April, 07 2007
Indian iron ore tussle likely to intensify
The ongoing tussle on the issue of iron ore export seems to be intensifying with both Indian steel makers and iron ore miners airing their views on the matter. Iron ore exporters have challenged domestic steel makers to absorb the entire production at the international price as a way out to limit overseas sale of the mineral. On the other hand Indian steel majors, who announced a temporary freeze on the prices of their products, have now sought reduction in the prices of iron ore.
Mr RK Sharma secretary general of Federation of Indian Mineral Industries told PTI that Indian iron ore producers are willing to supply to the domestic steel industry iron ore at spot FOB price, provided they under write the entire production of ore in the country.
Mr Sharma said We are per se not all that eager to export ore provided we get the same price as is available in the export market. Let the steel industry come forward and give a declaration in writing before the government. We are willing to cooperate to the maximum extent with the steel industry. FIMI is basically concerned to get the best price, whether in domestic or export market. We are willing to supply iron ore to domestic steel industry at spot FOB price minus logistics like railway freight and port charges.
Mr Sharma also said that Indian steel industry is not showing any concern for the iron ore sector despite the fact that they were depended on it for survival and growth. He said All iron ore produced goes in steel making all over the world and therefore it is strange that an industry which depends on iron ore as basic raw material should cry against that very industry.
As per reports, some of the steel majors have asked National Mineral Development Corporation that their purchase price of iron ore should be reduced as the net realization from sale in the overseas market has gone down, following the imposition of the INR 300 a tonne levy on exports.
The report cites an official of a steel maker as saying that the demand was justified. He said There is a government chalked-out formula to derive the net sales realization from exports of the NMDC. The prices of domestic ore are determined once a year in accordance with the net sales realization. So, the domestic prices will change this time also as the net sales realization changed.
Steel majors have been lobbying for stopping iron ore export to increase its domestic availability so as to match their increased requirements. But iron ore producers say that they get a better price overseas, moreover Indian steel companies do not have the technology to use ore fines and that as such the Indian steel makers can not absorb their production volumes. In a bid to discourage exports, Indian government imposed a duty of INR 300 per tonne on ore export from March 1st 2007, a move that was hailed by steel firms but decried by ore producers.
TATA Steel sees value in Corus takeover
TATA Steel said that the price paid for Corus was not too high as it has catapulted TATA Steel in a different league among global steel makers.
Mr Ratan Tata chairman of TATA Group during an interview with German weekly news magazine Der Spiegel told that "Those who accuse us of having paid too much are making a very shortsighted judgment.
Mr Ratan Tata said that Corus provided TATA Steel with a good take off position in Europe and that the link up has turned the relatively small TATA Steel into a global player in the consolidating steel sector. He added that "We have to think globally.
TATA Steel paid GBP 5.75 billion (USD 11.3 billion) for Corus at the end of January 2007 following a bidding auction against Brazil's CSN. Corus employs 47,300 people worldwide, around half of them in Britain. It produced 18 million tons of steel in 2006 and coupled with 5 million tonnes of TATA Steel, the combined company is ranked fifth in world steel production.
Jharkhand High Court rejects mining lease petitions
Local media reported that Jharkhand High Court has dismissed the petitions of about half a dozen private claimants to the mining lease in the Ghatkuri Iron Ore Mines in West Singhbhum.
The petitions were rejected on the ground that the Government of India, through notifications in 1962 and 1969, had reserved the mining area for exploitation by the Government of Public Sector Undertakings. The High Court also ruled that the state was not only the owner of all mines and minerals but also had the inherent right to reserve any area for the use of the PSU.
The petitioners Monnet Ispat & Energy Limited, Adhunik Alloys & Power Limited, Abhijit Infrastructure Limited, Prakash Ispat Limited, Ispat Industries Limited and Jharkhand Ispat Private Limited had moved to the High Court challenging the decision of the Jharkhand and Central Governments and Department of Mines, whereby recommendations made for grant of mining lease to these companies had been withdrawn and rejected.
NMDC considering setting up nickel smelter in Orissa
Project Today reported that Indias National Mineral Development Corporation has invited expression of interest for preparation of a techno economic feasibility report for a 10,000 tonnes per annum nickel production plant in Orissa.
The production plant would be based on the know how developed by Regional Research Laboratory Bhubaneswar by modified Caron Process applicable to Lateritic Chromite overburden of Sukinda in Orissa.
Vizag Port retains top slot for 7th year
Visakhapatnam Port has retained the top slot among major ports for the 7th consecutive year in 2006-07.
