August, 15 2005
Indian CR HDG makers wait for price increase
Its not just hot-rolled HRC, prices of CR and galvanized steel are also on the rise globally, lending credence to the views held by experts all along that the present steel price movements indicate neither a downturn nor an upturn and are merely market corrections.
On the heels of a $20-25 price hike in HR coils by international steel majors, comes the news that prices of CR sheets and hot-dip galvanized steel are likely to shoot up by $60-70 per tonne.
Whether the global price rise translates to equally dramatic price adjustments on the domestic front remains to be seen. As Indian Steel Alliances Moosa Raza says, The global increases that are being cited work out to just a 5% hike as prices of HR coil is just about $450 per tonne. In fact, they are not commensurate with the price drops for the past six months. Prices of HR sheet decreased from $780 per tonne in August-September 04 to the current level of $440 per tonne. In fact, since May this year, the price never climbed to the $500 per tonne level.
As a result, Indian steel companies, too, effected regular price cuts of Rs 1,000 or more on a monthly basis, bringing the price down to Rs 25,000 per tonne from Rs 28,000 per tonne in the first quarter this year.
The reason behind the price cuts was the slashing of inventories in the first half of 05 due to over-stocking all through the last quarter in 04. Global importers had placed huge orders at high prices fearing difficulty in accessing steel. Chinas huge appetite for steel in 04 led to the surge in demand and by 05 the country had built a huge inventory of 40 MT.
While the build-up was justified then as Chinas consumption had grown by 25.9% over the previous year, this year it has fallen to 16%. At the same time, the country cut down on exports, even as there was a 25% rise in capacity and production. All this meant there was a need to cut down the inventory. This led to price cuts.
Leading steel associations like Europer and World Steel Dynamics rightly interpreted the fall in prices as a correction. Now the stocks have been exhausted and buying has begun all over again, an industry source said.
Hence Nucor Corp, Charlotte, NC, Fort Wayne and US Steel Corp have all informed customers that a hike in base price or a surcharge is on the anvil.
But whether there is a real surge in demand is not clear, which is why some companies are only adjusting base prices instead of going in for a surcharge. Indian steel companies, too, are expected to make mere adjustments leading to marginal increase in prices, ranging between Rs 700-1,000.
SSP to increase capacity to 370,000MT
The board of directors of SAIL has approved the Rs 1,136-crore modernization plan of Salem Steel Plant as a part of the SAIL Corporate Plan 2011-12.
The modernization program is divided into two phases. While the first part will focus on backward integration of the plant with a steel melting shop, the second phase will forward integrate Salem Steel with a cold rolling mill and an annealing and prickling unit.
Once the modernization project is over, Salem Steel Plant's annual capacity will increase from 1.80 lakh tonnes per annum to 3.70 lakh tonnes per annum. Salem Steel will also get steel slabs from the Durgapur-based Alloy Steel Plant once its argon oxygen decarburisation unit is commissioned in 2006.
During 2004-05, Salem Steel's turnover was around in the range of Rs 1,000 crore. In the current financial year, the turnover target is Rs 1,450-1,500 crore. The net profit increased from Rs 1.94 crore in 2003-04 to Rs 3.48 crore in 2004-05.
Jharkhand Govt fails to keep promise on Tata lease
The state government has failed to keep its promise of renewing Tata Steels land lease by August 15. The state land reforms minister, Chandra Prakash Choudhary, today, confessed that the state government was not in a position to renew the lease by tomorrow and said that it could take another fortnight before the state government eventually renews the land lease.
Chief minister Arjun Munda had promised that the state government and the steel behemoth would sign the agreement to renew the land lease by August 15 after holding a high-level meeting with the company officials on the issue last month. Managing director of Tata Steel B. Muthuraman had attended the deliberations.
The issue of renewal of the lease is a contentious issue and has been pending for over a decade now. The company has been making fervent appeals to the state government to renew the lease as soon as possible.
There are five schedules under which the steel major was granted land lease by the state government. While the first three schedules consist of land involving the factory, housing and civic amenities, schedule IV comprise land area that was sub leased by the company to other parties. Schedule V involves lands that are vacant.
