August, 01 2005
Indian iron ore stockpiles at China ports
Over 36 million tonnes of Indian iron ore is lying in ports across China as the countrys steel factories are not interested in lifting them at this juncture. The unlifted stocks at the ports constitute nearly eight months worth of exports as India sells about 55 million tonnes of iron ore a year to China.
One reason for the stockpiling that has taken place at buyers godowns at the Chinese ports is a huge amount of speculative buying early this year. Speculators bought huge quantities of Indian iron ore early this year on expectations that the prices would rise after the Chinese government came out with its steel policy. The Chinese steel industry is witness to a severe slump in steel prices in recent months, which is another reason why steel companies are reluctant to pick up stocks that were imported by traders at high prices.
The Chinese authorities have made it clear that they would do whatever it takes to reduce the dependence on imported steel and raw materials and encourage local industry. The government a month back had announced plans to curb the processing of iron and steel by domestic processors using imported iron ore, pig iron, steel scraps, billets or ingots provided by overseas clients. The new policy also aims to discourage exports of low-end, energy-intensive products like steel alloy, pig iron, coke and steel scrap by gradually wiping out the export tax rebates on import of these products.
Indias exports of iron ore is expected to come down next year in view of the recent policy changes and changing market conditions in China, trade sources said.
Indian Govt wants cheap steel from Mittal for giving iron ore
The steel ministry has proposed a quid pro quo deal with LNM group chief LN Mittal under which he will sell a certain percentage of steel to be produced at his proposed plant in Jharkhand at a discount in the domestic market.
In return, the ministry will meet Mittals demand for supply of iron ore in excess of what he will require for production at the Jharkhand plant.
The proposal was made at a meeting Mittal had with steel ministry officials last week. The steel ministry had posed the counter-demand when Mittal had asked for a guaranteed annual supply of 30 million tonnes of iron ore annually. This is double the requirement of Mittals proposed 10-million tonne steel unit. The Jharkhand plant will utilise half of the iron ore, while the the balance will be exported to Mittals other facilities abroad.
Sensing that an arrangement may be reached by Mittal and the government, steel makers have started lobbying against the deal. The ministrys proposal will mean nothing but dumping of steel by Mittal. The industry is already under pressure due to huge imports. Any move to sell steel at discounted rates will add to problems.
JSW hopes for Chiria mine for West Bengal plant
The JSW group which proposed to set up a five million tonne steel plant at a cost of Rs 10,000 crore in West Bengal, is eyeing one block of the Chiria mine in Jharkhand for supply of iron ore for the project.
"If the ruling party here takes up the matter strongly with the Centre and the Prime Minister for one block of Chiria mine, it will not be very difficult because ultimately the whole region must be developed," Vice-Chairman and Managing Director of JSW Steel Limited Sajjan Jindal told
Asked whether the Steel Authority of India Ltd (SAIL), which at present has the lease of Chiria, would agree to part with one block, Jindal who had a talk with SAIL Chairman V S Jain said, "SAIL wants iron ore for Indian Iron and Steel Company and Bokaro steel plant for a period of 50 years. If their requirement is met, SAIL can part with one block of Chiria mine."
To a question if his company was looking for other iron ore reserves for its proposed plant in the state, Jindal said that they were concentrating only on Chiria mine although there were other contenders. He said that the mining policy of the government should not allow one company to block major iron ore reserve and "we must develop the steel industry in the country."
Jindal also strongly urged for a ban on iron ore export. "Why should we export, when steel plants in the country are not getting iron ore? Export of ore whether high or low grade or fines should be stopped."
Mr Jindal said that it had offered to set up a 5 million tonne pellet plant in Jharkhand at an expenditure of Rs 2,000 crore for supply to proposed plant in West Bengal for iron and steel making.
The product mix in its proposed steel plant in West Bengal is likely to be 50% each for longs and flats.
Referring to the expansion of Jindal South West (JSW), earlier known as Jindal Vijaynagar Steel Limited, he said Rs 3,000 crore would be spent for increasing its capacity to four million tonne from the existing 2.5 mt.
Jharkhand starts auto and auto-component SEZ project
Zeroing in on the automative sector after steel, the Jharkhand government has kick-started the process to promote their latest project, automobile and auto-component Special Economic Zone (SEZ) project, at Adityapur.
