July, 12 2006
TATAs TCIL to expand tinplate capacity at Jamshedpur
TATAs Tinplate Company of India Ltd has announced investment of over Rs.2 billion to increase the capacity of its plant at Jamshedpur for increasing domestic market share of tin plate to 60% from existing 40% by expanding capacity from the present level of 180,000 tonne per annum to 380,000 tonne by April 2008.
Mr Bushen Raina MD of TCIL told media that the company was toying with the idea of setting up a captive cold rolling facility for its tinning line. Due diligence work on the proposed project was currently underway. Its implementation would entail an investment of Rs 400 crores to Rs 450 crore. A firm decision on it would be taken within the next 5 to 6 months.
Mr Raina said that the company was focused on increasing market share and leading the value chain by providing cost effective, innovative and consumer convenient packaging solutions for edibles. Towards this end, the company has recently set up a "Solutions Centre" with state of the art printing and lacquering facilities at Jamshedpur.
The company said the capital expenditure would be generated through internal accruals and debt.
Orissa CM forms a working group to push Mittal Steel project
Orissa government has formed a joint working group to facilitate the establishment of 12 million tonne steel plant by Mittal Steel in the state. The working group will include three nominees of Mittal Steel, secretary of steel and mines, CMD of IPICOL, transport secretary and MD of IDCO.
The working group will identify the location and thrash out details of the project. The group will study the availability of iron ore, water and other infrastructure facilities, including rail and road linkages for the 12 million tonne steel plant. An expert group from Mittal Steel is scheduled to arrive here on July 17 to follow up on the proposal.
As per reports Mittal Steel has been indicated three locations for the plant at Keonjhar, Dhamra and Gopalpur. Orissa has not indicated any mining area but speculations for mining area include possibility of the state owned Orissa Mining Corporations Gandharmardhan Melantoli deposits.
Essar Steel profit declines in 2005-06 YOY
Essar Steel has posted a decline in net profit at Rs 86.37 crore for the fourth quarter of 2006 as against Rs 272.78 crore in the January to March 2005.Its total income net of excise during January to March 2006 is reported at Rs 1690.71 as compared to Rs 1926.64 crore in the January to March 2005. EBIDTA for the quarter stood at Rs 340.51 crore as against Rs 699.49 crore in corresponding period of last year.
Essar Steel has reported a total income of Rs 6390.72 crore net of excise during 2005-06 as against Rs 6121.27 crore in 2004-05 thus recording an increase of 4.4% although net profit reduced to Rs 530.18 crore in 2005-06 as against Rs 590.15 crore in 2004-05.
State Bank of Pakistan for widening of trade with India
The State Bank of Pakistan has called for more liberalization of trade with India which it believes will be more beneficial for Pakistan, as the country could save hundreds of millions of dollars by importing from India instead of elsewhere. SBP in a research note suggested that joint ventures would benefit from the Indian experience in different sectors. The report says the situation is disappointing because intra-regional trade remained stagnant at less than two per cent of the total trade in the last 25 years.
The report observed that Pakistan had adopted a conscious strategy to gradually open trade with India. On the other hand, India does not impose equivalent formal restrictions on exports to or imports from Pakistan though it also has sensitive list of items which are not allowed.
The SBP research identified potential sectors for mutual cooperation between India and Pakistan as agricultural products, tires, auto spare parts, minerals, chemicals, pharmaceuticals, leather, textiles, telecommunications, gas pipeline and electricity generation using coal and wind energy.
The report said India was the major source of iron ore and is a net exporter of steel. In FY04, Pakistan imported $662 million worth of iron and steel products (326 items) of which India supplied only 25 items worth $7.1 million.
PSU officers threaten to go on strike if demands are not met
The joint forum of officers associations of five leading public sectors National Thermal Power Corporation, National Hydroelectric Power Corp, Power Finance Corp, Coal India Limited and Steel Authority of India Limited have threatened to go on strike if the government failed to meet their demands of financial autonomy for deciding pay & allowances, removal of monetary ceiling on gratuity and merger of dearness allowance with basic pay.
