October, 05 2005
SAIL hopeful of 8-9% growth this fiscal
The steel major, Steel Authority of India Ltd SAIL is likely to record a growth of between eight-to-nine per cent during the year despite recording a growth of about 11 per cent till now, the company Chairman Mr VS Jain, has said.
"The growth during the full year will be around 8-9 per cent although the growth till now has been about 11 per cent," Mr Jain told
Indian alloy steel makers line up massive expansion plans
Leading alloy steel manufacturers Mukand, Usha Martin, Mahindra Ugine, Sun Flag and Aarti Steel have lined up massive expansion plans lured by the booming demand from automobile and components sectors. This expansion spree is expected to double the 2.12 million tonne domestic alloy steel market in a couple of years.
Mukand is expanding its capacity to 4,60,000 tonne from 3,30,000 tonne for an investment of Rs 120 crore. Mukand will use de bottlenecking and productivity improvement initiatives to increase capacity
Usha Martin is, however, planning to adopt the greenfield route for expanding its alloy and special steel manufacturing capacity to 5,00,000 tonne from 3,20,000 in two years by spending Rs 650 crore
Mahindra Ugine will expand its capacity to 2,40,000 million tonne per annum by 2008.
Sun Flag plans to increase its capacity to 4 lakh tonne from 2.25 lakh tonne.
Alloy steel is obtained when regular steel is mixed with a mixture of metals such as chromium, nickel, molybdenum, vanadium, manganese, silicon, and boron, depending upon the end-use. Addition of alloys helps in improving mechanical properties such as impact, hardness, tensile strength, and yield stress.
Further, alloy steel makers are planning to increase prices by 3-5 per cent over two to three months.
Un shredded metal scrap imports from Bandar Abbas barred
Government has closed the route for import of un shredded metal scrap from the Iranian port of Bandar Abbas. It has now stipulated that only shredded metal scrap can be imported from this port of shipment. Any import of unshredded metallic scrap from certain specified ports such as Bandar Abbas should be treated as violation of foreign trade policy and stringent penal action should be taken, the Central Board of Excise and Customs CBEC has advised its field formations.
This is the fallout of CBEC's move to align the customs clearance procedures with the recent changes in the exim procedures effected by the Directorate General of Foreign Trade (DGFT), in respect of metallic scrap imports. The DGFT had in mid-September stipulated that import of metallic scrap would be allowed only in shredded form from the ports listed under a specified list in the Handbook of Procedures.
Industry sources said the port of Bandar Abbas was near strife-torn Afghanistan, and pointed out that the killer scrap that took 10 lives in Ghaziabad last year had originated from there.
Tata investment proposal runs into rough weather
The National Board of Revenue (NBR) Tuesday turned down Tata Group's demands that were not in conformity with the country's existing rules and regulations. "We could not agree with the demands made by the Tata Group for fiscal incentives as those do not conform to the country's existing policies," said high official of the board.
The board has, however, advised the Indian conglomerate to place its demands along the line of country's existing rules and regulations during a meeting at its central office.
In the meantime, finance and planning minister M Saifur Rahman asked the Tata Group not to place unusual demands as pre-conditions to making their proposed US$ 2.5 billion investment. "I have suggested them not to place unrealistic demands like tax and VAT exemptions," Mr Saifur told reporters
The Tata Group is now in the third round of negotiations with the secretary level committee on its proposed investment on steel, power and fertiliser plants.
When contacted a Tata Group official refused to comment on the meeting between the NBR and the group. He said there is no more scheduled meeting on fiscal incentive this round.
Mittal Steel likely to be last mega steel plant in Jharkhand
Dwindling iron ore reserves and water availability have forced the Jharkhand government not to entertain any major investments in the steel sector after the proposed inking of a pact with Mittal Steel for a mega plant. "The state government has decided not to entertain any mega projects in steel. Iron ore reserves in the state will not last beyond 50 to 60 years once current proposals for steel plants are converted into reality," a government official told press.
Two million tonnes of iron ore and 20 million litres of water are needed to produce one million tonnes of steel. Experts pointed out that about a third of water is wasted in the process and only advanced technology can help recycle the remaining quantity.
Taking into consideration deals that have already been inked and proposals received, Jharkhand is set to add 42 million tonnes to its annual steel production capacity in about 10 years. This will make it the number one state in India in steel production, but the requirement of raw materials and water will create a huge burden.
Along with the existing plants of Tata Steel and Bokaro Steel, the state will need 106 million tonnes of iron ore and 1,060 million liters of water for its proposed 53 million-tonne steel plants.
SAIL to fund BCCL mine upgrade
Bharat Coking Coal Ltd BCCL, a Coal India subsidiary, has tied up with Steel Authority of India Ltd for funding mechanization in its underground Moonidih mine to boost production of coking coal. Funds of over Rs 300 crore have tied up with Sail for induction of two powered support long wall face in the Moonidih mine, BCCL CMD Mr Partha S Bhattacharyya told us here.
In the first phase Sail would provide Rs 166 crore and Rs 145 crore would be given in the second phase The production of 1.2 million tonne of coking coal from Moonidih mine would be supplied to Sail, he said.
Talks were also underway with Sail and Tata Steel for developing Kapuria block through underground mining as a joint venture, the BCCL chief said.
Sail has also confirmed that the company was holding talks with BCCL for developing the mining block to ensure supply of coking coal for its steel plants. With rapid increase in the prices of imported coking coal since last year, BCCL, he said, had leveraged this opportunity to internalise a higher price for its washed coking coal supplies to the steel sector.
Given the condition prevailing in the market for imported coal, Sail and BCCL have agreed to differentially price the prime washed coking coal and create for it a margin of around 22 per cent over medium washed coking coal.
Import defaults by power utilities irk coal ministry
According to highly placed sources in the coal ministry, the move is being contemplated in view of poor showing by power utilities, which reported only 25% of targeted coal imports for the current fiscal till end-September.
There is concern that low imports would put pressure on state-owned coal producing companies for additional allocation. Domestic companies are finding it hard to meet demand for coal as production has not kept pace with demand.
Against a target of 13.45 million tonne of coal imports sought by power utilities, it managed to import just 3.8 mt till September 30. Even during2004-05, power utilities imported just about 30% of targets.
