September, 21 2005
Chinese steel majors on iron ore shopping trip to India
A 55 member Chinese delegation, comprising of representatives of major steel companies like Bao Steel, Sino Steel etc is arriving in India today. It is understood that almost all members are in the list of companies allowed to import iron ore as per the policy announced in the year beginning
They are expected to hold discussions with leading Industry associations like CII and FICCI and later participate in a Federation of Indian Mineral Industry conference in Goa
Severstal bags CR order from Tata Motors
Severstal has announced that it will supply 20,000-30,000 metric tons of steel to Tata Motors in the fourth quarter of this year, compared with a total of 2,400 tons for the whole of 2004
The increase reportedly will bring Severstal's supplies up to 20-30% of Tata Motors' total flat steel requirement.
Tata Motors is India's largest vehicle manufacturer and fifth largest in the world, with the output of 400,000-450,000 vehicles a year
RSP BF 4 re commissioned to reach 2 mln hot metal output
SAILs unit Rourkela Steel Plant RSP is set to achieve its installed hot metal production capacity of two million tonne following re commissioning of BF 4, which was taken out of operation few months back for up gradation. Hot metal output from this furnace is expected to go beyond 2000 tonnes per day while the daily hot metal production from the blast furnace shops is expected to be 6000 tonnes.
BF 4, largest among all the blast furnaces of RSP, had been taken down around the middle of April this year, with a view to introducing various technological upgradations to enhance its performance. These included the complete replacement of the super structure and girder box, furnace shell, uptakes, down comers and bustle pipe etc.
During the repair, high top pressure system has been introduced along with a dedicated new gas cleaning plant. Modifications in the cooling system will take care of the extra cooling need of the furnace lining. Incorporation of new hot water pump house and cold-water pumps with higher capacity, total revamping of the charging side to meet the requirement of the higher charging rate and revival of dedusting system are some other major renovation jobs carried out in the furnace. Construction of a new sinter screen house and replacement of old coke screens, sinter screens and hoppers to ensure consistent feeding of sinter of right size to the furnace wre also carried out
The furnace upgradation was completed at a cost of Rs.118 crore.
Tata Steel confirms Rs 12,000 cr for plant in Chattisgarh
Tata Steel plans to invest about Rs 12,000 crore in its 5 million tonne per annum greenfield steel plant in Chattisgarh. Stating this, Tata Steel MD Mr B Muthuraman said that the company had signed a memorandum of understanding with the state government to this effect in June this year.
TopMaritime Boards bid to infuse life into Alang
The Gujarat Maritime Board GMB plans to infuse life into the dying ship-breaking industry in the State and has sent a draft policy to the government for its approval.
According to the source, the various measures include reduction of custom duty from 5% to zero and lifting of ceiling where a ship breaker is mandated to dismantle at least 10,000 tonnes a year or pay Rs 82 per tonne as the differential charge. It has also suggested for a waiver of the annual development charge of Rs 270 per sq meter of a plot where a ship-breaker carries out dismantling activity, besides reduction in the wharfage charge of Rs 108 per tonne.
The fact that the Alang ship-breaking industry has been passing through severe recession can be gauged from the steep decline in the number of ships the yard has received for dismantling in the last five years. As many as 333 ships had been dismantled at the yard in 2001-02, whose number declined to 300 and 294 in the following two years. The number of ships further slid to 196 in 2004-05, and it touched the dismal figure at 30 as of on September 1, 2005.
Besides the decline in the number of ships, the sharp increase in steel and sponge iron production in the country, and also the increased import of melting scrap have dealt a severe blow to the ship recycling industry in Gujarat. The Alang share of steel production through ship recycling route has been substantially reduced from the peak of 3 million tonnes in 1998-99 to less than 1 million tonnes in 2004-05.
This is a result of the generous tax structure and higher margin of subsidies being offered to the neighboring competitors like China, Bangladesh and Pakistan. While there is nil customs duty on ships in Pakistan, China offers 14 % subsidy to its ship-breakers and Bangladesh maintains a duty difference of 10 % between ships for recycling and finished steel
Indian Railways increases earnings from coal & steel sectors
The earnings from freight during August this year was placed at Rs 2,786 crore from 51.56 million tonnes as compared to Rs 2,326 crore from 46.19 million tonnes of such traffic during the same period last year
Of the total earnings, a total of 1,149 crore came from transportation of 23 million tonnes of coal, followed by Rs 137 crores from 3.94 million tonnes of raw material for steel plants, Rs 144 crores from 1.46 million tonnes of finished iron and steel and Rs 213 crore from 3.94 million tonnes of iron ore for exports.
