October, 12 2008
JSW to become largest private sector steel maker in India
PTI reports that JSW Steel is set to become India's largest private sector steel producer post-capacity expansion of its plant at Vijaynagar
However JSW Steel is in process of expanding its finished steel capacity at Vijaynagar plant in Karnataka to 6.8 million tonnes from the present 3.8 million tonnes .It has already commissioned a sinter plant and two blocks of coke-oven batteries as part of the company's INR 5,300 crore expansion project at Vijaynagar.
Mr Sheshagiri Rao CFO of JSW Group said that "On commencement of the expansion project in Q3 of the FY 2009, JSW Steel will be the largest steel plant in private sector in India with a total crude steel production capacity of 7.8 million tones.”
He added that as of now, we have secured financial resources for capacity expansion at Vijaynagar plant as also adding another three million tonne to it by March 2010".
He said that JSW Steel intends to reach 32 million tonnes of steel capacity by 2020 for which the company would invest INR 85,000 crore. It has lined up two Greenfield projects of 10 million tonnes capacity each in West Bengal and Jharkhand with a collective investment of about INR 70,000 crore.
Presently, SAIL is India's largest steel producer in the public sector with annual production hovering close to 15 million tonnes while in private sector TATA Steel tops the list with installed production capacity of 6.8 million tonnes.
Essar Steel Algoma to cut production by 50% - Report
SooNews.ca has reported that up to 1000 people may be laid off at Essar Algoma Steel in the near future. It said that some workers were notified by the company on October 9th 2008. According to sources, 50% of production will be curtailed which could led to layoffs for hundreds if not over a thousand steel workers locally.
The report said that Mr Armando Plastino COO of Essar Steel Algoma in a letter to all employees said that "The global financial crisis has lead to rapid reductions in steel demand. In less than a month, there has been a virtual stop in steel buying and the short to mid term market outlook is weak."
Mr Plastino said that "Consumer confidence is at an all time low and credit lines are feeling the crunch. In response, over the past two weeks steel mills across North America have drastically cut production. Essar Steel Algoma is not immune to the current economic situation. We do not have sufficient orders to sustain present operating levels."
He added that "Effective immediately, we will cease operations on no. 6 blast furnace and cut back production levels on no 7 blast furnace to adjust to current demand. We will also move to a single vessel operation in the steel shop. Although the number of turns in the DSPC will remain the same, overall production levels will drop."
Mr Platino concluded that "We are currently assessing the impact of reduced operations on our employment levels and developing an appropriate plan to address this. At this stage all employees are asked to continue to report to work as usual unless notified otherwise."
Essar Steel Algoma had earlier planned on increasing its production in 2009, which has been put on hold now.
BSL to cut output inventory levels
Reuters reported that Bhushan Steel Limited has stopped buying raw material for steel production and plans to cut down output inventory levels, given the current liquidity problem.
The report cited Mr Nitin Johari CFO of BSL as saying that "We are trying to reduce inventory levels so that it gives us some liquidity. We need to have 30 days inventory of raw material and finished goods. But we may now keep only 15 days or so.”
He however clarified that BSL has not planed any production cuts as yet.
Mr Johari said that tight cash conditions in the banking system have made it difficult for companies to raise working capital finance or borrow cash from banks, prompting the central bank to slash its cash reserve requirement to free up USD 12 billion in funds.
He said that "Most of the banks have put a freeze on working capital finance or term lending. If this continues, there would be a big problem underway.”
He however added that BSL, which has planned Greenfield project in Orissa, does not have any problems on its existing CPEX so far.
JSW Steel opens outlet in Kochi
It is reported that JSW Steel inaugurated the first JSW Shoppe at Kochi in Kerala on October 9th 2008.
Mr Sharad Mahendra assistant VP in sales and marketing said that it would display all the products of JSW Steel ranging from hot rolled to color coated steel. The outlet aims to provide a unique experience of buying steel products through a branded distribution channel.
SW Railway seeks rebate on iron ore cargos
Exim News Service reported that the South Western Railway has appealed to the Railway Board to reduce the freight charges for transportation of iron ore so that the available capacity on the Bellary-Mangalore section can be better and more optimally utilized.
Mr Praveen Kumar general manager of South Western Railway said that SWR had approached the Railway Board seeking 20% rebate in rail freight charges for iron ore cargo destined for New Mangalore Port.
Mr Kumar said that SWR has created enough capacity on the Bellary-Mangalore section. He said that "But I am not able to utilize it. I can run 4 rakes a day. However I am running only two rakes a day. A rebate on freight charges for iron ore cargo will help earn more and avoid damage to the road infrastructure. In fact the New Mangalore Port is also geared up to handle rail cargo."
Iron ore cargo contributes around 70% of the freight in the SWR zone. Nearly 5 to 6 rakes a day of the cargo are taken away by the road transport system following an increase in its rail freight charges.
The Railways had increased the freight rate for such cargo for export on May 22nd in order to make export dearer and to provide ample supplies for domestic consumption. The freight charge for the cargo from Bellary to Mangalore which was INR 1,434. 27 a tonnes on April 1 was increased to INR 1,853.53 a tonnes on May 22nd.
Siemens sets up new arm in India for rail transportation sector
Engineering goods manufacturer Siemens Ltd has set up a new, wholly owned subsidiary company to tap the potential in the Indian rail transportation sector.
The move comes in the wake of Siemens acquiring land at Aurangabad to establish a facility to manufacture rolling stock, including coaches for trains and metros.
The recently formed Siemens Rolling Stock Pvt Ltd is a 100% subsidiary of Siemens Ltd handling the Rolling Stock business in India, the company confirmed in response to a query.
Mr VB Parulekar director of Siemens Ltd and head mobility division in India said that “The rail transportation sector in India presents a huge business potential with many project plans being announced by the government. This offers interesting opportunities for Siemens.”
The company already has a significant presence in Aurangabad with three existing factories, including a new facility for instrument transformers that was recently inaugurated. Mr Parulekar said that “To address the growing business needs and market demands, we are actively looking at enhancing our capacities in various locations in India including at Aurangabad.”
Though Siemens did not give any more details, the first product to roll out under the aegis of SRSPL will be metro coaches. The Greenfield factory at the Shendra industrial estate at Aurangabad is expected to involve an initial expenditure of INR 500 crore and is expected to go on stream within a year’s time.
India not immune to global financial crisis
Exim News Service quoted Mr Arvind Virmani chief economic advisor in the Finance Ministry as saying that India cannot remain immune to the meltdown in developed economies.
Mr Virmani said that the US, the UK, Germany and Australia were key investors in India. For instance, the US was India’s largest trading partner and foremost export destination, accounting for nearly 17% of the exports.
Mr Virmani did not rule out the possibility of a global meltdown impacting India.
Mr Virmani cautioned that "India’s medium term growth potential remains 9%. We have to pay greater attention to policy and institutional reforms in six to nine months."
Even the Prime Minister, Dr Manmohan Singh had recently said in France that India was not immune to global financial upheavals.
To boost the flow of liquidity in the market, the Reserve Bank of India on October 6 cut the Cash Reserve Ratio by 50 basis points to 8.5% which will see INR 20,000 crore getting pumped into the system.
Port wage talks remain deadlocked
BL reported that the bilateral wage negotiation meeting held recently between the wage negotiating committee of the major ports and the representatives of 5 federations controlling about 66,000 port and dock workers remained inconclusive over the periodicity issue that is the period during which the new wage agreement will remain valid.
The last agreement which expired on December 31st 2006 was valid for 10 years. The new agreement, to be effective retrospectively from January 1st 2007 should be in force for 5 years insisted the trade union representatives at the meeting.
But the chairmen of the major ports who participated in the meeting could not take a decision on this. This was presumably because the periodicity issue could be decided only by the Shipping Ministry more specifically the Shipping Minister himself. The chairmen of Kolkata, Mumbai, Chennai, JNPT, New Mangalore, Kandla and Tuticorin and deputy chairman of Visakhapatnam port, the MD of Indian Ports Association and 12 representatives of five federations of port and dock workers were present at the 2 day meeting.
Meanwhile the federation leaders have urged the Shipping Minister to firm up its view on periodicity and other issues at the earliest, so that the agreement could be signed before Diwali.
The unions have demanded a minimum pay of INR 13,000 a worker at the lowest level. Right now the minimum pay is INR 3,700.
Mr PM Mohammed Haneef a trade union leader said that “There is no reason why the country’s major ports should not be able to pay what we’ve asked for. He said that the country’s port sector is now experiencing a virtual boom with productivity and profitability having increased significantly.” As he pointed out in 2006-07 alone, the country’s major ports posted a profit of over INR 2,200 crore. Also the productivity up by 11% in most other state owned organizations.
Mr Mohammed Haneef regretted that while the productivity and the profits of the port sector were rising, the size of the workforce was steadily getting reduced from 96,000 in 1997 to 66,000 in 2007.
Directory of Shipyards and Marine Service Providers in India
The Indian maritime sector has entered a high-growth phase fuelled by the country's spectacular economic growth and rapidly increasing seaborne trade. The most striking feature of this development is the simultaneous buoyancy in all the sub sectors shipping, ports and shipbuilding. This provides tremendous opportunities for all the players in the maritime field.
With the Government encouraging private sector participation in port infrastructure development under the National Maritime Development Program, the Ports & Shipping Industry is poised for spectacular growth in order to meet the surge in demand.
Published in October 2008, 'Directory of Shipyards and Marine Service Providers' has been comprehensively researched and prepared, to bring you a fully up to date guide to Indian shipyard industry.
Why spend hundreds of hours searching for new contacts? Invest in a copy TODAY!
Content:
This report covers name and product details of 49 shipyards and marine service providers of India in alphabetical as well as location wise order. Look at the information you'll get in the 'Directory of Shipyards and Marine Service Providers'
• Company name -49 entries
• Address-49
• Email-35
• Phone number-48
• Fax number -42 entries
• Mobile -6 entries
Format: PDF File
Total no of pages – 35
Delivery by Email on receipt of payment
Price:
USD 150 or equivalent in INR
Additional Charges would be levied for delivery of file on a CD or in printed form
How to order:
Ordering the report is simple. You can order your copy to reports@steelguru.com, who will send you an invoice of the report.
Directory of Overseas Scrap Suppliers to India
India is large market for import of steel scrap and this is the directory which is going to help many interested group to know this industry.
Published in September 2008, 'Directory of Scrap Suppliers to India' has been comprehensively researched and prepared, to bring you a fully up to date guide to overseas scrap supplier.
Why spend hundreds of hours searching for new contacts? Invest in a copy TODAY!
Content:
This report covers name and product details of 1191 overseas scrap suppliers to India in alphabetical as well as location wise order. Look at the information you'll get in the 'Directory of Scrap Suppliers to India'
• Company name -1191 entries
• Address-1191 entries
• Email-1074
• Phone number-1140
• Fax number -431 entries
Format:
PDF File
Total no of pages – 545
Delivery by Email on receipt of payment
Price:
USD 500 or equivalent in INR
Additional Charges would be levied for delivery of file on a CD or in printed form
How to order:
Ordering the report is simple. You can order your copy to reports@steelguru.com, who will send you an invoice of the report.