IL&FS Infrastructure Development Corporation, the advisor for the project, has invited bids for consultants to prepare a detailed project report.The consultant would carry out a detailed survey to assess the demand for the SEZ.
The newly proposed automotive and auto-components SEZ could hit West Bengal hard which was also trying to attract auto companies to invest in the state.
Emami & Action Shoes plan steel plant in Jharkhand
Jharkhands iron ore deposits, said to be more than 3,700 million tonne, have caused quite a few investors to stop and take a look. Apart from the big players in steel the states mineral reserves has also interested companies that produce cosmetics and shoes.
The trend is somewhat similar to what was experienced in the software sector a decade earlier when with opening of business opportunities had investors from diverse sectors like hospitality and automobiles jumping into the software bandwagon.
Mecon is currently evaluating the 1048 Crores investment proposal put forth by Emamifor setting up an integrated steel plant of one million tonne capacity. The steel plant is to be set up under the banner of Premiere Industries Limited. It is said the company is also looking for similar opportunities in neighbouring Orissa.
Action Shoes is yet to submit an official proposal to the state government. Company officials have already toured a few sites in Jharkhand, where they plan to set up a steel plant, and are also going to submit the proposal within a month. It is expected to be worth beyond Rs 1,500 crore.
Posco goes on a PR exercise
Worried over the continuing protests over Poscos proposed mega steel plant which is Indias biggest ever FDI of $12 billion, the company itself and the International Watch have initiated counter measures to win friends and influence the people here.
Apprehending that such opposition might scuttle the project, the US-based International Watch has started lobbying for the steel plant among a cross section of people including the media persons and political leaders. The non-profit organisation claims that it has set up a $5 million Tribal Trust Fund to ensure proper and humane rehabilitation of the people who will be displaced after the steel plant comes up.
Meanwhile representatives of the Posco have belatedly started their public relations exercise in Orissa by talking to people on a one-to-one basis to assuage the opposition against their project. It is learnt that they had been misguided by some officers who had, all along, asked them not to interact with the media. Realising Posco has now stepped up confidence building measures.
Jindals Stainless expansion plans
Jindal Stainless Steel will invest about Rs 10,000 crore to add fresh capacity. The company is expanding the Hissar plant in Haryana, setting up a new unit in Kalinganagar in Orissa and adding a new production line in the recently acquired plant in Indonesia.
Jindal Stainless Steel managing director Ratan Jindal, who was in the city last week, said, We are planning to increase our Hisar plant capacity to 7 lakh tonnes from 5.5 lakh tonnes at present at an investment of Rs 1,000-1,200 crore. The plants cold rolling capacity will also be increased from 120,000 tonnes to 300,000 tonnes.
We are also going ahead with the Orissa project which will be completed in phases. For that, we will invest Rs 2,000 crore in the first phase, added Jindal.
Mr Munda and team to fly on 2nd August
Jharkhand Chief minister Arjun Munda, along with his three ministerial colleagues and two officials are starting their London, Geneva and Paris 12 days tour on August 2.
Home minister Sudesh Mahto, parliamentary affairs minister Madhu Koda, urban development minister Raghubar Das, chief secretary Prem Prakash Sharma and principal secretary U.K. Sangma and public relations secretary Sukhdev Singh form the team.
SAIL for overseas JV with CIL
Steel Authority of India Limited (SAIL) is actively planning to form a joint venture with Coal India Limited (CIL) to acquire potential coal blocks abroad, but has no plans to form an independent entity for the same.
Through the proposed joint venture, SAIL aims to source guaranteed supply of coal through both short-term and long-term linkages, besides intending to acquire coal blocks.
However, the proposed joint venture between SAIL and CIL has failed to fructify so far because neither of the state-run utilities have been able to identify any potential coal blocks in the overseas.
Currently, SAIL has been importing eight to ten million tonnes of coking coal and with the planned expansion to 12 million tonnes by 2012, dedicated coal linkages is necessary.
Record LD gas output by RSP
The Steel Melting Shop - II of Rourkela Steel Plant has registered a record recovery of LD gas in June. 111.25 cubic metres of gas per tonne of crude steel was recovered, which is highest ever monthly LD gas recovery among all steel plants of SAIL.
