November, 29 2006
SAIL to invest INR 10,000 crores in ISP
Steel Authority of India Ltd today said that it would invest around Rs 10,000 crore for modernizing the IISCO Steel Plant besides modernization of the Durgapur based Alloy Steels Plant.
Mr SK Roongta chairman of SAIL while speaking to reporters on the said lines of Metals-2006 conference said that the expansion and modernization program of ISP would involve cost of around INR 10,000 crore in a span of 3 to 4 years to add a capacity of 2.5 million tonne.
Different packages for the ISP modernization program have been finalized and global tenders floated. Under the modernization program a new blast furnace would be installed besides finishing mills.
Mr Roongta also said that the company has already taken steps to modernize the Durgapur based ASP and that the plant's finishing capacity would also be upgraded.
TATA Steels plans for expansion at Jamshedpur on track
Irrespective of the outcome of the Corus deal, TATA Steel is determined to go ahead with its plans in India including raising capacity at its existing plant in Jamshedpur from 4.8 million tonnes to 10 million tonne by 2010.
Dr T Mukherjee deputy MD steel while speaking to media on sidelines of Metals 2006 said We will go ahead will all our plans in India, irrespective of the outcome of the Corus deal.
TATA Steel is planning to complete expansion of the plant at Jamshedpur by 2007 to take its capacity to 6.8 million tonne without adding a single blast furnace but mostly for long products. Dr Mukherjee said The 6 existing furnaces will be enhanced so as to meet the new requirements.
Dr Mukherjee added We are fully prepared to take up a further expansion at Jamshedpur to raise capacity to 10 million tonnes. We expect to complete it by 2010 mostly for flat products. Mr Mukherjee said that By 2010, the product mix at Jamshedpur is likely to be 65:35 in favor of flats products.
Indian coal imports to rise to 50 million tonne by 2011
Indias Planning Commission estimates that India will have to import at least 50 million tonnes of coal per annum by the end of the 11th plan period as compared to 10 million tonnes at present.
Mr Kirit Parikh member energy in planning commission said that the country has explored only 50% of its potential coal reserves, which will not be enough to cater to the growing demand by the various infrastructure sectors including power.
Mr Parikh said the rate of Coal Exploration in India has been increasing at the rate of 5% and at this rate India may run out of our reserves in the next 45 years and the domestic mining will have to increase to counter. He said "The country mines only 500 million tones of coal every year which will have to go up to anywhere between 1.7 billion to 2 billion tonnes in the next 25 years.
TATA Steels offer for Corus valid
In its first official comment on the Corus deal since a rival bid came up, TATA Steel said that its offer for buying out Corus remains valid in spite of a counter bid from CSN.
Dr T. Mukherjee deputy MD Steel of TATA Steel while speaking on the sidelines of a metal seminar said "We have made an offer for Corus on October 20. That remains valid."
Dr Mukherjee did not comment to questions about TATA Steels revised offer to match the CSN offer.
Spot Indian iron ore prices in China firm up
Chinese spot ore market remains flat operation with slightly climbed price for low grade ore amid nice spot ore transaction volumes.
At Tianjin Port transaction price stands at RMB 645 per tonne for imported 63.5% ore fine; RMB 660 per tonne for 66% Indian origin ore fine. Quotation is posted at RMB 510 per tonne for 58% Indian origin ore fine.
At Rizhao Port 64.78% Brazilian origin crude ore is traded at RMB 665 per tonne, 63% Indian origin ore fine at RMB 680 per tonne (dry basis) and 58.7% Indian origin ore fine at RMB 495 per tonne.
At Lianyungang Port for Indian origin ore price is offered at RMB 650 per tonne for 64% ore fine, RMB 490 per tonne for 58% ore fine and RMB 500 per tonne for 58% lump ore.
On the other hand, Indian offer also begins to go up, citing as high as $ 55 per tonne FOB offered at west coast of India for 63.5% ore fine.
Against such a backdrop, ocean freight rate trends up. Currently the ore route from West Indian coast to China's Tianjin port is posted at $ 20 per tonne.
