India further tightens steel scrap import rules

It is reported that Indian government has further tightened norms for imports of steel scarp.

Vide a public notice No 66 (RE-2006)/2004-2009 dated 23rd October 2006 the Director General of Foreign Trade has made the following amendments in the handbook of procedures

A) All import consignments of Metallic Waste and Scrap must accompany a pre shipment inspection certificate stating that
1. The consignment does not contain any type of arms, ammunition, mines, shells, cartridges, radio active contaminated or any other explosive material in any form either used or otherwise.
2. The imported item(s) is actually a metallic waste/scrap/ seconds/defective as per the internationally accepted parameters for such a classification.
The format of the certificate to be issued by the Pre-shipment Agencies, Names of the Agencies authorized to issue such certificates and procedure for authorization of these agencies to be made operational with effect from 1.4.2007, will be notified separately in due course.

B) The new system of import from registered sources will come into effect from 1st April, 2007. However, in cases where Bill of Lading is dated 31st March, 2007 or before, imports will be allowed on the basis of Pre-Shipment Inspection regime in terms of Para 2.32 of the Handbook of Procedures (Vol.1), notified vide Public Notice No. 1 dated 8th April, 2005 and as amended from time to time, till the new system of import from registered sources comes into effect.

C) Only direct imports from registered suppliers will be allowed. However, in all documents relating to import transactions, name of importer as well as exporter will be indicated. No high sea sale would be allowed.

As per reports DGFT has received more than 1,400 applications from suppliers across the world in response to the procedure set up earlier this month.

TATA Steel post Corus to enter Fortune 500 list

TATA Steel, post Corus merger, will become the 7th Indian company entering on the elite Fortune Global 500 list.

Currently there are 6 Indian companies including Indian Oil, Reliance Industries, Bharat Petroleum, Hindustan Petroleum, Oil and Natural Gas Corp and State Bank of India on the Global 500 list.

The Fortune list is based on the total global sales figures of the companies.

Indian Railways regaining share in cement & steel sector

Mr Laloo Prasad union railway minister during the Economic Editors conference in New Delhi last week informed that Indian Railways has increased its share in cement and steel transportation in the first halfd of 2006-07. he said "In the first six months, our share in cement and steel transportation has increased by 6% to 8%.

During April to September 2006 while production of cement and steel increased by 8% to 10% in the country, the rail traffic for these commodities registered an increase of 35% to 40%.

Indian Railways share in steel and cement transportation had come down to 30% to 35% by 2003-04 as against 70% to 90% in 1991.

Steel Exchange India Limited eyeing an Rs 1000 crore turnover

The Board of Directors of Steel Exchange India Limited decided to merge the steel trading and manufacturing businesses of Vizag Profiles Limited with SEIL. This will help to increase a turnover of Rs 1,000 crore within 3 years. Both the companies have almost the same management and promoters, and the Directors of both the companies have agreed to merge.

Mr B Suresh Kumar director of SIEL said Apart from the steel trading business, Vizag Profiles Limited has two wire drawing units with an annual production capacity of 25,000 tonnes and one re-rolling mill with a production capacity of 30,000 tonnes at Visakhapatnam.

SEIL has a steel melting unit at Ravulapalem in East Godavari district with a capacity of 90,000 tonne and a steel re rolling mill at Visakhapatnam with a capacity of 72,000 tonne.

Punj Lloyd secures 2 contracts for IOC's Haldia refinery

Punj Lloyd Ltd has secured 2 EPC contracts for Indian Oil Corporation's refinery project being implemented at Haldia in West Bengal. The combined value of both the orders is Rs 1,163 crore. The project for the hydrocracker unit is scheduled to be completed in 33 months while that for hydrogen generation unit is scheduled to be completed in 24 months.

The value for the Hydrocracker contract is Rs 864 Crore while contract for Hydrogen generation unit is valued at Rs 299 crore.