As per reports if the issues are not resolved by July 31, agitation w the officers of the five companies would hold demonstrations in front of the Department of Public Enterprises on August 1 and August 2, serve notice of strike to their respective ministries shortly and submit a memorandum to the Prime Minister. This would be followed by a relay hunger strike on September 5-6, followed by a token strike on September 12 and indefinite strike after September 12 if the demands were not met.
A strike by all officers of these 5 PSUs would adversely affect work in these firms and impact production of coal, steel and power generation..
Expert team completes inspection of SS Blue Lady
Reports from Ahmedabad indicate that the court ordered inspection of potential hazardous materials on SS Blue Lady has been completed. The four day inspection is said to have begun Friday July 8th while the ship remains at anchor in the huge swells off the coast of Gujarat.
No findings have yet been released.
The Supreme Court ruled that the ship could be scrapped at Alang only if it was declared safe by experts who included members of the Gujarat Pollution Control Board, Central Pollution Control Board and National Institute of Occupational Hazards.
Major ports' cargo traffic rises 6.38 pc in Q1
According to the Indian Ports Association data cargo traffic at the major domestic ports totaled to 106.61 million tonnes during April to June 2006 as against 100.22 million tonnes during April to June 005 thus recorded an increase of 6.38%. However the target set by shipping ministry was 115.21 million tonnes.
Out of the 13 major ports, seven showed a surge in traffic in the first quarter of the current fiscal.
Handling of thermal coal declined by 2.75% to 9.314 million tonnes and coking coal declined by 10.5% to 5.443 million tonnes during the quarter.
TATA Power to join with Siemens Project for UMPP
TATA Power Company Ltd has announced the signing of an agreement with Siemens Project Ventures GmbH Germany, a 100% subsidiary of Siemens AG's financial services Group, to jointly participate in the tariff based bidding process for selecting developers for the Sasan and Mundra projects under the ultra mega power projects initiative.
The two parties will cooperate in the development and implementation of ultra mega power projects at Sasan and Mundra, where TATA power has qualified for bidding.
SAIL appoints 4 part time directors on board
Steel Authority of India Ltd has informed BSE that on nomination by Government of India, the board of directors of the Company has approved the appointment of Mr Shyamal Gosh, Mr SNPN Sinha, Mr Mohammad Yusuf Khan and Prof Deepak Nayyar as part time non official directors on the board of the Company.
IVRCL bags orders for Rs 290 crores
IVRCL Infrastructures and Projects Ltd have announced that it has bagged orders of the value of Rs 290.29 crore. In a press release it said that this includes the Rs 184.86 crore order awarded by the Irrigation & CAD department of Andhra Pradesh for Koil Sagar lift irrigation scheme stage-1.
The other orders relate to power projects of the value of Rs 55.26 crore, sewerage and water pipelines of the value of Rs 32.39 crore and building of the value of Rs 17.78 crore.
Xstrata raises its hostile bid for Falconbridge by 12%
Xstrata Plc announced that it has raised its hostile takeover bid for Canadian nickel miner Falconbridge Ltd. by 12% to C$18.5 billion ($16 billion). Xstrata increased its offer for the 80 percent of Falconbridge it doesn't already own to C$59 a share from C$52.50.
Mr Mick Davis CEO of Xstrata said The combination of Xstrata and Falconbridge represents an excellent opportunity to create an outstanding global mining company.''
Xstrata is seeking to salvage a takeover that would create the world's largest zinc producer and No 4 copper miner and if it fails, it would be the second time in less than two years that it has lost out on a takeover. In March of last year, Xstrata's hostile bid for Australia's WMC Resources Ltd was trumped by an offer from BHP Billiton.
Xstrata in last August acquired a 20% stake in Falconbridge from Brookfield Asset Management Inc for C$2 billion or C$28 a share.
Nucor to build Special Bar Quality Mill in the Southern US
Nucor Corporation announced that it plans to construct a "Special Bar Quality Products" steel mill in the Southern United States with an estimated capacity of 850,000 tons for producing high quality carbon and alloy rounds and round cornered squares from 3" to 9" for the automotive, heavy equipment and service center markets.
Nucor is currently considering several locations. Construction is expected to begin after satisfactory resolution of site location, regulatory approvals, tax matters and various contracts.
