August, 19 2005
SAIL board approves 8000 crores investment in IISCO
The Steel Authority of India (SAIL) board has approved a Rs 8,000 crore corporate plan to develop and modernize the Indian Iron and Steel Company (IISCO). This includes upgrading facilities at a cost of Rs 4,500 crore and development of the Chiria and Gua mines at a cost of Rs 2,000 crore.
IISCO was declared sick in 1994 and was being run on a revival package from BIFR. But the spike in steel prices has turned IISCO profitable with net profits of Rs 27.1 crore and Rs 46.6 crore in FY04 and FY05. Thereafter the Government has approved the merger with SAIL
The investment plan envisages crude steel production of 2 million tons in 2012 from present level of 0.35 million tons. IISCOs integrated steel plant at Burnpur now has the capacity to produce 8.5 lakh tonnes of hot metal, 5.2 lakh tonnes of crude steel, 4.26 lakh tonnes of saleable steel and 2.54 lakh tonnes of pig iron annually. The mill has has four blast furnaces (three running), two coke oven batteries, two twin-hearth furnaces and pig casters in addition to a heavy structural mill, light structural mill and a merchant mill.
Under the corporate plan amounting to 4500 crores new facilities include a blast furnace, basic oxygen furnace, comcast billet caster and rolling mill
The corporate plan also proposes to invest Rs 2000 crore for the development of mines and collieries under IISCO, notably Chiria where iron ore mines are situated apart from Gua and Manoharpur. Coal mines are located in Chasnalla, Jitpur and Ramnagore.
CIL looking at overseas opportunities
The Government today admitted that Coal India Limited (CIL) has taken initiatives to pursue overseas opportunities in coking coal and low ash thermal coal, both of which have limited domestic reserves that can be techno-commercially exploited. The initiative is at a very nascent stage and the possible destination countries are Australia, Zimbabwe, Indonesia and Russia.
The investment requirements have not been finalized and CIL has envisaged to investment in foreign coal opportunities to bridge the demand-supply gap and to enhance the energy security of the nation.
Posco mulls JV option for ore mining
Korean steel major Pohang Steel Company (Posco) is working on forming a joint venture company for development of an iron ore mine that would meet the captive requirements of its proposed 12 million tonne steel plant in Orissa.
We are looking at forging alliance with an Indian or overseas mine developer for the 600 mt captive iron ore mine that would be part of the Orissa steel project. The process would be started once we get prospecting license for the mining activity, chief representative in India, Sang Moo Doh said
According to sources, Posco may rope in mining company BHP Billiton as 50% partner in the proposed joint venture mining company. However, Mr Doh said that Posco would also look at Indian mining companies for alliance. Globally, Posco does not own or run iron ore mines, but largely meets its requirements through direct purchases.
Besides a separate mining company, Posco is also looking at forming two other companies; one to produce steel and another for development and maintenance of the port that it plans to construct near Paradip.
Under this corporate structure, Posco India may be converted into a holding company of the three separate companies.
Mittal Steels Jharkhand foray may be delayed
The much anticipated Mittal Steel's memorandum of understanding (MoU) to be signed with the Jharkhand government may have hit a roadblock on the issue of exporting iron ore as Mittal Steel wants permission to export 30 per cent of iron ore from the mines allotted to the company in the state but, the state government does not seem to be very receptive to the idea.
A Mittal Steel spokesperson said that the company had never really decided on a date on when the MoU would have been signed In an email response, a Mittal Steel spokesperson said: 'We have no update on the potential Jharkhand investment. We are still holding discussions and as and when the MoU is officially signed we will make an announcement accordingly.' However, officials in the Jharkhand government maintain that the MoU was to be signed sometime this month.
State government is trying to persuade Mittal Steel to lower its demand for exports from 30 per cent to 5-10 per cent and also agree to SWAP formula whereby Mittal Steel might be allowed to export low grade iron ore from the state in exchange for importing a similar quantity of high grade iron ore.
Sanghi Industries announces steel & power plants in Chattisgarh
Cement major Sanghi Industries have proposed to start steel and power plants in insurgency-hit tribal areas of Chhattisgarh after undertaking a detailed survey of the area and send a 'specific' plan to the government.
Sanghi Industries had proposed setting up a steel plant with an annual output of one million tonnes and a 1,000 MW coal-fired power plant.
