October, 21 2007
JSW Energy ties up with Chinese firms for equipment supply
It is reported that JSW Energy has tied up with Chinese electrical equipment makers Shanghai Electric and Dongfang Electric Corporation for importing equipment for JSW’s upcoming power projects and has allocated INR 3,500 crore for sourcing the equipment for the 4,000 MW power projects.
Mr NK Jain VC of JSW Energy said that “The construction for the three projects has begun and the shipment of equipment will start in a couple of months.” He added that it is investing INR 11,000 crore for setting up the 3 projects including a 600 MW coal fired project at Vijaynagar in Andhra Pradesh, a 1,200 MW coal fired project at Ratnagiri in Maharashtra and a lignite based 1,000 MW project at Barmer in Rajasthan. Equipment such as boilers and turbines has account for 35% of the total project cost.
Mr Jain said that “The company has achieved financial closure for all its power projects.” He added that a consortium comprising 12 banks and financial institutions has participated in providing a loan of INR 3,750 crore for the Barmer project, which has achieved closure now. The total cost of the project is estimated at INR 5,000 crore.
Dongfang already has a JV with TATA Power for setting up ultra mega power project in Mundra. For forthcoming UMPP bids also, Dongfang is expected to participate with the TATAs, while Shanghai Electric is supplying equipment for the engineering, procurement and construction projects of Reliance Energy.
JSW Energy is already operating a 260 MW power plant in Vijaynagar. It sells 60 MW to group company JSW Steel, and 200 MW to other utilities. JSW Steel owns a 230 MW plant separately for its captive use, but its operation and maintenance are done by JSW Energy. Apart from the coal and lignite fired plants, it is also setting up a 260 MW hydel project in Himachal Pradesh.
Nalco may set up aluminum plant in South Africa
It is reported that National Aluminium Company Limited may put up a 0.5 million tonne plant in South Africa that would use local mineral resources as its raw material. Preliminary discussion for setting up the plant has been held earlier this week between Mr Subbarami Reddy union minister of state for mines and Mr Sandile Nogxina head of mining and steel ministry of South Africa during his visit to South Africa.
Mr Reddy, who accompanied Dr Manmohan Singh Prime Minister, during his visit to Nigeria and SA, told Mr Nogxina that Nalco is interested in establishing a plant with an annual capacity of 0.5 million tonnes. In response Mr Nogxina assured that his country would extend all possible support along with access to local mineral resources for Nalco to do the value addition.
During the discussions Mr Reddy also expressed India’s willingness to avail the services of Mine Qualification Authority of South Africa for Indian companies go get access to latest mining technologies. It was also mutually agreed to make use of South African training facilities in mining for Indian technicians in India as well as by sending Indian technicians, engineers and geo scientists there.
The discussions also focused on mining in forest areas with out effecting ecological balance and also rehabilitation procedures. Mr Reddy and his counterpart also agreed to establish Joint Technical Working Group consisting of experts from both the countries to develop a plan of action and identify projects and report to both the Governments, once or twice a year, so that the progress can be monitored.
Vizag Steel readies itself for a creative pitch
It is reported that Visakhapatnam Steel Plant is all set to call for a creative pitch. Recently, it has released a briefing to the agencies and asked them to submit their credentials. It is learnt that towards the end of October 2007, the agencies will be invited to make creative and strategy presentations.
The brief has been circulated amongst 8 agencies currently, the names of which could not be ascertained. After the first round of presentations, three agencies are expected to be short listed for the final run. Vizag Steel will also probably consider media agencies, but only after it has finalized its creative agency.
Sources close to the development confirm that Vizag Steel has planned an ad spend of INR 10 crore to INR 12 crore for this fiscal. Prior to this, some 10 years ago, it had RK Swamy/BBDO Chennai on the business for about a year and a half. After that, it has handled its advertising in house.
As part of the brief, the agency will be required to assist Vizag Steel in market research to understand target groups and analyze feedback, as also develop a concept and theme for corporate and product campaigns in print, television, outdoor and in house media.
Vizag Steel, which is held by Rashtriya Ispat Nigam Limited, has a turnover of INR 9,000 crore currently. It produces TMT re bars, structural angles, channels, beams and plain rounds, wire rods in coils, squares and billets. It has a market share of 15% in the long products market, SAIL has 10%, TISCO has 7% and secondary producers have 66%. About 2% is met by imports.
India’s H1 iron ore traffic handling up by 9% YoY
BL reported that India has exported 39.40 million tonnes of the ore during April to September 2007 period up by 9% YoY as against 36.20 million tonnes handled in April to September 2006 period. The increase in traffic was despite the INR 300 a tonnes export tax and strong rupee value.
According to the Indian Ports Association data, the major ports also surpassed the iron ore traffic target of 37.73 million tonnes set by the shipping ministry for the first 6 months. Nearly 95% of iron ore handled at Indian ports is exported to countries such as China and Japan and the rest is for local consumption.
Mr Moosa Raza president of Indian Steel Alliance said that the increase in traffic was due to the Chinese demand for iron ore. Around 80% of India’s iron ore is exported to China, which annually imports around 500 million of the ore from various countries. He added that “We will have a bull run as long as the Chinese demand is there. China’s steel production does not seem to be reducing. This is despite the price of iron ore touching a record high of USD 105 a tonnes three months ago. The price has dropped by USD 5 a tonnes now.”
