Mr Roongta calls for including iron ore in strategic materials list

Steel Authority of India Limited has called for including iron ore in the list of strategic minerals by the Indian government and for providing assured linkage of raw materials to new steel capacities.

Mr SK Roongta chairman of SAIL told reporters "Iron ore should be included in the list of strategic minerals and its linkage would have to be assured to the new steel capacities."

Mr Roongta said that there was also a case for preserving the mineral in view of massive capacity expansions announced by the steel utilities.

TATA Steel denies report CSN acquisition

TATA Steel has denied a newspaper report that the proposed TATA Corus Company may bid for Brazil's biggest steel firm Companhia Siderurgica Nacional.

TATA Steel in a statement filed with BSE said that the news item was speculative and based on unsubstantial sources. It said "It is not true and would mislead the company's shareholders."

Times of India newspaper, without divulging source, has yesterday reported that TATA Corus might make an offer for CSN and that the move was initiated by bankers involved in TATA Corus merger.

CSN has capacity of 5.6 million tonnes of steel with plans to reach 12 million tonnes by 2010 and about 21.5 million tonnes of iron ore. CSN holds more than 15% stake in iron ore giant CVRD also.

Armed guerrillas damage NMDCs iron ore facility

It is reported that Maoist guerrillas raided National Mineral Development Corporations mining operations in Bacheli and destroyed the conveyor belt. According to the report, armed rebels struck at the NMDC establishment in Dantewada district and set the conveyor belt of Project 10 on fire. Unconfirmed reports said the rebels also triggered blasts. Sources said the kilometer long belt was completely destroyed in the fire.

Production in the company is expected to remain affected for the next 10 to 15 days. The report cites an NMDC official as saying that It is too early to calculate the loss. But it will be to the tune of crores.

It is also reported that the rebels removed a portion of track between Bhansi and Kamlur railway stations in Dantewada resulting in part derailing of a goods train and that the transportation of iron ore to the Visakhapatnam port would be suspended for at least two days.

This is the third major guerrilla attack on NMDC installations this year.

Indian galvanizers increase prices

Some of the leading manufacturers of galvanized steel products in India have announced price increase for galvanized steel and other players are also expected to follow suit. The hike in galvanized steel price comes at a time when the global steel prices including for HRC, the base material for galvanized products, are softening.

JSW Steel Ltd announced a hike of INR 1,000 per tonne for its galvanized steel products. Mr MVS Seshagiri Rao director finance said the price hike for galvanized steel has been necessitated by the steep increase in zinc prices in the international markets. The price of zinc has gone up by $800 to $900 in the last thirty to 35 days. "

As per reports Uttam Galva Steels has hiked prices by INR 2,000 per tonne and spat Industries by 1,000 rupees.

The 3 month zinc prices reached an all time high of $4,202 on the London Metal Exchange on Tuesday the highest level since the metal was listed in 1915. Zinc prices have rocketed by 170% in a year and are inching towards $5000 mark.

Hindalco Almex JV to make alloys for aerospace

The Aditya Birla Group company Hindalco and the US based Almex Inc have entered into a 70:30 JV for manufacturing high strength aluminum alloys for applications in aerospace and surface transportation industries. A high proportion of the new company's output will be marketed overseas.

The JV is to be named Hindalco Almex Aerospace Ltd and envisages a capital outlay of Rs 155 crore at a production level of 46,000 tonnes. The location of the manufacturing facility is under finalization.

Mr Kumar Mangalam Birla said "We are aggressively ramping up our portfolio of value added products. Getting into high strength alloys is a part of our strategic growth initiative. About 80% of our products are value added; we expect to scale this up, going forward.

Almex, headquartered in Los Angeles, is a technology supplier and equipment manufacturing company.

HZLs Q2 profit zooms up by 562% YoY

Hindustan Zinc Ltd has announced that its net profit jumped to INR 12.98 billion in the July to September 2006 from INR1.96 billion in the same period a year earlier. Its revenue more than tripled to INR24.87 billion from INR7.06 billion Q2 of 2005-06.

