August, 17 2005
Exporting iron ore is against national interests says Tata Steel MD
Mr B Muthuraman, MD, Tata Steel said that allowing exports of iron ore is "absolutely against national interests", and is "a dangerous trend" to allow exports of iron ore even in exchange for investment in steel capacity in India.
Mr Muthuraman observed that the countries that allowed exports of iron ore were only those that did not have potential for domestic consumption of steel. He gave two examples. Ukraine, which has the world's largest iron ore deposits of 70 billion tonnes, needs about 7 million tonnes of iron ore annually for its domestic steel industry enough to last for a thousand years. Australia's iron ore deposits of 62 billion tonnes were enough to last for the next 500 years.
In contrast, India has about 18 billion tonnes of iron ore resources. The country's consumption is rising and is expected to match China's 300 million tonnes, from 30 million tonnes now. When that happens, the country's reserves will be exhausted in 55 years, he said.
Mr Muthuraman also noted that no country in the world allowed foreign companies to own iron ore mines. Indeed, no country allowed FDI in the steel sector. He said that international steel and mining companies were rushing into India only because they could not acquire mines anywhere else in the world. These companies were making it a pre-condition that they be allowed to export iron ore to their plants abroad. "This is a dangerous trend," he said.
Mr Muthuraman said that until recently the country used to export about 10 million tonnes of ore annually. But now exports have risen to about 55 million tonnes and were set to reach 100 million tonnes. Besides, all these years exports were mostly of fines, which otherwise go waste unless they are pelletised in sintering plants. Indian secondary steel sector faced the danger of becoming unviable because of the high cost of power and dependence on imported scrap and the units should set up sintering plants for converting fines into pellets and set up mini blast furnaces.
Withdrawal of dumping duty on steel imports stayed
The Delhi High Court has stayed the Union Finance Ministry decision to withdraw the anti-dumping duty imposed on certain grades of alloy and non-alloy steel imported from Russia and China.
In its order on a petition filed by the steel industry, the Court on August 1 advised the industry to file an appeal before the Central Customs, Excise and Service Tax Appellate Tribunal (CESTAT) while granting the stay.
This would mean that the anti-dumping levy would continue to be collected till the CESTAT gives its ruling, industry sources said.
The anti-dumping duty on imports of certain grades and types of alloy and non-alloy billets, bars and rounds from China and Russia was imposed on June 26, 2001. The duty was $ 90 per tonne on imports from Russia and $ 133 per tonne on imports from China, respectively. The anti-dumping duty levy was $ 14.9 per tonne on imports from one producerOEMK of Russia.
PSL to raise $40 m from overseas
PSL Ltd has announced that it would raise $40 million through issue of zero coupon convertible bonds. The five-year convertible bonds have a conversion price Rs 234.54 per share and are likely to be listed on the Singapore Exchange Securities Trading Ltd
The underwriter and book runner for the issue is Deutsche Bank and the co-lead managers are Bank of India and Bank of Baroda. The securities may not be offered or sold in the US without registration or an exemption from registration.
PSL makes steel pipes and anti-corrosion coating for pipelines for oil and gas, refinery, power plants, petrochemicals, fertilisers and shipping companies. - PTI
Industrial growth in Russia up 4.1 % in 2005
Russia's industrial growth in January-July July 2005 was 4.1%, down from 7.2% in 2004, the Russian Federal State Statistic Service said Tuesday.
Positive trends remained in the main industries in the same period, including 1.3% growth in the primary sector, 5.8% in manufacturing, and 2% in electricity, gas and water production and supply.
In January-July 2005, coal production grew by 2.2% to 164 million tons, oil production by 2.5% to 270 million metric tons however, iron ore production dropped by 2.7% to 54.7 million tons.
WB projects China's economic growth at 9% in 2005
The World Bank said Tuesday China's economy is expected to grow by 9 percent in 2005, and about 8 percent in 2006. In its quarterly update on the country's economy, the China mission of the World Bank said the economic outlook for China "remains good" in a stable macroeconomic environment and with favorable financial conditions.
The bank based the projection partly on global economic factors, saying the growth in world economic activity and trade is projected to slow during the rest of 2005.
China's exports will also be affected "somewhat by the modest revaluation of the RMB (the Chinese currency)" and the recent measures designed to discourage exports of "highly energy intensive products" including the cancellation of rebates to exporters of VAT (value-added tax) on aluminum and steel, the bank says.
