October, 21 2005
Arcelor announces plans for entry into India
Arcelor has decided to venture into India and the company is now working out a strategy to enter the country. Mr Alain Davezac, VP of international business of Arcelor, France, said the strategy could be decided within six months. We have taken an in-principle decision to come to India. The company is now in the process of evaluating how to go about it, he added.
Davezac said India is a growing and potentially attractive market. It is a cost competitive production area and a major zone of iron ore reserves, he added. However, Arcelor feels that expensive freight and lack of coking coal are some of the challenges facing this industry. It is also concerned about high electricity prices, environmental restrictions and bureaucracy.
SAIL looking at 50 million tonnes in 25 years to keep market share
It is reported in a daily that Steel Authority of India Ltd SAIL plans to ramp up its production capacity of finished steel to 39 million tonnes by 2019-20 and 61 million tonnes by 2029-30. So far SAIL has disclosed its corporate plan for 2011-12, by which time it intends to increase the capacity to 20 million tonnes of finished steel from 11 million tonnes at present.
The new projections are based on the fact that the company will continue to hold 30-35 per cent of countrys steel-making capacity in future. The development is significant as Tata Steel, has also upped its projection to a capacity of 30-35 million tonnes by 2015.SAILs projections are to be viewed in conjunction with the plans of global giants like Mittal Steel, Posco and Arcelor
In its draft steel policy, the government has indicated that the finished steel demand will grow from the existing level of 35 million tonnes to 110 million tonnes by 2020. Keeping the market share of SAIL unchanged at about 30-35%, we have envisaged that finished steel should reach 39 million tonnes by 2019-20,
Mr BN Singh ED Raw Materials is reported to have said that The Company envisaged that the growth rate beyond 2025 will taper off to 3.5% and by 2029-30, SAILs production should be around 61 million tonnes of the national production of 175 million tonnes. From now to that period, the growth rate is expected to stay at 7%.
Jharkhand puts a total ban on ore export
In a significant development, the most mineral rich state in the country, Jharkhand today announced a total ban on the export of mineral ore from the state after a decision was taken in a meeting of state cabinet chaired by Chief Minister Arjun Munda.
Cabinet secretary Mr Aditya Swaroop told press that the government has approved the proposal to ban the export of mineral ore from the state. It has also been decided that the ore would be allowed to be taken to other states in the country only after ensuring the fulfillment of the state's demand,'' he said.
Mr Swaroop said that the new licenses for ore extraction would be issued with a condition not to export the ore to other countries or even other states. The new licensee would have to use the ore in the state only and only the old licensees would be allowed to send ore to other states that too after meeting the state's demands.
Tata Steel to set up pellet plant
It is reported that Tata Steel will set up a pellet plant in Jharkhand or Orissa to cater to its domestic operations and the proposed Bangladesh plant. Deputy MD Dr T. Mukherjee said the pellet plant would be set up close to the mines. We are yet to finalize the capacity or investment required for the plant, he added. However, Dr Mukherjee confirmed that the capacity would be over 10 to 12 million tonnes.
It is also reported that a 5 million tonnes capacity pallet plant requires an investment of Rs 300 to 400 crore. Going by that, the company might need to pump in well over Rs 1,000 crore.
Bangladesh lacks iron ore and to feed the 2.4 million tonnes proposed plant there, the company needs to export ore from India. Both Orissa and Jharkhand are against export of iron ore and are asking value addition to be done within their territories. The pellet plant could be a step in that direction.
JSW Q2 net down by 19.6%
JSW Steel Ltd has announced a dip unaudited results for the quarter ended September 30, 2005
The companys net profit after tax has come down by 19.96 per cent to Rs 106.29 crore for the quarter ended September 30, 2005 where as the same was at Rs 132.79 crore for the quarter ended September 30, 2004.
However, total income has increased by 2.87 per cent to Rs 1543.79 crore for the quarter ended September 30, 2005 where as the same was at Rs 1500.72 crore in Q2 of 2004.
