November, 15 2006
Public Sector Steel Companies record impressive profit in current fiscal
Mr Ram Vilas Paswan Minister of Steel and Chemicals and Fertilizer while addressing a news conference said all the 15 public sector enterprises (PSEs) under the Steel Ministry have recorded a combined profit of Rs. 11497 crore in the financial year 2005-06. This is more than double of what they had achieved in the fiscal 2003-04.
Under his Ministry all the PSEs have also shown a significant improvement of around 17% in the first half of 2006-07 in earning profit before tax. The amount registered so far is Rs.6600 crore as against a combined tax profit of Rs. 5649 crore in the comparable period last year. The contribution of public sector enterprises under the Steel Ministry to the Government has also gone up significantly. The leading companies like Steel Authority of India Limited (SAIL), Rashtriya Ispat Nigam Limited (RINL), National Mineral Development Corporation (NMDC), Kudremukh Iron Ore Limited(KIOL) and the Manganese Ore India Limited (MOIL) contributed to the Central and State Government exchequers by way of excise duty, customs duty, dividend, corporate tax, sales tax and royalty. The amount was Rs. 13110 crore in 2005-06, more than double as compared to Rs. 5761 crore in 2003-04. Shri Paswan said this was possible following an increased output of value added products, improvement in techno-economic parameters like blast furnace, productivity, energy consumption, improved labour productivity, steel price buoyancy and improved corporate governance. The improvement was registered despite a sharp rise in inputs and costs.
Mr Paswan emphasized that the steel sectors growth in the last two and a half years has primarily been due to the National Steel Policy announced in November 2005. Which is the blueprint for the growth of the steel sector.
Stop high-grade iron ore exports
Inaugurating a new Fabrication unit in Faridabad The Chairman of TATA Ryerson Ltd. (TRL) Mr J.J. Irani Denounced export of high grade iron ore and termed such sales to foreign buyers as "suicidal'' for the domestic steel industry.
Dr. Irani pointed out that the steel industry had no problems with the export of low-grade iron ore (iron content less than 55%).
However, "the export of high grade ore (iron content of 55-65%) is suicidal", he said, as India would soon have to import steel to meet the growing demand. Instead of exporting these scarce reserves, the high iron content ore should first be supplied to the domestic steel-makers, he said.
Auto giants call for more steel production
In a speech of 2 days symposium on steel for automotive Mr B Muthuraman Managing Director of TATA Steel said: No other industry has more demand for steel than the automobile sector.
The seminar witnessed presentation of 12 technical papers by the management of top international auto companies and consultancy groups.
Presenting some of the concerns of the automotive industry, regarding the usage of steel, many speakers stressed the need for high strength steel (HSS).
HSS, an alloy of steel, reduces the brittle nature of steel and makes it more malleable and ductile. Owing to stringent safety norms and to reduce fuel costs, HSS is used to produce lighter vehicles by auto majors.
Mr Shinchi Takeuchi, the joint managing director of Maruti Udyog Ltd, said: We are currently importing HSS steel from Japan and Korea but are interested in localization of these products. This will be only possible if the steel majors in India gear up to meet the demand of HSS.
India's Usha Martin to buy 2 UK bright bar steel units in early 2007
Indias Usha Martin Ltd (UML), who is among the top four largest steel wire rope manufacturers in the world is close to acquiring steel operations in the UK, likely to be a steel bright bar units with a capacity of 15,000 tonnes.
UML with a total capacity of 65,000 tonnes, out of which 12,000 tonnes are made in the UK by Bruton Shaw. Is likely to ramp up global capacity levels to 70,000 tonnes.
Two UK bright bar companies have been identified and the acquisition is likely to be complete by early 2007.
Punj Lloyd declares Q2 results
Punj Lloyd Ltd has posted a net profit of Rs 7.87 million for the quarter ended September 30th 2006. Total Income is Rs 4095.91 million for the quarter ended September 30th 2006.
The Group has posted a profit for the year after minority interest & Share of profits of Associates of Rs 333.80 million for the quarter ended September 30, 2006. Total Income is Rs 11970.75 million for the quarter ended September 30, 2006.
Consolidated financials for the quarter and six months ended September 30th 2006 includes financials of newly acquired subsidiary in Singapore. Therefore, to that extent these are not comparable with the previous year financials
Sicals net profits dip by 64% YoY in Q2
Sical Logistics Ltd has recently announced that its unaudited net profit for July to September quarter was Rs 61.2 million down by 64% YoY from Rs 170.4 million. Its unaudited Q2 sales were Rs 2.45 billion up by 5% from Rs 2.34 billion a year ago while Q2 PBIDT was Rs 223.1 million, down 36% from Rs 349.6 million a year ago.