World crude steel production for August 2005 up by 6.1% on Aug04
World crude steel production for the 61 countries reporting to the International Iron and Steel Institute IISI was estimated to be 91.4 million tonnes in August, which is 6.1% higher than for the same month of 2004.
Chinese production was 30.4 million tonnes in August, a rise of 26.8% compared to August 2004 and 224.9 million tonnes for the first eight months of 2005 which is 28.2% more than that of the same period of 2004.
Total production in the Asia region was 48.7 million tonnes in August, an increase of 17.7% on August 2004.
European 25 production for the first eight months of this year is 124.0 million tonnes, 3.4% lower than for the same period last year.
Crude steel production in the United States was 7.7 million tonnes in August. This is a decrease of 8.4% compared to August 2004.
Brazil produced 2.6 million tonnes of crude steel in August, which is 8.5% lower than for the same month last year. Total year to date production in Brazil is 21.1 million tonnes, 3.6% down on the same period of 2004
US Steel Gary BF expected to re start in December
United States Steel Corp. has reported that No. 14 blast furnace at Gary Works is expected to be available for start-up in early December. The furnace should be capable of achieving its expected production rate of 9,200 tons per day by this coming January.
The furnace section that was involved in the incident reported earlier this month is being repaired and is expected to be put in place within the next week.
Gerdau aims to expand ownership of Sipar
Brazilian long steel producer Gerdau plans to increase its stake in Argentina based long steel laminator Sipar by 40.5% in a US$40.5mn, three-year deal.
Gerdau already holds a 43% share of Sipar and the new acquisition would expand the Brazilian company's stake to nearly 84%.
The investment would fall under Gerdau's international consolidation strategy. The acquisition would allow Gerdau to register Sipar results on its consolidated balance sheet.
US Steel Q3 profits to be hit by high cost and low volumes
US Steel Corp, the biggest U.S. steelmaker, said third-quarter profit will be below the average estimate of analysts because of increasing input costs and lower shipments.
Costs for natural gas as well as scrap are increasing whereas the shipments will be slightly below Q2 levels.
Pacific Basin says dry bulk market may spike in next quarter
Pacific Basin Shipping Ltd, a Hong Kong based operator of 50 dry bulk ships, said freight rates may spike in the fourth quarter on rising demand for coal and iron ore shipments to China. We are moving into the expected fourth-quarter strength and we have a spike potential as China ramps up on coal and iron ore imports,'' Mr Mark Harris, the CEO of Pacific Basin, said at the UBS Transport Conference in London today.
The Baltic Dry Index, which measures the cost of hauling commodities on ships of several sizes and routes, rose 34 points, or 1.1 percent, to 3011 today, according to the Baltic Exchange in London. It has climbed for 10 consecutive sessions and has gained 72 percent since dropping to a more than-two year low of 1747 points on Aug. 3. The index, which doesn't include ships as small as the Pacific Basin fleet, jumped to a record 6208 points on Dec. 6
Canadian Coal Miner signs loan deal with Japanese customer
NEMI Northern Energy and Mining Inc, a Vancouver based coal mining company, has signed deals with Japanese trading company for shipping metallurgical coal from its Trend property in northeast British Columbia, to take advantage of currently high coal prices that some say might slip in 2006.
NEMIs first deal is a loan agreement with a Japanese trading company by which the latter will loan NEMI $20 million to fund development of and production from its Trend mine and in return, NEMI has given the Japanese company the exclusive rights to market NEMI's coal for 10 years.
The lender will also have the right to purchase coal from NEMI on a guaranteed basis for five years. The Japanese trading company has also been given an option to buy a 10% interest in the Trend property and assets, based on an independent valuation of the mine.
