April, 04 2006
Steel price revival due to higher iron ore prices - Dr Irani
Dr JJ Irani Director of Tata Sons and Chairman of Indian Steel Alliance during CNBC-TV18 said that the revival in steel prices is due to higher scrap and iron ore prices and companies with captive mines will gain the most from this turnaround. He said that the turnaround in steel prices was expected because there was a prelude. Iron ore prices and scrap prices, which most steel makers buy in the open market, had gone up significantly in February and March. Therefore, a revival in steel prices was very much on the cards. What has happened was anticipated.
During the interview Dr Irani said that this price will now remain fairly stable barring few minor corrections because the raw material prices, which steel makers have to pay for have gone up significantly in the last few weeks. Of course the real winners are those steel makers who own the raw materials. He said that the steel companies are faced with higher iron ore prices and will try to pass it down to the consumers. Most of the steel companies, that buy iron ore and scrap, don't have much room to absorb significant increases in raw material prices.
Dr Irani also said that demand has also been very stable particularly in the South East Asian region. People were expecting that China might become a slower growth economy; but that has not happened. As one knows, in India, the economy is booming, and the demand for steel is consequently quite robust. But again it is largely as a result of the raw material prices where the present prices of steel have gone up.
CIL looking for coal prices increase
The price of coal might be revised upwards by the government with Coal India Ltd subsidiaries lobbying for an increase following hardening of prices in the overseas market. "Coal prices should go up as our costs have gone up and landed cost of imported coal is also high. The notified price of coal has not been revised since mid 2004," Eastern Coalfields Ltd CMD Mr D Chakravarti said.
The Bureau of Pricing and technical department of Coal India were already working on the pricing issue, sources in Coal India said. Their recommendation would be sent to the Coal ministry for final announcement. Several aspects were brought under consideration before deciding on pricing. Sources said the coal price was likely to rise by at least Rs 150 per tonne from the present notified price of Rs 600 per tonne.
SAILs Bhilai steel plant achieves record production in 2005-06
Steel Authority of India Ltd flagship Bhilai Steel Plant has achieved the highest ever hot metal and crude steel production during the 2005-06. For the first time since its inception in 1959, the plant has crossed 5 million tonnes production mark for hot metal as well as crude steel, becoming the country's only steel unit to achieve the feat BSPs MD RP Mr Singh said.
"In the fiscal year ending March 31, the plant achieved an all-round record performance in production and productivity. The production of hot metal, crude steel and saleable steel went up by 14.8%, 10.3% and 8.9% respectively compared to last year," Mr Singh told reporters. BSP has produced 5.178 million tonnes of hot metal, 5.05 million tonnes of crude steel and 4.29 million tonnes of saleable steel. BSP recorded a sales turnover of Rs 79.49 billion and a net profit of Rs 21.75 billion for the first nine months of 2005-06 up to December 2005 Mr Singh said.
"Besides catering to the demand of the domestic market, the plant exported about 292,000 tonnes of saleable steel," Mr Singh added. The unit exported its products to clients South Korea, Sri Lanka, Taiwan, Nepal, Myanmar and Bangladesh in Asia, while in Europe its key destinations included Britain, Italy, Spain, the Netherlands and Germany.
Coal Ministry recommends CVL to be a CIL subsidiary
Indian coal ministry has decided to circulate a fresh Cabinet note among the ministries concerned for seeking the Union Cabinet's nod to confer the Coal Videsh Limited the status of a CIL subsidiary contrary to its earlier stand of rendering its an independent entity.
"Initially we had planned that CVL would be an independent entity wherein it would be able to discharge its functions with efficacy and undue interference. But subsequently the question arose as to how and who would the new entity be accountable to. After due deliberations it was decided to confer the status of a CIL subsidiary to it and seek the cabinet's nod accordingly," a Coal Ministry official said.
Usha Martin hikes steel prices by Rs 2000
Leading producer of specialty steel Usha Martin Ltd today announced a price increase of Rs 2000 per tonne on its steel and value added products.
Usha Martin has manufacturing facilities in Ranchi, Jamshedpur and Hoshiarpur in India besides Britain, Thailand and United Arab Emirates and has a worldwide distribution, service and marketing network spread across the US, UK, Europe, Australia, Africa, Singapore and the Middle and Far East.