The Chief Minister said that the proposal would be approved if Sanghi agreed to set up the steel plant in iron ore rich Dantewada or Rajnandgaon districts and the power plant in Koriya district which have been badly hit by violence and terror created by the ultra-left armed naxalite movement
Chhattisgarh has become the happy hunting ground for steel and power companies since it was created in November 1, 2000. The state has received proposals worth Rs.430 billion over the past 12 months, mainly for steel and power plants. In June this year India's top private sector steel company, Tata Steel signed a memorandum of understanding (MoU) for setting up a five million tonne per annum steel plant in the Bastar region. This was followed by another MoU signed between Essar Steel and the state government last month for a 3.2 million tonne per annum steel plant in Bastar.
Indian Banks careful in dealing with Chinese banks
Bankers said that while they were keen to get a slice of the Chinese boom, but not without being extremely cautious and secure as some Indian exporters have already faced denials from Chinese banks leading to renegotiations. Bankers said that it was not just Indian banks that have faced such rough situations, even big US and European banks have gone through this process in China
The bankers said that they preferred dealing only with those Chinese banks listed in the International Bankers' Almanac. This Almanac is a document providing bankers with information on the global banking system, credit information and financial research. International bankers have relied on this intensely researched document for the last 150 years. It lists about 200 banks from China. But not all their LCs are accepted by the public sector Indian banks. Any acceptance is done on the basis of the Chinese correspondent bank's financials listed in the Almanac. As a result, at best, only about four or five Chinese banks' LCs are accepted by the domestic banks.
In addition almost all the top PSU banks and ICICI bank have opened representative offices in China. Banking sources said that as the Chinese banking accounting systems become more transparent, and comfort levels grow, these offices would eventually be upgraded into branches or joint ventures.
Indian companies to benefit for higher prices in carbon trading
Indian companies eyeing for carbon trading benefits may get a good deal now with prices increasing in the run up to the United Nations Framework Convention on Climate Change (UNFCCC) Montreal conference in November-December.
Rates per tonne of Certified Emission Reduction (CER) that Indian companies can bargain are shooting up than the present Euro eight levels since at the Montreal conference the developed countries are expected to report what they have done domestically to bring down the emission levels, say experts. However, the rates would continue to hover at much lower levels than those prevalent in the European Union. Each CER stands for one tonne of carbon dioxide reduced and can be traded on global exchanges.
Signs of increasing rates are evident from a recent deal between the German Government and an Indian firm wherein the project has been "agreed upon" at a rate of Euro 14 per CER, claimed a reliable source declining to divulge any further details. In EU, rates per tonne of carbon dioxide equivalent reduction are trading at Euro 22.47 having touched Euro 29 levels about a month ago.
The UNFCCC designed CDMs to achieve cost-effective green house gas (GHG) mitigation for industrialised countries. The Kyoto Protocol, that came into force on February 16, 2005, makes it obligatory for 37 developed countries to reduce their emissions of six harmful GHGs, including carbon dioxide. They can do this through a combination of direct domestic action and by investing in developing countries that reduce these emission levels.
Indian Govt declares more National Waterways
The Union government is planning to declare some waterways as National Waterways. The new waterways proposed are Kakinada-Pondicherry canals along with rivers Godavari and Krishna (1,095 km); East Coast canal along with river Brahmani and Mahanadi Delta (623 km) and River Barak (140 km). The estimated cost of development of the three waterways is Rs 542 crore, Rs 1,526 crore and Rs 46 crore, respectively.
TopJamshedpur land lease to TATA being renewed
Jharkhand government is likely to strike a revised deal with Tata Steel on the Jamshedpur lease, for which it has been receiving Rs 4 lakh every year as lease rent for approximately 6,000 acres of land, excluding 4,000 acres developed and sublet by the company
The revised agreement, expected to be cemented later this week requires the Tatas to pay double this amount as per the escalation clause of old lease that the government cannot increase the lease rate by more than one hundred per cent at a time. Tata Sons chief Ratan Tata is likely to sign the MoU,
In addition, Jharkhand government is asking TATA to spend Rs 150 crore on building a sports complex in Ranchi and pay Rs 25 crore for the next 30 years for various community health schemes, which add up to Rs 900 crore in three decades and also pay the consultancy fee for a project to drain out water trapped in coal mines and use it for irrigation purposes.
