higher import volumes are likely to offset the current strength in demand.
For North America MEPS is more confident and has lifted its full-year price forecasts slightly, though it points out its January 2007 forecast is for prices to be lower than at the same time this year.
Its outlook for Asia is flat, as while the oversupply problem is unlikely to go away MEPS suggests demand will improve, particularly as the Chinese return from holidays. One possible negative it has not included in its forecasts is the potential for the Chinese to continue to lift capacity at a faster rate than consumption, which would lead to further deterioration in the supply-demand situation.
POSCO could ask Nippon Steel to buy more stake for defense
POSCO, the world's fifth largest steel maker, said that it could ask Japan's Nippon Steel to buy its shares as a way of protecting it from a potential foreign hostile takeover. The South Korean steel maker, which is highly profitable and has a fragmented, foreign dominated share ownership, is viewed as a potential foreign acquisition target amid global consolidation in the steel sector and after a hostile takeover bid for South Korea's top tobacco firm KT&G Corp.
"We don't have such a plan now to ask Nippon Steel to buy POSCO shares, but we can consider that as an option if necessary," Mr Hugo Bae, an official at POSCO's public relations department quoted POSCO's CFO Mr Lee Dong hee, as saying. "We are financially strong, and we can take a leading role in M&A deals," Mr Bae cited Mr Lee as saying, confirming earlier local newspaper reports.
A spokesman for Nippon Steel declined to comment on the remarks.
The relationship between the steel makers has been favorable since the 1970s, with joint research and technology sharing contributing to establishment of POSCO. POSCO currently owns a 2.2% stake in Nippon Steel, and Nippon Steel has a 3.32% stake in POSCO. In August 2005, the two firms agreed to extend five more years of their strategic alliance, the plan that includes joint research and development and joint raw material procurement projects. Analysts say POSCO and Nippon Steel are not likely to threaten each other's management control even if their share ownerships were increased.
Shougang president calls for defenses against foreign takeover
Shoudu Iron and Steel Group Co Ltd's (Shougang) president Mr Zhu Jinmin told Chinese lawmakers that the country needs antitrust laws to protect the steel industry from multinational corporations during CPPCC National Committee meeting and that Chinese government should expedite antitrust laws and establish a relevant legislative department to prevent foreign multinationals corporations from controlling the steel sector.
Mr Zhu pointed to Mittal Steel's proposed hostile takeover bid for Arcelor and said if the acquisition is successful, Mittal Steel could control resources in Europe, the Americas and Brazil. He also said that Mittal Steel could theoretically control the country's largest steelmaker, Baosteel, with RMB 18 billion ($ 2.25 billion) if China does not have the relevant antitrust laws in place.
The central government is researching potential antitrust legislation and setting up a relevant department. The government has regulations in the steel industry that forbid foreign companies from owning controlling shares in domestic steelmakers.
China's Handan Group in talks with Arcelor& ThyssenKrupp
Handan Iron and Steel Group Co Ltd, parent of Handan Iron & Steel Co Ltd, is currently in talks with Arcelor SA and ThyssenKrupp AG about a possible stake sale by the Chinese steelmaker, said company president Mr Liu Rujun on the sidelines of the ongoing annual parliamentary session in Beijing without giving further details.
Handan Iron & Steel Group plans to invest up to Yuan 20 billion to upgrade and relocate its steelmaking operations from the centre of the northern city of Handan to its outskirts. He said that after the relocation capacity will remain unchanged at 8 million tonnes level but the company would produce higher value products. Mr Liu added that the first phase of the relocation will be finished in 2008 and the whole project will be completed in 2010.
Arcelor announces deposition of 98.5% of Dofasco's common shares
Arcelor SA announces that an additional 7,967,623 common shares of Dofasco Inc, including shares deposited by guaranteed delivery, were deposited to Arcelor's offer to acquire all of the outstanding common shares of Dofasco for C$71 in cash per Dofasco common share between February 20, 2006, the previous expiry date of the offer, and 8 PM on March 7, 2006, the latest expiry date of the offer.
To date, a total of 77,530,766 common shares of Dofasco, representing 98.5% of all outstanding Dofasco common shares, have been deposited to Arcelor's offer. Payment for all deposited Dofasco common shares, for which payment has not already been made, is expected to be made on or prior to March 10, 2006.
Its offer for Dofasco having expired, Arcelor intends, as soon as permitted, to acquire the remaining Dofasco common shares by means of a statutory compulsory acquisition procedure under the applicable provisions of the Canada Business Corporations Act at the same price as the offer price.
Arcelor also intends, upon acquiring a sufficient number of Dofasco common shares, to de-list the common shares from the Toronto Stock Exchange.
Arcelor CEO believes that he can fend of Mittal Steel takeover
Arcelor SA still believes it can fend off the Mittal Steel Co NV takeover bid, but does see the need for consolidation in the steel industry, CEO Mr Guy Dolle said according to the pre release of an interview to appear in Die Welt. The CEO said he has seen no signs on the investor road show that the company's shareholders want to accept Mittal's Euro 18.6 billion takeover offers, contrary to statements made by Mittal Steel.
