November, 08 2006
Indian government likely to revise steel production targets
Indian government may revise the steel production target set in the National Steel Policy due to great rush from both domestic as well as global players to install steelmaking capacity in India. NSP had targeted achieving a steel production capacity of 65 million tonnes by 2011-12 and 110 million tonnes by 2019-20 from the present level of about 41 million tonnes. As per reports, a steel ministry document has even estimated that India could have 180 million tonnes of annual steel manufacturing capacity by 2019-20.
Mr Ram Vilas Paswan union minister of steel while speaking on the sidelines of the 2 day Economic Editors Conference said The scenario in the sector has changed dramatically in last two years. Demand in the domestic market has increased and there is still a lot of potential for future growth. Mr Paswan said that the outlook for the steel industry remained robust with the sector registering over an 8% growth in the first quarter of the current fiscal.
He said A number of steel majors like Arcelor Mittal and POSCO are making a bee line for India and a total 116 MoUs have been signed with an intended capacity of 150 million tonne and an investment of INR 357,000 crore. He said that production of steel is set to overtake all the earlier targets and will touch 80 million tonnes by 2011-12, a 23% jump over the earlier projection of 65 million tonnes.
Mr Paswan also informed that The steel ministry has decided to entrust its economic research unit to prepare a plan for addressing infrastructure requirements of the steel sector in view of the massive expansions plans announced by both public and private steel utilities.
TATA Corus to regain margins in 4 to 5 years
TATA Steel expects to regain its margins in the fourth or fifth year after its takeover of Corus Group.
Mr B Muthuraman MD of TATA Steel told the Financial Times in an interview that TATA Steel will return to its average margin of about 30%in four of five years time based on EBITDA as against estimate of the combined TATA Corus margin 17% today. Mr Muthuraman said We will be able to return to around 30 %at normal prices.
The report mentions that Mr Muthuraman declined to elaborate on how TATA Steel will rebuild its profitability, saying only that there would be synergies a combination of higher sales and lower costs as a result of combining the two groups activities in fields such as procurement, marketing, maintenance and other areas, including tinplate production.
SAILs Chiria mines conflict with Jharkhand to be over by year end
Mr Ram Vilas Paswan union minister of steel while speaking on the sidelines of the 2 day Economic Editors Conference said talks are on and a settlement is in the offing for Chiria iron ore deposits of SAIL in the state of Jharkhand.
Mr RS Pandey secretary steel, after a 2 day visit to the Jharkhand said that SAIL has offered to set up a greenfield facility to strengthen its claim for the mines and the modalities for a MoU are being worked upon. Mr Pandey said Talks with the new state government in Jharkhand have been positive so far and there should be a breakthrough in the matter before the end of this year.
NTPC to adopt multi pronged growth strategy
Indian power major NTPC Limited plans to adopt a multi pronged growth strategy to achieve its ambitious plan of achieving 75,000 MW power generation capacity by 2017 to become a world class integrated power major.
Mr T Sankaralingam CMD of NTPC while addressing the employees on the 31st raising day of the company informed that the company is entering into new areas of growth by taking up challenging projects in the Hydro sector, coal mining, oil exploration and also nuclear generation in the XIIth plan.
NTPC is Indias largest power generating company with 14 Coal based, 7 Gas based and 4 JV power projects having a total installed capacity of 26,404 MW.
Mr Paswan announces mines for KIOCL
Mr Ram Vilas Paswan union minister of steel while speaking on the sidelines of the 2 day Economic Editors Conference announced that a revival plan of Kudremukh Iron Ore Company Limited has been worked out in cooperation with the Karnataka government.
Under the plan, half of the Raman Swamy mines with the state government would be given to KIOCL to run its pellet plant. Besides, the companys dispute with NMDC over Kumaraswamy mines would also be resolved so that iron ore mines could be provided to KIOCL to resume its work.
As per a Supreme Court order, all work on the KIOCLs mines in Kudremukh has been suspended with effect from December 31st 2005.
SBICAP to syndicate funds for DVCs power projects
It is reported that West Bengal owned Damodar Valley Corporation has signed a MoU with SBI Capital Markets Limited to syndicate funds for undertaking power projects to the tune of 3500 MW.