(Sourced from Mysteel.net)
JSPLs contract for El Mutun likely in December Report
Reuter has reported that Bolivian government said that it would sign a contract next month with Jindal Steel and Power to develop El Mutun iron ore deposits.
Mr Carlos Villegas energy minister of Bolivia was quoted as saying by state news agency ABI that "We hope to be able to sign the contract between December 15 and 20. We still have a few weeks for the technical teams to draft the final contract.
The contract signing ceremony has been delayed after signing MoU in June 2006 due to finalization of minor details for the El Mutun project.
BCCL finalizes master plan for Jharia rehabilitation
It is reported that Coal India Limiteds subsidiary Bharat Coking Coal Limited in association with the Jharkhand Government has finalized the master plan to rehabilitate the endangered population of about 80,000 families of Jharia in the non coal bearing areas of Dhanbad district.
As per the latest revised master plan, prepared by BCCL a total of 79,159 houses are to be constructed within a decade of which 25,000 will be provided to families working with the coal company. While 29,444 houses will be constructed for non BCCL population residing in the endangered areas of Jharia coalfields, another 23,846 will be for those living on the encroached lands of company for many years.
TATA Steels Noamundi iron ore mine wins safety award
TATA Steel's Noamundi Iron Ore mine won the first prize for overall performance in the Highly Mechanized Iron Ore Mines category, in the 44th Annual Mines Safety Week Celebrations 2006 for the Chaibasa region. The event was organized by the Directorate General of Mines Safety.
TATA Steel won the first prize for overall performance for the third consecutive year. It also won 20 awards in the group events and 24 awards in the individual events.
In the fortnight long Annual Mines Safety Celebrations, 172 mines from six districts of Orissa and Jharkhand participated.
Raw materials to shape global steel consolidation MEPS
UK based MEPS has said that the increases in the cost of steelmaking raw materials are driving many of the efforts at mergers & acquisitions that are reshaping the global steel industry and that the production of crude steel is gradually migrating away from the major steel-consuming regions, and into those countries that are rich in raw materials.
MEPS said that iron ore today costs more than twice as much as it did three years ago with the annual contract price widely tipped to go up again in 2007 perhaps by as much as 10% and that coal prices have also increased. MEPS said that this puts raw material availability further up the list of strategic priorities facing steel industry executives and companies with access to their own ferrous raw materials find themselves increasingly able to dictate terms.
MEPS attributes this rational behind some of merger & acquisition deals & offers in global steel industry in the recent times.
1. TATA Steels offer to buy 3 times bigger Corus due to rationale for eventual supply of slabs produced in India from captive iron ore at up to half the cost of UK produced slab.
2. Rival bid for Corus by CSN, which may eventually supply 100% of Coruss iron ore requirements from its own mine as well as providing low cost slabs at some point in the future.
3. Evraz and the Oregon Steel Mills deal also has a similar raw material connection as Evraz wants to supply slabs produced cheaply in Russia from the companys own iron ore to Oregons plate mill with aim is to widen profit margins for Oregons plate and pipe making operations. MEPS said that this would be the main rationale for the merger and the fact that it would create the worlds largest rail producer may be a secondary consideration.
4. Access to iron ore reserves in Ukraine was a major factor behind Mittal Steels acquisition of the Krivoy Rog steelworks a year ago.
5. Arcelors competitive operations in Brazil based on supplies of cheap iron ore were certainly one of the reasons why Mittal Steel was attracted to Arcelor.
6. MEPS also said that ThyssenKrupp, Baosteel and Dongkuk are involved in slab projects in Brazil and POSCO and Mittal Steel have similar ventures in India.
MEPS said that steel production is not likely to see much future growth in western industrial countries which do not have the advantage of natural resources and where steel consumption is not expected to grow very much. Producers from the industrialized countries are increasingly switching their crude steel making operations to low cost regions. MEPS expect this trend to continue while raw material costs stay high.