NEMI owns a 100% interest in the Trend Property, which is located approximately 710 kilometers northeast of Vancouver and consists of 27 contiguous coal licenses and coal license applications. NEMIs immediate objective is to put the Trend project into production under a limited production permit for 240,000 tonnes by Q4 2005 and reach an annual level of 1.5 to 2.0 million tonnes in 2007. In addition to Trend, NEMI has a 50% interest, with Western Canadian Coal Corp, in the Belcourt Saxon Limited Partnership JV for developing the Saxon coal properties, located about 80 kilometers southeast of Tumbler Ridge.
Wilkinson Sword announces closure
Wilkinson Sword, with factory in Acton West London to make ceremonial swords and scabbards, has announced closure of its sword's plant, to mark the end of a business relationship with the British Army spanning four centuries following the end of their last contact in July.
The Household Cavalry has been left looking for a new supplier of steel swords and three companies, two of them foreign, have been approached to replace Wilkinson Sword but the Household Cavalry fears a new supplier will mean a drop in the quality of workmanship.
It is said that "The Wilkinson Sword blade cannot be copied. They have a special way of making them and if it bends, it will go back to the original position, whereas some of the imported ones are not of the same quality."
Expatriate Pakistani to set up US$ 100 million steel plant
Mr Hasib Rehman, a Pakistani settled in Japan called on Prime Minister Mr Shaukat Aziz on Tuesday and informed him that he is setting up a steel plant at the total cost of US$ 100 million which includes Japanese equity.
The investment is being made in response to the recent visit by the Prime Minister Shaukat Aziz to Japan where he met various investors and captain of trade and industry to attract investment in Pakistan.
Mr Hasib Rehman said that the steel plant will manufacture steel sheets which are an important raw material for engineering industry, which is largly dependent on imports
Ontario lends $100 million to Stelco restructuring
Stelco Inc and its union told a bankruptcy judge Tuesday they have a deal to extract the steelmaker from court protection by the end of the year. Existing shareholders would see their investments wiped out as creditors would own 100 per cent of the Hamilton-based company. A key to the accord is a $100-million loan from the Ontario government. The province also agreed to give Stelco a break on its pension funding obligations.
The province could also end up owning as much as eight per cent of Stelco through warrants valid within seven years if the price of the new common shares of the restructured company doubles.
The agreement would be be formally considered Thursday by Justice James Farley of Ontario Superior Court. At the hearing Thursday, a day before current bankruptcy protection expires, it will seek an extension of that status until Dec. 2.
The accord is conditional on an arrangement with Tricap Management Ltd. which has been co-operating with the United Steelworkers of America - to provide $450 million in new financing. Under the plan, Tricap could end up with an equity stake in the restructured Stelco, although Pratt and Stephen told reporters they could not specify how large this holding would be at the end of the complex refinancing.
When Stelco sought bankruptcy protection in early 2004, it predicted it would run out of cash by November of that year. Steel prices then soared, causing the legally insolvent company to turn profitable.
Rio may revive mothballed iron site
A STALLED $400 million plan to restart an old iron ore pellet production line at Rio Tinto's Iron Ore of Canada IOC operation is back on the agenda in the wake of strong demand from steel makers. Four years ago Rio called a halt to the refurbishment because of failing demand as the steel industry wrestled with falling prices and overcapacity.
It was a tough decision, as IOC had already sunk $C260 million into the project. But now, with IOC sold out on its contracts, Rio said it had begun a feasibility study on completing the project.
Completing the project would add about 4.5 million tonnes to IOC's annual pellet production, which is now running at 13.2 million tonnes. The study is expected to be completed in the first half of next year. Construction would take a further 18-20 months, allowing first output as early as the second half of 2007.
Turkmenistan to purchase tubing worth US $ 18 mln for oil industry
Turkmen President Mr Saparmurat Niyazov has signed a decree aimed at speeding up oil and gas exploration and drilling works and casing of exploration and production oil and gas wells.
State corporation Turkmengaz is authorized to sign a contract with Trubnaya Metallurgical Company of Kazakhstan, which is a subsidiary unit of Trubnaya Metallurgical Company of Russia, for the purchase of 12 240 tons of steel casing and tubing exceeding US $ 18 mln.
4000 tons of tubing is intended for state concern Turkmengaz, over 6000 tons for state concern Turkmenneft and some 2000 tons for state corporation Turkmengeologia.
The contract will be financed by Turkmengaz and Turkmenneft and tubing will be supplied by stages from November 2005 to February 2006.