Out of nearly 10,000 acres of land in Jamshedpur almost 5,400 acres are either vacant or the company has been allowed to sublet at market rates, where Tatas retain 5 per cent commission and pay back 95 per cent of the money collected from sub-letting to the government.
BMS Labor Union eyes Tata Steel
Bharatiya Mazdoor Sangh (BMS), a BJP-affiliated trade union, is making a concerted effort to replace Tata Workers Union (TWU) as the registered union of Tata Steel. The move is aimed at a time when the Intuc-affiliated TWU is fighting to get back its registration, which was cancelled by the state labour department in May this year after the union allegedly violated the Trade Union Act during its elections held on January 15. Taking this opportunity, the BMS is leaving no stone unturned in getting its own union to take the place of TWU as the recognised union of the steel major.
The position of the TWU has become weak ever since the state labour commissioner cancelled its registration and when Jharkhand High Court turned down its appeal for restoring the registration of the union directing them to labour court
Sources at Tata Steel, however, maintained that chances of BMU making an entry into Tata Steel was remote. The reason was that the company management had, through an agreement with the TWU in 1956, committed itself to continuing its relation with the union for an unlimited period.
Liquidity Services Inc exclusive partner for scrap US Defense
Liquidity Services Inc LSI has been awarded an exclusive contract by the DRMS a US Defense department to manage the receipt, marketing and sale of virtually all surplus scrap property generated by DoD installations throughout the United States for 7 years. The contract includes steel and other no ferrous metals.
LSI will purchase scrap 0.01 cents per pound and share with DRMS 80% of the net proceeds resulting from LSI's sales activities after deducting its direct costs for managing the program. DoD surplus scrap property will be offered for sale through LSI's online auction marketplace. Over a quarter of a billion pounds of surplus scrap property will be made available each year to the public through this program.
LSI will also manage and provide transparent reporting regarding the details of the program, including receipts, payments, accounting systems, cash flow management, audits and cash distributions.
Australian Iluka expects 2005 net profit of $130m
Australian zinc and titanium producer Iluka Resources Ltd expects net profit for the 2005 calendar year of $130 million to $140 million after reporting record first half earnings. Iluka reported a net profit of $79.3 million for the first half of 2005, more than double the $37.3 million recorded in the previous corresponding period.
Iluka revenue rose to 464.3 million for the six months to June 30, 2005, up 17 per cent on the first half of 2004. This included mineral sands revenue of $428 million, up $52.3 million, coal revenue of $18.6 million, up $1.7 million and MAC iron ore income of $16.2 million, an increase of $13.2 million from the previous corresponding period.
Iluka managing director Mike Folwell said that the sales outlook for the rest of the calendar year was positive, however he warned that the second half profit was not expected to match the strong first half result due to increased mining costs at Eneabba and a smaller contribution from other areas.
Iluka also received a royalty entitlement from BHP Billiton Ltd's Mining Area C in Western Australia and coal interests in NSW. Iluka said that while two new mining and mineral concentrating operations were completed in Western Australia during the first half, the most disappointing aspect of the period was the slower than expected progress with construction of key components of the Douglas project in the Murray Basin.
Anashan Benxi merger a response to Chinese government plans
The establishment of ABIS is only a tiny part of the ongoing combination and reorganization moves of China's iron and steel enterprises. Less than one month ago, the NDRC issued a steel industry development policy which encouraged domestic steelmakers to form bigger entities, each with an annual output touching 30 million tons by 2010. According to the policy, China will endeavor to promote the acquisition, combination or reorganization moves of transregional iron and steel enterprises to have one or two iron and steel groups with a combined annual capacity of over 30 million tons and several large enterprises with production capacity in the tens of millions of tons.
Besides the Anshan-Benxi merger, other reorganization projects are being planned, such as the merger of the Capital Iron and Steel Company and the Tangshan Iron and Steel Company in northern China; the acquisition moves of Baoshan Iron and Steel Company in eastern and southern China; and the reorganization process of the Wuhan Iron and Steel Company in central and southwestern China, said Luo Bingsheng, vice president of the China National Iron and Steel Association (CISA).