Directory of Construction Companies in India
One can have an idea about the importance of the construction industry in India from the fact that it is the second largest contributor to the GDP after agriculture. The industry provides employment to more than 3% of the population. Its market size is around USD 55 billion and is growing at around 7% to 8% per annually, faster than the GDP growth. As the Construction sector is growing faster than the country’s project GDP growth, there exist a tremendous potential for development in the related area.
“Directory of Construction Companies in India” is one of the top sources of information available on a construction companies in India. It is one of the most comprehensive and accurate directory of construction companies in India that ever published. This powerful directory is your connection to the entire construction companies in India.
Published in August 2008, “Directory of Construction Companies in India” has been comprehensively researched and prepared, to bring you a fully up to date guide to Indian Construction companies.
Whether you are a product manager, in charge of marketing, raw material seller, in equipment business or simply interested to remain in touch with the latest developments in the construction companies in India, this directory will save you time and effort in finding the information you need. This report will enable you to profile construction companies in India, build new business prospects, generate new customers, discover who your competitors are and make vital contacts. You would save the time, money and effort of doing your own research. This directory has been especially compiled to assist with market research, strategic planning, as well as contacting prospective clients or suppliers. It is also an indispensable guide to India’s construction sector.
Why spend hundreds of hours searching for new contacts? Invest in a copy TODAY!
This report covers name and product details of 1000 Construction Companies in India in alphabetical as well as location wise order. Look at the information you'll get in the 'Directory of Construction Companies in India’
1. Company name -1000 entries
2. Address-1000 entries
3. Phone number-951
4. Fax number -652 entries
5. Mobile number-349
6. Email -749 entries
7. URL – 593
Format - PDF File (Total no of pages – 545), delivery by Email on receipt of payment of USD 950 or equivalent in INR. Additional charges would be levied for delivery of file on a CD or in printed form
How to order
Ordering the report is simple. You can order your copy to reports@steelguru.com for gettimç an invoice for the report.
Port of Mumbai improves container handling
It is reported that India's Port of Mumbai container handling at the existing terminal has improved after it transferred operations to its new private terminal operator, Indira Container Terminal Pvt Ltd Indira, a JV between Gammon India and Dragados SPL of Spain, recently took over operations at the terminal and entered a 30 year concession agreement with the port authority to develop a USD 300 million offshore container terminal.
In an advisory to the trade, the authority said that the private operator has installed new handling equipment including quayside gantry cranes and yard cranes, to boost productivity at the terminal. It said that "The upgraded facilities would improve efficiency and make operations cost effective, particularly at a time when the port is facing congestion."
As per report, the planned terminal expected to be ready by 2010 will increase the west coast port's capacity by 12 million tonnes a year and also enable it to handle 6,000 TEU vessels.
In a separate statement, the authority said that it handled 56,792 TEUs in the April to September period up from 50,845 TEUs in the same period a year ago.
Kashmir Valley railway line nears completion
It is reported that before the present project began, no surveyor had entered the area since 1936. So when IRCON was awarded a INR 21•5 billion contract to build a 120 kilometer section of a 1676 millimeter gauge railway from Qazigund to Barramulla in the heart of the Kashmir Valley, it was a question of starting from scratch, literally. That was in February 1999 following a study into the scheme in 1997.
The Kashmir Valley line is designated a project of national importance and the first section along the floor of the valley between Rajwansher and Anwantipora opened in mid 2006. This part of the route is isolated from the rest of the Indian Railways network and rolling stock had to be transported from Delhi to Srinagar by lorry. Not until the line is completed from Udhampur will through services be possible.
In the meantime, the section from Qazigund to Barramulla is due to be completed by October 2008, leaving only the most difficult segment from Udhampur to Qazigund to be finished. Ircon has a share in this work, having been awarded a INR 21 billion contract for the 47 kilometer section from Laole to Qazigund in December 2002. No less than 70% of the Laole Qazigund section lies in tunnel with 23% on bridges and viaducts. Indeed the world’s highest railway bridge is needed to carry the line 359 meter above the Chenab River on a 460 meter steel truss arch.
The line will also feature India’s longest tunnel. At 11 kilometer, the Pir Panjal tunnel is located between Kilometer 152•6 and Kilometer 163. Work has progressed slowly but steadily because of the difficult conditions and by the end of July 4•6 kilometer had been completed. Another 2 years will be needed to complete the bore.
The rock is either very hard, abrasive or swelling and in the middle of the tunnel we expect the overburden of up to 1 100 meter to generate a squeezing pressure of up to 200 MPA here the route lies under a ridge that reaches up to 2 900 meter above sea level. In areas of limestone there is considerable water ingress, requiring careful management of the flows. A 55 meter deep access shaft with a 13 meter diameter was built 585 meter from the north portal to open up the main face at that end, while additional faces were opened 2•75 kilometer from the south portal thanks to construction of a 774 m side adit. The two ends of the tunnel are 26 kilometer apart by road.
Despite all the odds, the first phase of India’s most ambitious railway project since independence is set to be operational 2008. Although this phase does not yet link the Kashmir Valley to the main Indian Railways network, the completion of the 120 kilometer stretch between Qazigund and Baramulla will soon give Kashmiris their first experience of inter city rail travel.
REC to provide INR 5,612 crores for Tamil Nadu power project
It is reported that Rural Electrification Corporation will loan the Tamil Nadu Electricity Board and the Neyveli Lignite Corporation INR 5,612 crore for two thermal power projects being set up by them in Tamil Nadu.
According to an official press release, REC entered into an agreement with TNEB for a loan of INR 2,175 crore it has sanctioned for the 600 MW North Chennai Thermal Power Station Stage-II Unit-II that TNEB is setting up at a cost of INR 2,718 crore.
REC has sanctioned INR 3,437 crore for Neyveli Lignite’s NLC Tamil Nadu Power Ltd, which is setting up a 1,000 MW thermal power project at Tuticorin at a cost of INR 4,909 crore. REC signed the loan agreement with Neyveli Lignite on Friday.
Both the agreements were signed in the presence of the Mr M Karunanidhi CM of Tamil Nadu.
World Bank to fund Dakshin Haryana Bijli Vitran Nigam
BS reported that to strengthen the power distribution system in Faridabad, the Dakshin Haryana Bijli Vitran Nigam has prepared a plan of INR 165 crore to be funded by the World Bank.
A spokesman of the Dakshin Haryana Bijli Vitran Nigam said that under this ambitious plan, the DHBVN had identified 33 feeders of 11 KV level, for High Voltage Distribution System where the system is over-stretched, particularly in areas having unplanned growth of residential & commercial establishments.
While laying this system of international standard, complete system of the feeders, right from their emanating point to the consumers end, would be renovated and additional transformers would also be set up as per requirement. The Nigam plans to add about 7383 new distribution transformers to the existing network of 3200 in the city.
Benefits of HVDS will be tremendous. Voltage up to the last distribution transformers of the feeders and thus reliability of power supply will improve. Losses will come down and the consumers, who have been hooking on to the system without a valid connection, will have to apply for new connection.
Also, old worn out and undersized conductor will be replaced with the new one and also, Aerial Bunched Cable will be used wherever finding Right-Off-Way for over-head conductor is not possible.
The spokesman said that bifurcation of more than 35 feeders had been planned and existing 11 kV lines will be extended to take these as much close to the load centre as possible. Loading on distribution transformers will be kept under check and in case of a getting overloaded, transformer of higher capacity will be installed to cope with the load.
MoU signed for hydel power projects in J&K
The Jammu and Kashmir government has signed a MoU with Jammu and Kashmir Power Development Corporation, NHPC and Power Trading Corporation for execution of the Pakal-Dul and other hydro-electric projects through a JV in the state.
An official spokesman said that the MoU was signed in the presence of Mr Jairam Ramesh, Union MoS for Power advisor to Governor C Phunsog and Mr Anil Razdan, Union Power Secretary Describing the inking of the MoU as a milestone in harnessing vast hydro power potential of the state.
Mr Ramesh said that it would accrue great economic benefits to Jammu and Kashmir. He said with the completion of the hydel power projects, the availability of power in the state would increase considerably to meet the requirement and the work on the Pakal Dul and two other hydel projects on the river Chenab with a capacity of 2100 Megawatt should be started soon.
Mr Ramesh congratulated all the parties for signing the historic MOU, saying the immediate priority should be to register the joint venture company and complete other formalities.
Mr Phunsog said it is an important milestone for harnessing the huge potential al the river Chenab. He said it is the beginning and exuded confidence that more power projects would come up in the state in the near future.
MCX and NCDEX indices fall sharply
It is reported that MCX and NCDEX indices has declined sharply on weekend. Traders have concentrated in mass profit booking, tracking weak global market sentiments. Hence most active commodities are trading down.
As per report MCX index fell sharply by 53.46 % to INR 2456 and NCDEX index down by 10.94 % to 1863. In MCX bullion contracts are trading moderately higher while in NCDEX Electrolytic Copper Cathode, mentha oil along with bullion futures are trading with modest gains.
Copper, nickel, crude oil, zinc and mentha oil contracts dipped sharply on the MCX counter where as on the NCDEX counter crude oil, steel, castor seed, pepper and jeera futures drowned.
IFC to provide USD 30 million to Punj Lloyd
International Finance Corporation will provide up to USD 30 million of debt and equity financing to Punj Lloyd Upstream, a subsidiary of Punj Lloyd.
The investment will help the company to provide drilling services to countries in the Middle East, North Africa and South Asia.
The company plans to initially acquire four onshore drilling rigs and cater to private and national oil companies operating in India and is in the process of assembling a robust technical team and is expected to take delivery of the onshore drilling rigs over the next 6 to 24 months.
Japanese steel orders in August 2008 down by 5.4% YoY
Jiji Press reported that orders for ordinary steel products in Japan in August 2008 fell by 5.4% YoY to 6,262,000 tonnes, the first drop in 28 months.
Japan Iron & Steel Federation said that the decline reflects weak demand for building materials due to slumping housing construction as well as a fall in exports orders, which fell for the first time in 15 months.
Although steel production has enjoyed brisk demand for a while, it seems that the industry has started to feel the impact of the slowing global economy.
By product category, total orders for steel products used in construction and civil engineering fell 7.9%, while automobile materials orders slid 3.4%, the first drop in five months. Exports declined 2.9%.
Copper slumps 14% on fears of deepening recession
Copper for three months delivery on the London Metal Exchange crashed to USD 4,570 per tonne, its lowest level since January 2006 and its biggest one day fall in electronic trading in both absolute and percentage terms since at least February 2001. The metal, used in power and construction, was trading at USD 4,856 per tonne from USD 5,315.
Mr Robin Bhar analyst at Calyon said that prices have fallen about 45% since a record high of USD 8,940 in July 2008. He added that "It’s panic. It’s fear of the unknown. The US, Europe and Asia saw panic selling of stocks on Friday, knocking the benchmark world equity index to a five year trough as fears grew that policymakers were not making enough effort to contain the financial crisis."
