December, 17 2005
TATA Steel launches TATA Structura brand for sections
TATA Steel has launched a new brand 'TATA Structura' for steel sections at AEC Expo, aimed at providing strength and elegance in constructions as the sector takes rapid strides on the back of real estate boom. This new brand will focus on aesthetics and strength requirements of structures of tomorrow.
Mr Anand Sen VP TATA Steel ''Internationally, the trend has been towards minimalist designs with wide spans and uncluttered spaces. Designs that are environment friendly but aesthetically superior. Designs that can be executed with ease and economy, but which can withstand the test of time.''
He added that the construction sector today constitutes about 7% of India's GDP and is growing at the rate of 7% to 8% every year.
Electricity tariff forces Chhattisgarh mini steel mills to close
It is reported that production in 115 mini steel plants came to a halt today as the Chhattisgarh Mini Steel Plants Association went on an indefinite strike demanding cut in electricity tariff following 'recession' in the steel sector. Association spokesman Mr Ashok Surana told press that most of the mini-steel plants were on the verge of closure following the recent increase in power tariff affected by the State Electricity Regulatory Commission.
Mr Surana said that Government had agreed to supply power at the rate of Rs 2.50 per unit as a part of its efforts to promote industrialization of the new state Chhattisgarh five years ago but has now increased the to Rs 3.71 per unit and has also slapped an additional levy of Rs 275 per KVA forcing the mini steel plants to pay about Rs nine lakh to the SEB every month, even if the plant remains closed.
Mr Surana said that with the consumption of 350 MW power, mini steel plants are one of the major consumers of the SEB and 115 mini steel plants pay an energy charge to the tune of Rs 40 crore to the CSEB every month
Government plans to supply ore from Belary to KIOCL
Karnataka government plans to transport iron ore from Sandur and other parts of Bellary to Kudremukh Iron Ore Company Limited as per Deputy Chief Minister Mr MP Prakash, to provide jobs to about 2,500 employees of the company
KIOCL has to stop mining from January 1, 2006.
Gujarat NRE makes first shipment of unwashed coal from Australia
The Australian subsidiary of Gujarat NRE Coke has sent the first shipment of unwashed coal from coal mine at Russell Vale in northern Wollongong region in the state of New South Wales.
The shipment, which left Port Kembla for India, is believed to be the first consignment of unwashed coal, shipped from the Australian shores in 40 years. The coal will be reportedly washed in India with the residue used to make bricks for houses.
According to the company's Australian Chairman Mr Arun Jagatramka, Gujarat NRE Australia will be sending shipments to India on monthly basis from next year. The production from Gujarat NRE mines would get a boost when the Avondale mine is reopened, he added. ''During the first two years we will produce something like three or four million tonnes of coal and further down the line when we have the transportation via the rail line to Port Kembla we expect to have production up to five million tonnes from that mine also,'' he told
ISMT part of a seamless tube JV in Australia
It is reported that Australian Boulder Steel, Indian Seamless Metal Tubes Ltd and Austrian Breitenfield Group have signed an agreement to set up a steel making cum seamless tube plant at Ipswich Queensland Australia. The financial closure is expected to be reached by mid 2006. Construction will take approximately 2 years and it is expected that the facility will be put into production by the end of 2008.
The project would include building a 350,000 tonnes EAF and a seamless tube mill for producing 110mm to 300mm diameter pipe of varying thicknesses to supply for the oil and gas sector, boiler manufacture and chemicals industry.
Special police forces to protect steel investors security from Maoists
Jharkhand will not buckle under fresh threats issued by Maoist guerrillas to investors and will provide extra security to the businessmen, Chief Minister Mr Arjun Munda has assured. "The government is firm on providing security to investors. Special forces will be raised to provide security to investors in the light of the fresh Maoist threat," said Mr Munda.
The state police have decided to raise Special Forces to provide security to these companies. Police trained by the army will be deployed for security. The district police chiefs have been directed to provide security to companies in the state," said a police official. "The security of the officials, including at their place of work, will be strengthened."