Bharat Forge may become worlds largest forging company soon
Pune-based Bharat Forge, the world's second-largest forging company, which makes engine and chassis parts for passenger vehicles and buses and trucks, had expected to hit $1 billion in revenues and overtake forging leader ThyssenKrupp of Germany by 2008. But it is expected that it may reach its target a year earlier than planned as Western manufacturers are outsourcing more work
After recent overseas acquisitions, Bharat Forge is raising capacity in India to 240,000 tonnes and annual global capacity to 500,000 tonnes by March 2006, which should help it reach its sales target a year early, Executive Director Mr Amit Kalyani said. "We are going to see acceleration in companies hiving off their in-house manufacturing, more manufacturing being done in low-cost centers," Kalyani told Reuters in an interview. "It's a huge opportunity for companies like ours to grab more business."
Bharat Forge bought bankrupt Federal Forge Inc in June and has bought two German components firms in the last two years. It also acquired Imatra Forging group in Sweden and Scotland, and is looking to establish a plant in China.
Bharat Forge supplies to Volvo AB and DaimlerChrysler AG, but he said Indian revenues would also grow as the auto market expands and new emission norms come into effect. India's auto parts industry has the potential to expand five-fold by 2015 to between $33 billion and $40 billion, according to estimates by consulting firm McKinsey & Co.
Global crude steel output increases in September 2005
In line with the figures released by the International Iron and Steel Institute IISI, world crude steel production for the 61 countries reporting to the IISI was estimated to be 92.1 million tonnes in September 2005, which marks a 3.5% increase as compared to the same month of 2004. The figure was 91.4 million tonnes in August 2005.
China, with production of 30.4 million tonnes of crude steel in September, was again the largest crude steel producing country. Year-to-date production reached 255.3 million tonnes, up 27.4% from a year earlier. Total production in the Asia region was 48.2 million tonnes in September, an increase of 14.3% on September 2004.
Crude steel production in Germany amounted to 3.6 million tonnes in September, down 7% compared to the same month last year. The United Kingdom produced 1.0 million tonnes of crude steel in September, 13.3% lower than the same month in 2004.
Turkey produced 1.7 million tonnes of crude steel in September, 0.6% higher than in September 2004.
Crude steel production in the US was 7.8 million tonnes in September. This is a decrease of 7% compared to September 2004. Production in Canada was 1.2 million tonnes, 13.6% lower than in September 2004.
Addox file case in NY court seeking ban on Krivorozhstal tender
Former owners of Krivorozhstal have attempted to ruin privatization of the enterprise via the US court.
Addox has filed a suit to the South District Court of New York seeking the ban on Krivorozhstal tender slated for October 24, 2005. Among the defendants are Ukraine, future successful bidder and Industrial Group where Arcelor is a co owner.
Addox holds 10% of ADRs of Nizhnedneprovsk Pipe Mill, the owner of the 10% of Mr Viktor Pinchuk and Mr Rinat Akhmetovs Investment & Metallurgical Union the former owner of steel mill. In the suit brought in New York court on October 14, Addox claims, although de-facto, it was Krivorozhstals co owner for 11 months and seeks the ban on repeated privatization of the enterprise as it will devaluate ADRs of the pipe mill and cause damage to the US investor.
It is reported that some independent lawyers dont think that any court of US will admit the suit of Addox. As a sovereign state, Ukraine is not governed by the jurisdiction of US courts
Nucor profits slip on falling prices
Nucor Corp's third quarter earnings slid 30%, but the earnings and sales for the first three quarters of 2005 remained ahead of the same period last year.
Weaker steel prices in Q3 drove earnings down from the same period of 2004, the company said.
For the quarter ended in September, net income declined to $291.9 million from $415.4 million. Revenue slipped 7% to $3.03 billion from $3.24 billion in the year-ago period.
Nucor, which recycles scrap and produces steel, said its average sales price per ton fell 15% YOY, although total tons shipped rose 9% during the period. The average cost per ton of scrap and scrap substitute fell 13% from a year ago to $217. Meanwhile, energy costs were up $12 per ton in the same period.
Australian nickel producers still buoyed by China demand
Australian nickel producers said that they are fielding plenty of inquiries from Chinese buyers, with no let-up in Asian demand for the steel-making ingredient. The continued interest from China together with a lack of spare mining capacity suggests that steelmakers will be paying relatively high nickel prices in the near, the producers said.