CISA statistics noted that in the first half of this year, 68 large and medium enterprises reported 49.233 billion yuan (US$6.1 billion) of profits, with top 10 earning profits of 33.582 billion yuan, accounting for 68% of total profits for the sector. This shows that the iron and steel industry is further shifting to large enterprises with competitive advantages.
Manholes theft in China fuelled by high steel prices
Rising steel prices, fuelled by China's surging appetite for the metal, have added new impetus to the regional phenomenon of drain-top thefts and manhole mishaps, forcing municipal authorities to get tough on this highway robbery. Missing manholes have long been a hazard throughout Asia and certainly a part of everyday life in Beijing and other Chinese cities, but escalating steel prices have exacerbated the menace.
Last year 24,000 manhole covers were stolen in Beijing alone The southern city of Guangzhou (Canton) reported 25,000 of the thefts. Shanghai on average loses 12 manhole covers a day. In the city of Tangshan, thieves took away 40 covers in one night alone.
INTERMET announces plans of reorganization
INTERMET Corporation a diversified manufacturer of cast-metal components has announced that it has begun distributing solicitation materials in connection with its proposed Plan of Reorganization. The United States Bankruptcy Court for the Eastern District of Michigan approved the Company's amended Disclosure Statement and the proposed solicitation and balloting process on August 12, 2005. INTERMET is distributing the Disclosure Statement and balloting materials to all eligible creditors in order to solicit their votes in support of the Plan.
The confirmation hearing with respect to the Plan of Reorganization is scheduled to begin on September 26, 2005.
With headquarters in Troy, Michigan INTERMET Corporation is one of the world's foremost producers of cast-metal components for automotive and commercial-vehicle manufacturers having over 700,000 tons of annual capacity. The company is organized into two distinct manufacturing groups, Light Metals and Ferrous Metals, each having unique operations but serving a common market. INTERMET components are used in most makes of automobiles, and in construction and farm equipment, heavy trucks, small internal combustion engines, computers, industrial tools and household appliances.
INTERMET's full-service capability is augmented by sophisticated engineering and metallurgical resources at its research foundry and technical center in Virginia, a design engineering center located at its Troy, Michigan, headquarters; and three in-plant product feasibility centers. INTERMET also operates engineering centers in Saarbrcken, Germany, and Tokyo, Japan.
Ghana to develop NF scrap processing and iron ore business
Deputy Minister of Trade and Industry, Ghana has asked Scrap dealers and exporters for the establishment of a processing plant in Ghana to serve the West Africa Sub-Region as most countries in this region did not have any processing plant of non-ferrous metals collected but were only exporting them to advanced countries amounting to almost five million dollars between 2000 and 2004
In addition, Mr Osei-Ameyaw said Ghana was in the process of attracting investors to undertake the mining and processing of iron ore deposit to manufacture steel.
Romanian State subsidies for steel industry under scrutiny
The State Secretary with the Ministry of European Integration (MIE) has examined the state subsidies received by some companies in steel industry sector in Romania during 2000-2004, which were not part the restructuring strategy of the steel industry sector for 1993-2008, agreed with the European Union. The strategy, that made the object of the accession negotiations, included only steel companies with an integrated character that have their own manufacture, foundry and processing facilities and are able to produce finite products
A detailed analysis of the state subsidies that were granted to those companies and of their compatibility with the EU acquisition is being undertaken to determine if the state subsidies received till present should be recouped or not. Since the beginning of this year, Romania has stopped granting subsidies in this field other than those that fully observe the EU acquisition.
In its EU accession negotiations Romania obtained a grace period for the restructuring of its steel industry sector till 2008. Six integrated companies in this sector have been included into this sector's strategy for which an of amount of 50,000 billion lei state subsidies were negotiated for the period of January 1, 1993 - December 31, 2004
The situation of the state subsidies granted to the integrated steel industry companies is included into Romania's Accession Treaty to EU. As for the other companies in this field, the situation of state subsidies is evaluated on the basis of a permanent consultation mechanism with the European Commission.
Stelco & Union agree to return to table
Stelco Inc. and the United Steelworkers union have agreed to extend their truce and postpone a critical court showdown that had been scheduled for this morning.
Local, representing 1,000 workers at Stelco's key Lake Erie facility recently dropped a 90-day strike notice on the desk of chief executive officer Courtney Pratt, just one example of increasing animosity in recent weeks. But yesterday Hamilton-based Stelco and the union agreed to resume talks.
