April, 18 2006
Chinese steel companies exploring opportunities in India
It is reported that some Chinese steel companies in the mineral and metals sectors are exploring business opportunities in India and are planning to make substantial investments in this sector and are already undertaking feasibility studies.
Mr Liu Zhengang chief representative China Minmetals Corporation said, "Chinese steel companies can make use of Indian iron ore reserves and many companies are exploring investment possibilities in India. But the Indian Government should make changes in its mines and minerals policy to allow freer movement of raw materials."
CIL in talks with Gujarat NRE for stake in its Australian coal mine
According to reports citing coal ministry sources, Coal India Limited has initiated preliminary discussions with Gujarat NRE Coke Ltd to acquire a minority stake in the its coal mine in Australia. If the deal goes through smoothly, this will be the first success for CIL in getting an overseas coal mine. CILs earlier attempts to find prospective coking coal properties in Australia, Zimbabwe and Mozambique did not bring about the desired results.
Official sources said CIL was looking at picking up about 20% to 30% stake in GNCLs operative mine in Australia, on GNCL signing a definite long term coal off take agreement with it. Later CIL may negotiate a similar deal in the companys second mine in Australia, which is yet to start production.
GNCL is the largest metallurgical non captive coke manufacturer in India with a production capacity of about 1.4 million tonnes. Besides the purchase of coal mines in Australia, it has also acquired 5% strategic interest in Australian coal producer Resource Pacific Holdings Limited which has soft coking coal mines in Australia with current annual production of 4 million tonnes. GNCL has acquired two coal mines in Australias New South Wales region, one of which started commercial production in September last with an annual production of 1 million tonne and the production is slated to increase to 2 million tonnes by the year end.
Orissa Congress demands shifting of POSCO project site
Expressing concern over likely large scale displacement by POSCO's proposed 12 million tonne steel plant near port town Paradip Orissas Congress called for shifting the project site. A 3 member Congress fact finding team visited Nuagaon, Dhinkia and Gadakujanga villages near Paradip, where POSCO proposes to set up the steel mill.
Leader of the team Mr Swain said that "about 7,000 betel farmers, a population of 25,000 and a large number of marine fishermen would be displaced if the project is allowed to be set up there. Traditional livelihood of the population will be totally wiped out and they will be displaced due to the project. Now their future is at stake."
However Mr Swain said "We are not opposing Posco project but we want it to be shifted to a nearby place."
JSW Steel may go for another increase of HRC prices
Mr Seshagiri Rao Director Finance of JSW Steel during an exclusive interview with CNBC - TV18s acknowledged that international HRC prices have gone up by more than $50 in last three weeks and JSW may consider raising Hot Roll prices again in the first week of May.
He added that the demand is very good in the international and domestic market, while the inventories are really low.
HZL raises Zn prices again
It is reported that Hindustan Zinc Limited has increased its price by 2.29% from Rs 157,100 per tonne to Rs 160,700 per tonne yesterday in line with rising international prices and LME index. HZL had earlier raised prices of Zinc on 5th April. Since March 1, 2006, the metal prices have been hiked by Rs 31,100 per tonne.
HZL will benefit significantly from firm zinc prices, volume growth from ramp up of new capacities, access to high quality zinc reserves, and its low cost structure," an analyst at Edelweiss Securities said.
A dramatic fall in inventories and temporary shut down of Mt Garnet zinc processing unit of Australias Kagara Zinc are mainly attributed to the phenomenal rise in prices of Zinc on the LME.
TATA Agrico ties up with Godrej Agrovet to increase reach
TATA Agrico, the agricultural implement division of TATA Steel has entered into a business venture with Godrej Agrovet Ltd to market its products. "The main objective of this business venture of TATA Agrico is to reach out to the farmer community with its wide variety of products in the rural interiors of the country. Farmers will now have the easy availability of genuine TATA Agrico products at reasonable price controlled by the TATA Steel'' a company release said
According to the arrangement, TATA Agrico's product will be available in all 22 Aadhar outlets across the country with products like Powrah, Sickle and so on for the farmer community.
TATA Agrico believes that with this agreement, they would be reaching out to the target audience at a larger number. Godrej believes that this would help them in enriching their product and service portfolio and can claim to be a single window solution provider for farmers.
