September, 23 2005
SAIL & RINL likely to pick up stakes in coal mines in Australia
The public sector Steel Authority of India Limited SAIL and Visakhapatnam Steel Plant RINL are eyeing equity participation in overseas coking coal production ventures. Union Minister for Steel told some reporters that opportunities are being pursued in Australia, Canada and China in this respect.
It is also reported that SAIL and BHP Billiton are close to acquiring a coking coal mine in Australia. Our alliance partner BHP Billiton has indicated two-three coal fields in Australia, and we are in the final phases of negotiations, said Mr V S Jain, chairman, SAIL. He, however, declined to give more details of the coal linkages. Currently, we source a large portion of our coking coal requirements from BHP, and this development will ensure that our coal requirements are met in the long term, Mr Jain said.
Late last year, SAIL had signed a memorandum of understanding with BHP Billiton to form an alliance for jointly developing coking coal mines.
SAIL has chalked out plans to increase its production capacity of steel to 20 million tonne by 2011-12 from the present 13 million tonne. At present, SAIL needs about 20 million tonne coking coal, of which it imports nearly 9.5 million tonne. By 2011-12, the company would require 36 million tonne coking coal.
Indian coking coal, apart from being high in ash content, is considered to be of inferior quality. It needs blending with a better grade of imported coking coal to meet the technological requirement for producing steel economically
Essar may extract iron ore from SA dumps
Essar Steel and Mintek Ltd, South Africa's state owned mining research company, may extract iron ore from dumps in the town of Phalaborwa in the east of South Africa. The dumps contain about 250 million tons of low grade iron ore, known as magnetite
Palabora mining co, owned by Rio Tinto Group Ltd and Anglo American Plc, and Foskor Ltd, the southern hemisphere's biggest phosphate producer, both own dumps in the Phalaborwa area. They have stockpiled ore containing magnetite for decades because it isn't profitable to export and plan to sell the dumps.
KIOCL scouting for mining site in State
The Kudremukh Iron Ore Company Limited KIOCL, which has been directed by the Supreme Court to close down by December this year on petitions with regard to various aspects, including environment, biodiversity and its location in the Western Ghats region, is looking for an alternative mining site in the State.
KIOCL CMD Mr P Ganesan said that the efforts were on with regard to providing for safety to the mines and had filed a petition with the Supreme Court seeking directions but at the same time, the Company was also looking for an alternative site in Karnataka besides exploring avenues in Orissa jointly with SAIL
The company produced 4.35 million tons of concentrate and 3.795 million tons of pellets during 2004-05. The exports were of the order of 0.70 million tons of concentrate and 3.799 millions tons of pellets.
Sesa Goa spurts on talk of Mitsui exiting company
The Sesa Goa stock has been shooting up in the wake of intense speculation that Rio Tinto, the worlds second largest mineral resource company, is buying out Mitsuis stake in the Indian company. The stock has gained more than 26% over the past week.
The grapevine has it that Mitusi is looking to exit the company. The Japanese company owns 51% in Sesa Goa, which at the current valuation, is worth over Rs 1,880 crore. Mitsui & Co had bought out Finsider Internationals 51% in Sesa Goa in October 1996, through the UK-based Earlyguard. Mitsui is a highly diversified Japanese conglomerate; valued over $7bn.
Rio Tinto has been trying to gain a foot hold in the Indian iron ore mining sector through a JV with Orissa Mining Corp. But, the partnership soured and the Company Law Board is hearing the dispute the two over mining concessions.
The restrictions being imposed by states rich in iron ore reserves may lead to standalone mining companies like Sesa Goa, to lose mining leases as some of the States have passed laws, which allow mining activity only if value addition is carried out within the states
PSL bags $55 million contract from Qatar
It is reported in a daily that PSL has received a substantial portion of the pipeline coating and related services contract worth $55.5 million, for the Qatar government's Dolphin pipeline project.