HZL produced 139,078 tonnes of mined metal in the fiscal second quarter up by 18% YoY and 89,206 tonnes of refined metal up by 32% YoY. It also sold 89,501 tonnes of surplus zinc concentrate.

HZL is a unit of Vedanta Resources PLC.

IST Steel & Power setting up sponge iron plant in Bellary

IST Steel & Power Ltd is setting up a 115,000 tonnes per annum sponge iron plant and an 8 MW power generation plant at Bellary in Karnataka. The project will be operational in the financial year 2007-2008.

As per release, IST Steel & Power Ltd has already entered into MoU with JSW Steel Ltd for manufacturing sponge iron on conversion basis for JSW Steel Ltd.

Man Industries Anjar expansion to go on stream in July 2007

Man Industries India Ltd has announced that its expansion project in the HSAW division at Anjar to increase the installed capacity for HSAW pipes by 200,000 tonnes per annum will go on stream from July 2007.

Man Industries also announced commissioning of its wind mill near Kutch in the state of Gujarat near Kutch. The release adds that Man Industries is putting up additional capacity of 4.5MW in wind energy.

PSL to supply spiral pipes for water line in Oman

PSL Ltd has announced that it has bagged a contract for supply of pre coated API 5L GrB PSL 2 spiral welded pipes valuing over $ 20 million for meting the requirements of Omans ministry of Housing, Electricity and water. The supplies are to be made within 4 months time.

The release said that the contract is related to a major water pipe line projects connecting different cities of Oman with cross country trunk water pipe line projects.

Steel Exchange board approves amalgamation of Vizag Profile

Steel Exchange India Ltd has informed BSE that its board of directors has accorded in principle approval to the proposal of amalgamation of Vizag Profiles Ltd with the company subject to requisite approvals.

Its board has also authorized management committee to oversee the process of Amalgamation including the finalization of scheme of amalgamation and swap ratio on receipt of valuation report.

China to cross 500 million tonne mark in 2007 CISA

China Iron and Steel Association said that China's crude steel production will increase by around 11% to more than 460 million tonnes and steel product output will also rise about 11% to 505 million tons in 2007.

CISA, based on production statistics from the first nine months, new operations in the second half and market demand said that crude steel production in 2006 will rise by 16.6% to 415 million tonnes and steel products production will increase by 19.1% to 455 million tonnes.

CISA said that China produced 356 million tonnes of crude steel and 382 million tonnes of steel products in 2005.

CISA said that China's steel production is still in a growth period and will fall off as governmental control policies continue to impact the whole industry and fixed-asset investment slows.

NAB sees 10% rise in iron ore prices and week steel demand in 2007

National Australia Bank said that iron ore prices are set to rise on the back of a tight spot market, after a massive 71.5% in the 2005 Japanese financial year and another 19% in 2006 due to a China driven surge. NAB economists are now forecasting a further 10% jump in contract prices for iron ore fines and a 7.5% increase in lump prices.

NAB said in a client note "Facing high costs in the domestic and spot market, Chinese steel mills may seek increased volumes of iron ore under contract primarily from Australia due to freight differentials. This is expected to place upward pressure on contract prices reflecting our forecast of a 10% increase for iron ore fines."

NAB had been forecasting a rollover of prices in this year's negotiations between miners and steel makers but says tight markets have prompted it to boost its forecasts.

NAB also said steel prices are set to trend lower as swelling inventories and growing exports from China place downward pressure on hot rolled coil prices in 2007. NAB said that demand for steel may also weaken particularly in the US where the economic picture is worsening.

China facing severe over capacity in steel sector with 2074 projects on way

China Steel and Iron Association reported that China produced 308.4 million tons of crude steel in the first three quarters of the year up by 18.45% YoY and 339 million tons of steel products up by 23.66%, whereas Chinas apparent consumption of steel rose by 10.5% YoY to 287.25 million tons in the first nine months.