China's CCCMMC reference Indian iron ore price unchanged last week
It is reported that the price of Indian iron ore in China remained unchanged last week. The FOB price for 63.5% of Indian iron ore stood at $54 to $55 while the CIF price was $71 to $72 according to the Indian iron ore national reference price released by the China Chamber of Commerce of Metals, Minerals, and Chemicals Importers and Exporters.
The reference price was initiated as a trial in May 2005 and was created to help regulate domestic trades of Indian iron ore prevent speculation on raw materials in China's steel industry.
KPMG cautions India on heavy reliance on coal
Leading global consultants KPMG International has cautioned India against relying too much on its coal reserves, which could run out in 40 years unless the energy basket is diversified to include larger share of hydropower. With India's energy requirements expected to grow at around 5% to 6% per annum over the next few years, there is an urgent need for the government to strategically re evaluate its supply options, said Mr Partha Bardhan head of KPMG's Energy and Natural Resources practice in India. KPMG suggests that the government will need to enter into alliances and partnerships with key nations to diversify the energy supply base and improve long-term supply security.
KPMGs report "India Energy Outlook" highlights that demand for oil is set to grow at 3.6% whereas supply is growing at approximately 2.5%. "The demand supply mismatch is catapulting India with China, with the two countries accounting for 35% of the world's incremental energy demand," states the report.
"Of most pressing concern will be the fact that, at current growth rates, India's mineable coal reserves for so long the principal constituent of India's energy basket will be exhausted in about 40 years," the report underlines. "Coal cannot be relied on forever while hydrocarbon reserves are meager. Hydro electric and nuclear power seem to be the obvious options, but improved frameworks are needed to attract the private sector participation which is so crucial to realizing India's potential in these areas," said Mr Bardhan.
Jindal Saw bags order worth $180 million
US based facility of Jindal Saw Ltd, formerly Saw Pipes Ltd, has bagged an order worth $180 million from Gulf South for supplying more than 250 miles of jointed and coated pipes. "In last two months, our facilities in the US have bagged three orders for high grade pipes. The current order book from US market alone has been to the tune of $400 million," Jindal United Steel Corporation and Saw Pipes USA Incs vice chairman, president and CEO Mr Indresh Batra, said in a release.
Mr Indresh Batra said "It is a huge vote of confidence for our facilities in US, which in last 2 months have bagged three large orders for high grade pipes from very prestigious clients like Center Point Energy and Questar Energy. It has now established a full fledged coating and double jointing Facility in the Texas premises. The current order book from US market alone has been to the tune of USD 400 million".
Jindal Saw Ltd presently, which has an order book position of nearly $900 million, manufactures a diverse product portfolio including SAW pipes, seamless tubes and ductile iron pipes.
SSW achieves record sales & production of wheel rims in March
Steel Strips Wheels Ltd has informed that the Company has achieved production and sales of 375,475 and 375,361 wheels rims in the month of March 2006. It is the highest all time production and sales in a month.
The Company has achieved total production and sales for the quarter January to March 2006 as 1,076,510 and 1,082,784 wheel rims and thus has registered an increase of 16.56% and 14.76% in production and sales over the corresponding quarter of previous financial year.
Sujana Metal & Deepak Cables to bid for PGCIL contracts
Sujana Metal Products Ltd, a steel re rolling mill, said that it will collaborate with Bangalore based Deepak Cables in bidding for large power transmission projects being put up by Power Grid Corporation of India Ltd and various state transmission companies.
Sujana Metal would be implementing the country's largest single location Greenfield facility for manufacture of 100,000 tonnes per annum, galvanized steel towers for power and telecom transmission projects, it said. Post expansion the company will have an installed capacity of 128,000 tonnes per annum making it one of the largest players in the industry, it added.
EC to investigate acquisition of EMO-EKOM by Sea-Invest
The European Commission said it has opened a detailed investigation under the EU Merger Regulation into Sea-Invests acquisition of joint control in EMO-EKOM. EC said that its initial market investigation has found that the proposed transaction gives rise to competition concerns on the market for coal and iron ore terminal services at the ports of Antwerp, Rotterdam and Amsterdam, including Zeeland, the so called ARA range. It is crucial that the Commission carefully analyses the impact of this merger in view of increasing demand for cargo handling services for coal, limited customer choice and a risk of price increases. commented Competition Commissioner Ms Neelie Kroes.