US steel service centers inventories up by 32.3% YoY in October
US Metals Service Center Institutes Metals Activity Report for October indicates that US service center steel inventories reached 16.8 million tons by Halloween, up by 32.3% from the end of October 2005 and 1.2% higher than at the end of September 2006. Expressed in terms of months supply on hand US service center steel inventories declined to 3.6 months from 3.8 months in September. On a seasonally adjusted basis US steel inventories have remained at 3.7 months supply on hand for the last two months.
Canadian service center steel inventories declined to 1.38 million tons, up by 37.1% YoY as compared to October 2005 but down by 6.2% as compared to September 2006. At current shipping rates, Canadian steel inventories represent a 4.1 month supply down by 9.7% from the end of September.
Steel inventory cycles tend to last roughly two years which means that inventories typically grow for about 12 months and then decline for the subsequent 12 months. Since December 2005, when inventories began to build, monthly additions to US service center stocks have averaged 410,000 tons, peaking at 674,000 tons in September with Octobers additions to inventory were only 195,000 tons. If historic patterns hold true, steel inventories at US metals service centers have peaked and may begin a slow decline in the coming months.
CISA dismisses AD actions against Chinese HRC in EU
The overseas media has reported that EU steel mills are mulling over possible anti-dumping allegations against Chinese hot rolled coil imports. Mysteel has confirmed that with CISA and was told that CISA is having smooth communication with Eurofer and unaware of any anti dumping complaint to be filed by EU mills against Chinese HRC.
The overseas media reported that Eurofer is preparing a case against hot-dip galvanized imports from India and could move against Chinese hot rolled coil next.
In the first nine months of 2006, Chinese HRC import volume into European markets rose by 250%. However, these imports are arriving mostly in Italy and Spain, where they are destabilizing prices, cited by the media. North European stockiest said they have not felt the impact of increased imports from China so far.
A trader said that proving dumping will be difficult, as the difference between import and domestic prices is not large enough especially in view of the strong financial results of EUs domestic producers.
(Sourced from Mysteel.net)
Major fire hits MMK killing one person
Reuters has citing emergency services reported that a major fire hit Russian Magnitogorsk Steel Plant killing one person and hurting several more.
A regional spokesman for the emergency ministry told Reuters "One of the workshops of the Magnitogorsk steel plant is on fire." The spokesman added that one person had died and eight had been hurt. A spokesman for the emergency ministry was quoted by the RIA news agency as saying that "The fate of five people is still unknown.
RIA reported that the fire started at 7.30PM and spread to an area of about 1,000 square meters and has pulled down the roof of the plant. The cause of fire and further details of damages are not available as yet.
MMK produced 11.4 million tonnes of crude steel last year and posted a net profit of $947 million.
AISI sees all time high yearly steel imports in US during 2006
American Iron and Steel Institute, based on preliminary Census Bureau data reported that the United States imported a total of 3.823 million net tons of steel in October 2006, including 3.082 million net ton of finished steel down by 2% and 0.9% respectively as compared to Septembers final data and that the year to date imports in these categories are now up by 45% and 46% respectively as compared to the same period in 2005.
China was the single largest source of steel imports to the United States at 596,000 net tons. Imports from China were 338% higher in October 2006 than in the same month last year and at their present pace, will exceed 5 million tons this year.
Key products with large increases in October compared to the month before include steel piling at 407%, tin free steel at 39%, tin plate at 34%, line pipe at 29%, plates in coils at 27%, OCTG at 18% and sheets & strips all other metallic at 13%.
AISI said that on an annualized basis, based on YTD 2006 imports, total and finished steel imports at 46.5 million net tons and 36.8 million net tons respectively would set all time records easily in 2006 surpassing the previous record of 41.5 million net tons and 34.7 million net tons set in 1998.
The rise in YTD 2006 imports compared to the previous year remains pronounced for Thailand up by 165%, China up by 125%, South Korea up by 61 percent% and Russia up by 106%.
WBMS estimates 94,000 tonnes shortfall in refined nickel in 9 months
The World Bureau of Metal Statistics estimates that the production of refined nickel in the first 9 months2006 was only fractionally above the year earlier level although there were increases in European and Canadian output which were largely offset by lost production in Oceania.