Mr Luo Bingsheng vice chairman of the CSIA said that although strong demand in both domestic and overseas market is the major force driving domestic output up but overproduction still exists in Chinas iron and steel industry, especially in those plants that consume high amounts of energy consumption and cause serious pollution.

According to Mr Luo by August 2006, Chinas iron smelting production capacity increased by 6.47 million tons, its steel making capacity was up 3.6 million tons, hot rolling steel capacity increased by 12.8 million tons, and cold rolling capacity jumped 2.7 million tons. Mr Luo said that currently there are 2,074 projects under construction for the whole industry.

(Sourced from Mysteel.net)

NLMKs net profit surges by 64% YoY in January to September

Novolipetsk Steel announced that its net profits, calculated to Russian Accounting Standards, increased by 64% YoY in the first nine months of 2006 to RUB 44.99 billion ($1.67 billion).

Proceeds of NLMK in Q3 increased by 48.1% to RUB 40.042 billion from RUB 27.035 billion in Q3 of 2005. Gross profit grew by 105.6% to RUB 20.214 billion, sales profit rose by 102.8% to RUB 17.541 billion and net income increased by 193.2% to RUB 18.963 billion.

Novolipetsk Steel, which is based in Lipetsk, Central Russia, attributed its quarterly profit growth mainly to an increase in profit from sales due to an improved situation on the world metal products market and the sale of its stake in the KMAruda mining company, based in Belgorod on the Ukrainian border.

Mittal Steel SAs Vanderbijlpark plant reports accident

Mittal Steel South Africa has estimated a loss of about 0.1 million tonnes of liquid steel production at its Vanderbijlpark plant on October 24th 2006. The fire started after one of the supply pipes to a caster no VI released a fine mist of hydraulic fluid, causing a flashpoint and major fire. One person was killed in the fire and two were injured.

The individuals affected were from a subcontractor, FESS, a special company contracted to install and commission fire suppressing equipment for Mittal Steel South Africa at the casters. Mittal SA said that a gas suppression system, which was installed but not commissioned at the time released its content unexpectedly leading to ripping off a routing pipe from its mounting and hitting the contractors in close vicinity of the bottle, causing one fatality and two injuries.

Mittal Steel SA said that it expected that two production units had been affected and that one of them, the Continuous Caster V2 would be back in operation within eight days but Caster VI will only operate again within three to four weeks.

Mittal Steel SA said that it has taken measures to minimize the impact on its customers. It said that is considering diverting exports from its other plant at Saldanha and also importing final products to minimize the effect on the domestic market. Mr Tami Didiza company spokesman said "In the meantime, we will make use of our present capability as a global company to minimize the effect of the incident on the domestic market, even though it will be at a significant cost to the company.

Mittal produced 3.8 million tonnes of liquid steel at its Vanderbijlpark plant in 2005 out of a total of 7.2 million tonnes produced by Mittal Steel South Africa in 2005.

AD actions on rise against Chinese steel export

China's trade surplus hits $15.9 billion in September 2006, with 9 month total amounted to $109.8 billion already exceeding the 2005 figures. Meanwhile, China has realized a steel trade surplus of $1.18 billion in the first eight months from years of deficit in the past. China has become the world's biggest steel exporter for the first time, indeed a dramatic change which took place within one year. It is predicted that steel trade surplus is set to advance at a remarkable race in days to come.

Exports of steel products and semis translate into net crude steel export of 4.03 million tonnes in September, with the full year net crude steel export estimated to reach some 28 million tonnes.
The steel exports hit a record height of 4.07 million tonnes up by 5.44% MoM and 200% YoY respectively and the steel imports slip 36.5% YoY to 1.58 million tonnes 50,000 tonnes less from the previous month. In the first nine months, China shipped out 28.59 million tonnes of steel products up by 81% YoY, leaving net steel export at 14.45 million tonnes.

Global steel community has paid great attention to ballooning steel exports from China, with more of them resorting to anti dumping actions for protecting domestic steel industry. That's why Chinese steelmakers have witnessed rising AD cases during first ten months of this year. Steel producers in other countries have encountered intensifying competition from inexpensive Chinese steel exports and they are concerned that soaring Chinese steel exports may weigh on international price downward sooner or later.