Both companies are cargo handling companies mainly active in the loading, unloading and storage of iron ore and coal.
Sea Invest is a Belgian cargo handling company active in a number of ports in Belgium, France, Germany and South Africa. Among others Sea-Invest has sole control over the ABT terminal in Antwerp which provides cargo handling services for coal, iron ore and other dry bulk.
EMO-EKOM is a Dutch joint-venture providing cargo handling services for coal and iron ore in the port of Rotterdam. The current shareholders in EMO-EKOM are ThyssenKrupp Veerhaven BV, Manufrance BV and HES Beheer NV. TKV is ThyssenKrupp Steels seaport forwarder for the ports of Amsterdam, Rotterdam and Antwerp. HES holds stakes in a number of terminals handling dry bulk in the ports of Rotterdam, Amsterdam and Zeeland, while Manufrance holds interests in dry bulk terminals in Amsterdam and Zeeland.
Chinese Premier says that market should decide iron ore prices
Chinese Premier Mr Wen Jiabao's said that the price of iron ore should be dictated by market forces after talks with the Australian government, but added that two countries need to establish a system for obtaining fair prices.
"Regarding iron ore, I believe that this is a matter to be decided by the market, in particular by the relationship between supply and demand of iron ore on the market. Therefore it is a commercial act" Mr Wen said. "The responsibility for the two governments is to put in place a fair, open and reasonable market order as well as to come up with a pricing mechanism that is in accordance with international practices," he added, without elaborating. The two trading partners need to approach the mineral trade from a long-term perspective Mr Wen said. "That is to say, China and Australia shall work together to put in place a long-term relationship of stable supply and demand and also a pricing mechanism that is up to the international practices," he said.
The comment appeared aimed at allaying Australian concerns that Beijing intends to intervene in the soaring cost of iron ore from Australia and Brazil to cap the price that Chinese steel mills will pay. Last month, China's government expressed concern at soaring iron prices and warned that it would take unspecified measures to protect its steel makers if negotiations failed to produce reasonable prices.
Chinese buyers are in the midst of price talks with leading suppliers BHP Billiton Ltd. and Rio Tinto Group of Australia and Brazil's Companhia Vale do Rio Doce for a new annual price for the year beginning this month.
Mr Juncker criticizes Brussels on market approach
Luxembourg's PM Mr Jean-Claude Juncker has attacked the European Commission over its stance that France is being protectionist about it energy sector amid fresh reports that Brussels will this week take legal action against Paris in other sectors. In an interview with FT Deutschland, the Luxembourg leader sided with France in its dispute with Brussels over a planned government-orchestrated merger in the energy sector. Mr Juncker said "I criticize the communication strategy of the commissionIt gives the impression that everyone who puts questions to planned or ongoing mergers should automatically be a protectionist. That is a very apolitical approach."
The planned merger between Gaz de France and Suez, designed to avert a takeover of Suez by Italian firm Enel, is seen by Brussels as protectionist, with internal market commissioner Mr Charlie McGreevy recently suggesting France is building political Maginot lines around its economy.
Mr Juncker also spoke out against hostile takeovers in Europe. Mr Juncker said "I cannot see why there should be hostile takeovers in the EU." He demanded that in merger situations, the interests of employees and regions be taken better into account. "Pure market ideologists overlook that this is about the fate of people" he said.
CISA unhappy over CVRDs price announcement
The China Iron and Steel Association criticized CVRD for its move to unilaterally announce its annual price while international negotiations are continuing. The CISA regards the move by CVRD to be extremely ill considered and in violation of the rules of the international iron ore price negotiation and that price information should only be released to the media only after at least one iron ore supplier has made a pricing agreement with a steel plant.
A spokesman for CVRD of Brazil announced on March 29 that it will raise its 2006 iron ore price by 24% over last year's price.
Arcelor to make announcement about Mittal Steels bid
Reuters has reported that Arcelor will today announce measures designed to fend off unsolicited bid from Mittal Steel citing a source close to the deal.