Mr Michael Lewis global head of commodities research at Deutsche Bank said that "The banking sector problem is now spilling over into other sectors. It’s obviously quite a powerful negative demand shock. Copper does look the most exposed."
Mr Stephen Briggs commodity strategist at RBS global Banking & Markets said that energy is estimated to account for up to 45% of aluminum smelting costs. He added that "It’s a very, very sombre picture. There is only one game in town economic meltdown."
Mr Briggs said that "We’ve had all this government action but there is still huge concern in all markets and this is a reflection of it. When markets move, they really move. We believe that prices are not going to recover quickly and that many of them will flat-line for some considerable time."
Salzgitter AG increases Norddeutsche Affinerie stake to 20%
It is reported that steel maker Salzgitter AG has further increased its stake in the Hamburg based copper processing company Norddeutsche Affinerie AG.
In a mandatory financial markets disclosure Norddeutsche Affinerie said that Salzgitter's stake in the company exceeded 20%, reaching 20.001% October 9th 2008.
Salzgitter AG wasn't immediately available to comment on whether or not it's planning to further increase its stake.
Under German stock market law Salzgitter would have to file a mandatory takeover offer for Norddeutsche if its stake reaches 30%.
Japanese ERW pipe exports to USA at USD 1,600 FOB level
Tex reported that Japan's integrated steelmakers have maintained a high price level of USD 1,600 per tonne FOB for products with 16 inches or less diameters in negotiated ERW pipe exports to the USA's steel wholesalers for shipments in the October to December 2008 quarter. By comparison, the Japanese steelmakers saw the negotiated price level stand at USD 850 per tonne FOB at the beginning of this year in their ERW pipe exports to the USA for store sales there.
Until now, the Japanese steelmakers have won favorable price and quantity terms in their ERW pipe exports to wholesalers in the USA where demand continues strong for energy sources such as gas and oil despite a confusion of the domestic economy. There are three main factors that are benefiting the Japanese steelmakers, according to market sources. First, ERW pipe exports out of South Korea and China to the USA are on hold in the wake of the antidumping cases filed by US steelmakers against ERW pipe imports from South Korea and China. The US International Trade Commission has already admitted the damage caused to US steel mills by the imports in its preliminary determination. Second, US steelmakers indicate less interest in selling ERW pipes as line pipes because OCTG are fetching much higher prices than ERW pipes. Third, US wholesalers are poised to pay even high prices for what they take to replenish their ERW pipe stocks.
Various steel wholesalers in the USA, though, are concerned about a widening price spread between ERW pipes and HR coils for ERW pipe production. The domestic HR coil market is reported to have declined to a level of USD 960 per tonne in the Middle West since the beginning of October, compared with the earlier level of close to USD 1,100 per tonne. It is understood that local wholesalers have apprehensions of a sudden fall in ERW pipe prices.
Besides, anxiety is looming large that drilling rig operators in the USA may get involved in financial uncertainties pervading the nation at any time. At present, a total of nearly 2,000 drilling rigs are in operation nationwide. But most of the rig owners represent a small business with a family owned management style, operating five or less rigs.
Meanwhile, the Japanese steelmakers face a virtual stoppage of negotiations on their ERW pipe exports to Southeast Asia for local store sales in the repercussions of falling steel prices on the whole in Asia. There were Southeast Asian bids to accept a price increase of USD 50 per tonne until early September for imports of ERW pipes from Japan. In this connection, the going export prices of Japanese ERW pipes are estimated at USD 1,300 to USD 1,350 per tonne FOB for shipments to Southeast Asia.
(Sourced from TexReports)
Falling markets may hit OneSteel bid for Steel & Tube
It is reported that OneSteel may pull or change its bid for Steel & Tube if the New Zealand share market keeps tumbling. Steel & Tube's 50.27% owner OneSteel has given notice of a cash offer of USD 4 a share for the shares it does not already own.
But the bid is conditional on the NZX50 index not closing below 2710 on three consecutive days before the bid becomes unconditional.
The index fell 139.081 points to 2805.314, which is still some distance from the level cited. Still, in the current volatile markets the condition may become an issue.
Institutional shareholders are waiting for an independent report and recommendation from the board before deciding what to do. The bid by the Australian parent was seen as opportunistic in a weak share market and brokers said at the time notice was given that the price looked a little light.
OneSteel will spend USD 175 million if it is successful and said funding was not an issue.
Tokyo Steel cuts scrap purchase prices by JPY 5,000
Japan's largest electric steelmaker Tokyo Steel Mfg Co has reduced what the company pays for locally available ferrous scrap by a uniform JPY 5,000 per tonne for all grades at its four works, effective with October 7th 2008 purchases.
As a result, the new delivered prices of number 2 HMS are JPY 35,000 per tonne for seaborne and overland arrivals at the Okayama works, JPY 35,000 per tonne for seaborne and overland arrivals at the Kyushu works, JPY 33,000 per tonne for seaborne and overland arrivals at the Takamatsu works and JPY 35,000 per tonne for overland arrivals at the Utsunomiya works.
US Steel shares sink to 3 year low - Report
AP reported that US Steel Corporation's shares briefly hit a 3 year low as an analyst downgraded the steel maker's stock and the broader market faltered.
As per report, US Steel shares fell USD 1.80 or 3.9% to close at USD 44.59. Earlier in the session, they dipped to USD 39.30, their lowest level since November 2005.
Mr Mark Parr analyst at KeyBanc Capital Markets has predicted lower volume and prices for steel producers such as US Steel and lowered the company's near term rating to 'hold' from 'buy'. He considers steel firms that use electric arc furnaces, such as Steel Dynamics Inc, Nucor Corporation and Gerdau Ameristeel Corporation, as top picks amid the current uncertainty over credit availability, orders and future pricing levels.
A recent drop in prices of scrap metal, used to make steel in electric furnaces, also gives those companies better maneuverability in the current volatile, and as yet unsettled, demand spot pricing environment.
In depth analysis of steel projects in India
What is important to take note of now, however, is that the Indian steel industry suddenly finds itself in a completely different context. In the world of steel, every player remains familiar with the cyclical nature of the growth. Therefore, the slowdown should not have surprised any in the industry. But, none really expected this to have happened so fast. The steel super cycle seems to have been ended abruptly or really?”
“India’s steel dream looks to be fading away” This is how we started our last year’s steel report. With the added uncertainty, the industry’s plans are in total disarray. There are no questions on the opportunities this country has offered in steel. From all points of view, these have been strong and credible ones.”
But the recent great years in steel have supported strong capacity growth in the steel industry in India. The more competitive brownfield expansion projects have started delivering results and more are expected to come. What has been extraordinarily interesting to note in the past few years is the growth of very small to mid size capacities.
The Indian steel industry is in a peculiar fix. The capacity could not be raised immediately because of their own strategic problems. The limited capacity in the country and higher global prices provided to them all the opportunities to make sufficient money themselves and raise their credibility in the global capital market. However, an impulsive government, given the high political value attached to inflation in India, intervened in the steel business more than it needed to do.
Despite the fact that the capacity expansions in India have been of recent origin, a huge chunk of the existing capacity is technologically outdated or is uniquely backward.
It will be premature to write India’s steel ambition off despite all the bad news surrounding it currently.”
“Indian Steel Projects: Ground Reality, Strategic Issues and Opportunities” from Steel and Natural Resources Strategy Research analyses the context each significant producer is placed in and identifies their core problems. It makes an objective assessment of the strength and weakness of each of the major projects, when they are expected to be completed and at what cost.
It takes a macro view of the emerging steel supply scenario till 2021.
This 115 page report with 35 tables, 12 charts, a number of annexure, three maps and an appendix looks at the steel industry’s future in India from a strategic point of view to guide the investors in the industry, capital goods industry, steel traders, raw materials suppliers and the policy makers in the government in their own individual planning for the future.
Report Summary:
1. Published: Sep 2008
2. Format PDF File (Delivery by Email on receipt of payment)
3. Total no of pages – 115
Price: USD 1100 or INR 50,000
(Note: You can Save USD 100 if you order before October 15th 2008)
(Additional Charges would be levied for delivery of file on a CD or in printed form)
You can order your copy to reports@steelguru.com
Japanese steelmakers raises steel sheet price to electronics makers
JMB reported that Japanese integrated steel makers will conclude the steel sheet price negotiation with Japanese electric appliance makers to increase by JPY 15,000 per tonne from October shipping.
They increased the selling price by JPY 20,000 to JPY 25,000 per tonne in April shipping. Some makers raise the price by JPY 10,000 in October shipping and by JPY 5,000 for the shipping in January 2009.
Japanese steelmaker costs decline on easing port congestion
Bloomberg reported that port delay costs for Japanese steelmakers have dropped more than 7 fold as a cut in Chinese demand for iron ore and coking coal reduces harbor congestion. Waiting times fell as China's reduced raw materials demand eased pressure on competitors to secure more frequent shipments.
JFE Holdings Inc has two mills along the Inland Sea, which links three of the country's four main islands. Nippon Steel Corporation and Kobe Steel Limited have plants near the waterway, a chokepoint for freighters.
Mr Tetsuo Imakubo executive VP of Nippon Steel said that China's steel output may be less than 500 million tonnes in 2008. Production may rise 9.4% to 535 million tonnes. He added that "Our increased production, and congestion at loading ports, have caused port congestion at our mills, but it is easing now.''
Mr Matsunori Mizoguchi GM of coal & iron ore carrier group at Mitsui OSK said that delay charges fell to around USD 40,000 a day this month from USD 300,000 a day in May 2008 for spot cargoes as ship queues declined in Japan's Inland Sea and other ports.
Mr Mizoguchi said that "The situation is different from two months ago, when the Inland Sea was congested with ships. Steelmakers that used to hire extra ships on spot contracts to ensure stable supplies are now cutting back.''
China's steel mills are cutting demand for iron ore and asking miners to postpone deliveries because of slower sales and a lack of credit, Mt Gibson Iron Limited. Baosteel Group Corporation and Jiangsu Shagang Group Co are considering reducing output.
Indian Steelmakers Directory 2008
The fast developing Indian steel industries are continuing beyond what most believed was possible. As one of the world's fastest growing economies, India has become the most happening place among world steel market over last few years and thus is in the radar of not only Indian but most of global players associated with steel industry. But due to fragmented nature of industry, a comprehensive list of smaller steel makers is not readily available.
"Indian Steelmakers Directory 2008' is one the top sources of information available on steel making companies in India! 'Indian Steelmakers Directory' is one of the most comprehensive and accurate directory of Indian steel companies that have ever been published. This powerful directory is your connection to the entire Indian steel industries sector.
Published in February 2008, “Indian Steelmakers Directory 2008” has been comprehensively researched and prepared, to bring you a fully up to date guide to India's rapidly growing steel makers. This Directory will be extremely useful to businesses that deal specifically with companies in the iron and steel industry, ferro alloys, consumable suppliers, raw material sellers, equipment makers and others.
Whether you are a product manager, in charge of marketing, raw material seller, in equipment business or simply interested to remain in touch with the latest developments in the Indian steel industries, this directory will save you time and effort in finding the information you need.
