April, 10 2006
Australian mineral resource minister invites Indian companies for tie ups
Mr Ian Mcdonald NSW Minister for Natural Resources, Primary Industries and Mineral Resources Australia during a 3 day long international conference on global steel 2006 in Goa invited Indian companies to capitalize on Australias huge reserves of coking coal, a raw material for steel industry, and forge agreements in this regard. "We have resources that can help India develop its steel industry and in the current scenario resource security is the most important aspect. We have significant resources of coking coal and companies associated with the steel industry can secure this coal as it is basic raw material for them" he said.
Mr Mcdonald said that during the conference three Indian companies evinced interest for joint venture with Australian companies. "The talks are yet to begin with these companies", he added.
"A lot of companies are keen to ink joint venture agreements with Australia and secure the supply. Ensuring security of raw material supply is most important for any industry," said Mr JP Singh former Joint Secretary Union Ministry of Steel and present Chief Secretary of Goa.
Of the 20 million tonne coking coal imported by India, a major share comes from Australia.
Expansion plans of BSP as per SAILs Corporate Plan 2012
As per SAIL Corporate Plan 2012, BSP has planned to increase the capacity of Hot metal production to 7 million tonnes by the year 2012. By the end of the first phase of Corporate Plan in 2006-07, BSP's capacity will be enhanced to 5.45 million tonnes of hot metal, 4.95 million tonnes of crude steel and 4.25 million tonnes of saleable steel with finished steel at 74% of total saleable steel. By 2011-12, BSP's capacity will be enhanced to 7 million tonnes of hot metal, 6.7 million tonnes of crude steel and 6.21 million tonnes of saleable steel with finished steel at 92% of total saleable steel.
SAIL Corporate Plan 2012 envisages an investment of Rs 9000 crores for BSP. Schemes of Rs 1200 crores have been finalized and ordering completed. Out of this, three schemes have been commissioned while the remaining 8 schemes are scheduled to be completed in stages by September 2007. Further, 27 schemes are planned for Management Approval in 2006-07. The capital expenditure during the financial year 2006-07 is Rs 235 crores.
There are plans for production of 100% of steel through basic oxygen furnace and continuous casting by 2012, with addition of a new Steel Melting Shop-III of 3.9 million tonnes per annum capacity and revamping of SMS -II to augment its capacity to 2.8 million tonnes per annum. The volume of semis would be reduced from 26% to less than 8% by 2011-12 through de-bottlenecking of existing mills such as rail & structural mill, merchant mill and modernization of wire rod mill, plate mill and installation of a new bar & rod mill. The product mix would be widened with installation of a compact strip plant and a pipe plant.
Against these plans, certain projects are already under execution. These projects include rebuilding of coke oven battery No 5, modernization of BF No 7, installation of hydraulic automatic gauge control & plan view rolling in plate mill, modernization of B-Strand in wire rod ill and installation of turbo generator No 3 in power & blowing station.
SAIL board has approved the proposal for installation of a new slab caster with associated facilities like Ladle Furnace & RH Degasser for SMS II of BSP at an estimated cost of Rs 520 crores and installation of hot metal desulphurisation in SMS-II at a cost of Rs 86.23 cr.
TATAs Bangladesh investment plans likely to be formalized soon
TATA groups $2 billion investment plan for setting up fertilizer, steel and power plants in Bangladesh will soon be formalized. Negotiations in this regard are in the final stages, and a high-power delegation of TATA Sons will soon go to Dhaka to negotiate gas contract chairman of the company Mr Ratan Tata told FE.
A senior official of the company said, the major irritant was difference of opinion on gas price offered by the TATA and that demanded by Bangladesh. Other reasons stalling the move were instability and security threats. It is reported that TATA offered $1 per mmbtu for gas whereas Bangladesh demanded higher price in the range of $4 to $5 per mmbtu, which led to failure of the negotiations. Now, both the sides have agreed to be more flexible, and the agreement will be signed this year.
Mr Ratan Tata said that the differences would be sorted out soon.
SAILs increased coking coal imports to put pressure on logistic
It is reported that preliminary estimates suggest that the Steel Authority of India Limited will be required to import about 11.5 million tonnes of coking coal in 2006-07 as against actual import of 9.9 million tonnes during 2005-06 as SAIL's hot metal production is estimated at 15.2 million tonnes in 2006-07 up from 14.4 million tonnes in 2005-06. Due to substantial increase in hot metal production the requirement of coal will be an estimated 15.83 million tonnes in 2006-07, comprising 11.5 million tonnes of imported coal and 4.32 million tonnes indigenous coal.