There are 12 AD allegations against Chinese steel exports this year

Source: Mysteel Research Centre

The main cause for AD accusations is surging steel exports from China to countries like Mexico, Italy, US, who all report over 100% growth for Chinese steel imports in the first eight months. China's Steel Exports to Major Destinations during Jan-Aug, 06
Destination volume % growth

Source: China Customs, MRC
In 000 tonnes

Some other countries including South Korea, Japan and EU etc are also paying close attention to surging Chinese exports. South Korea is moving to monitor steel imports, mainly targeting materials from China and expects to set up a monitoring system in November. Japan's steel circle are keeping close eye on rising wire rod imported from China while steel officials from EU have expressed great concerns about flooding Chinese steel imports and suggested possible moves to rein in thick plate imports.

China has lowered the rebate rate for steel exports from 11% to 8% this Sep, when China's steel exports continue strong growth momentum. Mysteel analysts suggest that in order to minimize opposition from global community, China should further reduce the rebate rate on steel exports which will force Chinese steelmakers to lift up their export price and avoid cut throat competition. Moreover, they will be forced to improve product mix for strengthening presence in overseas markets and reduce export of low value added products. At last, as more steel products being diverted to domestic market, those inefficient steel producers would be phased out through intensifying competition. Senior analysts with Mysteel.net suggest that the authority should not give any transitional period for any further rebate cut. Any adjustment to the rebate scheme should be made depending on the actual market response.

(Sourced from Mysteel.net)

Vietnam may stop coal export and start imports in 2015 to meet demand

According to Vietnams Coal and Mineral Group, which has drawn up the strategy on coal industry development for 2006-2015, said that the demand for coal in Vietnam is increasing sharply and it may have to start importing coal by as of 2015.

It said that the consumption level will increase by 18.2% per annum in 2006-2010 and 8.65-10.3% in 2011-2025. In 2006, Vietnam will need 18.8 million tonnes of coal and the figure will rise by 31.8% in 2010, 50.7 million tonnes in 2015, 75.4 million tonnes in 2020, and 118.1 million tonnes in 2025.

Vietnams total reserves of coal are estimated at 3.625 billion tonnes and it is estimated that Vietnam will be exploiting 46 million tonnes per year by 2010, 50 million tonnes by 2015, 57 million to 63 million tonnes, by 2020 and 59 million to 66mil tonnes by 2025.

With the increased demand, Vietnam may have to import coal as of 2015. The total imports will be around 3.4 million tonnes in 2015, 19.7 million tonnes in 2020, and 57.4 million tonnes in 2025.

Vietnam is now a big coal exporter in the world. The coal export growth rate reached 20.4% per annum in 1995-2005, from 2.78 million tonnes to 17.88 million tonnes. Vietnam plans to gradually reduce exports and stop exporting in some years. Vietnam will export 12 million tonnes of coal per year by 2010 and 5 million tonnes by 2015. No exports will be made after 2015.

Rautaruukki Q3 profits up YoY

Rautaruukki has reported that its third quarter pretax profit was Euro 141 million up from Euro 112 million in Q3 of 2005. Its sales for the quarter came in at Euro 885 million as against Euro 812 million in Q3 of 2005.

By division, the group's construction unit recorded an operating profit of Euro 33 million as against Euro 39 million a year ago. Company said that profitability in the unit was weakened by the rise in the price of zinc, which is used in color coated products. Operating profit for the engineering unit rose to Euro 28 million from last year's Euro 23 million due to a stronger order book. Operating profit for the metals unit fell to Euro 69 million from Euro 89 million in the previous year.

Third quarter steel production rose to 765,000 tonnes from 725,000 tonnes a year earlier.

Mr Sakari Tamminen CEO said The market situation has remained robust in the third quarter. There was continuing strong demand within construction, and deliveries to the engineering industry grew. Demand for standard and special steel products held up well and prices of steel products rose further.