Price pressures are projected to ease. International raw material prices are generally easing, with the important exception of oil (energy) prices, according to the report. Based on past patterns and the World Bank's international commodity price projections, increases in China's raw materials prices are expected to decline from 9.6 percent year-on-year in the second quarter to 7.3 percent in the fourth.
GSHL raises $150 million to part fund Kremikovtzi purchase
Global Steel Holdings, controlled by the Pramod and Vinod Mittal of Ispat group, has raised nearly $150 million to part finance its acquisition of a 71% stake in Kremikovtzi by mobilising the fund against securitised debt from a host of international steel traders including Stemcor, VAIT and Selzgitter. The cost of borrowing of the debt instrument, which was securitised against off-take of steel, was 7 to 8 per cent a year.
GSHL revamped the Kremikovtzi board on Monday following the completion of acquisition of majority stake and Mr Pramod Mittal, chairman of Ispat and Global Steel Holdings, has joined the chairman of the supervisory board of the company. Alok Gupta, a former investment banker, has joined the company as chairman of management committee and chief executive officer
Global Steel Holdings has paid a part of the fund for its acquisition of a 71 per cent stake from Finmetals on Monday and the remaining part would be used to take care of the companys liabilities, estimated to be around $ 200-300 million. Kremikovtzi is supposed to pay this amount to several state agencies like railways and power. Bulgarian government still owns 25 per cent of Kremikovtzi, and individual shareholders hold the remaining four per cent shares.
In addition to the $ 150 million, Global Steel Holdings will infuse $ 300 million in Kremikovtzi in five years. Of this, nearly $ 100 million would be invested on environmental issues. The proposed investment would scale up the capacity of Kremikovtzi from 2.2 million tonne to 3 million tonne. The manufacturing process would also be upgraded to continuous casting from the existing ingot production.
Kremikovtzi would provide the Ispat group an access to European Union as Bulgaria would join EU in January. The Ispat group now operates and manages 14 million tonne per annum of steel making capacity in Philippines, Libya, Nigeria, India, Bulgaria and another 1.4 mtpa of coke making facility at Bosnia and iron mines in Nigeria with over 260 million tonne reserves
Ukrainian police search tycoon Rinats offices
Police searched the eastern Ukrainian offices of the country's wealthiest tycoon on Tuesday as part of a tax evasion investigation. Investigators were looking for documents at Rinat Akhmetov's offices "in connection with prosecutors' investigation of tax evasion and abuse of power," said Irina Ankudimova of the Donetsk prosecutor's office.
Akhmetov, a coal and steel magnate, could not be reached for comment.
The tycoon and his businesses have faced increasing pressure since Viktor Yushchenko came to power in January and part of the new government's crackdown on shady business deals dating back to the previous administration. Akhmetov's U.S.-based lawyers have called the investigations politically motivated.
In July, police summoned Akhmetov for questioning about an alleged 1988 assassination attempt. Akhmetov failed to show up; his company said he was abroad and insisted the summons was not mandatory. Yushchenko's government also has regained control over an important steel mill that was bought last year by Akhmetov and the son-in-law of former President Leonid Kuchma in a highly criticized privatization deal.
Akhmetov has been listed by Forbes magazine as Ukraine's wealthiest tycoon, with an estimated fortune of $2.4 billion. Besides steel and metals holdings, he is also the owner of a top soccer club and a major television station.
CVRD joins Venezuelan Carbozulia for coal project
Carbosuramica, the coal mining joint venture between Brazilian resources giant CVRD and Venezuelan state development agency Carbozulia, has kicked off its pre-investment phase. Once pre-investment is finished in some six months, the investment and early mining phases will begin with the first 500,000t of coal and full production of 10Mt/y will be reached in 3-4 years
CVRD will pay US$250mn-300mn in exploration rights for the Venezuelan mines.
Carbosuramica also plans to build a large-scale port to the north of the Gulf of Venezuela close to the islet of San Bernardo. The port would link up to Carbosuramica mines Paso Diablo and Mina Norte via a 90km railroad with a joint investment in excess of US$1.1bn.
