April, 08 2007
Indian SS prices to go up due to surge in nickel prices
FE reported that due to an unprecedented hike in nickel rates in the international market, the prices of stainless steel in India could go up by 7%.
Mr NC Mathur president of Indian Stainless Steel Development Association told FE "Even 1% of nickel usage accounts for USD 400 per ton in the final cost of making stainless steel at current nickel prices. Hence, the rise in nickel prices would impact adversely. Nickel being a costly metal, accounts for over 60% of the total cost of production and depending on its usage in the final product prices could go up by INR 5,000 per ton to INR 14,000 per tonne.
Utensils business is likely to suffer the most as it accounts for the majority of the stainless steel market. About 70% of countrys stainless steel is used to make utensils while the rest 30% goes in various sectors such as construction, equipment used for industrial applications in sectors such as petrochemical, medical, food processing and pharmaceuticals. Generally 1% to 4% of nickel is used in utensils and about 8% in industrial applications.
CIL to suggest 5% stake sale in 2007-08
It is reported that Coal India Limited will recommend to the government for selling 5% stake during 2007-08 fiscal year through an initial public offering. Mr PS chairman of CIL told "An IPO is needed as this would bring in a greater degree of financial discipline and better corporate governance. I will take it up with the government in 2007-08."
But M Bhattacharjee added that possibility of a float he said the IPO route would come only at the last stage after CIL gets the Navaratna status. He said We have already got the Mini Ratna status and we will soon complete the process of inducting independent directors. Our next target is to get the Navaratna status and only after that will we go ahead with the IPO plans.
Mr Bhatacherjee said that a proposal recommending diluting 5% of its paid up equity capital is to be put before the company's board for approval and once it is approved by the board, the proposal will be sent to the concerned ministry in New Delhi.
Encouraged by, obtaining Mini Ratna status from the Department of Public Enterprises, CIL & 4 of its profit making subsidiaries have initiated the process of meeting the eligibility and classification conditions for Nav Ratna status as it desires to enjoy more autonomy in order to ensure higher transparency in its operations.
Supreme Court decides in favor of Essar Steel in the matter of power transmission
PTI reported that Indias Supreme Court has last week directed Essar Steel to pay only 30% of the INR 72 crore wheeling charges imposed by the Gujarat government owned Gujarat Energy Transmission Corporation Ltd on carrying electricity from its captive power plants to steel units through its own distribution system. As per report, Supreme Court has stayed 70% of the recovery of wheeling charges and directed Gujarat High Court to decide the matter by July 31st 2007.
Essar Steels counsels contended that GETCL cannot not impose wheeling charges, as Essar Steel has been using its own distribution system for supply of electricity and not the GETCLs transmission line. Essar Steel said "The entire distribution system and associated facilities are set up, maintained and operated by the company entirely at its own cost for the purpose of conveyance of the electricity generated by CPPs to its plants through Essar's own distribution system.
Essar Steel has moved to the Supreme Court challenging imposition of wheeling charges by GETCL and had sought quashing of the Gujarat High Court's order that rejected its application for interim stay on bill and disconnection notices issued by GETCL. Essar Steel had moved to the Gujarat High Court seeking a stay on recovery of wheeling charges and for restraining the GETCL from taking coercive steps for recovery.
TATA Power facing land hurdle in Jharkhand Report
Local media recently reported that TATA Power Company Limiteds plan hit a road block due to hurdles in land acquisition in Jharkhand. The report mentions that the land sought by TATA Power has many suitors.
The report cites some source in the government as saying that "The fact is that too many investors are eyeing the vacant land reacquired from the HCL. For instance, we have received application from TATA Power, BSF battalion station, Core Steel and a proposal to set up medical and engineering college, for the same 900 acres land that are available in that area.
TATA Power has been looking for a 1000 acre land plot to set up its 1,000 MW Greenfield thermal power plant and had identified land in Rakha Mosaboni townships in Jharkhand, which have been reacquired by the Jharkhand government following closure of mines by the HCL-ICC.
JNPT crosses 3 million TEU mark in 2006-07
Inidas premier container handling port, Jawaharlal Nehru Port, handled 3.30 million TEUs during 2006-07 up by 23.6% YoY as against 2.67 million TEUs in 2005-06.JNPT handled a total of 44.82 million tonnes of cargo during 2006-7 as against 37.84 million tonne in the 2005-06. The operating income of the port during the year touched INR 780.25 crore as against INR 670.32 crore in 2005-06 and the operating surplus stood at INR 482.12 crore.