Low zinc stocks may constrain consumption

Teck Cominco forecast that world zinc stocks will contain only 11 days of supply by the end of this year and may sink so low that it could constrain metals consumption.

Mr Mike Agg VP Refining & Metal Sales for Teck Cominco said that the shortage of zinc concentrates is already limiting global metal production, as the globally tight concentrate market continues through 2006 and 2007, as a result the deficit will cause the drawdown on zinc stocks to continue and could actually constrain metals consumption.

Mr Agg noted that only 18 days of total global zinc stocks remained at the end of September. London Metals Exchange stocks have fallen 73% so far this year to only 3.8 days of global consumption. Mr Agg explained that zinc spot premium prices are rising in most markets as the strong demand is outstripping supply. He said Global zinc demand is up 5.5% in the Americas, 5.7% in Europe and 4.9% in Asia, as of the end of August.

CISA calls for government guidelines for steel industry consolidation

Mr Luo Bingsheng vice chairman of the China Iron & Steel Association said that as consolidation of China's iron & steel industry directly affects profits of each province and city, Chinese government should map out relative policies to help solve problems during the process of iron & steel industry's consolidation.

Mr Luo pointed out "Weak and lax cooperation of medium and small-size steel makers have already severely hindered the coming iron ore price talk. We should speed up consolidation; otherwise, Chinese steel makers' competitive edge would be weakened and are even likely to be nibbled to death."

Though China still boasts prosperous demands for steel and Chinese steel makers remain an output growth of some 20% during the first 9 months with improvements on energy savings as well as pollution reduction, plus obviously rising exports, the low concentration degree of China's iron & steel industry has not solved yet.

(Sourced from Mysteel.net)

Algoma Steels Q3 net up despite higher costs

Algoma Steel Inc has reported net income of C$59.5 million for the three months ended September 30th 2006 as compares to net income of C$79.2 million in the second quarter of 2006 and C$30.8 million in the third quarter of 2005. EBITDA for the third quarter was C$112.3 million compared to C$124.1 million in the second quarter of 2006 and C$62.8 million in the third quarter of 2005.

It said that the decrease in net income compared to the previous quarter of this year was due mainly to higher costs mainly of coal and a higher provision for income taxes, partially offset by higher prices.

Mr Denis Turcotte president and CEO said "Results were in line with our expectations as demand and pricing remained solid through the quarter. Early indicators are that demand from service centers and the auto sector will continue to be soft through the fourth quarter as these customers try to work down their inventories. This will result in pressure on pricing and, as required, a corresponding reduction in our sales volumes as we maintain our focus on profitability. Although we are concerned that the current market weakness may extend into the new year, we continue to be optimistic about the mid and longer term dynamics of the industry."

IMSA starts plans to buy back 12% shares in market

Mexican steel maker IMSA announced that it has started the paperwork to buy back almost 12% of its stock that is in public hands for 3.127 billion pesos ($290 million).

If the offer pans out and is taken up by IMSA shareholders, the Canales family would own 100% stock of IMSA and would have effectively delisted the shares from the Mexican stock exchange.

Nucor acquires assets of Verco Manufacturing

Nucor Corporation announced today that its wholly owned subsidiary, Verco Decking Inc, has completed the purchase of substantially all of the assets of Verco Manufacturing Company for a cash purchase price of approximately $180 million, subject to post closing adjustments.

Verco produces steel floor and roof decking at Phoenix in Arizona, Fontana in California and Antioch in California. Nucor's Vulcraft Group is the largest U.S. manufacturer of steel deck. With the addition of the Verco facilities, Nucor's total annual deck capacity will exceed 500,000 tons.

Mr Daniel R. DiMicco chairman, president and CEO of Nucor said "Verco is an excellent addition and complement to our existing Vulcraft group. We are looking forward to expanding our reach to the western US deck market.