ONGC Mittal Energy Ltd to bid for PetroKazakhstan
It has been reported that ONGC Mittal Energy Ltd is planning a $2 billion bid for Canada's PetroKazakhstan Inc, which is listed on London's Alternative Investment Market. PetroKazakhstan said in late June it was considering setting itself up for sale and confirmed it had been approached by several parties and have appointed Goldman Sachs as advisor although Mr Mittal's office has declined to comment
Chinese PetroChina Co Ltd, Sinopec and Russia's Lukoil Holdings are also reported to be interested in acquiring the Canadian firm.
L&T expands presence in Gulf
Larsen & Toubro Limited and its Oman-based subsidiary have expanded its presence in the Gulf by securing five contracts with an overall value of Rs 467 crore for the construction of major water supply projects, several high-rise buildings and luxury condominiums.
L&T (Oman) LLC has secured two contracts valued at Rs 195 crore from the Ministry of Housing, Electricity and Water of the Sultanate of Oman to construct water supply distribution system to Saham and Khaburah towns, around 200 km from Muscat. The project is to be completed within 12 months and involves laying of a 693 km pipeline network. The scope of the project includes construction of three elevated overhead tanks, of 2,000 cu m capacity, and two 1,500 cu m capacity pumping facilities, a tanker filling station and associated structures.
In the UAE, the company's Construction Division won three orders in the urban infrastructure sector accounting for Rs 272 crore. Two contracts valued at Rs 117 crore involve construction of two 39-storied commercial and office buildings in Dubai for Han World Enterprises Inc and Technobuild Space Limited. The complexes will be built at Jumeirah Lakes in the Nakheel area of Dubai within 20 months. The third contract, valued at Rs 155 crore, has been secured from Trident International Holdings, Hong Kong, for construction of two towers of 35-storied and 25-storied luxury condominiums and associated structures at Marsa, Dubai Marina. L&T is already executing the Waterfront Tower at Dubai for Trident International Holdings
These contracts represent an extension of L&T's capabilities in water treatment and supply projects to overseas markets.
Salem Steel to pitch for coin order from Bdesh
Salem Steel plant has entered into a partnership with Calcutta Mint, a division of the Reserve Bank of India and have earlier participated in a global tender floated by the Bangladesh Government for minting its coins but did not succeed in bagging the order. A fourth of that total order had gone to Indonesia and the remaining part was cancelled. Bangladesh Government has decided to float a fresh tender and SSP intends to participate in the tender and has sought help of Union Ministry of External Affairs to lobby for them
The Bangladesh Government is compelled to procure its coins from outside, as it does not possess a mint. While Salem Steel would supply the stainless steel required for manufacturing the coins, the coin production would be done by Calcutta Mint.
Tata Steel seals bonus deal
Tata Steel signed the annual bonus agreement for the year 2004-05 today with the Rashtriya Colliery Mazdoor Sangh (RCMS) and Indian National Mine Workers Federation, representing the workmen of the companys coal mines, ore mines and quarries.
In accordance with the memorandum of agreement signed jointly by Dr T Mukherjee, Deputy MD Steel, Mr AD Baijal, VP Raw Materials, Mr Avinash Prasad, VP IR and Mr SS Zama, secretary, RCMS, Digwadih Colliery, and other union officials, all eligible employees will be paid annual bonus, which will be 20 per cent of wages or salary paid during the year. The minimum and maximum annual bonus payable will be Rs 11,019 and Rs 49,091, respectively.
At the same time, Tata Steel and Tisco Adityapur Complex, a subsidiary of the company, declared yesterday that an annual bonus of 20 per cent for the accounting year 2004-05. According to the agreement signed by Tisco Adityapur Complex and Tisco Mazdoor Union, the employees will get a minimum and maximum bonus of Rs 19,096 and Rs 51,954 respectively.
In case of Tata Steel, the minimum and the maximum annual bonus payable will be Rs 14,230 and Rs 61, 235, respectively
No employee is eligible for the bonus under the Bonus Act, 1965, as their pay is higher than the required limit. But the company is paying a bonus to all unionised employees, including supervisors.
Kamdhenu ties with Belgian CDRM for Tempcore technology
Kamdhenu Ispat has tied up with the apex steel industry body of Belgium for technological assistance to produce 'Tempcore TMT' reinforced steel bars at its Bhiwadi production unit in Rajasthan. "The tie-up with Centre de Recherches Metallurgiques of Belgium will pave way for installing advanced Tempcore technology for production of steel bars," company chairman Satish Aggarwal said.