The JV will develop coal reserves at Socuy and other pits in Venezuela's Zulia state. Once Socuy hits production capacity and the Paso Diablo and Mina Norte mine expansion wraps up, coal production in the state will stand at 24MT per year
CVRD is seeking to diversify its mineral portfolio with investments in coal. The company is exploring coal projects in Australia, China and Mozambique and has expressed interest in developing coal reserves in Venezuela.
China to close 7,000 unqualified coal mines by 2005 end
Li Yizhong, director of the National Bureau of Production Safety Supervision and Administration, ordered approximately 7,000 unsafe coal mines across the country to be closed down by the end of this year. China now has 5,290 coal mines that have not applied for safe production licenses and 2,000 coal mines that have not passed examinations by regulators. The coal mines, which are located in 26 provincial areas, must be closed down eternally with mining installments utterly demolished
The safety of Chinese coal production in the latter half of this year hinges on the fundamental solution of these unqualified and unauthorized coal mines, he said. Hundreds of small coal mines were ordered to be closed down or to suspend operations in the past two years for failing to meet official safety work standards. Many, however, have resumed operations without government approval.
Diana Shipping Inc. announces new short term Charter
Greek Diana Shipping Inc, a global shipping transportation company specializing in dry bulk cargoes, today announced that it has entered one of its Panamax dry bulk carriers, the Nirefs, into a short term time-charter contract with B.H.P. Billiton Marketing AG for a period of approximately 20-25 days, estimated to begin on Aug 20, 2005, at a gross rate of $14,250 per day, with delivery immediately following termination of her drydocking at Singapore. Redelivery will take place at South China. The Nirefs is a Panamax dry bulk carrier of 75,311 dwt built in Korea in 2001.
Diana Shipping Inc. is a global provider of shipping transportation services. The Company specializes in transporting dry bulk cargoes, including such commodities as iron ore, coal, grain and other materials along worldwide shipping routes.
Zamil to open second plant in Vietnam
Steel manufacturer Zamil Steel Vietnam announced today the company is to open its second plant in Vietnam, aiming at market expansion in the country, a company official reported August 16.
The second plant, which is to produce pre-engineered steel for construction facilities, is built in Amata Industrial Park of Dong Nai province, 35km from Ho Chi Minh City, and is to go into full operation in the first half of next year. The newly-built plant, with total investment capital of US$8 million, is designed with an initial monthly capacity of a thousand tons of pre engineered steel.
Zamils first plant was built at Noi Bai Industrial Park with an output of 4,000 tons of steel per month. Zamil has 30 percent market share in pre-engineered steel for buildings in Vietnam, and over 1,500 building projects nationwide use the trademarked products.
Zamil Steel is headquartered in Dammam, Saudi Arabia, and has fabrication facilities and Research and Development centers in Saudi Arabia, Egypt and Vietnam.
Viksunsky Iron & Steel Works pipe output declines by 5%
JSC Viksunsky Iron & Steel Works (Nizhny Novgorod region) in January-July 2005 produced 520,000 tones of pipes of different assortment, down 4.9 percent from the same period last year. The production of big diameter pipes slipped 5.5 percent to total 219,000 tones.
In July 2005, the pipe output amounted to 75.000 tones, up 2.4 percent, the production of big diameter pipes made up 34.4 thousand tones, an increase of 14 percent.
JSC Viksunsky Iron & Steel Works was established in 1757. Company's revenue for the year 2004 came to 26,63 billion rubles, net earnings was 2,03 billion rubles.
CMC acquires Joist making unit in Mexico
Texas-based steel and metal products company Commercial Metals Company CMC has acquired a joist manufacturing plant in in Juez city in Mexico's Chihuahua state from Quebec-based industrial firm Canam Group for an undisclosed amount which produces 45,000t/y of joists, steel deck and structural steel.
The Juarez facility will join CMC's joist manufacturing group operating as SMI Joist with facilities in Hope, Ark.; Starke, Fla.; Iowa Falls, Iowa; Fallon, Nev.; and Cayce, S.C. This facility is owned by CMC Fabricators, Inc. and will operate as part of CMC's Domestic Fabrication operating segment.
