January, 02 2006
TATA Steel to ramp up TISCON sales
TATA Steels long products premium brand TATA TSICON is expected to touch Rs 2,000 crore sales in a little over three years. At present, TATA TISCON has a turnover of Rs 1,500 crore and we expect it to grow at least by a compounded annual growth rate CAGR of 7%, said Mr Sunil Seth chief of marketing and sales of long products of the company.
TATA TISCON was launched in 2000 and had a turnover of about Rs 350 crore in 2002 but has seen a turnaround in the last three years. The brand has a market share of about 10%, which should increase to 30% in five years, Mr Seth said. The brand now has a pan-India presence. The next two years will see the retail network increase from 1,500 to 2,200, said Mr Seth.
TATA TISCON is used in the construction industry and the brand caters to the residential and non-residential segments. TATA Steel has launched marketing campaigns in the construction industry and is also targeting budding architects to increase the brand awareness.
JSW to keep HR prices unchanged in January 2006
JSW has decided against a price cut in January as it expects global prices to firm up and domestic demand to remain steady, industry officials said on Saturday. "We have decided to roll over prices to January. I believe, other producers too are not changing prices," Mr Seshagiri Rao MVS finance director at JSW Steel Ltd said.
"There are indications that steel contracts for March are being offered at $15-20 a tonne premium to those of January and February," he said. "Prices can fall further only if there is a drastic cut in prices of raw materials such as coal and iron ore," Mr Rao said.
Indian sponge units unite for closure
India would lose nearly 80% of sponge iron production by January 10 after three major producing states agreed to a shutdown proposal of Chhattisgarh industrialists which have already closed 70 units. "Sponge iron units owners of Jharkhand and West Bengal have agreed to suspend production from January 5 while Orissa would do so from January 10. This decision was taken at a meeting held at Kolkata Thursday," said Mr Suresh Agrawal, president of Chhattisgarh Sponge Iron Manufacturers Association.
He claimed that Chhattisgarh along with Orissa, Jharkhand and West Bengal accounts for 80 percent of India's total sponge iron production of 10 million tonnes.
"We will restart production only after the government guarantees us adequate iron ore supply and coal linkage," Mr Agrawal said.
Mining comes to standstill at KIOCL
As per the Supreme Court order, the mining activity has come to a standstill and employees' unions of KIOCL observed Sunday as a black day. KIOCL has been carrying out mining activity for over three decades at Kudremukh in Chikmagalur district. After the expiry of mining the entire mining area has come under forest department, as it is part of the Kudremukh National Park.
Urging the State and the Central governments to let the KIOCL resume mining operations, the workers took out a massive protest march in the township. Most shops and business establishments downed their shutters during the day. The workers vented their ire against environmentalists, blaming them for the Supreme Court order banning mining activities by KIOCL.
As per the information available, the company stopped blasting of mines on December 18 itself. Since then, the dumpers and other earth moving equipment were being slowly moved down the hills and parked in the workshop within the mining area.
KIOCL has not yet given up the hope and even though the Supreme Court has rejected all applications by the mining company, including a curative petition, two more petitions on slope stability as well as drawing one tmc ft water to company's pallet plant in Mangalore will be tentatively heard on January 26.
JSL artdinox to open 27 new outlets
The lifestyle products division of Jindal Stainless Ltd JSL artd'inox is planning to open 25 new outlets spread across the country by 2006 and a store each in Dubai and Colombo at an estimated expenditure of Rs 50 lakh per store. The company is planning outlets in the main metros and cities such as Ludhiana, Chandigarh, Surat and Pune. Currently artd'inox has one exclusive store each in Gurgaon and Mumbai and it plans to add one more in both cities.
Mr Sugato Bose business head of artd'inox said, "As a part of our strategy we aim to broaden our horizons and reach out to more customers, though we are witnessing 600 per cent growth and still find the need to expand. We will be launching 25 new stores in 2006. We also plan to add new products to our current portfolio."
Under brand artd'inox, JSL manufactures stainless steel lifestyle products including office desk accessories, kitchenware and tableware, which it retails at the stores. JSL has set up a plant at Rohad exclusively to produce lifestyle products, which has a 40,000 unit per year capacity. It exports almost 70% of its lifestyle products to markets such as Canada, the UK, the US and Australia, while the balance is available for domestic sale.
SAIL directors to shoulder additional charge
SAIL Director Personnel Mr SK Roongta and MD of Bhilai Steel Plant Mr RP Singh will hold additional charge of the post of MD of Durgapur Steel Plant and MD of Rourkela Steel Plant respectively as Dr Sanak Mishra MD of RSP and Dr SK Bhattacharyya MD of DSP have retired from service with effect from January 1, according to a company release. This arrangement has been made for a period of three months or until further order.