Mr Atul Punj chiarmna of Punj Lloyd said "Punj Lloyd has come a long way ever since it bid for the mechanical construction of its first hydrocracker project at Mathura refinery. This IOCL contract will give Punj Lloyd the opportunity to exhibit its expertise as both the projects are complex in nature in terms of technicality involved and in terms of execution".

NMPT to organize meet to promote business

The New Mangalore Port Trust and Federation of Karnataka Chambers of Commerce and Industry are organizing a trade meet in Bangalore on November 10th to apprise importers and exporters in the State about the facilities available at the New Mangalore port.

NMPT release said that the port is all set to handle any type of cargo with utmost efficiency and that the commissioning of Mangalore-Hassan stretch of railway line for freight traffic, creation of a deep draught multipurpose general cargo berth and other related infrastructure have contributed immensely for the growth of the port.

MEPS pegs global steel production at 1.237 billion tones

MEPS has estimated that the global steel production during 2006 would be about 1.237 billion tonne s as compared with 1.129 billion tonnes in 2005, resulting in YoY growth of 9.56%. MEPS also estimates that the BF route production in 2006 is expected to reach 873 million tonnes recording a double digit growth YoY.

The region wise forecast estimates highest YoY growth of 19.5% in China followed by 11.2% in Other Europe.

In million tonnes
Source MEPS forecast

MEPS reports said that We predict further solid increases over the next few years. Demand has been strong across the globe. Mill order books are full in most regions. However, this situation could change in some parts of the world in 2007 as an inventory drawdown commences in many industrialized nations.

EU and China joins hands to create an informal group on steel imports

The European Union plans to set up a group with China to discuss steel imports from the world's largest metal producer. This is also a step to obviate the dispute with china. This group is being created to review this trade in the informal group and identify any prospective problems and how those can be amicably resolved.

This agreement will be one of many, signed by EU Trade Commissioner Mr Peter Mandelson and Chinese Commerce Minister Mr Bo Xilai.

Rio sees strong iron ore demand and price gains

Rio Tinto sees strong global demand for iron ore and said that it will help raise prices for a fifth consecutive year in 2007. Mr Sam Walsh head of the iron ore business at Rio said that miners are struggling to meet the demand led by Chinese steelmakers.

Talks with Chinese steel mills to set next year's benchmark prices are expected to start this month. This year's negotiations dragged on through June as Chinese steel producers not willing to accept 19% gains agreed by European and Japanese producers.

China has challenged forecasts that say Chinese steel industry will continue to expand. According to Mr Zou Jian, Chairman of China Metallurgical and Mining Association, Iron Ore prices should decline in 2007. This is opposed by Melbourne analysts. According to these analysts, benchmark ore prices from Australia my rise 10% to $51.71 per tonne.

Market may slow down, warns Stelco

"Demand for steel in the North American market has softened towards the end of the third quarter due to reduced consumption by the automotive sector combined with high steel inventory levels at our customers, particularly at the steel service centers," Stelco said after stock markets closing, warning that demand will fall through the fourth quarter and into the first quarter of 2007.

Some major steel producers in North America including Stelco have decided to cut production levels to match supply with demand following this speculation.

North American steelmakers may face squeeze on prices and smaller market share because of competition in US Market by European, South American and Asian steelmakers.

Rio Tinto to license HIsmelt technology

Rio Tinto is thinking over the possibility of licensing the technology over the next year. Mr Sam Walsh CEO of Rio Tinto said that companies including Shougang Corp. and Nucor Corp are keen to build HIsmelt pig iron plants.

Rio's technology enables companies to use iron ore with higher impurities to make pig iron, a raw material heated in steelmaking furnaces. Any deal will involve companies buying ore from Rio, said Mr Walsh.

Rio is documenting the process, systems and control mechanism so the technology can be deployed easily. Mr Walsh said that the technology will enable Rio to sell iron ore resources that it wouldn't otherwise want to mine.

