October, 02 2005
SAIL lowers prices by 3-4% for long products
India's largest steel producer Steel Authority of India Ltd SAIL on Saturday lowered prices of long products by three to four per cent. The price status of flat products remains the same and the company had decided to roll over prices of hot rolled coils and flat products into October.
India's another major steel producer, Tata Steel may decide on prices on Monday.
A SAIL spokesman is reported to have said that price correction has been effected in the case of long products to keep in tune with the international price levels and stock piling.
Indian steel makers raised prices 2.5 percent in September after slashing them almost 25 percent the preceding quarter after global prices eased and inventories rose.
Supreme Court firm on Kudremukh mine closure
Three member bench of the Supreme Court on Friday upheld its earlier verdict delivered in October 2002, directing Kudremukh Iron Ore Company Ltd KIOCL to stop its mining activities by the end of this December.
KIOCL, a Government of India undertaking, had obtained permission of the Union Environment Ministry in 1976 to carry out mining activities for a period of 30 years on contract basis. The company had obtained provisional license in 1999 and continued operations, however, several environmental organizations launched agitation against the mining operations in 2000 and filed Public Interest Litigation PIL in the Supreme Court in this regard.
The Apex Court, which heard the PIL, delivered its verdict in October, 2002 directing the respondent company to stop its mining operations by December 31, 2005.
However, the company had filed a review petition praying the Apex Court to reconsider its decision on the ground that the unit should continue operations to achieve slope stability before closure. But the Apex Court on Friday dismissed the review petition asking the company to abide by the 2000 verdict. It also directed the company to later file a petition in January next, seeking permission for slope stability.
Tata Steel Q2 sales increase by 14%
Tata Steel, besides achieving an all-time high production of hot metal, crude steel as well as of saleable steel for the second quarter of the current fiscal ending September 30, has posted sales of 1.18 million tonne during the period, registering 14% sales growth over the corresponding period last year
The hot metal, crude steel and saleable steel production stood at 1.32 million tonne, 1.23 million tonne and 1.21 million tonne, respectively, showing an increase of 17%, 15% and 14%, respectively over the figures for the second quarter of 2004-05.
The company said on Saturday that most of its facilities planned for its 1 million tonne per annum expansion had been commissioned and the upgraded G blast furnace had also stabilized as per its rated capacity.
The company said that its cost aspect had also started taking a downward trend due to volume impact, advantages associated with operating a large furnace and significant reduction in the use of metallics.
Final negotiation with Tata begins today in Bangladesh
The final negotiation between the Bangladesh government and Tata Group on the proposed US$ 2.5 billion investment in Bangladesh will begin today.
As per their proposal, the Tata Group will set up a fertilizer factory, a steel plant and a 1000 megawatt coal fired power plant in the country. The development and operation of a coal mine is also included in their investment plan.
A 20 member negotiation team of Tata, led by Mr Alan Rosling, Managing Director of Tata Sons, has already reached Dhaka. Communication Secretary Mr Shafiqul Islam will lead the Bangladesh side in the negotiation meeting scheduled to take place at the communication ministry.
Sources in the Board of Investment said this would be the final round of negotiation which is likely to stagger for nearly one month to arrive at a decision on Tata's proposed investment in Bangladesh.
Mittal Steel India to be born soon
Mittal Steel the world's biggest steelmaker, will shortly sign an agreement to mine for iron ore in the eastern Indian state of Jharkhand as part of a plan to build a $9 billion steel complex in the region.
Mr Aditya Mittal CFO of Mittal Steel has, during an interview in Seoul, said that We plan to sign the deal shortly,''
Mittal Steel would be competition with POSCO, which is setting up a $12 billion steel plant in the neighboring state of Orissa.
India Turkey trade to exceed $1.5 b
Bilateral trade between India and Turkey is expected to exceed $1.5 billion this year, Turkish Ambassador to India, Mr Hasan Gogus has said. The ongoing dialogue between the two countries for promoting bilateral trade might lead to growth of trade volume Mr Hasan added.
The trade between the two countries, in favour of India, increased substantially from $250 million two years back to $1.2 billion in 2004
Turkey exports machinery, construction materials, textile and electrical items to India, while India docks pharmaceutical products, chemicals, textile yarn, automobile parts to India.
Mr Gogus said that cashing in on the zero duty benefit in Turkey, Indian investors belonging to steel, petroleum, textile, leather and jewellery sectors could invest there.