Moreover, four independent directors have also been appointed to the SAIL Board to fill up some of the vacancies. It may be noted that the entire top level management of SAIL and its steel units would change over the next six month.
Indian railway reluctant on restarting discount for imported coal
The railway ministry has revealed its unwillingness to restart the discount scheme, which was given on transportation of imported coal till recently and was stopped after CIL urged the rail ministry to not to give any sops for imported coal as the domestic coal was not given any discount. However recently the Cabinet secretary Mr BK Chaturvedi had directed railway officials to re-examine the possibility of restarting the scheme in wake of increase in coal imports
Railway ministry sources said that while discount scheme on coal worked well earlier when there was a glut in coal production and quantum of imports was limited. Sources also said that railway ministry was yet to begin discussion on the subject and there was no chance that the scheme may be revived in the near future. Railways maintain that uniformity should be maintained in freight rates for transportation of coal, whether indigenous or imported. It cannot go against CIL on any discount scheme, as CIL provides the largest business to the railways.
The decision of the railway ministry would be a setback for the steel sector that largely meets its requirement of metallurgical coking coal through imports. With coke comprising 30% of the total production cost of the steel sector, a discount would have helped it reducing the final output that has also become necessary in wake of cut throat competition in the sector.
India imported 21.68 million tonne of coal in 2003-04 and 26.13 million tonne in 2004-05. During the current fiscal, the planning commission has estimated a shortfall of 39.17 million tonne that would be met through imports.
Lower steel exports push down Indias exports revenues
Indian exports increased by average 20% for last 44 months but have slipped by 11.38% in the month of November 2005. Indian exports amounted to $57 billion during April-November 2005-06 which is 16.07% higher than $49 billion during April-November 2004-05.
Indian economy today is quite integrated with the global economy and changes in world trade do get reflected in our trade statistics. Sudden fall in international prices of primary steel products resulting in a fall in value realization and volumes has had an impact.
The commerce minister has spoken of achieving $100-billion export target in this financial year, even though the ministry has set a more modest target of $93 billion. The latter target appears to be achievable. To achieve that, an average monthly export realization of $7.5 billion would be needed. The average during the first eight months has been $7 billion. So, an export target of $93 billion seems to be within reach.
Russia cuts off gas to Ukraine
Russian state monopoly Gazprom said that it had cut supplies of gas to Ukraine by a quarter after Kiev refused to sign a new contract under which it would have to pay four times as much for the fuel. Gazprom said gas deliveries to Western Europe would not be disrupted unless Ukraine covered its own shortfall by siphoning off transit supplies being piped westward across its territory. All the gas now being pumped to Ukraine is meant to be shipped on to Europe
Gazprom spokesman Mr Sergei Kupriyanov said exports to Ukraine had been cut by 120 million cubic meters a day equivalent to Ukraine's total daily imports. He said 360 million cubic meters a day were being shipped as normal via Ukraine to other countries, and if supplies to Western Europe were disrupted, Ukraine would be to blame.
The Ukraine Naftogaz statement, contradicting Gazprom's figures, said the volume of gas reaching Ukraine from Russia had been cut by 187 million cubic meters a day.
The biggest European importers of Russian gas are Germany, Italy and France, which would have to draw down reserves of gas stored underground or seek alternative supplies if there was a major supply disruption.
Moscow is seeking a rise in the price of gas it sells to Ukraine to $230 per 1,000 cubic meters from the current $50 -- a level that reflects Soviet-era subsidized rates.
Chinas GDP up 9.8% in 2005 NDRC
China's economy grew 9.8% in 2005, said Ms Ou Xinqian vice minister of the National Development and Reform Commission NDRC. The commission's previous estimate for last year's economic growth was 9.4%. This figure was adjusted according to the newly-revised GDP in 2004.
China last month revised the size of its economy in 2004 by 16.8% to 15.99 trillion yuan ($1.93 trillion), with over 90% of the newly-added 2.3 trillion yuan from better data about the services sector.
Ms Ou revealed the figure at a meeting on the coal supply and demand. She said China's CPI remained within 2% in 2004 and the fixed assets investment grew 25%.
Arcelor on shopping spree in last week of 2005
While much of corporate Europe shut down last week, top officials at the
Luxembourg steel company Arcelor were working harder than ever. In the space of just seven days starting December 22, Arcelor bought a 50% stake in two Costa Rican firms and snapped up 20.5% of Erdemir. By far its biggest move came on December 23, when CEO Mr Guy Dollannounced a revised $4.2 billion hostile takeover bid for Dofasco topping an agreed offer by Germany's ThyssenKrupp.
Arcelor is trying to reduce its heavy dependence on the European market that now accounts for 75% of its business. "Expansion into North America is a key strategic objective for Arcelor," Mr Dollexplained.