Sources said that coal minister Mr Dasari Narayana Rao has asked senior officials of the ministry to take up the coal import issue immediately with the power ministry and Central Electricity Authority (CEA) so that the matter can be resolved.
The ministry has already apprised the power ministry that domestic coal companies would not be able to meet additional demand of coal by power utilities in case of import default. Against a coal production target of over 400 mt during current fiscal, coal shortage is expected to be about 39 mt. The coal ministry has provided coal linkages of about 279 mt to power utilities for 2005-06.
The proposed import of 13.45 mt amounts to about 25 mt tonne of coal available through domestic sources due to its superior quality.
RINL to raise debt for expansion
Rashtriya Ispat Nigam Ltd RINL has ruled out funding of expansion plan through an initial public offering IPO and it is reported that given the liquidity in the market, the company could go in for more borrowings. The expansion program would cost more than Rs 8,000 crore and the central government advised company to keep the ratio at debt equity ration at 1:1.
In line with the increasing demand projections in the country, RINL has made plans for capacity expansion to 6.3 million tonne by 2008.The expansion would be completed in two stages.
In the first stage, all process units along with wire rod mill and seamless tube plant would be commissioned in 36 months by 2007-08.
In the second stage, special bar mill and structural mill would be comissioned in 48 months from the go-ahead date.
Tata Ryerson plans expansion of its production base
Tata Ryerson Ltd, a 50:50 joint venture between Tata Steeland Ryerson Tull of the US is planning to set up rebar processing facilities in Faridabad to leverage on the growing market. The company is hopeful of generating a revenue of around Rs 1,500 crore by 2007-08.
The company was augmenting its steel processing and distribution capacity in a phased manner to 2 million tonnes per annum by March 2008 with an estimated investment of around Rs 200 crore, which would be generated by way of internal accruals and debt.
Besides augmenting capacities at its plants in Jamshedpur and Pune, Tata Ryerson was setting up a 50,000 tonnes per annum capacity fully automated rebar processing facility at Faridabad with a view to meeting the demands of the infrastructure segment of the National Capital Region.
The Faridabad plant, in which Rs 30 crore would be invested, would also cater to the needs of automobile ancillaries in the northern region. The plant is slated to be inaugurated on October 18. In the first 12 months of operations, revenue from the Faridabad plant is expected to be around Rs 120 crore.
In the next fiscal, a processing facility would be set up in Bangalore at an estimated investment of Rs 20 crore. The plant would have among its primary customers South India-based automobile and auto ancillary companies. It would also produce thick plates that could find takers by companies such as L&T and Bharat Earth Movers Ltd, among others.
Tata Metaliks to acquire independent coal & ore mines
Tata Metaliks is looking at acquiring iron ore mines and coal blocks in the country and MD Mr Harsh K Jha has informed that the applications for acquiring the mines had been sent to the concerned ministry. "But it's a long drawn process. So we cannot predict a specific time frame to acquire the mines." Mr Jha said that "Our entire requirement of raw iron ore is provided by Tata Steel. But they have plans of expansion and so do we. At one point Tata Steel will not be able to supply us with the raw material. So self sufficiency is the aim"
Commissioning of a second blast furnace a few months back helped Tata Metaliks increase its production of foundry based pig iron to 3.25 lakh tonne during the current fiscal. "We hope to reach 3.5 lakh tonne by 2006-07. The company spends around Rs.6-7 crore annually for modernisation and increasing production capacity," stated Jha. "Our target is to reach a capacity of half-a-million tonne during the next few years. For that we will need to commission a third blast furnace at an investment of about Rs 65-70 crore."
Elecon Engineering wins Rs264.2mn wagon tippler contract
Elecon Engineering Company Limited has announced that it has won a contract valued at Rs264.2mn from Andhra Pradesh Power Generation Corporation Limited (APGENCO), Hyderabad for design, engineering, manufacture and supply of Wagon Tippler, associated equipments and conveying system for their Coal Handling Plant, Rayalaseema Thermal Power Project.
The contract is on a turnkey basis, which includes associated electrical, civil and structural work due to be completed by November 2006.
The Company said that, this will be the 10th Elecon made Wagon Tippler to be installed by APGENCO, covering 80% of the total Wagon Tippler installation by the Corporation, building the confidence in the power industries on performance.
Kanishk Steel forms consortium to market steel products in TN
Chennai based Kanishk Steel Industries Ltd has formed a Steel Firm, an exclusive steel consortium to market Kanishk range of products for entire Tamil Nadu as a part of marketing strategy to reach customers in an efficient manner.
The current distribution channel comprised hundreds of dealers and retailers controlling more than a third of the steel going to the customers. Whereas Steel Firm comprises of main dealers Indian Steel, Union Steel, Raja Steel and Jaysons Steel having exclusive rights from Kanishk to market Kanishk TMT bars and Structural in Tamil Nadu.
Kanishk Steel is also looking at the possibility of employing similar distribution model in neighboring states
Kanishk Steel had recently set up a sponge iron plant in Tamil Nadu for producing superior quality TMT Bars. As part of its marketing initiatives to strengthen the company's presence in the TMT Bars category and expand its base to other markets, it also charted out an aggressive plan for various brand-building initiatives.
Vizag port to expand iron ore handling facilities
The Visakhapatnam Port has decided to take a Rs 197 crore soft loan from the Japan Bank for International Cooperation (JBIC) to modernise its iron ore export facility Ore Handling Complex OHC. The move is aimed at enhancing the iron ore exporting capacity of OHC from the existing 100-120 lakh tonnes to 190-200 lakh tonnes, according to Mr K Ratna Kishore, chairman, Vizag port. The port is expecting the iron ore exports to touch 230-lakh tonnes by 2010. Keeping this in mind, the management has decided to modernise the existing facility, Mr Kishore said.
At present, MMTC Limited, National Mineral Development Corporation NMDC and private steel companies like Hy-grade Pellets, Vikram Ispat, Ispat Industries Limited and more than 20 iron ore exporting companies use Vizag port for exporting iron ore. During last fiscal, the port handled about 140 lakh tonnes of iron ore through its mechanical handling facility
As per the modernization plan, the port will add new and higher capacity equipment like wagon tipplers, bucket wheel reclaimers and other related equipment to its OHC. Apart from this, it will increase the outer harbor depth from the existing 16.5 meters to 18.1 meters to accommodate 2,00,000 DWT vessels at the outer harbor. It will also strengthen its existing two ore berths.
