September, 02 2005
Indian steel makers raise prices
After witnessing a downward trend for last three months domestic steel prices shot up once again on the back of hardening international prices and rising demand. The domestic integrated steel producers on Thursday hiked steel prices by Rs 500 to Rs 1,000 per tonne effective from 1st September
SAIL has announced price increase by an average 2.3 percent or 500 rupees per tonne across all its product categories with immediate effect. Tata Steel has also increased HR coil prices by Rs 500 per tonne bringing it to an average rate of Rs 22,000 to Rs 25,000 per tonne, except for long term customers. Essar Steel said it had increased the prices by Rs 500 per tonne and also reduced rebate to result in price increase up to Rs 1,000 in certain products
After a downslide, steel prices globally have firmed up again. As per industry estimates steel prices have shot up between $67 and $70 per tonne internationally requiring a correction by Indian steel producers.
JSW Steel Ltd has also announced a price increase of galvanized steel by up to Rs750 to Rs 1,000 per MT due to buoyant demand and increases in input costs. However, they are not decided on increasing prices of hot rolled coils as yet
TATA Steel to form a JV with BlueScope
The Tata Group has announced that it is negotiating a deal with Australia's biggest steelmaker, BlueScope Steel Ltd., for a steel coating and painting joint venture in India.
"Today we are close to arranging a Memorandum of Understanding with BlueScope in terms of working together in coating and painting lines in India," Tata's Chairman Mr Ratan Tata said after addressing a Forbes CEO conference.
BlueScope CEO Mr Kirby Adams said last week the proposal to work with TATA Steel, was awaiting a decision by Tata before the two groups could select a site and put the venture together.
China bound iron ore freight rates soar
With the Chinese government lifting restrictions on iron ore imports, resulting in a 25 per cent jump in demand, freight rates for China-bound cargo have shown an increase of over 50 per cent since early this month. Freight rates have reportedly moved up from $11 to $17 per tonne in the spot charter freight market.
However, cargo for China-bound ports is expected to decrease from the current levels as imports decline in the winter months. Though freight rates to other major destinations are currently stable, analysts believe that rates across destinations will start easing from November onwards.
CIL may acquire coal block in Russia
Coal India Ltd CIL is planning to acquire a coal block in Russia. The company has recently identified a block in that country and a team of experts would be going to Russia next month to make an on-the-spot assessment of the potential reserves
The block, according to official sources, belongs to a steel manufacturing company, which no more uses coal and has changed its technology. "They want to sell the mine which is why we are examining it," officials said.
"It is a small block. We have been given the impression that there are around 60 million tonnes reserves. Our team of experts would try to assess whether there are more reserves in the adjoining areas because worldwide such small reserves rarely exists. There is no reason that if coal has been formed over centuries in a particular spot, why there should not be more coal in the adjoining areas," officials said.
However, the public sector coal giant is also continuing its search for more mines in counties such as Australia, South Africa, Indonesia and Mozambique. CIL is also negotiating a joint venture deal with a medium-sized Indonesian mining company for developing blocks in Australia.
CIL and SAIL had initiated talks for setting up a joint venture for acquiring coal blocks abroad in June. The CIL board has already cleared setting up of CIL Videsh as a wholly-owned subsidiary with a proposed equity base of Rs 100 crore. CIL is likely to form the joint venture company through CIL Videsh.
Ore scarcity not to affect plans for steel plants
Union Steel Minister Ram Vilas Paswan today said a scarcity of iron ore would not be a hurdle in setting up steel plants in the country. Speaking after a meeting with private players, the minister said steel producers must intimate their requirements, based on their medium and long-term capacity expansion plans.
Assuring international steel giants interested in investing in the country, Paswan said, If foreign companies like Posco and Mittals come to India and firm up their commitments, there should not be any problem regarding the availability of iron ore.
The Centre would also interact with states and remove any bottlenecks in the way of implementation of projects, the minister added. The minister also said the Centre was closely watching the proposed capacity expansions in states like Chhattisgarh, Jharkhand, Karnataka and Orissa. However, for removing any bottlenecks that may arise during the course of implementation, the Centre would interact with different states, he added
RINLs Vizag Steel Plant to double capacity by 2007
Vizag Steel Plant, which is looking at doubling its capacity by 2007-08 to about 7MT per year, seems to ahead in the race for expansion among domestic steel makers, as it has already embarked upon a Rs 8,500 crore capacity expansion plan to be completed in the next 36 months and is also looking at acquisition of captive mines in India and abroad through JVs
Larsen & Toubro which has erected several projects like Vizag Industrial Water Supply Company, port facilities for Nalco, Vizag Steel Plant erection, Vizag refinery up gradation, Simhadri super thermal power plant and the IT facility for HSBC is looking towards VSPs expansion also as per Senior VP Mr K V Rangaswami
Erdemirs privatization puts government in a hot spot
Turkish Prime Minister Mr Recep Tayyip Erdogan had recently declared Whoever pays the money will get Erdemir, in a blunt response to accusations that the government, keen to shore up its public finances and lure much needed foreign investment, is betraying national interests.