DVC has decided to set up additional generating plants to supply power at competitive rates to utilities outside its command area that comprises of several districts in the states of Jharkhand and West Bengal. It utilizes ample coal reserves available in the area to generate power at extremely competitive rates for supply to the industries and utilities.
DVC currently has an installed capacity of 2796.5MW consisting of 5 thermal power stations, 3 hydel power stations and 1 gas turbine station. DVC's has planned capacity extension by 4500 MW during the 11th Plan Period. DVC has also planned for capacity addition of 1000 MW through JV with TATA Power and another 500MW through its existing JV Company with Steel Authority of India Limiteds Bokaro Steel Plant.
Goodearth to setup a shipbuilding facility at Cuddalore
Business Line has reported that Chennai based Goodearth Maritime plans to build a shipbuilding yard at Cuddalore in Tamilnadu at a cost of INR 1,000 crore and has filed an application with the Tamilnadu Maritime Board for the project. The first phase would entail investment of INR 500 crore from institutional funding and company's internal accruals.
Mr PB Anandam chairman told BL that the shipyard was planned for building very large crude carriers. TMB would facilitate operations of the project and after the state government's approval the project would go to the centre for its consent, including environment clearances.
Goodearth Maritime had earlier engaged Korea Maritime Consultants to do a pre feasibility study of a shipbuilding yard at Tuticorin and is going with them for this project also. Goodearth has invested around Rs 1,400 crore to get ships built at Hindustan Shipyard Ltd in Visakhapatnam.
9 agreements signed for CBM blocks exploration
Subsequent to the approval granted by Indias Cabinet Committee on Economic Affairs on September 29th 2006 for award of 10 coal bed methane blocks, 9 contracts have been signed as agreement for one block with BP of UK could not be firmed as yet.
The details of the agreements signed are as under
1. The consortium of Mr Anil Ambanis Reliance Natural Resources Ltd-Reliance Energy Ltd-GeoPetrol International Inc signed production sharing contracts for 4 blocks. While RNRL would look after exploration side, REL would be responsible for utilizing the CBM for power generation. GeoPetrol is the operator of the consortium. Initially, they expect to pump in around Rs. 100 crores in the first phase of exploration in the 4 CBM blocks.
2. Australian Arrow Energy led consortium comprising of GAIL (India) Ltd. and EIG Energy Infrastructure Group AB signed pact for 3 blocks. The consortium plans to spend about $500 to $600 million over a period of 20 years in the blocks
3. Coalgas Mart & Deep Industries JV signed agreement for 2 blocks.
Coal bed methane fields produce a low pressure gas that must be compressed before being fed into a pipeline. Its heating value is lower than that of natural gas.
Bidders pitch to prepare feasibility report for Kolkata port
Exim News Service has reported that at least 12 firms have responded to the tender floated by the Indian ministry of shipping inviting bids for the preparation of a feasibility report for a deep sea port in West Bengal with a budget of INR 10 crore.
As per reports some of the bidders recently made presentations in Kolkata to a high level panel from ministry, Kolkata Port Trust and state officials and include firms from US, Europe and China,
The selected consultant or a consortium will have to not only prepare the report but also associate itself with the project, right from conception to the commissioning.
Patel Engg bags another package in Loharinag Pala Hydro project
Patel Engineering Ltd announced that it has bagged orders for construction of 4x150MW Loharinag Pala Hydro Electric Power Projects penstock and power house worth Rs 360 crore from National Thermal Power Corporation Ltd. The project will be completed in the next 45 months.
The project is situated on river Bhagirathi in Uttarkashi District of Uttaranchal about 195 kilometers from Rishikesh on NH 108. The project comprises of surge shaft of 13.5 diameter, inclined pressure shaft, underground power house, underground transformer hall, tail race tunnel and switchyard.
Patel Engineering was earlier awarded the head race tunnel package worth Rs 318 crore for this project.
Gerdau to invest $3 billion in next 3 years to increase production
Brazilian steel maker Gerdau SA will invest $3 billion over the next 3 years to beef up its production capacity with about $2 billion going into Gerdau's Brazilian operations and the rest going for modernization and expansion at facilities abroad including in North and South America and in Spain.