Simplex bags Rs 260 crore highway project
Simplex Concrete Piles (I) Ltd has secured a Rs 260-crore project from the National Highway Authority of India (NHAI) for executing the Lucknow-Muzaffarpur National Highway. The project involves making the 40-km Gorakhpur-Gopalganj section of the National Highway No 28 a four-lane one, which falls in Uttar Pradesh. The project is scheduled to be completed within 36 months.
Simplex Concrete is known to have the largest fleet of pile drivers outside the US and a whole range of other construction equipment, including cranes, hydraulic excavators, dumpers, generators, compressors, well-point dewatering sets and slip form equipment.
The companys construction activities include the execution of big industrial projects, piling jobs, constructions of ports and bridges, setting up of power projects, processing plants and commercial and industrial complexes.
Simplex Concrete, the largest infrastructure solutions providers, clocked up a turnover of Rs 1,000 crore in 2004- 05, an increase of 53 per cent over the last years figure.
Jindal Stainless planning overseas offices
Jindal Stainless is now planning to establish trade offices in Singapore and Dubai. While the Singapore office would help in tapping the demand in the South East Asian region, Dubai office would be used to tap Middle East and Africa.
JSL has increased their capacity at Hissar plant, acquired a plant in Indonesia and is setting up a Greenfield plant in Orissa and would need strong marketing channel to push increased volumes, especially in view of the sluggish market conditions in SS market
Bidding process for Machilipatnam port begins
The Andhra Pradesh government has initiated the bidding process for the development of Machilipatnam minor port as a deepwater port facility under private sector. This is the fourth port in a series that is going in for development under the private sector following Kakinada, Gangavarm and Krishnapatnam ports, which were given to private players by the previous government
The state government intends to complete the selection of developer for the Machilipatnam port development, which is estimated to cost nearly Rs 1,100 crore in 3-4 months from now. The government is planning to provide 3,000 acres of land for the integrated development of the port including the development of a port-based SEZ or a Free Trade Zone in public-private partnership. The government has invited expressions of interest (EoIs) from experienced port developers by October 29, 2005.
Battle for Erdemir Turkish OYAK places $2.77 billion highest bid
Turkey's OYAK, an industrial venture representing the army pension fund, placed the highest bid of 2.77 billion dollars for a 46.12-percent stake in the country's biggest steel company, Erdemir. OYAK's bid exceeds the market value of Erdemir's shares slated for privatisation by 86 percent. Under Monday's quoting prices, Erdemir's entire asset was valued at 3.2 billion dollars and its 46.12-percent share at 1.4 billion dollars.
Under the bidding conditions, the winner is obliged to also buy a 3.17 percent share held by a public bank.
The OYAK bid needs to be approved by the Competition Board and the Privatisation Board before the sale can go ahead.
If the result of the tender is approved, OYAK will have the option to pay the total price at once, or pay 50 percent immediately and the remainder in equal installments in two years with a seven percent interest rate.
The tender took place as some 500 Erdemir workers and trade unionists gathered at a central park in Ankara, shouting anti-government slogans and pledging to oppose moves to privatise the institution.
Coking coal prices will stay high
Coking coal prices are forecast to remain at high levels until the end of 2006but increasing supply from Australia has caused Citigroup Smith Barney analysts to predict a rollover of the current contract price of $125 per metric ton. Previously, these analysts had forecast a rise to $135 for 2006 deliveries.
Supply of merchant coking coal was tight in 2004, boosting the price by 119% on 2005 supply contracts. But, in a new research note, the Citigroup Smith Barney analysts report a surge in bituminous coking coal supply this year from Australia.
Some commodity analysts suggest Australia's ability to supply more coking coal shipments is being hampered by capacity at some export port terminals.
But the Citigroup Smith Barney analysts note the Australian miners are overcoming the infrastructure constraints by exporting coking coal at the expense of lower-priced thermal coal used to fuel factory boilers and power plants
Steel makers set to battle rising iron ore prices
Steel makers will fight any attempt by iron ore miners to raise prices, even as top importer China sucks in 25% more of the raw material this year to fuel rapid industrial growth, steel company executives said. They said iron ore from new and expanded mines in Australia, Brazil and India would ease tight supply that sparked a 71,5% jump in prices this year. Steel company executives also warned high raw material prices were not sustainable for the industry as a whole.
"It's good for suppliers to raise prices, but they have to remember that users could look for alternatives to steel if prices become too high," said Mr Shoji Muneoka, executive vice president of Nippon Steel. IISI Secretary General Mr Ian Christmas noted iron ore prices had climbed 256% since January 1999, while steel prices had risen only 156% in the same period. "We need to tell others in the supply chain not to kill the goose that laid the golden egg," he told the meeting.
But the iron ore miners view things differently.
Mr Roger Agnelli, CEO of the world's top iron ore minerCVRD, said last week that tight market conditions would persist as Chinese demand grew strongly.
Iron ore fines currently cost an average $39,26 per dry metric tonne, up from $22,89 last year. When talks to set next year's price begin in earnest, they are bound to be tough.
IISI releases short range outlook Good prospects for steel
The International Iron and Steel Institute (IISI) has issued its Short Range Outlook for Steel Demand. The Outlook forecasts the development of the Apparent Demand for Finished Steel Products until the end of 2006.
The prospects are good for continued real growth in the demand for steel worldwide according to the latest projections by IISI. Apparent Steel Demand is forecast to grow to between 1,040 and 1,053 million tonnes in 2006 from a total of 972 million tonnes in 2004. This is a growth of 4-5% over the two year period.
The strongest growth continues to come from China which should see a 10% increase in steel demand in 2005 and a further 7-10% growth next year. In the rest of the world, Apparent Steel Demand in 2005 will be the same as in 2004. A significant build-up of steel inventories in 2004 has been worked-off this year. In 2006 there should be a renewed increase in Apparent Steel Demand of 20 to 25 million tonnes in the rest of the world and a further increase of 20-30 million tonnes in China.