Mr Rahul Baldota president of Federation of Indian Mineral Industries however, said that iron ore traffic was affected due to drop in imports by China. He added that said “China’s iron ore import dropped by nearly 25% and this should have a significant effect on Indian iron ore exports.”
JSW Group to foray into cement business
It is reported that JSW group is foraying into the cement business by setting up 2 plants with a combined capacity of 3 million tonnes in Karnataka and Andhra Pradesh and has floated a company JSW Cement, which will invest INR 1,200 crore in the upcoming facilities. The new units will use ash from its power plants and slurry from its steel plants as raw material.
Mr NK Jain VC of JSW Energy said that “JSW Cement is planning investments at 2 locations close to the steel and power plants at Vijayanagar in Karnataka. The AP plant is also near the Karnataka border. The initial investment for the projects will be INR 1,200 crore. After this project, JSW Cement will consider other investments also.”
JSW Energy is already operating a 260 MW coal fired power plant in Vijayanagar while its sister concern JSW Steel owns a captive 230 MW coal based plant at the same location. It’s also planning a 600 MW imported coal based project at Vijayanagar. Another 1,200 MW coal fired project is under construction at Ratnagiri in Maharashtra. It requires a 10 to 15 million tonne thermal coal a year to fuel its upcoming power projects. According to rough estimates, almost 3 to 5 million tonne per year ash will be produced from these plants.
Mr Jain said that JSW Steel has a 3.8 million tonne per year upstream steel plant, which produces flat products for automobiles and white goods, at Vijayanagar. This plant is supported by the down stream facility at Vasind in Maharashtra. The slurry from these plants would be channelled to the cement plant. JSW Steel has also firmed up plans to expand its manufacturing capacity 6.8 million tonne per annum by mid 2008, which it aims to ratchet up to 10 million tonnes per annum by 2010.
Tayo Rolls plans to raise capacity
Tayo Rolls Limited has announced that it is expanding its cast roll capacity from 13,500 tonnes a year to 15,000 tonnes and total roll making capacity after the expansion, including forged rolls, would be 18,000 tonnes a year.
The expansion would enable Tayo to cater to the increasing demand of rolls in India and overseas, including Corus, the parent company of Tayo.
REL Q2 net profit up by 34% YoY
Reliance Energy Limited has posted a net profit of INR 250.08 crore for the July to September 2007 quarter up by 34% YoY as against INR 186.39 crore in July to September 2006 quarter. While it has posted net income of INR 1,799.92 crore up by 13.65% YoY as against INR 1,583.70 crore.
For April to September 2007 period, its net profit has increased by 30% YoY to INR 472 crore, while income was up by 28% YoY to INR 3,712 crore. It registered a cash profit of INR 619 crore up by 28% YoY as against INR 484 crore.
A power sector analyst said that “Other than electrical energy sales, extraordinary elements like other income from operations helped the performance, which was along the expected lines. While power generation grew by 9%, sales grew by only 7% and power purchase expenses increased by 13%, business from EPC and other contracts was also lower, which means the company could have done better.”
The turnover of engineering, procurement and construction and the contracts division was INR 621 crore in April to September 2007 as against INR 740 crore in the corresponding period last year. Other income for the first half year, mainly representing interest income, grew by 57% YoY to INR 547 crore.
REL’s energy sales grew up by 40% YoY to INR 2,543 crore for the half year as against INR 1,823 crore. It sold 4,860 million units of electrical energy for the period up by 10% YoY as against 4,416 million units.
Commenting on the power generation performance, REL said that its Dahanu Thermal Power Station operated at a plant load factor of 99.1% for the first half year similar to the first half in the previous year. The Samalkot Power Plant operated at a higher PLF of 66.2% as against a PLF of 48.9% in the corresponding period last year. This was mainly due to mixed fuel operation and increased gas supply to meet the growing grid demand. The Goa Power Station maintained a lower PLF of 79.3% as against 88.9% during the period under review.
Mittal, HPCL signs MoU signed for Vizag refinery
It is reported that Mittal has signed a MoU with Hindustan Petroleum Corporation, GAIL, Oil India and Total of France to set up a USD 6 billion refinery and petrochemical complex at Vizag in Andhra Pradesh.
The feasibility study for a 15 million tonnes per annum refinery and a 1 million tonnes per annum petrochemical complex is expected to be completed by March 2008. Total of France will lead the feasibility study for the refinery project, while GAIL will take charge of the feasibility study for the petrochemical unit. The exact equity structure and the project cost will be finalised after completion of the feasibility study.
Indian Railways to invite bids for locomotive unit in Bihar
It is reported that, with global majors EMD and GE expressing their interest with the Indian Railways for setting up the diesel locomotive unit through a JV, Indian Railways is now working towards inviting the bids for setting up the unit in Marhowra in Saran district of Bihar.
As per the request for qualification document, to which GE and EMD had responded, the Indian Railways had stated that the required manufacturing capacity of the new factory is envisaged to be around 100 diesel locomotives per annum.
A reliable source said that companies would be asked to bid for the project by quoting the price at which they would supply each unit of locomotive to Indian Railways. Source added that “They have to quote the price as per the present level of taxes.”
Indian Railways would have 26% equity in the JV while the private firm would have the majority stake. The source said that “The firms can bid through a consortium while the lead firm needs at least 51% stake.”