Our shareholders are very happy with our current performance and the growth plan, Mr Dolle told the newspaper, adding that the shareholders still favor the independence of the company. Mittal Steel and Arcelor do not complement each other the CEO said, adding that a merger should amount to more than the sum of the two parts. Mr Dolle added that he feels his arguments against the takeover are good and Arcelor's outlook is more than good. He does not see this jeopardized by the entrance of hedge funds as shareholders.
ORNL technology for lighter passenger cars
Researchers at the USs Oak Ridge National Lab are making progress on research that has the potential to change the automotive industry. They are developing an inexpensive carbon fiber based material that could replace steel.
"I don't think you would probably see a huge difference in appearance. But you would get a significantly lighter car with better fuel economy and safety," said Mr Bob Norris, from ORNL. The cars made with carbon framing would weigh 60% less than current vehicles and gas mileage would jump significantly. "It has been projected for each 10% reduction in weight there would be a 5% fuel savings," said Mr Norris.
The biggest remaining hurdle is making the carbon based materials more affordable to auto makers. Currently carbon fiber material is about $8 a pound. To compete with steel the price needs to drop to around $3 a pound and ORNL is trying to make that happen.
Carbon fiber technology is already used extensively in Formula 1 and Indy Car racing. But so far the costs have prevented extensive use in passenger cars. ORNL hopes their research can help change that.
Terra Nostra announces successful production in SS Unit
Terra Nostra Resources Corporation announced successful production trials and the commencement of sales and distribution at its recently opened stainless steel facility in China. The Company had previously announced the grand opening of the state of the art 180,000 MT stainless steel casting mill in Zibo City, Shandong Province, China, which took place on January 22, 2006.
The initial trial production results have been very positive, with all three electric arc furnaces, two AOD furnaces and casting line operating, presently producing 100 metric tons of stainless steel billet per day, and representing a production ramp up to approximately 17% of the operating capacity of the mill. Construction also remains on schedule for the rolling mill production lines, including the 200,000 MT strip line that is scheduled to commence production trials in the second quarter of this year. The Company is currently selling the stainless steel billets produced to factories throughout China, but plans to use the billets as feedstock for the rolling mill once the strip line becomes operational.
"This represents an extremely encouraging start towards our production goals", said Mr George Chua COO of Terra Nostra. "We are pleased to have reached this important milestone which lends further credence to the Company's ability to generate revenue and growth, and we are anticipating several similar achievements throughout the year".
Terra Nostra Resources Corporation owns a 51% interest in Shandong Quanxin Stainless Steel Co Ltd. The Company is also emerging as a leading copper producer in China through its 51% interest in Shandong Terra Nostra Jinpeng Metallurgical Co Ltd. Both joint venture companies are located in the highly industrialized coastal Province of Shandong, China.
Xstrata likely to make offer for Falconbridge
Xstrata Plc probably will make an offer for Canadian nickel miner Falconbridge Ltd, topping a C$13.7 billion ($11.8 billion) bid by Inco Ltd, Merrill Lynch & Co. said. They said an offer isn't likely before May 15 because of an agreement covering the 20% stake in Falconbridge that Xstrata bought in August.
Buying Falconbridge would increase and diversify Xstrata's commodities output and give it more potential for growth, the analysts said. Inco may be forced to increase its offer, giving Xstrata a higher price for its existing stake if Inco prevails, they said.
Kumba & Mittal Steel in Senegal mix up
As per reports in a daily Kumba Resources has confirmed that the deposit allocated to Mittal Steel in Senegal is the same property on which it holds rights, and on which it has spent several millions of dollars exploring.
Kumba said it had concluded an agreement with Miferso in July 2004 to explore the Faleme deposit, which it was envisaged would yield up to 12 million tons a year of high grade ore over a 20 year period. The main constraint on the project was the need to build rail and port infrastructure and a preliminary estimate of the capital needed was $950m, of which two-thirds would be spent on transport infrastructure. Kumba said two weeks ago that it had begun a bankable feasibility study to develop a mine to exploit the Faleme iron ore deposit in southeastern Senegal. The company had exercised its option to acquire a controlling interest in the project.
However, Kumba CEO Mr Con Fauconnier told media after the results that the group had received reports a day or two earlier that Mittal Steel had signed a memorandum of understanding with the Senegalese government over a property which at that stage Kumba was not yet certain was the same.
Kumba Resources GM for corporate affairs and investor relations, Mr Trevor Arran, said yesterday that Kumba Resources was trying to resolve the issue with the Senegalese government and its development agency, Miferso. A meeting was scheduled for later this month. Asked whether Kumba Resources intended to pursue legal action, Arran said: At this stage we are talking to the government and Miferso to see if we can resolve this amicably. Obviously, we believe we have rights and will do everything in our power to protect them.
Mittal Steel SA, which was formerly Iscor before it became a subsidiary of Mittal Group, is Kumba Resources biggest iron ore customer in SA. Kumba and Iscor were the same company until Iscor Mining was spun off separately in 2001.