PSL manufactures specialized pipes like spirally welded steel pipes and a major portion of the company's total turnover is generated from exports
Import data on steel to go online
Import data on steel would be made available online 'very soon so that effective measures could be taken to avoid any injury to the domestic steel industry, Steel Minister Mr Ram Vilas Paswan has announced
TopTata set for crucial discussions in Dhaka
Tata Group, which is planning to invest $2.5 billion in Bangladesh, is expected to begin its crucial third round of negotiations with the government here Oct 2 to settle contentious issues. Sources in the Board of Investment of Bangladesh, which coordinates the talks, said fiscal incentives to be offered would be the most critical issue in this round of negotiations.
The two sides are likely to discuss the issue of gas security for Tata's steel and fertilizer plants apart from the proposed power unit. The group has proposed to set up a urea fertilizer plant in Chittagong and a steel plant in the north. Natural gas will be used as the source of energy in the planned steel and fertilizer plants while coal will be used as an energy source in the power plant. Tata officials had earlier asked the Bangladesh government for a 30-year guarantee of uninterrupted gas supply, a board official told IANS, adding this issue would also come up for discussion this time.
Mexico sets duties On Russian, Romanian & Ukrainian steel
The Mexican Economy Ministry on Wednesday imposed final anti-dumping duties from 37% to 68% on imports of all types of carbon steel plates from Russia, Romania and Ukraine, after ending a 3-year-long investigation.
The ministry said that based on an investigation into imports of steel plates from the three countries during the period of January to October of 2002, compared to the same period of 2001, the government found that dumping did occur. The government investigation found that the 227% increase in these steel imports during the period of investigation had surpassed the volume allowed according to international trade rules and caused a negative impact on the local steel industry. Imports from Russia, Romania and Ukraine accounted for 6%, 23% and 22% respectively of total Mexican imports at the time of the investigation, the ministry said.
The imports of the product took place under conditions of discriminatory pricing, causing damage to the same national line of steel production, the ministry said in a statement, adding that local prices fell 2.4% and local production and domestic market sales both fell 8% as a result of the dumping.
The dumping margins were found to be in excess of 120.5% from Romania, 36.8% from Russia and 60.1% from Ukraine.
Anti-dumping duties were set at 36.8% for Russia, 60.1% for Ukraine and 67.6% for imports from Romania
It is not the first time Mexico imposed anti-dumping duties on imports of steel products from Russia and Ukraine. In 1999, a 20% duty was fixed on Russian imports of hot rolled steel, while duties on imports from Ukraine of the same product were set at 47%.
The duties take immediate effect and are expected to benefit Mexican steelmakers Altos Hornos de Mexico SA, one of Mexico's largest steel makers and a producer of carbon steel plates for the local market.
POSCO cuts domestic steel product prices by 6-9 %
POSCO has announced its decision to cut its domestic selling prices for 11 steel products by 6-9 pct, up to 70,000 won per ton, in order to curb excessive inventories of commercial products resulting from massive inflows of cheaper imports from China while increasing the output of high end products.
HRC prices are reduced to 550000 won per ton from 595000, CRC to 650000 from 695000, electrolytic galvanizing iron sheets to 744000 won per ton from 799000 and CRNO to 687000 won per ton from 757000 and by 70,000. Other products include hot dipped galvanized, cold rolled full hard coil, black plates, tin plates, hot rolled pickled & oiled coil and billets.
The reduced prices will be applied to orders made from Monday to relieve small and mid sized companies who depend greatly on these products, according to POSCO.
Import of cheap Chinese steel products for common use in the eight months through August exceeded 4.9 million metric tons, already 600,000 tons more than last year's total volume. Thus prices of products for common use were pulled down whereas high end product prices remain strong due to global steelmakers' tight supply and increasing demand. In July, the steelmaker downsized production by 300,000 tons and reduced the prices of several products including foundry pig iron and iron rods.
"As our combined domestic sales of those 11 products amount to 15 million tons per year, we expect the discount to help our clients suffering from high oil prices and sluggish demand in the construction sector," POSCO said.
Coal market well balanced
Macquarie analysts who attended the McCloskey European Coal Outlook Conference in Nice earlier this week have concluded that in general terms, the outlook for coal prices remains extremely robust, although some easing of prices from recent record highs is seen as likely in 2006. Despite this, no one at the conference expected a major retreat from current prices, the analysts report, which are for the most part more than double levels of a few years ago.