China mine flood: Death toll rises to 13
Rescue workers have recovered five more bodies from a flooded coal mine in northern China's Shanxi province, bringing the death toll from last week's incident to 13, state media said on Sunday. Four workers remained missing after Wednesday's flood at the Fanjiasi mine in Dianwan town in Zuoyun County.
An initial investigation suggested that the accident may have been caused by an error on the part of mine maintenance workers, Xinhua reported last week.
Taiwanese Formosa Plastics to proceed with Yunlin steel mill
The Formosa Plastics Group announced that it expects to start work on its NT$140 billion ($4.27 billion) steel mill next year despite local opposition to the project. "The group is ready to launch the investment plan. Apart from waiting for emission standards to be released by the central government, the steel mill project is proceeding well," an official at group subsidiary Formosa Heavy Industries Corp said.
"We expect to break ground in the second quarter or the third quarter of next year," the official said. The official said that the planned steel mill will have an annual production capacity of 7.5 million tonnes of steel products.
Formosa Plastics Group, Taiwans largest industrial group responded to a report that the proposed project had come to a halt pending further discussions with the Yunlin County Government, who wants more compensation to offset the pollution likely to be caused by the plant.
China lifts coal price barrier for power companies
The National Development and Reform Commission NDRC said Friday in Beijing that the coal supply in 2006 will be enough to meet the market demand, therefore the government will call off price control measures against power companies adopted at the end of last year. The coal producers and power companies may negotiate the coal prices themselves, said the NDRC.
But the NDRC urged both sides should decide the price in a rational way. And to prevent unexpected soaring coal prices under the new mechanism, the NDRC will also set up an emergent-reacting system to ensure the stable market.
China has decided the total amount of railway transportation of key coal products would be controlled within 690 million tons in 2006. Currently, China's coal transport capacity on railways can only meet 35% of the market demand, said the NDRC.
NDRC predicted that China is expected to need a total of 2.15 billion tons of coal in 2006, 150 million tons more than this year.
Ukraines GDP growth slowed down in 2005
Over the period of the economic upswing that began in Ukraine in 2000, 2005 has proved to be the year of slowest economic growth. According to ICPS estimates, GDP grew 2.5% in 2005. Despite continued rapid growth of consumption, investment in the countrys economy shrank.
According to ICPS estimates, the balance of trade fell to US $118mn in 2005, after a record-high US $4.9bn in 2004. In 2005, imports of goods grew almost as fast as during the previous year, whereas exports slowed down from 41.6% growth in 2004 to 6% in 2005. In August 2005, for the first time since 1999, the balance of trade in goods became negative.
This decline in investment was driven by deep cuts in public investment. The lack of public resources for capital investment was the result of the new Administrations socially-oriented policies. Although the new government committed many mistakes that contributed little to the countrys economic growth, ICPS economists do not think that the steep economic slowdown is mainly the result of failed policies in 2005. Instead, ICPS experts are convinced that the foundation for sustainable economic development was not laid during the previous years.
According to ICPS economists, slower economic growth was the result of three long-term factors weak investment, lack of reforms and economic dependence on external factors.
The ICPS forecast for 20062007 is for the economy to grow 5.5% per annum. The acceleration in 2006 will be driven by renewed investment flows, which are expected to grow 7% according to the ICPS forecast on the back of increased commercial lending and public investment. In 2007, investment will accelerate to 9% per annum.
Rotterdam Port reports record throughput
Rotterdam Port, the worlds second-largest port, said it probably handled a record amount of cargo in 2005 as it moved more coal and mineral oils including petroleum. The port handled an estimated 369 million tonnes of goods last year, a 5% increase compared with the previous year. It also shipped about 9.3 million twenty-foot equivalent units, a 12% increase from last year.
The port benefited from processing larger amounts of coal, mineral oil products and containers. It handled about 27 million tonnes of coal last year, a 7% increase from the year earlier period, as demand for coking coal for steel production increased. Coal demand from Dutch and German power stations declined over the year.
Antwerp, Europes second-largest port, said it also likely processed a record amount of goods in 2005, led by steel shipments and container traffic. The port moved an estimated 160 million tonnes last year, also up 5% cent on last year. The port probably handled about 10 million tonnes of steel last year with imports up by 8%.
Coal mine fire defies firefighters in Australia
Firefighters are having difficulty accessing a blaze at a coal mine in Victoria's Latrobe Valley as firefighters and workers from the Hazelwood power plant worked through the night but failed to extinguish the fire at the Morwell open cut brown coal mine, 130km south east of Melbourne.
Firefighters said that the workers were still at the scene as the fire which began late yesterday continued to burn on a coalface about 200m long and 100m deep. Firefighters were wetting down the area to contain the fire but poor access meant there was little opportunity to extinguish the blaze.