Tempcore bar is an advanced high strength-reinforcing bar made by a unique mill heat treatment process developed by CRM in Belgium to produce a combination of physical properties tailor-made for building and construction industry. The combination of high strength and high ductility results in extra safety of the building and also the superior bendability of the bars as compared to the cold-twisted bars makes the bar easy to fabricate.
To tap the growing market for branded reinforcement steel bar market, Kamdhenu Ispat has a set a target to raise output capacity to 3,75,000 metric tonne by 2005-06 (US$32 million) and to five lakh tonne by 2006-07.
Iron ore, coking coal prices to fall globally
Consultancy firm Goldman Sachs JBWere (GSJ) has recently forecast that iron ore and coking coal sold under term contracts will go on a downward spiral, adding that a downturn in the global steel market and increasing supplies will see prices decline from peak levels reached this year. Global iron ore and coking coal prices are expected to fall 10 per cent and 12 per cent, respectively
According to GSJ, a 10 per cent decline in prices of iron ore fines sold under contract over the Japanese 2006-07 was likely. The report also said GSJ now expected the benchmark price for coking coal to be $110 per tonne, 12 per cent below the current benchmark. The previous forecast was for no change.
It also forecast that seaborne iron ore trade in 2005 will be at 641 mt, based on a rise in Chinese imports by 23 per cent to 255 mt and a fall in trade with the rest of the world by 1.5 per cent to 386 mt. It also estimated that Australia and Brazil would supply at least an additional 15 mt each this year, leaving a shortfall of about 10 mt that needs to come from other suppliers to balance the market. Goldman Sachs said Indian exports to China rose by almost 40 per cent during the first four months of this year but the recent lack of activity in the spot market and decline in Indian spot prices suggest a slowdown in Indian shipments as the year progresses. Our base case assumption is that the seaborne market will be closely balanced this year but will tend towards modest oversupply in 2006 as capacity expansions in Australia and Brazil reach fruition, it said. Goldman Sachs analysis of iron ore capacity expansions implies a net addition to export supply of just over 50 mt a year between 2005 and 2007 which slightly exceeds its demand growth forecasts.
The firm said the same demand issues apply to the coking coal market but it believes the seaborne market for hard coking coal will remain exceptionally tight for at least the next two years. Its revised price forecasts imply an annual average price of $108/ t for the three year period 2005-06 to 2007-08, which is 80 per cent above its long term price assumption of $60 and more than double the 10 year average price before this years massive price rise.
Mexican Cu Miners support steel workers
Miners at Grupo Mexico SA, Mexico's largest copper producer, plan to stop work for an hour on Monday and increase stoppages by an hour each following day, said Consuelo Aguilar, a spokeswoman for the miners' union.
The union changed its plans for a one-day walkout Friday in support of striking workers at the company's Asarco unit after Mexican authorities ordered Mexican steelworkers, who belong to the miners union, to scrap their strike and report to work in 24 hours, Aguilar said.
Workers for the steelmaker Grupo Villacero, based in Monterrey, will ignore the order and continue the strike at the company's steel plant in the city of Lazaro Cardenas in the southern state of Michoacan, Aguilar said.
The work stoppage by about 4,000 unionized miners, which affects Grupo Mexico's mines in Cananea, Nacozari and Agua Prieta, is intended to put increasing pressure on Mexican labor authorities to negotiate with striking steelworkers. Talks were scheduled for Friday.
Japan steelmakers making more high-quality steel
Major Japanese steelmakers are increasing production of high-quality steel products for automakers and shipbuilders to meet growing demand, The Nihon Keizai Shimbun reported without citing sources.
Their production of commodity-grade steel products, such as those used in construction, has been cut due to the excess supply as a result of sharp increases in output by Chinese steelmakers, the business daily said.
Nippon Steel Corp, the world second largest crude steel producer, plans to spend 25 bln yen to set up a continuous casting machine, used to make semi-finished products, the Nikkei said.
The machine, its sixth, will start operation in November 2006 at its main steelworks in Chiba prefecture. It has capacity to produce about 2 mln tons a year, or seven pct of the firm's crude steel production.