The tender to sell off Turkeys national steel company Erdemir has become an uphill battle for the government, which faces growing opposition from local businesses and trade unions to potential foreign buyers. Angry workers have blocked representatives of foreign bidders from inspecting the factory, top company executives have resigned and die hard opponents have asked the courts to halt the sale.
Critics argue that Erdemir, Turkeys biggest steel company and only flat steel producer, is a strategic asset and cannot be dispensed with, particularly at a time when it is profitable. Apart from its economic value, the company has an emotional significance. Built in 1960 in the Black Sea town of Eregli, it has become a symbol of Turkeys painstaking efforts to industrialize. Throughout the decades, it has also steered social life in Eregli, funding infrastructure projects, building schools, organizing festivals and sponsoring sports clubs.
Turkey is under pressure to speed up its often botched privatization efforts under a 10-billion-dollar stand-by deal with the International Monetary Fund that is aimed at consolidating a spectacular economic recovery after two severe crises in 1999 and 2001.
Among the 13 companies that qualified to bid for Erdemirs publicly held 49.29 % share are Mittal Steel, Arcelor, Corus and POSCO. The deadline for the final bids in the tender is September 26.
Proponents see a unique opportunity to get a good price for Erdemir, estimated at about two billion dollars, after the boom 2004 year in the global steel industry, which saw Erdemir boost its production to 3.6 million tons and its profits to some 470 million dollars. Consolidation is now accelerating in the sector, analysts say, and global giants will be keen to add to their assets. If the tender fails, they warn, Erdemir would face inevitable losses, given the now decreasing demand on the market.
But for local businesses, which are Erdemirs most important customers, foreign acquisition of the company is an anathema. Twenty-three Turkish firms joined forces last month and submitted their own bid to buy the company.
China's CSRC approves 36.67% sale of Hunan Valin to Mittal Steel
The China Securities Regulatory Commission CSRC has approved the sale of a 36.67% stake in Hunan Valin Steel Tube & Wire Co Ltd to Mittal Steel. In a statement filed with the Shenzhen Stock Exchange, Hunan Valin Steel said its parent, Hunan Valin Group will sell 647.42 mln shares it owns in the listed firm at 3.96 yuan per share to Mittal Steel.
The NDRC has already approved the sale which is still pending approval by the Ministry of Commerce. The purchase will see Mittal become the second largest shareholder in the Chinese company.
After the transfer Hunan Valin Group will still hold 37.67 in the listed company.
Russian Metalloinvest to join consortium for Kyryvorizhstal
Metalloinvest, which controls the steel industry assets of Alisher Usmanov, is thinking of bidding as a member of a consortium at the forthcoming tender for 93.02% of Ukrainian steel giant Kryvorizhstal, Nazim Efendiyev, Metalloinvest's general director, said.
"We are not bidding as such, but one of the companies that is bidding is putting a consortium together and is inviting us to take part," Efendiyev, who is also head of the Urals Steel company, said. "We are considering the invitation," he told
Austrian special steel maker Boehler's H1 profit jumps
Austrian special steelmaker Boehler Uddeholm AGs first half operating profit jumped 78 percent as demand remained robust, the company has announced
EBIT rose to 139.8 million euros ($170.5 million) in the six months to June 30 from 78.6 million euros in the same period a year earlier. Net profit, however, came in at 87.8 million euros. For the full year the company said it is expecting sales of roughly 2.5 billion euros, compared with 1.9 billion euros the previous year.
Boehler, one of the world's top producers of precision steel for cars, airplanes and other products, expects full year EBIT of roughly 280 million euros, compared with 2004's figure of 191.9 million euros. Boehler CFO Mr Horst Koenigslehner told that a recent acquisition of a German stainless steel firm Edelstahlwerke Buderus will also boost earnings in the second half.