Mr Osvaldo Schirmer CFO said that the company will spend $1 billion next year, $1.1 billion in 2008 and $900 million in 2009. He said that these investments are independent from money Gerdau might use for acquisitions. The company is interested in expanding its overseas operations, particularly in Mexico and Argentina.
Gerdau has spent $1.4 billion divided evenly between investments and acquisitions during January to September 2006. Gerdau has acquired US based Sheffield Steel Corp as well as a majority interest in Peruvian steel maker Siderperu SA and also announced earlier this month that it will pay $104 million for a majority stake in US based Pacific Coast Steel Inc.
US ITC to conduct sunset review on HR products
The US International Trade Commission has voted to conduct full 5 year sunset reviews concerning the countervailing duty and antidumping duty orders on imports of hot rolled carbon steel flat products from Argentina, China, India, Indonesia, Kazakhstan, the Netherlands, Romania, South Africa, Taiwan, Thailand, and Ukraine.
As a result of today's votes, the Commission will conduct full reviews to determine whether revocation of these orders would be likely to lead to continuation or recurrence of material injury within a reasonably foreseeable time.
With respect to Argentina, the Netherlands, South Africa, and Thailand, all six Commissioners concluded that both the domestic group response and the respondent group responses were adequate and voted for full reviews.
With respect to India, Indonesia, Kazakhstan, Romania, Taiwan, and Ukraine, all six Commissioners concluded that the domestic group response was adequate and the respondent group responses were inadequate, but that circumstances warranted full reviews.
With respect to China, Chairman Daniel R. Pearson, Vice Chairman Shara L Aranoff, and Commissioners Jennifer A Hillman, Deanna Tanner Okun, and Charlotte R. Lane concluded that the both the domestic group response and the respondent group response were adequate and voted for a full review; Commissioner Stephen Koplan concluded that the domestic group response was adequate and the respondent group response was inadequate, but that circumstances warranted a full review.
Zinc surges as inventories decline
Zinc prices on London Metal Exchange rose to a record after its inventories dropped to the lowest level in past 15 years to 99,550 tons.
Zinc for delivery in three months rose by $60 or 1.4% to $4,490 a metric ton at 1:32PM on the LME.
LME monitored inventories of zinc have plunged by 79% in the past year to the lowest since April 1991 and prices have more than doubled in the past year.
Ternium announces Q3 results
Ternium SA announced its results for the third quarter ended September 30, 2006. Its net sales amounted to $1.7 billion up by 2% YoY on shipments of flat and long products totaling 2.2 million tons down by 8% YoY with operating income of $508.2 million, EBITDA of $614.9 million and equity holders net income of $257.4 million. Net income for the third quarter was $354 million as compared to $289.2 million in the second quarter.
Terniums production in the third quarter 2006 reached 2.5 million tons of crude steel, while 1.9 million tons of hot rolled coils and 0.5 million tons of long products were manufactured from semi finished products. During the third quarter 2006 there was a lower output of flat and long steel products at Terniums Venezuelan and Mexican operations, partially offset by higher production levels at its Argentine facility.
Sales of flat products during the third quarter totaled $1.3 billion, an increase of 1% compared to the second quarter. This was the result of higher prices offset by lower volumes. Shipments were 1.7 million tons in the third quarter, a decrease of 8% compared to the previous quarter as a result of lower demand in the North America Region, and lower sales of slabs in the South & Central America Region in preparation for the relining of blast furnace #2 in Argentina.
Sales of long products were US$339.2 million during the third quarter, a decrease of 1% compared to the previous quarter. This decrease was mainly due to lower volumes partially offset by higher prices. Shipments were 532.8 thousand tons in the third quarter, representing an 8% decrease versus the second quarter, as the previously tight supply/demand balance for long products in the North America Region returned to more normal levels during the third quarter.
US SS consumption up by 13% YoY during January to August
According to the latest figures from the Specialty Steel Industry of North America, consumption of stainless steel in US grew by 13% YoY to 1.734 million tons in January to August 2006.
Consumption of stainless sheet and strip rose by 14% to 1.251 million tons while that of plate increased by 34% YoY to 227,638 tons and that of wire rose by 10% to 57,690 tons. Consumption of stainless steel bar fell by 8% to 152,940 tons and that of rod by 10% to 44,275 tons.