Iran's Iron production potential at 16 million tones

National iron industry has the potential to increase its production capacity to 16 million tonnes from last year's 10 million tonnes provided that the government supports private producers, said Mr Mohammad Azad, Association of Iron Traders as quoted by Iran Daily. The iron market in Iran has stabilized to some extent as a result of end of construction season and renewed imports.

Mr Mohammad said that the Iron prices have become moderate compared to high September levels. Domestic factories have agreed to raise production to 12 million tons by next March, when the country would still face a shortage of 8 million tonnes.

Domestic companies can make up 50% shortage and the better state support for private sector is the best solution under such circumstances. If producers do not receive the raw material and importers do not get finance, iron prices are expected to surge when constructions resume. Iron exports were banned to deal with shortage.

Specialty steel maker to launch Aerospace manufacturing in china

Timken's highly engineered bearings, alloy steels and related products and services turn up everywhere. The Company today announced an important investment in its ability to serve the Chinese and global aerospace markets.

Initially, more than 200 associates will manufacture ball and cylindrical roller bearings up to 12 inches (30 centimeters) in diameter. The first product shipment from Chengdu is anticipated for late 2007.

Vietnamese steelmakers worried of billet price hikes

Vietnamese construction steel cost is forecast to spike this month fuelled by hiking steel ingot prices in the world market, said Vietnam Steel Association announcement.

Steel ingot prices have increased $15 to $20 per ton as demand outstrips supply. The Vietnam market is heavily dependent on steel ingot imports to service domestic steel manufacturers. Domestic steel makers are afraid that while ingot rates remained high, Chinese manufacturers will be able to offer lower priced steel products.

Chinese steel ingots have been pouring into the Vietnam market over the last couple of months, making up 60 percent of the market. Scrap steel consumption is also forecasted to jump next year to over 1.5 million tonnes, mainly due to the steel ingot refineries that are just coming online in the country.

Pakistan to establish coal-power generation authority

There has been some movement on establishing an authority to explore and utilize huge coal resources of the country for power generation. This authority will be a joint venture of Government of Pakistan, Government of Sindh and private sector.

The authority would mainly be involved in exploring coal reserves and utilize it for power generation at national level. Presently multiple authorities are handling the issues related to coal exploration, mining and power generation. These authorities include the Ministry of Water and Power, WAPDA, Pakistan Power Infrastructure Board, Sindh Coal Authority, Lakhra Coal Development Company, Punjab Mineral Development Corporation and Federal Mineral Board.

Many companies from countries like China, Ukraine, USA, Malaysia are interested in investing in coal power generation. The Pakistan government has already signed MoUs with different companies.

Analyst sees no steel production cuts in Brazil

BNamericas has reported that Brazilian steel producers are unlikely to reduce production or shut down operations in the short to mid term, unlike steelmakers in other parts of the world.

While responding to Arcelor Mittal's announcement last month that it is idling two of its blast furnaces in the US indefinitely to bring production in line with reduced levels of demand for flat products, an analyst with local brokerage Planner told BNamericas that "In the short to medium term, I do not see a scenario of plant shutdowns, output reduction or risks of over production. I believe it will take some time until this situation reaches Brazil." The analyst added that demand in the country is stable.

However, the analyst sees strong competition for Brazil's steel shipments from markets abroad, particularly China, which is continuously increasing steel exports.

Kobe Steels net sales in H1 up by 109.3 billion

Kobe Steel Ltd announce last month that its consolidated net sales in the first 6 months rose by 109.3 billion yen to 898.8 billion yen in comparison to the same period last year. Operating income was 98.8 billion yen, a decrease of 9.3 billion yen in comparison to the same period last year, as the inventory valuation under the average method in fiscal 2005 had pushed up profits more for that year.

