April, 15 2006
India needs $550 billion investment in 5 years
The high-profile Investment Commission, headed by Mr Ratan Tata, has said that India needs to attract investments of up to $550 billion in the next five years if it wants to become an economic powerhouse. Mr Tata had presented the report to Prime Minister Dr Manmohan Singh last month. The commission has identified sectors like roads and highways, energy, civil aviation, textiles and garments, automobile components, real estate, construction, tourism and food processing as high priority areas.
In its report, the commission pointed out that the roads sector alone required investments of $30 billion by 2010. The report says that the power sector needs investments of $140 billion in five years to generate 90,000 Mw of electricity. At present, investment in this sector stands at $54 billion. Highlighting the importance of the coal sector, the commission has said the sector needs investments of around $30-40 billion over the next decade to double production from 240 million tonnes at present. Until now, the sector has attracted investments worth only $2.5 billion.
The prime minister has now asked nine central ministries, including petroleum, power, civil aviation, telecommunications, textiles, tourism and food processing, for inputs within a month on what they intend to do about this.
Higher steel consumption than growth in production in India leading to higher imports
Credit rating agency Icra in a study has found that during April to December despite a phenomenal growth of the Indian steel industry of around 7.1% the rate of consumption was higher by 9.7%.
The domestic demand in India is met by domestic production and higher imports. Steel exports registered a marked increase of 5.9% yet the quantum of imports was as high as 92.4% during April to December 2005-06.
Pig iron production witnessed a rapid growth of 34.1% and an apparent consumption of 33.2% respectively.
While the volume of sales reported healthy growth, in value terms, sales were lower as steel prices declined during April to December 2005.
Orissa government abducts 9 anti POSCO protestors
It is reported that police swooped down in three villages of Dhinkia, Nuagaon, Gadakujanga in Jagatsinghpur district on Thursday night and took away nine people protesting the setting up of POSCOs plant resulting in building of tension in these villages. Policemen have been deployed in the villages after the arrests to ward off further trouble, a senior district police official said.
Anti POSCO activist M. Akhaya alleging that workers of the ruling Biju Janata Dal also attacked many villagers in the presence of cops and the police did not act against pro-POSCO campaigners.
Trouble broke out in Dhinkia village in Jagatsinghpur district last Tuesday, just before state Panchayati Raj Minister Damodar Rout was to have arrived. At least 1,000 agitated residents of nearby villages, who say the plant will ruin the lives of 10,000 betel leaf farmers, came to Dhinkia in a procession and clashed with POSCO supporters leaving over a dozen injured.
Indian coal mister increases allocation for e auction route
Coal India Ltd has been authorized by coal ministry to e auction 36 million tonnes of coal in 2006-07. This is 16 million tonnes more than 2005-06. Coal Minister Mr Sheba Siren said CIL subsidiaries had realized additional revenue of Rs 900 crore from e marketing of coal.
Mr Soren scrutinized CIL's commitments, particularly relating to power utilities prior of approving the e auctioning. He informed that the coal major's commitment to power sector for the current fiscal was 272 million tonnes as against 255 million tonnes dispatches in 2005-06. The targeted production in the current fiscal would be 363 million tonnes as against the production of 343 million tonnes of coal by CIL in the 2005-06.
China wants long term iron ore contracts with Indian suppliers
Chinese steelmakers and Indian iron ore producers will try to negotiate iron ore prices based on long term supply and demand rather than spot market prices within this year, the China Business News reported, citing an industry association official.
Mr Luo Bingsheng, vice president of the China Iron and Steel Association said during a China-India iron ore summit that domestic steelmakers should ally as soon as possible to start price talks with Indian iron ore producers. He suggested that the two parties negotiate the price once a year, the newspaper said.
China's steelmakers currently purchase Indian iron ore based on spot market prices, which can be very volatile.
POSCO to use FINEX technology in Orissa plant
POSCO has announced that it will use newly developed Finex technology the proposed 12 million tonne project at Paradip "Though, initially we were planning for blast furnace route, we have now decided to adopt the Finex technology as the demo process has almost been completed" POSCO CEO Ku-Taek Lee told visiting Indian media persons.
According to him, the capital and production costs of steel making will be less with the use of Finex technology.