Vizag port handled a record cargo throughput of 56.39 million tonnes as against 55.8 million tonnes in 2005-06. The port handled 25.15 million tonnes of export cargo in 2006-07 as against 23.83 million tonnes in 2005-06 while imports totaled 27.93 million tonnes at an increase of around 10%. Visakhapatnam Container Terminal also handled 55,789 TEUs in 2006-07 up by 18% as against 47,276 TEUs in 2005-06.
Mr K Rathna Kishore chairman of Visakhapatnam Port Trust said that during 2006-07 the main cargoes which contributed to the record performance were an all time high loading of crude by HPCL, unloading of finished fertilizers and the largest volume exports of ore pellets by Essar.
Mr Kishore also welcomed the construction of Greenfield ports on the East Coast of India by saying that "Competition with private ports is also good for trade, and to retain the trade with us, we have already made several reductions in the tariff structures for shippers. We have not increased the tariff since 2001.
Under the National Maritime Development Program, VPT has earmarked Rs 3,035 crore for the development of port infrastructure. As part of its business plan, VPT has appointed Rotterdam Maritime Group of the Netherlands, with TCS as its Indian associate, for preparing a road map for its expansion. VPT has also signed an agreement with Japan Bank for International Cooperation for expansion of the ore berths in the outer harbor under which JBIC would provide INR 185 crore for strengthening, expanding and deepening the ore berth to handle 200,000DWT vessels requiring a draught of 18.1 meters. In addition, three more berths would be constructed at the inner harbor, WQ-8 with internal resources and EQ-10 and WQ-6 berths under BOT program. VPT also planned to acquire two harbor mobile cranes.
BHPV achieves INR 176 crore turnover
Bharat Heavy Plate and Vessels Ltd has achieved a turnover of INR 176 crore during 2006-2007, the highest during the past five years, thus improving its performance considerably.
BHPV could achieve turnover of INR 123 crore in 2005-06 and its net losses could be reduced to INR 36 crore from INR 72 crore during the previous year.
Nippon Steel increases CAPEX Report
Nikkei, without citing sources, recently reported that Nippon Steel Corp has decided to invest an additional JPY 300 billion or more, bringing total investments in the two years to March 2009 to around JPY 850 billion.
Nikkei said that the increase in investments reflects growing steel demand in the auto and electronics industries as well as intensifying competition amid industry reorganization worldwide. It added that Nippon Steel will boost domestic capital investment in such manufacturing processes as casting, coil rolling and rust proofing and will focus capital investment mainly on capacity for steel sheet used in automobiles overseas.
CMC bids to acquire Zeljezara Split in Croatia
Texas based Commercial Metals Company announced that its Swiss subsidiary, Commercial Metals International AG has submitted a bid to acquire Zeljezara Split dd at Kastel Sucurac from the Croatian Privatization Fund. CMI is apparently one of six bidders who submitted bids in connection with the proposed privatization of Split.
Split has approximately 170,000 metric tons of rebar capacity along with 30,000 tons of mesh capacity. CMI's bid for Split, which includes the share purchase price assumption of a portion of the debt due to or guaranteed by the Croatian government as well as the assumption of trade payables, is approximately HRK 155.7 million (USD 28 million). In addition to continuing the existing operations at the Split mill, CMI contemplates future expansions including capital expenditures and working capital increase of at least HRK 300 million (USD 54 million). The existing level of the employee work force, less normal retirements or other natural attrition, will be retained for a minimum of three years under the terms of an agreement CMI has already reached with the trade union representing employees at the facility.
Mr Hanns Zoellner president of CMC's marketing and distribution segment stated that "We are very excited about the prospects for Split and look forward to promptly commencing discussions with the Fund to conclude a purchase contract. We know the rebar business as CMC is the 3rd largest manufacturer in the United States and with the experience and success we have enjoyed following the acquisition of a majority interest in CMC Zawiercie, our Polish mill, we are confident we can achieve the same results in Croatia at Split. Even more exciting is the possibility that CMC will also acquire the Sisak mill. CMC's marketing group annually markets close to 500,000 metric tons of tubular products globally and has previously sold pipe products produced by Sisak. If our efforts to acquire both Croatian mills are successful, we can see significant synergies in their operations. Our worldwide marketing capability in both product lines should improve results at both facilities. These moves fit our strategy to expand product
ion capability in the key markets of Central and Eastern Europe. The acquisition of Split and Sisak would definitely fit with CMC's strategic objectives."