WBMS estimates that world demand grew by 65,000 tonnes per year YoY during January to September 2006 and it calculates a production & consumption deficit of 94,000 tonnes in the first 9 months of this year.
CSN outlined pension proposals to Corus trustees Report
AFX, citing trade union sources, has reported that Companhia Siderurgica Nacional has already outlined its pension proposals to Corus Group's trustees at a meeting held last Thursday.
The report cites a union source as saying that A small sub group of two employer nominated trustees and two employee nominated trustees met with CSN representatives on Thursday last week. A full meeting of all Corus pension trustees has not been initiated so far.
The source however mentioned that TATA Steel had also met this sub group of trustees before making its formal offer and later held a full meeting of all pension trustees after it made a formal offer for Corus adding that 'Given this, it is logical that CSN will take a similar route.
Under the UKs Pensions Act of 2004, a change of control of a scheme sponsor is a notifiable event which must be reported to the UK's Pensions Regulator. As a result, trustees of defined benefit schemes will play a more significant role in the negotiation of certain transactions. They are required to take steps to ensure pension promises can, and will be, fully paid and this often means such moves as the injection of cash or the provision of other collateral.
Aztec board finally accepts Mt Gibsons bid
The long drawn takeover battle between Australian iron ore juniors Mount Gibson Iron and Aztec Resources appears to be over, with the Aztec board announcing that it would unanimously recommend to its shareholders to accept the 3 for 1 Mount Gibson scrip offer after Mount Gibson crept over 54% on its share registry. The recommendation marks a sudden change of tune by Aztec.
Mount Gibson launched its takeover bid in July, offering one Mount Gibson share for every three Aztec shares, valuing Aztec at about $248.2 million. Mount Gibson currently controls about 54.14 per cent of Aztec and the takeover offer is scheduled to close on December 6.
Mr Luke Tonkin CEO of Mount Gibson said that Aztec would fit in well with Mount Gibson's strategy of growing its hematite business but ruled out further consolidation of the iron ore sector for consolidation's sake. He said "Some of the small juniors out there would probably like us to rationalize their business and we would pay a premium for them because they are already overheated. I think there is a lot of opportunity for future growth through merger and acquisitions, but it needs to be done at the right time, the right place and with the right players."
Mr Peter Bilbe MD of Aztec said that with Mount Gibson gaining control of Aztec, the board needed to make a rational commercial decision. He said "We came to a clear conclusion, we think it is in the best interest of our shareholders. Mr Bilbe said that the effective value of Mt Gibson's scrip offer had increased from 26.3 to 28.6 a share as a result of recent movements in Mt Gibson's share price.
Partly as a result of the scrip takeover, Mt Gibson has three substantial foreign shareholders Russia's Gallagher Holdings, Hong Kong's Sun Hung Kai Investment Services and China's Shanghai Merchant Holdings.
Mount Gibson produces about 3 million tonnes per annum from its Tallering Peak operation in Western Australia and Aztec holds the Koolan Island operation off the coast of WA. Koolan Island is expected to come into production this month at a rate of 4 million tonnes per annum.
MCC denies bid for Ziscosteel
Chinas state owned Metallurgical Group Corp clarified that it has not made a bid for Zimbabwe Iron & Steel Company. An official with MCC's overseas investment department said "There's no such thing. We haven't bid for it at all."
Government run Herald newspaper, citing Mr Christopher Mutsvangwa Zimbabwe's Ambassador to China, had reported that the Metallurgical Corporation of China had put in a $3 billion offer for a 60% stake in troubled Ziscosteel and was waiting for a response from Harare.
BHPB sees high run for commodities prices
BHP Billiton has reiterated that while it expects global rates of growth to slow its global economic outlook is positive and commodity prices would remain high.
Mr Don Argus chairman told shareholders of BHP at the company's annual general meeting in Brisbane that growth in North East Asia would be a big driver of the global economy. He said "While rates of growth around the world are likely to slow from the very strong levels we've seen, we still view the global economic outlook as positive."
Mr Argus repeated that the risks to the mining giant's outlook were unchanged escalating geopolitical tensions, supply disruptions and high energy prices, and the likely outcome ns an extended period of high cyclical prices for commodities.