The forecast for 2006 are given as a range to reflect some uncertainty in the prospects for a pick-up in economic growth which may be adversely impacted by the recent further sharp rises in the price of oil and energy. However, the forecasts confirm the trend of recent years of an increase in steel use in-line with general economic growth and with the fastest growth occurring in the countries with the highest GDP growth such as India and China. Costs of raw materials and energy continue to represent a major challenge for the world steel industry.
POSCO sees 2005 net profit up 12% to $4.16 bln
POSCO, the world's fifth largest steel maker, said on Tuesday, it expected net profit to rise 12 per cent this year due to firm steel prices, nearly matching analysts' estimates. POSCO President Mr Kang Chang-oh said in a presentation at the International Iron and Steel Institute's annual conference that 2005 net profit would be around $4.16 billion on sales of $21.7 billion. It was the first time POSCO has made a forecast for this year's net profit.
The South Korean firm almost doubled net profit last year to $3.72 billion on sales of $19.27 billion, boosted by a rally in global steel prices.
Analysts said 2005 second-half earnings will be squeezed by a 71.5 per cent jump in iron ore prices and a 120 percent rise in coking coal prices for the year to next March.
14 trapped in latest Chinese mine accident in NW Xinjiang
An explosion at a Chinese coal mine north-western region of Xinjiang has trapped 14 people being the latest accident to hit the world's deadliest mining industry. Eleven miners have escaped the accident
The accident happened at 10:45 a.m. in Yatuer Colliery, Baicheng County.
Rescue work is under way.
Poland gives green light to IUD takeover of Huta Czestochowa
Poland's competition authority has given the green light to Ukrainian group Donbas to take over Poland's second largest steel producer Huta Czestochowa, once a suspected takeover target of Mittal Steel.
Donbas signed a deal with the Polish Treasury in July to buy the steel company, which produces up to 700,000 tonnes of steel per year, mainly for the shipbuilding industry, and 12 subsidiaries for 320 mln euro.
The Ukrainian company promised to invest 440 mln pln in Huta Czestochowa and to obey an EU demand to reimburse a government grant to the steel company of 4 mln euro
7 companies now vie for Kryvorizhstal stake
Ukrainian State Property Fund has now signed seven confidentiality agreements with potential buyers of the 93.02% of steel giant Kryvorizhstal that will be offered at a tender on October 24, the Fund's press office said, without naming the bidders.
It is reported that all but one of the major Ukrainian steel magnates have now entered the bidding for the reprivatization of Krivorozhstal. But inside each of their camps, sources acknowledge that the political forces currently at work in Kiev are unpredictable and chaotic, obliging them to keep changing their tactics to win the plant.
The uncertainty surrounding the political futures of Mr Yushchenko and Ms Timoshenko, and their urgent need to raise the cash required to fight the coming parliamentary election campaign, have transformed politics in Kiev, and set Russian and Ukrainian oligarchs at each other's throats over fresh asset sales.
Krivorozhstal's fate is important, because the government has decided to resell it next month, and because control of the mill is a "licence to print money", says an international banker to the steel industry. Krivorozhstal is one of the lowest-cost, highest-profit steelmakers in Europe.
Last year, Krivorozhstal produced 7.1 million tons of crude steel and 6.2 million tons of steel products. The plant also controls iron-ore and coking coal sources that provide between 80% and 90% of its input requirements. The company posted revenues of $1.9 billion in 2004 with net profit at $378 million, the highest net margin among the Ukrainian steel enterprises.
The controversy that has surrounded the plant since last year's disputed sale to regime insiders, Mr Victor Pinchuk and Mr Rinat Akhmetov, persuaded the management this year not to remove quite as much of the cashflow of the company as generally occurs through offshore trading schemes at other Ukrainian steel plants this duo controls.
Weeks ago, the government of Yushchenko and Timoshenko had fixed a minimum price for the state's 93.02% stake in Krivorozhstal at $2 billion, a higher price than Russian steelmakers, either singly or in combination, have ever paid for an acquisition. In addition, a 7-year $2.4 billion capex program has been set as a qualifying condition, plus annual sales revenue targets and employment commitments.
The potential local bidders who believe they can afford that include Mr Victor Pinchuk, Mr Sergei Taruta's Industrial Union of Donbass (IUD), Mr Semyon Mogilevich, Mr Igor Kolomoisky and Mr Akhmetov
US panel votes to curb imports of China steel pipe
A rapid increase in steel pipe imports from China threatens the financial health of American pipe producers, a US trade panel said on Monday, setting the stage for President George W. Bush to decide in coming months whether to restrict the imports. The US International Trade Commission voted 4-2 that imports of the pipes have increased in such volumes "as to cause or threaten to cause market disruption."
The decision is a victory for US pipe producers, who are seeking import protection under a special "safeguard" provision of China's entry into World Trade Organization in 2001.
The pipes targeted in the case range in diameter from 0.372 inches (9.45 mm) to 16 inches (406.4 mm).
Chinese JV targets 50% of auto market
Nippon Steel, the world's third-biggest steel maker, said at the weekend its joint venture with Baoshan Iron & Steel and Arcelor in Shanghai aims to take half of China's auto use steel market by 2010. "We hope to obtain 50 percent of the auto use steel market for steel made in China within four to five years, including products sold by Baosteel," Mr Shoji Muneoka, vice president of Japan's top steel maker, told press He added that the joint venture could take that share with its existing facilities.
The 3 billion Yuan joint venture, held 50% by Baosteel, 38% by Nippon Steel and the rest by Arcelor, will begin churning out steel early next year. Total investment by the three firms is $805-million.
The venture aims to supply high-quality steel sheet to automakers, including Japan's Honda Motor, Nissan Motor and Toyota Motor, which have existing or pending assembly plants in the southern province of Guangzhou.
Japanese auto makers in China currently import most of their steel from Japan, citing the inferior quality of locally made products, and are keen to see domestic steel makers set up shop in China to lower production costs.
SSAB may build steel plant in China to tap demand
SSAB Svenskt Staal AB, a Swedish steel producer that makes high-tensile steel used in automobiles, may build a production plant in China to supply the world's third-largest vehicle market. We always have to look at opportunities in other areas And the fastest growing market is in China.''' Mr Anders Ullberg, CEO of Stockholm-based SSAB, told during an interview in Seoul
Demand for cars is surging in China where the economy expanded a faster-than-expected 9.5 percent in the second quarter. Sales of passenger cars in the world's most populous nation rose in July for the fifth month this year, gaining 40 percent to 315,600 units, according to data from China Association of Automobile Manufacturers.