Nalco plans to set up plant abroad
State owned National Aluminium Company Ltd NALCO has announced that it is actively exploring possibilities of setting up a joint venture project abroad. Three companies in Oman, Dubai and Qatar have been short listed and a feasibility report is under preparation for setting up an aluminium plant
Nalco CMD Mr CR Pradhan told press that necessity for the plant was felt as about 1.2 million tonne of surplus alumina would be available after the second phase expansion currently underway
Within the country, the company recently commissioned its 50,000 tonne rolled products unit for manufacturing high value items with a revised cost estimate of Rs 398.36 crore. It has also tied up with the Moscow Institute of Steel and Alloys and Romelt Sail India Ltd for development of technology for extraction of aluminium from partially laterised khondalite.
During 2004-05, Nalco posted a 67 per cent growth in net profit at Rs 1,234.84 crore and the turnover increased by Rs 1,100 crore from Rs 3,349 crore the previous fiscal with exports accounting for Rs 2,200 crore. For the current fiscal, the company is targeting a 10 per cent growth in both turnover and profits.
During 2004-05, production of bauxite rose to 4.8 million tonnes and alumina to 1.5 million tonne. With the Rs 4,091 crore second phase expansion program currently underway, Nalcos production capacity would increase from 6.3 million tonnes of bauxite
Kanika Infocom appoints MN Dastur consultant for power projects
Kanika Infocom has appointed MN Dastur & Co as consultant for its proposed Rs 160 crore projects in Himachal Pradesh, Chhattisgarh and West Bengal
The company is planning a 2x6 MW hydel power station in Himachal Pradesh for Rs 70 crores, a 2x7.5 MW rice husk based power plant in Chhattisgarh for Rs 60 crores and a solar cell unit in West Bengal at an investment of Rs 30 crore.
The company can sell power to a "group associate" which is coming up with a steel unit at Raigarh in Chhattisgarh. Incidentally, it has submitted a reverse merger proposal involving Sunil Sponge Iron Ltd, which is working out the steel project.
Battle for Erdemir - Auction at 16:00 hrs on October 4
The privatization tender for Turkey's Erdemir will be held at 4:00 PM on October 4 and a total of six firms and consortiums will compete for the bloc sale of 46.12 percent of the company at Ankara Hilton Hotel.
The timing of tender is kept at 4:00 PM in order to prevent the shares of bidders transacted at the Stock Exchange to be affected negatively.
The Privatization Administration, OIB, also made reservations at the Sheraton Hotel and two public facilities other than Bilkent as a precautionary measure against possible reactions.
The tender for Erdemir, which was earlier planned to be held on October 3, was postponed to October 4 because officials could not predict outcomes of Turkey's membership negotiations with the European Union EU.
The OIB negotiated with three firms including Eregli Joint Enterprise Group on Thursday and the other three firms on Friday to ask them to revise their offers. Erdemir officials said whether the tender will be held on October 3 or 4 will have no effect on Erdemir's price. The officials also noted that everything will be clarified in October 3 morning assured that companies that will participate in Erdemir will not be negatively affected by the October 3 entry talks.
Severstal Air Liquide JV start to the build largest air separation unit
A solemn ceremony has taken place for giving the start to the building of Russias largest air separation unit with daily capacity of 3,000 t of liquid oxygen, by a JV Air Liquide - Severstal" at Severstal industrial site in the City of Cherepovets in Vologda region. It will provide to the Severstal works high pressure high purity oxygen as well as nitrogen and argon, in accordance with a gas supply contract.
The main consumer of products generated by the new air separation unit will be BOF shop, as the oxygen, having a very high degree of purity, is necessary for making IF type steel grades with low nitrogen content. Besides, commissioning of the new installation will allow to reduce energy consumption of gas generating and to improve production safety by using internal compression process.
Total amount of investment in the project will be around 100 million euros. Air Liquide participation in new JV: 75% minus one share. Severstal participation: 25% plus one share. Commissioning of the object is planned for the first half of 2007.
At the ceremony, JSC Severstal General Director Mr AN Kruchinin underlined that "building a new oxygen block is another step in the development of Russian-French relationship in the field of business. For Severstal, this joint venture is the second one with foreign partners. The first one, Severgal, a JV with Arcelor, representing an industrial line for manufacturing hot-dip galvanized sheets, will be commissioned this year.
In his turn, Mr Klaus Schmieder, member of Air Liquide Board of Directors, said the following: "We are very pleased to have Severstal as partners, a company that is not only a leader in steelmaking, but is also well known all over the world.
Air Liquide of France is the world leader in production of industrial and medical gasses, equipment for air separation and related services. The Company was established in 1902. Air Liquide designed and constructed over three thousand plants, it owns and operates over 500 plants in more than 70 countries and 5500 km of oxygen, nitrogen and hydrogen pipelines in Europe and the USA.