The buyers are mostly chasing nickel briquettes, but Minara, operator of the Murrin nickel mine in Western Australia, has no spare supplies. Europe recently experienced a drop in nickel usage due to cutbacks in stainless steel production, but "China is soaking up the world supply at the moment", he said.
Minara is Australia's second biggest nickel producer after BHP Billiton. Murrin, 60%-owned by Minara, is expected to produce around 30,000 metric tons in the fiscal year ending June 30, 2006, rising to 36,000 tons the following year.
Mr David Moore, MD of Mincor Resources NL, said that his company is also fielding inquiries from Chinese nickel buyers roughly once a month. However, Mincor has a long-term supply agreement with BHP's NickelWest unit and "we don't have any free concentrate", Mr Moore said. "So we don't pursue these approaches," he said. The global nickel mining industry is "at capacity", Moore said, adding that he expects prices to remain strong. "Developing mines is getting more expensive," he said. "So basically if the world wants the metal, it will have to continue to pay these prices," he said. Mr Moore said that Mincor expects to produce around 13,000 tons of nickel this fiscal year, ending June 30, from its mines in the Kambalda region of Western Australia.
Some analysts had predicted a slowdown in China, but the latest statistics show the country's imports of the metal rose 32% YOY in the seven months to the end of July a producer said. This means that nickel prices will "stay positive", he added.
Nickel prices are currently around US$12,350/ton, well down from their recent peak in May of nearly US$18,000, although still twice their level of three years ago.
Kazakh ore giant to double exports to China in 2006
Sokolov Sarbai Mining Production Association SSGPO, Kazakhstan's biggest iron ore producer, intends to more than double iron ore exports to China next year to 5 to 6 million tonnes, from the 2.5 million tonnes anticipated in 2005,
Mr Mukhamedzhan Turdakhunov, SSGPO's president, said that China is a very promising market for SSGPO. But he said also that SSGPO would not be neglecting its long standing partner MMK. He added that MMK would be SSGPO's main customer, and that "60% of our output will go to MMK."
SSGPO stopped exporting ore to MMK in May this year after the two companies argued over prices. But the two resolved the conflict at the end of July and the shipments resumed at the end of August.
SSGPO produced 14.8 million tonnes of iron ore commodities in 2004 and is targeting 16 million tonnes in 2005.
Nippon & Mitsubishi to invests in emissions project
Nippon Steel Corp., Japan's biggest steelmaker, and Mitsubishi Corp. will invest in the world's largest emissions credit project to help meet Japan's pollution reduction targets under the Kyoto Protocol.
The project, based in China, will generate 55 million metric tons of emissions credits, Tokyo-based Mitsubishi said. Nippon Steel, Mitsubishi and a Natsource LLC unit will get 10 million tons of credits a year from mid-2007 through to 2012 by cutting fluorocarbon emissions from Shandong Dongyue Chemical Co.'s operations.
The China project falls under the Kyoto Protocol's clean development mechanism, which allows companies to invest in projects to cut pollution in developing nations, said Mitsubishi, Japan's biggest trading company.
Steelmakers, utilities and trading companies are investing in pollution-reducing projects overseas betting the value of the emissions credits will rise. CDM projects also are attracting funding as lowering pollution levels at home to meet targets set under the protocol is more expensive and challenging
Coal export duty hurting investment in Indonesia
The recently imposed 5% export duty on coal will not yield significant revenues for the government and will deter future investments in the coal mining sector as per Mr Jeffrey Mulyono Chairman of Indonesian Coal Mining Association. While the firms that acquired the first generation contracts to exploit coal could reclaim the export duty, as most contracts stipulate that miners would not be affected by any new duties and taxes, new investors will be discouraged, seeing how easily regulations can change here," he added.
The Ministry of Finance issued a decree on Oct. 11, stipulating that all coal exports would be charged a 5 percent duty based on FOB prices. The decree is effective immediately.
Indonesia exports some 70% of its coal, mostly thermal coal used to generate power, to Japan, Taiwan, South Korea, India and China. This year's production is predicted to reach 155 million tons, and with the current high prices, the association has estimated next year's total will rise 12 percent to 175 million.