JFE Holdings Inc will spend about 6 bln yen to install equipment that makes its rolling processes more efficient and faster at the steel sheet plant at its plant in Hiroshima prefecture.
The steelmaker produced just over 15 mln tons of steel sheet last year. With its latest capital investment, output of steel sheet for use by automakers and others will increase by about 700,000 tons, or roughly five pct.
Kobe Steel Ltd has earmarked 1.2 bln yen to raise its annual output capacity for high-tensile steel sheet, used mainly by automakers, by 70 pct to 700,000 tons this fall.
Stalprodukt to get LOI Batch Annealing Plant for CRGO
Stalproduckt SA at Bochnia, Poland has awarded LOI Thermprocess a contract for a new batch type annealing plant for grain oriented silicon steel. The new LOI furnaces replace the existing vacuum furnaces to increase the production capacity with significant reduction of maintenance costs.
The plant will have an annual capacity of 22,000 t. It is to be designed for a maximum outside diameter of 2,200 mm, a maximum coil weight of 20 t and a maximum strip width of 1,150 mm.
The LOI Multi-Stack Batch Type High Temperature Annealing Plant exists of 8 bases, each designed for 4 stacks. Each plant runs under a very high annealing temperature of nearly 1,200 C and is equipped with controlled rapid cooling devices.
The reached magnetic properties like core loss and permeability of magnetisation allow using the annealed material for highest efficiency power transformers.
The scope of supplies under the contract also includes a control and information system and the ProView supervisory control system for fully automated, computer-aided heat treatment. Commissioning is scheduled for May 2006.
Nippon Steel to invest 25 bln yen in equipment
Nippon Steel Corp. , Japan's biggest steel maker, said on Monday it would invest 25 billion yen ($228.6 million) to build equipment used in the production of high-quality steel products to meet growing demand.
The world's third-largest steel maker will set up a new continuous casting machine used to make semi-finished products for the first time in eight years, with output due to begin in November 2006.
The machine will have an annual output capacity of over 1.9 million tonnes, a Nippon Steel spokesman said.
Booming demand for high-quality sheet steel, which accounts for up to 85 percent of Japanese steel makers' business, has helped them fend off the excess inventories and slowing demand that have dogged rivals such as world leader Mittal Steel Co. and second-largest producer Arcelor .
Nippon Steel has benefited from strong worldwide sales of Japanese cars, but growing world supply, especially from China, has stripped more than 30 percent from the value of some steel grades this year.
To counter falling prices, Nippon Steel President Akio Mimura has said the company expected to cut its crude steel output for July-September by at least 300,000 tonnes from its original plan.
Iran\'s steel imports unavoidable
Steel imports will never cease as long as domestic producers are incapable of supplying various kinds of the product, said a steel industry official. Asadollah Farshad, deputy head of Iran Alloy Steel Company, told ISNA that even if national steel output reaches 48 million tons under the 20-Year Perspective, the country will still need to import the product.
Steel products are quite diverse and no country is able to supply its entire demand he said, adding that there is no economic justification in investing in all steel-related areas.
He said that Iranian steel producers need to increase competitive power and reduce costs. Farshad said earlier that the recession in the construction sector has led to a decline in steel demand. He said that the steel industry would fail to materialize the fourth plan (2005-2010) targets, if the government does not increase steel import tariffs.
There are plans to increase steel production capacity to 40 million tons by 2010. Nine million tons of steel were produced last year, when six million tons were imported. Steel production units are under mounting pressures due to excessive imports. Steel import duties stand at 15%.
Experts say excessive imports would discourage private companies from investing in steel projects.
Average steel imports have reached 4.5 million tons in recent years.
Irans steel production is expected to reach 10 million tons by March 2006.
Oil Ministry provides steel mills with the much needed fuel.
Fortescue under attack on Pilbara Native Title deal
Andrew Forrest's Fortescue Metals Group is facing a fresh battle to develop its $2 billion-plus Pilbara iron ore project, with the Pilbara Native Title Service accusing the company of unconscionable conduct over a land access agreement.
Fortescue announced on Friday an access agreement covering 80 per cent of its Chichester Range iron ore resources, which Mr Forrest said would ensure the granting of any mining tenement within the Nyiyaparli claim area "unimpeded by any Native Title constraints". It also provided "life of project benefits for the Nyiyaparli people" such as vocational training and employment, small business and joint venture opportunities.