Gerdau secures 60% of Diaco
Brazilian long steel producer Gerdau has secured a 60% share of Colombian steelmaker Diaco. "The merger process between the Gerdau group and Diaco and its subsidiaries has been completed, meaning Gerdau now holds 60% of the shares and the Mayagu group 40%," Diaco president Mr Juan Manuel Romero told press
Gerdau will hold three posts on the Diaco board and the Mayagu group, which previously controlled Diaco, will have two, Mr Romero said. Mr Romero was also ratified as executive president.
Diaco, which sells 50% of the 500,000t of steel consumed in Colombia every year, delisted its shares from the Bogotbourse on September 12 after Gerdau started its takeover bid.
Porto Alegre-based Gerdau delivered 12.6Mt of steel in 2004, up 3.4% from 2003. The company is the largest long steel producer in the Americas and has 26 production plants in Brazil, the US, Canada, Chile, Argentina and Uruguay.
Nippon & Kobe Steel to build plants to cut costs
Nippon Steel Corp and Kobe Steel Ltd plan to build facilities that will use lower cost materials to make steel, the Nihon Keizai Shimbun reported citing unnamed sources at the companies.
Nippon Steel plans to construct a coke furnace at its Oita Prefecture plant as early as 2008. The new furnace can increase the purity of ordinary coal, lowering the ratio of heavy caking coal, which is about 40 pct more expensive than ordinary coal, required to 50 pct, the newspaper said. By making the furnace smaller, construction and production costs can be lowered by about 20 pct. The annual output capacity of this furnace will be 1 mln tons, or 7.7 pct of Nippon Steel's overall coke consumption. Investment in the project is estimated at 20-30 bln yen, it said.
Kobe Steel plans to build a steelmaking plant in the US in 2007. While conventional blast furnaces use chunks of iron ore, the new facility will use a blend of ordinary coal and powdered iron ore, which is about 30 pct cheaper. The new plant is expected to cut material expenses by 20-30 pct, and it is slated to cost only about 10 bln yen to construct, it said. The facility will be capable of completing production in 10 minutes, compared with eight hours in a blast furnace, and will produce 500,000 tons each year.
Russia ups coal production 4% in 9 months
Russia increased coal production 4% year-on-year to 212.7 million tonnes in January-September, the Fuel and Energy Dispatch Center said. September production was 26.8 million tonnes.
The center said coal producers shipped 198.2 million tonnes of coal to consumers, 5 million tonnes more than a year previously.
Siberian Coal and Energy Company SUEK, Kuzbassrazrezugol and Yuzhkuzbassugol are Russia's biggest coal producers.
Russia produced just over 283 million tonnes of coal
BlueScope expects 20% of sales from China
BlueScope Steel Ltd, Australia's largest steelmaker, may get 20 percent of its sales from China in the next few years as it sells more steel products to feed the nation's building boom, CEO Mr Kirby Adams said. BlueScope Steel sells specialized steel products in China, and previously said it could gain from building contracts for the 2008 Beijing Olympic Games.
BlueScope Steel will get between 5 percent and 10 percent of its sales from China this year, and that contribution to total revenue will probably double in the next couple of years,'' said Mr Adams
BlueScope last year bought Butler Manufacturing Co to help it boost sales in China of custom-designed steel buildings and is also spending A$280 million on a coating and paint plant in Suzhou, eastern China.
IISI welcomes new members
The Board of Directors of the International Iron and Steel Institute IISI has elected and welcomed 16 new members to take the total no of members to 192
Regular Member companies of IISI are those that produce more than 1.8 mmt of crude steel per year and the new entrants in this category include Evraz Group (Board representative is Mr Alexander Abramov), Magnitogorsk Iron and Steel Works (Mr Victor Rashnikov), Novolipetsk Steel NLMK ( Mr Vladimir Lisin) and TMK (Mr Dmitry Pumpyanskyi)
Associate Member companies produce less than 1.8 mmt per year and the new entrants in this category include Acc. Valbruna of Italy, Baoshan Iron & Steel Group of China, Benteler Steel of Germany, Changwon Speciality Steel Co of Korea, Oy Ovako AB of Sweden, Pakistan Steel of Pakistan, Shanghai Krupp Stainless of China, Taihan Electric Wire of Korea and Zhangjiangang Pohang Stainless Steel Co Ltd ZPSS of China
Affiliated Members are steel associations and institutes and the new entrants in this category include Chinese Society of Metals of China, Edelstahl-Vereinigung e.v. of Germany and Stainless Steel Council of China Special Steel Enterprises Association of China
Gladstone to become world's largest coal port
Gladstone will become the world's largest coal exporting port by 2010 following a $1.8 billion investment announcement, boosting coal export capacity by 20 million tonnes a year. Gladstone will overtake Qinhuangduo port in northern China as the world's largest coal export point.
Queensland Coordinator General Mr Ross Rolfe has declared the proposed Wiggins Island Coal Terminal at the Port of Gladstone to be a "significant" project yesterday, clearing the way for planning and environmental processes to be expedited. Rolfe has also declared a major expansion to the Fisherman's Landing wharf centre, involving the construction of a 2.4 kilometre wharf approach and wharf structure, as a "significant project".
Premier Mr Peter Beattie told Parliament the Wiggins Island development would add a massive 70 million tonnes of coal exporting capacity for Queensland. "Combined, these two projects, along with the Barney Pt Coal Terminal, will result in coal export capacity at the Port of Gladstone reaching 140 million tonnes making the Port of Gladstone the largest coal exporting port in the world."
The project will be jointly developed by the Central Queensland Ports Authority and Queensland Rail and will include an electrified rail connection to the main rail line, new rail loops, rail receival stations, stockpiles, shiploaders and a 2.4 km of new wharf approach and wharf structure.
"The State's coal exports are forecast to increase to 210 to 220 million tonnes a year by 2010, ensuring long term supply chain opportunities for Central Queensland coal fields and strengthening the possibility of further expansions in the Bowen and Surat basins," says Beattie.
Macsteel Service Centers acquires API to expand in Midwest
Macsteel Service Centers USA Inc has announced that it is expanding its heavy gauge steel processing capabilities by acquiring the business and assets of Alpha Processing Inc API, located in Chicago, Illinois. Terms of the purchase were not disclosed.