Five United Steelworkers' locals have agreed to drop their request that Mr. Justice James Farley of the Ontario Superior Court allow any creditor to submit a restructuring plan for the legally insolvent steel maker. Such a move would have allowed the union to bring forward a $1.35-billion recapitalization of Stelco proposed by Brascan Corp.
S&P declares POSCOs as The Best in profitability
South Korean steel giant POSCO enjoys better financial health, profitability and technical prowess than its global rivals, according to a recent S&P report The report by Standard & Poors showed POSCO having the soundest financial position among four steel heavyweights the credit appraiser rates as the worlds most creditworthy blast furnace steelmakers.
POSCO, which S&P rates A minus beat Bao Steel Co. of China (BBB plus), French steelmaker Arcelor SA (BBB) and Mittal Steel Co. of the Netherlands (BBB plus) in the categories of profitability and technological powers.
In terms of management, POSCO came in second place after Mittal Steel.
Chinese Steel output to reach 330 mln tons this year
China's steel output is expected to reach 330 million tons this year, or 60 million tons more than that of last year, Shanghai Securities News reported on Thursday. The rapid growth of the industry will maintain for sometime despite the slowing down pace in June and July, the report said, quoting Zhao Zhicheng, a researcher with the Guangda Securities.
In June and July, China's steel output dropped to 28.54 million tons and 29.24 million tons respectively from 29.72 million tons in May.
Statistics showed that in the January-July period, China's steel output came to 194 million tons, registering a year-on-year increase of 28.06 percent, with crude steel output increasing by 42.45 million tons year on year.
The statistics also said that the growth rate of China's privately-owned steel mills ranged between 49 to 68 percent from January to July, two to three times higher than that of the state-owned ones.
30m clean up of closed Ispat plant due next week
Demolition work is due to start next week on the derelict Ispat steel plant in Cork harbour as part of a year long project to rehabilitate the area. The contractors, Hammond Lane Metal, are expected to collect up to 15,000 tonnes of scrap metal from the site which will be exported by ship to mills in Europe. Demolition and scrapping process will take place in tandem with work which started last week to determine contamination levels and advise on remedial work for the site.
The ailing plant at Haulbowline in Cork, known as Irish Steel was sold to Irish Ispat Ltd in 1996 which closed the facility on 2001 due to mounting losses.
Malaysia's Almag Steel 4Q Loss MYR374,000
Amalgamated Industrial Steel Bhd Malaysia has announced the un audited quarterly results for quarter ending June 30th 2005 as per Malaysian Accounting standards.
The company has reported a net loss of 0.374 million MYR for quarter as against profit of 3.770 million MYR during last year in spite of increase in revenue from 27.549 million MYR to 28.3030 million MYR
However the yearly results have shown a profit of 5.032 million MYR down from 7.905 million MYR during previous year.
MMB hires Deloittee as consultant for Redi Port project
Maharashtra Maritime Board (MMB) has appointed professional service and advice organisation Deloittee Touche Tohmatsu as consultant for developing Redi Port at an estimated cost of Rs 11 crore. After the feasibility report, MMB will invite open tenders from private parties for constructing new facilities.
At present, this minor port located at the border of Maharashtra and Goa is having two jetties for handling minerals such as iron ore and bauxite. And MMB is planning to construct a 60 metre new jetty and refurbish old and un utilised jetty. The proposed plan would also include construction of a direct approach road to the port from the main road.
At present, Redi Port is handling over 4.5 lakh tonne of cargo per year. This is expected to go up to 11 lakh tonne with the industrial development in the surroundings. The Redi Port would mainly handle barge operations for iron ore and bauxite from the mainline vessels.
Corus looks at mining coal at Port Talbot steel works
Anglo-Dutch steelmaker Corus is considering developing part of the Margam coal field at its Port Talbot steel works in south Wales and has applied to the coal authority, which manages undeveloped state-owned coal reserves in the UK, for a licence to mine coal at Margam.
Margam is understood to be one of the few sources of coking coal in UK having estimated reserves of between 20m and 22m tonnes as per a 1999 study. Corus said its decision to look at the Margam reserves was not linked to issues of security of supply but could be price orientated.