Imports of stainless steel rose by 18%YoY to 541,361 tons resulting in the level of import penetration rising by one percentage point to 31% in the period.
US ITC to conduct sunset review on rebar imports
The US International Trade Commission voted to conduct full 5 year reviews concerning the antidumping duty orders on imports of steel concrete reinforcing bar from Belarus, China, Indonesia, Korea, Latvia, Moldova, Poland, and Ukraine.
As a result of today's votes, the Commission will conduct full reviews to determine whether revocation of these orders would be likely to lead to continuation or recurrence of material injury within a reasonably foreseeable time.
With respect to Belarus, Latvia, Moldova, and Ukraine, all six Commissioners concluded that the domestic group response was inadequate and the respondent group response was adequate, but that circumstances warranted full reviews. With respect to China, Indonesia, Korea, and Poland, all six Commissioners concluded that both the domestic and the respondent group responses were inadequate, but that circumstances warranted full reviews.
Coal exports from Shanxi down by 17.6% YoY in 9 months
Shanxi's coal exports have dropped perpendicularly ever since this year, but still accounts for more than 40% of China's total exports.
Shanxi Province exported 20.38 million tons of coal during January to September 2006 down by 17.6% YoY accounting for 42.4% of the 48.07 million tons across the country valued at $ 1.196 billion down by 15.6% YoY.
During the same period export price averaged $ 65.13 per tonne up by 13.63% YoY but in a downtrend. Average price in September stood at $ 58.37 per tonne down by $ 21.40 per tonne from that in last month and by $ 15.34 per tonne from that in January.
Among the 17 importers of Shanxi's coal, the three biggest importers all witnessed fewer imports. South Korea received 1.99 million tons, down by 33.8%, followed by Japan, 800,000 tons, down 11.4% and India, 400,000 tons, down 49.8%.
(Sourced from Mysteel.net)
Zinc deficit during January to August estimated at 281,000 tonnes
According to the latest monthly update from the International Lead and Zinc Study Group, the global refined zinc market recorded a production consumption deficit of 281,000 tonnes during January to August 2006.
Total commercial stocks held by the London Metal Exchange, producers, consumers and merchants are estimated to have been 562,800 tonnes at the end of August equivalent to around 4 weeks of global consumption as against 6 weeks consumption at the end of August 2005.
LME stops electronic trade system
London Metal Exchange announced that it will revert to an older version of its electronic trading system as it seeks to solve technical problems that stopped transactions for two days after stopping electronic trading at 8:27 AM UK time. Other LME methods of trade, via telephone and trading floor, aren't affected
LME still plans to introduce reduced size futures contracts for copper, aluminium and zinc on November 20th. Mr Adam Robinson LME spokesman said "We are fully committed to the launch."
The LME, which handled $4.5 trillion worth of trades last year, is competing with the New York Mercantile Exchange to offer electronically traded, reduced-size futures for users such as hedge funds. The new LME futures, called LMEminis, will only be traded on the LME's Select electronic system.
OMKs Vyska increase pipe production by 53% in 10 months
United Metallurgical Companys Vyksa Steel Works produced 1.22 million tonnes of pipes during January to September 2006 up by 53% YoY as compared to 0.793 million tonnes during January to September 2005. During the period its production of large diameter pipes increased 1.87 fold to 0.652 million tonnes.
Vyska produced 0.101 million tonnes of pipes in October 2006 up by 15% YoY and its production of large diameter pipes rose by 23% YoY.
VSW is planning to produce 1.423 million tons of pipes and 0.8 million tonnes of wheels in 2006. It had produced 1 million tonne of pipes, 0.8 million tonnes of wheels and 0.459 million tonnes of steel in 2005.
Shanxi Province to close many more coal mines
Chinas biggest coal producing base North China's Shanxi Province will close 900 more coal mines by June 2008 amid concerns over safety, environmental protection and resource conservation. According to a circular issued by the Shanxi provincial government recently local authorities have listed 500 coal mines and the number could climb to 1,100 by June 2008.
