October, 10 2005
India world leader in sponge iron
The Indian sponge iron industry is set to retain its number one slot at the international level with the domestic average growth rate clocking 21 per cent as against the average global growth rate of 10 per cent. Sponge iron is the substitute for steel melting scrap. Scrap availability is getting difficult and the coking coal reserves are limited therefore steel industry has to depend heavily on sponge iron for the supply of metallics in future.
India is the largest producer in the world with 18 per cent of world production for the last three years. There are four major producers in the world India, Venezuela, Mexico and Iran accounting for 60 per cent of the global production. Ninety per cent of the world production is gas-based and out of the 10 per cent coal based plants, India accounts for 78 per cent.
India has an installed capacity of 170 lakh tonne at present. And there are at least 160 more plants in various stages, from planning to implementation. So we expect that the installed capacity will go to 3 million tonne in the next five years.
Existing sponge iron manufacturers are going in for expansion in addition to large number of greenfield projects which are in the pipeline. Many players are putting up their own induction furnaces as forward integration. They go even a step forward and set up rolling mills. For sponge iron in future to survive they must have forward or backward integration. A 60,000 tonne-a-year plant without power generation will cost Rs 24 to 25 crore and a small plant of 50 tonne-per-day will cost Rs 5 to 6 crore.
MMTC eyes stakes in coal mines abroad
State owned Metals and Minerals Trading Corporation MMTC, the largest Indian international trading company, plans to acquire stakes in coal mines in Australia, Indonesia as well as in the domestic market.
Mr S D Kapoor, CMD of MMTC said that international trading companies acquire stakes in mines to facilitate procurement of ferrous metals, which in turn helps mining firms enter into long-term partnership.
There are two crucial factors in acquiring a stake in coal mines, the price of coal and the location. International coal prices are softening and it is the right time to make the move, he added.
Indian PM urged to review mineral policy
Senior Congress leader and former Union Minister Mr KC Lenka has urged Prime Minister Mr Manmohan Singh to has demanded termination of the MoU signed between Orissa government and POSCO and has urged to amend the existing national mineral policy to impose ban on export of iron ore and effect necessary changes in the Indian Mines and Mineral Development Act, 1993.
Expressing concern over mindless exploitation of natural resources by successive Governments in the State, Lenka in a letter to the Prime Minister said during the last five decades mining laws had been changed without giving due consideration to the States interest.
Stating that foreign companies should not be allowed to exploit and export our valuable high-grade mineral reserves in the guise of FDI, he demanded that export of minerals without value addition should be banned. While other mineral rich countries were preserving their natural resources and mindfully exploiting their reservoirs, the Centre should not allow foreign companies to exploit and export the countrys mineral wealth, he said.
Goa Ispat's special GIL TMT bars
Goa Ispat Ltd, using Evcon technology for manufacturing of thermo mechanically treated bars is reported to have a market share of 60 per cent in Goa and 30 per cent in Konkan region.
Mr Rajendra Singhal, MD announced that the company has manufactured nearly 55,000 mt of steel and have achieved total sales turnover Rs 13,379.87 lakh during 2004-05.
He further added that now the company has started the production of steel angle and will start the production of more steel products.
Mittal Steel looking at more buyouts in China
Mittal Steel is looking at further acquisitions in China. The company had recently acquired a 36.67% stake in Hunan Valin Steel Tube & Wire of China for $338 million. Now the global steel giant is exploring some other facilities that are up for sale in China
While refusing to comment on any specific buyout, Mittal Steel senior officials said they were always looking for acquisitions that would add value to the company. As far as China is concerned, it is one of the largest producers in the world and consolidation in this market has just begun. There are many opportunities in that market.
Mr Aditya Mittal said we do not comment on acquisitions. We always look for good opportunities around the world on the issue of buyouts
Irans KSC exported 489,000 MT steel
Khouzestan Steel Company KSC, wholly owned by NISCO which is affiliated to the Iranian Ministry of mines and industries, has reported exports of 489,000 MT during last six months, almost half of their total production
KSC has exported Billet, Bloom and slab to Korea, Japan, India, Germany, Thailand, Kuwait, Indonesia, Taiwan, Singapore, Saudi Arabia, and Greece and still is planning to expand Export.
KSC, established in 1989 in Ahwaz, is the first Iron and steel Complex in Iran with DRI EAF route.
MacSteel MD supports import parity pricing policy in SA
Mr MichaelPimstein MD of steel trading group MacSteel and President of Steel and Engineering Industries Federation of South Africa SEIFSA has questioned prevailing assertions that import-parity pricing of primary steel is crimping downstream competitiveness and enterprise development. He also pointed out that IPP remained the mechanism of choice, with only a few exceptions, internationally and was especially relevant where a country was seeking to apply international best practice
The Macsteel MDs intervention was somewhat surprising given that SEIFSA had hitherto steered a neutral course on the issue, due to the fact that its membership cut across both sides of the debate.
The contentious issue of pricing has been identified as a concern by the Department of Trade and Industry and Cabinet is likely to make a determination on an alternative pricing structure some time next year. The DTI has indicated that it would like to replace IPP, which is based on a selected international selling price, but also includes all freight, handling and tariffs the final price determination, with a model that is still market sensitive, but also more cost reflective.