US Energy Corp to open molybdenum mine in Mt Emmons
Wyoming based US Energy Corp has confirmed they plan to open a molybdenum mine on Mount Emmons. "We view this property as a potential company maker. Rarely are mineral deposits of this magnitude discovered, and we now own it in a very favorable pricing environment" said Mr Mark Larsen president. US Energy still need to conduct feasibility and environmental studies, and acquire a number of permits, as well as raise capital before opening any mine.
US Energy was forced by a federal district court to take possession of 25 contested mining claims and a water-treatment plant during an ownership dispute with Phelps Dodge, another mining company.
A study directed by the Bureau of Land Management suggests the Mount Emmons claims to hold 23 million tons of molybdenum ore.
Guangzhou Port to enhance coal handling capacity
The Guangzhou Port Group plans to spend Yuan 300 million towards increasing the capacity of coal handling system in Xinsha Area of the port from 4.6 million tons of 2002 to 20 million tons at the end of 2006. The coal handling system in Xinsha will come into the forth stage of construction this year.
Finally, the three coal berths in Xinsha Area will have a combined handling capacity of 20 million tons annually. It will greatly ease the tight coal supply in Guangdong Province.
Union leaders say fair deal possible with AK Steel
Union leaders who have negotiated new contracts with other units of AK Steel say fair deals that keep the steel maker profitable are possible for locked out workers at its Middletown Works plan and the company and the union at its largest plant should be able to avoid an extended lockout like the one at its factory in Mansfield, which had turned bitter.
AK Steel and its independent Middletown union representing about 2,700 workers resumed negotiations Tuesday, meeting for about 40 minutes. AK Steel said the union finished presenting a counterproposal and requested additional information, and the company will review the presentation and requests before trying to schedule another bargaining session. Union officials weren't immediately available for comment.
AK Steel has said it needs to cut labor costs at Middletown to be competitive. Its latest proposal would increase pay for most workers, but reduce the work force, slash job classifications, freeze pensions and charge workers for some of their health insurance.
On the other hand the union says it's already made sacrifices and done its part to keep the company competitive with long hours and increased productivity.
Denton Wilde Sapte advising GHC on steel plant project
Denton Wilde Sapte is advising General Holding Corporation, a project development agency of the Abu Dhabi government, on the financing and construction of a new steel plant in UAE.
"We are enjoying working with the GHC team and our co advisors HSBC and Atkins", says Dentons UAE based partner Mr David Courtney Hatcher. "Finalizing this technically and contractually complex agreement in a short time was a fine achievement for all involved. This is just one of the many superb industrial and infrastructure projects in the region on which we are busily working."
The EPC Contract for the Emirates Integrated Steel Facility, awarded to Italian Contractors Danieli, was signed at the end of January. Danieli will provide engineering, construction and technology expertise for the two rolling mills, a direct reduction plant and a melt shop.
Harris Steel Q4 profit falls
Harris Steel Group Inc had a fourth quarter profit of $19.75 million, a decline of 6.2% from a year earlier. Sales were higher in the final three months of 2005, rising to $283.9 million from $203.7 million in the fourth quarter of 2004.
For the full year, Harris Steel had net earnings of $64.1 million compared to earnings in 2004 of $71.5 million.
EBIDTA excluding the Nucor gain is $111.0 million, which is a new record for Harris and is 10% higher than the comparable value of $100.9 million in 2004, the company said.
AECs Phulbari coal mine development plan in approval stage
Bangladesh government will take decision on Asia Energy Corporation's development plan for Phulbari coalmine by May, sources concerned said. The feasibility study and development plan by AEC for the coalfield is now under consideration of the government. A source at the Energy Division said the proposal of the AEC has been sent to an experts' committee for evaluation. At the same time, the drafting of the policy is now at the final stage, the source added.
The Energy Division hopes that a decision on Phulbari will be taken in line with the opinion of the experts' committee and the coal policy shortly. Energy Adviser Mr Mahmudur Rahman said two aspects are linked with taking a decision on Asia Energy's Phulbari coalmine development proposal, the national coal policy has to be finalized and the report of the experts' committee has to be obtained.
Roanoke Electric Steel reports record first quarter results
Roanoke Electric Steel Corporation reported record first quarter net earnings of $10.3 million for the period ended January 31, 2006, compared to net earnings of $9.1 million for the same period last year, a 12.8% increase. Sales for the quarter were $149.2 million, also a first quarter record, and up by 13.6% from sales of $131.3 million for the same period last year.
Mr Donald G Smith Chairman and CEO and Mr T Joe Crawford President and COO, stated "We are pleased to announce that for the second year in a row we have established new record totals for sales, net earnings and earnings per share for the first quarter of our fiscal year. The sales increased as a result of improvements in product mix and higher average selling prices for some of our products. The increase in average selling prices was mainly due to strong market demand for a number of our products, as well as more market discipline in steel pricing. We are excited concerning the anticipated combination with Steel Dynamics, Inc. The merger, which we expect to be completed in April 2006, will place Roanoke in an improved position regarding capital projects, meeting competitive pressures, and serving customers more efficiently.