SAILs coking coal import takes place through three ports on the east coast. SAIL imported 4 million tonnes of coking coal through Visakhapatnam port, 4.37 million tonnes through Haldia and about 1.52 million tonnes through Paradip during 2005-06. The reported estimates for 2006-07 are 4.5 million tonne through Visakhapatnam, 5 million tonnes through Haldia and 2 million tonnes through Paradip.
The increased volumes of coking coal would put pressure at the port facilities as imported coking coal for steel plants has to compete for storage in ports with so many other commodities such as iron ore for exports, imported thermal coal for power plants, thermal coal for coastal shipments.
In addition the movement of coal from port to various steel plants would also have to increase substantially. South Eastern Railway and the East Coast Railway handle the imports almost entirely. According to tentative plans, the SER will be required to handle 5.05 million tonnes of imported coal on SAIL account in 2006-07 compared to 4.33 million tonnes in 2005-06, up an estimated 17% while the ECOR an estimated 6.44 million tonnes as against 5.3 million tonnes in 2005-06 a 22% increase.
Projects commissioned at BSP during 2005-06
It is reported that SAIL Bhilai Steel Plant has commissioned several projects during 2005-06. The list includes the following
1. Replacement of mill stands 9, 10 & 12 of merchant mill by housing less stands to enhance product quality by achieving consistent closer tolerances, reduction in roll breakage and reduction in roll changing time in November 2005 at a sanctioned cost of Rs 18.64 crores.
2. Installation of on line ultrasonic testing machine at plate mill in Mrach 2006 at a sanctioned cost of Rs 10.37 Crores.
3. Installation of coal dust injection unit at BF No 1 & 5 in December 2005 a cost of Rs 29.21 crores.
4. Crushing & screening facilities for BF over size iron ore lumps at Dalli Mines was completed at a cost of Rs 1.84 crores.
5. Independent exhaust system for slab caster.
6. Additional flare stack for convertor vessel.
7. Extension of pinch roll repair shop at SMS II.
8. Additional gravity filters and pumping main to augment the equipment cooling at CCS.
Arcelor will continue to invest massively despite cash payouts Mr Dolle
Mr Guy Dolle CEO of Arcelor SA, said that the steel maker will continue to invest heavily in its production and research capacity in coming years, despite the heavy cash payouts promised to shareholders as part of his efforts to fend off a hostile takeover bid from Mittal Steel. Arcelor announced last week that it would raise the dividend payout on last year's earnings to 1.85 euro per share from 1.20 euro and announced a new plan to return 5 billion euro to investors through share buybacks or exceptional dividends.
If we made this proposal to shareholders, in a situation where we are in combat, as it were, it's simply because we have faith in our industrial model. Mr Dolle said in an interview with France Inter radio on Saturday. We have generated this financial capacity, and we are going to continue to generate them as we continue to invest massively in our factories, in particular those in Europe, and as we continue to expand in areas of innovation and research and development, he said.
MSCs capacity reaches 4.2 million tonnes
It is reported that the production capacity of the Isfahan based Mobarakeh Steel Complex has reached 4.2 million tons per annum.
Mr Mohammad Rajaii deputy director of MSC said that pre commissioning stage of cold rolled steel lines and pilot production plus installation of a reduction unit were completed as of March 20, 2006. The reduction unit is expected to come on stream by mid June 2006, he added.
At the moment, the pilot production contributes 1,000 to 1,200 tons per day to the annual cold-rolled steel capacity, hitting the total of 1.5 million tons.
SMS Meer GmbH to modernize Atlas Tubes 16" tube welding line
Atlas Tube Inc Canada has placed an order with SMS Meer Mchengladbach, Germany for the supply of equipment for the modernization of a 16" tube welding line. The modernization will be carried out as part of plant relocation from Canada to a new operation in the USA.
The order for SMS Meer includes the supply of a new cross welding table, a spiral strip accumulator and a squeeze stand with outside flash trimmer. The scope of supply also includes the tube transport facilities down line of the cut off unit and the automatic bundler.
The tube welding line is designed for the production of tubes with outside diameters from 5" (127 mm) to 16" (406 mm) and square hollow structural section sizes ranging from 4" (101.6 mm) to 12" (304.8 mm) with a maximum wall thickness of 0.625" (16 mm) at welding speeds up to a maximum of 146 feet per minute (45 meters per minute).