Sical attributed the fall in Q2 earnings and slow revenue growth mainly to
1. Nearly Rs 15 million in Q2 at Sicals exclusive ship berthing facility JD-5 at Chennai port on competitive pressure from depend drafts at the Chennai port.
2. Nearly Rs 40 million loss in Q2 from Sicals coal handling contract with the Tamil Nadu State Electricity Board as volumes and unit realizations dipped on TNEBs inability to source higher capacity vessels and TNEBs reduced dependence on coal for power generation because of increased hydel power generation.
3. Reduced volumes and margins in the trucking division owing to issues related to government guidelines on overloading and pricing pressure mainly from the unorganized trucking providers.
4. Higher costs in Sicals non core business of building materials: purchase of traded goods in H1 rose by Rs 157.7 million to Rs 742.0 million.
Ashwin Muthiah vice chairman of Sical said that Q2 results, while being disappointing in absolute terms, should be seen in the context of major changes in the companys business and organizational structure. He said, As Sical refocuses, reorganizes and overhauls, we might have to sometimes forgo short term performance for long term gain.
Magnitogorsk, Gerdau bidding for Arcelor's 400 million euros German plant Forbes Report
Russia's MMK, Brazil's Gerdau and several other companies are bidding for Arcelor Mittal's Maxhuette German steel works, the Financial Times Deutschland reported citing industry sources.
These sources told the newspaper that bids are currently around 400 million euros and that Arcelor is likely to select the winning bid within the next few weeks.
The European Commission ruled that Arcelor Mittal must sell the plant when it approved the merger of the two companies earlier this year. Maxhuette has an annual steel production capacity of more than 900,000 tonnes.
Taiwan rebar market demand weak
After China imposed the export duty, demand of rebar in Taiwan has softened. Construction companies are reluctent to buy at high levels. Earlier in March this year, Taiwan government decided to allow Chinese bar and wire rods to meet demand from the domestic fasteners industry.
Taiwan Government was hoping that the import will lower the cost of downstream steel companies and raise export competitiveness. That was second extension by the Taiwanese Ministry of Economic Affairs since the government first announced that Chinese rebar and wire rod would be allowed to enter the country.
Demand for scrap steel is outpacing supply
According to the World Scrap Congress 2006, the demand of scrap steel is outpacing the supply in India and China along with other developing countries. This demand is expected to fuel the scrap metal market and alternative sources of supply. The demand will also accelerate the development of new technologies to exploit unproductive scrap.
Mr NK Gupta, additional director general of foreign trade (DGFT) for the Indian government, told delegates at the Bureau of International Recycling conference in Brussels that India would not accept second-rate material and it was trying to avoid explosives and ammunitions entering in scrap consignments as a number of workers had been killed in incidents handling this material. Imports of shredded metallic waste are permitted from all sources through all ports in India but this will change under the new law, which will only allow the scrap in through 26 designated ports spread all over the country.
Australian company to develop iron ore project for Chinese market
The Australian arm of Sudance Resources Ltd will develop Mbalam iron ore project in Cameroon. This West African project will produce high grade hematite.
The Mbalam deposit is estimated to contain 570 million tonnes of key 60% grade. The main deposit is 2 km long and 600 meters wide. Other two small deposits contain 65.7% grades.
These deposites are being developed at an accelerated rates eying Chinese market. The location is close to European and Middle Eastern markets.
Mbalam deposits are just 125 Kilometers away from planned Chinese iron ore mine in neighboring Gabon. The Chinese have announced to build a railway to the Atlantic Coast and Sudance could build the railway connecting to that. The has indicated it's support and told that it wants the railway built as part of its economic development ambitions. This would make it easy for Sudance to ship the iron ore to Chinese markets.
The Romanian crude steel output returned to positive growth rates Report
In an announcement of report on Romanian Steel and Iron sector, Research and Markets said that the crude steel output returned to positive growth rates in Q2, after shrinking in the four previous quarters. The crude steel output increased by 15% YOY in Q2 to 1.6 million tonnes.
After it improved for three consecutive quarters, partly on seasonal trend, the output recovered the ground lost during Q2-Q3 2005. Moreover, the growth rate accelerated to 28% YOY in Jul-Aug, an outstanding performance yet partly grounded on low base effect.
Corus to cease production at 150 years old steel plant
Steel giant Corus today announced that it will stop production at Corus Colors Cookley Works located at Brierley Hill. The Cookley works was in production for nearly 150 year. The facility produces coated steel products for the automotive fuel tank market.
The company officials said that the plant is no longer profitable because of increasing trend to use plastic products. The site had more than 1500 workers in its peak time but employees only 40 workers for last few years.