All producers reported a massive rise in operating costs over the past year, averaging 30-50%, and ongoing problems in obtaining explosives, truck tires and skilled labor to operate mines.
A source of disquiet clearly arose from Indonesia, with Macquarie reporting speaker after speaker pointed to the negative impact Indonesia is having on the supply of coal into the Pacific Rim market this year. Indonesia will overtake Australia as the worlds largest exporter of thermal coal this year with exports forecast to rise by 12-19mt from last years level of 105mt, the analysts note.
By contrast, Australian exports are projected to grow by only 1-2mt from last years 107mt. Offsetting this growth is a likely 5-8mt or so decline in Chinese exports from last years level of 72mt.
The spot price out of Australia has declined continuously and is now reported to be around US$45-46/t, well below this years contract level of US$62/t.
There was a general expectation, the analysts report, that the contract price may well decline to the US$45-50/t range in 2006, although some of the Japanese utilities have, in early discussions, indicated that they may well settle at around US$48/t.
The analysts conclusion from the conference is that the market remains remarkably well-balanced with a small surplus currently evident which the analysts suggest may represent Japanese de-stocking ahead of price negotiations. Any shortfall in supply would quickly rebalance the market in the analysts view
China to become world's largest stainless steel producer in 2006
China will become the world's largest producer of stainless steel next year, with annual production capacity to reach nine mln tons, the China Non-Ferrous Metals Journal reported. It quotes Mr Li Cheng, director of the stainless steel sub association of the Special Steel Enterprises Association of China, as saying China may not find it necessary to import stainless steel in 2006.
China's demand for stainless steel totaled 4.6 mln tons last year versus output of 2.33 mln tons, with half of the stainless steel used in the construction and kitchenware sectors imported. Domestic and foreign producers are expanding capacity in China which should convert the country into a net exporter of stainless steel by 2010, boosted by the booming construction sector and continued rapid economic growth in the country.
Baosteel Group will complete a stainless steel production expansion project this year which will increase its annual capacity to 1.5 mln tons. Taiyuan Iron and Steel (Group) Co Ltd is building a 1.5 mln ton-capacity stainless steel facility which will double its annual production capacity to three mln tons upon completion. The expansion of Shanghai Krupp Stainless, ThyssenKrupp AG's joint venture in Shanghai, with the German partner investing 1.4 bln usd, will also be completed soon. No output forecast was provided.
An industry source has said that China's total stainless steel production capacity will rise to 16.3 mln tons by 2010 if all currently planned production facilities are fully operational and China will have to expand exports to offset the huge production capacity increases as domestic demand will only total 8-10 mln tons by 2010
US steel inventories fall to 15 month low
US steel inventories held by wholesale distributors, who are among the biggest buyers of the metal, fell in August to their lowest since May 2004 because of increasing demand, Merrill Lynch & Co. analyst Daniel Roling said.
Inventories totaled 13.4 million tons, down 6.5 percent from July and 7.5 percent lower than August 2004, Roling said Wednesday in a report, citing a monthly survey by the Metals Service Center Institute, a trade group of distributors. Shipments jumped 23 percent from July to 5.02 million tons, he said.
The inventories are sufficient to meet demand for 2.7 months, down from the equivalent of 3.5 months in July, Roling said. Supplies have dropped since distributors stockpiled steel late last year, sending prices on an 11 month slide
Laid off steel workers protest against Angang Benxi
More than ten thousand laid-off workers held a demonstration on September 20 at the headquarters of the Anshan Iron and Steel Group in northeastern China's Liaoning Province.
The protesters carried banners and marched around the administration buildings of Angang, currently China's third largest steel maker, demanding that the company increase their redundancy payments. The crowd melted away after listening to the commitments made by the senior officials of Angang led by Mr Liu Jie, Secretary of Angang's CPC Committee and General Manager.
Angang has informed that workers were laid off during the process of internal restructuring. Angang merged with Benxi Steel, another large steel producer, in August, creating a combined annual production capacity of 30 mln tons to become China's second largest steel company after Baosteel.
However, the huge size of the new company has created problems and the management is facing difficulties in reassigning employees to the merged group. The unrest reflects some of the problems associated with the restructuring of the country's traditional industrial bases.