In terms of human resources for the unit, to avoid poaching of personnel from the Railways’ production units, Indian Railways is trying to provide for deputation of officials from the Railways set up to the new units. Indian Railways will facilitate land procurement and provide the land on lease to the JV, with the lease charges being 8% of value of land. While the Railways would facilitate provision of water and electricity to the location, the joint venture would have to bear the cost of electricity and water.
The ministry of Railways is tentatively looking to procure mainline diesel electric locomotives with minimum Horse Power requirement of 4,500 at 22.5 tonne axle load and 6000 at 25 tonnes axle load. Additionally, the Railways may also require provision of maintenance services by the joint venture company for the mainline diesel electric locomotives to be supplied under the project.
Everest Industries to set up a manufacturing unit in Uttarakhand
Everest Industries has announced that it will put up a manufacturing unit at Roorkee in Uttaranchal with an investment of INR 750 million. The plant will have a manufacturing capacity of 50,000 tons of fibre cement boards and 100,000 tons of roofing products per annum.
The plant will make roofing sheets, boards, light gauge steel frames to cater to both domestic and international markets and will also meet demands from neighboring countries, such as Nepal and Bangladesh along with the domestic market.
Everest Industries has manufacturing facilities in Kymore in Madhya Pradesh, Kolkata, Coimbatore and Nashik. It posted a 20% growth in turnover at INR 3.03 billion in 2006-07as against INR 2.54 billion in the previous fiscal. The company aims to grow at 25%.
SLB Energy to commence work on Katghora power plant soon
ProjectsToday reported that SLB Energy is expected to commence work on its Phase I of 250 MW coal based thermal power unit at Katghora in Korba district of Chhattisgarh by November 2007. The unit will entail an investment of INR 813 crore and will require around 70 acres of land.
Mr Rajiv Srivastav a consultant to SLB Energy informed that company was awaiting approvals from pollution control board and was also in the process of achieving financial closure. The project DPR was prepared by Raipur based Bhomkar & Associates.
NTPC identifies new location for Sri Lanka power project
It is reported that the perception of an increased threat from separatist outfit LTTE has forced NTPC Ltd to relocate its proposed 500 MW coal based thermal power plant in Sri Lanka.
A senior NTPC executive said that “The new site is north of Trincomalee, while the earlier site was south of it. We have selected the site and prima facie it is okay. We now have to sign the power purchase agreement.”
The power project is an attempt by India to engage its neighbors both politically and economically, the Indian Navy has access to the Bay of Trincomalee under an accord signed by the two countries. The NTPC plant is expected to significantly enhance power supplies in the island nation.
Sri Lanka has a total power generation capacity of only 2,500 MW as against India’s capacity of 130,000 MW. The project in Sri Lanka is important for NTPC to globally demonstrate its ability to set up power projects in other countries. It also plans to set up power plants in Nigeria, which is allocating long term supplies of liquefied natural gas to fuel NTPC’s plants in India.
NTPC’s Sri Lankan project involves an investment of USD 500 million and is to be set up in a JV with the Ceylon Electricity Board. It is expected to be commissioned by 2011. The project will be set up on a build, operate, own and transfer basis and will have a debt to equity ratio of 70:30. It will use around 2.5 million tonnes per annum of imported coal, which may be sourced from Australia and Indonesia.
Mr RV Shahi former secretary in India’s power ministry said that “Sri Lanka is in need of power generation capacity as the power supply situation there is weak. Being a major power generation player in this part of the world, it is a good thing for NTPC to set up projects outside India.”
However, a Mumbai based power sector analyst who did not wish to be identified said that it remained to be seen whether there was a big international market for NTPC. He added that “Not many power generation companies have a global presence.”
McNally Bharat bags INR 125 crore orders from GRSE
McNally Bharat Engineering Company Limited announced that it has received an order worth INR 104.48 crore, including all taxes and duties from Garden Reach Shipbuilders & Engineers Ltd for design, manufacture, supply, erection, testing, commissioning and maintenance of a 250 tonnes Goliath crane at GRSE Main, Phase IT of Modernization.
McNally Bharat has also received an order from RINL Visakhapatnam Steel Plant for design, engineering and supply of all equipment including commissioning spares and training of VSP personnel for electric wagon pusher and wagon tippler complete with all electricals and accessories for installation in ore & flux unloading yard valued at INR 21.72 crore, including all taxes and duties.
IFGL Refractories Limited receives CAPEXIL Special Award
UNI reported that specialized refractories manufacturer IFGL Refractories Limited has received CAPEXIL Special Award for Refractories for the year 2006- 2007. This is the 5th year in a row that IFGL has won this recognition.
An important supplier of refractories to the Indian steel manufacturers, IFGL has presence in several major steel producing countries. It has also plants through step down subsidiaries in the UK, USA, Brazil and China.
KRIBHCO, SECL to form JV for power plants in Chhattisgarh
It is reported that Krishak Bharati Co operative and South Eastern Coalfields Limited is planning to form a JV with Chhattisgarh State Electricity Board for setting up 2 power plants with capacity of 2,000 MW and 1,000 MW each at an investment of around INR 9,500 crore and INR 5,000 crore respectively.
Krishak Bharati has submitted a proposal to form a 76:24 JV with the CSEB to install a 2,000 MW thermal power plant. While, South Eastern Coalfields Limited is keen to form a 51:49 JV with the CSEB to build a 1,000 MW power plant in Korba.