Mr Argus also commented on the slowdown in the US economy. "Clearly, the US economy is slowing from the rapid growth experienced earlier in the year, but we expect any slowdown to be offset, to an extent, by increased demand in Japan and Europe. These factors, together with low inventory levels, means that the demand outlook for commodities is encouraging."
Bekaert plans investment at Zwevegem in Belgium
Belgian steel cord and wire manufacturer Bekaert NV announced that investment plans of EUR 18 million in its advanced wire products plant at Zwevegem in Belgium.
Bekaert said that With this investment in Zwevegem we will pursue our sustainable profitable growth in applications based on stainless steel wires and thus better serve our customers in these rapidly growing markets.
Mechel profits surge by 18% YoY during January to September
Mechel announced that its net profit increased by 18% YoY during January to September 2006 citing greater efficiency and ongoing market recovery. Mechel's net profit rose to $372.1 million in the first nine months from $314.7 million in January to September 2005. Revenues increased by 7.9% YoY to $3.14 billion from $2.91 billion and EBITDA increased by 17.5% to $668.5 million.
Mr Alexey Ivanushkin COO of Mechel in a statement said "The third quarter of 2006 was the best quarter in Mechel's history, as we achieved outstanding financial and operating results. For the second consecutive quarter, we reported significantly improved performance, demonstrating our ability to execute on our strategy of improving the overall efficiency of our operations. We also benefited from the ongoing recovery we've seen in our markets, increasing production volumes to meet growing market demand. Moreover, we are now confident that our performance over the full year will show substantial improvement over last year's levels, as consolidated net profit for the nine months is already close to the result of the whole last year."
Mr Vladimir Iorich CEO of Mechel during teleconference with investors said Mechel's iron ore output was on track to reach record production levels of 5 million tonnes this year, a goal originally targeted for 2007, while the company also capitalized on unusually high nickel prices. He said "In 2007, we expect a stable environment for our main products, and we remain committed to our strategy of increasing sales volumes, controlling costs and tapping new markets to enhance the mining segment's performance in the future.
Mechel said its capital expenditure stood at $344 million in the first nine months of 2006, of which $207 million was invested in the mining segment and $137 million in steel. Mechel changed its development strategy in March by announcing that the bulk of its capital investments would be diverted from steel to its more profitable mining division.
AK Steel & IAM to meet on December 1st
AK Steel announced that it will meet the negotiators of International Association of Machinists on December 1st for a bargaining session, due to a request made by IAM.
The company and union met last on November 16 in which they remained far apart on key issues.
IAM Local 1943 represents about 1,800 hourly workers at the Middletown based steel plant, where workers have been locked out of since March 1st 2006 when their labor contract expired without a new deal in place.
Lundin takes 10% stake in Canadian Mantle Resources
Swedish zinc lead producer Lundin, which has recently merged with EuroZinc Mining, said it has entered into a financing arrangement with Canadian junior Mantle Resources, which will give it a holding of just under 10% for an investment of C$2.87 million.
Mr Neil OBrien VP of exploration for Lundin Mining said This investment gives us an opportunity, through Mantle, to participate in the exploration and advancement of properties that hold very exciting potential and which are located within an emerging premier zinc lead district.
Mantle is focused on exploring the Akie zinc lead deposit in British Columbia, in which it holds a 65% earning interest.
Viz Stal to increase CRGO output by 10% in 2006
Interfax has reported that Russia's second biggest producer of grain oriented electrical steel VIZ-Stal plans to increase steel production 10% to 200,000 tonnes this year.
Mr Valery Shevelev GD of Viz-Stal told Interfax plans to produce around 180,000 tonnes of transformer steel and 20,000 tonnes of dynamo steel. Mr Shevelev also said that the plant is not planning to increase output any further in 2007.
Mr Shevelev said that the plant's main priority was to enhance the quality of its steel to enable it to compete on the world market. Mr Shevelev said the plant was modernizing capacity, but he did not say how much it was investing.