Margam, which was initially identified as a potential site for mining development by British Coal, has been the subject of significant interest in recent years with a number of companies applying for licences, according to the coal authority.
Corus was also looking at other mining assets as a plans to expand upstream operations, including Norway's biggest iron ore mine. AS Sydvaranger, which controls the Bjornevatn mine.
Linklaters to pre finance iron ore mining in Venezuela
Linklaters has advised, together with Corporacion Andina de Fomento (CAF) as financial advisor, CVG Ferrominera Orinoco, C.A. ("FMO") on a U.S.$135 million pre-export credit financing. The proceeds of the financing, which was signed on 8 July 2005, will be used to finance the expansion of an iron ore processing plant in Venezuela.
Linklaters' project finance partner, Matthew Hagopian, who led the team said; "This transaction represents an important step for FMO in capitalising on the unprecedented world demand for hot briquetted iron and facilitating the expansion of its iron ore processing business. It will also allow Venezuela to maximise its benefit from current and projected market conditions." "CAF was instrumental in bringing this financing to a successful close and involved Linklaters in the transaction due to the number of energy and natural resource financings we have previously worked on together elsewhere in South America, and our extensive experience in this sector."
Explosive blast kills 7 at Shanxi coal mine
Explosives blasted Wednesday morning in a coal mine in north China's Shanxi Province, leaving seven dead and 23 others injured as of Thursday afternoon. The source with the provincial administration of coal mine safety supervision said the blast took place at 10:00 a.m. in the Shiyu Coal Mine, located in the county of Xiangyuan, Changzhi City.
Preliminary investigation shows that the explosives are illegally restored at the mine, and further probe into the cause of the accident is underway.
E China province to invest 6.44 bln USD for port construction
East China's Shandong Province will invest 53 billion yuan (6.44 billion US dollars) for port construction in the next five years to develop Shandong into a major navigation center in northeast Asia by building 159 berths and increasing the annual handling capacity by 400 million tons.
By 2010, Qingdao Port, Rizhao Port and Yantai Port will stand there as 100 million dwt ports, and four transport systems will also be set up for large containers, ores, coal and crude oil respectively. The combined handling capacity of the province's ports will reach 620 million tons annually, and the number of TEU containers handled by local ports will total 13.5 million
.
A developed transport network of highways, railways and airways will be established, linking all the ports along Shandong's coast, as well as connecting Shandong with other provinces like Hebei, Inner Mongolia and Shanxi which have abundance in natural resources.
Norilsk Nickel acquires 2.5% stake in RAO UES of Russia
Norilsk Nickel has acquired 2.5 percent of shares of RAO UES of Russia for US$322 million, Nornickel said to make their total holding of 3.5 percent as Nornickel had acquired 1 percent of RAO for US$115.6 million in 2001.
MMC Norilsk Nickel is the leading producer in Russia and one of the leading producers in the world of base and precious metals like nickel, copper, cobalt, palladium, platinum and other precious metals (gold, silver), selenium, tellurium, technical sulfur, hard coal and other materials for industrial needs.
MMC Norilsk Nickel is the world's largest producer of nickel and palladium and one of the largest producers of platinum. Its market share exceeds 10% of cobalt and 3% of copper production worldwide. Domestically, MMC Norilsk Nickel holds close to a 96% market share of nickel, 55% of copper and 95% of cobalt production. Norilsk Nickel is one of the leaders in the national economy as it account for 4.3% of the Russian export. The share of Norilsk Nickel in the Russia's GDP is 1.9%, and 2.8% in the industrial output of the Russian Federation, that is 27.9% of the non-ferrous industry.
Australian Centennial Coal upbeat about future
Centennial Coal Co Ltd's annual profit was hit by a mine's poor performance but Australia's largest mid-tier coal producer says that's all behind it and its next results will soar. Chief executive Bob Cameron also said Centennial was keeping an eye out for new acquisitions as he announced the company's net profit fell 31 per cent to $36.5 million in 2004/05.
The NSW miner's net profit, which was at the lower end of guidance, included a $14.7 million after-tax charge as a result of the now-defunct Munmorah mine's poor performance and closure in June 2005.