He said that POSCO will minimize the swapping of iron ore in view of the new technology adopted for Orissa but clarified that "we are not dropping the idea of swapping.
China to cut ferroalloy production by 25% by 2010
China will cut its ferroalloy capacity by a quarter over the next five years to reduce the industry's serious overcapacity problem, according to the country's planning agency. Total production capacity last year, for instance, was twice the amount the market was able to absorb. Ferroalloys sector has experienced rapid growth since the end of the 1990s in tandem with the boom in steelmaking generated by the country's expanding economy. China is now the world's top ferroalloy producer, consumer and exporter.
China plans to cut its ferroalloy production capacity by 25% by 2010 to deal with oversupply problem and Chinas ferroalloy output capacity will be limited to around 17 million tons a year. Upon completion of the scheme, the output of large ferroalloy producers with an annual production capacity of above 100,000 tons will account for over 40% of the country's total.
The move comes in line with a circular jointly issued by the National Development and Reform Commission and six other departments, which called for stepping up the structure adjustment in the ferroalloy sector, which faces excessive capacity. The circular said during the 11th Five Year Plan for 2006-2010 period, China will upgrade the access standard in the ferroalloy sector and strictly control investment in the industry. The circular also encourages Chinese enterprises to explore overseas market and sponsor ferroalloy mines abroad. The government will also control the excess export of ferroalloy to avoid price fluctuations.
There are 1,570 ferroalloy producers in China, with an accumulated capacity of 22.13 million tons. Additional 161 projects are under construction, with a total designed output capacity of 1.23 million tons. Last year, China produced 10.67 million tons of ferroalloy up by 16% YOY according to the National Bureau of Statistics.
Nippon Steel & Sumikin raises SS prices
Nippon Steel & Sumikin Stainless Corp., Japan's largest stainless steel producer, raised prices of its nickel based sheets for a fourth straight month in April because of higher nickel prices.
The company increased prices for its 304 grade steel by 1.6% percent to 320,000 yen ($2,700) a metric ton compared with March Mr Yosuke Sakai, a manager at the planning department said. We'll watch the market trends while considering reflecting materials costs in prices for long term contracts as higher prices may continue,'' the company said in a statement.
Prices of nickel for delivery in three months have gained 32% this year on the London Metal Exchange.
Nippon Steel & Sumikin is 80% owned by Nippon Steel Corp and 20% by Sumitomo Metal Industries Ltd.
Techint and SMS Demag acquire LOI Thermprocess
Techint and SMS Demag, two of the leading European metallurgical plant building companies, are taking over LOI Thermprocess GmbH, based in Essen, Germany, from the Elster Group. The transaction is subject to approval by the antitrust authorities. Techint and SMS Demag have formed a joint-venture company for the takeover of LOI. The transaction has a strong industrial logic and will benefit all stakeholders of LOI, Techint and SMS Demag.
The leading position of the LOI Group will continue to expand as a result of the takeover by Techint and SMS Demag. The existing corporate structure of LOI as an independent supplier of furnace technology will be maintained. The Essen headquarters and all other locations of the LOI Group will be retained and further developed.
With around 600 employees and sales of approx. EUR 200 million, the LOI Group is an international supplier of high quality industrial furnaces for the steel and aluminum industry. Since 2003 DREVER International based in Lie, Belgium, has been part of the LOI Group, a subsidiary of the Elster Group, the former Ruhrgas Industries.
Mittal Steel Kryvy Rih to double its iron ore output
It is reported that Mittal Steel Krivy Rih will spend $250 million to double iron ore output by the end of 2009 at three Ukrainian mines it acquired last year and also wants to acquire coal assets nearby. Mittal Steel, which bought the mines as part of its $4.8 billion purchase of Ukraine's biggest steel mill, would be able to supply ore to its other plants in Europe after restoring output to Soviet era levels.
Mittal Steel Krivy Rih GD Mr Narendra Chaudhary told Reuters in an interview "Our obligation was to continue operating the mines at current capacity levels, but we see value in increasing output. We would like to have more self sufficiency as a group in the iron ore area." Mr Chaudhary said "We are deficient to the extent of 2 million to 2.5 million tons of raw ore equivalent. By the end of 2007, we should be self sufficient. Our projection shows that there will be a period in 2008 or 2009 when we should have some surplus. That surplus we may sell to other Mittal Steels units within Europe."