CMC and its subsidiaries manufacture, recycle, and market steel and metal products, related materials and services
The Juez plant will operate as part of CMC's joist manufacturing division, known as SMI Joist. The division already has complexes in the US states of Arkansas, Florida, Iowa, Nevada and South Carolina. The new acquisition will allow SMI Joist to expand its presence in the southwestern US and northern Mexico, where demand for joists is growing. This facility is recognized as one of the most efficient and reliable manufacturers of joists in North America and while the CMC has traded in Latin America before, it never has had a manufacturing presence within the region.
CMC and its subsidiaries manufacture, recycle and market steel and metal products, related materials and services in the US and certain overseas markets.
WCI Steel Inc files plan of reorganization
WCI Steel Inc announced today that a Plan of Reorganization approved by the company's independent board of directors has been filed in the U.S. Bankruptcy Court for the Northern District of Ohio, Eastern Division. The reorganization plan, sponsored by WCI's ultimate parent, The Renco Group, Inc., is subject to approval by the bankruptcy court and a vote of creditors and other stakeholders.
Edward R. Caine, WCI's vice chairman and chief restructuring officer, said the Renco-sponsored plan contains a substantial cash infusion, assumption of current pension obligations and a ratified labor agreement with the United Steelworkers of America - all of which provide the company with a significant amount of financial strength and flexibility.
WCI filed a voluntary petition for protection under Chapter 11 of the U.S. Bankruptcy Code on Sept. 16, 2003.
WCI is an integrated steelmaker producing more than 185 grades of custom and commodity flat-rolled steel at its Warren, Ohio facility. WCI's products are used by steel service centers, convertors and the automotive and construction markets.
Pakistan Steel mills to be privatized by December 2005
The Privati-zation Commission has informed the International Monetary Fund (IMF) that the Pakistan Steel Mills will be privatized by December 31, 2005 during a visit of high level delegation of the IMF Mission to Ministery for Privatisation and Investment.
TopBrazilian Vicunha Siderurgia's Q2 profit down 10%
Brazilian steelmaker Vicunha Siderurgia ended the second quarter with net profits of 86.7mn reais (US$37mn), down 9.8% from the 96.1mn reais seen in same period of 2004.
The company's net revenue stood at 2.54bn reais, down a slight 0.66% from the second quarter last year. Gross profits rose 1.84% in the same comparison, to 1.21bn reais, while operating profits jumped 67%, to 389mn reais.
Vicunha Siderurgia is the steel asset holding company of Brazil's Vicunha group, of the Steinbruch family. It owns 46% of the total capital of Brazilian steelmaker Cia. Siderrgica Nacional (CSN), the largest steel maker in Latin America, producing some 5mt per year.
Venezuelan Sidor downplays reports of plant standstill
Venezuelan steelmaker Sidor is downplaying press reports of halted operations at its plant this month over the work-related death of an employee.
"After the accident employees stopped work at the plant during one shift, as a tribute to their workmate," a Sidor official told BNamericas. Press reports had said worker unrest over the accident had paralyzed Sidor activities. Operations stopped for eight hours, after which activities resumed as normal. "And union leaders have made this clear," the official said.
Nearly 60% of Sidor is owned by the Amazonia consortium made up of Mexico's Hylsamex, the Techint Group, Brazil's Usiminas and Venezuela's Sivensa.
Mexican Steel output up 1.2% in 1H05
Mexican liquid steel output totaled 8.4Mt during the first half of 2005, up 1.2% from 1H04, Mexico's iron and steel chamber Canacero announced.
But June production fell 7.3% to 1.34Mt from 1.45Mt in May 2005 and slipped 3.7% from 1.40Mt in June 2004, the chamber said in a statement.
Canacero director Octavio Rangel said results derive from fluctuations in the international steel market.
"Since end-2003 and during almost all of 2004 the Chinese and US economic upturn led to solid steel product demand. During the next few months an adjustment period is forecast to stabilize the market," he said. Currently the market is undergoing a slight fall in steel demand as some international consumers, mainly from the China and US, are consuming excess stock rather than buying new metal, Rangel said. The US consumes 90% of Mexican steel exports.
"Last year international steel product demand was extraordinary, meaning results for the year's first months do not impact the sector's productivity. In general national steel companies participate competitively in new markets and meet domestic demand," he said.
Mexican steel production rose from 15.2Mt in 2003 to 16.7Mt in 2004 and is expected to reach 17.8Mt in 2005, up 7% year-on-year, according to Canacero's figures.