An Arcelor spokeswoman later confirmed that the company would issue a statement on Tuesday morning concerning Mittal Steel's offer but declined to comment on the Reuters report. "We will communicate tomorrow... it will be regarding the on-going offer" she said.
S&P gives good credit rating to Australian steel makers
Australia's three biggest steel producers have been given a tick of approval by ratings agency Standard & Poor's. S&P said that BlueScope Steel, OneSteel and Smorgon Steel Group have benefited from booming demand from China and India and now have robust and defendable business positions.
"Geographically remote and mature, Australia's steel market is efficient and competitive, and comparatively stable by global comparison," S&P credit analyst Ms Lisa Barrett said in a research paper today. "With little direct competition and limited overlap in products sold, these companies have generally robust and defendable business positions. Combined with Australia's stable economy and good growth prospects, these market characteristics provide a stable business environment for Australian steel makers, despite operating in a globally volatile and currently consolidating industry" she said.
Ms Barrett said when the unrated BlueScope, OneSteel and Smorgan were compared against each other and selected international peers, "it becomes apparent that the three all have credit quality sufficient to tap the capital markets".
Mittal Steel SAs largest BF back in production after a problem
The largest blast furnace at Mittal Steel SAs Vanderbijlpark works reportedly stopped working three weeks ago when the coal feeder system encountered problems and the furnace reportedly cooled down. Mittal Steel SA confirmed in a statement that there had been an incident at its Blast Furnace D at the Vanderbijlpark plant in mid March. "On Saturday, March 11, a skip that feeds the furnace with coking coal went off its rails. This caused a chain reaction which affected its operation," Mittal Steel is reported to have said.
The furnace is reported to be back in production and is progressing very well. "We are pleased to announce that Blast Furnace D is ramping up its production daily. We'll be back in full production shortly," Mittal Steel SA said.
The furnace's production was shifted to Blast Furnace C and an electric arc furnace and therefore no major impact was foreseen on production the company said. The production in Blast Furnace C, whose normal production capacity is 3500 tons per day, was ramped up to 4000 plus tons per day and a third standby electric arc furnace was brought into operation.
Blast Furnace D produces 1.6 million tons of liquid steel per annum and is reported to be scheduled for a major overhaul around mid of 2006.
China sees potential surplus of coal in 2006
A senior figure in the coal industry said recently that supply and demand for China's coal will be basically balanced in 2006 although there is a potential surplus in coal production. Mr Wu Chenghou, Executive Director of the Coal Sale and Transportation Association of China, during the China Coal and Power Investment Summit 2006 late last week, said that as the growth of domestic demand for coal will slow in 2006, the gap between coal demand and supply will be decreased.
According to estimates, China's demand for coal will be around 2.25 billion tons in 2006, including 2.17 billion tons for domestic demand and 80 million tons for export. As China's coal production capacity will reach 2.26 billion tons in 2006, the supply will be a little more than demand.
But Mr Wu said the real coal output will be more. The risk of a potential supply surplus is the major problem facing China's coal industry this year, he said. Chinese coal enterprises should limit their output, improve coal quality and enhance coal supply structures to ensure profits said Mr Wu.
Anshan deal puts Gindalbie on the global iron ore map
Chinas second largest steel producer Anshan Iron & Steel Group decision to take 50% of Gindalbie's magnetite and haematite iron ore projects and finance a pellet plant in Western Australia has placed Australian iron ore junior Gindalbie Metals into major league. It was a big day for Gindalbie, a former junior gold miner and another feather in the cap for Gindalbie chairman Mr George Jones, who in a similar role at Portman, steered that company from start up iron ore producer in the early 1990s to an operation worth $500 million.
Gindalbie was likely to turn its present resource at the Karara magnetite project from the present 737 million tonnes to more than 1 billion tonnes. So far, only 2.2 kilometers of strike at Karara had been drilled and there was another 2 kilometers to be explored.
Anshan will take 50% of Karara and will have the right to buy all the output of that mine by providing 75% of the cost of the pellet pipeline and plant. The new pellet plant will be built at Oakajee and will be fed through a 250km slurry pipeline. Anshan will also get half of Gindalbie's haematite iron ore project, now in development, by refunding 50% of the money spent by the Australian company getting that mine into production.