Mr Chaudhary said Mittal Steel Krivy Rih had two open cast iron ore mines with a reserve of 1 billion tons or more, and another underground mine. "Once upon a time these mines were able to produce 30 million tons a year of raw ore. The whole condition of the industry has deteriorated after the break up of the Soviet Union and today they are at a level of 16 million tons." Much of the $250 million investment would go toward removing several million tons of overburden that has accumulated at the mines and on the modernization of the mining fleet, he said.
He added Mittal Steel was also interested in acquiring a separate, Soviet era project, the KGOKOR ore enrichment plant, for which the Ukrainian government said on Wednesday it wanted to find an investor to help complete construction.
Mr Chaudhary said Mittal Steel Krivy Rih also wanted to reduce its dependence on coal purchases and would consider buying mines in Ukraine. "We are always open to that. We would like to get more and more vertically integrated. If there are opportunities in the coal area, we would definitely look at them," he said.
China GDP in Q1 slows down to 8.5%
Chinas economy grew about 8.5% in the first quarter, slowing from 9.5% in the previous year, the China Securities Journal reported, citing the investment department of the nation's top economic planning body. Growth will slow to 8% in the second quarter and 7.8% in the third, the newspaper said.
Economic expansion for the year will slow to 7.5% from 9.9% in 2005, it said.
Japans top 5 steelmakers to increase output by 7.2% by 2009
Japan's top five steelmakers Nippon Steel Corp, JFE Steel Corp, Sumitomo Metal Industries Ltd, Kobe Steel Ltd and Nisshin Steel Co plan to boost crude steel production to a combined total of 88.4 million tonnes in the year ending March 2009 up by 7.2% from the last financial year, the Nihon Keizai Shimbun reported without citing sources.
Nippon Steel plans to lift output by 2.6% to 32 million tonnes and JFE Steel intends to boost production by 12.2% to 30 million tonnes. Kobe Steel and Nisshin Steel plan to increase production by 8.5% to 8.2 million tonnes and 13.5% to 4.2 million tonnes respectively, the report said. Sumitomo Metal Industries, the world's leading producer of seamless pipe for oil rig use, plans to raise output of the pipe by 10% boosting production across the board by 5.3% to 14 million tons, the Nihon Keizai said.
All of them use blast furnace route to produce high grade steel. Blast furnace steel in Japan accounts for about 75% of total crude steel production.
POSCO shares surge on takeover defenses
Shares of POSCO rose to an all time high after CEO Mr Lee Ku Taek said the company must raise its market value by a fifth to guard against a hostile takeover. Posco's shares rose to 260,000 won, giving the steelmaker a market value of 23 trillion won ($24 billion). POSCO's stock has risen 29% this year.
Mr Lee has been considering defenses against a hostile takeover since Mittal Steel's hostile $25 billion offer for Arcelor SA and US billionaire Carl Icahn's unsolicited bid for South Korea's biggest tobacco maker, KT&G Corp.
Posco has said it may buy back stock or sell shares to a strategic investor. If POSCO's share price is increased by 20% from a 250,000 won base, raising the market capital to $26 billion, we won't be exposed to the dangers of a hostile takeover'' Mr Lee is reported to have said to executives on April 8 at an internal meeting. There is no way to defend against a hostile merger and acquisition 100 percent, but the best method is to raise market capital'' Mr Lee told.
Kumba Coal undertakes pre feasibility of Botswanas coal resources
Kumba Resources subsidiary Kumba Coal has concluded an agreement with Botswanian Magaleng to undertake a pre feasibility study for the development of the Mmamabula Central coal resource. Magaleng holds a two year prospecting license in an 87.5 square kilometer area of the resource. Indications are that the work which is being undertaken to prove that Mmamabula East and Mmambula South have sufficient coal resources to support a 3 600 MW power station will be completed by June. The mine will produce 12 million tons of coal a year. The targeted commercial launch of the mine mouth power station is 2011.