Why spend hundreds of hours searching for new contacts? Invest in a copy TODAY!
This directory covers name and details of 720 of Indian steelmakers in Alphabetical as well as location wise order.
Look at the information you'll get in the 'Indian Steelmakers Directory'
• Company name -723 entries
• Address-723 entries
• Phone number-723 entries
• Fax number -590 entries
• Email -446 entries
Report Summary:
1. Published: Feb 2008
2. Format PDF File (Delivery by Email on receipt of payment)
3. Total no of pages – 396
Price: USD 1250 or equivalent in INR
(Additional Charges would be levied for delivery of file on a CD or in printed form)
You can order your copy to reports@steelguru.com
United Tractors may cut 2009 sales targets
Bloomberg reported that PT United Tractors may lower next year's vehicle and machinery sales growth target as buyers face difficulty in getting loans amid the global credit crunch.
Mr Gidion Hasan finance director of PT United Tractors said that the initial target was for sales of heavy vehicles and equipment used in mines, farms and construction to expand between 10% and 15%. He added that "Liquidity is drying up, while our customers buy heavy equipments with loans. We are reviewing our growth target for next year.''
Mr Hasan said that PT United Tractors expects to reach its 2008 sales target of 4,750 units, a 38% increase from 2007. It sold about 3,800 units of heavy vehicles and machinery between January and September 2008, up by 45% YoY. Net income in the six months ended June 30th 2008 more than doubled to IDR 1.2 trillion as orders for coal extraction and construction machinery increased. Sales jumped by 54% YoY to IDR 12.59 trillion.
Toyota finds constructive ways to cut steel price
Nikkei reported that Toyota Motor has set an example for the world on how to push suppliers to cut materials costs. It solicited ideas from five Japanese steel makers in a brainstorming exercise, coming up with some 100 ways to cut steel procurement costs amid rising resource prices and declining sales.
Toyota first approached Nippon Steel Corporation, JFE Steel Corporation, Sumitomo Metal Industries, Kobe Steel and Nisshin Steel in the spring, casting about for cost saving ideas. After months of discussion, Toyota determined that about 100 of these proposals were practical and it decided to carry out three of them this month.
Toyota maintained that if all these measures were to be implemented, it would help slash production costs by 3% at the steel makers. It added that "The rise in prices of steel and other raw materials is no longer an issue that we can tackle on our own. We aim to stabilize the price in the mid to long run by jointly working on rationalization efforts."
Besides the joint efforts in consolidating product types and specifications, Toyota also agreed to relax quality standards and will accept steel plate with minor scratches, while the steel makers will reduce the proportion of rare metals used in high tensile steel for auto bodies.
Toyota spent about JPY 400 billion a year to buy 4 million tonnes steel in the domestic market. The automaker had a hard time this fiscal year because manufacturers raised prices of steel plate by slightly more than 30% this year, equivalent to the aggregate price hike for the previous three years. Amid weaker demand from the United States, as well as in its home market, Toyota was unable to pass on higher production costs to vehicle buyers.
A survey published by the Japan Automobile Dealers Association showed that Japan’s industry wide auto sales, excluding mini vehicles with 660 cubic centimeter engines, fell by 5.3% YoY in September 2008, to 310,992 vehicles. Sales at top ranked Toyota Motor, excluding the Lexus brand, dropped 6% YoY. Toyota in late August cut its 2009 annual global sales target to 9.7 million vehicles, it had projected delivering 10.4 million cars for the year.
Daewoo shipyard results likely in one month
An industrial source said that "The potential buyers are required to submit their final bids for Daewoo Shipbuilding and KDB will announce a preferred bidder later this month after reviewing their detailed bids."
KDB wants at least KRW 5 trillion for the sale, but market capitalization of Daewoo Shipbuilding reached KRW 4.48 trillion, a sharp drop of nearly 30% from its peak in October 2008.
Global steel drops by 30% to 50% in price since late July
According to a summary prepared by London Metal Exchange, a global trend toward less demand and lower pricing for steel has become pronounced since late July 2008.
Mr Roger Manser of LME said that since late July 2008, pricing for billet in the Mediterranean region has dropped by some USD 400 per tonne, while prices paid for rebar in the Black Sea region have actually been cut in half from that time from USD 1,300 per tonne in late July to as low as USD 650 in late September.
Mr Manser anticipates that the fourth quarter will witness production cutbacks and thus less scrap being melted as inventories of finished steel are reduced.
The LME assessment blames a slowdown in Chinese construction for causing inventories of finished steel to build in that nation first. Subsequently, Chinese exports have helped bring excess finished steel to the market in other parts of the world, including the Middle East.
Polish steel industry buckles under financial crisis - Report
Puls Biznesu reported that the financial crisis is hitting companies investing in the construction market, automotive companies and numerous other steel producers steel mills, which had an excellent period recently, are cutting production to stop the reduction in prices.
Mr Andrzej Ciepiela director of Polish Union of Steel Distributors said that "We shall witness a plague of repairs in the steel mills. By limiting production, companies will try to avoid a sharp drop in prices of steel products."
Mr Andrzej Krzyształowski spokesperson of ArcelorMittal Poland, who admitted that the firm will cut production and, in line with previous plans, will shut down the furnace in Kraków and speed up repair of a furnace in Katowice. He added that "This will last until Q2 2009. We hope that the situation will stabilize by that time."
ArcelorMittal is not only cutting production in Poland, but also in other countries, a similar move by other companies, such as Ukrainian producers.
Votorantim loses big with currency bets
Reuters reported that Brazil's largest industrial conglomerate Grupo Votorantim has spent BRR 2.2 billion to eliminate all its foreign currency derivatives exposure. Votorantim joined companies such as pulp producer Aracruz and meat processor Sadia in announcing massive trading losses in currency derivatives.
They were hit by the quick depreciation of the Brazilian real BRBY against the US dollar in the past few months. Companies were betting the real, which has fallen around 32% since its peak a few months ago as global financial markets deteriorated, would continue to gain.
Votorantim said that "The group renews its commitment to preserve its assets, adapting its future investments to the new global outlook."
Votorantim has a diverse business portfolio, which includes banking, metals and mining, pulp and paper, cement, agribusiness and chemicals. The group's cash generation, which totaled BRR 8.1 billion in 2007, is expected to reach BRR 8.4 billion in 2008. Net sales are forecast at BRR 34 billion as compared with BRR 30.9 billion in 2007.
The company's steel division said in September 2008 it planned to invest USD 1.5 billion to build a steel mill in Colombia.
Tube City IMS opens trading office in Vietnam
Tube City IMS, a service provider to steel mills and foundries throughout the world, announced that it has opened its first representative trading office in Ho Chi Minh City in Vietnam.
Mr J David Aronson president raw materials & optimization group at Tube City said that Vietnam is an increasingly important market in the Asia Pacific region. He added that "We believe the steel industry in Vietnam will continue to grow over the coming years. The opening of this office, coupled with our offices in Beijing, China, Jakarta, Indonesia and Singapore, provides the Company with an excellent platform to serve its customers in the region."
Heading up the newly opened Vietnam office will be Ms Thao Nguyen as chief representative. Prior to joining the company, Ms Nguyen worked at several large Asian trading companies specializing in steel products. She has bachelor degrees in both English and economics from Ho Chi Minh City University in Vietnam. She has also joined the office as an Administrative Assistant.
Mr Aronson said that "Ms Thao is a seasoned trader and we are pleased to welcome both her and Tam to the team. She will report directly to Hideyuki Nishi Nishizawa MD of Asia, who is responsible for developing, managing and expanding the Company's Asian trading operations from the Singapore trading office."
Tube City IMS is a leading provider of outsourced steel services, including raw materials procurement, scrap management, raw materials optimization, slag processing, metal recovery and surface conditioning to integrated steel mills, mini-mills and foundries. The Company, headquartered in Glassport, PA, has operations at 75 plants throughout the United States, Canada, Europe, Mexico, the Caribbean, South America and Asia.
CEC receives order for CleanCast basketless heat treat system
It is reported that an international manufacturer of automotive components has signed a contract with Consolidated Engineering Company for a CleanCast® basketless heat treatment system for diesel cylinder heads. This purchase was initiated due to the need for additional capacity in order to produce a new diesel head product.
Once the decision was made to purchase a new line for the foundry in Mexico, the company began an evaluation of whether to go with a conventional roller hearth with baskets or the newer basketless systems. This evaluation revealed the clear advantages of going with the CEC CleanCast® basketless system. Other considerations that swayed the decision to the CleanCast® system over other systems were lower operating costs, flexibility to adapt to engine blocks if that should become necessary, future expandability by adding modules, the ability to remove sand from the castings and the ability to perform temperature uniformity surveys during production.
Once this system is up and running, it will add the capability of processing about 730,000 cylinder heads per year. This equipment is the first of its kind in this foundry to air quench diesel heads using individual nozzles for each head resulting in minimal part to part variation. It is also this company's first system to eliminate the use of baskets. The individual castings are loaded and unloaded directly on a conveyor which will result in better part to part uniformity.
CEC has been building its reputation as a world leader in quality heat processing technology. Over the years CEC has experienced phenomenal growth with over 3,400 installations worldwide, of which 60% are from repeat customers. With a comprehensive background in innovative heat processing technologies, and 110 US and foreign patents, CEC can help turn any heat processing challenge around by lowering labor costs through increased automation, efficient process control and reduced energy consumption, while maintaining consistent product quality.
PSMC commissions coke oven battery no 2
It is reported that Mr Mueen Aftab Sheikh chairman of Pakistan Steel inaugurated the production process of Pakistan Steel’s coke oven battery no 2 after its reconstruction and preheating process.
The Reconstruction process started in January 2007 is done by internationally famed Ukrainian Concord Group including PS Engineers and skilled workers.
The preheating of the battery before production started in June 2008.Chairman
Pakistan Steel appreciated the efforts and praised all the employees of Pakistan Steel on the memorable event.
Pakistan Steel will save billions of rupees by producing metallurgical coke to fulfill its need and save big expenditures on coke import
Oyak Group expects to make acquisitions in 2009
Reuters reported that Oyak Group owner of Turkish steel maker Erdemir EREGL.IS will make foreign acquisitions in 2009 in foreign mining sectors.
Mr Coskun Ulusoy CEO of Oyak at a press conference told reporters that Oyak is also interested in participating in Turkey's nuclear power plant construction project, if conditions are suitable.
Pak and Iran to implement IPI pipeline project bilaterally
PTI reported that running out of patience, Pakistan and Iran have decided to go ahead with the USD 7.4 billion tri nation IPI gas pipeline project bilaterally, saying India could join it later at its convenience.
The decision was taken during talks between Pakistan Foreign Minister Shah Mahmood Qureshi and his Iranian counterpart Manouchehr Mottaki here.
The two countries have agreed to undertake the Iran-Pakistan-India gas pipeline project bilaterally to meet Pakistan's growing energy needs at the earliest they told a joint press conference after the meeting.