ZISCO on the brink of collapse
Zimbabwe Iron and Steel Company ZISCO is on the brink of collapse as it is reported to be saddled with debts exceeding $30 million. Its major creditors include the National Railways of Zimbabwe NRZ, Wankie Colliery Company WCC, the Zimbabwe Electricity Supply Authority ZESA and the Jewel Bank formerly the Commercial Bank of Zimbabwe Limited.
It is estimated that US$250 million would be required to put ZISCO back on its rails. ZISCO is capable of earning US$105 million every year if it receives sufficient capital injection.
Analysts say ZISCO is edging towards collapse because of a backlog of decisions that were not executed for any apparent reason. A record 18 technical studies with detailed recommendations were done on ZISCO including by Voest Alpine Study, British Steel, Booz Alen and Chinese CICC. Nobody is prepared to take responsibility in case the revival of the company goes wrong.
A spokesperson for ZISCO said dismissing management and the board would worsen problems at the company. ZISCO can only recover if more money is poured into the rehabilitation of the giant steelworks. There is a solution to ZISCO's problems and this must start with a holistic approach to the issues involved. "A piece meal approach to ZISCO's problems will not be effective. First the rehabilitation program must be completed. "This will put the company's operations into new and current technology that will allow for improved productivity, improved product quality, reduction of production costs and open new export market with competitive value added products," he said.
He also called for the authorities to relieve ZISCO of its debt so that it can start to operate on a clean slate. But this could prove to be a tall order to the Government, which is the controlling shareholder in ZISCO, given the pressing and immediate task of financing the land reform and importation of maize to avert starvation. ZISCO needs to source offshore funding to limit its exposure to punitive interest rates prevailing locally.
Vietnam coal and mineral industrial group formed
Vietnamese Prime Minister has taken a decision on the establishment of the Vietnam Coal and Mineral Industrial Group VCMIG, a State-owned company mandated to manage the domestic coal and minerals market.
The VCMIG is licensed to engage in construction, exploitation, processing and export of coal and minerals such as copper, lead, zinc, aluminium, tin, chromium, gemstones and ferrous and non-ferrous metals. Besides, the group is allowed to take part in the management of thermo-power plants, engineering manufacturing and trade in industrial explosives.
The coal and mineral group operates as a holding company with the Vietnam Minerals Corporation becoming a subsidiary of the group.
Pakistan assures locals for revising steel structures import policy
Pakistans Central Board of Revenue has assured the steel sector traders for revising the import policy of steel structures. Following second round of talks with the CBR officials in Islamabad as representative of Lahore Chamber, steel industrys spokesman Mr Kashif Mehar told that Pakistans total steel production including imported steel has reached 9 million tonnes and that the talks with the CBR officials were in progress for combating the negative impacts on industry spurred by surplus steel.
Kashif Mehar suggested constituting a high-level Board comprising of the members of Chambers and steel industry for reviewing the policy after every three months.
Ukraine to boost car output 11% in 2005
Ukraine's car making industry will boost production 11% on the year in 2005 to 200,000 cars in 2005, up from 180,000 cars produced in 2004 Mr Yuriy Yakovenko, the head of the automotive department at the Industrial Policy Ministry, said.
The pace of growth is less than a half of what had been originally expected and is the result of canceling tax breaks that the domestic industry had enjoyed for the past several years, he said.
Espito Santo Brazil's second largest exporter to Arab nations
Brazil's southeastern state of Espito Santo has risen from fifth to the second place among the largest Brazilian exporters to the Arab countries. Between January and November, the state had revenues of US$ 506.2 million with sales to the League of Arab states. Only the state of S Paulo had greater revenues with exports to the region US$ 1.9 billion. Sales from the state to the Arabs rose 85% up to November this year as against those in the same months last year.
"Our sales almost doubled," stated the president of the Espito Santo Union of Export and Import, Severiano Imperial. A large part of the increase took place due to the sales of iron ore, which grew 98.8%. Industries from the state had revenues of US$ 454.6 million with iron ore exports to the Arab world between January and November this year, against US$ 228.7 million in the same period in 2004.
Mining companies CVRD and Samarco have operations in the state. Samarco is in the city of Anchieta and Vale is located in Vitia the state capital.
At the beginning of this year CVRD signed a contract with Qatar Steel Company for the supply of 2.66 million tons of iron pellets up to 2010.
Vast coal reserves in North Sea
Students from Norwegian University of Science and Technology analyzed data from 600 wells drilled on the Norwegian Shelf of the North Sea. They calculated that there is 3000 billion tons of coal off the Norwegian coast. Most of the reserves are located at Haltenbanken.
This compares to todays proven and recoverable world reserves of 900 billion tons of coal.
Norwegian oil company Statoil thinks that the vast coal-reserves on the Norwegian shelf can be utilized.