NAFTA to create database to prevent steel dumping
NAFTA governments will create a database designed to track steel imports from non-NAFTA countries, aiming to detect steel dumping early on."More than anything we're looking to act on time," said Mr Kenneth Smith, evaluation and business tracking director at Mexico's economy ministry
In addition, the database would classify the type of imported steel and its country of origin so the NAFTA countries - Mexico, the US and Canada - could see if one non-NAFTA country is selling steel at an unfair price. That way, NAFTA governments could act, levying antidumping duties before domestic industries suffer a blow.
The plan is part of a NAFTA strategy to develop practices to protect steel industries from outside competition. The three countries also aim to eliminate disputes over steel imports within NAFTA. In one case, Mexican steel tube producer Tubacero is upset the US government levies import duties against its product.
NAFTA members will submit a report on steel industry strategies during a November North America free trade market meeting in Ottawa on the subject.
Freight rates for dry bulk ships rise
The cost of shipping commodities such as iron ore and coal posted its biggest gain recently as fewer ships are available for hire this month.
The Baltic Dry Index, a measure of freight rates for different size dry bulk ships on international routes, rose 4.3 per cent, or 85 points, to 2044, the London-based Baltic Exchange said. The Baltic Dry Index gained 17 per cent since slumping to a 30-month low on August 3.
An expansion in the world fleet of dry bulk carriers, slower growth in Chinas iron ore imports, and a decline in chartering because of holidays had helped push rates down.
Freight rates for Capesizes, the largest dry bulk carriers, on the benchmark route from Australia, the worlds biggest iron ore and coal exporter, to China rose 2.8 per cent, or 22 cents a tonne, to $ 7.92 a tonne, the Baltic Exchange explained. On the Brazil to China route, costs reached $ 20.97 a tonne, an increase of 3 per cent or 62 cents.
Capesizes can carry up to 175,000 tonnes of cargo. Rates for the vessels shipping coal from the Richards Bay coal terminal in South Africa, the worlds second-biggest coal export port, to the Netherlands rose 2.2 per cent, or 22 cents a tonne to $ 10.43, the Baltic Exchange elaborated.
Mexican miners union starts one-hour staggered stoppages
Thousands of Mexican mining and steel workers today launched one-hour staggered stoppages in support of striking Asarco employees. Union officials say the stoppages were being carried out at all mining and steel operations and refineries across the country, in solidarity with copper workers at Asarco.
Workers at Asarco have been on strike since early July over a labor dispute.
The hour-long work stoppages also are in solidarity with workers at Monterrey-based Grupo Vilacero's Lazaro Cardenas steel plant who have been on strike since August first.
One dead and one injured at Mittal Steel Temirtau
On August 14 during the welding at the zero mark a 22 years old welding operator was stricken by current flow and died at Vostochnaya dressing plant of Mittal Steel Temirtau JSC as per Karaganda oblast Emergency department press service
Another accident took place at the other Mittal Steel Temirtau JSC enterprise on the same day when a 30 years old woman, production and technical sector employee, was hit by the train and injured at the railroad, maintaining for coal department .
Lone Star Technologies announces changes in Board of Directors
Lone Star Technologies, Inc today announced the elections of David A. Reed and Dan O. Dinges to its board of directors. Mr. Reed is Managing Partner at
Causeway Capital Partners, LP, and co-founder and advisor of ANSRSource, Inc. Mr. Dinges is Chairman of the Board, President and Chief Executive Officer of Cabot Oil & Gas Corporation.
Lone Star Technologies, Inc.'s principal operating subsidiaries manufacture, market and provide custom services related to oilfield casing, tubing, couplings, and line pipe, specialty tubing products used in a variety of applications, and flat rolled steel and other tubular products.
Xstrata eyes Oxiana as BHP lurks
Xstrata has left the door open on a possible $2 billion-plus bid on Melbourne based Oxiana after slapping down $US1.7 billion to snare effective control of Canada's biggest mining company, Falconbridge, which was Xstrata's second choice for a major acquisition in the copper and nickel industries following Xstrata's loss to BHP Billiton in the battle earlier this year for WMC Resources.
BHP won the WMC battle with its knockout bid of $9.2 billion, leaving the acquisitive Zug-based Xstrata to chase up new ventures more exciting than WMC
Somewhat ironically, speculation of BHP being interested in Oxiana has now bobbed up.