L&T bags order for fuel facility at Kuwait airport
Larsen & Toubro Ltd has bagged a Rs 581 crore contract order from Kuwait Aviation Fuelling Company for a new fuel depot project at Kuwait International Airport. The project entails pumping fuel through underground pipelines from Mina Al-Ahmadi Refinery to the storage depot. L&T would be involved in installation of new pumping units at MAA refinery, laying jet fuel pipeline from the refinery to fuel depot, construction of high fuel tanks at the new storage depot.
The company would also be involved in the installation of interconnecting pipeline from the new fuel depot to existing hydrant system of the airport, construction of headquarters building, providing depot control system with associated instrumentation works and the complete electrical system including the total power backup facilities.
"The fuel storage facility project is yet another landmark for L&T in Kuwait and marks the company's continued involvement in major oil and gas projects in the Gulf region. L&T is well placed to contribute significantly for the growth and development in the region through critical infrastructure projects" L&Ts ED Mr K V Rangaswami said.
Isibars board approves MoU with Kalyani Steel
Isibars Ltd has informed BSE that the Board of Directors of the Company at its meeting held on April 15, 2006 has approved a MoU entered into by the Company with Kalyani Steels Ltd subject to the approval of the CDR Lenders.
The MoU is for a 10 year long term JV Agreement for the operations of the rolling mills of the Company.
Thermax secures a large order for HRSG
Thermax Ltd has informed BSE that the Boiler & Heater Group of the Company has bagged a single largest Order valued at about Rs 3600 million from one of the leading business house for their new Refinery Project.
This order is for design, manufacture, supply, erection and commissioning of Auxiliary Boilers and Heat Recovery Stem Generator. The HSRG is to be fitted to gas turbine Frame 9 Machines. The entire steam generation form the plant will be approx 2500 tons of Steam per hour.
DP World now part of SPV to develop WB port
It is reported that following the acquisition of P&O, Dubai Port World will now be part of a consortium to develop a private port and an adjoining special economic zone in the state of West Bengal.
A special purpose vehicle to set up the first private river port in West Bengal was formed two years ago. P&O Ports Australia, which is now part of DP World, along with other equity partners Keventer Agro and Mukand Steel, signed a MoU with the West Bengal state government. Under the terms of the MoU, the state government would assign 50 years concession to develop, operate and maintain the port. P&O Ports (Kulpi) which is now DP World, and Keventer Group, each hold 44.5% stake, while the West Bengal Industrial Development Corporation holds 11%.
This new port will have provision for two berths each with capacity for accommodating 500,000 twenty feet containers. Construction of two berths is estimated to cost $235 million.
Mr Naveen Prakash ED of West Bengal Industrial Development Corporation said that feasibility studies to assess the viability of the proposed Kulpi port in the state's South 24 Parganas district at a distance of 45 miles down the river Hooghly were already taking place and will be completed in August. This will be followed by investment budgeting, financial tie ups and equity distribution among the partners. The construction is likely to start next year.
Jinan Steel seeking merger with Baosteel
It is reported in Chinese media that the Shandong Jinan Iron and Steel Group, China's seventh biggest steel mill, is in merger talks with Baosteel. Mr Li Changshun GM of Jinan Steel told media on the sidelines of the fourth China International Steel Conference in Beijing that Jinan Steel is aware that consolidation is inevitable in the global steel sector and mergers with other large companies are an efficient way to increase competitiveness. However, unlike Shandong Laiwu Steel which sold a 38% state owned stake to Arcelor, Jinan Steel prefers to talk with domestic companies Mr Li said.
We are considering comprehensive cooperation with Baosteel. Supported by the Shandong government, Jinan Steel and Baosteel are now in negotiations for an asset merger." Said Mr Li. He added that the two companies would launch a 10 million ton steelworks in the city of Rizhao in Shandong Province once they have merged. With convenient transportation conditions, the port city of Rizhao is an appropriate location for the operation of a steel mill. Baosteel also regards Rizhao as another strategic base in its long term development outside of Shanghai" he said.
The 10 million ton steelworks project was initiated by Jinan Steel in 2003, but it was suspended when the Chinese government decided to implement measures to curb overheated investment.