SMS Meer GmbH forms part of the Tube, Long Product and Forging Technology Business Area of the SMS group. SMS GmbH is the holding for a group of companies internationally active in plant construction and mechanical engineering relating to the processing of steel, non-ferrous metals and plastics. The group is divided into the Business Areas of Metallurgical Plant and Rolling Mill Technology, Tube, Long Product and Forging Technology and Plastics Technology.
Mittal Steel Mexico reported to be firing striking workers
It is reported in local media that Mittal Steel's Mexican unit has begun steps to fire about 800 workers striking in support of their deposed leader, bringing the total number of fired workers at the steel mills in Lazaro Cardenas to more than 1,100 as during the weekend Villacero's Sicartsa unit at the same complex took steps to fire at least 300 of its striking workers.
After workers ignored Mittal Steel's ultimatum to return to their jobs on Saturday, the company launched a process to cancel their collective contract, national daily El Universal reported.
More than 4,000 steel workers and miners have walked off the job to try to pressure the government to recognize as their representative former union boss Mr Napoleon Gomez, whom the government has accused of corruption. Copper miners at Grupo Mexico's La Caridad copper mine in the northern state of Sonora began a strike on March 24 and have received support of other miners and steel workers at Sicartsa's and Mittal Steel's steel installations.
Stelco's former shareholders cry foul after newly issued stock soars
Newly issued stock in Stelco Inc's, which was doled out at $5.50 apiece to creditors, financiers and the steel producer's new CEO, traded as high as $24.90 on the Toronto Stock Exchange last week. The shares, which began trading Monday morning, closed Friday at $18.50. Stelco's old shares were wiped out and delisted last month as the company completed its court supervised restructuring process, which left value for bondholders and other creditors but nothing for stock investors.
Now some members of the shareholder group are crying foul. "This is a pretty sad day," "What the market's basically said is what we said, and that's that there is substantial value there" Mr Jervis said. "Does this not suggest that the process was somewhat disgraceful? You've got at least half a billion dollars of shareholder value that had to be there before."
Mr Peter Jervis represented a group of Stelco's former shareholders, including AGF Management Ltd. and Pollitt & Co, which had tried to stop the old stock from being wiped out. Shares of firms that file for bankruptcy protection in Canada normally lose all their value because shareholders are at the bottom of the ranking of creditors to be paid back. In January, Mr Jervis's clients lost a legal bid to delay Stelco's restructuring for 30 days while they tried to find a buyer for the steel maker.
Stelco's stock market value is close to $600 million now. Jervis's clients commissioned a report by Navigant Consulting, which concluded that Stelco's shareholder equity should be worth between $1.1 billion and $1.3 billion. A later report by the same firm revised that estimate down to $750 million.
Fire at wire rod mill of Nigerian Ajaokuta Steel
It is reported that a fire broke out at GSHLs Ajaokuta Steel Rolling Complex during the weekend. The fire is reported to have started at the wire rod mill and was reportedly caused by unstable electrical voltage. The fire lasted for several hours and was put off by the fire service.
Mr Mike Amaduaka operation manager said that the fire was noticed when the power supply at the wire rod mill showed high voltage and later low voltage, after which fire broke out, adding that the inferno did not affect production.
The Kogi State governor Mr Alhaji Ibrahim Idris also rushed to the complex to assess the extent of damage.
Isfahan Steel targets 3 million tons production in 2006
Iran's Isfahan Steel Co MD Mr Bahram Sobhani announced that this year's production has been targeted for 3 million tons. "Last year although we faced many difficulties and problems we successfully produced 2.574 million tons worth $1 billion and this year hopefully we are to produce 3 million tons" said Mr Sobhani.
"Also we were able to produce 330,000 tons of exportable products which of course had to meet specific requirements, which this number is twice the amount of exported products in 2004," he added.
Australian ports delays double in 2006
Ship consultancy Simpson Spence & Young said that port delays which regularly stoke global dry freight prices, for loading coal and iron ore in eastern and western Australia have risen to 9 days, twice the average of 4.6 during 2005, Analysts said the delays were supporting prices on core routes, though their influence was less marked compared with 2003 and 2004.
SSY said cyclones that hit Western Australia in the first quarter or 2006 contributed to the congestion. According to SSY's Australian coal port congestion index, average delays at coal terminals are around 10 days, the highest in eight months.
1 killed & 2 trapped in Songzao coal mine accident in Chongqing
One person was killed and two others trapped in a coalmine accident Sunday in Chongqing, Southwest China's Chongqing Municipality. The accident took place at 10:40 AM at a mine of the Songzao Coal & Electricity Ltd Co in Shihao Township, Qijiang County, according to officials with the company.