Zeljezara Split dd is the second of Croatia's two operating steel mills for which Commercial Metals International has submitted a purchase offer after it had submitted a bid for the Valjaonica Cijevi Sisak pipe mill in February 2007. All bids for the Sisak mill were subsequently rejected by the Fund which has requested new bids for Sisak due by April 17th 2007 and CMC is studying the tender request for Sisak and intends to have Commercial Metals International submit a bid on or before April 17th for that facility. Sisak has currently approximately 70,000 tonnes melting capacity and about 300,000 tonnes of tubular manufacturing capacity in its existing product line which include seamless, welded and cold processed pipe
Both of these privatization efforts are in preparation for Croatia's anticipated membership in the European Union in 2009.
Hangang Steel begins construction of steel plant in Handan
China's eleventh largest steel mill Handan Iron and Steel Group has begun construction of its 5 million ton steelmaking facility in the city of Handan in Southwestern Hebei province. Hangang will invest RMB 19.4 billion (USD 2.51 billion) in the project and hopes to complete the construction of a hot rolling line by 2008 and complete construction of the whole facility by 2010.
Hangang will start constructing two 250 tonnes converters on April 6th 2007 and will also begin to build a 4.5 million tonnes per annum 2250mm hot strip mill at the same site later this month.
As per report, the new facility will produce more high value added products for use in pipelines, automobiles, household electronic appliances, as well as hot rolled steel coils, cold rolled steel coils, galvanized plate and color coated steel.
Hangang will gradually phase out its outdated capacity as the new facility becomes operational and intends to reach a steel product production capacity of 7.44 million tons by the end of 2010. Handan will phase out most of its wire rod and rebar production at its city location in tandem with the commissioning of the new HRC and CRC lines. It will continue to produce a mall amount of long products at the original site according to market demand. It has already closed four 300 cubic meter BFs at this old location but continues to operate a 900 cubic meter and two 2000 cubic meter BFs at the city site.
Baosteel Group is currently negotiating with Hangang to be a strategic partner in the project.
(Sourced from Mysteel.net)
US Steel backs new anti subsidy legislation
Platts reported that US Steel executives have expressed support for new legislation designed to ensure that US anti subsidy laws apply to imports from non market economy countries like China. The purpose of anti subsidy law is to offset perceived unfair competitive advantages that foreign manufacturers or exporters obtain as a result of export subsidies.
According to US Steel Whether it is through government intervention in currency markets, government intervention in raw material markets, preferential access to loans from state directed banks or any of several other means, manufacturing in China and other non market economies is and threatens to remain heavily subsidized.
Mr Merle Stein GM of US Steel's Fairfield Works in Alabama said "Putting the bill in its broader context, our anti dumping and anti subsidy laws constitute in most instances our only practical line of defense against severe market-distorting practices that would otherwise allow foreign producers to overrun this market. It simply makes no sense to exempt Chinese producers from the reach of the subsidy law, particularly given the evidence that they are among the most heavily subsidized producers in the world."
The "Non Market Economy Trade Remedy Act of 2007." bill was introduced recently by Alabama Congressman Mr Artur Davis.
Arcelor Mittal files request for registration of offer for Arcelor Brazil
Arcelor Mittal announced that it will file with the Brazilian securities regulator, Comissao De Valores Mobiliarios an amended request for registration with respect to the public offer for all of the remaining outstanding shares in Arcelor Brazil SA pursuant to its initial decision of September 25th 2006 and the final decision of March 21st 2007.
The release adds that In addition to the changes to the offer documents requested by the CVM, the value to be offered per Arcelor Brazil share also reflects adjustments made in the calculation of the reference value to ensure the consistent treatment of Arcelor's pension liabilities and they are also making this offer with the purpose of canceling the registration before the CVM as a listed company.
As per release, the reference price, which is determined on the basis of the relative values of Arcelor Brazil EBITDA and Arcelor EBITDA, shall be composed of BRL 11.70 in cash and 0.3568 class A common shares of Arcelor Mittal. This floating reference price after adjustments for dividends and interest on cash would represent a total value which as of April 4th 2007 would be equivalent to EUR 18.89 or BRL 51.27.
The maximum amount of cash to be paid by Arcelor Mittal will be approximately BRL 10.9 billion, assuming 100% acceptance of the Cash Option and the maximum number of Arcelor Mittal shares to be issued will be approximately 76 million, representing 5% of the share capital of Arcelor Mittal on a fully diluted basis assuming 100% acceptance of the Mixed Option.
Ziscosteel resumes production
The Herald reported that Zimbabwes Ziscosteel has resumed production after three months of inactivity. Ziscosteel stooped production in the first week of December 2006 due to coal shortages which resulted in shutting its only operational blast furnace number 4. Its blast furnaces 1, 2 and 3 ceased operations some years ago.