Brazilian mills announce flat product price increase
It is learnt that strong domestic demand, surge in international prices and the strengthening Brazilian economy have pushed Brazilian steelmakers to raise their steel prices for April 2006.
CST as well as other steelmakers including Acesita has announced that they will raise April flat steel prices by about 6%.
NLMK net profit up by 19% in Q4 as per RAS
As per a company statement net profit of Novolipetsk Steel in the fourth quarter of 2005 increased by 19.4%, over that of third quarter, to 7.724 billion rubles according to the Russian Accounting Standards.
This increase in sales profit was largely due to a drop in price for raw materials and improved conditions on the global steel market.
Danieli to Supply New EAF for Gerdau Ameristeel
Gerdau Ameristeel has chosen Danieli Centro Met to supply a new 110 ton electric arc furnace for its melt shop in Jacksonville. Danieli said that the eccentric bottom tapping furnace will have a 6.5 meter diameter shell, current conducting arms, single point roof lift and swiveling system and fast operating hydraulic movements. The timetable for the new EAF installation was not released.
A complete chemical energy package is included with the order, including sidewall oxygen, gas, and carbon injection HiJet systems. Lime injection will be available, too. Electrode regulation will be available via the Danieli HiReg system, and foamy slag control will be included with the automation and electrical controls. CO combustion will be available due to a highly efficient dropout chamber according to Danieli, with an in line fume quench tower to minimize water cooled sections in the fume duct system using modulating air-water spraying.
SIC sees China 2006 GDP growth at 9.3%
China's gross domestic product is expected to grow by 9.3% during 2006 the State Information Center, a government think tank, said in a report published in the China Securities Journal. It projected CPI to rise 2% compared with 1.8% in 2005 and nominal retail sales to rise by 12.8% during 2006.
China's GDP rose by 9.9% while retail sales grew by 12.9% in 2005. China's CPI rose 0.9% YOY in February and 1.9% in January.
For 2007 it sees GDP rising 8.8% and retail sales climbing 12.5% to 8.52 trillion yuan.
Overcapacity in certain sectors will be fully reflected in the economy in 2007 and there will probably be a sharper slowdown in the growth rate during the year, the report said. Government agencies has repeatedly warned over overcapacity problems - notably in the steel, alumina, auto and coking coal industries.
Privatization of Slovenian Steel Group Could Start in June
It is reported that after a new privatization plan for the Slovenian steel sector was adopted by the government in December, investors are expected to be invited to bid for the state owned stake in the group in June. The move comes three years after the privatization of three of SIJ's companies Acroni, Metal and Nozi was halted in August 2003 due to unfavorable conditions on the global steel market.
Ms Marija Zagozen chairman of commission in charge of the sale said that a valuation is under way, whereupon an information memorandum would be compiled and sent to the potential bidders before a call to bidders is out. The new program sets out the privatization of Acroni, Metal, Nozi, Elektrode Jesenice, Metalweld Polska, two companies employing the disabled SUZ Jesenice and ZIP Center Ravne, and some others.
Unlike the aborted 2001 program which envisaged the privatization of subsidiaries piece by piece and the subsequent liquidation of the group the new scheme envisages the sale of the group as a whole. The program aims at keeping the group with a view of making the Slovenian steel producers more competitive. It is learnt that a stake of 25% plus one share that would be kept by the state and a 55.35% stake to be offered to bidders.
Brazilian ALL to buys rails from Pangang
Brazilian Amica Latina Logtica is reported to be negotiating with Chinas Panzhihua Iron & Steel to buy 8,600 tons of rails for 144 kilometers of railway line in anticipation of increased volume of cargo over the next few years.
ALL has already imported almost 20,000 tons of rails from China and Russia and this would be its third such acquisition in the last 12 months.
Panzhihua Iron & Steel, known as Pangang, is located in the city of Panzhihua on the banks of the river Jinsa.
ALL is the largest operators in its sector in Latin America and carries out with a 16,397 kilometer rail network, engines and carriages as well as distribution centers and warehouses.
AK Steel agrees to settle pollution suit
AK Steel Corp has agreed to settle a 6 year old lawsuit by spending an estimated $12 million to $13 million to clean up two streams contaminated with polychlorinated biphenyls from its Middletown Works plant, the steel maker and US government announced. The agreement, if approved by US courts would resolve a lawsuit filed in June 2000 by the US government.