Rescuers have found the body of the dead and were looking for the two trapped miners. Rescue work and investigation into the cause of the accident are still underway.
Auto demand drives Thai CSP forecast higher
Thailands CSP Steel Centre Plc has projected a 15% rise in revenue during 2006 over 2.74 billion baht in 2005 citing a pickup in global steel prices and higher demand from the automobile industry. CSP MD Mr Weerasak Chaisupat said performance in the first quarter of this year would be better than in the fourth quarter last year, thanks to the improving trend in steel prices. Further gains are expected in the second quarter. Mr Weerasak said the company expected its profit margin to return to its normal range of 10-12% on higher steel prices and rising demand.
"This year we will continue to focus on the automobile industry, even though local sales might be slightly affected by the political situation, but this is not significant since we have many customers in the export business" Mr Weerasak said.
CSP plans to increase the production capacity for steel pipes for the automobile industry by 30,000 tonnes in 2006 to reach 223,800 tonnes per year. Two new machines will be installed by June. A slitting line and a cold rolled steel pipe machine installed recently are now in operation.
CSP reported revenues of 2.74 billion baht in 2005 up by 39.5% from 1.96 billion in 2004 and net profit rose by 56.6% to 69.21 million baht but gross profit margin dropped by 7.86%. Automobile companies accounted for 30% of CSP's total sales last year, furniture makers 15%, appliance makers 12% and the wholesale industry 25%.
Mechels Chelyabinsk Works order special steel casting package from Danieli
After the record breaking results obtained at the existing 6 strands Danieli FastCast conticaster at Mechels Chelyabinsk Works in Russia, with 1.1 million tonnes of 100x100 mm billets produced in 12 months of operation, Mechel Group decided to enlarge casting flexibility on the 2nd Danieli FastCast caster currently under installation. The special steel casting package will enable to cast in submerged mode180 mm square and 150 mm dia round billets.
Main equipment included in the package are stopper rods, automatic powder feeding system, new 1,000 mm long moulds, implementation of the secondary cooling system and Danieli Rotelec Final EMS for guaranteeing the highest quality level for all steel grades castable in continuous mode. Danieli Automation will take care of the automation and process control system implementation.
Pakistans EDB finalizes tariff recommendations for steel sector
Pakistans Engineering Development Board has finalized tariff recommendations for budget 2006-07 on the steel sector. The recommendations for reduction of tariff were accepted while the request for increase in tariffs was turned down in order to keep the prices low.
EDB CEO Mr Imtiaz A Rastgar presided over a meeting with representatives of steel manufacturers, the Pakistan Steel Melters Association, Ship breakers Association, Pakistan Steel Re rolling Mills Association, All Pakistan Contractors Association, Pakistan industrial Fasteners Manufacturers Association and Pakistan Steel Line pipe Industry Association. Their recommendations for reduction of tariff were accepted while the request for increase was turned down in order to keep the prices low.
On the demand of industry an 11 member group was formed to examine the sales tax and pricing issue. It will present its report within a week to the Board.
Coal prices could drop 5%-10% in 2006 Mechel
Coal prices in Russia could drop by 5% to 10% in 2006 due to decreased consumption and increased production Mr Alexander Yevtushenko a director at the Mechel group told a news agency.
Mechel itself plans to expand its coal segment and it thinking of building new capacity including the Sibirginskaya deep mine and Olzherassky strip mine. Production at these mines is due to begin by 2008.
Pakistan government to support steel industry development
Pakistans minister of state for investment and special initiatives Mr Omar Ghuman has said the steel sector in Pakistan is showing robust growth of 15% to 20% annually. He said that the government recognizes the needs of the steel industry and is actively considering measures to further support and strengthen this vital sector of the countrys economy.
He said there was a gap between supply and demand, a shortfall of approximately 1.2 million tons per annum.
Coal import into US to further increase
According to the USs Energy Information Administration coal import in 2005 was highest at 30 million short tons and is likely to reach 46 million short tons by 2025, resulting in competition to Central Appalachia producers. Some experts believe imports will make the most impact in the Southeast, but several experts say that that, compared with the 1.13 billion short tons produced in the US in 2005, imports will have little effect on any market.
Of the four customs districts cited by EIA, two accounted for most of the tonnage. The southern customs district saw more than 18 million short tons in 2005, followed by the eastern customs district with 9.5 million short tons, EIA said. Colombia supplies the most coal to the US, some 21.2 million short tons in 2005, while Venezuela is a distant second, shipping 3.7 million short tons, according to the EIA's Coal Report October-December 2005.