CVRD JV’s for production of steel slabs in Brazil
Companhia Vale do Rio Doce recently announced that its board of directors has approved an investment budget of USD 11 billion for 2008, out of which 0.7% or USD 81 million is for setting up a steel slab mill.
CVRD will participate in an integrated steel slab production plant, with an initial capacity of 5 million tonnes per year, in partnership with Baosteel. CVRD’s investment in this project, Companhia Siderúrgica de Vitória Baosteel CSV is budgeted at USD 718 million, with an expected disbursement of USD 8 million in 2008.
CVRD also has a share in ThyssenKrupp CSA, which should produce 5 million tonnes of slabs in the plant being built in the state of Rio de Janeiro. CSA will require 8.5 million tonnes per annum of iron ore and pellets which will be supplied by CVRD. Start up is scheduled for the first half of 2009.
ThyssenKrupp aims to double China Sales in 5 Years
Reuters reported that German industrial conglomerate ThyssenKrupp aims to double its China sales to EUR 2 billion in the next five years. The report quoted Mr Ekkehard Schulz CEO of ThyssenKrupp on the sidelines of an event in Shanghai as saying that the company also aimed to invest EUR 500 million in China over the same period, including in such areas as automotive components, elevators and bearings for windmills.
ThyssenKrupp also has a galvanized steel partnership with Angang New Steel in northeast China that plans to double annual capacity to 800,000 tonnes by next year. ThyssenKrupp's sales have been climbing in China as rapid economic growth fuels robust demand for industrial products.
Mr Schulz criticized the Chinese government, however, for insufficient action to curb steel exports. He said that "10 million tonnes of steel will be exported to the EU this year. Last year was only half that. All the measures taken by the Chinese government to curb these exports have been without effect so far. He added that if China wishes to avoid long-running trade conflicts, the rules of the market have to be obeyed."
Chinese iron ore price negotiation to begin in November
Mr Chu Jiandong deputy general manager of Tangshan Steel at Asia Ferrous Metals Development Dialogue 2007 on October 17th 2007 said that "2008 Iron ore benchmark price negotiation will start in early November 2007. The price may rise further, but should not rise over 15%."
Tangshan Steel is one of the 16 Chinese steelmakers who participate in the price negotiation. 60% to 70% of imported iron ore it consumes is fixed by long-term contracts with lock in period of 20 years.
The world's largest iron ore producer, Brazil's CVRD, declared on October 15th 2007 that it planned to pour USD 59 billion in the coming five years to expand its business in iron ore, nickel, coal and so on. Iron ore output will enjoy an annual increase of 7.1% and reach 450 million tons by 2010. Mr Roger Agnelli CEO of CVRD noted that robust iron ore demand in Asia, especially in China, stimulated the decision.
Mr Gong Fangxiong general manager of JP Morgan Securities (Asia Pacific) Ltd, forecasted that iron ore price would gain 30%, a figure agreed by most overseas institutions.
Mr J Sun Trading Consultants Ltd told reporters that many factors, such as products prices and profits level of Chinese steelmakers, price for Indian spot ore and long-term contracts Chinese steelmakers signed with other miners would be mentioned during the negotiation.
According to Mr Chu, with the implementation of obsolete capacity elimination, growth rate of China's steel output is declining. The country will demand less and less iron ore, thus price is unlikely to surge.
China's steel output registered 272 million tons in last January to August 2007, up by 18.6% YoY the figure stood at 321 million tonnes during this January to August increase of 17.7% YoY. The growth rate is falling. Mr Chu said that "Total cost of ocean shipping records some USD10/ton, including shipbuilding cost and oil price. The long-term contract Tangshan Steel has signed covers freight rate of USD12/ton. However, freight rate for spot iron ore from Brazil now approaches USD100 per tonnes. Personally I think USD 20 per tonnes is reasonable. As for Australia's request, they can not decide unilaterally."
An insider from a large domestic shipping enterprise revealed major bulks involve iron ore, coal and grain. Large amount of bulk cargo ships were launched in 2005 and 2006, hence most insiders took a pessimistic view towards dry and bulk cargo transport market in last year. However, the market became seething in the third quarter and the bloomy operation lasts until now. He explained that Brazilian iron ore resources that were transported to the US and Europe now flow into China. Long shipment distance leads to increased freight volume. In the meanwhile some transport capabilities are left waiting owing to overstock at ports. Moreover, many vessels are lain idle and international speculators mislead BDI by apparent tight transport capabilities.
Mr Chu told reporters Tangshan Steel now plans to build three 300,000 ton bulk cargo ships and is consulting with CVRD and a large ship company to jointly set up a barge train, in an attempt to curb ocean shipping risks.
(Sourced from Mysteel.Net)
Baosteel Huangshi produced color coating sheet with 1mm thick
It is reported that Baosteel Huangshi Company first produced 100 tons of color coating sheets with 1mm thick and qualified ratio reached 100%. The color coating line is one of the two main lines in the company, with annual capacity of 50,000 tons.
Based on integrated synergy with Baosteel, Huangshi has developed five categories of fluorin carbon sheet and polyester including lividity gray sheet with ten colors including Kelly, metal gray, silver and phoenix blue as well as new special structural materials since early this year, laying a solid foundation to produce in quantity and realize stable and tailored production.
NLMK named “Supplier of the Year” by ABB
NLMK has been recognized by ABB Oy, Machines representative office of ABB Group in Finland as “Supplier of the Year 2006”. ABB Oy, Machines, specializes in the development and production of automation systems for industrial enterprises and power complexes.