Mr SS Hussain chairman of JNPT told media that out of the 3.30 million TEUs, the JN Port container terminal handled 1.31 million TEUs, the Nhava Sheva terminal 1.36 million TEUs and the recently commissioned Gateway Terminals 0.63 million TEUs.
Mr Hussain informed that the port has received security clearance for its harbor channel deepening project, under which it plans to dredge the channel to accommodate vessels up to a draught of 14 meters with 6,000 TEUs capacity using the tidal window in the first phase at an investment of INR 800 crore. In the second phase, the channel will be dredged to accommodate vessels up to 15 meters draught. He added that "Work on the first phase is likely to start by mid-2007 with a completion schedule of 27 months."
JNPT is also implementing the fourth container terminal project and marine chemical terminal projects and has already appointed a consultant for deciding the modalities for execution of the project. When fully developed, the capacity of the terminal will be 4.4 million TEUs and 15 million tonnes of liquid cargo at an investment of about INR 5,000 crore.
BHEL eying big oil rig order from ONGC
It is reported that Bharat Heavy Electricals Limited is hoping to bag its first major order from Oil and Natural Gas Corporation worth about INR 680 crore by the end of 2007 from manufacturing new rigs. Mr AK Mathur told reporters director of industrial systems and products of BHEL told reporters "ONGC is looking for 10 to 20 rigs for onland drilling. We are in discussions with them and expect an order of 10 rigs in the first phase.
Mr Mathur said "We have been in oil rig manufacturing business long time back. We had, in fact, supplied some 70 rigs to ONGC but with the flagship firm's focus shifting from owning the rig to leasing, BHEL didn't get much business. Now with the global rig scarcity, ONGC is again looking at having its own rigs manufactured. We are talking to ONGC about rig specifications. This may take about six months but we expect first orders before the end of the current calendar year.
BHEL has decided to make a re entry into oil rig manufacturing business and has already secured orders worth over INR 600 crore from ONGC for refurbishing and modernization of 15 rigs. New oil rigs would be manufactured at BHEL's Hyderabad plant that has a capacity to build 6 to 7 rigs in a year.
Steel plant land acquisition issue surfaces in Jharkhand
Local media reported that the process of land acquisition for setting up a steel plant by Jagdamba Steel Services at Raneshwar in Dumka district of Jharkhand has met a hurdle as the villagers have refused to give away their land.
The report adds that the district officials are holding discussions with villagers to convince them about the project and urge them to give their land.
Jagdamba Steel Services has signed a MoU with Jharkhand government recently for setting up as tell plant.
Indian SEZs - boon or bane
Special Economic Zone, one of the most controversial issues in India in the recent times leading to violent incidents against land acquisition, is viewed and projected by the Indian government as a route for rapid industrial and economic growth. But, many economists, social activists and other sections of society question governments rationale saying that the SEZ scheme is a misadventure and its benefits are far less than the sacrifice.
Indias Empowered Group of Ministers on Special Economic Zones has recently lifted the current freeze on SEZs, with tighter rules and prescribed a ceiling on the size of SEZs, which has now been fixed at an upper limit of 5000 hectares. A revised SEZ policy on these lines is being released.
SEZ Act of 2005 was passed by parliament in May 2005 and was given Presidential assent on June 23rd 2005. It came into effect on February 10th 2006 supported by the SEZ rules. As per a government release, objectives of the SEZ scheme are
(a) Generation of additional economic activity
(b) Promotion of exports of goods and services
(c) Promotion of investment from domestic and foreign sources
(d) Creation of employment opportunities
(e) Development of infrastructure facilities
The total no of valid formal approvals for SEZ so far is 234, out of which 63 have been notified and formal approval pending notification is 171. The number of valid in principle approved SEZ is 162. As per a government release, the total land requirement for proposed formally approved and in principle approved SEZ is 1750 square kilometers. As per government projections, if all 234 formal approvals becomes operational, investment amounting to INR 300,000 crore will come in.
By limiting the area of SEZ, thus putting a cap on the land acquisition, Indian government is trying to bring in the investments through SEZs but on a cautious note, by avoiding agitations. But many economists dispute this approach by saying that investment in many of the sectors in some parts of the country is due to availability of natural resources. Incremental investment can be ascribed to industries catering primarily to export. Those units in SEZ, which mostly cater to the domestic market would come irrespective of the SEZ scheme and would not contribute to incremental investment substantially.