Botswanas Mmamabula coal resource is an extension of the Waterberg coalfield, which hosts Kumbas 17 million tons of year Grootegeluk, South Africas largest coal mine and the largest coal- beneficiation complex in the world, which supplies coal to Matimba power station.
Kumba Resources commodity development manager for coal Mr Danie Mouton told a mining weekly that Kumba Coal is currently involved in the first phase of a drilling program on the resource. It is anticipated that the drilling program will be completed later this month, and that the pre feasibility study will be concluded by the third quarter of the year. Mr Mouton says that the company is currently in the process of obtaining the remaining geological information that was gathered in previous drilling campaigns on the resource.
China fails in meeting environmental goals
China's rapid economic growth has prevented it from meeting nearly half of its goals for environmental protection, with the level of sulphur dioxide emissions rising by 27% over the past five years, the State Environmental Protection Agency said in a report. China had set a target of cutting discharges of sulphur dioxide by 10% in 2000-2005. It set the same target for reducing emissions of carbon monoxide but only managed a 2 percent%. Of 20 environmental goals, eight were not achieved, including reducing discharges of carbon dioxide and industrial solid waste and expanding the proportion of waste water treatment, it said.
The report cited surging energy consumption due to the economic boom, which has kept growth in the gross domestic product above 9%. ''Some regions set more value on pursuing rapid GDP growth, sacrificing the environment and public health,'' the report said.
Kenyan importers opposes pre shipment rule
Kenyan importers have raised concern over hiring of firms for pre shipment inspection at supply source, saying this would raise the cost of doing business. The importers said that the enforcement of the Verification of Conformity to Kenya Standards Imports this month had made importers pay huge extra charges. The group led by Kenya International Freight and Warehousing Associations VC Mr Peter Mambembe, asked the Government to review its stand.
On March 10, Kenya Bureau of Standards announced through the media the introduction of new verification rules. Kebs had explained that the order followed legal notice number 78 of July 15, 2005 and was based on Article 5 of the World Trade Organization. The notice further said Kebs had appointed Intertek International and Societe General de Surveillance to provide verification of conformity service from supply countries. According to Kebs, goods covered under the PVOC program should be cleared for entry into the country upon presentation of a certificate of conformity issued by SGS or Intertek.
Danieli to upgrade two rolling mills of the Beltrame Group
Beltrame Group has awarded two contracts to Danieli for upgradation of its plants in Italy and France.
Beltrames T320 mill at Lamin Marchands Europns in Trith Saint Leger in France will undergo a major modernization aimed at enlarging the present product range and at enhancing mill operation and efficiency. The hot rolling and finishing areas of the mill will be completely reconstructed. All this will enable production of 45mm to 120mm angles, equivalent unequal angles, channels & I beams up to 160mm, flats in range of 50mm to 200mm and tees in range of 50mm to 80mm, at rates of up to 120 tonnes per hour. The upgrading project will be carried out in two subsequent phases, respectively in December 2006 and December 2007, for optimization of plant stoppages.
This will involve the replacement of the present mill stands with new H, V and H/V housing less type rolling units and auxiliaries, arranged according to a modern and rational layout. A new 80 meter long cooling bed with in line multi strand straighteners, a new 16 meter long automatic stacker for profiles and bundling facilities will also be installed. Electricals and automation system will be supplied by Danieli Automation.
The modernization of the bar and light-section mill at AFV Beltrame in Vicenza in Italy will involve the complete replacement of the intermediate and finishing rolling units with roll stands of the same type and size of those to be supplied to LME, for promoting equipment standardization. Also in this case the project will be implemented in two subsequent implementation stages, with a first plant stoppage in August 2006 and another in December 2007. The mill produces 12mm to 30 mm dia round & square bars, 25mm to 120mm flats, up to 80mmx40mm unequal angles, and correspondent channels and tees at rates of up to 100 tonnes per hour.
Panama Canal to widen
The Panama Canal Authority has approved a plan for a $7.5 billion upgrade of the 1914 built canal. The plan is likely to be approved by the Panamanian government.
The new construction project, which will take about seven years to complete, will add huge new locks, allowing wider vessels to transit the canal. The project will be funded by loans, increased transit fees and by selling future transit fees at today's prices.