Mr Augustine Timbe a spokesperson of Ziscosteel said With continued steady supplies of coking coal from Hwange Colliery Company Limited and delivery of this essential raw material by the National Railways of Zimbabwe, production is set to increase at Zisco and this will assist the company in addressing its local debt.
Mr Timbe said that "Overall, higher production will pave way for the restoration of Zisco's viability and enhance the company's capacity to contribute more meaningfully towards national economic development through provision of affordable steel products, employment creation, generation of foreign currency, import substitution and value addition across various sectors of the economy.
Zimbabwe's sole steel producer Ziscosteel is currently sitting on a USD 55 billion debt. Among its creditors are HCCL, NRZ and Zesa Holdings. Ziscosteel has been plagued by debt arrears, which last year forced Hwange to temporarily cut coal supplies to the state owned company.
With a 90%, Government is the major shareholder in Zisco. Lancashire Steel, Stewart & Lloyds and Tanganyika Investments are the other shareholders.
China likely to reduce export rebates on copper products
Interfax China has reported that China may reduce or cancel export tax rebates on copper products in the near future. A senior official with the China Nonferrous Metals Industry Association told Interfax that the government might reduce or cancel export tax rebates on copper products that will depend on the amount of exports and China's trade surplus in March.
According to the official the CNMIA has lobbied with the government not to further reduce copper product export tax rebates as the former tax rebate policy has already successfully reduced copper product exports in the first two months of the year. The official claimed that "The government is determined to curb China's huge trade surplus and reduce over investment in some sectors by restraining exports. It is very likely that the government will release a new policy on export tax rebates to cover most nonferrous metal products at the end of April or in early May.
China exported 70,756 tonnes of copper products January and February down by 9.7% YoY. China reduced copper product export tax rebates from 13% to 5% on September 15th 2006.
Gazprom & Conef Energy ink 20 year gas supply deal
Russia's gas giant Gazprom and Romania's Conef Energy announced that they have signed a contract for delivery of Russian gas to Romania during 2010 to 2030.
Under the contract, Gazprom will supply Romania with up to 2 billion cubic meters of gas annually or up to a total of 42 billion cubic meters over the 20 year period.
As of April 1st 2007, Gazprom has exported a total of 110 billion cubic meters of gas to Romania starting from 1979. Gazprom supplied over 4.5 billion cubic meters of gas to Romania in 2005 and the volumes for 2006 are not available.
Tianjin to be largest man made deep water port
It is reported that Chinese construction workers have been working on a project that will help turn Tianjin into the world's largest man made deep water port at an investment of CNY 714 million (USD 89.25 million).
Sources from the municipal government of Tianjin said that the project requires a construction of a navigable deep water channel capable of accommodating ships of 250,000 DWT. The projected channel would be 19.5 meters deep upon its completion late this year, which will enable Tianjin to handle all ships that sail into the Bohai Sea. Workers have so far completed 14.3 million cubic meter or 43.3% of the project's workload.
Tianjin port situated at the northwestern edge of the Bohai Sea currently has a deep water channel accommodating 150,000 DWT ships. Tianjin port now serves as an outlet for goods from the central and western parts of China. It handled 250 million tons of cargo and 5.9 million TEU of containers in 2006. The port is aiming to handle 300 million tons of cargo and 10 million TEU of containers by 2010.
Albidon breaks ground for Munali nickel mine in Zambian
Metals Insider reported that Mr Levy Mwanawasa president of Zambia, attended a ground breaking ceremony for the new Munali nickel mine, owned by UK listed Albidon Ltd.
The new mine which is located around 60 kilometer from the countrys capital of Lusaka, is expected to enter production around the middle of 2008. The mine is forecast to produce around 8,500 tonnes per year of nickel in concentrates. The concentrates will go to Chinas dominant producer Jinchuan.
Xstrata's Koniambo nickel mine to start in 2010
World's 4th largest nickel producer Xstrata Plc announced that its Koniambo nickel project in New Caledonia will probably begin output by the end of 2010. The project could be in full production in 2012, delivering 60,000 tons of nickel. Xstrata had previously said production may begin in 2009 or 2010, and that costs had blown out to beyond USD 3 billion.
Mr Kevin Brown project director of Koniambo at the Third New Caledonia Nickel Conference in Noumea said that its production will be on par with Goro, the largest nickel project under construction.
Mr Brown however added that The worst thing that we can face, any company can face, in building a project of this magnitude, is developing it without any understanding of where your costs and schedules are going.