"In part overheated demand during the first three months was followed by normal order levels in the second quarter. However, the demand for high-alloy specialty steels also remained strong from April through June," the company said in a statement.
The firm's largest division, high performance metals, saw steady, strong demand in the United States, Asia and Europe. In Europe demand was strongest in Germany, Scandinavia and the eastern region. A high level of demand was registered in the energy technology, aircraft construction, oil field technology, chemicals, offshore and machining tool sectors," Boehler said. "However, the completion of numerous model changeovers earlier this year reduced sales to the German automotive industry," it added.
Native title agreement clears path for iron ore mine in Murchison
Traditional owners in Western Australia's Murchison region have agreed to a native title deal, paving the way for the development of an iron ore mine in the area. The agreement was reached between the Wajarri elders, the Ngoonooru Wadjari people and mining company Murchison Metals.
The company plans to begin operations at its mine in the Jackhills area, about 650 kilometers north east of Perth, by the end of the year. The deal also provides a range of outcomes for the traditional owners including compensation, employment and new business opportunities
Mittal Steel SA to seek strike interdict
Mittal Steel is to ask the Labor Court in Johannesburg on Friday for an order interdicting members of labor union Solidarity from going on a pay strike. Documents to this effect were filed with the court on Wednesday, said the company's spokesperson Mr Tami Didiza and the case would be heard on Friday. Should it succeed, the company then intended asking the court to review a strike certificate issued by the Metal and Engineering Industry Bargaining Council, which gave the go-ahead for Solidarity's labor action.
Solidarity said it plans to go on strike at four of Mittal Steel SA's plants in Vereeniging, Vanderbijlpark, Newcastle and Saldanha next Tuesday. It also expressed regret that Mittal chose to take Solidarity to court rather than attending to the grievances of workers.
The two parties have reached a deadlock in a dispute over the salaries of 134 Solidarity members employed at Mittal Steel SA's Vereeniging plant. Workers at the other plants may strike in sympathy.
Pakistan to use Indian sponge technology for steel making
Pakistans steel units have placed orders to import $102 million equipment from India and are now due to meet authorities in Islamabad seeking the nod to set up new plants with Indian technology. A 16 member Pakistani delegation, representing different steel re rolling mills and production companies, has recently returned from India and now plans to meet high ups in the industry and commerce ministries, in a bid to get support for co operation with the Indian industry.
The members of the countrys seven steel mills mainly from Lahore, Gujranwala and Karachi visited Indian state of Chhattisgarh, a hub of Indian steel production and exports, earlier this month. The Pakistani delegation comprises representatives from Mughal Steel, Star Steel, Abdullah Steel, Sonef Steel, Fazal Steel and Qadri Steel.
The six Pakistani companies signed MoU with Indias BeeKay Engineering, the biggest equipment supplier to sponge iron industry in India, for supply of equipments and with Raipur Alloys for supply 1,000 MT of ferro manganese to the seventh Pakistani company.
The country consumes over four million tonnes of steel every year, but its production stands below three million tonnes. The rest of demand is met through imports from Europe, South Africa, CIS, Russia and South America.
Molybdenum demand drives mine development
The development of Australia's first major molybdenum mine has moved a step closer with the appointment of the contract for pre-feasibility engineering. Worley Parsons has been selected as the lead engineering consultant for the pre-feasibility engineering studies, likely to be completed by the end of the year. The project is hoping to get online by 2007.
Moly Mines' managing director Derek Fisher says molybdenum is currently fetching a good price. "Like a lot of the metals that are associated with the steel industry it's gone up significantly in price, it's about $30 a pound, $29 a pound, 'moly', which is probably 10 times higher than it was, say, three or four years ago," he said. "It's at a peak. It will come off those prices."
Moly Mines Limited runs the Spinifex Ridge copper project, located 50 kilometres north-east of Marble Bar in Western Australia's Pilbara region.
China unlikely to be major steel exporter
Despite strengthening of global steel prices, spurred by falling stocks and all round economic growth, the world's largest steel producer China is unlikely to become a significant exporter anytime soon. The emerging conditions are ideal for China to foray into the export market in a big way. However, quality considerations may come in the way of China making a splash in the export market.
"However, indications from regional trading sources suggest that there has been no increase in Chinese export offers, and regional buyers are not keen on most Chinese material due to bad experiences they had with Chinese exports in late-2004 and early 2005," according to Mr Jim Lennon, analyst with Macquarie Research Commodities.