China Special Steel posts 3.41% decline in profit in 2005
China Special Steel has posted a 4.31% decline in net profit to 122.14 million yuan last year. Gross profit margin slipped to 19.14% from 19.95% in 2004, despite a 19% rise in sales volume to 244,437 tonnes due to a 6.64% drop in the average product selling price. Bearing steel accounted for 93% of last year's turnover, up from 82% in 2004.
"Last year's profit decline was due mainly to the government's macroeconomic tightening policies which saw steel prices fall," said CFO Florence Lee. "But with our output rising to 400,000 tonnes this year, gross margin should improve."
China Special Steel makes bearing, spring, gear and carbon structured steel for the machinery and equipment manufacturing industries.
New Millennium increases LabMag iron ore estimates
New Millennium Capital Corp has announced that estimates that include the 2004 and 2005 drilling programs for its LabMag Iron Ore Project near Howells River in Labrador in Quebec demonstrate approximately 3.084 billion tonnes of Measured Mineral Resources, and an additional 581 million tonnes of Indicated Mineral Resources, for a total of 3.665 billion tonnes. Not included above are other Resources which are classified as Inferred and amount to 1.475 billion tonnes.
According to Mr Magnus Erickson of Raw Materials Group, Stockholm, Sweden, the 3.6 billion tonne LabMag iron ore Mineral Resource is the largest known undeveloped magnetite resource in the world that is currently at an advanced stage of exploration.
Mr Robert Martin, President and CEO of NML commented, "the LabMag Iron Ore Project, with over 3 billion tonnes of Measured Mineral Resources, is now confirmed to be a mega project development - one that we hope will benefit, to the fullest extent possible, our shareholders, our northern aboriginal and non-aboriginal communities, our local and provincial governments and the Canadian people in general".
New Millennium Capital Corp owns 80% of LabMag Iron Ore project and the balance 20% is owned by The Naskapi Nation of Kawawachikamach. NML is planning additional drilling and metallurgical testing this year to further define the extent of the Mineral Resource on the Property. The development of this resource, which is called the LabMag Iron Ore Project, is the Corporation's main focus. The development contemplates the construction and operation of a mine, crusher, concentrator, slurry pipeline, pellet plant, ship loading facilities and related infrastructure. Subject to positive feasibility studies and project financing, it is expected that the final pellet product would be shipped by ocean vessels to markets in Canada, the United States, Western Europe and Asia.
ThyssenKrupp Nirosta orders batch annealing plant to LOI
During January ThyssenKrupp Nirosta has awarded LOI Thermprocess GmbH a contract to supply an HPH batch annealing plant for its Benrath facility. The contract covers two additional HPH annealing bases and a heating hood to boost the capacity of the existing plant. Commissioning is scheduled for August 2006.
The plant will be used for annealing hot-rolled steel strip and is designed for a maximum coil diameter of 1960, a maximum stack height of 4000 mm and charge weights of up to 80 t. Natural gas will be used for heating.
The scope of supplies includes advanced Siemens S7-300 PLC control systems. The entire control systems of the new plant are to be connected to the existing supervisory control system.
Brazilian long product demand to expand 8% in 2006
Brazil's demand for long steel is forecasted to expand by 8% in volume terms this year compared to 2005 Mr Adriano Blanaru a mining and metals analyst is predicting. "This increase would occur due to this year's elections, tax reductions related to the civil construction segment and due to infrastructure works in the country" Mr Blanaru added.
The country's presidential elections are in October 2006. Brazilian President Luiz Inio Lula da Silva signed a decree in February to reduce taxes for the civil construction industry, which benefits customers who buy steel such as rebar and tubes for building projects. "Around 95% of products manufactured by Gerdau will be impacted by this decree," local long steel producer Gerdau's senior VP Mr Frederico Gerdau Johannpeter said in February when asked about the tax reduction benefits.
In addition the analyst expects domestic sales to grow in 2006. "Exports are expected to decline this year due to a recovery in local steel use, a good sign which will benefit the Brazilian steelmakers," Mr Blanaru said. Domestic sales bring better margins to steel producers, Mr Blanaru added.