Severstal JSC of Russia is a central plant of the multi profile group and steel making division. Severstal Joint Stock Company is an assignee of Cherepovets Iron and Steel Works, the latter being founded in 1955. Severstal produced over 10.4 million tons of crude steel and over 9.2 million tons of rolled products in 2004.
Mining costs are booming
Commodity prices have never been higher but so have been production and construction costs. Queensland mining and infrastructure projects worth almost $10.5 billion may struggle to contain soaring materials and labor charges which threaten to blow out development costs by more than 30 per cent.
Mining giant BHP Billiton refocused attention on the resource sector's rapidly escalating cost problems this week by revealing that the bill for its Australian nickel expansion had blown out by $US400 million ($A525 million) to $US1.8 billion.
Profit margins have nevertheless kept soaring as an unexpected spike in prices, particularly for commodities like coking coal and iron ore, have outpaced significant increases in production and construction costs.
However, the question on the minds of some analysts is whether all mining projects now under way can survive when commodity prices drop in response to increased production.
Wilson HTM infrastructure analyst Mr Gregg Taylor said there was "a very real risk" facing companies which are in the midst of upgrades or new developments but had failed to get their budgeting in order. "I think that companies that are now planning capital expenditure plans are aware of this but for projects that started 12 to 18 months ago and are coming to completion now and in the next six months, that's where the potential for the blow-outs are," Mr Taylor said. "There is no way in pricing these things that some of the companies could have foreseen some of these price increases in raw materials and labor. I don't think anyone foresaw some of the increases we've seen over the last 12 months. A lot of companies have left themselves exposed."
Battle for Erdemir Turkey EU entry meeting on Monday
Turkey's timetable to begin entry talks with the European Union will be decided in a Council of Europe summit scheduled for October 3. The Turkish business groups hope that in case of the worst scenario, if the relationships with the EU breaks off on Monday, there will be activity in the Stock Exchange, foreign exchange and interests but will not have a permanent effect
The effect of this scenario on tender of Erdemir on October 4 is being discussed in the business circles and it is rumored that the could take the extreme step of stopping the sale
Mittal Steel may raise up to $3 Billion to fund expansion
Mittal Steel Co may raise as much as $3 billion to buy stakes in producers and secure supplies of iron ore as it seeks to increase output. The company may issue debt, shares and warrants from time to time'' to fund acquisitions and invest in new projects, it said in a so-called shelf registration filing to the U.S. Securities and Exchange Commission.
The shelf registration filing, once declared effective by the SEC, will enable Mittal to offer newly issued securities, including debt securities, Class A common shares, warrants and units, from time to time, having an aggregate value of up to US$3.0 billion,'' Mittal Steel said in a press release accompanying the move.
Mr Aditya Mittal, CFO of the company, in an interview in Seoul.
We have no immediate intention to raise funds. It just gives us financial flexibility in case we are successful in acquiring companies
Mittal Steel plans to increase output to an annual 100 million tons from 70 million tons in coming years, partly through acquisitions. Mittal Steel has plans to increase capacity in several countries. It is bidding in an auction for a controlling stake in Turkey's Erdemir, is vying for the privatization of Ukraine's Kryvorizhstal and may build a $9 billion steel complex in India's Jharkhand region.
Chinese iron ore import prices in September
The prices of iron ore import in China as on 30th September through major ports have been reported by a Chinese portal as under
Indian iron ore concentrate imported through the Tianjin has varied from USD 54.52 CIF for 58% Fe, USD 81.78 CIF for 63.5% Fe to USD 91.70 CIF for 65% Fe content
The prices of Brazil and Australian iron ore concentrate imported through the Qingdao Port have been reported to be USD 95.42 CIF for 67.6% Fe and USD 81.78 CIF for 63.5% Fe, respectively
Indian and Brazilian iron ore concentrate imported through the Rizhao Port have been reported to be USD 79.31 CIF for 63.5% Fe and USD 75.59 CIF for 62% Fe respectively
Indian iron ore concentrate imported through the Lanshan Port have been reported to be ranging between USD 69.39 CIF for 61% Fe, USD 79.31 CIF for 63.5% Fe and USD 87.98 CIF for 64.78% Fe
Indian iron ore concentrate imported through the Zhanjiang Port have been reported to be in the range of USD 74.35 75.59 CIF for 63% Fe
Indian iron ore concentrate imported through the Lianyungang Port have been reported to be USD 64.44 CIF for 60.2% Fe, USD 78.07 CIF for 63% Fe and USD 86.74 CIF for 65% Fe
The prices of Australian iron ore concentrate imported through the Yantai Port are reported to be USD 79.31 CIF for 61.5% Fe
FeCr low as stainless demand drops
Ferro chrome prices are still wallowing at low levels, as demand from the stainless sectors continues to drop off. It is reported that high carbon ferro chrome is now changing hands at RMB 5,600-5,700 per tonne ex works, while the medium carbon material is selling at RMB 8,200-8,400 per tonne ex works in China.