Mr Mottaki said the bilateral launch of the pipeline project would help avoid further delay.
An official statement quoted Gilani as saying that "Pakistan wants the gas pipeline project should be initiated bilaterally between Pakistan and Iran while India could join afterwards whenever it so desires.”
The proposal for the pipeline was mooted three years back but it failed to move ahead because of differences over pricing and transit fee and concerns over security. India wants these issues to be addressed before the project could be implemented.
China to help Pakistan in setting up industries and power plants
The News International reported that Pakistan will seek help from China in installing two more nuclear power plants at Chashma, materializing the Diamer-Bhasha Dam project and joint ventures in manufacturing and assembling cars during the visit of President Asif Ali Zaradri to Beijing that is to start from October 14.
According to a senior government official at Finance Ministry, Pakistan and China may also strike deal in manufacturing and assembling of trucks.
They may also enter into agreements for setting up steel mills and cement plants and for developing the agriculture industry.
China would be invited to invest in pesticide production and hybrid seed industry. During the visit, Pakistan would also seek cooperation in developing the electronics industry and home appliances.
When contacted Deputy Chairman Planning Commission Salman Faruqui confirmed that the cooperation on the said economic sectors would be sought from the top authorities of Beijing. According to the official, Pakistan has only 29 cement plants having annual production capacity of 39 million tonne. Pakistan wants more investment in this sector. The official said that “Likewise, we need more steel mills keeping in view the increasing needs in the country particularly for developing the earthquake hit areas.”
Pakistan will seek financing from China to install more nuclear power plants at Chashma and satellite communication system during the upcoming visit. The official said “To materialize this very important project of NPFC, the country needs nuclear fuel technology from China to fabricate local fuel for the future nuclear power plants. With four similar power plants at Chashma site, it will be possible to reduce maintenance and physical security costs.”
Dubai airport expansion plan on track
It is reported that Dubai authorities showcased a state of the art airport terminal, vowing not to blink in face of the global financial turmoil and to press ahead with their USD 4.5 billion expansion plans.
Mr Paul Griffiths CEO of Dubai Airports said that “We are in front and we intend fully to stay there. This is not a time to blink.”
The new terminal is due for a soft opening on Tuesday. Emirates Terminal 3 dedicated to the Gulf city state's Emirates airline adds a capacity of 20 million passengers a year to Dubai international airport, taking total capacity to 60 million while construction goes on at another airport intended to be one of the worlds largest.
Mr Griffiths said that Dubai airport will have handled around 40 million passengers by the end of the year, about 5 million more than last year. He added that “Dubai is in a unique geocentric position where we have by default become the world's most significant hub.”
Mr Griffiths said that “You haven't got to look very far around the region to see airports and airlines that would love to take some of the market share that Emirates and Dubai Airports are achieving.”
Big 5 PMV spotlight on cement saving tools
Trade Arabia News Service reported that developers and construction companies are under increasing pressure from soaring building costs in the UAE and are now eyeing new technologies to cut cement usage and make big savings on concrete.
In June the UAE ministry of economy had fixed the cost of cement at AED 295 per tonnes. However construction firms still face ever rising cost of cement with some recent reports suggesting distributors are charging 15% higher than the government cap around USD 95 per tonnes to USD 100 per tonnes.
A strong line up of companies displaying a wide range of cement-saving tools and machines are being assembled at the Big 5 PMV, the Middle East’s premier plant, machinery and vehicles show which runs from November 23rd to 27th 2008 in Dubai. It is good news for construction firms faced with the increasing cost of cement, the most expensive component in the fabrication of concrete.
UK based ready mix concrete specialists Hydronix is gearing up to showcase its new Hydro-Probe Orbiter which cuts pre cast concrete production time considerably at the show.
Mr David Serra the company’s international sales manager said that “Usually, a ready mix concrete producer will over cement to compensate for water in the fine aggregates that was not taken into account when calculating the water cement ratio. He said that our moisture measurement eliminates this problem. Customers report pay back periods in a matter of months. Rising costs of materials were making developers, contractors and producers more aware of their processes and procedures and this will in turn increase cost effectiveness in our industry.”
He said that “The industry can sometimes be quite slow in adopting new technologies, but as costs increase, the differences between those who keep up with the latest technology and those who don’t will grow.”
He added that Italian manufacturer Sacme will showcase its fully automatic block-making machines. He said that “Our machines are peculiar in the sense that they produce blocks on a steel plate. This system enhances the blocks' quality and permits a saving of cement up to 25% with the use of higher water content which helps in the optimal curing of blocks.”
Another Italian exhibitor, Onyma Srl Sistemi & Tecnologie is displaying software and electronics that process control and manage the concrete production industry, accurately measuring and optimizing the quantities involved in the concrete production cycle.
Mr Marco Severini CEO of Onyma said that “An automatic control system used at the production plant, linked with a specific unit installed on transit mixers can lead to actual money savings from 5% to 15% a year. He said that this is done by avoiding raw materials wastage through guaranteeing a concrete mix that matches lab specifications and supervising delivery of concrete to the pouring site and collecting technological information.”
Among the American firms appearing at the show’s new US Pavilion, CemenTech will spotlight its on site cement mixers, Volumetric which could find a niche market in a country increasingly plagued by traffic problems. The mixers are attached to trucks and allow contractors to keep ingredients separate until they reach the work site.
The US pavilion will be joined by 8 other national pavilions including Spain, France, Italy and China, constituting a fraction of the event’s 300 plus exhibitors from over 22 countries covering an area of 40,000 square meters. Organized by Streamline Marketing Group, the Big 5 PMV will take place alongside the Big 5, creating a mega trade show, featuring the latest technologies, products and services in the construction industry.
Baosteel to cut production by 1 million tonnes - Report
Reuters quoted sources close to the company said China's largest steel maker Baosteel Group will cut steel production over the next three months in the face of a weakening outlook for demand.
The sources told Reuters that Baosteel, parent of Baoshan Iron & Steel Co would overhaul one of its biggest blast furnaces and expected this to reduce its production by about 1 million tonnes.
Baosteel had previously said it expected its crude steel output in 2008 to rise nearly 5% to 30 million tonnes. A spokesman for the group said he had not received any information from management about a production cut.
Earlier in the week, Chinese industry officials said four other big steel makers Shougang Group, Hebei Iron & Steel Group, Anyang Iron & Steel and Shandong Iron & Steel had agreed to cut production by up to 20% perhaps until the end of this year in an effort to support falling steel prices.
4 Chinese steel giants reduce production by 20% - Report
It is reported that 4 domestic steel giants, Hebei Iron & Steel, Shougang Group, Shandong Steel Group and Anyang Iron & Steel Inc, have decided to reduce production by 20% in October to prevent a further plunge in steel prices, which fell more than 5% before Golden Week holiday.
Analysts said that the falling trend for steel production has been formed after a new wave of steel price plunges led by shrinking domestic demand and surging raw material prices.
Mysteel analyst said to the China Securities Journal that steel prices in Shanghai and Tianjin markets are 5% to 10% less than a week ago, and it is estimated that prices of some steel varieties will keep falling in the next week
Experts said that steel prices have remained high since June, but now the trend has changed because of iron ore, coke and other raw material prices falling.
Domestic iron & steel giants will implement five measures to deal with the market changes
1. Controlling production to maintain supply and demand balance
2. Further reducing raw materials' purchasing prices to cut down storage
3. Enhancing communication between companies to ensure smooth channels
4. Intensifying the constraints of steel enterprises and dealers' sales, 5. Adjusting product structure and the flow of resources to avoid disorderly regional price competition
Chinese CR export prices witness substantial decrease
It is reported that export offers for Chinese CRC tumble this week on substantial decrease in domestic market prices.
On Shanghai market, 1.0mm CR sheet by Anshan steel goes at CNY 5250 per tonne down CNY 950 per tonne from September.19th; 1.2mm to 2.0mm material at CNY 5180 per tonne a drop of CNY 830 per tonne. While that for 1.0 CR coil by Maanshan steel drop by CNY 800 per tonne to CNY 5000 per tonne from the same period of last month.
Export offer for DC01 1.0mm CRC has been down by another USD 100 per tonne to USD 810 per tonne to USD 820 per tonne FOB from late last month. The market remains sluggish and most exporters are not sure when the price will level off.
(Sourced from MySteel.net)
Chinese steel market under adjustment amid weak demand
It is reported that the financial tsunami continues across the world despite the attempted USD 700 billion bailout and dragging down the steel market further in China after the National Day holiday. On October 6th, 4.75mm HRC price plunged CNY 200 per tonne to some CNY 4300 per tonne in Shanghai, while plate, rebar and wire rod also followed down.
The main steelmaking raw materials dropped by a bigger range. The homemade and Indian spot iron ore prices stood lower than the term contract prices, suggesting that the large-sized steelmakers are losing the advantage of enjoying a lower cost. Meanwhile, the coke price also turned downward with second grade metallurgical coke falling off to CNY 2000 per tonne or below that.
Data from various sources showed US financial crisis has led to shrinking demand of the world. Chinese export growth to that country fell 9 percentage points in first half of this year, while to EU and other regions, the exports are also showing a damping trend.
Along with infirm external demand, consumption in China's domestic market is also weakening. The government still holds prudent toward regulation of the financial market while keeping a cap on real estate credit.
Production cuts separately launched by the steelmakers were not planned as a whole or calculated, and it also takes time to see whether the increasing fresh capacity and facilities will add to the production.
Considering cost and operation pressure, it's believed the steel production would thin down.
(Sourced from MySteel.net)
Chinese HDG export prices witness swift drop
It is reported that hot dipped galvanized coil prices have seen a swift drop this week, following the step of HRC and CRC. This is also the case with export quotation.
On Shanghai market, 1.0mm HDG by Anshan steel is being quoted at CNY 5200 per tonne down CNY 1080 per tonne from September 19th. That for 0.5mm HDG by private steel makers is at CNY 5600 per tonne a drop of CNY 1200 per tonne from the same period of last month.
Prevailing export quotation for 1.0mm HDG Z120 goes at around USD 850 per tonne FOB down USD 100 per tonne to USD 110 per tonne from late last month. 0.5/0.5mm materials are being quoted at USD 920 per tonne to USD 930 per tonne. Though there have been more enquires than before, it remains to be seen whether or when importers start to move.
(Sourced from MySteel.net)
Sutor Technology commences operation of HDG line
Sutor Technology Group Limited a leading provider of steel finishing fabrication products in China announced the commencement of operations of its new 400,000 tonne hot dipped galvanized steel production line.
According to the release, the new HDG steel production line is capable of galvanizing both hot rolled and cold rolled steel with both zinc and aluminum, which will significantly expand our production capacity of HDG steel. Production capacity will increase from current 200,000 tonnes per year to 600,000 tonnes per year up by 200%.
In addition to the significant increase in production capacity, the addition of the new production line is also expected to diversify the Company's product portfolio and further vertical integration, which will increase our profit margin.
Ms Lifang Chen Chairlady and CEO of Sutor said that "The operation of the new production line will make Sutor more influential in the Chinese steel finishing and fabrication industry, and will help us further penetrate the domestic and global niche market for HDG steel products. Sutor's strategic plan to introduce high value added a steel product is being realized in a step by step fashion."