Murchison secures Asian steel buyer
Junior iron ore developer Murchison Metals has secured another sales contract for ore from its Jack Hills project in Western Australia. Under the new contract, Asian steel mill Tangshan Danyang (Group) Co Ltd will purchase 540,000 tonnes a year for the first three years.
Tangshan Danyang also said it would increase its offtake quantity to two million tonnes once Murchison expanded the mine under its second phase development plans.
Murchison already has two other contracts with Asian steel mills in place and, with the latest contract, takes first year sales to 1.19 million tonnes, generating gross revenue of $US71 million.
First production from the mine is expected next year and because of the high grade nature of the ore, can be directly shipped without processing first
Komatsu plans to open Russian plant
Komatsu, Japans No. 1 manufacturer of construction equipment has announced a plan to set up a production facility in Russia at an investment of $27 million, most likely near Moscow or St. Petersburg to produce 600 units of 30 ton excavators per year. Komatsu would own up to 66 percent of the assembly facility, with the rest of the shares being controlled by Ivanovo based Kraneks, a maker of excavators
Anatoly Komov, vice president of Kraneks, said on Monday that his company had been in talks with Komatsu but had not yet received a concrete offer.
Kraneks already operates a 50-50 joint venture with Komatsu in Ivanovo, which since 1999 has been producing plates used in hydraulic shovels.
Komatsu has supplied a lot of equipment to the coal mining and seaport construction projects in Russias Far East since the 90s. They also sell a lot of equipment to timber producers and are second biggest company in this segment after Caterpillar
Shaanxi coal crackdown
Ya'an city in Shaanxi Province launched a comprehensive safety check of all coal mines yesterday, following a coal mine accident that killed 12 miners and injured two others last week. Official investigators had sought to cover up the deaths in Huangling County and lied in their report to authorities. They were suspended and were under investigation
The city ordered all collieries with hidden safety risks to halt production; operators who refuse to suspend production will face lawsuits. The decree also calls for severely penalizing coal mines that operate illegally, and owners of coal mines where fatal accident occur will be punished, the city said.
Officials participating in safety inspection will also be severely punished under the law if they fail to report accurately or cover up accidents and dangerous conditions.
The decree was issued following the gas blast last Thursday at the Gouxi Coal Mine, which left 12 miners dead and two others injured. However, the tragedy was covered up for four days as the coal mine management tried to settle it privately by providing 2.54 million yuan (US$306,600) in compensation to the victims' families, according to the local production safety department.
Salzgitter to reorganize company to save on tax
Salzgitter AG, Germany's second largest steelmaker, plans to reorganize its financial and reporting structure to help reduce some tax payments and will ask shareholders to approve the reorganization at a Nov. 17 meeting. However, the change won't affect the company's management structure, Salzgitter said.
The new structure will help Salzgitter avoid disadvantages amounting to presumed total of 130 million euros ($158 million) to 150 million euros in financial year 2005 and the financial years thereafter,'' Salzgitter said.
Salzgitter has four business divisions: steel, tubes, trading and services and company spokesman Mr Bernd Gersdorff said Salzgitter is only merging the most important divisions'' so that the company can offset carried- forward losses from different units to a greater extent.
GM rolls out plan to improve supplier relations
General Motors Corp HAS presented new plan to the suppliers for improving its relationship with them while cutting its purchasing costs. Under the plan, which will be in effect from the last quarter of this year through 2007, GM will set cost-cutting targets for individual parts rather than setting overall corporate cost-cutting targets for 250 to 300 of its top suppliers.
GM spokesman Tom Wickham said suppliers have criticized GM for setting overall cost-cutting targets for supply companies even if they were meeting GMs targets for some of their individual parts. Under the new program, a supplier that makes three or four separate parts for GM will be given a cost-cutting target for each part based on market data and other factors. Wickham said GM will give greater consideration to cost issues facing suppliers when theyre building certain parts, such as the high cost of steel
The Detroit-based automaker has had a rocky relationship with suppliers, which have accused the company of squeezing them to stem its own losses. The worlds largest automaker lost $286 million in the second quarter.