Baosteel is capable of producing 30 million tons of steel and Jinan Steel has already reached 10 million tons in annual capacity. The merged group will expect to lift total capacity to 50 million tons once the Rizhao project is launched Mr Zhang said. Mr Zhang said that the two.
China iron ore output to rise by 100 million tonnes in 2006
Mr Wu Xichun, advisor to China Iron and Steel Association at the 4th China International Steel Congress said that China's iron ore output is expected to rise by 100 million tons this year. "Based on production in the first quarter, we estimate that output this year will rise by 100 million tons" he said. In late March, the National Development and Reform Commission, China's top economic planner, said it expects iron ore production to rise by 120 million tons this year.
China's iron ore output has been rising because of technological advancements, which have enabled mills to process the country's large reserves of iron ore with low iron content, the report said. In addition, the government has eased controls on mining for ore with a low iron yield. "We hope to reduce our dependence on iron ore imports, and we've already achieved technological advancements" Mr Wu said.
However, he declined to disclose targets or a timeframe.
China's iron ore output increased by 25.3% YOY to 420.49 million tons in 2005.
Mexican miners strike continues
Striking Mexican copper miners and steel workers vowed to prolong a 24 day stoppage after no talks between management and union were held over Easter. Workers at Grupo Mexico SA's La Caridad copper mine in the northern state of Sonora walked out on March 24 in support of an embattled national union leader not recognized by the government or mining companies.
Other miners and steel workers, including those at steel producer Grupo Villacero SA, are backing the La Caridad miners and are also on strike, though union members at Mittal Steel's Mexican operation returned to work last week.
The strike is aimed at pressuring the government to recognize Mr Napoleon Gomez as the union's representative. The government has accused him of fraud involving the disappearance of millions of dollars of workers' funds.
Bao Steel not sure of timetable for end of iron ore price settlement
There is no timetable for the conclusion of iron ore talks Ms Xie Qihua, chairwoman of Shanghai Baosteel Group Corp said on Monday. Ms Xie said that media reports about a settlement for a 10% rise in iron ore prices between China's steelmakers and western suppliers were not true and puts Baosteel at a disadvantage in negotiations.
Last week, popular Chinese local information provider Mysteel.com informed that talks had concluded with an agreement for a 10% rise in prices.
When asked by Dow Jones Newswires on the sidelines of a steel conference if ore price talks would conclude by the end of this month, Ms Xie said "I don't know.
Baosteel is the sole Chinese steelmaker representing China in protracted negotiations with global suppliers for 2006 iron ore.
UK Coal pushes for 40% price increases for thermal coal
It is reported that UKs biggest coal producer UK Coal wants to increase the prices that it charges to power generators by 40%. UK Coal is negotiating key contracts with electricity generators and wants big increases to reflect the soaring world coal price.
UK Coal says that Britain needs coal to meet a large proportion of its power needs, at least for the next ten years. The company also says that generators cannot import all of their coal because the rail infrastructure will not cope and that even with a 40% increase, it can beat import prices. High gas prices and problems with nuclear energy output also have meant that the country has become increasingly reliant on coal for power generation. In the past five months 50% of Britains electricity generation has come from coal.
Mr Gerry Spindler UK Coals CEO said that the last supply contracts, which were agreed in 2001, were based on prices that did not reflect current prices. Mr Spindler added that generators were resisting the rises and that he would press the Government to intervene. He said We are looking for assistance in helping to get the contracts renegotiated. We are looking to get that done now.
Grange in talks with Malaysian Perwaja & Megasteel for pallet sales
Grange Resourcess MD Mr Geoffrey Wedlock said that he had preliminary talks with Malaysia's two largest steelmakers Perwaja Steel Sdn and Megasteel Sdn for sale of iron ore pallets to be processed in Malaysia.
Grange, which plans to start production in early 2010, is seeking to start the mine last month started a tender process for JV partners for its project. China's Sinosteel Corp. has already said it wants a majority stake. Grange plans to start construction in January. It is expecting to produce 6.8 million tons of iron ore pellets a year from the plant in Kemaman in Malaysia. It is seeking partners to take between 60% and 70% of the project.