Mr Daniel R DiMicco chairman, president and CEO of Nucor said "This is a great opportunity to position Nucor as a market leader in Special Bar Quality products. We have consistently said over the last six years that we would not build a Greenfield steel mill unless we could take advantage of a unique market niche and/or a significantly better cost structure compared to the competition. This project definitely fits that strategy."
Nucor and affiliates are manufacturers of steel products, with operating facilities in seventeen states. Products produced are: carbon and alloy steel in bars, beams, sheet and plate; steel joists and joist girders; steel deck; cold finished steel; steel fasteners; metal building systems; and light gauge steel framing.
Smorgon acquires 20% stake in Thai Suntech Group
Australian steelmaker Smorgon Steel has acquired a 20% interest in Suntech Metals Company, a subsidiary of Thai metal recycling company Suntech Group. Under the deal, Smorgon will have day to day operational rights over Suntech Metals operations and trading activities. Smorgon said that it will nominate two directors on the Suntech Metals board.
Chonburi based Suntech Metals, located 120 kilometers east of Bangkok, employs over 100 people and handles about 170,000 tonnes of both HMS and shredder feed ferrous scrap annually.
Smorgon said that the acquisition will complement the presence it already has in Thailand, which currently consumes about five million tonnes of ferrous scrap per annum, about 40% of which is generated domestically. A statement said "Although Suntech Metals handles only minimal amounts of non ferrous material, it will complement the existing presence in Thailand of Smorgon Hartwell Recycling, which is an active participant in both the non-ferrous and stainless steel scrap markets."
Bloomberg survey point to fall in Q2 profits of POSCO
World's 4th biggest steelmaker South Korean POSCOs net income would probably reduce by 45% to 6,984 billion won ($742 million) in the quarter ended June 30 from 1.26 trillion won a year earlier, according to the median estimate of eight analysts surveyed by Bloomberg New as competition from China forced the company to lower prices and raw material costs rose.
POSCO may report second quarter operating income tomorrow of 982 billion won down by 43% from a year ago, according to the Bloomberg survey. Sales may fall by 9% to 4.9 trillion won, according to analysts' estimates.
Competition from China prompted POSCO to lower prices in January and April which coupled with a 19% jump in iron ore prices this year has narrowed its margins.
Japan steel makers seek 10% price rises
The Nihon Keizai business daily reported that Japan's Nippon Steel Corp and other major steel makers will seek price rises of up to 10% from auto makers and ship builders to go into effect from the autumn. The newspaper, without identifying its sources, said the steel makers needed to raise prices because of increases in the cost of iron ore, zinc and crude oil. Higher prices for these materials are projected to push up costs in the steel industry by nearly 300 billion yen in the year to next March.
The paper said that if the steel makers win the price hikes, which they are seeking to offset the rising cost of raw material prices, it would be the fourth year in a row of price increases representing a cumulative rise of around 50%.
Japanese steel makers are, however, still keen to raise prices, citing the gap between domestic and international prices. An aggressive push to cut prices with suppliers by Nissan Motor Co in the late 1990s helped sharply lower the prices of high grade automotive sheet steel in Japan. Analysts estimate that the average prices Japanese steel makers charge auto firms are still more than 10% lower than those of international competitors, and are even lower than the prices of commodity grade steel sold by Asian rivals.
Nippon Steel and JFE have declined to comment on the report.
Reliance Steel & Aluminum to acquire Yarde Metals
Reliance Steel & Aluminum Co announced that it has reached an agreement to acquire Yarde Metals Inc. The transaction is expected to be finalized within 60 days, subject to the completion of due diligence and regulatory approvals.
Yarde was founded in 1976 and specializes in the processing and distribution of stainless steel and aluminum plate, rod and bar products. Yarde has additional metals service centers in Pelham in NH, East Hanover in NJ, Hauppauge in NY, High Point in NC, Streetsboro in OH and Limerick in PA. Yarde's net sales for the fiscal year ended June 30, 2006 were approximately $385 million.
Mr David H Hannah CEO of Reliance said "The Yarde acquisition adds significantly to our geographic network in the Northeastern United States and also expands our customer base and product offerings."
Reliance Steel & Aluminum Co., headquartered in Los Angeles in California is one of the largest metals service center companies in the United States with a network of more than 150 locations in 37 states and Belgium, Canada, China and South Korea.