Rocky Mountain Steel may setup a new rail mill at Pueblo

It is reported that US Rocky Mountain Steel Mills is studying the possibility of setting up a new rail plant in Pueblo and that if the new mill is set up, it will replace the companys current mill and will be the first US mill with the capability of producing 480 foot long rails.

Mr Robert Simon VP of Rocky Mountain Steel said Were doing a study. It's by no means a done deal. There are lots of drivers." He added that some parts of the current mill dates back as far as the 1920s and 30s. The mill currently has the capability to produce rails of up to 80 feet.

Strike at Kumbas Rosh Pinah mine in Namibia

It is reported that workers at Kumba Resources' Rosh Pinah zinc and lead mine in southern Namibia are pinning their demands for wage increases on buoyant lead and zinc prices and increased production, as a work stoppage entered the fourth day. Wage negotiations are deadlocked and the workers, who went on strike on Sunday, are threatening that they will not budge until their demands are met.

Workers downed their tools after 333 of the 363 Mineworkers Union of Namibia members at the mine voted in favor of the strike. Union members represent 79% of the workforce at the mine.

The workers are demanding a wage increase of between 12% and 14% depending on a worker's grade. The workers are also demanding relocation allowances for retired workers and a housing subsidy.

Mr Trevor Arran of Kumba said that the company is offering a nine percent increase for workers in the lower grades and an eight percent increase for those in other grades. He said "Our offer is fair and reasonable and we will continue negotiating with the union to reach a mutually acceptable agreement.

Rosh Pinah mine's annual production for zinc and lead in concentrates is around 70,000 tonnes and 28,000 tonnes respectively. The zinc concentrate is processed by Zincor's electrolytic refinery in Springs, South Africa. An extended strike at Rosh Pinah could further affect extremely tight world zinc and lead and zinc supplies.

Teck Cominco net earnings double in 9 months

Tech Cominco has announced that its third quarter earnings were $504 million up from $405 million a year ago and EBITDA were $874 million in the third quarter compared with $611 million a year ago.

The net earnings for January to September 2006 are $1.6 billion, almost double the net earnings of $835 million in the first nine months of 2005.

Mr Don Lindsay president and CEO of Tech Cominco said. We did ship all of our Red Dog concentrates during the 2006 shipping season, however poor weather conditions delayed the loading of vessels and the timing of shipments resulting in the shifting of some of Red Dog's sales from the third quarter into the fourth quarter of this year and the first quarter of 2007.

Chinese coal exports declining amid domestic price rise

Chinas National Development and Reform Commissions latest reports indicate that China's coal price is continuing to rise while export declined in September.

NDRCs reports show that in coal consuming coastal areas the per tonne price of coal went up an average of RMB 5 in September. The per tonne price of coal for power plants increased to RMB 515 to RMB 525 in Guangzhou and RMB 505 to RMB 515 in Shanghai and Ningbo by the end of September.

According to the report, as the price increased, coal exports fell in September. Coal exports fell by 9.1% YoY to 4.93 million tons in September and the figure for the first nine months was 47.22 million tons down by 12.8% YoY.

NDRC attributes the price hikes to rising transportation cost and market demand, fueled by heavier dependence on coal by power plants and preliminary stockpile for heat supply in the coming winter season.

China's coal output in the first nine months totaled 1.57 billion tons up by 8.4% YoY.

Gerdau Ameristeel completes acquisition of stake in Pacific Coast JV

Gerdau Ameristeel Corporation announced that it has completed the acquisition of a controlling interest in a newly formed JV with Pacific Coast Steel Inc and Bay Area Reinforcing. The purchase price for the interest in Pacific Coast Steel was approximately $104 million in cash. Gerdau Ameristeel funded the transaction with available cash on hand.

The venture, to be called Pacific Coast Steel, comprises one of the country's largest reinforcing steel contractors, specializing in the fabrication and installation of reinforcing steel products across a variety of construction projects throughout California and Nevada. Additionally, the venture operates four rebar fabrication facilities in California, including San Diego, San Bernardino, Fairfield, and Napa, with a combined capacity in excess of 200,000 tons per year.