Euro Finance Ltd to invest $300 mln in Bila Tserkva mill
Euro Finance Ltd, which controls six Ukrainian scrap metal collection companies, is planning to invest $ 300 million in the construction of a mini steel mill in Bila Tserkva of Kiev region as per an announcement from Mr Valentyn Makarenko VP
The annual capacity of the new facility is expected to be one million tons of steel products.
UKs Altan Resources Ltd to open Taiwan office
UK based steel and pig iron merchant Altan Resources Limited has announced opening of a new office in Taipei, to increase their trading activities in the Far East. Mr Joachim Schweimler MD of ARL, a former executive director of Macsteel International, has informed that Mr Colin Guo will be in charge of their operations in Taiwan.
ARL specializes in handling pig iron, steel, stainless steel and ferro alloys and handles their both bulk and containerized shipments. Their operations are spread across several countries including Brazil, Korea, Hong Kong, China and Indonesia
Japan Q4 ferro chrome price fall
The term price for ferro chrome between a top Japanese buyer and two key South African suppliers has been reduced by 6% to 73 cents a pound for October to December. The price reduction was the second consecutive quarter on quarter cut and followed a 6% cut to 78 cents for July to September. The fourth-quarter price was the lowest since the January to March quarter last year.
The price dropped as stainless steel makers were cutting output due to oversupply, said an official of Nippon Steel & Sumikin Stainless Steel NSSC. "We've asked the suppliers to lower the price as we've been reducing our production in our (stainless steel) products," the official said.
The South African suppliers - Xstrata, the world's biggest producer, and Samancor Chrome, another major producer were hesitant about cutting the price sharply due to rises in the South African rand
NSSC and the suppliers conduct a review each quarter to set a term price for Japan, which is also seen as an important benchmark in European markets, industry sources said. Backed by robust demand from the automobile and electronic sectors, the price had risen steadily to a record 83 cents during April-June as the market faced supply shortages. The term price was at 39 cents in January to March 2003.
NSSC, the top Japanese stainless steel producer, is a joint venture between top Japanese steel maker Nippon Steel and third-ranked Sumitomo Metal Industries formed in October 2003.It produced about 1.1 million tons of SS in 2004, equivalent to one third of total domestic output.
Gerdau Aza investing to upgrade scrap recycling unit
Chilean iron and steel company Gerdau Aza, a unit of Brazilian long steelmaker Gerdau, has budgeted $20mn in upgrades to its scrap recycling plants in 2005, company CEO Mr Hermann von Mhlenbrock told local press. $15mn of investment is programmed for 2006 and in 2007 the company will begin investment in an expansion to almost double plant production, he added
"From 2007 we should start an important investment of about US$100mn to expand the plant to 750,000 tonnes by 2010," he said, adding that the "bicentenary project" was still in early engineering phase. Gerdau Aza processes almost 500,000t/y of scrap. The company covers almost 70% of demand for scrap metal provided through a network of scrap collectors
The company forecasts production of roughly 400,000 tonnes in 2005 and 2006 but expects to exceed this figure in 2007. Last year, Gerdau Aza produced 371,000 tonnes. 90% of Gerdau Aza's production includes bars and rolled steel shapes, which go to the domestic civil construction and metal-mechanics industries. The company also exports to Ecuador.
The company has two production plants, Renca and Colina, in the industrial areas of Chile's capital Santiago and provides 430 direct jobs.
AK Steel dedicates new degasser and caster at Ashland Works
AK Steel held a dedication ceremony yesterday for its new vacuum degassing unit and converted caster at the company's Ashland, Kentucky Works. The projects are part of a nearly $120 million investment at Ashland Works in recent years, which also includes blast furnace refractory work, the rehabilitation of coke batteries and a restart of an idled coke battery. The project was completed two months ahead of schedule with the first heat of molten metal processed through the degasser on July 28, 2005.
Completion of the project would enable AK Steel to more closely match its steel production capabilities with customer requirements for ultra-low carbon steel products, primarily for automotive and appliance markets. Completion of the project eliminates AK Steel's need to purchase degassed steel slabs from outside sources.