VIZ-Stal was bought by Novolipetsk Steel for $550 million in August and controls around 56% of Russia's transformer steel market and 11% of the world market.
Ukraine and EU plan a new gas pipeline from Central Asia
As per reports in Ukrainian Forum citing Mr Mykhailo Honchar VP of of the Strategy 1 foundation & former deputy chairman of UkrTransNafta, Ukraine and the European Union are planning to construct a new gas pipeline from Azerbaijan to Ukraine on the Black Sea floor.
The pipeline is supposed to run along the Shahdeniz - Baku - Supsa route relying on the infrastructure of the existing Baku - Tbilisi - Erzurum pipeline. In the vicinity of Supsa the branch will turn toward the Black Sea and will run to Feodosiya on the sea floor and then to Ukrainian mainline gas pipelines via Crimea. The minimal cost of the first stage of 700 kilometers on the sea floor is $2 billion.
As per reports, the project is being elaborated by the Georgia - Ukraine EU (GUEU) consortium which consists of consulting and engineering companies.
ChTPZ starts shipment of pipe nodes
ChTPZ Group has announced that its Connecting Branches of Pipelines shipped the first batch of pipe nodes to consumers in November. The unit's projected capacity in the first phase is 6 thousand pipe nodes per annum.
Pipe nodes are finished structures assembled at the plant from separate components. Until recently pipe line contractors had to assemble the nodes just on the route and with this program the time of delivery and assembling is reduced.
TMKs Taganrogs pipes conform with TUV NORD Standards
Pipe Metallurgical Company TMKs subsidiary Taganrog Metallurgical Works has completed a planned audit of TUV NORD in which an expert from Germany checked samples of water and gas carrying pipes made by Tagmet for conformity with the standards currently in effect in the European Union.
TMKs release mentions that based on the results of the check, the products of Taganrog Metallurgical Works were deemed compliant with the requirements of the following standards
1. DIN/EN 10210
2. DIN/EN 10216
3. DIN/EN 10255
4. DIN/EN 10240
5. AD2000-MERKBLATTWO/TRD100
6. Direktive 97/23 EC
Toledos Philippine Ni JV Borang gets approval for full scale mining
UK listed junior Toledo Mining Corporation said that the Berong nickel project in the Philippines has been issued a special mines permit by the Department of Environment and Natural Resources, allowing it to begin full-scale commercial mining.
Berong is a JV between Toledo Mining, local producer Atlas Consolidated Mining & Development Corporation and Investika Ltd. Its current activities are focused on the extraction of a bulk metallurgical sample of approximately 45,000 WMT at a grade of approximately 1.7% nickel. To date, approximately 20,000 WMT of ore has been mined.
Toledo said that progress has been slower than anticipated because of heavy rains associated with the typhoon season and that this should change with the approaching dry season.
The bulk metallurgical sample will be shipped to Hainan Yulai Steel, a Chinese stainless steel producer. Commercial mining operations will now commence immediately with an export target of 1 million wet tonnes set for the first year of operations.
Indonesia lifts import duty & coal export tax
To attract investors to put their money in Indonesia's vast energy resources, the government has lifted import duties on goods and equipment for oil and gas exploration and production as well as export tax on coal products.
The import duty exemption for equipment and goods used in the oil and gas upstream sector is given to oil and gas companies that operate under production sharing contracts with BP Migas, the regulatory body for oil and gas exploration and production, said English daily The Jakarta Post.
The equipment and products exempted from import duties include those used for drilling and production, transportation, power generation as well as workshop equipment, electrical tools, valves and fitting tools, building materials, metal, hardware and packing equipment, paints, oils, chemicals and laboratory equipment, medical equipment and supplies, household and office appliances.
According to the Finance Ministry's ruling, the exemption came into effect on October 16th 2006 and will be valid until July 15th 2007. Related companies wishing to take the advantage of the import tax exemption should report their import plans for at least a year to the office of the director general of excise and customs.
In addition to the abolition of the import duty, the Finance Ministry also removed the 5% tax imposed on coal exports which was introduced several years ago to protect the coal supply at home.
(Sourced from Mysteel.net)