The LD gas generated during the process of steel making in the LD converter has got high calorific content and is used to create mixed gas, a fuel for various furnaces in the steel plants Hot Strip Mill, Plate Mill and Cold Rolling Mill etc to reduce consumption of energetic materials.
Centre clears land for Haldia coke project of TATA
The shipping ministry has given its assent to the proposal of handing over 180 acres of land at Haldia to Tata Steel and the West Bengal Industries Development Corporation for their proposed power plant and coke unit projects.
The land would be given on a 99-year lease to the consortium for Rs 56.17 crore and the Calcutta Port Trust would be apprised of the ministrys approval to the land allotment in a day or two. The 180-acre plot is where Hindustan Fertiliser Corporations plant was located. The unit has now turned sick and the new project proposal will help put the land into more productive use.
The Tata Steel-WBIDC consortium has guaranteed a minimum throughput of 1 million tonnes of coal every year, ensuring the Calcutta port trust a regular revenue of around Rs 8 crore.
The consortium will form a new company, Hooghly Metcoke & Power, which will be a subsidiary of Tata Steel with WBDIC holding a minority stake. The new company will import coal and convert it into high grade coke for steel furnaces. Initial capacity of the coke plant will be 8 lakh tonnes a year, which will be later increased to 1.6 million tonnes.
Tata Steel sources said that the coke will be either bought by the company itself for its new furnaces planned for Jamshedpur steel plant, but the option of selling some of the high grade coal to other steel makers is also there.
The by-products generated in the form of gases during the coke production process will be used is generating electricity. The power will then be fed to the West Bengal State Electricity Board grids. The project aims to generate 120 mega-watt power annually when completed.
ESAB`s new plant to start operations by April `06
ESAB India has begun to build a plant at Irungatukottai near Chennai, to assemble equipment for the welding industry. The company will invest Rs 20 crore in the plant. The new plant would be spread over 50,000 square feet, and will start operations by April 2006.
The plant would make equipment which would bring down the power consumption while simultaneously improving the quality of welding. The plant is being built to serve the Indian market which improved during last year in the wake of the upturn in the steel and automotive industry.
The new plant is Esab Indias first greenfield venture in India. The company began operations here in 1988 after it acquired the welding division of Philips India. Subsequently, the companys manufacturing footprint increased on the heels of more acquisitions.
Kremikovtzi acquisition to close mid August
Finmetals Holding the majority owner of Kremikovtzi failed to show up in July 31st share holders meeting at SofiaThe no-show of the majority sharehder once again foils any forthcoming announcements about the nascent deal with India's Global Steel Holdings Ltd (GSHL) for the sale of the Finmetals equity.
The seating of GSHL executives on Kremikovtzi's supervisory board is seen as a precursor to the acquisition but all recent shareholder meetings convened recently to authorise the reshuffle failed to effect the change.
The presence of Pramod Mittal, the GSHL owner, at last week's launch of the plant's new continuous casting complex was interpreted as a sign that a breakthrough in the acquisition could be at hand. Mittal said that the deal should be wrapped up by mid-August when a new shareholder meeting is scheduled.
Thailand steel import up by 68% in H1
Demand for steel products in Thailand is estimated to be 15 million tonnes this year, up from 12.7 million tonnes last year. The country produces about 21 million tonnes of steel products, some of which is exported, and imports a number of high standard steel products used by the electrical appliances and automobile industries.
Thailand imported US$4.9 billion worth of steel in the first six month of the year, an increase of over 68% year-on-year.
It is expected that steel imports will remain high in the second half of the year despite efforts by the government to curb them by imposing measures to make import procedures more difficult.
Steel products that are most likely to be imported include hot-rolled steel, stainless cold-rolled steel and steel used for construction such as pickled oil steel.
US Coke demand spurs construction of new clean plants
Demand from the steel industry has triggered interest in the construction of new coke plants across the Midwest and Appalachia. The rush of activity reflects the changing economics of the global steel industry. It also highlights the latest coke-making technology, which is designed to reduce the risk of toxic air pollution, a problem that has dogged the industry for decades.
After the passage of the Clean Air Act of 1990, coke plants in the United States began dying out, decreasing from more than 30 to 19 today.