Mr Wen visits Wisco Fangchenggang project
It is reported that Mr Wen Jiabao Premier of China recently paid a visit to a 200,000 DWT dock in Guangxi based Fangchenggang project, promoted by Wisco and emphasized three principles concerning the project.
1. The project must produce premium steel products
2. The project must introduce the most advanced technology and management in the world
3. The project should do its best to protect local environment, save energy and cut emissions.
According to Mr Deng Qilin general manager of Wisco, the project will produce 25% of hot rolled sheet, 40% of cold rolled sheet, medium heavy plate measuring up to 5m in thickness, auto sheet, silicon steel and home appliances sheet.
Baosteel commissions No 8 air separator
It is reported that in September 25th, No 8 air separator of Baosteel successfully generates oxygen, the start of operation of the first independent integrated air separator in China proclaims the break of monopoly of foreign enterprises in high level air separator manufacturing field.
Through technology import and absorption and independent innovation, Baosteel has accumulated profound experiences in air separator construction, operation and maintenance ever since the initial phase project production. The 8 sets of air separators in Baosteel are 30,000 cubic meters per hour level and 60,000 cubic meters per hour level each one is of world class levels of its time.
The profound air separator construction and maintenance experiences of Baosteel contribute greatly to the development of air separator design and manufacture level of China and propel the whole air separator industry upgrade. In 2002, Baosteel cooperated with Hangzhou Oxygen Generator Work and Kaifeng Air Separator Work in the expansion revamp of No 2 air separator in which Baosteel was in charge of technology in general and the tow suppliers were to manufacture low-temperature equipment.
The successful revamp is the first attempt to manufacture a 30,000 cubic meters per hour large air separator in China and is a break of monopoly of foreign enterprises. The air separators manufactured by Hangzhou Oxygen Generator Work and other suppliers soon occupied the domestic market and have since then been exported oversea. Before the construction of No 8 air separator, Baosteel also built 2 sets of air separators for 2 local enterprises as the responsible party of technologies through the method of technology trade. All these have built up the experiences for the independent integration of No 8 air separator
The independent integration of No 8 air separator is under the leadership and instruction of Baosteel, project engineered by WISDRI Engineering & Research Incorporation Limited and equipment manufactured by Hangzhou Oxygen Generator Work. The project is constructed by SBC and ZheJiang Kaiyuan Construction Company under the supervision of Baosteel Supervision Company. The project construction lasted for 15 months after the first piling in June 19th 2007 and was put into operation one month in advance.
As the first independent integrated air separator, No 8 separator has attained world class and owes Independent Intellectual Property Rights in integration technology, control technology and key sequence engineering, crucial equipment localization. The project has directly saved investment for app. CNY 60 million comparing with similar project. The successful operations of No 8 air separator of Baosteel further improved the air separator design and manufacture level in China and extend the way of localization of large air separators.
China Armco Metals retains HC International for investor relations
China Armco Metals Inc a leading ore agency, distributor and steel recycler in China announced that it has retained HC International to lead a strategic financial communications program. HC International will initiate a proactive and targeted investor relations campaign immediately. Mr Matthew Hayden and Mr Alan Sheinwald of HC International and their team will be advising the Company in all facets of public financial communications.
China Armco Metals, Inc. is engaged in the sale and distribution of metal ores and non-ferrous metals throughout the PRC and the recycling of scrap steel for the Chinese market. The Company maintains customers throughout China which include the fastest growing steel producing mills and foundries in tier 2 and tier 3 cities. Raw materials are supplied from global suppliers in India, Hong Kong, Nigeria, Brazil, Turkey, the Philippines and Libya. Armco's product line includes ferrous and non-ferrous; Iron Ore, Chrome Ore, Nickel Ore, Copper Ore, Manganese Ore and Steel Billet. Beginning in the second quarter 2009, Armco expects to begin operating its steel recycling and scrap metal supply, which is in the process of implementation. The recycling facility is expected to be capable of recycling one million tonne of scrap metal per year which would positioning the Company as one of the top 10 largest recyclers of scrap steel in China. ARMCO estimates the recycled steel market at 100 million tonnes per year.
HC International is a premier information resource to institutional investors, hedge funds, independent portfolio managers, buy-side and sell-side analysts, small to large retail brokerage firms and accredited individual investors. HC International will leverage its recognized investment community relationships to help capitalize on China Armco Metals' key assets, while helping management to articulate its future growth opportunities. Additionally, the firm will extend CNAM's investor awareness programs, shareholder communications and coordinate introductions to key industry and sell-side analysts as part of a comprehensive IR program.
Mr Kexuan Yao chairman of China Armco Metals Inc said that "The team at HC International is well-respected and has a proven track record of representing successful China-based, US listed companies, including a US listed Chinese steel company which recently moved the New York Stock Exchange. After careful review, we selected HC International to ensure that the investment community is properly informed of our growth strategy and competitive advantages particularly as we expand into the profitable recycling segment in China upon completion of our recycling facility. In addition to their sector knowledge, we are confident HC will help us to improve our overall communication capabilities, which includes delivering our story and subsequent milestones to a larger, targeted base of investors."
Mr Matthew Hayden President of HC International said "ARMCO is well positioned to capitalize on two key market opportunities in China's steel industry currently. ARMCO has been, and will continue, to capitalize on China's robust steel demand, which is currently estimated at approximately 500 million tonnes annually, by providing commodity distributor sourcing and servicing to several major steel producers in China. As overall steel prices begin to stabilize, ARMCO is intently focused on meeting a growing demand for recycled steel that combines cost and energy savings for plants with the additional benefit of a 'Green' footprint critical for producers to operate profitability in both the short and long term. Currently, China is only meeting 20% of the domestic demand for scrap steel which stands at approximately 70 million tonnes annually. With Armco's recent capital raise, we are confident they will leverage their new steel recycling and scrap metal supply facility when completed, reputation and customer base to generate meaningful future growth."
South Korea stops importing HRC and plate from China
It is reported that Korea has stop importing HRC and heavy plate from China as of the middle of September.
As per report, the prevailing HRC price is USD 820 per tonne but the actual deal price is USD 790 per tonne. The plate price is USD 950 per tonne.
At present, although some manufactures are continuing to reduce their prices, the deals are still few in number. Most of China’s steel producers are receiving small orders. It is said that as global prices fall, it will lead to reduced purchasing quantities; most importers still expect prices to fall even further.
(Sourced from Yieh.com)
CR prices drop in Shanghai
It is reported that the market prices of carbon steel cold rolled have dropped continuously in Shanghai.
Price of cold rolled sheet with thickness 1.0mm from Ansteel is currently being quoted at CNY 5,530 per tonne a drop of CNY 20 per tonne compared with the previous day, and thickness 1.5mm is only CNY 5,420 per tonne a drop of CNY 30 per tonne compared with the previous day.
Regarding the cold rolled coil price, the price for 1.0mm thickness from Masteel is at CNY 5,270 per tonne a drop of CNY 30 per tonne compared with the previous day.
China oil refiners may return to profit in October - Association
According to an industry association, China's oil refiners may return to profit this month after benefiting from the recent falling global crude prices.
The China Petroleum and Chemical Industry Association said in a report the country's oil refining industry would probably shake off heavy losses caused by previous crude price increases and state-imposed caps on refined oil prices if international prices continued to drop.
Association figures show, China's petroleum and chemical sector had experienced double-digit annual growth in its profit for five consecutive years before suffering a 0.04% fall in the first five months of this year. In the first half, its profit raised a mere 2.5%. The association said that attention should be paid to increasing uncertainties for the petroleum and chemical industry. It added the sector's risk-resisting ability had improved markedly despite the global financial turmoil.
According to the report, the output of Chinese refiners totaled CNY 175.8 billion in August, 37.4% up from the same period last year.
China produced 18.2 million tonnes of refined oil products in August, 10.6% more than the same period in 2007. The growth was 1.3%age points higher than in July. Output of the country's petroleum and chemical industry increased 34.9% to CNY 604.2 billion in August from a year before accelerating 16.3%age points.
Huaneng signs purchasing deals for nuke plant
China Huaneng Group, parent of Huaneng Power International Co Ltd, has announced that it has inked contracts with 10 suppliers to equip a nuclear plant in Shandong.
The largest power producer said the suppliers include China Nuclear Energy Technology Co, Tsinghua University, Shanghai Electricity Group and Harbin Power Equipment Co, etc.
The nuclear power plant, located at Shidao Bay in the Rongcheng city of Shandong province is designed to adopt the high temperature, gas cooled technology, with a capacity of 200,000 kilowatts for the first phase. The first phase project will start construction from September next year and is expected to start operation in 2013.
Sources with the company have said, besides nuclear power, Huaneng will also accelerate the development of hydropower, wind power, solar power and biomass power. By 2010, installed power capacity using such clean energy will increase to 13,000 MW.
Huaneng is also currently developing wind power plants in Hainan, Guangdong, Jilin and Shandong provinces, as well as in the Inner Mongolia autonomous region. The company presently has more than 1,300 MW of wind power operations and planned projects.
NLMK may cut production
RBC-News reported that Novolipetsk Steel is not ruling out the possibility of a reduction in its output due to the financial crisis.
A spokesperson of NLMK told RBC that “As a result of the crisis, demand for steel has declined on global markets, which has primarily affected NLMK's exports to Europe and the US. The company is now studying market conditions.”
As per report, at the same time, however, NLMK has not changed the forecast for its 2008 financial results. Earlier, the company announced that its revenue was expected to top USD 13 billion and EBITDA USD 5 billion this year, while production was projected to climb 26% to USD 11.6 million tonnes of steel.
Privatbank Kolomoisky increases Ferrexpo stake to 6.9%
Interfax reported that Mr Ihor Kolomoisky, co owner of Ukraine's largest bank Privatbank has bought another 20,551,710 shares in Ferrexpo plc to increase his stake in the iron ore company to 6.8857%.
These shares were transferred on September 29th to Kolomoisky's BVI-registered Ralkon Commercial Ltd, which on September 30 bought the additional 20,551,710 shares in Ferrexpo.
Mr Kolomoisky earlier held 20,000,000 shares in Ferrexpo through Paneuro Products Ltd and Nevis Corporate Services Ltd.
Ferrexpo said on October 6 that RPG Industries had bought 20.79% of Ferrexpo plc from the company's core owner, Mr Konstantyn Zhevaho. This reduced Zhevaho's stake in Ferrexpo 51%.
Severstal Warren cold rolling operation could idle
It is reported that Severstal Warren, formerly WCI Steel, may temporarily close its cold rolling operation because of the economic meltdown due to the global economic meltdown.
Fall in demand hits hard in Ukrainian metals sector
Ukrainian Journal Staff cited Mr Volodymyr Rabotnev deputy transport and communications minister and director of the state department of the sea and river transport as saying that that a fall in demand on products of the Ukrainian metals sector are negatively influencing the transport sector, especially ports.