Net profit might be down, but Centennial's annual sales revenue was $670 million, up 34 per cent on the back of booming prices for coal. Centennial's run of mine coal production for 2004/05 was 14.9 million tonnes and it is targeting 21 million tonnes in fiscal 2006, in a bid to exploit strong prices.
Production at Pakistans ship-breaking industry resumes
Scrap production from ship-breaking industry has started entering into the local market after a gap of almost two years as incentives offered in the budget rescued the tottering industry. Currently only a few small ships are being dismantled and big ones are expected to anchor late next month or early October. The operators have placed orders of over a dozen ageing vessels and their arrival was delayed due to formal processing and documentation matters.
Ship breaking activity came to a halt year as ageing vessels, fond of making their last voyage to Gadani ship breaking yard, started making their way to China because their Pakistani buyers could not afford higher prices.
Pakistan government has reduced withholding tax from 3 percent to 1 percent in current budget and also reduced value-addition benchmark from 14 percent to 5 percent.
Oceaneering bags $13 million steel tube contract
Oceaneering International, Inc. announced today that Oceaneering Multiflex has secured a contract with a value of $13 million from Newfield Exploration Company to supply steel tube umbilical for the Gulf of Mexico Wrigley field development. Wrigley is located at Mississippi Canyon 506 in approximately 3,700 feet of water. This 28-mile umbilical will be manufactured at the Oceaneering Multiflex facility in Panama City, Florida. Product manufacturing is planned to commence early next year with delivery scheduled for the second quarter of 2006.
John Huff, Chairman and CEO, stated, "This contract with Newfield is a great beginning to what we anticipate will be several more steel tube umbilical awards in the near future for our Panama City plant. Subsea completion activity worldwide, and notably in the Gulf of Mexico, is expected to remain at historically high levels over the next several years. "We expect the financial performance of our new Panama City umbilical manufacturing plant will increase substantially next year and be a major contributor to a growth in Oceaneering's earnings."
Oceaneering is an advanced applied technology company that provides engineered services and hardware to Customers who operate in marine, space, and other harsh environments. Oceaneering's services and products are marketed worldwide to oil and gas companies, government agencies, and firms in the aerospace and marine engineering and construction.
Thai Metal Trade expects 20% growth
Thai Metal Trade Plc (TMT), a steel processor and trader, expects sales growth of 20% this year despite the significant decrease of world steel prices in the second quarter and has forecast sales of 6.5 billion baht, up from 5.4 billion last year.
In the first half, TMT posted total revenue of 3.48 billion baht and a net profit of 127 million baht, down from 148 million baht in the same period of last year.
Edgen Corp. unit buys Western Flow Products
Edgen Corp. said recently that its subsidiary, Edgen Canada Inc., acquired Western Flow Products Inc Edmonton, Alberta-based, a stock distributor of specialty alloy pipe and components for use in the oil and gas, processing and power generation industries.
Baton Rouge based Edgen Corp. distributes specialty steel pipe, fittings and flanges primarily for use in the oil and gas, processing and power generation industries. It operates a carbon products group location in St. Louis.
Vinashin has plans for Nam Dinh
Viet Nams largest shipbuilder Vinashin said it will pump VND1.7 trillion (US$1.07 billion) into projects in the northern coastal province of Nam Dinh for shipbuilding and seaport enlargement projects, to make Nam Dinh the countrys third largest shipbuilding centre, after Hai Phong and Quang Ninh, by 2010, the company said.
Vinashin (Viet Nam Shipbuilding Industry Corporation) said the biggest project would be the Xuan Chau Shipbuilding Complex with an expected investment of VND800 billion.. The 89.5-ha complex will include four factories and house a shipbuilding plant, a steel rolling plant, a ship accessories plant and an onboard cranes production plant. The shipbuilding plant will produce ships weighing 3,000-5,000 tonnes with an annual capacity of 30 ships and the steel rolling plant will have output of 50,000 tonnes per year.
VND600 billion will be invested in Thinh Long shipbuilding centre project which will build ships of 5,000-15,000 tonnes. The State-owned shipbuilder will invest VND320 billion to construct the My Trung industrial complex and enlarge the Hai Thinh seaport.
The company has won a number of prominent shipbuilding contracts since the beginning of this year including four container ships worth $68 million to Denmarks Rederiet Fabricius A/S, eight cargo ships worth $212 million to UKs Graig Investments Company, eight container ships worth $142 million Germanys MPC Marine and $336 million worth cargo ships for the UKs Graig Shipping Ltd.