Xstrata is reviewing Koniambo, acquired when it took over Falconbridge Ltd. last year, to make sure the increase will cover higher costs and the risk from unrest experienced by Cia Vale do Rio Doce at Incos Goro nickel project also in New Caledonia. New Caledonia, a French-controlled Pacific territory located 746 miles east of Australia, contains a quarter of the world's known nickel resources.
SASAC approves BaoSteel's acquisition of Bayi Steel
State Owned Assets Supervision and Administration Commission of the State Council, the People's Republic of China has given its official approval for Baosteel to acquire some parts of Bayi Steel's state owned shares.
Baosteel Group then will hold over 30% shares of Bayi Steel's state owned shares.
(Sourced from MySteel.net)
Khartsyzsk increase Q1 output by 56% YoY
Ukrainian Industrial Policy Ministry told Interfax that Ukraine's Khartsyzsk Pipe Mill increased production of large diameter pipes with anti corrosive by 55.5% YoY during January to March 2007 to 175,900 tonnes. It produced 61,800 tonnes of pipes in March 2007.
The ministry told that large diameter pipe production at Khartsyzsk up by 9.2% in 2006 to 595,700 tonnes and the mill has orders for more than 700,000 tonnes in 2007.
Aricoms update on Kimkanskoye and Sutarskoyew iron ore project
Aricom announced that an independent consultant Wardell Armstrong has valued its Kimkanskoye and Sutarskoyew iron ore project at USD 1.676 billion. Mr Jay Hambro CEO of Aricom in a statement said This independent valuation of just one of our assets at what amounts to what would be twice the market capitalization of the company is confirmation of Aricom's potential.
Aricom said that it would now exercise an option to buy the 50% of the project it does not already own from an affiliate group, with the deal to be settled in new shares. Aricom is issuing 123.8 million new shares for the remaining 50% stake from Philotus Holdings Ltd worth (USD 159.6 million) at Wednesdays share price. Philotus Holdings is jointly owned by Mr Peter Hambro and Mr Pavel Maslovsky, the chairman and COO & non executive chairman of Peter Hambro Mining plc
AIM listed Aricom purchased a 50% interest in the project in June last year from a company controlled by Peter Hambro Mining. Aricoms projects are targeting markets in Russia and China. As per Aricom there are four scenarios for production, including output of as much as 10 million tonnes per year of iron ore for 32 years.
Cleveland-Cliffs appoints Mr Brake as executive VP
Cleveland-Cliffs Inc announced the appointment of Mr William Brake as executive VP and chief technical officer of Cliffs Metallics effective April 16th 2007.
Mr Brake joins Cliffs after having served as executive VP operations for Mittal Steel USA. He began his career with LTV Steel and following the acquisition by the International Steel Group, was responsible for the initial re start of its Cleveland facilities.
Mr Joseph A Carrabba president & CEO of Cliff said "Bill is a highly respected leader whose extensive steel industry expertise complements the talents of Cliffs' existing leadership team. We look forward to his contribution as we continue to grow our organization."
Hanjin Heavy bags order to build 5 container ships from Danaos Shipping
South Korea's 7th largest shipyard Hanjin Heavy Industries & Construction Co has announced that it received a KRW 261.2 billion (USD 281 million) order to build 5 container ships for Danaos Shipping Co of Greece by 2010.
Hanjin expects this year's shipbuilding and construction orders to reach KRW 4 trillion as against KRW 3.5 trillion last year. Shipbuilding orders account for about 30% of the company's total orders.
Belons Q1 coal output up by 14% YoY
Novosibirsk based coal and metals group Belon announced that it has increased its production of coal by 13.5% YoY in the Q1 of 2007 to 970,200 tonnes.
Belon in a release said that the group's Listvyazhnaya mine produced 550,400 tonnes of steel coal instead of the planned 518,000 tonnes due to the launch of a new mine face in January 2007, outfitted with high performance equipment. Belon plans to increase monthly coal production at Listvyazhnaya to 200,000 to 250,000 tonnes in 2007 and expects the mine to produce a total of 2.7 million tonnes. Mining will increase in April with the launch of loading complex at the new Listvyazhnaya concentration plant, which will make it possible to establish an efficient system for shipping coal to consumers.
Belon said that its Chertinskaya Koksovaya mine produced 336,900 tonnes of coal in the quarter 17% more YoY.
The Belovskaya concentration plant produced 863,000 tonnes of coal concentrate in the quarter, 14% more YoY. The plant processed 1.179 million tonnes of coal.
Belons mines are expected to produce about 4.7 million tones of coal this year. There are plans to process 4.66 million tonnes of coking coal this year and produce 3.309 million tonnes of concentrate.