The Appalachian area produced 396.4 million short tons in 2005, up 1.7% from almost 390 million short tons in 2004, EIA said.
US uses about 22 million short tons of coal every week.
No rating impact on MMK from PSMC buy Fitch
Fitch Ratings said that Magnitogorsk Iron & Steel Works default rating of BB minus with stable outlook will not be affected by the recent acquisition of a 75% stake in Pakistan Steel Mills Corporation through a consortium including MMK, Al-Tuwairqi and Arif Habib Group. As a lead partner in a consortium for this PSMC acquisition, MMK will finance the main part of the transaction. The consortium submitted the highest bid of $361.8 million, which the Pakistani government is expected to formally accept within 30 business days.
MMK had a net cash position of $499 million at end 2005, which is sufficient to finance the purchase without it taking on additional debt. In Fitch's view this acquisition will not materially change the operating or financial profile of MMK, and is therefore seen as credit neutral.
This deal will be the first acquisition by MMK, which has so far refrained from domestic or international M&A expansion. Taking into account the acquisition's relatively small size, it may be viewed as a test pilot project and does not necessarily indicate a strategic change in the company to a more aggressive stance on debt-financed acquisitions. Fitch would see any further acquisitions as an event risk.
Baosteel orders X ray pipe inspection system for new mill to YXLON
Baoshan Iron & Steel Co has awarded YXLON International a contract for three state of the art X-ray real time inspection systems and two state of the art X-ray film inspection systems. The systems will be used to secure the quality of the pipes produced in the new pipe factory, which Baoshan Iron & Steel Co. is building within its LSAW Pipe Project. The pipes produced will be used for oil and natural gas transportation. At completion in 2007 the total capacity of the new pipe factory is up to 350,000 tons per year. The production facility will be able to handle pipes with 508mm to 1422 mm in diameter and 10 meters to 18.5 meters in length in wall thickness up to 40mm.
The pipe inspection systems provided by YXLON International will inspect 100% of the production according API 5l standard. The systems are designed to meet the high capacity requirements and the high demands for superior image quality from Baoshan Iron & Steel Co.
YXLON International, with its expertise in worldwide pipe business, has developed a series of pipe inspection systems to meet the high demands of the pipe industry. The YXLON expertise includes inspection methods for all variations in pipe material and sizes up to 3048 mm diameter, 19 meters length and up to 32 tons weight per pipe. The solutions offered include material handling and or interfacing with the material handling systems of all types of pipe mills.
YXLON International is an innovative high tech company with a long tradition. Founded in the spring of 1998 as the direct successor to Philips Industrial X-Ray of Germany, Andrex of Denmark and LumenX of USA. Andlinger & Comp Inc is the majority shareholder of YXLON. Through its headquarters in Hamburg, Germany, subsidiaries in the USA, Japan and Denmark, two sales offices in China and a tightly meshed network of agents, YXLON International keeps in close contact to its customers worldwide.
New GD for Prokopyevskugol appointed
It is reported that Mr Sergei Tikhonov, formerly deputy head of Novolipetsk Steel's office in Novokuznetsk, will take charge as GD of Prokopyevskugol, a coal producer in the Kemerovo region of Russia.
Novolipetsk Steel has acquired 100% of Kuzbass Asset Holdings Limited, which controls Prokopyevskugol. Novolipetsk Steel bought the shares from the former owners of Prokopyevskugol, which are companies representing the Kuzbassrazrezugol Coal Company.
Prokopyevskugol did not comment on the information. "Official information will be released in due course" it said.
Western Canadian Coal appoints VP Marketing & Business Development
Western Canadian Coal Corps President and CEO Mr Gary K Livingstone has announced the appointment of Mr Paul Brent as Vice President Marketing & Business Development effective April 5, 2006. Mr. Brent will be responsible for coordinating the Company's marketing efforts as well as identifying and developing other strategic business opportunities. He will also retain responsibility for transportation, a critical component in maintaining WCCC's cost competitiveness.
Mr. Brent has over 25 years experience in marketing, most recently as WCCC's Director of Commercial Development. Prior to joining the Company, he was VP Marketing at BC Rail. Mr Brent's experience in the 80s and 90s included marketing and business development roles with Canadian Pacific Railway and Ford Motor Company as well as consulting assignments in Canada's coal and transportation industries.