Severstal withdraws Arcelor plan from EU scrutiny
Russian steel maker Severstal has withdrawn its plans to merge with Arcelor from European Commission scrutiny.
Arcelor agreed last month to merge with Mittal Steel, after a 5 month battle against the deal during which it hooked up with Severstal in an attempt to ward off Mittal Steel.
Mittal Steel SA to increase domestic steel prices again in August
Mittal Steel South Africa has released details of yet another set of price increases from August 1 following average increase of 5.4% on flat products on July 1 covering 85% of its sales. Domestic steel users have received notification of another general adjustment for orders confirmed for delivery from August 1 onwards.
The notice indicates that hot rolled coil prices would rise by 12% and plate by 9%, while the average increase across its flat products range would be around 8%. The average long product increase for steel to be delivered on August 1 would be 6% but as the previously applicable discounts would be discontinued the total price increase effect for the user would be more.
A spokesman of Mittal Steel SA confirmed the proposed price increases with media saying that the adjustment was the result of a rise in domestic prices in all the countries against which the South African producer benchmarked its local selling prices. As per Mittal Steel SA, it decides domestic monthly pricing using a basket of domestic prices in six countries including Brazil, US, Germany, Korea, China and Russia.
Mittal Steel SA's pricing system remains a contentious and contested issue with the company defending South Africa's first ever case of excessive pricing at a Competition Tribunal hearing currently under way. The case was referred to the tribunal by gold miners Harmony and DRDGold and has been under way since March. Final argument is now set for the end of November.
Nickel on all time high
Nickel prices in London gained for a 10th consecutive session, extending a rally to the highest in at least 19 years, as inventories of the metal dwindled to the lowest in 10 months. Stockpiles of nickel monitored by the London Metal Exchange fell by 486 metric tons or 5.5% to 8,418 tons, the lowest since Aug. 23. Inventories of Nickel are down by 76% this year.
Nickel for delivery in three months jumped by $900 or 3.7% to $25,550 a ton on the LME. Prices earlier reached $25,700, the highest since at least 1987. The metal has gained 90% this year, the biggest increase among 59 commodities, including other metals, energy and grains.
Credit Suisse Group said last month 2006 demand will outpace output by 15,000 tons.
Mittal Steel US plans R&D lab expansion in East Chicago
Mittal Steel USA announced plans for a $10 million expansion of its research and development laboratory in East Chicago in Indiana. The expansion was prompted by Mittal Steels decision to close another research lab in Bethlehem in Pennsylvania and consolidate its operations at the East Chicago laboratory campus.
Mr Louis Schorsch CEO of Mittal Steel US in a written statement said that The lab expansion will further improve our ability to provide advanced engineering solutions to meet the evolving needs of our most demanding customers. This multimillion dollar expansion will significantly enhance our research and development operations not only in the United States but all over the world.
Mittal Steel also has research facilities in France and the Czech Republic.
Inco offer still the best value for Falconbridge - CEO
Canadian nickel producer Inco restated its belief Tuesday that its offer for rival Falconbridge remains the best option for Falconbridge shareholders compared with a hostile bid from Swiss mining group Xstrata. Mr Scott Hand chairman and CEO of Inco in response to a revised bid from Xstrata for Falconbridge said "Inco's offer for Falconbridge remains the best alternative on the table for Falconbridge shareholders, both in terms of immediate and long term value creation,"
Mr Hand said "The implied value of our offer for Falconbridge under our friendly three way agreement with Falconbridge and Phelps Dodge is C$61.65 ($54.87) per share, based on today's mid-day share price for Phelps Dodge. This represents a premium of 4.5% above the Xstrata offer." He added that Xstrata's offer was subject to several conditions, including receipt of necessary regulatory approvals. Consequently, Xstrata may not be able to close its offer on July 21 as it had stated, Mr Hand said.
He said "By contrast, Inco has obtained all of the regulatory clearances required to complete its transaction. Only Inco's offer gives both current Inco and Falconbridge shareholders the opportunity to participate in the great earnings, cash flow and growth potential of Phelps Dodge Inco. Inco's offer, unlike Xstrata's, also provides the only opportunity to fully capture the outstanding synergies available in the Sudbury Basin and elsewhere. To date, the synergies identified through the Phelps Dodge Inco combination are estimated at $900 million annually, with a net present value of $5.8 billion. By bringing Inco and Falconbridge operations together in Sudbury, Phelps Dodge Inco is the only transaction that offers significant new opportunities for investment, growth and employment in the Sudbury Basin."