With the dry season in south west China approaching, some ferro-chrome producer sources are placing their hopes on power shortages. Supplies could be tightened as the smelters in south west China will not have sufficient rainfall to operate their power stations
But another source with a Jilin based smelter holds a different opinion, citing the threat from the increased imports. We notice that ferro chrome is selling much cheaper in India and South Africa, which must have attracted overseas suppliers to flood a lot more material to China
Another trader in southern China agreed. Stainless mills may well have to choose cheaper material, especially when their own industry is suffering from a long term slowdown, he explained.
China imported 17,971 tonnes of ferro chrome last month, up 17.8% from the record of August 2004. For the first eight months as a whole China imported a total of 187,974 tonnes of the alloy, with the majority coming from Kazakhstan 80,165 tonnes, India 47,651 tonnes and South Africa 56,454 tonnes.
Iran plans to export 10m tons year steel by next four years
Minister of Industries and Mines Mr Ali Reza Tahmasbi has told press that Iran's steel exports should reach as high as 10 million tons year by next four years to help the country have a successful presence in the field. Mr Tahmasbi said Iran has a meager one percent share in the world steel production, making it inevitable to push up the exports.
Mr Tahmasbi said a four billion ton iron ore reserve along with rich energy resources and talented and specialized workforce are the advantages of the steel industry and 28 million to 29 million tons of steel/year should be produced by the end of the Fourth Five-Year Economic Development Plan 2005-10 plans.
Meanwhile, Managing Director of Mobarakeh Steel Facility Mr Mahmoud Eslamian said his company had managed to raise its products to more than two million tons in the first six months of the year and the company's products will reach the record high of more than four million tons by the end of the year on March 20. Furthermore, Mobarakeh Steel Facility is expected to increase its cold roll production capacity to 1,760,000 tons per year from 760,000 tons per year in the period.
US Steel Gary BF project resumes to finish by December
US Steel Corp reports that the repairs to its No 14 blast furnace at the Gary Works will be completed by December, a month later than the rebuild project was expect to finish. After normal start-up procedures are complete, USS says the rebuilt furnace should achieve its new production rate in January 2006.
The $260-million rebuild began August 1. Last week USS announced a multi-wheel carrier transporting a large fabricated furnace section, failed, damaging the carriers and the new furnace section. The damaged furnace section is being repaired now and is expected to be in place within the week
Last spring USS laid out plans to rebuild its No13 blast furnace, the largest in the organization, beginning August 1 and concluding October 30. This furnace would be relabeled as No14 After rebuilding.
BF No 13 was producing 7,045 tons of hot metal per day and after rebuild it is expected to produce 9,200 tons of hot metal per day at 97.5% availability for 20 years.
Amazon giant CVRD aiming to be king in mining jungle
Last week, Brazils CVRD formalized its $670million bid to take over Canadian mining firm Canico, and, according to an executive at one of its rivals, it is hungry for more. A senior manager at one of its rivals said: CVRD will be a company like BHP Billiton within five to 10 years.
CVRD Chief executive Mr Roger Agnelli has stated his intention to diversify into new countries and metals with the aim of becoming the worlds third largest mining firm by the end of the decade.
The Brazilian giants $50bn market value already ranks it number five. Even though it is the worlds largest producer, its colossal iron reserves could still last for 200 years.
Since buying into a coal deposit in Mozambique last year, the company has been scanning the globe for acquisitions, but so far its strategy, offering to take stakes in its targets in exchange for some of its Amazonian riches, has had no takers. French iron ore giant Eramet and Canadian firm Noranda have rejected CVRDs approaches. This has left the company following an organic growth strategy, looking for exploration and development assets in China, Angola and the former Soviet Union.
Part of the reason it has held back from doing anything more aggressive is that its lead shareholder, a consortium of Brazilian pension funds, is unlikely to back a value destructive transaction. If it could bring its shareholders round, though, an obvious way for CVRD to go global at a stroke would be to pounce on the industrys other deal-hungry player, Xstrata.