NLMK has been shipping cold rolled non grain oriented narrow strip steel of 0.5 mm thickness to Finland for over 10 years. In the first three quarters of this year, NLMK exported about 234 thousand tonnes of cold rolled non grain oriented steel. This steel product is used in manufacturing of stators and rotors of electric motors, generators of different capacity and other electrical equipment.
In 2006 ABB Group’s representatives audited NLMK’s Quality Management System and Environmental Management System for electrical steel production procedures. The auditors confirmed the compliance of the Management System, technological processes and NLMK’s products to the requirements of international standards and requirements of suppliers.
ABB Group is one of the largest world companies, which specializes in the production of power equipment and automation technologies. The company’s branches are in 100 countries of the world. The Headquarters are located at Zurich in Switzerland.
Chinese Steelmakers listed in 2007 “World class Steel Producers”
It is reported that six Chinese steelmakers are listed into the "World class Steel Producers" in this year's ranking by World Steel Dynamics, which includes 23 names in total. The Chinese makers are Baosteel, Anben Steel, Ma'anshan Steel, Shagang, Wuhan Steel and Taiwan's China Steel Corp.
In this ranking, India's TATA slips to Fifth after its merger with Corus, as Corus will have to buy all its needed minerals on the world market in coming years. Russia's Severstal has topped the list, with very high marks in items of materials cost, service cost and acquisition. South Korea's POSCO is the Second, boasting dominant role on the market, good profitability and BS and processing cost.
ArcelorMittal is lifted to Third from Tenth for big steps in expanding output, lowering cost and acquisition. China's Baosteel is the Fourth thanks to progress in expansion, acquisition and service cost saving.
"World-class Steel Producers" are known in possession of such competences as: superior production strength and flexible marketing capability, attractive to steel buyers, and can capture capital at lower interest rates with its reputation and strength.
(Sourced from Mysteel.net)
TMK starts making pipes for Gazprom rigs
Pipe Metallurgical Company TMK announced that it has become the first comp any in Russia to launch production of cold resistant high collapse seamless pipes used for the construction of jack up rigs in the Arctic environment.
TMK in a release said that it would produce seamless pipes used in floating drilling rigs designed for Gazprom's Arctic shelf development projects. It said that TMK's Volzhsky Pipe Plant mastered the unique technology of seamless pipe production of special steel PCF 40W, used in shipbuilding.
TMK's new products passed certification tests, testifying that seamless pipes produced from PCF 40W steel exhibit higher cold resistance and can be used in the construction of special elements in jack up rigs that are directly exposed to dynamic ice loads.
At present TMK's premium pipes are already used in the construction of "Arcticheskaya 100" jack up rig, designed for operation in the Barents Sea.
TMK said that Gazprom is now actively exploring oil and gas potential of the arctic water areas of the Barents, the Kara, the Okhotsk, and the Pechora Seas, and, in particular, the Russian gas giant is starting implementation of its large scale project of Shtokman gas field development.
Chinese iron, copper ore imports up
According to latest statistics released by the China’s General Administration of Customs, China imported 250 million tonnes of iron ore fines in January to August 2007, up by 14.5% YoY.
China’s Customs sources said that the import price of iron ore fines from January to August 2007 period averaged USD 78.2 per ton up by 25.5% YoY as compared with January to August 2006 period. The price soared to USD 89.8 per ton in August 2007, up by 36.9% YoY.
Experts held that the hike of iron ore fines price was mainly triggered by the rocketing freight cost, which by the end of this June had more than doubled the year earlier level. The mounting cost was due largely to the shortage of international shipping capabilities.
China’s imports of copper ore fines in January to August 2007 went up by 35.9% YoY to 3.192 million tonnes, which were valued at USD 6.01 billion up by 63.2%. The average price of the arrivals in the January to August period rocketed to USD 1,882 per tonnes up by 20.1% YoY.
China has scarce copper ore resources and mainly imports copper ore from Chile, Peru, Mongolia and Australia to fill up the gap between supply and demand.
According to the latest report of International Copper Study Group, world supply fell short of demand by 130,000 tonnes in the H1 of 2007 after seasonal adjustment. The short supply gives strong support to the copper price hike. With the brisk domestic demand for copper, industrial insiders predict that the China’s copper price will continue going up in the fourth quarter of this year.
Ferrous scrap prices on decline in 2007 - Brazil
BNamericas reported that Brazilian ferrous scrap prices are falling as steelmakers have increased production of pig iron, a key input in their production processes.
Mr Sergio Camarini president of São Paulo state ferrous and nonferrous scrap metal wholesale union Sindinesfa told BNamericas that "In Brazil, steelmakers determine scrap prices. Up until August 2007, ferrous scrap was worth BRR 420 per tonnes but reached a value of BRR 390 per tonnes last month and is due to further decline to BRR 360 per tonnes in October.”
Mr Sergio Camarini said an increase in the country's industrial production results in an increased scrap supply, creating a surplus on the local market. I believe ferrous scrap will close the year at some BRR 360 per tonnes. He added that "Until there's a way for us to open up an opportunity on markets abroad, prices will continue to fall, adding obstacles to selling scrap outside Brazil include the lack of access to shipping.”
Chinese MoC mulling over threshold for licensed steel exporters
It is reported that China’s ministry of commerce are working on new threshold for qualified steel exporters. Sources close to the regulators tell local media that steel exporters may be requried to ship a minimum of 30,000 tonnes per year of steel products for getting the export license.