Philippine freighter carrying steel sinks
A Philippine registered freighter sank after it collided with a Japanese cargo vessel near Tokyo Bay in heavy fog Thursday but its 25 crew members all managed to escape to safety, the Japanese coast guard said. The 5,608 tonne Eastern Challenger began taking on water and sank at 12:07PM local time, about seven hours after colliding with the 452 tonne Tsugaru-maru, said Mr Isao Matsumoto, a spokesman for Japanese coast guard's regional office in Yokohama.
Visibility was about 150 meters at the time of the accident but the cause of the collision is still under investigation, Mr Matsumoto said.
The Eastern Challenger was carrying steel products to Yokohama from a port in the Philippines via Japan's western port Osaka.
Hungarys M Cargo bags Dunaferr haulage contract
M Cargo Zrt, freight division of state run railway company M Zrt, has signed a three plus two year haulage contract with steel maker Dunaferr Zrt. Under the deal, M Cargo has agreed to ship 4.5 million tons of goods for Dunaferr annually in the next three years, which may optionally be extended by another two.
M Cargo expects to make big investments in 2006 to modernize its rolling stock, develop its IT system and expand its infrastructure, CEO Mr Tam Koz said.
CVRD appoints Mr Tito Martin as ED of corporate affairs
Companhia Vale do Rio Doce announced that it has appointed Mr Tito Botelho Martins to the Board of Directors to be the Executive Director of Corporate Affairs. He will be responsible for the coordination of CVRDs relationship with its stakeholders, aiming the use of social responsible practices and the consolidation of the Companys image.
Mr Tito Martins joined CVRD in 1985 and has a vast experience in corporate finance issues. He was Director of the Corporate Finance department between August 1999 and September 2003 and also CFO of Ferrovia Centro Atltica. He was a member of the Board of Directors of FCA, Samarco, Ferroban, Aminas, Gulf Investment Corporation and advisory committees of Itabrasco and Hispanobr. Since October 2003, Tito Martins is the CEO of Caemi Minerao e Metalurgia SA and also the CEO of Mineraes Brasileiras Reunidas MBR. He is leaving these positions to become an Executive Director of CVRD.
Accident in Krasnolimanskaya coalmine in Ukraine
A worker of the Krasnolimanskaya coalmine based in the town of Rodinskoye in Ukraine's Donetsk region died in an accident at a depth of 545 meters, the Emergency Situations Ministry said on Thursday.
The accident was the result of safety rule violations.
50 workers have died at Ukrainian coalmines this year. There were a total of 157 fatalities in 2005, which were 43 less than the year before.
SGS offers distance learning courses on quality assurance
SGS UK is now offering distance learning based Institute of Quality Assurance Certificate and Diploma courses. The IQA Certificate and Diploma are internationally recognized, industry standard qualifications for quality professionals. They have been accredited by the Qualifications Curriculum Authority in support of the Department for Education and Skills.
"These IQA courses are a welcome addition and part of our plan to expand our range of quality management systems courses" said SGS Training Manager Mr Gary Baker.
Quality Management & Training operates and administers the IQA Certificate and Diploma. "We've been running these successful and popular courses since 2000," says QM&T Director Edda Saunders. "They bring major benefits to employees and employers alike, particularly the ability to confidently interpret and apply all the latest quality assurance principles, practices, tools and techniques."
SGS is the global leader and innovator in inspection, verification, testing and certification services. Founded in 1878, SGS is recognized as the global benchmark in quality and integrity. With over 42,000 employees, SGS operates a network of almost 1,000 offices and laboratories around the world.
Quality Management & Training Established in 1984, QM&T provides a wide range of quality-related training, distance learning, software and other services. QM&T has been an authorized Institute of Quality Assurance Education Centre since 1991. It also works with the University of Central England and is a member of the British Quality Foundation.
Institute of Quality Assurance Founded in 1919, IQA is the UK's leading professional body for the advancement of quality practices. Among its services, IQA provides training, education and support for quality professionals. IQA is also a founder member of the European Organization for Quality.
Ukrainian steel company asks court to annul Russia-Ukraine gas deal
It is reported that Dzerzhynsky Metallurgical Combine in February filed a lawsuit with the Kiev arbitration court seeking to annul the gas supply agreement Ukraine signed with Russia signed January 4.
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