Some couldn't meet the new environmental regulations without costly upgrades. For others, it didn't make economic sense to operate them because of tepid demand for steel
The economic factors have reversed. Not only has the steel industry improved, but foreign sources of coke are drying up as China is using up its supply, making it profitable to build capacity in the United States.
Coke, which is used to make steel from scratch, is made by baking a special kind of coal at high temperatures and then quenching it with water. Most older coke plants use a technology that removes certain toxic chemicals from the waste gas and recycles them. Such plants are prone to unwanted emissions because the outward pressure created by the hot gas allows it to leak through doors and lids that aren't well sealed.
Sun Coke Co, a subsidiary of Sunoco Inc started production in last Mrach in their coke plant near Portsmouth. It is perhaps cleanest, coke plant in the country. It uses a technology that burns off toxic chemicals instead of trying to reclaim them and then transfers the waste heat to boilers to generate steam. The exhaust gas is then scrubbed of sulfur dioxide. Sun Coke's new plant in Ohio is in stark contrast to a conventional byproduct coke plant that fouled the air around them. They plan to double the capacity soon
Knoxville, Tenn.-based Sun Coke also wants approval to build a coke plant in Cambria County, Pa., east of Pittsburgh. Other groups are considering new plants in Toledo and West Virginia, while a Chicago firm hopes to rebuild an idled coke plant there.
US steelmakers shun China trade bill
US steel companies, supposed to be among the biggest beneficiaries of changed rules under the China trade bill, say they hope it never becomes law
The bill, passed by the US House this week as part of the complex package of deals agreed to win support for the Central American Free Trade Agreement, was hailed by its author as the largest step towards strengthening our trade remedy laws in over 15 years.
The move to allow US companies to seek tariffs on subsidised Chinese imports would send a strong signal to Beijing But US steel companies are unimpressed. As far as we're concerned it's a step backwards, not a step forward, said Robert Johns, director of marketing for Nucor, the largest US steel producer.
China's steelmaking power reshapes world markets
Not since the Great Leap Forward of nearly a half-century ago, when revolutionary leader Mao Zedong ordered the nation to build backyard steel mills, has China's steel industry changed so much, so quickly.
With construction and manufacturing booming as the economy grows at a rate of 9.5 percent per year, China's appetite for steel seems insatiable: It consumed 258 million tons last year, a third of all steel used worldwide. Demand this year is expected to reach 310 million tons or more.
The China factor has more than tripled selling prices in the past three years as the surge in demand turns one-time gluts into shortages. Prices for key ingredients like iron ore and coal have doubled.
China also has captured the attention of steel companies around the world companies whose short-term benefits are balanced by long-term concerns about how serious and fair a competitor it will be in the new global market.
"China produces and consumes an amount of steel way beyond what is normal for an economy of its size," says Peter Morici, an industry consultant and professor at the University of Maryland. "It has the potential to significantly disrupt global steel markets."
Since the days of Mao's disastrous 1958-1961 "Great Leap" experiment when communities melted pots, farm implements and even doorknobs to meet sky-high targets for steel output this communist country has viewed steelmaking as a barometer of industrial progress.
Chinese mills turned out 273 million tons of crude steel last year, about as much as the United States, Japan and Russia combined, and a quarter of the world total. This year, output is expected to exceed 300 million tons.
China's recent rise as a global steel power has been led by Shanghai Baosteel Group, a state-owned industrial showcase on the banks of the Yangtze River, north of downtown Shanghai, that is the country's biggest, most modern steel manufacturer.
Baosteel has been groomed since its founding in 1978 to compete with the global giants. And as it and other Chinese steel mills retool, boosting production of the high-quality steel in greatest demand, they're beginning to do just that. Baosteel quickly became the country's biggest steelmaker, surpassing older mills saddled with outdated equipment and armies of redundant and retired workers.
Production cutbacks elsewhere such as Mittal Steel Co.'s decision June 29 to trim by 1 million tons reflects competitors' concerns about China's increased steel output.
Baosteel, which did not respond to several Associated Press requests for comment, controls over half the domestic market for automotive steel, sells more than 40 percent of steel used in Chinese appliances and is a big supplier of steel pipes used in the oil industry.