A well informed source said that "There are over 12000 steel traders in China at the moment and the new threshold would slash the number to around 200." He added that Beijing is set to move forward in drafing further rules to regulate steel export in the future to reduce hefty trade surplus and tackle the pollution to the environment.
A steel trader who sells less than 20,000 tonnes overseas annually said that rising up the threshold for steel exporters is aimed at restoring the market order rather than merely curbing export volume, according to market analysts. The regulation would benefit the market players in preventing price wars.
The new rules would put smaller steel traders at the crossroads, either retreat from exporting business or tieing up with the bigger players. By contrary, the leading steel mills are poised to have more pricing power over steel export thanks to the new policy.
(Sourced from Mysteel.net)
Japan crude steel output in September rose by 3.4% YoY
According to Japan Iron and Steel Federation, Japan's production of crude steel rose by 3.4% YoY in September from a year earlier to 9.93 million tonnes. That figure reflects a 0.3% MoM drop from August 2007.
The federation noted that of the total, production by converters rose by 4.3% YoY to 7.42 million tonnes and that by electric furnaces rose by 0.7% to 2.51 million tonnes. Production of ordinary steel rose by 4.4% YoY to 7.77 million tonnes, while specialty steel output fell 0.2% on year to 2.16 million tonnes.
Annealing furnace for stainless steel wire
It is reported that China Dongbei Special Steel Group has awarded the Gases Division of The Linde Group a contract for the installation of a new annealing furnace for stainless steel wire.
The installation will be the world’s first application of oxyfuel technology in stainless steel wire treatment and demonstrates the wide range of applications that can be improved with this technology.
The new annealing furnace for stainless steel wire will combine two of Linde’s technologies, DST and Rebox oxyfuel solutions and the use of oxyfuel will further improve important parameters such as fuel consumption, throughput capacity and emission levels. The commissioning of the Rebox® DST furnace in this application is scheduled for September 2008.
ECZ rejects Lusaka steel plant application
The Environmental Council of Zambia has turned down an application for the establishment of a steel bar production plant in Lusaka by True Companion Steel Company, the council has, however, approved 12 other projects.
Mr Justin Mukosa public relations officer in a statement to the Times said the ECZ decided to reject the establishment of the plant because the proposed site bordered the Zesco coventry power substation and was within the way of a high voltage power line. He said the proposed location posed a risk to the coventry substation which supplied power to a large part of Lusaka and advised True Companion Steel Company Limited to find an alternative site.
The other 12 projects approved by the ECZ include the proposed Kaputa Bio Gasifier project by the ministry of Energy and Water Development, building of a bulk emulsion manufacturing plant facility by Bulk Mining Explosives Zambia Limited at Kansanshi mine as well as the proposed construction of storage facility for agricultural commodities in Lusaka by Grain Storage Solutions.
Wire Rope changing name, moving headquarters to KC
Wire Rope Corp of America Inc announced that it will change its name to WireCo WorldGroup on October 29th 2007.
Wire Rope Corp said the new name better reflects its evolution into a global manufacturer of wire rope and other steel products. Since emerging from bankruptcy in 2003, Wire Rope has expanded its operations into Mexico, Canada, China and Germany. It also moving its corporate headquarters, with about 85 employees, to Kansas City from St Joseph at the end of the month.
Mr Ira Glazer CEO of Wire Rope Corp in a statement said that “WireCo WorldGroup represents our heritage while highlighting our corporate strength global availability.”
ArcelorMittal seeks talks with Venezuela on iron ore investment
Bloomberg reported that ArcelorMittal is seeking talks on a possible iron ore investment in Venezuela with the government of Mr Hugo Chavez president of Venezuela who nationalized utilities and threatened to seize a foreign owned flat steel producer.
Mr LN Mittal CEO of ArcelorMittal in an interview at the International Iron and Steel Institute in Berlin said that “We are interested in Venezuela. We're interested in hearing what the government's position is.''
Steelmakers such as ArcelorMittal, the worlds largest are scrambling to secure raw materials as surging demand from China pushes up prices. The company may enter Venezuela as businesses including Exxon Mobil Corp the biggest publicly traded oil operator and ConocoPhillips, the second largest US refiner are exiting. The two oil companies are pulling out after Chavez demanded they cede control of JV projects.
According to the government Venezuela has more than 2 billion metric tonnes of proven reserves of iron ore in southeast Guayana state. An investment would further ArcelorMittal's strategy of cutting iron-ore costs by expanding in nations with deposits.
Mr Mittal said “We would like to participate in all the Latin American countries. ArcelorMittal plans to get at least 80% of its iron ore from captive mines. The company also plans to develop deposits of the ore in Liberia and Senegal.
E Crane installed at River Metals
River Metals Recycling LLC a subsidiary of David J Joseph Co announced that it has installed an E Crane Model 7317 electrical equilibrium crane at its Louisville in Kentucky location.
According to a release from E Crane International USA, the rail mounted Series 1000 crane installed in Louisville offers 104 feet of reach and 15 tons of lifting capacity. The equilibrium crane is feeding a 3,000 hp Henschel stationary shear at the Louisville River Metals Recycling location and replaces several conventional cranes at the task.
The company has also announced that a rail mounted E Crane model has been ordered for the Sever Corr electric arc furnace steel mill and scrap mill service location at Columbus in Mississippi.