Ukraine to raise Moldova electricity tariffs to Eastern European in 2009
Ukrainian News Agency cited Mr Volodymyr Luchnykov Deputy Fuel and Energy Minister of Ukraine as saying that Ukraine intends to raise electricity tariffs for Moldova in 2009 so they would equal the tariffs for the countries of Eastern Europe.
He said that "We are proceeding with exporting electricity to Moldova, because Ukraine inherited from the Soviet Union an interconnected network of high voltage power lines. Ukraine's high voltage system cannot function in isolation from Moldova. It is redundant to say that Moldova cannot manage without Ukraine's high voltage power system. It will be left without electricity generation at all."
He went on to say that Ukraine by exporting electricity to Moldova implements the arrangements reached before.
Mr Luchnykov said the tariffs for electricity exported to Moldova will be raised. He said that "I cannot announce the revised tariffs because I would abuse commercial interests of the companies involved. However, I can assure you that the rise in tariffs will be substantial, and the rise is planned not for this year alone but for the next year as well."
Mr Luchnykov said "We could not settle the tariff issue because of Odesa region's dependence on Moldovan high-voltage power transmission lines. Today this hindrance is removed. Next year the electricity tariffs for Moldova will be raised, so they will equal with tariffs for Eastern European countries."
Mr Luchnykov emphasized that in case Moldova, due to any reasons, disconnects Odesa region from its power circuits, the Bolhrad-Budzhak-Reni and the Artsyz-Bolhrad high voltage power lines will provide South of the region with electricity from Ukrainian high-voltage power systems.
Odesaoblenerho power supplying company commissioned a high voltage power transmission line Bolhrad-Budzhak-Reni in Odesa region.
IMF cuts Russian growth forecast to 7%
According to the International Monetary Fund, Russian economic growth will slow more than expected because the world faces the most dangerous financial shock for developed markets since the 1930s.
The Washington based IMF said in its World Economic Outlook gross domestic product will probably expand 7 percent this year and 5.5% in 2009. That is less than a July estimate for 2008 growth of 7.7% and a 2009 expansion of 7.3%.
The IMF report said "Growth is set to weaken appreciably, reflecting slowing world demand and tightening financial conditions. As investors' appetite for risk declined, pressures extended to emerging markets, particularly to Russia which faced a confluence of shocks."
The report said the IMF's growth forecast for 2008 reflects Russia's "stronger-than-expected performance early in the year, rising terms-of-trade gains, and a larger than expected fiscal stimulus package. However, growth prospects are deteriorating as the region has been affected by the global financial turmoil.
ONGC confirms interest in Kazakh oil asset
It is reported that leading Indian explorer Oil and Natural Gas Corp confirmed on Thursday its interest in buying a stake in MangistauMunaiGas a Kazakhstan based oil producer.
A government source said earlier this week ONGC had approached the Kazakh side over MMG, which has total oil reserves of 812 million tonnes and recoverable reserves of 194 million tonnes.
Mr Narinder Pal Singh the head of the Kazakh representative office of ONGC Videsh Limited, the overseas arm of ONGC, said his company was eyeing MMG. He said that "There have been no talks on MMG, but we are interested in this asset."
Kazakh oil company KazMunaiGas has received state approval to buy a controlling stake in MMG from Indonesia's Central Asia Petroleum Ltd.
Fitch rates Donetsksteel Steel with 'B-' outlook stable
It is reported that Fitch Ratings has assigned Ukrainian based CJSC Donetsksteel Iron and Steel Works Long term foreign and local currency Issuer Default ratings of 'B-' with Stable Outlook and Short-term foreign and local currency IDRs of 'B'. Fitch has also assigned the company National ratings of Long-term ‘BBB+ with Stable Outlook and Short-term ‘F2(ukr)’.
The ratings reflect the company’s strong domestic market position in coking coal and its partial vertical integration comprising coal, coke and metallurgical production. They are also supported by the proximity of its production facilities to each other, to Donetsksteel’s main domestic customers and to the sea port of Mariupol. In addition, the ratings reflect the company’s moderate net leverage and good fixed charge coverage. Fitch expects the company’s leverage will increase over the next two years on account of substantial capital expenditure to modernize its equipment. However, Fitch anticipates that net leverage will be maintained below 3x.
The ratings are constrained by Donetsksteel’s low EBITDAR margin which is below that of its main Russian and Ukrainian peers and by the absence of its own iron ore supply and rolling facilities. Donetsksteel leases rolling facilities from OJSC Donetsk Metallurgical Plant, an entity not consolidated in Donetsksteel’s accounts but controlled by the same beneficiary as Donetsksteel. Part of the metallurgical equipment used by Donetsksteel is dated and with low efficiency. Open hearth furnaces are more than 30 to 40 years old, and the plate-rolling mill, though modernized, still pales in comparison to more modern equipment used by some competitors. Fitch also notes that Donetsksteel’s corporate governance is below global standards. In addition, the company does not have a defined policy for maintaining minimal cash reserves. This could lead to a worsening of its credit metrics if capital expenditure rises sharply in the coming years.
Fitch views Donetsksteel’s liquidity as being adequate for the rating. This is supported by cash reserves of USD182 million committed undrawn credit facilities totaling USD 121 million and good operating cash flows. As at September 1st 2008 27% of the company’s total USD 783 million debts were due within a year. The loan portfolio includes the following domestic bonds in issue: UAH 150 million with a coupon of 13% due 2011; UAH150 million with a coupon of 12.5% due 12 November 2008 and UAH 600 million with a coupon of 12% due 2013. The holders of the series A and C bonds benefit from periodic put options at two yearly intervals for series A and annually for series C. The majority of the company’s credit facilities are unsecured.
The Stable Outlook reflects Fitch's expectation that Donetsksteel will proceed with the development of its own iron ore supply and the modernization of its metallurgical complex, and that the company will be able to maintain its financial performance.
Inprom rises in ratings of top 400 largest companies in Russia
It is reported that Inprom has been rated 237th by rating agency EXPERT RA among Russia's top 400 largest companies on the amount of revenue in 2007 up 24 notches from last year's rating of 261, as published by Russian business magazine Expert. In 2007 the company's revenue hit RUB 16.5 billion up by 37% on the previous year.
As per report, with CAGR of 53.7%, Inprom is currently rated 51st among the top 350 Russian companies for rates of growth, as published by Russian business magazine Sekret Firmy in early October.
Amid a boom in Russia's main steel consuming industries, Inprom's development strategy focuses on carrying out innovative technologies on the domestic steel market. The company intends to manage the full spectrum of primary processing services for the end-user, and also to preserve its position as a leading retailer on the Russian steel distribution market, by developing a nationwide service center network in the form of "steel hypermarket + processing."
SOCAR boosts gas output by 36% in 9 months
Interfax reported that the State Oil Company of the Azerbaijani Republic saw gas production increase by 35.8% to 5.794 million cubic meters in January to September 2008 compared to the same period of 2007.
SOCAR received 1.245 billion cubic meters of gas from the Azeri- Chirag-Guneshli field which was a decrease 38.5% in comparison with January-August 2007. SOCAR acquired 1.663 billion cubic meters, up 66.5%, from the Shah-Deniz project, also operated by BP-Azerbaijan.
In September, SOCAR produced 643.8 cubic meters of gas, 118.59 million cubic meters of associated gas from the Azeri-Chirag-Guneshli field and 249.51 million cubic meters of gas as part of the Shah-Deniz project.
SOCAR forecasts that gas production in 2008 will come to 8 billion cubic meters. In addition, SOCAR plans to receive 1.4 billion cubic meters of associated gas from the Azeri-Chirag-Guneshli field and purchase 2.9 billion cubic meters from the Shah-Deniz field from BP-Azerbaijan in 2008.
Deliveries of crude oil to Ukrainian refineries down 29% YTD
Ukrainian Journal Staff reported that deliveries of crude to Ukraine's five oil refineries and the Shebelinsky gas processing plant declined 29.1% YoY in the first nine months to 7.746 million tonnes.
Inprom paid promissory notes
It is reported that Inprom has paid promissory notes to the amount of RUB 200 million under its note program.
The company also plans to redeem notes to the amount of RUB 100 million on October 15th.
Veles Capital Investment Company is the organizer of Inprom's promissory notes issues.
Shell Ukraine to begin exploration of Shebelinsky hydrocarbon tract
Ukrainian Journal Staff cited Mr Patrick Van Dale general director of Shell Ukraine as saying that Shell Ukraine Exploration & Production plans to begin exploration and development of the Shebelinsky hydrocarbon property jointly with Ukrgazvydobuvannia in early 2009. It is the largest project to explore fields in the Dnipro-Donetsk basin,
Analysts expect ferrochrome prices to soften for two years
Analysts said that ferrochrome prices are expected to soften in the next two years, but they were more robust than those of other commodities. However, they expected ferrochrome companies to benefit from a simultaneous drop in coking coal prices and the rand weakening.
Analysts forecast the fourth quarter ferrochrome contract price with European buyers to be settled at between USD 1.85 and USD 1.93 a pound this week, following the trend of USD 1.93 per pound agreed on with Japanese buyers. In the September quarter, the price agreed on was a record USD 2.05 per pound.
Ferrochrome company executives were all locked in meetings yesterday. Merafe Resources finance director Mr Stuart Elliot said he could not comment, but Merafe would make an announcement in the next day or two.
Another ferrochrome company executive confirmed the European price settlement was at USD 1.85 per pound, and said the lower price reflected fear of a global slowdown in stainless steel manufacturing.
Stainless steel research group MEPS said last week that European and Japanese stainless steel production this year was expected to be the same as last years. US output would fall slightly on weak demand from the automotive sector, and South Korea's production would be similarly lower as domestic and export orders were weak.
Mr Simon Toyne analyst at Numis Securities said that he expected ferrochrome prices would average USD 1.78 per pound in the 12 months to June 2009, USD 1.50 per pound in the following year and USD 1.18 per pound from 2013 onwards. He expected IFM's unit costs to decline to below USD 0.70 per pound from 2010 on weaker coke prices and a long term rand assumption of ZAR 8.80 to the dollar.
SA is the world's biggest producer of ferrochrome, which gives hardness to stainless steel. Local producers include the Xstrata Merafe JV, Hernic Ferrochrome, Samancor Chrome Kermas and International Ferro Metals.
Price of SA charge chrome for Q4 is reduced
According to an information from Europe, it is supposed that, in consequence of the negotiations taken place between stainless steel mills in Europe and producers in South Africa on price of charge chrome for shipments in October to December 2008 quarter, it has been agreed upon to reduce the price by 20 cents per pound of Cr in comparison with that settled for July to September 2008 quarter.
Owing to a sudden and drastic change of the economic circumstances in Europe and the USA, the price of South African charge chrome for shipments in this quarter has been turned to a fall.
Plymouth Tube to cut its workforce
It is reported that Plymouth Tube in the Northwood Industrial Park is cutting 20% of its work force next week, citing weakened economic conditions for the processor of stainless steel tubing for aerospace, nuclear and commercial industries.