Explaining the situation, the analyst pointed out that while the only Chinese steel which overseas buyers have serious interest in is from tier one or top steel mills, these mills sell at a large premium to the spot market and therefore, they are not competitive on current regional prices. On the other hand, the quality of supplies from tier two or other mills in China is widely described as poor or worse, and overseas buyers have no interest in the products. The Chinese steel industry is focused on production volumes, characterized by higher and higher output without much attention paid to quality.
"Chinese steel is no longer seen as attractive; and even if regional prices see a strong recovery, Chinese exports are still unlikely to rise," Mr Lennon remarked
Port-Activ buys 50% of Vladivostok Port
CJSC Port-Activ, the second biggest shareholder of JSC Vladivostok Trade Seaport, Vladmortorgport, after the biggest stockholder MMK, has obtained 50 percent in the managing company of Vladmortorgport.
MMK has recently consolidated 26.44 % of port's shares and is expected to increase it further. Vladmortorgport's authorized capital is 176.73 million rubles.
Siemens to supply automation for new ferrochrome smelter
Siemens Southern Africa's Automation and Drives division has announced that it has secured an order of some R7-million for the PLC and SCADA component of Xstrata's Lion project.
Work on the construction of the new ferrochrome smelter in Steelpoort, Mpumulanga has already begun, with the first phase expected to be completed by the middle of next year.
The Lion project will see the construction of a state-of-the-art automated facility to manufacture ferrochrome for the stainless steel industry.
Nickel to drive mining growth in Philippines
Miners are eyeing the Philippines as a potential source of nickel for Chinas booming economy as the countrys mining sector emerges from a two decade slump. The metal, which has more than doubled in value in the last three years as China devours it to add to SS, could do for the impoverished Philippines what oil has done for Saudi Arabia, Mr Jon Steen Petersen, Senior VP of Toronto based Crew Gold Corp says.
The Philippines has 20-25million tonnes of nickel in its soil, or at least a quarter of the worlds known nickel laterite resources, estimates Crew Gold, whose local unit owns a 40% share in a nickel project in Philippines. Mr Benjamin Philip Romualdez, President of the countrys Chamber of Mines, says these resources rank the Philippines as potentially the worlds fourth or fifth largest nickel miner.
At a current world price of about $14,850 a tonne, the country holds between $297bn and $371bn worth of nickel
Chinese Cos signs MOU with Indonesians for Iron Ore mining
Indonesia and China have signed six MOUs and investment deals worth US$20 billion as a part of efforts by the two nations to triple bilateral trade to US$30 billion over the next five years.
Among the six MOus, Chinese Chengda Chuan Wei Group Co Ltd and Sinchuan Chuan Wei Group Co Ltd have signed a MOU for the development of an iron ore mine in Kalimantan with a group of Indonesian companies PT Krakatau Steel and PT Sumbergas Sakti Prima,.
Indonesia badly needs foreign technology and capital to develop its natural resources, while China, with more than US$710 billion in foreign exchange reserves, has been shopping around the world to secure stable sources of raw materials.
Canadian miner reopens large tungsten mine
North American Tungsten Corp has announced that it has restarted its CanTung tungsten mine in northwestern Canada, an operation that was the largest of its kind in the Western world before it shut down on the verge of bankruptcy. CEO Mr Stephen Leahy said the mine, on the border of the Northwest Territories and Yukon, is ramping up to reach full annual capacity of 400,000 tonnes in October, which is almost 7% of the global production of tungsten concentrate
The CanTung mine was shut down in December 2003 when it lost its only two customers when prices for ammonium para tungstate APT, the most widely traded tungsten product, plummeted to $67 a metric ton unit.
But a quadrupling in tungsten prices since then because of a shortage of supply and good demand from China gave it a new lease on life. Tungsten prices hit record highs in June of almost $300 a metric ton unit, a measure equal to 10 kg, or 22 pounds. But they have tumbled to around $210-$230 a metric ton unit since then because of weaker demand from the steel industry and northern hemisphere summer holidays.
Mr Leahy said the mine has signed long-term supply contracts with five customers to take up 280,000 tonnes of its tungsten concentrate a year. The firm was also in talks with three other potential customers. The firm's customers are predominantly based in North America. Initial shipments of concentrate from the mine are expected to begin in September.