The Communist Party of India-Maoist guerrillas at a press conference in a place in Bihar near the India-Nepal border on Wednesday warned investors of dire consequences and even named the companies that have signed MoUs with the sate government to set up steel plants in the state. The prominent companies named by the CPI-Maoist are Tata, Posco, Jindal and Essar.
Maoist guerrillas are active in 16 of the 22 districts of the state. At least 550 people, including 220 policemen, have been killed in the last five years in Maoist-related violence.
Coaljunction to host Global coal meet at Kolkata in February
Coaljunction, a division of Metaljunction services limited, will organize a 3 day international conference named "India Coal Conference 2006" between February 8 and 10, 2006, at the ITC Sonar Bangla hotel in Kolkata in association with the Informa group. The conference would be supported by the ministries of coal and power of the government of India.
Mr Viresh Oberoi MD of Metaljunction said that the conference would bring together leading international coal companies, international traders, top government officials, coal producers and consumers besides the transportation industry and technology providers. Mr Oberoi added that the conference would discuss areas such as raising coal supplies by identification of new sources, adoption of latest technology, sea borne trade in coking coal, development in coal preparation and pre-carbonization technologies.
More than 300 delegates were expected to register at the conference including representatives of the ministries of coal, power and steel, CIL, NTPC, SAIL and TATA Steel. Overseas speakers are expected from Macquarie Shanghai, Energy Economics, PT Bumi Resources and other institutions.
VSP bags energy conservation award
RINLs Visakhapatnam Steel Plant has bagged the National Energy Conservation Award for the fifth consecutive year. The award is instituted by the ministry of power and was given to VSP for its dedicated efforts towards energy conservation and for making it a mass movement by taking it to the grass-root levels.
Various initiatives have helped VSP reduce its energy consumption by over 21% in the last five years. The energy conservation efforts have helped the company save about Rs 350 crore and many of the energy conservation solutions have been no cost or low cost solutions
Supplier & buyer far apart on iron ore demand projections
It is learnt that during the talks between iron ore suppliers and Asian importers for 2006 iron ore contracts, which started on November 30th and are ongoing, the demand projections has emerged as a major difference between the two sides
The three major suppliers CVRD, BHP and Rio claim that demand for iron ore next year will remain strong, despite falling steel prices. However, Chinese buyers, headed by Baosteel, expect demand to fall in 2006, as steel prices in China continue their decline due to overcapacity. Nippon Steel is adopting a similar position, ruling out any acceptance of higher iron ore prices next year,
This year's talks are expected to be much tougher than last year, when suppliers and buyers both acknowledged that iron ore prices should rise in 2005 due to higher demand.
Arcelor mulling over new bid for Dofasco
It is reported that Arcelor SA has not ruled out making a higher bid for Canadian steelmaker Dofasco, and will announce its decision before the end of this year. The newspaper reported that Mr Dolle remains very much in favor of a Dofasco deal and estimates that Arcelor would be able to extract more synergies from a merger than ThyssenKrupp. 'We have the means to match our ambitions,' Mr Dolle was quoted as saying after an Arcelor board meeting yesterday.
At a board meeting Thursday, Arcelor's management presented its analysis on Dofasco. In response, the board instructed management to refine its analysis on one or two points. If Arcelor wants to buy Dofasco, it must make a new offer before Jan. 10, the date on which ThyssenKrupp is due to close its offer.
Arcelor launched a hostile bid valued at Euro 3.2 billion for Dofasco in November, but this offer was trumped shortly afterward by a Euro 3.5 billion bid from ThyssenKrupp, which received the approval of Dofasco's management.
Mechel profit drops by 25% in January to September 2005
Russian steel and mining company Mechel reported a 25% drop in profit on Friday, but said it expected to benefit from steel production efficiencies and coal-mining expansion next year. Mechel said net income for the first nine months of the year fell to $314.7 million from $420.8 million in 2004. Revenue rose, however, to $2.91 billion from $2.47 billion in the same period.
"The third quarter was a challenging time for us, like the second quarter, but the market is starting to recover," CEO Mr Vladimir Iorich said. "The market in the first half of the year had a negative impact on nine-month production," he said, adding that Mechel is leaning toward the mining side of its operations. "Mining continues to be the primary interest for us and we intend to enter new coal markets."