Hyundai Steel investigating Chinese Mills for Dumping Report
Korea times reports that the Hyundai Steel is considering requesting an anti-dumping investigation of Chinese mills, which have substantially undercut Hyundai's market share here with low-priced products.
An insider at Hyundai Steel Monday said that at issue are steel H-beams, which are widely used in the construction of buildings and bridges.
"We are now checking the viability of asking that Chinese H-beam exporters be subject to anti-dumping investigations", said the insider who wanted to remain anonymous.
He said, "toward that end, we have gathered data to learn whether or not Chinese H-beam makers employ a dual pricing strategy exporting H-beams to Korea at lower prices tyhan in China".
The move by Hyundai Steel, the affiliate of the countryu2019s second biggest chaebol Hyundai Automotive Group, seems intent on preventing the increasing influx of inexpensive made-in-China steel products.
The inbound shipment of Chinese H-beam products was negligible just several years ago but the figure skyrocketed last year, according to the Korea Iron and Steel Association. Chinese firms combined to export a mere 62,808 tonnes of H-beams in 2004 but the amount jumped 257% to 224,051 tonnes last year.
During the first nine months of 2006, imports stood at 601,982 tonnes, about 4.5 times increase YOY.
As a result, Chinese H-beams expanded their market share here to more than 20 percent in the 4 million ton market per annum, threatening business leader Hyundai Steel, which accounts for roughly half of the demand.
Corus to invest 6 million pounds in Shotton steel works
Corus is investing 6 million pounds in its Shotton Steel Works, Flintshire, UK.
Shottom steel works is the construction arm of the company. The investment will establish production of insulated building panels by 2008.
The investment follows rising demand from the construction industry for use in building factories and offices. Corus said construction now accounted for around 30% of its 10 billion pounds annual turnover, and is the largest single part of the business.
The company is currently producing structural steel, roofs, walls, floors and foundations.
Puda Coal announces significant sales to major new customer
Puda Coal Inc, a leading supplier of China's highest grade metallurgical coking coal which is used to make coke for steel manufacturing, announced today that it has achieved significant sales to major new customer Wulin Coke. Puda began delivering to Wulin Coke in Q2 2006. The 53,388 tonnes delivered placed Wulin Coke behind only Baotou Steel as Puda's largest customer in the second quarter.
Puda delivered an additional 50,040 tonnes to Wulin Coke in Q3 2006. 103,429 tonnes delivered year to date ranked Wulin Coke third among all clients and is equal to approximately 15% of total 2005 sales across all customers.
Metal Managements profits up by 72% YoY in Q3
Metals recycler Metal Management Inc recently announced that its Q3 earnings surged by 72% on higher sales. Its net income in Q3 of 2006 grew to $29.1 million as compared to $16.9 million in Q3 of 2005 and sales surged by 55% to $584.7 million from $378.3 million in the third quarter last year. The company said that about 1.4 million tons of metal were processed and sold during the quarter.
It said that strong fundamentals for nonferrous metals helped offset volatility in the market for iron based metals. The company's ferrous metals business was hurt by a drop in demand from the automotive industry, as the nation's major automakers made severe production cuts to stem losses.
Metal Management is one of the largest full service metal recyclers in the United States, with approximately 50 recycling facilities in 16 states.
Nippon Steel & Sumikin Raises Stainless Prices for 11th Month
Bloomberg reports that the Nippon Steel & Sumikin Stainless Corp., raised sheet metal prices for a eleventh month following higher nickel costs. The company, increased the price of its 304-grade steel sheet to 525,000 yen per tonne this month, from 510,000 yen last month, the Tokyo- based company said yesterday.
Nippon Steel & Sumikin has been raising prices of sheets, which are used in oil and petrochemical plants and auto parts, to pass on nickel prices that have more than doubled this year. Nickel is used to produce rustproof steel.
Mauritius Government in a dilemma over iron bars
The biggest supplier of iron bars, Desbro, in Mauritius warned that it will close down as it cannot continue to produce at such low prices. It is learnt that the Mauritius government will give its final decision on Friday after the cabinet meeting.
Since Desbro stopped its iron production on 1st November, the parties have not been able to reach a consensus. The conflict became even worse last week when the government realized that the supposedly more affordable prices expected from foreign companies could finally prove more expensive.
The conflict started between Desbro and the ministry of Trade after the former explained to the government that it could no longer go on producing iron bars at the existing price. Despite the support of its competitors who agreed that price of iron bars had to be raised in view of the rise in the price of raw materials.
Australian firm Texima and America Steel Industries of Philadelphia were the two companies expected to save the sector. The estimate of Texima is actually Rs 1,000 higher than Desbro's while the US company revealed it could not at the moment supply the country with billets.