Perwaja, owned by Maju Holdings Sdn, is able to produce 1.5 million tons of steel annually. It is considering expanding to 2.5 million tons per annum Mr Wedlock said. Megasteel, owned by Lion Corp, is Malaysia's largest integrated steelmaker and has a capacity of 2 million tons per annum.
Shanxi coke makers raise coke price by $5 per ton
The coke manufacturers in Shanxi Province have increased the coke price by RMB 40 ($5) per ton starting from April 15. An industry official said that that it might take some time for all coke producers to raise the price but it was a crucial decision because the whole sector is in the red.
The steel sector is seeing price rises and the benchmark iron ore concentrate price would probably rise again this year, he said. However, the coke price has been falling since the second half of 2004 due to excessive capacity increases. When the coke price reached its nadir in September 2005, producers were losing more than RMB 200 ($ 25) per ton, and many were forced to cease production.
The coke stockpile has fallen sharply over the winter season and spring and the stockpile at the Tianjin Port has fallen from 4 million tons at the beginning of this year to 1.5 million tons.
Shanxi produces 40% of China's coke and is responsible for 80% of the country's total export volume. It produced 80 million tons of coke and exported 12 million tons of coke in 2005.
Baosteel and Hitachi team up for a roll making JV
Baosteel Group and Hitachi Metals Ltd have agreed to establish a JV Bao Steel Hitachi Rolls (Nantong) Ltd in China to for the manufacture and sale of cast rolls for hot strip mills. The venture, with a registered capital of 520 million yuan ($65 million), will be located in Nantong in eastern Jiangsu Province and start shipments in 2008. Hitachi Metals will hold 70% and Baosteel 30%. The venture plans to generate annual sales of 420 million yuan in 2010 by meeting growing demand for high quality, high performance rolls in Asia, led by the rapidly growing Chinese market.
Hitachi said in a statement that "The steel industry is gradually shifting from a focus on increased production volume to the manufacture of high grade products, such as hot rolled steel sheets or strips for use in automobile panels or electric appliance field."
Hitachi Metals, the steel and metal products unit of Hitachi Ltd, is the leader in Japan's cast rolls market. Hitachi Metals Ltd was established in 1956 and is engaged in the manufacture of diverse products including special steels, electronics related products and piping equipment. The Company's principal activity is the manufacture of high grade metal products and materials.
Fitch rates CSN's debenture issuance 'AA-(bra)'
Fitch Ratings has assigned an 'AA-(bra)' National Scale rating to the proposed BRL600 million fourth debenture issuance of Companhia Siderurgica Nacional due Feb. 1, 2012. The debentures rank pari passu with CSN's other unsecured debt obligations. The proceeds of the issuance are expected to be used for general corporate purposes at CSN. CSN's National Scale rating is also 'AA-(bra)' with a Stable Outlook. Fitch also maintains an international scale local currency rating for CSN of 'BBB-', with a Stable Outlook, and a 'BB-' foreign currency rating, with a Positive Outlook.
CSN's ratings are supported by the company's position as one of the industry's lowest cost steel producers primarily due primarily to its ownership of the Casa de Pedra mine. The company also benefits from its modern production facilities, vertical integration, and access to low cost labor. CSN stands to benefit from the strong price environment for iron ore and the positive outlook for demand over the near to medium term. CSN is also planning to increase its production of steel slabs over the next five to seven years with modular investments in four blast furnaces of 1.5 million tons each, totaling about $3.4 billion.
With annual production capacity of 5.8 million tons of crude steel, CSN ranks as one of the largest steel producers in Latin America. The company's fully integrated steel operations, located in the state of Rio de Janeiro in Brazil, produce steel slabs and hot- and cold-rolled coils and sheets for the automobile, construction and appliance industries, among others. CSN also holds leading market shares in the galvanized and tin-mill products segments.
Wheeling-Pittsburg stock surge on buyout reports
Shares of Wheeling-Pittsburgh Corp rose by 12% yesterday on reports in Wheeling News Register and Pittsburgh Post Gazette that the troubled steel manufacturer is weighing two competing takeover offers from Brazilian steel maker CSN and Illinois based steel distributor Esmark. Wheeling-Pittsburgh shares rose by $2.32 to close at $21.28 on the Nasdaq Stock Market.