Headquartered in Middletown, Ohio, AK Steel produces flat-rolled carbon, stainless and electrical steel products, as well as carbon and stainless tubular steel products, for automotive, appliance, construction and manufacturing markets
Malaysia Steel to expand its billet capacity
Malaysia Steel is spending RM100 million to RM120 million on a new 150,000 ton section mill plant to broaden its product range. The plant will produce different grades of channels and angles used in the manufacturing,
To cater for the needs of the new plant, Malaysia Steel will expand its billet capacity to 450,000 tons by the second quarter of 2006. It also aims to increase exports including about half of its eventual section mill output.
Jinchuan acquires almost 10 percent of Canada's GobiMin
Northwestern China's Jinchuan Group, the largest nickel producer in the country, recently bought a 9.996% stake in GobiMin Inc a Canadian mining company for CAD 3.06 million. GobiMin will supply nickel ore to Jinchuan, to supplement to Jinchuan's increasing nickel capacity projects.
The GobiMin operates a nickel mine in northwestern China's Xinjiang Province and all the output from the mine will be provided to Jinchuan from 2005 to 2009.
Apparently, GobiMin's supply is not enough for our capacity by 2008. The company is now negotiating with Australia's Allegiance Mining Co. for developing the Avebury nickel sulphide mine in Tasmania Australia.
The company plans to increase nickel capacity to 150,000 tons by 2008. Last year, Jinchuan produced 70,000 tons of nickel products, and output is expected to climb to 90,000 tons this year. The company expects 102,000 tons nickel product in 2006.
Anglo American approves $516 mln coal project
Anglo American has announced that its board has approved a $516 million project to ramp up production of metallurgical coal Lake Lindsay project in Australia. The Lake Lindsay metallurgical coal project, 30% owned by Mitsui Coal Holdings, will raise output at Anglo's German Creek mining area in Central Queensland to 10 million tonnes a year from 6 million currently. Construction at Lake Lindsay is due to start later this year with production coming on stream in late 2006
When Lindsay reaches full production together with the recently announced Dawson project, another JV with Mitsui, Anglo's metallurgical coal output will rise by 5 million tonnes to 16 million tonnes a year.
"Anglo American's global coal business is continuing to expand. The Lake Lindsay project will enhance Anglo Coal's position in the metallurgical coal market by broadening its product range and significantly increasing metallurgical coal production," said Anglo CEO Mr Tony Trahar.
The price of metallurgical, or coking, coal has jumped around 120 percent for contracts that run up to March next year, on the back of strong demand from Asia, and China in particular.
Anglo also produces around 80 million tonnes of less-valuable thermal coal each year, which is used to fuel power stations.
Itochu, Mitsui to increase iron ore output at Australian JVs mines
Itochu Corp and Mitsui & Co have announced that they will hike iron ore output capacity at their BHP JVs mines in Australian. The combined additional investments will be total Y180 billion ($1.57 billion), with Itochu spending Y14.4 billion and Mitsui Y12.6 billion to increase the annual output capacity at the northwestern Australian mines by 20 million tons to 129 million tons by 2008.
The output increase is designed to keep up with growing global steel demand, led by strong demand from China, the report said, quoting Itochu and Mitsui. E
WISCO cooperates with Sojitz for overseas projects
The WISCO Engineering and Technology Co Ltd, a wholly owned subsidiary of WISCO, signed an agreement with Japan's Sojitz Corp. to cooperate on overseas metallurgical construction projects and an equipment sourcing information exchange. Sojitz has a comprehensive information network worldwide with many industries and through the agreement, Sojitz will provide metallurgical project information to WISCO to get more business opportunities.
On the other hand, WISCO is building many projects for capacity expansion of high end products, which needs much key equipment from overseas. Sojitz will provide us with information of oversea equipment builders with good credits
Sojitz is one of Japan's largest comprehensive traders. It also provides information consultancy services to its clients because of its many representative offices around the world.
Reliance Steel & Aluminum Q3 profit rises by 12%
Reliance Steel & Aluminum Co, a leading metal processor and distributor, reported that its Q3 profit rose 12% bolstered by demand from the aerospace industry and a steel acquisition it completed in July
For the quarter ended September 30, Reliance reported net income of $49.4 million compared with year ago profit of $44.1 million. Sales rose 11% to $870.1 million from $783.7 million a year ago.