Thailand to start AD investigation on wire rod
It is reported that Thailand wire rod manufacturers are applying for anti dumping investigation on wire rod import from China, India and South Africa and that the Thailand government will start the anti dumping investigation within 1 month.
Nemi, Anglo and Hillsborough to consolidate coal assets in BC
Hillsborough Resources Limited and NEMI Northern Energy and Mining Inc announced that they have entered into a non binding letter of intent together with Anglo Coal Canada Limited and Itochu Corporation, whereby the north eastern British Columbia metallurgical coal assets of Hillsborough, NEMI and Anglo Coal Canada will be consolidated into a company to be formed for the purpose. The parties intend to finalize the transaction within the next three months with comprehensive due diligence exercises and binding agreements to be concluded during this time, although the finance agreements for a portion of the total debt will be prioritized to enable NEMI to meet its current obligations. The transaction is subject to regulatory and respective company board approvals.
Shareholdings in the new entity will be subject to a fair market valuation of each company's metallurgical coal assets located in Northeastern British Columbia. Anglo Coal Canada and Hillsborough will have the right to contribute additional funding to make their shareholdings 60% and 20%, respectively in the event of a shortfall in the valuation of the assets contributed. Anglo Coal Canada will by its shareholdings have management control of the new company. In addition, Anglo Coal Canada will provide funding to NEMI over the next three months subject to certain conditions. Itochu will continue to have off take, marketing and equity conversion rights relative to the NEMI assets.
Mr David Slater president and CEO of Hillsborough said "The synergies that are inherent in this consolidation are very compelling from a financial, operational and logistical aspect. I believe that we have taken the first step towards creating a truly world class coal operation in northeast BC."
The Anglo Coal division of Anglo American plc has interests in operations in South Africa, Australia, Venezuela and Colombia producing in excess of 100 million tonnes of coal per annum.
NEMI Northern Energy and Mining Inc. is a western Canadian based coal company with strategically located metallurgical coal properties in northeast British Columbia. NEMI owns a 100% interest in the Trend Property located near the town of Tumbler Ridge. NEMI also has a 50% interest in the Belcourt Saxon Limited Partnership that covers over 50,000 hectares of known and highly prospective coal bearing land in northeast British Columbia.
Hillsborough Resources Limited is a coal mining company that operates the Quinsam underground thermal coal mine in Campbell River, British Columbia serving the local and west-coast U.S. cement industry, and the Crossville underground thermal coal mine in Tennessee serving the regional power utility and industrial markets. Hillsborough is also developing substantial metallurgical coal properties near Tumbler Ridge in the Northeast of British Columbia, as well as the Bingay Creek metallurgical coal project in the Elk Valley region of Southeast British Columbia.
Xingang sets 5 million production targets for 2006
Chinese Xingang Company has set 5 million tons of steel as the production target for 2006 on June 28th after it produced 2.180 million tons of pig iron, 2.500 million tons of steel and 2.305million tons of billets and finished steel registering increase of 24.8%, 29.75% and 31.22% YOY over January to June 2005.
Xingang has set a workgroup to solve the problems in steel melting, balance the billet and raw material supply and coordinate in other areas effecting production and quality to achieve the target.
Corus to produce steel decking in Dubai
Corus International announced that plans for investing in a new facility to produce metal decking profiles in Dubai. Corus will produce two steel decking profiles, CF46 and the deeper CF80, at its site in the Jebel Ali Free Zone. Manufacturing of the new product is to begin August 2006.
The new facility will enable Corus to produce the first fire rated steel composite decking in the Middle East, material which was previously imported.
Mr Bob Fletcher GM said "As the need for taller buildings here increases, so too will demand for steel structures. This is the first time this product has been manufactured in the region."
Aztec Resources resumes exploration at Koolan Island iron ore mines
Aztec Resources Ltd said it has resumed exploration work at the Koolan Island iron ore mine on the western coast of Australia. Mr Peter Bilbe MD of Aztec said Koolan Island has large areas which have been left relatively unexplored by the previous owner, BHP Billiton.