The circular said that the measure is aimed at reducing the number of coal mines to 2,500 by 2010. Currently, the province has about 3,500 coal mines. From July last year till this June, Shanxi has shut down 1,156 coal mines.
Shanxis coal output accounts about one third of the Chinas total and has seen numerous coal mine accidents in recent years.
Acindars net increases by 21.5% YoY in 9 months
Argentine steelmaker Aluar Industria Argentina de Aceros SA announced that its net profit increased by 21.5% YoY during January to September 2006.
Its earnings jumped to 508.2 million pesos ($163.6 million) from 418.1 million pesos in the same period a year earlier and net sales rose by 13.1% to 2.09 billion pesos with domestic sales up by 24.6% to 1.81 billion pesos and exports falling to 328.7 million pesos. Acindar's average costs rose by 16.2% due to an increase in natural gas and electricity expenses as well as labor costs.
Acidnar is Argentina's No 3 steelmaker and market leader in rolled steel. Acindar is controlled by Brazilian Belgo Mineira a unit of Arcelor Mittal.
Tubacex net profit up by 10% YoY in 9 months
Spanish Tubacex SA announced that its net profit increased by 10% during January to September 2006 to Euro 20.77 million as compared to Euro 18.88 million during January to September 2005. Its revenue during the period increased by 18.6% to Euro 379.2 million from Euro 319.6 million in the prior year period.
Tubacex said that EBITDA grew by 13.1% to Euro 48.07 million from Euro 42.49 million, while EBIT was up by 14.6% at Euro 35.04 million from Euro 30.57 million.
Looking ahead, Tubacex reiterated that it expects full year 2006 net and sales to exceed those reported in 2005, which was a record earnings year for the stainless steel tubing manufacturer.
Maanshan to sell bonds for $698 million
China's 9th biggest steel maker Maanshan Iron & Steel Co plans to sell RMB 5.5 billion yuan ($698 million) worth of bonds that can be converted into shares to finance a new plant.
Maanshan said in a statement to the Shanghai Stock Exchange that it will sell the yuan currency bonds on Monday after receiving regulatory approval.
China's eastern Anhui Province based Maanshan plans to raise capacity by 50% to 15 million tons by mid 2007 by building a plant to make auto grade steel.
AK Steel announces December surcharges
AK Steel has advised its customers that a $135 per ton surcharge will be added to invoices for electrical steel products shipped in December 2006.
Japanese MS Zinc increases domestic zinc price by 6% this week
Platts has reported that Japan's largest zinc producer Mitsui Mining and Smeltings subsidiary MS Zinc has raised its zinc list price for domestic delivery to Yen 577,000 per tonne ($3,722) effective November 7th 2006 up by Yen 33,000 per tonne or 6% from the price of Yen 544,000 made effective November 1st 2006.
PLatts quoted as an official from MS Zinc as saying that "We have increased the zinc price mainly because the London Metal Exchange zinc prices have increased and the company's November average pric now stands at Yen 572,000 per tonne up from an average price of Yen 494,000 per tonne in October.
Japanese base metal producers change their domestic list prices regularly, based on changes in the supply demand balance, price movements on the LME and exchange rate fluctuations. The list prices are used as a benchmark to set the prices for zinc coated galvanized steel sheet and other products.
Schnitzer Steel reports results
The Portland, Oregon based Schnitzer Steel Industries Inc announced that its net income for the fourth quarter was $50.2 million as compared to $34.4 million in the prior year quarter and excluding an additional gain of $1 million from the separation of its JV with Hugo Neu Corp net income was $49 million.
Its fourth quarter revenues increased to $604.63 million from $195.68 million in the same quarter last year. Metals recycling business revenues rose to $487 million from $117 million in the previous year quarter. Revenues from Auto Parts business segment increased to $64 million from $29 million in the year-ago quarter. Steel manufacturing business revenues were $104 million up from $87 million in the prior year quarter.
For fiscal year 2006, its net income was $143 million as compared to $147 million. The full year result included $35 million of gain from the disposition of the Hugo Neu joint venture assets and $15 million of charge. Excluding these items, net income would have been $122 million. Revenues for the fiscal year 2006 increased to $1.9 billion from $853 million in the preceding year.