Alpha Processing, Inc. is owned by Paul H. Athens and a group of investors. In April, Macsteel Service Centers USA had acquired Alpha Steel, a large distributor of hot rolled plate and structural steel products. The Alpha Processing acquisition adds heavy gauge cut-to-length processing and shot blasting to Macsteel Service Centers' expanding portfolio of products and services in the Midwest.
Alpha Processing, Inc. will operate under its existing name as part of Macsteel Service Centers USA Midwest Division. Their management will continue with the Company.
Macsteel Service Centers USA is one of the leading companies in the North American metals service center industry. The company has a network of 32 locations, which includes the former Edgcomb Metals, Regal Steel Supply, Baldwin Steel, Hokin-Katz, and Ferro Union sites, all of which operate as Macsteel Service Centers USA; and the most recent acquisition of Alpha Steel.
Macsteel Service Centers USA processes and distributes carbon, stainless, aluminum and specialty metals to customers throughout North America and Puerto Rico. Products include a full range of flat rolled, plate, tubing, pipe, bar and structurals. The company also supplies a full range of steel building
products, coated and prepainted metals.
Macsteel Service Centers USA is headquartered in Newport Beach, CA and is
owned by the global steel company, Macsteel Holdings.
Vinacoal mulls export coal price hikes for 2006
State owned Vietnam Coal Corp Vinacoal, is considering raising its export prices on coal products between 10 and 35% from next year as per a new paper report. It quoted a Vinacoal official as saying that the Hanoi-based group was seeking government approval to raise the sale price on both domestic and export markets, in the face of rising production costs.
This year, production costs have risen by 15.6% year compared with 2004, Vinacoal's figures show. Vinacoal targeted to produce 30 million tons of coal in 2006, similar to the expected 29 million tons this year, the official said.
Vietnam planned to export 15 million tons of coal next year, compared with about 14 million tons this year, she added.
In the domestic market, Vinacoal is asking the government to allow a price increase of between 31 and 57% on its coal products, which will be sold to power, cement, paper and fertilizer companies.
Vinacoal sells its coal products at an average price of $27 per ton to domestic consumers, while its average export price is $38 per ton
Vietnam is estimated to have exported 11.3 million tons of coal valued at $437 million in the first nine months of this year, up 35.6 per cent on year in volume and 78.9 percent in value, according to government statistics.
Turnaround of Sartid by US Steel
Since purchasing the Sartid steel manufacturer in 2003, US Steel has turned the operation around, becoming Serbia's largest exporter and a major success story in the privatization process.
US Steel purchased the state owned Sartid and its six subsidiaries for 19m euros in 2003, pledging to invest another 124.2m euros over the next half-decade. As part of the deal, US Steel made a three-year commitment to donate nearly 4.2 million euros to civic causes such as child welfare, sports and culture.
Today Sartid has become an engine of local economic growth, providing jobs to nearly 9,000 workers in the city of Smederovo. It is also Serbia's largest exporter. In June of this year, the company restarted a key blast furnace at Smederovo, enabling it to boost output to 1.6m tonnes this year and eventually double it to 2.2m tonnes.
The operation has become one of the most successful chapters in the Serbian saga of privatisation, a process marred by lack of regulation, widespread allegations of fraud and corruption, and a host of other problems since a 2001 law paved the way for selling off state assets.
Sphere Investments awarded Mauritania iron ore exploration license
Australian miner Sphere Investments has been awarded an exploration license to seek magnetite iron ore deposits in Mauritania, West Africa. Exploration work on the Lebtheyniye deposit will start immediately and will be carried out independently of a feasibility study on the firm's joint venture Guelb el Aouj project.
The magnetite-quartzite mineralization at Lebtheyniye, which outcrops along a 25 km strike length, is strategically located within 50 km of the existing dedicated heavy haul iron ore railway owned and operated by SNIM, the 7th largest supplier to the global seaborne traded iron ore market and Sphere's joint venture partner in the 7-million ton Guelb el Aouj DR pellet project in Northern Mauritania.
The Lebtheyniye license adds to Sphere's existing iron ore interests in Mauritania, comprising the flagship 50% joint venture with SNIM over the Guelb el Aouj joint venture area (five deposits) and the EL172 licence to the south covering two further magnetite-quartzite deposits.
BHP Billiton to reopen Illawarra coal mine
BHP Billiton Illawarra has announced plans to reopen its Elouera mine, south-west of Wollongong, on the NSW south coast, after signing a deal with Delta Mining to fully operate it. It comes after an Indian company officially reopened the former South Bulli mine two weeks ago, with all coal being exported to the sub-continent.
BHP Billiton Illawarra president Colin Bloomfield says his company will soon have five operating mines in the region
The mining division of the Construction, Forestry, Mining and Energy Union (CFMEU) has been campaigning for the mine to be reopened for the last month. The CFMEU says high costs are the likely cause of the mine's closure but the coal market has now been revitalised.
Leighton lands $180m contract work
Leighton Mining has secured $180 million in contract extensions and new work at the BHP Billiton Mitsubishi Alliance's BMA Peak Downs and Saraji coal mines in central Queensland.
BMA, already Australia's largest export coal producer, awarded the contracts as part of an aggressive plan to double annual production by 2010 to 100 million tonnes in response to surging commodity prices and China-driven global demand.
The Leighton contract comprises two parts, a $110 million extension of current pre-stripping at Peak Downs and a new $70 million agreement at Saraji. Leighton Contractors executive general manager Laurie Voye said the new Saraji contract built on a very successful four-year relationship with BMA at Peak Downs.
JSW mining group invests PLN 4.16 billion till 2010
Jastrzebska Spolka Weglowa JSW, the largest coke coal producer in Europe, has prepared a strategy till 2010 to sustain capacity. Today, it explores 13m tonnes of coal a year. The strategy provides for improving effectiveness, Mr Leszek Jarno, JSW CEO informed local press
JSW comprises five mines, which have stocks for 11-30 years. The concern plans to joint three of those mines within two years. In the future, it is going to have capacity of 10m tonnes of coal annually.