Kobe said that in addition, from fiscal 2006 machinery and equipment depreciation was changed from the straight-line method to the declining-balance method, which increased the depreciation burden. However, ordinary income increased 1.9 billion yen to 87.3 billion yen in comparison to the same period last year owing to higher profits from equity-valued affiliates. As no extraordinary loss was posted in the half-year period, after tax net income increased 14.8 billion yen to 51.5 billion yen.

Kobe Steel has decided to pay an interim dividend of 3 yen per share for the half-year period, taking into consideration the trend of its business performance and the result of a comprehensive evaluation.

China to loosen control on yuan slowly

People's Bank of China recently said that China will loosen controls on its currency gradually and should step up development of financial tools such as derivatives to help banks and companies cope with a more flexible exchange rate system.

Mr Su Ning deputy governor of the People's Bank of China at an economic conference in the eastern city of Suzhou in Jiangsu Province recently said that China will improve the yuan's flexibility gradually. China needs to develop new financial tools and enhance financial reform to help remove the burden on its financial system. Mr Su said that the Chinese government should step up reform of the nation's banks including Agricultural Bank of China.

According to the China Foreign Exchange Trade System China has limited gains in the yuan to 2.6 percent since dropping a decade old peg to the US dollar in July last year. The currency strengthened 0.1% to 7.9025 to the dollar recently.

Chinese officials have said repeatedly that the yuan's exchange rate will be loosened only gradually because the nation's banks and companies aren't prepared to cope with a free floating currency. China has been introducing derivatives such as interest rate forwards and swaps to provide tools to hedge risks and plans to add interest-rate and stock index futures.

A record trade surplus has flooded Chinese economy with cash, spurring investment in factories and real estate that the government is concerned may lead to overcapacity and bad loans.

Chinas coal chemical industry surging on high oil prices

Chinas National Development and Reform Commission announced recently that propelled by the price hikes in the international oil market, the Chinese coal chemical industry has been growing rapidly with the demand for fuel products and China's total investment in coal chemical programs under construction reached over 80 billion yuan ($10.1 billion).

NDRC said that the programs under construction would raise annual production capacity by 8.5 million tons of methanol, 0.9 million tons of olefin and 1.24 million tons of coal liquefied oil. Total annual production would rise to 34 million tons of methanol, 3 million tons of olefin and three million tons of coal-liquefied oil. The coal chemical industry also produces coke, calcium carbide and coal developed fertilizers.

During 2005, China's production of coke reached 232.83 million tons, calcium carbide 8.95 million tons and coal developed fertilizers 25 million tons, all the highest in the world.

Chelyabinsk Zinc could increase free float after IPO

Interfax has reported that Chelyabinsk Zinc Plant could increase its free float to 50% minus one share after its initial public offering.

A source in banking circles told Interfax "Shareholders are ready to place up to 50% minus one share of charter capital and keep the controlling stake of 50% plus one share.

Analysts from one of the bank organizers estimate that Chelyabinsk Zinc has a capitalization around $750 million.

Kumba split cots R109 million

It is reported that the costs to implement the separate unbundling of Kumba's iron ore assets and the creation of Exxaro is estimated at 109 million rand.

Rand Merchant Bank accounts for the largest portion of the costs at 37.5 million rand for its advisory work on the transaction. Rand Merchant Bank along with Nedbank also earned 22.5 million rand in loan raising fees. SRK Consulting will get 9.74 million rand for its Competent Person's Report and attorneys Webber Wentzel Bowens will get the fourth largest fee of 6.5 million rand for legal services provided.

The total fee includes the 45.4 million rand forecast of professional fees for the unbundling of the iron ore assets according to the announcement.

Venezuelan tax authorities ask for unpaid taxes from Sivensa

Venezuela's Seniat tax authority last month demanded $8.4 million in unpaid taxes from steelmaker Sivensa.

Venezuela's Seniat tax agency is engaging in a drive to extract more revenue from private firms, particularly those involved with energy and mineral resources.

Sivensa is one of the largest private exporters in Venezuela and makes products for the construction, manufacturing and infrastructure sectors.