Viet Nam Steel inks deal with Vinalines
Vietnam News Agency reported that Viet Nam Steel Corporation on October 16th 2007, signed a cooperation agreement with the Viet Nam National Shipping Lines.
The two sides agreed to use one another’s products in their business activities. Vinalines will use steel made by Viet Nam Steel to build and repair its vessels as well as build ports and other facilities. Viet Nam Steel will in turn use the shipping fleet and port system of Vinalines for transporting their products. The two corporations will also cooperate to build steel specific ports, including the Thi Vai International Port located on 41 hectare in the southern province of Ba Ria Vung Tau.
The companies also plan to set up a joint stock company to invest in a team of vessels to be used by Viet Nam Steel to transport iron ore and other steel production materials. Longer term cooperative plans include building industrial zones and investing in real estate, banking and labor export.
Mr Nguyen Thanh Dong chief of the Viet Nam Steel’s Committee Secretariat said that “Vinalines has a high quality fleet and we have already been partners for a long time.”
Nucor draws Mill Services
Memphis Mill Services Co a subsidiary of Edward C Levy Co is moving a mill service operation to Nucor Corp's Memphis site at Frank C Pidgeon Industrial Park, bringing 35 jobs and USD 20 million in capital investment with it.
Mr Thad Solomon GM of Nucor Steel Memphis Inc said that "The services they provide are absolutely critical to us. They will manage our port facility, they will conduct our scrap handling on site, they will do our slag processing as well. We have some experience with them in some other locations and we're delighted to have them here."
Edward C. Levy Co formed Memphis Mill Services to serve Nucor Memphis,
According to Mr Tom Smith area manager of the company's "We provide support services to Nucor Memphis that allows their employees to focus on steel making."
Reliance Steel appoints Mr Hannah chairman of the board and CEO
Reliance Steel & Aluminum Co announced that effective October 17th2007, Mr David H Hannah, currently CEO was elected to the additional role of Chairman of the Board.
Mr Hannah became CEO of Reliance in January 1999. He served as President from November 1995 to January 2002. Prior to that, he was appointed a Director in 1992 and had served as an executive vice president and as CFO since he joined Reliance in May 1981.
Mr Joe D Crider a Director and previous non executive chairman of the Board of Reliance said that "Dave has been an invaluable leader for the past 26 years and the Company has prospered very well under his direction. He is essential to the future success of Reliance and will continue to guide the Company's outstanding management team going forward."
Mr Crider will continue as a Director until his term expires in May 2008, at which time he plans to retire from the Board of Directors. This succession plan was put in place by the Company's independent Directors and Members of the Nominating and Governance Committee. Mr Joe Crider became the Chairman of the Board of Reliance in February 1997. He also served as Chief Executive Officer from 1994-1999 and was President until November 1995. He has served as a Director since 1987. His commitment to Reliance spans over 45 years.
Mr David Hannah said that "We recognize the wisdom, guidance and accomplishments that Joe has contributed to Reliance throughout his stellar career and we also appreciate his dedication to the Company's growth and success."
Reliance Steel & Aluminum Co headquartered at Los Angeles in California, is one of the largest metals service center companies in the United States. Through a network of more than 180 locations in 37 states and Belgium, Canada, China, South Korea and the United Kingdom, it provides value added metals processing services and distributes a full line of over 100,000 metal products. These products include galvanized, hot rolled and cold finished steel; stainless steel; aluminum; brass; copper; titanium and alloy steel sold to more than 125,000 customers in various industries.
CVRD makes payment to holders of mandatorily convertible notes
Companhia Vale do Rio Doce announced that it will pay additional interest to holders of the mandatorily convertible notes due June 15th 2010 issued by its wholly owned subsidiary, Vale Capital Ltd in two series, RIO and RIO P.
Under the indentures governing the notes, additional interest due to each noteholder is an amount in US dollars equal to any cash distribution net of any applicable withholding tax and fees paid by the Depositary of our ADSs each representing one common/preferred CVRD share, RIO/RIOPR to the holder of one ADS, multiplied by the number of ADSs that would be received by the noteholder upon conversion of the notes at the conversion rate specified in the applicable indenture (as adjusted for the forward-stock split approved in August 2007). Therefore, the approval by our Board of Directors of a dividend distribution to shareholders, as announced today, triggered the payment of additional interest to noteholders.
The additional interest paid per series RIO note and per series RIO P note will be equal to an amount in US dollars equivalent to BRR 0.659381778 and BRR 0.782596840, respectively, converted at the actual Brazilian real/US dollar exchange rate on October 31st 2007.
The additional interest will be paid to noteholders listed on the records of the trustee as of October 23rd 2007. The Bank of New York, the trustee, will pay the noteholders on November 7th2007.
BHP and NiHAO to search for nickel in Philippines
BHP Billiton Ltd and Philippine metals explorer NiHAO Mineral Resources International Inc signed an agreement on October 17 to look for nickel deposits in the Southeast Asian nation.
Mr Jerry Angping president of NiHAO in an interview said that BHP will provide technical assistance to an initial exploration of NiHAO’s 7,102 hectare property in Zambales province, Ms Emma Meade a BHP spokeswoman confirmed the agreement by telephone from Melbourne.
Mr Angping said that “Under the agreement, BHP Billiton may take over the final round of exploration should the results of the initial search meet its requirements. BHP Billiton may also buy the output from the property should it be developed. This agreement with BHP helps communicate that NiHAO is serious about investing in the mineral industry and that we aren’t just a flash in the pan. It’s a win win arrangement they have the expertise and we have the minerals.”