Some of Baosteel's global competitors fret that China and a few other fast-producing countries such as Brazil may one day produce so much steel they will outpace global demand, driving down prices.
"We now have probably the most irrational global capacity expansion in this business that the world has ever seen," said Bob Jones, an executive at the U.S.-based Nucor Corp.
There are other concerns, including fear of government intervention in the form of currency manipulation that benefits the home nation and subsidies that some say make for an uneven playing field.
Brazilian steelmakers, for example, get tax breaks on their steel exports and also have access to preferential financing, U.S. trade investigators have found. And in China, state-owned steelmakers have long been backed by state banks that often enough end up writing off unpaid loans.
"China is behaving like a smoking man in a gasoline warehouse," says Morici, the industry consultant. "China has the most to gain by the maintenance of the international rules of trade. It doesn't have a fully developed economy and it needs trade more than anyone else to prosper."
Adding to the anxiety is the secrecy: China's evolving industry remains largely a mystery to those outside the country.
"It's my belief that to the degree that China is a long-term threat, it's not going to be directly in exporting steel," said Wilbur Ross, the American businessman who led U.S. consolidation efforts with his International Steel Group Inc., an Ohio company with a plant in south suburban Riverdale since bought by Netherlands-based Mittal.
"I think the greater danger is that it will continue to capture the market for products made from steel, such as cars and appliances," Ross said.
Baosteel and a handful of other modern steelmakers are exceptions in China. For the most part, it's a rust belt industry crowded with inefficient, poorly equipped factories ill-planned relics of the Cold War.
Drowning in manpower, they turn out an average of only 40 tons of steel per worker, far below the 600 tons or more per worker produced by Baosteel and other international steelmakers.
The government is gradually closing down factories that lack the technology, capital and managerial expertise to compete internationally, but it's a slow process: Last year, China's 15 biggest steel companies accounted for only 45 percent of total production.
Current plans call for the 10 biggest manufacturers to increase their share of total output to 50 percent by 2010 and to 70 percent by 2020. Many smaller mills are being shut down or acquired.
Analysts, however, say the consolidation won't mean cutbacks in output.
"For at least the next 10 or 20 years, China will have strong demand for steel. The problem is not demand but output. We are short of the resources needed to make enough steel to keep up with demand," said Qu Li, an analyst with Huaxia Securities in Beijing.
Pakistan allows Indian steel to be imported
The Pakistan government has issued a fresh list of 770 items importable from India. The list of importable items is included in the Import Policy Order 2005 released yesterday.
Steel, gas cylinders and containers, mineral products and metal ores including metallic concentrates have been allowed to import from India in new list, reported the Online News.
The banned item list consists of Boilers, Compressors, Air conditioners, refrigerators, Hand tools, miscellaneous machinery and parts thereof and Sugar plants, cement plants, oil refinery, chemical plants, thermal power plants, hydel power plants, cranes, road rollers and machine tools,
According to official figures, Pakistan imported goods from India amounting to the tune of Rs 21.843 billion during the fiscal year 2004-05 while its exports stood at Rs 10.5 billion during the same period. (ANI)
Pakistan Govt allocates Rs 152.3 million for mineral projects
Government has allocated Rs 152. 3 million for uplift projects in mineral sector for the financial year 2005-06, sources said here on Sunday.
The projects include construction of laboratories, office building in Peshawar for accelerated mineral exploration Programme to identify new economic mineral deposits in the country.
As many as Rs 50 million will be spent for ground follow-up of aeromagnetic anomalies in district Chaghi of Balochistan and Rs 50 million have been allocated for feasibility study for development and exploration of Chechali iron ore and commissioning of steel mill at Kalabagh.
The mineral sector offers enormous potential for economic growth as well as employment generation and keeping this in view government is focusing on this sector.
Baosteel plans 4b yuan share buyback to prop Baoshan
Baoshan Iron & Steel said its parent, Shanghai Baosteel Group, may double to 4 billion yuan (HK$3.8 billion) the amount it plans to spend on buying shares to support the price of Baoshan, China's largest steelmaker.
The money will be used to buy back stock from Baoshan Steel's public shareholders if the price falls below 4.53 yuan in the eight months after shareholders approve a plan to sell state-owned shares in the company. Shareholders will vote on August 12.