"We are not satisfied with steel sector performance and will be concentrating on raising efficiencies and cutting costs," said Iorich. "In 2006 we expect to see the effects of these programs.Our strategy for 2006 is unchanged and will be centered on continuing development of our mining core business," he said in Russian translated by a company official on the call.
Mr Iorich said the company was developing two new mines with a combined capacity of 5 million tonnes per year of high quality coking coal which would help supply its steel mills or be sold to third parties. Mechel expects total coal production of 25 million tonnes per year by 2010.
Vitkovice Steel to double investment to CZK 800 million in 2006
Vitkovice Steel plans to double investment next year to CZK 800 million, of which CZK 600 million will go into new technology enabling the company to produce higher quality steel, CEO Vladimir Bail told local press. The investment must be made in line with the accession protocol between the Czech Republic and the EU and the technology must be put into operation in October next year, said Mr Bail. Evraz has pledged to invest CZK 2.5 billion in the company by 2008.
All 2006 investments will be financed from the company's own resources. Mr Bail said the financial plan for next year currently being drafted will take into account the situation in the global steel market. "The market is under pressure, prices are falling. We shall have to fight for customers," said Mr Bail.
Vitkovice Steel was sold this year to Russian steel maker Evraz Group for CZK 7 billion. In 2004 the company generated a profit of CZK 1.5 billion on sales worth CZK 13.5 billion. Vitkovice Steel expects sales and profit 30% higher this year than last year.
Siberia's Kuzbass basin sets coal mining record of 160 million tonnes
Kuzbass, one of the world's largest coal basins located in western Siberia, produced 160 million metric tons of coal in 2005, the administration of the Kemerov Region said. "Kuzbass has not seen such production volumes in its 100-year history of coal mining," the administration's press service said.
Governor of the Kemerov Region Mr Aman Tuleyev said 15 mines and 16 pits with a total annual capacity of 44 million tons had been opened in Kuzbass in the past seven years. Kuzbass' share in Russia's overall coal production has increased from 43.7% to 56% since 1999
NDRC approves 74 coke producers in China
Chinese National Development and Reform Commission NDRC announced a list of 74 approved coke producers on December 9. The list accounts for only 5% of all domestic coke producers which numbers around 1480 but the 90 million tonnes capacity of these 74 companies amount to 30% of the total coking capacity in China.
The list includes major steel makers Baosteel, Shougang, Handan Steel, Tanggang, Angang, Benxi Steel, WISCO, Valin Steel, Pangang, TISCO and Kunming Steel. The qualified coking companies are mostly in Shanxi, Hebei, and Shandong Provinces and include Shanxi Coking Group, Hebei Xinyue Coking Co Ltd, and the Shandong Hengxin Coking Co. Ltd.
NDRC published a document on January 1st 2005 called "requirements for the coking industry" in order to curb a coke oversupply and eliminate primitive coking facilities. Due to the oversupply and a steel sector depression, coke prices fell dramatically and most coking enterprises experienced deficits this year.
According to the NDRC announcement, the first batch of candidates included 135 enterprises in China. Of these candidates, 30 were steel company coking plants with 51.58 million tons of annual capacity and 105 were coking enterprises with 77.13 million tons of capacity.
Currently, China's coke capacity has reached 250 million tonnes and another 100 million tonnes is underway. To meet the demand for 400 million tonnes of steel this year China is expected to consume 250 million tonnes of coke resulting in 100 mln tons of coke overcapacity.
Imsa board sanctions new galvanizing and painting Line
Directors of Grupo Imsa have authorized a $120 million investment for the Imsa Acero division to increase its production capacity for CR, HDG and PPGGI steel at current facility in Monterrey, Mexico. The project calls for a new continuous line to galvanize and paint steel, for the automotive, appliance, and refrigeration markets. It will galvanize 300,000 tons per year of steel with an optional capability to paint 130,000 tons per year of the total capacity. Imsa Acero will raise cold-rolling capacity by 260,000 tons per year to supply the new galvanizing and painting line. Construction will start early in 2006 for operation by mid-2007.