Fortescue raises ore reserve estimate to 2.3 bln tons
Fortescue Metals Group Ltd, a Perth based iron ore mining company, has raised estimates of its iron ore reserves in Australia to 2.3 billion metric tons, the Tex Report said, citing Chairman Mr Andrew Forrest.
The extent of the rise in the estimated amount is not known but it is learnt that Fortescue's reserves are about two times the combined reserves of Rio Tinto Plc. and BHP Billiton
CVRD sets sights on Australian projects
The world's biggest iron ore producer, Brazil's CVRD, wants to join the likes of BHP Billiton, Rio Tinto and Anglo-American as a truly diversified global mining house within the next 10 years and has set its sights on Australian projects.
CVRD representative Mr Rogerio Carneiro said his company's July agreement with AMCI to study the Belvedere coking coal project in Queensland could be the first of many such deals
Peabody Energy opens office in Beijing
St. Louis-based Peabody Energy Corp, the world's largest coal producer, has opened an office in Beijing and plans joint ventures in China as it seeks to capitalize on that country's growing energy needs. Peabody would be restricted to holding minority stakes in Chinese mines, but there is ample room for growth in the country, which is the world's biggest producer and consumer of coal
Spokesman Mr Vic Svec declined to discuss specific joint ventures but said We have several objectives. The first is to improve our understanding of the marketplace there. The second is to expand our sales and trading position. The third is to pursue business development opportunities, including joint ventures."
Peabody's coal products generate more than 10 percent of all U.S. electricity and 3 percent of worldwide electricity. The company's 2004 revenues totaled $3.6 billion
BHP & CVRD fights mining law change in Mongolia
BHP and CVRD are among the companies battling proposed changes to Mongolia's mining laws that may drive up costs and set limits on how long exploration tenements can stay idle. Lawmaker Mr Ragchaagiin Badamdamdin, head of a parliamentary group promoting the amendments said in Ulan Bator that the changes are needed to stop speculation on the value of exploration permits and to raise funds to fight poverty and help the environment
All mining majors are looking to tap billions of dollars of mineral deposits in Mongolia to meet surging demand for raw materials from neighboring China and the government is under increasing pressure to distribute more of the country's mining wealth to the poor.
Mongolia, a land-locked country with a population of 2.8 million, wants foreign investment in its mining industry to help boost annual gross domestic product from $450 per person.
Indonesia coal exports to rise by 19% in 2005
Strong global energy demand and bottlenecks in Australia's coal export infrastructure will help boost Indonesia's coal exports this year by 19% to 110 million metric tons, a senior Indonesian coal industry official says.
APBI now forecasts that Indonesia will produce 155 million tons of coal this year, up 17% from 132.4 million tons in 2004.
Mr Jeffrey Mulyono, chairman of the Indonesian Coal Producers Association APBI said that the projection of demand, most of which is for thermal coal for electricity generation, is tied to soaring Asian electricity demand caused by robust economic growth in the region and better the economy, higher will be the demand for electricity which will support demand for coal
Coal producers were seeing increasing demand from energy-hungry China and India
Malayawata Steel to boost exports
Malayawata Steel Bhd is intent on penetrating more export markets and improving productivity to boost competitiveness despite a government ban on the export of certain steel products and a slump in the local construction industry.
The companys chairman Mr Datuk Lim Kiam Lam said The group will, however, still forge ahead to broaden its export market penetration while improving productivity in order to enhance competitiveness
On the local front, Lim said the company is looking forward to the Governments efforts in boosting the construction industry via the 9th Malaysia Plan, which he said would determine the performance of Malayawata. The industrys ability to vary the ceiling prices of controlled steel products in tandem with international scrap prices, along with the ease to import and export steel bars and billets in and out of the country, will also affect our performance he added.
ThyssenKrupp calls takeover rumors "nonsense"
German steel and industrial goods conglomerate ThyssenKrupp on Tuesday denied market rumors that the group was a takeover target for a US based company. "That is nonsense," a spokesman for ThyssenKrupp said, when asked about these rumors
Traders said potential suitors included US Steel, but the company declined to comment on the rumor.
ThyssenKrupp is not the only German steelmaker to find itself the target of takeover rumors recently. Salzgitter Germany's second largest steelmaker after ThyssenKrupp, also faced a speculation that UK rival Corus might make a bid at the beginning of the month