The CEO estimates that the investments till 2010 will amount to PLN 4.16 billion (EUR 1.1 billion). The costs of merging the mines will amount to PLN 74.1m, while exploring reserve fields PLN 0.5 billion. Janusz Olszowski, the CEO of the Mining Industrial and Trade Chamber, believed that JSW must invest in its future. Some specialists say, however, that instead of buying shares of Koksownia Przyjazn coke plant (JSW paid PKP state-owned railways PLN 500m for the stake), JSW should have spent those funds for its investment programme.
Umicores Balen Zinc smelter facing strike
Belgian metals company Umicore SA has said that striking workers at its 250,000 metric tons a year Balen zinc smelter are to vote Tuesday on a proposed deal to end the dispute. "Management and unions reached agreement yesterday evening and this agreement has now to be voted on by blue-collar workers at Balen today," Umicore spokesman Mr Tim Weekes told pree
The ballot requires support from one-third of the voting workers to be passed, he said. "If the agreement is approved, normal business will resume at Balen," he added.
The strike by around 400 workers began Thursday at the plant. Workers at the site are protesting the reallocation of blue-collar workers to other functions in the plant
Molybdenum looks strong
Prices for steel additive molybdenum show no sign of falling any time soon, according to Mr John Graell, chief executive of Molymet, the world's leading producer. But he maintains that high prices are not the result of a fundamental market shift. "The price has defied all of Molymet's attempts to forecast its movement and is at a level that is not sustainable," Mr Graell said.
Prices for molybdenum oxide have jumped from $7 a pound at the start of 2004 to $34 a pound now, providing a bonanza for Molymet and copper miners such as Perus Antamina, in which BHP Billiton has a 33.75 per cent interest, that produce it as a by-product.
China is a key consumer of molybdenum, but it also represents 20 per cent of global supply. Mr Graell said supply from China was tightening as the country changed its development strategy and adopted environmental and work standards used in Australia, Europe and the US. "This new strategy definitely means less production. At the end of the day the offer of molybdenum to the West from China will fall," he said.
Ground broken on SeverCorr
Crews started preparing the construction site Monday for an $880 million mill in Lowndes County that plans to produce high-grade steel for the automotive industry. The mill, scheduled to open in 2007, is being built by SeverCorr, a startup company. Construction of the 1.2-million-square-foot SeverCorr mill is expected to take about 21 months, Correnti said. The mill eventually will make 1.5 million tons of steel sheets a year.
The mill site near Columbus is within a day's drive of a dozen auto manufacturing sites in the South, including a Nissan plant in Mississippi and Hyundai and Mercedes-Benz plants in Alabama. "We'll be able to make steel up to 74 inches wide," SeverCorr chief executive officer Mr John Correnti said Monday. "If you take a tape measure across an SUV or big truck ... you need steel that wide."
Mr Correnti said most of the steel used in the Southern automotive plants comes from the Northern U.S. or from other countries. He said steel plants in or near the South are making narrower sheets.
TMK posts 2004 results
The Pipe Metallurgical Company TMK has reported net income of RUR 664.455m ($23.188m) under IAS for 2004 against a loss of RUR 696.363m ($24.301m) a year earlier.
As TMK press service reported, its revenue increased by 34.5 percent and amounted to RUR 53.617bn ($1.871bn) for the reported period. Gross profit increased 2.3 times to RUR 9.576bn ($334.212m). Operating profit surged 40 times to RUR 3.764bn ($131.451m). Income before the income tax amounted to RUR 1.102bn ($38.495m) against a loss of RUR 624.862m ($ 21.818m) a year earlier.
TMK is owned by Cyprus-based TMK Steel
Dofasco completes acquisition of Copperweld
Dofasco Inc announced that it has successfully completed the acquisition of certain assets of Copperweld Holding Company of Pittsburgh, Pennsylvania through a transaction with Atlas Tube Inc of Harrow, Ontario. The transaction, which was announced on August 17, 2005, was completed effective October 3, 2005 at a purchase price of US$177.8 million. It is expected that this price will be reduced by post-closing adjustments.
Dofasco purchased the assets related to Copperweld's mechanical tubing and automotive components businesses from Atlas immediately following the acquisition of Copperweld Holding Company by Atlas.
Dofasco is a leading North American steel solutions provider. Product lines include hot rolled, cold rolled, galvanized, Extragal(TM), Galvalume(TM) and tinplate flat rolled steels, as well as tubular products, laser-welded blanks and Zyplex(TM), a proprietary laminate. Dofasco's wide range of steel products is sold to customers in the automotive, construction, energy, manufacturing, pipe and tube, appliance, packaging and steel distribution industries.
Judge approves Stelco's deal with Tricap extends court protection to
Ontario Superior Court Justice James Farley has given Stelco Inc permission to complete a $100 million loan agreement with the province of Ontario and a $450 million financing deal with Tricap Management Ltd., paving the way for the steelmaker to hold a November 15 creditor vote on a final restructuring plan. He also extended the Hamilton-based steelmaker's bankruptcy protection, which was set to expire Tuesday, until Dec. 5.
But the end of the Stelco's restructuring is not necessarily in sight.
"Make no mistake, unless there are substantive changes made to the plan, it will be voted down," Mr Kevin Zych, a lawyer for Stelco's bondholders, said Tuesday.
Raybestos Products to quit steel stamping business
Crawfordsville based Raytech Corporation has announced plans to phase out the steel stamping business of its subsidiary, Raybestos Products Company RPC. RPC will begin transitioning the steel stamping business to outside suppliers and move the related heavy duty assembly plant to a location near an outside supplier during the fourth quarter of 2005.
Mr Larry Singleton, President and CEO stated, "Raybestos Products Company competes in a global market. Our customers are demanding lower costs for the products we provide in a highly competitive industry. We have to take the necessary steps to reduce our costs to satisfy our customers' needs while providing an adequate return for our shareholders."
Raytech Corporation is a worldwide manufacturer of wet and dry clutch, power transmission and brake systems as well as specialty engineered polymer matrix composite products and related services for vehicular applications, including automotive OEM, heavy duty on-and-off highway vehicles and aftermarket vehicular power transmission systems.It operates manufacturing facilities in the United States, Germany and China
IPSCO announces redemption of $100 Million 7.8% debentures
IPSCO Inc gave notice to the holders of its $100 million 7.8% Debentures, due December 1, 2006, that it will redeem all such outstanding Debentures on November 4, 2005. The total redemption price will be $105,655,780 based upon the greater of the Canada Yield Price or par, plus accrued interest up to, but not including, the noted redemption date.