Mr Santiago Clariond, president and CEO of Imsa Acero said that "This line, which will be the most advanced steel galvanizing and painting line in Mexico, reinforces Imsa Aceros commitment to serve the highest specification markets. Over the past few years, the domestic market for coated steel has grown considerably, driven by growth in industrial markets, where we have seen plants from other countries being relocated to Mexico in order to better serve the North American market."
Imsas Steelscape Inc subsidiary is already underway with construction of a new coating plant in Shreveport, LA, comprised of equipment relocated from a defunct operation in Richmond, CA. That project may eventually total $200 million and include cold rolling, pickling, galvanizing, and painting lines.
WestLB faces Euro 500 million damages claim from Balli
WestLB is being sued by Balli Group PLC for as much as Euro 500 million in damages for alleged improper conduct related to Balli's acquisition of metal distributor Kloeckner & Co, a German newspaper reported, citing Balli's lawyers. Balli claims that the German state-owned bank planned from the beginning to secure the stake for itself and sell it on for a profit. The company is now demanding that WestLB either return the stake in Kloeckner to Balli or pay Euro 500 million in damages.
Balli bought Kloeckner from E.ON AG in 2001 for Euro 1.1 billion and Balli now alleges that WestLB granted the company loans to finance the takeover even though it knew the company did not have the necessary collateral. Neither E.ON nor WestLB nor the renowned advisors showed us the red card before the acquisition, Balli's lawyers told the newspaper.
Balli is understood to have used at least Euro 47.5 million of KloeCo's capital to finance the acquisition before it legally owned the company. But shortly after the acquisition Balli defaulted on a Euro 175 million loan from WestLB and was forced to hand over its shares in the company to WestLB. At the end of last year WestLB sold the 94.9% in Kloeckner to Lindsay Goldberg & Bessemer for Euro 320 million.
Balli's decision to sue WestLB comes after a Duesseldorf court's ruling yesterday that Balli heads Hassan Alaghband and Vahid Alaghband breached German regulations by using KloeCo's capital to finance the takeover. The brothers Alaghband have been ordered to pay a total fine of Euro 4 million
Steel Dynamics raises Q4 profit outlook
Steel Dynamics Inc raised its fourth quarter earnings outlook on improved margins and performance across several divisions, largely due to stronger demand for its products from the construction industry and strong operating performance from its flat-roll division. Increased demand from the nonresidential construction industry has boosted results at its structural and rail segment and building systems division. The company's bar products unit has also seen greater-than-expected shipments.
"We are entering the first quarter with strong backlogs for our flat-rolled and structural products and believe that service center inventories are now at reasonable levels," said Mr Keith Busse, president and CEO.
POSCO to invest for increasing high end steel products
POSCO, the world's fifth largest steel, announced that it would invest 160 billion won ($157.6 million) over the next two years to produce high end steel products. The investment would start from 2006 and end in October 2007, enabling the South Korean firm to produce an additional 300,000 tonnes of high end steel products a year
POSCO has been focusing on quality steel products, such as those used for cars and home appliances, as profit margins at the low end have been squeezed by a regional supply glut.
In 2004, POSCO produced 701,000 tonnes of high end steel products, which are used to make motors used in refrigerators, washing machines and plant machinery.
Samarco reaches record earnings of $ 1 billion
Samarco, a Brazilian mining company belonging to CVRD and BHP announced that company profits this year have already reached US$ 1 billion. The value, according to the company, is 72% greater than that registered in 2004 and represents the greatest result in the company history.
According to a Samarco spokesperson, the market is growing as there has been a recovery in the price of iron pellets, the company's main produce and hopes that the market may have the same behavior in 2006.
Up to the end of the year, Samarco estimates that exports should reach 14 million tonnes of pellets, and 1.6 million tonnes of pellet feed, which is concentrated iron ore.
Alorsa set to buy Yakutugol assets
Mr Alexander Nichiporuk president of Russian state owned diamond giant Alrosa said that as part of its diversification plan, the company would buy coal and natural gas assets.
Alrosa was primarily interested in buying local non-core businesses, specifically the coal mining company Yakutugol and Yakutgazprom, a subsidiary of the Russian natural gas monopoly Gazprom.