But the agreement was immediately disputed by the Pilbara Native Title Service, which claimed the representatives of the Nyiyaparli people who signed the deal now wanted the documents torn up. "They have informed the land council that they thought the terms of the agreement were quite different from what the alleged agreements actually say, and have instructed the land council to have the agreements rendered void."
ECU Mitsui coal venture in Bowen Basin
Australian Eastern Corporation Limited (ECU) said that Mitsui Coal Holdings Pty Ltd will proceed with a joint venture feasibility study of the Broughton coking coal project in the Bowen Basin following final government approvals.
Eastern CEO, Mr Paul Williams said the Queensland Department of Natural Resources and Mines had approved Mitsuis acquisition of an initial 10% interest in the Broughton project.
This follows approval late last month from the Foreign Investment Review Board. Under the terms of the agreement, Mitsui will now pay $4 million for the initial 10% interest in the project. Mitsui also has the right to acquire a further 20% interest in the project, taking its total participation in the joint venture to 30% upon completion of a feasibility study and an additional payment of $11 million.
AKD to acquire 70% of JMI-NEL pig iron project in Indonesia
AKD Limited (AKD) announced that it has reached an agreement with PT Jogja Magasa International (JMI) and Nusantara Energy Ltd (NEL) whereby it may acquire a 70% interest in the Yogyakarta Ironsands Pig Iron project located in Yogyakarta Province, Indonesia.
AKD said the parties have agreed, subject to feasibility, that the iron deposit at Yogyakarta would be used as the basis for the establishment of a liquid iron (pig iron) making facility in the Yogyakarta Region to provide feedstock for major regional steel producers.
Cuba guaranties quality of SS
Eight years introduction of a set of solutions to improve the efficiency of the smelter that supplies molten steel to the 200-T lamination machine at Las Tunas ACINOX stainless plant Cubans guarantee to supply top quality stainless steel.
The package, introduced in 1997, includes 28 solutions designed by Engineer Erio Bas Pereda and a group of local innovators. The measures, which prevented the plant from closing, ended up in improved efficiency in the forging process and a three-fold increase in steel bar production. Tapping the local talent and resources, the Las Tunas steel plant managed to reduce power consumption and has also cut down in some 100 cubic meters yearly the amount of contaminating gases that it released into the atmosphere.
The solutions introduced have meant 80 percent less time to fix breakdowns in the furnace where the billets are made. The plant is today free from the troubling long breakdowns of the past, which resulted in losses of raw materials and an excessive rusting of furnace pieces.
Its continued technological innovation work earned Las Tunas ACINOX stainless steel plant the countrys highest quality award for 2004, given by the Cuban ministry in charge of the steel and electronics industry.
The environmental face of China
Chinas heavy reliance on coal has been a decisive factor in polluting the countrys air and land, earning it the notoriety in 1998 of being home to seven of the worlds 10 most polluted cities.
After slashing its coal consumption for four consecutive years until 2000, coal demand rose again to 64% of Chinas primary energy consumption in 2002 and 67% in 2004. This was on the back of rising oil prices which have doubled since 2001. Chinas coal dependence was slashed from 94% in 1953 to 71.8% in 1975. It crept back to around 75% in 1990-94. China depends significantly on coal for power generation and steel production, as well as for other industrial and domestic uses.
Coal combustion has contributed significantly to corrosive acid rain, which has plagued China for years and affected more than one-third of its land. Dust storms, often linked to Chinas deteriorating land condition, especially in its north-west, are another nagging issue. In August 2002, when a shocking brown cloud engulfed east Asia, reducing sunlight by 10-15%, few observers were confident that Chinas appalling environment had nothing to do with it.
Chinas failure to reverse its coal dependence is not unique. The November 16, 2004, Wall Street Journal cited British Petroleum figures that indicated world coal consumption rose by 6.9% in 2003, compared to 2.1% for oil. Coal is a much cheaper source of energy: based on last years prices, if it takes $3 to produce a certain amount of energy with coal, it costs $7 with natural gas and $8 with oil.