CSN spokeswoman ms Flavia Ferreira declined to comment specifically about Wheeling-Pittsburgh. "CSN is always on the lookout for companies in the United States and Europe" she said. "But with respect to this particular company, we have no comment to make."
A Wheeling-Pittsburgh spokesman declined comment.
Wheeling-Pittsburgh manufactures hot and cold rolled flat steel and products such as corrugated steel roofing. Wheeling-Pitt emerged from Chapter 11 bankruptcy protection in 2003 and employs about 3,100 people at plants in West Virginia, Ohio and Pennsylvania. Nearly 27% of Wheeling-Pittsburgh is owned by the company's retiree benefits plan trust. Greenwich based hedge fund Tontine Partners owns about 9.5% of Wheeling-Pittsburgh.
Palladon appoints SA&E as operator for Iron Mountain railway
Palladon Ventures Ltd has announced the selection of the Albany and Eastern Railroad Company to operate Palladon's shortline railroad serving the Iron Mountain project near Cedar City, Utah. Palladon and A&E will independently operate the 14.4 mile shortline railway, which runs from the mouth of the Comstock Mountain Lion iron mine to Iron Springs where it connects with the Union Pacific Railroad's main line.
Palladon is currently building interchange tracks at Iron Springs, where unit trains from the mine will be interchanged with empty trains returning to the mine for re-loading. A&E will also perform ongoing maintenance and rehabilitation of the shortline in anticipation of new railcar deliveries commencing in the summer of 2006. Palladon is currently assembling iron ore processing equipment and is preparing for construction of plant facilities.
Don Foot, President and COO of Palladon Ventures stated, "Our goal for this project is to engage experienced, professional individuals and organizations in whom we have confidence and with whom we can form a close partnership. Mike Root and Albany and Eastern railroad will be that kind of partnership. Their experience will assure the successful implementation of our shortline."
Palladon Ventures Ltd. is a junior resource company focused on the exploration and development of mineral resource projects worldwide. Development stage projects include the Western Utah Copper Project near Milford, Utah, the Iron Mountain project near Cedar City in Utah, in addition to gold exploration projects in Nevada and Argentina.
UKs fasteners industry estimates additional cost due to AD on SS fasteners
The British Association of Fastener Distributors has now estimated that, over a 5 year period, the duties could represent an additional taxation burden on British industries as diverse as engineering, electronics and construction as well as on the consumer of GBP 8 million. Although Stainless Steel members of the Association have reviewed sourcing strategies to limit the impact on their customers, the duties or the additional cost of purchasing more products from European manufacturing sources are likely to mean an average 15% increase in the cost of stainless steel fasteners to industry.
In November 2005 the European Commission confirmed the imposition of anti dumping duties on the majority of threaded stainless steel fasteners imported from six key Asian producing countries. The duties, which range up to 27.4%, will remain in place until at least 2010, when they could feasibly be extended for a further period.
BAFD chairman Mr Steve Auld said It is entirely unrealistic for European politicians to expect this level of cost increase to be absorbed by the fastener distribution industry. In some cases the duty exceeds the entire profit margin available to the distributor.
BAFD is now deeply concerned that similar measures may be targeted against the import of carbon steel threaded fasteners. If this happens the impact on British industry and consumers will be 30 times wider ranging and deeper biting said Mr Steve Auld.
Fitch Assigns 'B+' to Sidetur's $100 million notes
Fitch Ratings has assigned a 'B+' foreign currency rating to the proposed $100 million 10 year unsecured notes to be issued by Sidetur Finance BV, a wholly owned subsidiary of Siderurgica del Turbio SA. The notes are unconditionally and irrevocably guaranteed by Sidetur. The proceeds of the issuance are expected to be used to refinance Sidetur's bank debt. In conjunction with this issue rating, Fitch has assigned to Sidetur a long term local currency rating of 'B+' and a long term foreign currency rating of 'B+', as well as a national scale rating of 'A-(ven)'. The Rating Outlook for the international scale corporate ratings is Stable.