If CVRD merged its Brazilian wealth with Xstratas assets in Australia and South Africa, the result would be a giant with an enviable spread, both geographically and across the commodities. The challenge would be striking a deal with the Swiss trader Glencore, which holds 40% of Xstratas shares
Baosteel orders second Danieli slab caster
After 6 months from the first order to Danieli Davy Distington, Baosteel awarded the order for a second thick slab caster, to be installed in No.3 plant in Shanghai. It confirms the leading technical position of Danieli Davy Distington as supplier of superior slab casting equipment, as well as reflects customer satisfaction reached during the execution of the contract of the caster for plant No. 4 presently under advanced design stage.
The new contract calls for the supply of a single strand machine with a yearly production exceeding 1.5 million tones per year slabs of 200 and 250 mm thickness with 1500 to 2300 mm width for structural, BQ, SBQ and other special grades
The main features of the machine include vertical curved design with a vertical length exceeding 2.6 meters, a 9.5 main radius and continuous bending and unbending roll diagram, top feeding dummy bar, complete breakout prevention system with thermal mapping of the mould, state of the art INMO mould including in line width adjustment during casting, hydraulically operated oscillator, optimum type segments designed for the application of Dynamic Soft Reduction process, air mist secondary cooling controlled by a dynamic model and a complete automation system including predicting mathematical models for Liquid Pool Control LPC and Solidification process used for Dynamic Soft Reduction DSRC and Dynamic Secondary Cooling DSC system.
This is the Danielis 20th slab strand, 8th in China, adopting INMO mould technology, the last generation patented mould, designed with superior zero clearance guidance system for outstanding slab surface quality.
USW steelworkers reach labor agreement with Mittal Steel USA
United Steelworkers of America leaders have reached an agreement on a new labor contract covering about 5,100 Mittal Steel USA hourly workers, including about 300 on the Iron Range after about 19 months of negotiations. The contract would cover workers at Local 6115 in Virginia, Local 1010 at Indiana Harbor, Ind., and Local 9231 at New Carlisle Works, a steel finishing plant in Indiana.
The executive board "has to look at it yet and approve it, but if they give it their blessing, we hope to be getting information on it out in the next three or four weeks." said Mr Marty Henry, president of USWA Local 6115 at Mittal Steel USA Minorca Mine near Virginia.
"We are pleased that we have a tentative agreement and that the negotiating team has recommended it to the membership," said Mr Dave Allen, a Mittal Steel USA spokesman.
Though details aren't being released, the contract also would give Mittal Steel USA workers an agreement similar to those signed at other domestic steel and iron ore operations.
Steelworkers at other Iron Range taconite plants are working under labor contracts that expire Aug. 31, 2008. The Mittal Steel USA contract is expected to have the same expiration date. In addition to owning Mittal USA Steel Minorca Mine, a 2.9 million ton-per-year taconite plant, Mittal Steel also holds majority ownership in Hibbing Taconite Co.
Iron mining in Penokee-Gogebic Range may restart
It's been four decades since mining ended in the Penokee-Gogebic Range, but the rich deposits of magnetic iron ore remaining in two counties in Northwest Wisconsin are again on the radar. There's no clear indication that iron ore mining will resume, but two land and mineral management companies are betting it will.
A 22 mile long stretch of the range, cutting through Ashland County just south of Mellen, and Iron County through Upson, contains more than 2 billion tons of iron ore. The Penokee-Gogebic range was mined from the 1880s to the 1960s. The iron ore there is buried deep in long, narrow bands, and is difficult to mine. Thats an estimated 15 percent of all recoverable iron ore in the United States.
Over time, production shifted to other areas with wider, more accessible deposits, such as Minnesota's Iron Range. As price of taconite and virgin steel continue to rise, and the reserves of other mines are slowly depleted, the Penokee-Gogebic Range is expected to get more attention from the industry. Mining companies likely will play the waiting game as long as they can before investing in a new mine because it's costly to start from scratch while established mines are producing.
Two companies have secured nearly all of the land and mineral rights in the area, sharing parcels totaling about 22,000 acres. RGGS Land and Minerals, Ltd of Houston controls about 62 percent of the potential mining area. LaPointe Iron Co. and several related interests control the rest. RGGS, led by Texas oilman Mr Russell D Gordy, bought its share of the Penokee-Gogebic Range from US Steel Corp in early 2004 in a deal that included land in Minnesota and 13 other states.
LaPointe Mining Co. was the first corporation ever formed in the state of Wisconsin. It has owned the mineral rights to some of its Penokee-Gogebic Range land for 146 years.