Being a Third World country with a large population, China faces more difficulties than richer nations in shifting to clean energy. But that only explains part of Chinas environmental crisis. Policy mistakes and ignorance after the 1949 revolution, for example in the massive conversion of marginal land into crop land in defiance of ecology, led to widespread land degradation.
However, the most lethal blow has come since the 1980s, when China switched to free market (profit-oriented) rural and industrial production across its vast territory. The problem has escalated since the 1990s, as Beijing increasingly positions China to be the factory of the world, blindly pursuing economic growth at all costs. While not all state firms were faultless before the 1980s in relation to polluting the environment, violations were less rampant because social responsibility was still a consideration.
Fiscal decentralisation from the mid-1980s meant that sub-national authorities tended to focus on their own narrow interests. The mushrooming of township and village enterprises, which are generally key contributors to the income of local areas, resulted in local authorities turning a blind eye to their environmental vandalism. Rampant wastewater discharge by such enterprises is a huge problem.
The proliferation of small coalmines is one example. The essential procedure of coal washing is increasingly ignored. Employing technology to make coal mining cleaner involves investment that is out of the reach of most small operators.
Most collectively owned enterprises are only nominally collective. Driven by profit, they tend to be blind to the environmental costs of their production activities, so long as their bottom line isnt hurt. Outright private firms, which are fast rising in number, care even less about the public good.
De-collectivisation in rural production, among other problems, has meant that ecologically sensible measures such as crop rotation and a sustainable balance between cultivation and other forms of food production are much less likely to be maintained. The sharp increase in intensive livestock rearing has hugely increased organic pollutants, which often arent managed responsibly.
Rampant misuse of pesticides and fertilisers is common. The latter is a major cause of eutrophication, nutrient over-enrichment of water bodies through organic pollutants, which promotes algal blooms. It causes red tides (marine algal blooms), which have plagued Chinese coasts. These devastate the ecology as well as economically valuable marine life. According to Chinas State Environmental Protection Administration, red tides hit Chinas coasts 96 times in 2004 and 119 the year before.
According to a 2001 World Bank report, China: Air, Land and Water, Chinas pesticide production skyrocketed from 1000 tonnes in the early 1950s to 625,000 tonnes in 1999, making the country the worlds second largest producer and consumer of pesticides.
The heavy export orientation of a significant section of both domestic and foreign-invested firms has resulted in serious depletion of Chinas raw minerals, energy and other natural resources. More production inputs need to be imported, attracting the unfair accusation that China has drained world resources.
Writing for the Summer 2004 edition of National Interest, David Hale said China accounted in late 2003 for 20.6% of global copper demand and expected it to account for 21% of global aluminium demand in 2005. Hale added that China already accounted for 20% of world zinc output, 20% of magnesium, 16% of phosphate and 35% of coal.
This has left China to shoulder the rising devastation of its air, land and water by such a high concentration of cowboy-style industrial production that is way beyond the needs of its own population. This is a shift, or export, of the undesirable consequences of industrial (especially polluting) production to China.
Chinas economic growth for the last 20 years has averaged 8-9%, far exceeding the world average. But industrial production has grown even faster 18% in late 2003, while exports grew 40%.
The irrationality of the pro-capitalist path is the critical cause of Chinas worsening environmental crisis. Beijings blind efforts to outbid rival producers in the long-saturated automobile market is a clear expression of that dynamic. From negligible private car ownership two decades ago, Chinas production of non-agricultural vehicles reached 22 million in 2004, with a total of 106.4 million non-agricultural vehicles now running in China.
Turning a blind eye to its further contribution to capitalisms problem of overcapacity/overproduction, Beijing proudly declared that in 2004 China became the worlds fourth-biggest auto producer and third-largest auto consumer.
The 2001 World Bank report reveals a sober fact: Motor vehicle emissions have become a major source of ambient air pollution in a few super large cities, including Beijing, Shanghai, and Guangzhou. In an interview with the March 7, 2005 edition of Spiegel magazine, Chinas deputy minister for the environment Pan Yue disclosed that in Beijing alone, 70-80% of all deadly cancer cases are related to the environment, with lung cancer being the number one cause of death.
Coal is big business in state, Port of Mobile
The coal trading business is a complex enterprise, influenced by an array of world events, weather patterns and cultural trends -- all things that have an effect on the Port of Mobile, which is the largest source of import coal in the United States and among the largest exporters.