IPSCO operates steel mills at three locations and pipe mills at six locations in Canada and the United States. As a low cost North American steel producer, IPSCO has a combined annual steel making capacity of 3,500,000 tons and provides further processing at its five cut-to-length lines located in both the U.S. and Canada.
The Company's tubular facilities produce a wide range of tubular products including line pipe, oil and gas well casing and tubing, standard pipe and hollow structural.
ABB wins order for SeverCorr
ABB, the leading power and automation technology group, announced today that it received a contract to supply a high power rectifier system and two static var compensator (SVC) systems for a steel mill to be built in Columbus, Mississippi, which will be owned by SeverCorr, LLC.
The steel mill will use a DC electric arc furnace powered by ABB to produce approximately 1.5 million tons of rolled products annually. The high power rectifier (ABB Thyribloc(R)), rated at 2 x 80,000 amp, 1,000 VDC, will convert AC utility power to DC as the primary power input to the arc furnace. The plant will primarily supply the automotive manufacturing industry.
The project also includes two SVC systems, one 160 Mvar EAF compensation system (Arc-Comp(Arc-Comp(R)) and one 100 Mvar rolling mill SVC. The SVC systems will provide the reactive power compensation to meet utility power quality requirements.
ABB will provide its newly developed AC 800PEC equipment control platform incorporating Arc-Comp(R), the first application of this technology in North America. The AC 800PEC is a high-end controller belonging to ABB's AC 800 automation family. It combines the high-speed control requirements of power electronics applications with low-speed process control tasks usually carried out by separate PLC units.
The plant is scheduled for commissioning and start-up in Q4, 2006.
SeverCorr, LLC is owned by Severstal Group, a Russian holding company which operates a steel-making division in Mississippi.
Russian steel groups Evraz, Novolipetsk plan LSE share sales
Two of Russia's four biggest steel companies, Evraz Holding and Novolipetsk, are planning share sales on the LSE that could raise $1.7 billion
Evraz, which sold 8.5 pct of its shares to investors via a London IPO in June, wants to offer roughly another 17 pct through a secondary sale. Mr Alexander Abramov, Evraz's president and majority owner, told the press that the timing of the share sale would be 'opportunistic'. It would depend on the overall buoyancy of steel company shares, which have been high recently following a good run for steel prices and profits. 'I'd like to put more of the company in the hands of the public because this will increase the credibility of Evraz generally around the world,' said Mr Abramov, who owns slightly less than 60 pct of the company.
Novolipetsk is listed on the Moscow stock exchange but with a free float available to outside investors of just 4 pct of its total capital. Mr Anton Bazulev, deputy chief executive, said it was planning to follow Evraz in gaining a listing in London. He said this would happen 'in due course', indicating he is thinking of selling up to 25 pct of the company's share capital in this way in the next two years.
Of the other big Russian steel producers, Magnitogorsk and Severstal, the second and third largest respectively, are listed in Moscow, the newspaper noted. The fifth biggest steel maker, Mechel, has a listing in New York.
Changes in imports tariffs in Mexico
Effective next year, temporary imports, which enter Mexico only for processing or where the end product is to be exported, must pay the same duties as imports that remain in the country.
These tariffs are 10% on hot and cold-rolled sheet, 15% on coated steel and pipe and tube, and 5 to 7% for semi-finished steel.
Temporary imports will count as definitive and will increase the imported steel numbers. This will help the domestic steel producers that are preparing for a flat rolled dumping case against China, Japan, South Korea, Russia, Kazakhstan, Turkey, Slovakia, Romania and India.
Tin price fall closes Renison mine
Plunging tin prices have forced Bluestone Tin to halt production at its historic Renison mine and sack hundreds of workers. Although commodities such as nickel, copper and iron ore have hit record highs this year, tin has dropped due to oversupply.
London tin prices have fallen 27 per cent to $US6555 a tonne, or $US2.97 a pound, in the past 12 months.
Bluestone said it would reopen Renison pending higher tin prices and a revised strategy that would link its other assets in Tasmania's west coast with the mine
While Renison is closed, Bluestone will focus on its other project, the Collingwood tin project near Cooktown in Queensland as the Collingwood project remains economically viable despite low tin prices.
Teck Cominco and striking smelter workers reach agreement
Teck Cominco Ltd. and the union representing 1,300 workers on strike at its Trail, B.C., smelter have reached a tentative agreement, the company said Monday. Details of the agreement were not released, but wages and pensions had been key points in the dispute, which resulted in the first strike at the smelter since 1990.
The union was seeking wage increases that are almost double what the company offered, as well as improvements to pensions and earlier retirement with full benefits. The company was seeking to shift from a defined-benefit pension plan to a defined-contribution plan for new unionized workers, as it has done with non-union employees.
Schnitzer subsidiary Pick-N-Pull acquires GreenLeaf Auto Recyclers
Schnitzer Steel Industries, Inc. announced that its subsidiary, Pick-N-Pull Auto Dismantlers (Pick-N-Pull), has acquired GreenLeaf Auto Recyclers, LLC (GreenLeaf), an auto dismantling and recycling business that sells reclaimed auto parts primarily to collision and mechanical repair shops.
Pick-N-Pull, a self-service used auto parts retailer, will add GreenLeaf's 22 locations to its existing network of 30 stores, significantly increasing its presence in the Southern, Eastern and Midwestern United States.
The total consideration paid to GreenLeaf for these operations was $22.5 million, subject to a post-closing working capital adjustment.
Schnitzer Steel Industries, Inc. Subsidiary, RRC Acquisition LLC to Acquire Regional Recycling LLC
BHP hands $545m to taxman
BHP Billiton has revealed that it had paid the Australian Taxation Office $545 million as part of a dispute over questionable write downs against a $989 million tax, interest and penalty bill raised by tax authorities in June due to write-downs of bad debts associated with its unprofitable West Australian HBI project from 1999 to 2002, which was permanently shut in August.
"The company has taken legal advice and remains confident of its position and intends to vigorously defend the claims," BHP said, repeating its June stance.If BHP eventually wins the fight, the $545 million will be refunded, with interest.