BHP Billiton approves Samarco pallet plant expansion
BHP has approved the expansion of the Samarco, their third Pellet Project in Brazil that will cost the company $590 million to increase annual iron ore pellet production capacity to 21.6 million tonnes per annum, an increase of 7.6 million tonnes.
"This expansion is consistent with our strategy of maintaining our position in growing iron ore markets," BHP Billiton iron ore president Mr Graeme Hunt said. "Samarco is a low cost supplier of seaborne pellets with a strong customer base. Investment in a third pellet plant will consolidate its strong market position and will enhance BHP Billiton's exposure to the important iron ore pellet market."
BHP Billiton has a 50 per cent stake in Samarco, with CVRD holding the remaining 50 per cent
Maanshan Iron & Steel Q3 profits unchanged
Eastern China's Anhui province based Maanshan Iron & Steel Co has announced that its third quarter net profit growth was little changed from the same time last year, as oversupply of steel products weighed on prices.
The firm posted a net profit of Yuan 576.97 million for the three months ended September, compared with Yuan 574.24 million in the same period last year, based on Chinese accounting standards.
Revenue in the period rose to Yuan 8.11 billion from Yuan 6.46 billion.
Novamerican Steel announces new President
The Board of Directors and Mr D Bryan Jones, Chairman and CEO, of Novamerican Steel Inc have announced the appointment of Mr Scott B Jones as President of the Corporation. Mr Scott Jones has been a vice president, secretary and a director of the Corporation since April 1997 and has seventeen years of experience in the steel industry. Mr Bryan Jones, formerly President of the Corporation, will remain as Chairman and CEO.
Novamerican Steel Inc., based in Montreal, Canada with twelve operating locations in Canada and eleven operating locations in the United States, processes and distributes carbon steel, stainless steel and aluminum products, including carbon steel tubing for structural and automotive markets.
AK Steel names Mr Wainscott as chairman
Mr James L Wainscott, who was named AK Steels president and CEO in a management shakeup two years ago, was elevated to chairman of the board of the Middletown-based steel maker. Mr Wainscott, 48, who will continue as the companys president and CEO, will become chairman on January 1
He succeeds non executive chairman Mr Robert H Jenkins, who was elected in September 2003 when the board fired then chairman and CEO Mr Richard Wardrop Jr.
Mr Wainscott, who joined AK Steel as vice president and treasurer in 1995, got high marks from unions, the community and environmental groups for reopening lines of communication they said were shut off under his predecessor. He also led an extensive restructuring at AK Steel that included hourly and salaried job cuts. The restructuring, aided by the rebound in the steel market, returned the company to profitability last year after several years of losses.
Universal Stainless Q3 earnings up by 20%
Universal Stainless & Alloy Products Inc has announced that Q3 earnings rose 20% on strong demand in its aerospace, power generation, petrochemical and tool steel markets.
Net income rose to $3.3 million as against $2.7 million in Q3 of 2004 and revenue rose 29% to $43.1 million from $33.3 million last year.
Looking ahead, the specialty steel maker said it expects fourth-quarter shipments to re roller customers will continue to decline, as it expands its focus on supplying value-added products. Also, the company anticipates slightly lower sales of special shape products due to the work stoppage at its Titusville plant
Scot Forge installs new press at Spring Grove site
A new forging press, touted by its makers to be one of the largest of its kind in the world, is up and running at Scot Forge, 8001 Winn Road. The custom-made, two column, open die press made its first production piece on August. 22. Design to startup took more than a year after management approved the project in July 2004.
The hydraulic press is about 60 feet high and 22 feet wide with a 14 by 15 foot opening and is capable of generating 5,500 tons of force while manipulating carbon and alloy metals. The new press is named Big Del, for Mr Del Hendrix, a retired plant manager who worked at Scot Forge for more than 40 years.
"There are a limited number of press manufacturers available in the world," said Mr Ronald Hahn, director of engineering at Scot Forge. He was part of a six-member team that designed and built the press. To get an outside company to build it within our time frame and to our specifications would have been difficult. Internally, we have the abilities to design and build it, and we were able to do it in much less time."
Scot Forge, an employee owned company, manufactures metal open-die and rolled-ring forgings. It creates custom steel parts for about 6,000 customers, mostly throughout the United States.