Mr Jagdish Bhagawati the famous economist is openly critical of our SEZ policy. He said that "India should have a few large sized multi company, multi product SEZs on the eastern and western coasts with world class infrastructure and facility. An export obligation of 60% to 75% should be imposed on units operating from SEZs should be utilized for production and processing. Fallow and single crop lands should get preference for location of SEZs along with a generous package of compensation including housing, social amenities and employment.
Mittal Steel US employees take to CFL to protect environment
It is reported that about 20,000 employees of Mittal Steel USA will take the ENERGY STAR Change a Light pledge to use energy efficient lighting in an effort to protect the environment for future generations.
The ENERGY STAR Change a Light, Change the World Campaign is a national challenge sponsored by Environmental Protection Agency and the US Department of Energy to encourage Americans to switch to light bulbs and fixtures that have earned the ENERGY STAR for energy efficiency. Lighting accounts for about 20% of a home's electricity use, and ENERGY STAR touts the switch to energy efficient lights as a significant way to reduce greenhouse gases, save energy and protect the environment.
Mittal conducted the campaign as part of its overall energy-awareness initiative, which seeks to reduce the use of energy in its operations as well as in employees' homes. Mittal Steel USA has helped employees fulfill the goal of the campaign by exchanging each pledge for a compact fluorescent light bulb and a fact sheet on the amount of energy that's saved by replacing an incandescent bulb with a CFL.
According to EPA estimates, Mittal employees' 20,000 pledges have the potential to save more than 5.5 million kilowatt hours of energy and nearly 9 million pounds of greenhouse gas emissions by changing just one bulb.
ENERGY STAR was introduced by the EPA in 1992 as a voluntary, market based partnership to reduce air pollution through increased energy efficiency.
CSC sets up new CRC & HDG lines
Taiwan's China Steel Corp announced that it will invest about USD 14.07 billion in building up two product lines for HRC and hot dipped galvanizing, which have output of 1.5 million and 0.4 million tons per year respectively.
As per report CSC will additionally invest USD 196.61 million in upgrading their No 1 blast furnace in Kaohsiung that can make the output of crude steel increase about 360,000 tones per year.
CSCs sale of finished steel amounted to 10.225 million tons in 2006 as against 9.8 million tons in 2005.
Scrap laden freighter sinks near Japanese coast
Bloomberg reported that a Japanese freighter with a cargo of steel scrap sank after colliding with a Cambodian freighter leaving one crewmember of the Japanese vessel missing. The 313 ton Eifuku Maru No 7 collided with the Cambodian registered Yin He No. 1 off the coast of Wakayama prefecture near the town of Susami in western Japan.
A Japan Coast Guard ship is searching for a 65 year man missing from the crew of four on the Japanese freighter. There were no injuries among the 10 Chinese crewmen onboard the 1,592 ton Cambodian vessel which is carrying silicon ore.
Eifuku Maru No 7 is owned by Nagoya based Tsutsui Kaiun KK.
MacroAsia inks deal with Jinchuan on Palawan exploration
MacroAsia Corp announced recently that it has signed an agreement allowing Jinchuan Group Ltd of China and JCP Geo-ex Services to further explore MacroAsia's mine site in the western Philippine province of Palawan.
MacroAsia said "Jinchuan intends to conduct due diligence on the property in Brooke's Point, Palawan for a further possible joint exploration with MacroAsia on its own expense, and has designed an exploration program to this effect.
JGS is an independent exploration service contractor accredited by the Mines and Geosciences Bureau.
MacroAsia has an exclusive right to explore, develop and utilize for commercial purposes nickel, chromite, iron and other mineral deposits that may be found within a 1,114-hectare mineral site at Brooke's Point.
AK Steel's Zanesville honored for safety and positive community impact
AK Steel announced that its Zanesville Works has received three awards for the plant's 2006 safety performance, along with an award recognizing its positive economic impact on the Zanesville area. The awards were presented at the annual meeting of the Zanesville Muskingum County Chamber of Commerce held on March 30th 2007.
The safety awards, presented by the Ohio Bureau of Workers' Compensation, division of Safety and Hygiene, in conjunction with the Zanesville-Muskingum County Safety Council, included the following
1. The Group Safety Award for having the lowest incident rate in the industrial group
2. The 100% Award for operating the entire year without a lost-time injury
3. A Special Award for working 1,809,293 hours without a lost-time injury from April 21st 2003 to December 31st 2006.
Zanesville Works also received the Award for Community and Economic Success from the Muskingum Growth Partnership which honors companies that invest in new facilities or equipment or increase employment during the year. The award recognizes AK Steel's restart of an idled cold rolling mill and an annealing and pickling line during 2006 which resulted in the recall of previously laid-off employees.