Aztec stopped exploration activities on the island last year to conserve costs until it has obtained all the necessary approvals for the project.
Koolan is estimated to have resources of around 53 million tonnes with a 9 year mine life at 4 million tonnes per annum.
Zaporizhstals rolled steel output up by 5.8% in H1
During January to June 2006, Ukrainian steel maker Zaporizhstal has increased rolled steel output to 1.8 million tonnes up by 5.8% YOY and crude steel output to 2.2 million tonnes up by 2.7% YOY.
Zaporizhstal produced 3.6 million tonnes of rolled steel and 4.4 million tonnes crude steel during 2005.
Ukrainian pipe maker to boost exports to MEA
It is reported that Ukraines major steel pipe producer pledged to tap markets in the Middle East to compensate the loss of business in the European Union following anti dumping investigation and duties imposed.
Nyzhniodniprovsky Pipe Rolling Works, a division of the Interpipe group, is considering shipping pipes to markets in the Middle East if its exports to the European Union decrease.
Russian Railways traffic up by 3% in H1
Russian Railways OJSC transported above 634 million tons of goods during the first half of 2006 which is 3% higher YOY over H1 of 2005.
Transportations of ferrous metals grew by 8.5% to 38.906 million tons, of coal by 3.7% to 141.702 million tons and of iron and manganese ore by 6.2% to 53.218 million tons.
Kuzbassrazrezugol increases coal production by 2% in H1
UK Kuzbassrazrezugol OJSC mined 19.961million tons of coal in the first half of 2006, which is 2% higher than in January to June 2005 although production of coking coal reduced by 7.6% to 1.926 million tons in H1 of 2006. Company delivered 19.315 million tons of coal to consumers including 8.877 million tons of exports.
UK Kuzbassrazrezugol comprises of 12 coal mines and its coal production totaled 42.8 million tons in 2005 including 3.8 million tons of coking coals. The export volume was 19 million tons.
Cleveland-Cliffs to buy back 2 million additional shares
Cleveland-Cliffs Inc on Tuesday said its board authorized the repurchase of up to an additional 2 million shares of its common stock, on a post split basis. The Company is authorized to make purchases from time to time in the open market or negotiated transactions at a market price. Shares will be accumulated as treasury shares for general corporate purposes.
The Company's prior repurchase authorization of 1.25 million shares of common stock announced on May 9, 2006, was fully executed prior to a two for one stock split distribution on June 30, 2006.
Mr John Brinzo CEO of Cliff said "As we continue to seek growth opportunities for our business, we maintain our view that repurchasing our own shares is an attractive means of enhancing shareholder value. Given the Company's positive business outlook and strong cash flow expectations, the Board believes it is appropriate to return a meaningful portion of profits to shareholders."
Cleveland-Cliffs Inc, headquartered in Cleveland, Ohio, is the largest producer of iron ore pellets in North America and sells the majority of its pellets to integrated steel companies in the United States and Canada. Cleveland-Cliffs Inc operates a total of six iron ore mines located in Michigan, Minnesota and Eastern Canada. The Company is majority owner of Portman Limited, the third largest iron ore mining company in Australia serving the Asian iron ore markets.
Raspadskaya increase boosts coal output 5.6% in H1
Kemerov based Russian coal producer Raspadskaya has increased coal production by 5.6% YOY to 5.14 million tonnes in the first half of 2006. Raspadskaya mine produced 4.5 million tonnes and its MUK-06 mine produced 633,000 tonnes.
The Raspadskaya enrichment plant processed 3.44 million tonnes of regular coal during January to June 2006 and produced 2.82 million tonnes of concentrate.
Mr Gennady Kozovoi GD said in the release that "The launch of our own plant in the summer of 2005 has enabled use to control the quality of products, concentrate the enrichment process in direct proximity of our mines and reduce transportation costs."
Minmetals secures $200 million loan
It is reported that Chinas biggest metals trading company Minmetals Corp will receive a $200 million loan to expand and cut borrowing costs.
Minmetals Capitals & Securities Inc, a Hong Kong based unit of the state owned China Minmetals, will use the loan to replace a three year $100 million loan taken in 2004. The company will save $120,000 in annual interest charges by refinancing the loan. The remainder of the money will be used to boost working capital.