Mr Astro del Castillo MD of Manila based First Grade Holding Inc, a financial management and advisory company said that “BHP is doing this because the initial data is not enough to conclude that the property is commercially viable.”
The Philippines is counting on overseas mining companies to develop the nation’s mineral resources, including nickel, copper and gold, which the government has estimated may be worth as much as USD 1 trillion. The price of nickel, used to make stainless steel, rose to a record in May on the London Metal Exchange.
Carpenter Technology's corporate credit rating raised to 'BBB' - S&P
Thomson Financial reported that Standard & Poor's Ratings Services raised its corporate credit and senior unsecured ratings on specialty metals company Carpenter Technology Corp to 'BBB' from 'BBB-' with a stable outlook.
S&P said that the upgrade reflects the company's improved financial and operating performance, favorable outlook for its aerospace and energy end markets, strong liquidity position and improved cost structure.
S&P added that the ratings also reflect the company's good market position in specialty steel long products, management's moderate financial policies and favorable market conditions in its key markets.
Philippine nickel ore exports to China fall for second month
It is reported that Philippine nickel ore shipments to China fell for a second month in September after demand for the metal used in stainless steel dropped.
According to Philippine’s Bureau of Customs data, exports from the southern Philippines, which accounted for more than 90% of the nation’s nickel ore shipments last year, nearly halved to 326,538 tonnes in September from 595,931 t a year earlier. Shipments fell 59% in August.
Macquarie Bank Ltd commodity analysts including Mr Jim Lennon and Mr Bonnie Liu said in an October 4th2007 report that demand for nickel declined, causing a drop in sales for nickel pig iron producers and an overhang of limonite ore stocks at Chinese ports.
The Philippines is China’s biggest supplier of low grade nickel ore, which can be processed into pig iron containing as much as 3% nickel. Nickel is used to strengthen stainless steel and prevent it from rusting.
China stepped up production of nickel pig iron this year after the price of the refined metal reached a record. Nickel for delivery in three months on the London Metal Exchange rose to USD 51,800 per tonnes on May 9 before sliding the following three months.
Chinese production fell as prices declined and after officials in August ordered the closure of small nickel pig iron furnaces to save energy and improve the environment. Prices fell to a one year low of USD 24,800 per tonnes in London on August 16 amid speculation tightening credit markets may slow global demand.
Macquarie analysts said Chinese production cuts and reduced stainless steel output has left about 4 million tonnes of limonite ore sitting at Chinese ports. The recent rally in prices may encourage some resumption of output. Nickel fell 4% to USD 30,150 per tonnes in London recently.
ChTPZ may issue RUR 15 Billion worth of bonds
FIS reported that the Directors Board of Chelyabinsk Tube Plant approved the issue of bonds to the total amount of RUR 15 billion. Issue of the bonds of the second series to the total amount of RUR 7 million will have the term of circulation of 5 years and the issue of the third series in seven years.
Nawarat wins Egat's Mae Moh mine bid
Mr Pratya Mankong manager of NWR's said Nawarat Patanakarn Plc has revised up the value of its backlog by 150% to THB 15.06 billion after winning the bid for soil excavation and transport services at the Mae Moh mine in Lampang. The latest project, commissioned by the Electricity Generating Authority of Thailand, would last nine years, from January 2008 to December 2016.
He said Egat would pay THB 16.12 billion toward the venture, which translates into revenue of around THB 18 billion throughout the life of the contract. Under its JV agreement, NWR would earn THB 9.02 billion from the project.
Mr Pratya said that before the project, NWR's backlog was worth 6.05 billion, far short of the target of THB 15.51 billion after the Royal Irrigation Department delayed the construction of the Lampaw Dam in Kalasin. He said that NWR, which had earlier won the bid for civil engineering worth THB 444 million for the dam project, plans to join the bid again if the project resumes, possibly next year. NWR expects to realize THB 1 billion each quarter from the backlog.
Gross profit margins in the second quarter rebounded to 6.14%, on par with the industry average of 5% to 6%, from minus 39% in the first quarter. The poor first quarter reflected low margins from the public sector, which accounts for 70% of NWR's work at home and abroad.
Mr Pratya said ''We cannot expect a high gross profit margin when serving the public sector. He said ''Although I can't tell exactly how much we would earn this year, I'm sure the loss will be smaller by the end of the year.''
Coal piling up while slips block railway line
It is reported that State miner and coal exporter Solid Energy is building up stockpiles of coal at Ngakawau on the West Coast while it waits for slips to be cleared from the Westport-Stillwater railway line.
Coal trains from Ngakawau to the Port of Lyttelton have been cancelled since Sunday after two slips blocked the line.
Mr Kevin Ramshaw spokesman said Rail line maintenance company Ontrack has struck problems clearing the slips and good progress had been made in stabilizing the bank at the entrance to the Tawhai tunnel near Reefton. However, Mr Ramshaw said the Tawhai site should be stabilized and it was hoped rail services could resume by the end of the day.
Mr Bryn Somerville spokesman for Solid Energy said about 14 trains each transporting 1500 tonnes of coal had been cancelled since the slips but the next export shipment was not due out of Lyttelton until early next month. He said that "We're building the stockpiles at Ngakawau and we're quite capable of catching up when the trains get going again."