Mr James L Wainscott chairman, president & CEO of AK Steel said Congratulations to our Zanesville employees for their outstanding safety achievements, especially for working well over three years without a single lost time injury. It is also an honor to be recognized for AK Steel's positive impact in the Zanesville area community."
Anyang Steel's SBQ plates get 5 certifications
Anyang Steel's ship building plates have obtained certifications from classification societies in China, US, Britain, France and Germany.
Anyang has received certificate from British Lloyd's Register of Shipping enabling the steelmaker to export its advanced products to developed countries. The certifications, which Anyang Steel prepared since May 2006 began in November 2006 and ended on December 25th of 2006.. Certificate from Lloyd's Register of Shipping has arrived on February 26th 2007 with tenure to January 20th 2010 and those from other four countries are on the way.
The certifications are carried out due to thickness expansion from 25mm to current 36mm and newly added common strength plates of grade D on the basis of previous certifications.
(Sourced from MySteel.net)
Newell Recycling to add a shredder at Savannah
It is reported that Newell Recycling LLC of Atlanta has made an agreement to purchase industrial property in the Port of Savannah for building a shredding plant. The Savannah operation will include a shredder and downstream processing technologies such as eddy currents and metal sensors that will allow for higher recovery rates. Savannah facility is expected to be completed in the fall of 2007.
Newell Recycling cites soaring scrap metal prices and global demand for scrap metal as reasons for its expansion. Mr Bobby Triesch VP of Newell Recycling said This expansion is just part of a larger plan permitted by the recent robust markets for scrap metal worldwide.
The Savannah acquisition will bring the total number of Newell facilities in the southeastern United States to 14.
Rostekhnadzor suspends activity of 30 Russian coal mines
Interfax last week reported that the Russian Federal Environmental, Technological and Atomic Oversight Service Rostekhnadzor has suspended the activity of 33 mines, including 29 in the Kemerovo region and 4 in the Rostov region, as a part of a comprehensive check of mining enterprises in Russia starting on March 27th 2007.
Erdos EJM aiming to become largest global FeSi producer
Platts reported that Chinese ferroalloy major Erdos Electrical Power & Metallurgical, JFE Steel and Mitsui & Cos Inner Mongolia based silicomanganese making JV Erdos EJM Manganese Alloy plans to produce 70,000 tonnes of silicomanganese in 2007. Erdos Metallurgy Group is planning to increase its ferrosilicon production to 350,000 tonnes per year in 2007 up from 240,000 tonnes per year a year ago. Erdos currently exports about half of its total ferrosilicon output to the overseas market.
Mr Zhang Hai president of Erdos Metallurgy Group recently said that it has invested a capital of over USD 2 billion in Qipanjin Industrial Park in Inner Mongolia and had established the world's largest ferrosilicon production base, occupying 15 square kilometers. He said that "We also target to reach an output of more than 530,000 tonnes per year in 2008 as we aim to become the world's largest ferrosilicon producer.
Mr Zhang also expected that ferrosilicon prices would continue to steadily go up by about 10% this year. He said "Power costs in China are set to increase further later this year due to the expected policy change later this year on regulating the country's power system. Production costs are likely to increase further and more ferrosilicon producers will have to shut down their production.
China's ferrosilicon enterprises are mainly located in the western part of China, including Inner Mongolia, Gansu, Ningxi and Qinghai areas, the reason for this is because those areas are rich in coal reserves which is a key material for ferrosilicon production. China's ferrosilicon production in 2006 accounts for two thirds of the world's total output. The country exports about 1.3 million tonnes per year of ferrosilicon, accounting for about 26% of the world's total production.
Zhujiang Steel to expand HRC output
YIEH reported that Chinas Guangzhou Zhujiang plans to raise its hot rolled coil annual output by 14% YoY to 2.05 million tones in 2007.
Zhujiang Steel is affiliated with Guangzhou Iron & Steel, and it is the only HRC producer in southern China making coils in thickness from 0.8mm to 10mm.
TMK to increase prices for pipes
Bloomberg last week reported that world's 2nd largest producer of steel pipes for the oil and gas industry Russian TMK will increase prices for all products from this month because of higher raw material costs.
TMK in a statement said that the price of scrap metal and round billet, increased by 30% and 13% respectively as compared to last year.