Incidentally, MacSteel is an international trading company owned by Mittal Steel SA, which has reaped maximum benefits from IPP, being the largest domestic steel producer
Welding on special stainless steels causes occupational asthma
It is now reported that occupational asthma can be induced by welding fumes of common stainless steel. In recent years, the use of special stainless steels with a high chromium content has increased
Dr Timo Hannu of Department of Occupational Medicine, Finnish Institute of Occupational Health, Helsinki, Finland and his colleagues have described that two patients who developed asthmatic reactions when they were exposed to welding fumes from special stainless steel. The diagnosis of occupational asthma was based on respiratory symptoms, occupational exposure and positive findings in specific welding challenge tests.
The authors' findings emphasize that there are differences between different stainless steel subclasses in asthma inducibility. The results are important in view of the widespread use of special stainless steels.
Venezuelan Government tightens control on mining and steel
A series of measures are being put in place to give the government greater control over Venezuelas economy in order to develop it in the interests of the poor majority.
President Mr Chavez announced on September 25, that the government would use $1 billion of the foreign currency to create a new state-run steel and iron processing company, aiming to create employment and manage the nations resources.
The previously state owned steel plant was privatized before Chavez came to power in 1997, at the cost of thousands of jobs. Chavez explained that the formation of the new state-run plant was part of a series of polices aiming to create a new model of social and economic development.
On September 20, Chavez announced that his government would refuse to grant any more concessions to any private foreign or national mining company. Venezuela plans to create a national state owned mining company that would take charge of all mining activities in the country.
HR coil price stable in Shanghai market
It is reported that there is currently some 600, 000 tons of hot rolled coils in stock in the Shanghai area and no sign of mills reducing their output.
According this condition, it is lucky that the HR coil price is still remaining firm. Although the HR coil have little room to drop, the price still isnt up in short term. Some analyst are saying that steel companies and traders must cooperate with each other and create the harmonious firm environment for the steel market in order to maintain the firm market.
VAT to be reduced from 18% to 13% in Russia
Russian PM Mr Mikhail Fradkov ordered the Finance Ministry and Economic Development and Trade Ministry to draft proposals on reducing the value-added tax from 18% to 13% since 2007. The Russian government said that this measure aimed to boost economic growth but should not increase the share of state expenses in the GDP.
The VAT reduction may increase the economic growth by 0.5% of the GDP, while the annual industrial output and investments will grow by 0.3-0.5% and 1.1-1.3% respectively.
Chrysler deal has SET looking at opening new plant in Ohio
SET Enterprises Inc may open a new plant in the Cleveland area after winning a large contract from the Chrysler Group. The Warren-based metal processor will supply steel blanks for the Dodge Durango SUV and the Dodge Caravan and Chrysler Town & Country minivans.
Most of the work will launch in early 2006, though a small part of the project begins right away.
SET is scouting locations in Cleveland because the blanks go to Chryslers stamping plant in Twinsburg, Ohio, said CFO Kenneth Pachla. Because SET produces heavy, metal parts, it tries to locate its operations near customer plants to keep freight costs down.
SET is a minority business enterprise owned by Chairman and CEO Sid Taylor. SET has plants in Warren, New Boston, North Vernon and Chicago.
Investcorp acquires leading global alumina company Almatis
Investcorp, the global investment group that specializes in alternative investments, has acquired Almatis, the global leader in development and production of specialty alumina based products. Almatis produces refractory materials that are vital to steel industries for insulate high temperature furnaces
Established in 1910 as a division of Alcoa, Almatis operates eight manufacturing facilities in three continents with an extensive facility at
Investcorp COO Mr Gary Long, said Almatis has a leading position in a market that is difficult for others to enter, as it requires specialist technical expertise, substantial investment in production facilities and, in particular, security of supply of consistent quality alumina.
Private equity is one of four products in Investcorps alternative investment offering, alongside real estate investment, hedge funds and venture capital. Investcorp announced net income of $110.3 million for the recent fiscal year ended June 30, 2005, an increase of 22 percent over the previous audited fiscal year. Income before operating expenses, at $324.7 million, was a record achievement for the firm.
Hele Gunnarson appointed VP of Group Assurance, Sandvik AB
Hele Gunnarson, VP Group Communications and head of Group Staff Communications, has been appointed VP of Group Staff Assurance, effective 1 January, 2006.
Group Assurance shall, on behalf of the Board of Directors and Audit Committee of Sandvik AB, ensure compliance with the Groups corporate governance, internal control and risk management policies. The independence of Group Assurance is secured through reporting to the Audit Committee and the Chairman of the Audit Committee. Functionally, Group Assurance will report to Sandviks Executive Vice President and CFO.
As of January 1, 2006, Group Staff Communications will be divided into two units, communications with the equity market and the financial media will be handled by Jan Lisser, head of Investor Relations, who reports to Per Nordberg, Executive VP and CFO and all other corporate communications operations will be handled by Group Staff Communications, under the management of Anders Wallin. Anders Wallin is currently responsible for public relations and brand related matters within Group Staff Communications. Anders Wallins position will be directly subordinate to the President.