Sidetur's ratings reflect the company's solid competitive position as the leading producer in Venezuela of steel angles and light beams, the leading producer of flats, merchant bars and special quality steel products, and one of the two dominant manufacturers of rebars. Sidetur enjoys a market share of about 40% and benefits from its access to raw materials such as steel scrap and HBI and from its relationships with large steel distributors, wholesalers and retailers in Venezuela.
Sidetur is located in Venezuela and manufactures semi finished and finished steel products including billets, reinforcing and merchant bars, angles, beams, and specialty steel. The company's main production facilities consist of two melt shops with a capacity of 835,000 tons of crude steel, four rolling mills with a capacity of 635,000 of long finished products and a plant with a capacity of 67,000 tons of welded and drawn products. The melt shops are mini mills that use electric arc furnaces to melt scrap metal and HBI, a scrap substitute. Sidetur is the largest scrap buyer in Venezuela and owns 13 scrap yards. Sidetur also owns 50% of Vicson, a manufacturer of steel wire products. In 2005, Sidetur produced 595,000 tons of crude steel and 413,000 of finished products. Sales volumes consisted of 602,000 tons and generated $341 million in revenues, 28% of which was from exports. Finished steel products accounted for about 80% of total revenues and semi finished billet products accounted for 20%. Sidetur is 100% owned by the corporation Sivensa, a Venezuelan industrial conglomerate.
Iranian private steel mills to produce 3 million tons of steel this year
It is reported that the private steel mills in Iran will have the capacity to produce up to 3 million tonnes of steel during the current Iranian year started March 21 as against 2million tonnes in last year.
Mr Taqi Bahrami chairman of Irans Steel Producers Association said that If the raw materials are supplied in time, this years production is expected to hit three million tons. He also said that phase 2 and 3 of the Ardebil Steel Mill development project, for producing 800,000 tons of steel, is expected to become operational in September this year. Over two trillion rials have been invested in Ardebil Steel Mill. The project is expected to be in full stream by the end of the year.
Scomi Marine gets coal transportation contract from TNB
Malaysian Scomi Marine announced that it had received a letter of intent from TNB Fuel Services Sdn Bhd, a wholly owned subsidiary of TNB, for a contract to carry bulk coal for the latter. The contract signifies a breakthrough for Scomi Marine in our involvement in the key supply chain of coal. It involves the transportation of coal from country to country, which is an extension to our existing operations in Indonesia, which is mainly in tugs and barges, a company official said.
The coal supply contract will be for three years, with an option for TNB Fuel to extend another two years. The total quantity of coal to be transported will be 500,000 tonnes per annum. The announcement, however, said the quantity of coal and the distance to be transported from the different countries had yet to be finalized.
Currently, Scomi Marine's coal transportation business in Indonesia involves over 100 tugs and barges. In 2005, the company transported approximately 30 million tonnes of coal in total for its customers.
By 2010, Malaysia is expected to consume 20 million tonnes of coal a year.
Japans crude steel output increasing
Japan Iron and Steel Federation announced that crude steel output in March rose by 0.8% from a year earlier to 9.66 million tons and 8.9% increase MOM. Crude steel production by blast furnace grew by 0.2% to 7.19 million tons and by EAF increased by 2.4% to 2.47 million tons, rising for the fourth month in a row.
Crude steel output during January to March quarter at 27.99 million tons, was 0.8%t higher than in the last quarter of 2005, rising for the first time in three quarters.
Chelyabinsk Zinc to boost output by 30% during 2006
Russia's largest zinc producer, Chelyabinsk Zinc Plant a unit of ChTPZ group, will boost output nearly 30% during 2006 after its acquisition of 51% of Nova-zinc, a Kazakh Swiss JV formed nine years ago. The company said it had secured a $70 million syndicated loan from HVB to help pay for the acquisition, though it did not disclose its full cost.
Chelyabinsk said it would produce 150,000 tons of zinc in 2006, up from an earlier estimate of 130,000 tons and the 116,366 tons it produced last year.
Two killed in explosion at Chita coalmine
Two people have died in an explosion at a Kvarts Company coalmine in the Petrovsk Zabaikalsk district in the Chita region at 12:20 PM local time.
According to preliminary information the accident happened during demolition work and investigation are underway by .government bodies.