In a survey of 259 suppliers this spring, 85 percent said they had a poor working relationship with GM, and just 3 percent said they had a good relationship, according to Planning Perspectives Inc. Suppliers trust in GM was at its lowest level in 15 years, the survey said.
GM isnt the only automaker that has been trying to improve its relationship with suppliers. DaimlerChrysler AGs Chrysler Group said last month that it has begun rewarding its highest-performing suppliers with longer-term contracts and the first opportunity to bid for new business.
Steel wheel maker expands into aluminum business
Hayes Lemmerz International announced that its North American Wheel Groups intend to expand their product lines to include low-pressure cast aluminum wheels for commercial truck and trailer customers.
Current plans are to have several truck wheel designs and dimensions on the market in 2006. North American aluminum truck wheels will be produced at the company's Gainesville, Ga. facility where a specific OE truck program is also scheduled to launch in 2006. Products for the European markets will be produced at the company's Dello, Italy facility where it currently houses its European R&D center for aluminum wheels.
Hayes Lemmerz has expanded remarkably since its start in 1908 as Hayes Wheels, when it manufactured its first product a wooden spoke wheel for the Ford Model T. Since that time, the Company has become a leading global supplier of wheels and other components for the passenger and the light, medium and heavy duty truck markets.
The Company has grown through acquisitions including Motor Wheel in 1996, and then certain businesses of Bosh as well as Lemmerz in 1997.In addition, Hayes Lemmerz has expanded it presence in Brazil, South Africa, Thailand, Japan, the Czech Republic, Turkey, Mexico and India. As a result of these acquisitions, Hayes Lemmerz is the market leader worldwide for steel and aluminum wheels.
Today, Hayes Lemmerz has developed a worldwide presence and customer base with 44 facilities worldwide and a presence in 17 countries serving all major Original Equipment Manufacturers
Bekaert to restructure two production plants in Belgium
Steel cord and wire manufacturer Bekaert SA said it is to restructure two wire production plants in Hemiksem and Lanklaar, Belgium resulting in 210 job losses
Bekaert said the plant at Hemiksem is facing 'increased pressure' on sales in Western Europe due to increasing competition from imports of galvanized low carbon wires into the EU.
Bekaert added that the plant at Lanklaar, which supplies steel cord products for tyre reinforcement, faces a 'marked shift' in tyre production from Western Europe to Central Europe, affecting export sales and production costs
Samancor hearing postponed
The industrial hearing into the circumstances around a gas explosion at Samancor's ferrochrome steel factory in Middelburg, which claimed eight lives, was postponed to October 6 and 7 on Thursday
National Union of Metalworkers of SA legal representative Richard Spoor applied for the postponement saying the unions had not yet been furnished with the information needed to prepare.
Preliminary investigations by the labor department established there was a water leak at the furnace, which automatically shut down a lockout system. "Upon further investigations by 13 members of the maintenance team, the hot gas exploded on them," the department said.
Falconbridge adopts plan to prevent takeover bids
Falconbridge Ltd., the world's third- largest nickel producer, plans to grant shareholders the right to acquire stock at a discount to prevent hostile takeover bids. Some of our shareholders have voiced concerns with the possibility of a creeping takeover,'' CEO Mr Derek Pannell said in a statement today. The plan applies when a bidder seeks to buy more than 20 percent of Falconbridge's shares.
Xstrata Plc, which owns a 20 percent stake in the company, also can't boost holdings except in specified circumstances said Falconbridge
Xstrata agreed to buy most of the stake from Brascan Corp. for $1.7 billion in August. Xstrata raised the stake to 20.04 percent this month after agreeing to buy 180,240 more shares. Xstrata CEO Mr Mick Davis is making acquisitions to reduce company's reliance on thermal coal and increase holdings in zinc, copper and nickel, whose prices are soaring because of demand from China.
Guangdong coal imports rise by 21.6% in August
According to statistics from the customs authority, China's Guangdong Province imports 604,000 tons of coal in August, up sharply by 21.6% year on year. Guangdong is short of coal resources and sources over 60 mln tons of coal from other provinces, but transportation problems mean that it is sometimes more economical to import from countries such as Vietnam, Indonesia and Australia.