Mr Leahy said he was not concerned about the price fall because even with new output from the CanTung mine, global demand was likely to continue outstripping supply as there is only one other major new mine Tiberon Minerals Ltd.'s Nui Phao project in Vietnam slated for start up in 2007, on the drawing board
BHP, Anglo and Xstrata agree coal wage deal in SA
South African coal producers and mining unions agreed a two-year wage settlement with salary hikes of 6-8 percent for the first year, an industry group said on Thursday. The industry's Chamber of Mines negotiates on behalf of seven coal firms covering around 25,000 workers including Ingwe Collieries, owned by BHP Billiton, Anglo American Plc's Anglo Coal and Xstrata.
Wage talks had deadlocked in July and the country's biggest mining union, the National Union of Mineworkers, declared a dispute, but after further talks a deal was hammered out. Anglo Coal and Xstrata will boost wages by eight percent for the lowest paid workers and 6.5-7.5 percent for other categories in the first year. The second year wage increase will be CPIX inflation plus one percent with a minimum of seven percent. BHP has offered lower increases of 6-6.5 percent coupled with immediate job grading changes that will boost wages by an additional 8-14 percent. Most companies also agreed to boost housing allowances to 1,500 rand to month from 1,200 rand
South Africa is the world's sixth biggest producer of coal.
China's ferrosilicon exports jump 28% in H1 2005
China's exports of ferrosilicon in the January-June period of 2005 jumped 28% year-on-year to 510,000mt, according to the latest statistics from the country's General Administration of Customs. The value of the ferrosilicon exports for the period surged 17% to $350-mil.
Meanwhile, China imported a total of 1.53-mil mt of chrome ore during the first-half period of 2005, up 42% year-on-year, with the value of the imports rising 67% to $311-mil.
Exports of unwrought manganese during the period increased about 35% to 150,846mt, with the value of the exports increasing 47% to $232-mil. Imports of manganese ore increased 19% to 2.58-mil mt. The value of the imports during the period rose 78% to $413-mil.
Perus Siderper unlikely to meet debt payments
Lima-based analysts Apoyo & Asociados (A&A) have maintained their category C rating on Peruvian steelmaker Siderper bonds as they believe the company will have difficulties meeting financial obligations.
Category C implies there is "a very high risk of not complying with payments."
The analysts, who are associated with Fitch Ratings, argue that Siderper's cash flow is insufficient to pay about US$7.9mn of debts due September 30, a payment creditors have already agreed to postpone from February 28, 2005.
"In spite of the company's operating improvements, with a favorable outlook for the industry, relatively high prices and an increase in demand for Siderper products, cash flow generation is still insufficient to meet the September 30 payment," A&A said in a report.
Siderper, based in Chimbote in central Peru's Ancash department, has a production capacity of 400,000t/y and is controlled by local holding Sider.
Keystone emerges from Chapter 11 bankruptcy proceedings
Keystone Consolidated Industries Inc announced that it has emerged from
Chapter 11 bankruptcy proceedings on August 31 2005. Keystone previously
received confirmation of its Third Amended Joint Plan of Reorganization from
the U.S. Bankruptcy Court for the Eastern District of Wisconsin in Milwaukee
at a confirmation hearing held on August 10, 2005.
Keystone believes it is one of the few steel companies that has been able
to successfully reorganize and remain an independent company. Mr David L. Cheek, President and CEO of Keystone said: "This restructuring has been a success by any measure thanks to the cooperation and continued commitment and support of our employees, retirees and creditors, as well as the support of our loyal customer base. The success of our restructuring has allowed Keystone to emerge with improved cost structure, liquidity, financial condition and competitive position with other steel and wire product manufacturers - both domestic and foreign. Our customers can be assured of the continued delivery of quality and service that RED BRAND has exemplified."
Keystone has been providing quality steel and wire products to its customers for over 100 years
Kobe Steel holds centennial ceremony
Kobe Steel Ltd held a ceremony Thursday to celebrate the 100th anniversary of its founding in its birthplace of Kobe, Hyogo Prefecture.
"We can feel the weight of the past 100 years and I thought about the next 100 years," President Yasuo Inubushi said at the ceremony as a centennial monument was unveiled. "As our company's manufacturing bases have now spread to many countries in the world, we aim to see each of them prosper along with concerned local communities."
Japan & Thailand signs bilateral FTA
Japan PM Mr Junichiro Koizumi and Thailand PM Mr Thaksin Shinawatra have signed an agreement on a free trade accord, which was forged in principle on August 1
Under the agreement, Thailand will reduce tariffs on steel products imported from Japan over the next eight to 10 years to give time to Thai steel manufacturers to prepare for the competition.