Pakistani steel industry and users meet to curb steel prices
It is reported that during meeting of steel manufacturers, re rollers, ship breakers and contractors held at the Engineering Development Board, Pakistans steel industry is considered different proposals to reduce sale tax to reduce prices of steel products.
During the meeting, the chairman of All Pakistan Contractors Association referred to the example of cement sector, where government's intervention had immediately reduced prices. The chairman of APCA pleaded for a mechanism, which would be helpful to bring down the prices of steel bars. As per report, chairman claimed that he was getting the material in Afghanistan at the rate of USD 580 per ton.
But the representatives of steel industry contested his arguments by saying that steel was different commodity and cannot be compared with cement. The representatives of steel industry said that the price was unrealistic as its raw material billets are selling at price of USD 560 per ton in the international market and someone can not add value at the differential of only USD 20.
During the meeting EDB representative presented a vision for future of steel industry as it failed to develop its own preferences. The vision suggested that 20 unit of 200,000 tonnes per annum capacity are needed in re rolling sector. It further said that at least 6 mini steel mills using local iron ore and coal should be established for achieving energy efficiency in re melting. The vision also called for use of clean scrap in re melting and cleaner fuel in pre-heating of furnaces of re-rolling for achieving environmental standards.
Zimbabwes Hwange Coals 2006 production dips by 32% YoY
It is reported that Zimbabwes Hwange Colliery Company Limiteds 2006 production has been reduced by 32% YoY from the 2.070 million tonne sin 2005. However HCC posted a net profit of ZWD 10.1 billion for 2006 as compared to ZWD 264 million in 2005.
Coal deliveries to the Zimbabwe Power Company's Hwange Power Station amounted to 1.330 million tonnes down by 34% YoY as compared to 2.023 million tonnes in 2005. HCCL's coke sale for the year was 11% below 2005 figures at 196,523 to 174,434 tonnes accounting for 49.6% of the company's turnover. HCCs coke exports in 2006 also dropped to 73,831 tonnes from 105,927 tonnes during the 2005. Its coal exports increased marginally by 6% YoY to 41,470 tonnes. Bulk of the coal exports were shipped to Zambian and Democratic Republic of Congo markets.
Mr Tendai Savanhu chairman of HCCL attributed the significant rise in profits to the company's focus in improving margins through efficiencies and cost control policies and the revaluation of the investment properties. He said "The Company continued with its capitalization initiatives in order to boost production capacity. Two state of the art drills were procured from Europe and two new shuttle cars were acquired from the Republic of South Africa. The company took delivery of the mining equipment from China North Industries Corporation of China in October last year."
HCCL has experienced cash flow problems during the year due to late payments by its major customers, Zimbabwe Iron and Steel Company and Zesa Holdings' subsidiary ZPC which resulted in trade creditors accumulating to ZWD 8 billion as at the end of 2006 as to ZWD 391 million payable as at end of 2005.
Northwest Pipe bags USD 5.5 million pipe supply order
Northwest Pipe Company recently announced that that it has been named as pipe supplier by Balfour Beatty Construction Inc of Fairfield in California for an East Bay Municipal Utility District project near Sacramento in California.
Northwest Pipe will supply approximately 7,382 feet of 36 inch through 144 inch diameter steel pipe valued at approximately USD 5.5 million for an engineered and custom fabricated piping system to be installed in the Clay Street & Camanche Raw Water Pumping Plants project.
The pipe is expected to be manufactured in Northwest Pipes Portland, Oregon or Adelanto, California division, with delivery scheduled to begin in the fourth quarter of 2007.
Northwest Pipe Company is headquartered at Portland in Oregon and has nine manufacturing facilities across the United States and Mexico. Northwest Pipe Company manufactures welded steel pipe in three business segments Water Transmission Group, Tubular Products Group and Fabricated Products Group.
Germanys March crude steel output up by 1.4% YoY
Germany's Federal Statistics Office reported that crude steel production in March up by 1.4% YoY to 4.17 million tonnes, while pig iron output was down by 3.9% to 2.54 million tonnes.
On a MoM basis, crude steel production was up by 9.1% in March, while pig iron production was up by 4.6%. Adjusted for seasonal and calendar effects, crude steel production fell by 1.1% in March from February, it added.
SDI completes USD 500 million offering
Steel Dynamics Inc announced that it completed an unsecured notes offering of USD 500 million in 6.75% senior notes due 2015.
SDI said that its net proceeds will be used to redeem USD 300 million in 9.5% senior notes due 2009. Proceeds will also be used to repay outstanding loans under a senior secured revolving credit facility, finance capital expenditures and serve general corporate purposes.