The proposed agreement was signed by AK Steel, the U.S. Department of Justice, the U.S. Environmental Protection Agency, the Ohio Environmental Protection Agency, the Sierra Club and the Natural Resources Defense Council.
Under the deal, AK Steel would remove the contaminated sediments from Dicks Creek and Monroe Ditch, both tributaries of the Great Miami River, and contaminated soil from neighboring floodplains of the Dicks Creek basin. The company also agreed to comply with specified requirements of the Clean Air Act and the Clean Water Act and pay a $460,000 civil penalty that will be split between the US government and the state. However under the agreement, AK Steel would not formally acknowledge any violations. The settlement also would require the Middletown-based company to spend $750,000 on a project to remove ozone depleting refrigerants from some plant equipment, and pay $450,000 to the environmental groups for their costs and attorney fees.
Mr James Wainwright AK Steels chairman, president and CEO said in a statement that the company was pleased to have reached the agreement.
Shaogang adopts Echelon technology for operating cost reduction
Echelon Corporation announced that the Shaogang Iron and Steel Group of China have successfully used Echelon's technology to optimize its energy utilization and process control systems. Shaogang's first energy optimization application has resulted in a 10% reduction in operating costs.
Prior to implementing its Echelon based solution, the large size of the physical plant made it challenging to accurately measure energy usage in real time. Information from the energy and control system is integrated with the plant's manufacturing execution system to allow Shaogang to identify best case use scenarios for energy consumption and production. Mr Jianmei Huang, head of the information technology department at Shaogang Iron and Steel Group said "Echelon's technology has given us the ability to create the infrastructure that helps us quickly deploy a scalable system and achieve our energy and operating goals."
Mr Anders Axelsson Echelon's senior VP of sales and marketing said "Echelon's infrastructure approach to controls is ideal for Shaogang Iron and Steel Group's energy conservation application because each additional device on the network can improve the overall effectiveness of current and future optimization strategies. We look forward to working with the Shaogang Iron and Steel Group on future enhancements to their facilities and with other steel producers across China."
Founded in 1966 and based in Guangdong, Shaogang Iron and Steel Group is among the top 100 steel manufacturers in the world and is in the top 500 Chinese enterprises with annual steel production reaching five million tons.
Echelon Corporation is a pioneer and world leader in control networking. Echelon's LonWorks platform for control networking was released in 1990 and has become a worldwide standard in the building, industrial, transportation, and home automation markets. Echelon is based in San Jose, California, with international offices in China, France, Germany, Italy, Hong Kong, Japan, Korea, The Netherlands, and the United Kingdom.
Holden International files lawsuit against Ukrainian NTRP
It is reported that Canadian Holden International Inc has filed a lawsuit with the International Centre for Dispute Resolution American Arbitration Association against Ukranian Nizhnedneprovsky Tube Rolling Plant claiming breach of contract and is seeking over $100 million in damages.
Holden International claims that according to contract conditions Nizhnedneprovsky Tube Rolling Plant in 1997 undertook to supply wheels, produced with Holden International technology and design at a fixed price and subsequently these conditions were not followed.
Holden International is seeking compensation for direct expenditures and lost profits, which it estimates at over $100 million. NTRP has not yet made any comment.
Foundation Coal names Mr James F Roberts as new Chairman
USs Foundation Coal Holdings Inc announced that chairman Mr William E Macaulay has resigned and will be replaced by president and CEO Mr James F Roberts.
Mr Roberts joined the company as president and CEO in 1999 when it was called RAG American Coal Holding Inc. Prior to that he was president of CoalARBED International Trading from 1981 to 1999. Mr Richards has been a board member since 2005, and was a board member of RAG American from 2000 to 2003.
Shaanxi Longmen to develop iron ore mine in Daxigou in Henan
It is reported that Shaanxi Longmen Steel is developing an iron ore mine in Daxigou in Henan province to secure a stable iron ore supply and the production at the 2.7 million tonnes project is expected to start before the end of the year.
Shaanxi Longmen Steel expects to use the bulk of the iron ore produced at their own steel mills and the remaining ore will be sold.