Bdesh steel rerolling mill urge govt to resolve problems
Operators of steel and re-rolling mills have urged the government to resolve their problems regarding power supply and import of raw materials as the mills were facing serious problems in the production due to frequent load-shedding of electricity and Irrational duties levied on raw material import. They also alleged that a section of the customs officials harass mill operators in releasing the imported raw materials from the port.
The re-rolling mill operators have urged the NBR to address the problems immediately otherwise they would be compelled to go for greater movement to realise their demands. The steel mills have demanded 20 percent rebate on electricity bills of those mills that pay their bills regularly and where electricity systems loss has come down to below five percent from a whopping 50 percent in the past.
Mechel Q1 profit soars but outlook cloudy
Russian steel major Mechel announced its first-quarter net profit more than tripled to $170 million on strong demand from $53 million a year earlier. Revenues soared to $1.05 billion from $0.66 billion in the same year-ago quarter. Its EBITDA rose to $279.65 million from $115.26 million and EBITDA margin grew to 26.65 percent from 17.59 percent.
First quarter 2005 was a very successful period for Mechel, one in which we saw continued strong operational and financial performance, particularly from our mining segment as raw material prices remained at peak levels," Mechel CEO Vladimir Iorich said in the report. "Although I believe that Mechel is well-positioned for the future given its status as one of the world's most integrated mining and steel companies, the current slowdown in the market will almost certainly make the first quarter the best quarter of 2005 for us."
Mechel increased production of various steel products by 12 to 20 percent in the first quarter of 2005 compared to the same year-ago period. In particular, rolled steel output rose 19.7 percent to 1.3 million tonnes. Mechel now wants to boost its already strong position in the upstream raw materials sector to prepare against the steel market's cool-down. It sees coking coal sales as part of its core business and has been aggressively expanding its raw materials base. Mechel already makes steel entirely from its own raw materials and sells about 50 percent of its coal on the market, making it Russia's second biggest coking coal producer behind bigger rival Evrazholding.
Belon awards tender for equipment supply to Listvyazhnaya Mine
OJSC Belon, a leader in Russia's coal sector, has completed a tender for production and supply of equipment for its Listvyazhnaya coal mine. Among participants of the tender were seven producers of industrial equipment representing Germany, UK, Poland, Czech Republic, Ukraine and Russia.
Joy Mining Machinery Ltd., UK, a global leader in the development, manufacture, distribution and service of underground mining machinery, won the tender and with it a US$6 million contract with Belon.
Baoshan Iron builds 580m yuan steel plant
Baoshan Iron & Steel, the listed unit of China's biggest steelmaker, is building a 580 million yuan (HK$556.7 million) specialty steel production line in Shanghai to boost output of alloy steels to 100,000 tonnes a year starting early 2007
The mainland's largest steelmakers are making more steel sheets and plates to meet rising demand for cars and appliances. Baoshan Iron will shut its low-quality steel-rolling, steel-casting production lines after it starts making the specialty steel.
Excel coal triples profit
Excel Coal Ltd has more than tripled its annual net profit and the New South Wales miner expects demand for coal to power this fiscal year's profits even higher. The company has lodged a higher than expected 2004/05 net profit of $95.1 million, against the $25.7 million it made in 2003/04. The result includes an extraordinary tax credit of $19.9 million arising from the recognition of future tax benefits. Excluding the benefit net profit would have been $75.2 million.
Excel said all its operations achieved very strong production results in the final quarter of 2004/05. Run of mine coal lifted 43 per cent in the quarter to 1.984 million tonnes against 1.387 million tonnes in the previous corresponding period. The full year total rose 8.5 per cent to 6.483 million tonnes. Saleable coal production during the quarter was up 44 per cent on the same time last year at 1.570 million tonnes pushing the full year figure up 9.6 per cent to 4.99 million tonnes.
Excel expects strong prices will drive fiscal 2006 net profit to about $150 million, providing expansion at its Wambo mine goes as planned and sales from Millennium occur as scheduled. Excel said its saleable production and coal sales were expected to increase significantly in fiscal 2006 with an additional one million tonnes planned from the Wambo expansion and initial sales from the new Millennium mine planned for the second half.