The international coal price has continued to climb this year. From
January to August, 3.66 mln tons of anthracite was imported into
Guangdong, with the price rising 37.2% year on year. It imported 409,000
Tons of coking coal, with the price up 52%, and 2.14 mln tons of other
bituminous coal, at a price higher by 22.3%
Precoat Metals to expand in Hueytown
Precoat Metals is investing $30 million for its new coil coating complex in Hueytown, which will have a 62 inch wide tandem coil coating line and slitter on the site capable of leveling, embossing and applying a full range of organic coatings and laminates to cold-rolled, galvanized and Galvalume steel, as well as aluminum. Precoat Metals plans to open the expanded plant in 2006
Precoat Metals bought the former Southern Coil Processing facility for $4.3 million. Southern Coil built the processing warehouse in 1996 and consolidated its operations to another facility in 2004.
The Hueytown plant will join others Precoat Metals operates in St. Louis, Granite City, Jackson, Portage, and McKeesport
Northrop Grumman brings SCM solution to Millennium Steel
Northrop Grumman Corporation has announced that the company's OpenTrac(TM) software and e-commerce system will assist Millennium Steel Service's expansion to San Antonio, Texas, by helping the company manage its business, update its technology and processes, and reduce operational costs.
Northrop Grumman's Web-based OpenTrac software for the metals industry is an enterprise resource planning solution that helps control the supply chain, and links communication between a business and its trading partners.
Northrop Grumman Information Technology, headquartered in McLean, Va., is a trusted IT leader and premier provider of advanced IT solutions, engineering and business services for government and commercial clients.
Cline Mining update on coking coal mine projects
Cline Mining Corporation, which is currently bringing two metallurgical steel making coal mine projects into commercial production in British Columbia, Canada has issued an update on the status of mine developments and related activities
The Lossan Coal Mine project is located in the Northeastern British Columbia Coalfield and the Lodgepole Coal Mine project is in the Crows Nest Pass Coalfield of Southeastern British Columbia. Both coal mine developments are on planned schedule with first mining to commence in the first Quarter of 2006.
The field programs on both projects were successfully completed on schedule during the second Quarter this year, providing the final detailed information to meet environmental and feasibility requirements to bring both mines into commercial production. Drilling, bulk sampling of coal from adits driven into the coal seams, detailed pilot plant tests, analysis and assessment of coal qualities for steel making are completed. Mine planning, process plant design and designs for coal loadout to rail are being finalized and will be compiled into separate Reports to be issued in November, as planned.
The results from both the Lossan and Lodgepole coal mine projects confirms the coals to be suitable for steel making purposes producing Pulverized Coal Injection (PCI) as well as coking coal grades, with excellent blending attributes and qualities.
The November Reports will provide for each of the Lodgepole and Lossan coal mines to be brought into initial coal production at 250,000 tonnes a year increasing to 1.0 million tonnes of coal annually. Lodgepole will be further increased to a 2 million tonne per year production level in planned increments.
Outokumpu Technology to deliver a new copper plant to China
Outokumpu Technology has been awarded a contract valued at more than Euro 50 million by Yanggu Xiangguang Copper Company for a green field copper production plant to be built in Yanggu County in Shangdong province, China.
The copper production in Yanggu will be based on Outokumpu technology, including Flash Smelting process, Kennecott-Outokumpu Flash Converting process, anode casting shop, tank house, and sulphuric acid plant.
In the first phase, the new plant will have the capacity of 200,000 tonnes of copper cathodes per year, and it is planned to be expanded up to 400,000 tonnes.
Outokumpu Technology is a worldwide technology leader in minerals and metals processing, providing innovative tailored solutions for a wide variety of customer needs in iron and steel, aluminium and non-ferrous metals industries.
Heron Resources announces deals with Exchelon & Inco
Heron Resources Limited announced that Echelon Resources Limited has signed a Heads of Agreement to acquire a large number of iron ore tenements from Heron.
Pursuant to the Heads of Agreement, Echelon will acquire Heron's iron ore interests in return for 25 million Echelon shares and 10 million performance options.
Heron Resources Limited announced that it has completed an excluded placement of 16.5 million fully paid ordinary shares at $0.75 per share to raise $12.375 million to Inco Limited