Yakutia's government is expected to sell a 5% stake in Yakutugol next year and Alrosa said it may be among the bidders.
Alrosa is Russia's largest and the world's second largest producer of unrefined diamonds.
Russian FTS change tariff for iron ore movement
The Russian Federal Tariffs Service has set a reduction ratio on current tariffs for export import operations of iron ore and concentrate by rail. The ratio has been set for 2006 depending on the distance and transportation route.
As a result, tariffs for export-import operations with iron ore commodities for a distance of up to 300 kilometers have been evened out. In addition, equal tariffs have been set for transporting iron ore commodities from mining and metallurgy combines located at approximately identical distances from the border.
Cazaly responds to Rio on Shovelanna
Cazaly Resources Ltd has lodged its second submission to the Western Australian Department of Industry and Resources in support of its application for the Shovelanna iron ore project, responding to Rio Tinto's opposition.
The submission is in response to a request by Rio Tinto Limited to the Minister for State Development, Mr Alan Carpenter MLA, to exercise his discretion under section 111A of the Mining Act of 1978 to refuse the application for ELA 46/678 on the grounds of public interest.
Cazaly had lodged an exploration license application for the tenement, located approximately 30 kilometers east of Newman, on 7 September 2005 after the exploration license, held by previous owners, Hamersley Resources Limited a subsidiary of Rio Tinto, Wright Prospecting Pty Ltd and Hancock Prospecting Pty Ltd, expired on 26 August 2005. The Company was then given a timeframe in which to lodge an initial submission with the DoIR in support of its application for Exploration License 46/678, which was lodged on the 7th of November.
Vietnam coal exports to increase by 2.1% in 2006
State owned Vietnam Coal Corp Vinacoal plans to export 14.5 million tonnes of coal next year up by 2.1% over 2005 as per state media
During 2006, Vietnam will produce 31 million tons of coal up by 5.1% over 2005 our of which 16.5 million tons will be consumed in the domestic market and 14.5 million tonnes will be exported
Court postpones request for examining Stelco director till January
Justice James Farley, who is presiding over the Hamilton-based company's restructuring under creditor protection, adjourned until January the shareholders' request to examine a former Stelco director.
Meanwhile, Stelco Inc has agreed to the public release of a report based on its confidential forecasts, but first deleted some commercially sensitive information. The report was commissioned by a group of shareholders that is fighting the restructuring plan. Stelco's restructuring plan essentially wipes out the value of the company's current shares. The shareholder group alleges that the forecasts the plan is based on lowball Stelco's value.
The shareholders' report, released Friday afternoon, was written by Navigant Consulting. It makes use of Stelco's 2006 forecast, which the shareholders were able to obtain from Stelco after signing a confidentiality agreement.
Navigant's report uses Stelco's valuation model, but substitute steel price forecasts from Metal Bulletin Research. In an affidavit, James May, a consultant with Metal Bulletin, said his base estimate for hot rolled steel coil in 2006 is $525 per tonne. Stelco's forecast was $458 per tonne. The report concludes that Stelco's shareholder equity is worth between $1.1 billion and $1.3 billion
In court documents prepared for Friday's hearing, Mr Murray Pollitt, president of Pollitt & Co., alleged that Stelco's management and board actively undermined Stelco's shareholder equity by using inaccurate information. He pointed to recent offers for Stelco's neighboring Dofasco Inc, which values that company at more than $4 billion. "Although Dofasco has arguably better fixed assets, a much lower pension deficiency and a different labor structure, this price indicates that, on a comparable basis, Stelco has enterprise value measuring in the billions," Mr Pollitt said.
Swedish Fagersta appoints Stainless Wire as sole agent in UK
Fagersta Stainless AB, of Sweden, has announced that Stainless Wire Supplies Ltd has become their exclusive UK Agent, for the marketing & supply of their range of finished drawn stainless steel wire.
Through their partnership with Stainless Wire Supplies Fagersta intends to supply material direct to the market and offer a high level of service. A stockholding facility will be available, either at the Redditch warehouse or if suitable at the customers premises.
Fagerstas material is being used within many industries, including aerospace, automotive, food, construction, household appliances, chemical & electronics.