Mr Marvin Dunham GM of Plymouth Tube said that the last work day for 20 of the manufacturing firm's 100 or more workers is October 17th 2008. He added that "It was announced to workers who lost jobs. Overall economic conditions impacted the Salisbury mill whereby we had to make some decisions; we are impacted by a change in the current market conditions, current demands."
Mr Dunham said that the processing plant that opened in Salisbury in 1983 intends to continue operations near the corner of Industrial Drive and Beam Street. He added that "There will be no more staff reductions."
The Salisbury operation is part of the Warrenville, Ill based Plymouth Tube Co that has been in business since 1924.
Minara Resources sees positive nickel outlook
Minara Resources said that the outlook for the steel hardening agent is positive after posting a rise in output for the third quarter. Nickel production from the Murrin Murrin operation in Western Australia during the three months to September 30th 2008 climbed 14.7% on the previous corresponding quarter to 7,656 tonnes.
Minara Resources reiterated its full year production forecast of 31,000 to 35,000 tonnes, but stressed output would be at the lower end of the range.
Mr Peter Johnston CEO of Minara said that "Going forward we believe that the nickel market will stabilize and some of our input costs will return to normal levels."
Minara said the nickel market continued to be volatile but forecast a positive outlook in the mid to longer term.
Mr Paul Young and Mr Brendan Fitzpatrick analysts at Deutsche Bank said that stainless steel demand and production is likely to remain sluggish until the second quarter of calendar 2009. They added that "In our opinion, a sustained but slow recovery in stainless steel production and therefore nickel demand is unlikely to begin until the back end of Q1 2009."
Minara said there had been a significant weakening in the sulphur spot market over the past two months and that the company expected the decline to continue. Minara holds 60% of the Murrin Murrin operation, with commodities trader Glencore International holding the balance.
JSL facing hurdle in Orissa expansion - Report
BS reported that the financial market crisis has put a temporary stop to phase III and IV of JSL Limited’s expansion plans in Orissa. The expansion would have doubled power and stainless steel capacity.
Mr Arvind Parekh director for strategy & business development of JSL Limited said that it had initiated negotiations but would now defer discussions.
He added that at present, power capacity is 250 MW and stainless steel production is 800,000 tonnes. The investment would have been INR 2,000 to INR 3,000 crore and would have been largely raised through debts.
DCM DECOmetal becomes ordinary member of ICDA
It is reported that DCM DECOmetal GmbH has requested to become ordinary member of ICDA after 17 years of associate membership.
DCM DECOmetal bought the majority of ACR Albanian Chrome and DCMchrome Pty South Africa in 2007. The Council of ICDA unanimously approved their application.
Severstal Resources extends offer for PBS Coals Limited
OAO Severstal one of the world's leading metals and mining companies announced that 7027940 Canada Limited an affiliate of Severstal, has extended the expiration date for its offer to purchase all outstanding shares of PBS Coals Limited at an offer price of CAD 8.30 cash per share on October 20th 2008.
The Offer has been extended to allow for the receipt of confirmation from the Committee on Foreign Investment in the United States under the Exon-Florio Amendment to the Defense Production Act of 1950, as amended, that no second-stage investigation will be initiated in respect of the joint application submitted by Severstal and PBS Coals Corporation.
Shares representing approximately 94% of the outstanding shares of PBS Coals Limited have been tendered and not withdrawn pursuant to the offer.
The Offer will file its Notice of Extension with Canadian regulatory authorities and mail copies to all shareholders of PBS Coals Limited shortly.
Russian miner halts zinc and nickel projects due to financial turmoil
Reuters reported that the Russian Copper Company has temporarily shelved separate projects to expand into nickel and build a zinc plant with a rival miner due to the global financial crisis.
The company, Russia's third largest copper producer, said all existing projects would continue to operate and that no production cuts were planned.
Mr Alexander Khanin spokesman for Russian Copper said "We are not closing any projects. We are only putting on hold those projects which are at the blueprint stage the nickel and zinc projects. He said that production has not stopped. We do not plan staff cuts. The construction of projects which have already started and upgrades to existing plants are proceeding."
Russian Copper said in February it was prepared to invest USD 640 million to create a new subsidiary, the Russian Nickel Company, to produce at least 10,000 tonnes of nickel and 1,000 tonnes of cobalt.
In May, Russian Copper and Urals Mining and Metals Co, the country's second-largest copper producer, announced a $650 million project to jointly build a new zinc plant with annual capacity of 30,000 tonnes a year.
Chinese coal prices witness trend mixed
It is reported that since middle of September, international coal prices plummet amid financial crisis and falling global market which also have a negative effect on the coal demand in China, with both coking coal and non-contract thermal coal prices decreasing.
Mr Li Chaolin analyst of www.cctd.com.cn told CAIJING.COM.CN said that slipping steel prices drives coking coal and coke prices sliding, and slower growth of Chinese economy and power also dampens demand for coal.
Mr Wang Shuai the chief coal analyst of Orient Securities said that coal prices drop both at home and abroad can be attributed to the weak demand, and declining oversees market, which would put domestic prices under pressure in turn. He added that "To some extent, Beijing Olympics have some effect on China's power utilization decrease, but the main factor comes from limp growth of Chinese economy. Power production in Aug. grew only by 1.8%, much lower than 13% to 14% at the same time of last year.”
According to Mr Li Chaolin as lots of plants in Yangzi River Delta and Zhujiang Delta has cut or halted production under the shrinking export trade, demand for electricity drops and coal consumption and demand are also weakened.
A report on September coal industry from CITIC Securities shows, due to sluggish market of housing, autos and home appliances, steel demand is weakened. Besides, steel price slipped CNY 500 per tonne to CNY 1000 per tonne in August from the high level in June and construction steel price has dropped more than CNY 1000 per tonne.
(Sourced fromMySteel.net)
Oz Minerals has no plan on delaying on shipment
It is reported that Australia's Oz Minerals Ltd which supplies steelmaking alloys such as nickel and zinc to China has not had any requests for shipment delays even as steel mills cut production.
Mr Andrew Michelmore CEO of Oz Minerals said his company had seen nothing like that when asked if, like Mt Gibson, Oz was being asked to delay shipments. He said that on the contrary, for zinc at least, Chinese smelting firms were reducing their fees to attract more raw materials from miners. He added that the message very clearly there is they want that zinc."
Mr Michelmore said that unlike the metals Oz Minerals mines, coal and iron ore shipments to China were partially halted during the Olympic Games in Beijing last month, resulting in a back up of those materials at coastal ports and adding to the backlog. He said that "You've got these massive stocks sitting on the wharf so I'm not surprised that they're backing off and, where they can, saying I don't need them yet."
As per report, steel mills in China this week asked fellow Australian miner Mount Gibson Iron Ltd to delay some iron ore shipments, triggering concerns Chinese appetite for Australian minerals was waning in the face of the global financial crisis.
Shanxi to set iron ore futures spot market
It is reported that rich in coal resource, Shanxi wants to develop iron ore trading business with Brazil and looks forward to setting up an iron ore futures market in Shandong, home to Qingdao and Rizhao ports together with an annual iron ore throughput of 135 million tonnes accounting for over a third of the country's total iron ore throughput.
As per report, the idea came after Brazil expressed last year that it would increase steel capacity to 66 million tonnes a year in 2012 from 31 million tonnes in 2010, which will require at least 17 million tonnes of coking coal as raw material. Shanxi accounts for 50% of the worldwide coking coal market and China exported 28% of its coking coal output to Brazil last year.
Mr Li Zhen director of the Economic Academe under the Provincial Development and Reform Commission of Shanxi said that setting up such a market will help Chinese players enhance their influence in overseas annual iron ore negotiations as well.
Mining projects await forest clearance in Jharkhand
IANS reported that several mining companies, which have been allotted mining blocks in Jharkhand are not able to start operations in the state as the projects are yet to be cleared by the forest department.
According to sources in the mines and geology department, 22 companies have been allocated iron ore mines and coal blocks in the state. But none of them is able to start mining.
A department official told IANS that “Several companies got approval for mining in the state from the central government. But the mining work can start only after forest clearance is accorded to them.”
The companies who got mining lease include ArcelorMittal, TATA Steel, Jindal South West and Electrosteel Casting.
Electrosteel was given a mining lease on June 1, 2006. After more than two years, the company is still waiting for forest clearance. A senior Electrosteel official told IANS that “Allocation of mines is just one step in the process to start mining. Before starting mining, we have to seek clearance from the forest and environment department, pollution department among other departments. The procedural work unnecessarily delays the mining work.”
Cleveland Cliffs announces results for special meeting
Cleveland Cliffs Inc, which will be renamed Cliffs Natural Resources in mid October 2008, announced results for the special meeting of shareholders held on October 3rd 2008.
It said that, based on the results provided by the independent Inspector of Elections, IVS Associates Inc, its shareholders rejected Harbinger Capital Partners’ control share acquisition proposal. The proposal asked Cleveland Cliffs shareholders to allow Harbinger to acquire more than one fifth but less than one third of Cleveland Cliffs shares outstanding.
According to the report provided by the Inspector, more than 78.9 million shares were represented in person or by proxy at the meeting, reflecting a total turnout of nearly 74% of all outstanding shares. With respect to the required first majority approval, 51.3 million or 65% of the votes represented at the meeting, voted against adopting Harbinger’s proposal. With respect to the required second majority approval, or shares voted by holders other than Harbinger Capital Partners, its equity swap counter parties and other interested shareholders, 46.3 million or 82% of the eligible votes represented, voted against adopting the Harbinger proposal.
Mr Joseph A Carrabba chairman, president & CEO of Cliffs said that "While pleased our shareholders voted to reject Harbinger’s proposal, Cliffs recognizes it will face an uphill battle winning the two thirds majority of shares outstanding required to complete its proposed transaction with Alpha Natural Resources. We continue to believe that, over the long-term, the transaction is in the best interest of shareholders and are hopeful the number required to approve the deal are convinced of the merits."
Cliffs set the record date for the shareholder meeting to vote on the proposed transaction with Alpha as of October 6th 2008. The shareholder meeting will take place in mid November 2008, with a specific date to be determined.
At least 7 killed and 7 injured in south China mine blast
Xinhua news agency reported that at least seven people were killed Friday and another seven injured in a coal mine gas blast in southern China.
The agency quoted a local safety official as saying that the accident happened in the Guangxi Zhuang Autonomous Region on Friday morning when around 100 miners were underground.
Eighty-four people have been safely brought to the surface.
China's mining industry is considered one of the world's most dangerous with accidents killing up to 7,000 workers annually. A major gas blast at Liaoning's Sunjiawan mine in February 2005 killed more than 200 miners, making it the worst mining tragedy in China for at least 15 years.
China Guodian may lose USD 1.32 billion on coal cost
Reuters reported that China Guodian Corp, one of China's five major power generating groups, will likely CNY lose 9 billion this year due to high coal costs and low state-set power rates.
Mr Meng Tingrong general manager of China Guodian's fuel unit said that Guodian, parent of GD Power Development Co Ltd and Guodian Changyuan Power Development Co Ltd has lost CNY 5.65 billion in the first nine months of this year.