Last year, a record 13 million tons of coal passed through the port, and this year the tonnage could top 16 million, according to Alabama state docks director Jimmy Lyons.
A bundle of factors have increased coal demand over the past few years, according to Rich Bonskowski, a geologist who researches coal for the U.S. Department of Energy's Energy Information Administration.
United Group 2nd-Half Profit Rises 53% on Rail Demand
United Group Ltd., Australia's biggest rail equipment maker, increased second-half earnings 53 percent on increased demand for rail services, particularly from mining companies.
Net income climbed to A$29.2 million ($23 million) in the six months ended June 30, from A$19.1 million a year ago. The second- half result was calculated by subtracting first-half earnings from Sydney-based United's full-year profit to A$42.9 million.
We have a business that benefits from the resources sector and the growth and demand for iron ore and coal from China,'' Chief Executive Richard Leupen, 52, said in an interview. We've seen no slow-up in demand.''
Shares of United have surged 54 percent this year as more companies use its rail, water, property management and maintenance services. The company in June bought Alstom SA's Australian and New Zealand transport business for A$268 million.
United has A$4.3 billion of order, up from A$2.3 billion a year ago. Full-year sales at Goninan, which makes passenger and freight trains, rose 33 percent to A$577.2 million. Total sales rose 17 percent to A$1.25 billion.
New Zealands Steel & Tube posts 27% profit rise
Lower Hutt-based steel distributor Steel and Tube Holdings today reported a 27% rise in annual profit. The company posted a record net after tax profit of $36.1 million for the year to June 30. Revenue climbed 13% to $438 million.
"The economy during the last 12 months was more buoyant than expected," chief executive Nick Calavrias said. Despite a slowdown in new residential building during the period, total construction grew substantially on the back of a 30% increase in commercial construction.
Steel and Tube processes and distributes steel roofing and pipes.
AIOC signs acid spills pact
The Department of Environmental Protection has signed an agreement with American Iron Oxide Co., in Allenport to ensure that the firm manages its hydrochloric acid tanks to prevent future failures.
American Iron Oxide Co., in Allenport accepts "pickle liquor" from Wheeling-Pittsburgh Steel Co. and U.S. Steel Corp. Pickle liquor is generated in steel plants during pickling when steel surface is cleaned using HCl. AIOC regenerates the acid for reuse by the steel companies, in their Acid Regeneration plants and the iron oxide produced in the process is sold to magnetics and other industries.
AIOC experienced two acid tank failures last year and has agreed to DEP to pay penalties for several past waste, air and water quality violations, including acid and iron oxide releases into the Monongahela River that's next to the Allenport facility.
Philippine steel makers ask Govt to zero import duty
Steel manufacturers want Government to bring down inputs duty to zero. Domestic steel manufacturers are maintaining the current tariffs on intermediate and finished steel products provided the government brings down to zero the rates for raw materials.
Board of Investments officer-in-charge Elmer C. Hernandez said this was contained in a newsletter by the Philippine Iron and Steel Institute (PISI). Hernandez cited the case of rebars which are slapped with 7 percent tariff and a 3 percent for bars (raw materials) because it is not locally produced. Rebars are long steel products used in construction projects.
Based on the industry analysis, maintaining the higher tariff and reducing the materials to zero or one would shield the local industry from the possibility dumping later on as demand from India is starting to slacken.
Industry analysis points to an excess steel capacity in China by 2008.
"The industry is comfortable with the 4 percent tariff differential between finished (7 percent) and raw materials (3 percent)," Hernandez said.
But the fear is that once the ASEAN-China Free Trade Agreement takes into effect, the gap would be narrowed.
It is because under the modality in the ASEAN-China FTA, tariffs on rebars will be immediately reduced to 5 percent cutting the tariff differential between raw materials and finished products to 2 percent.
Thus, the industry is pushing for a zero-tariff on raw materials to make up for the reduction in rates on finished and intermediate products. Hernandez said the industry can file its petition so they can be included in the comprehensive tariff review.
He said that the present tariff rates are set up to the end of the year only. Thus, the government is undertaking another comprehensive tariff review on most-favored nation (MFN) rates to effect a new tariff starting 2006.
