May, 24 2006
Essar & Stemcor JV to set up 5 meter wide plate mill
Essar Steel has entered into a 76:24 JV with Stemcor for setting up a plate mill at Hazira named as Hazira Plate Mill with an estimated investment of Rs 1,969 crore ($433 million) with annual capacity of 1.5 million tonnes. The technology for the mill is being provided by VAI Clecim of France. The mill is scheduled to be commissioned by the end of 2007.
Essar said that it has achieved full financial closure for this project. SBI Capital Markets and IDBI Capital Market Services have syndicated the term loan facility.
It will be the first plate mill of its kind in India with the capacity to produce ultra wide plates of five meter width and one of the select mills globally. Wide plates find application in varied industries including, manufacture of large diameter oil and gas pipelines, ship building, boiler vessels and construction industry.
TATA Steel plans raw material source overseas
TATA Steel is planning several projects in India and overseas to own strategic raw materials sources. TATA Steel has planned projects for coal in Bangladesh, limestone in Oman, iron ore in Iran and Southeast Asia. This is besides the planned projects in coal and iron ore in the domestic market.
Dr T Mukherjee deputy MD (Steel) of Tata Steel said there were large coal deposits to the northwest of Bangladesh and the company was in an advanced stage of negotiations for it. He said that the company was looking at limestone deposits in Oman and also iron ore in Iran but nothing had been finalized yet. The company was also in discussions with an Australian company for a stake in a coal mine project.
Dr Mukherjee said the company was in an extremely advantageous position as far as raw materials were concerned and would continue to leverage it. He added raw materials accounted for 50% of the cost of production. The company was looking at insulating its margins from rising input costs, which had hit steel makers without captive raw materials.
Indian Railways to resume wheel imports
Indian Railways is likely to resume importing wheels this year onwards and import about 40,000 wheels as Railway Minister Mr Lalu Prasad Yadav has agreed to allow import of wheels for the next two three years till the wheel production capacity within the country goes up. Indian Railway plans to place its highest ever wagon procurement order for 30,000 four wheeler unit wagons this financial year.
A Parliamentary Committee has pointed out that Indian Railway needs to import 40,000 wheels if it has to meet its target of acquiring 30,000 FWU wagons during the fiscal. To meet its target of wagon procurement, Railways requires around 240,000 wheels during the 2006-07. The total manufacturing capacity in the country is about 200,000 wheels, which would result in a shortage of 40,000 wheels.
Indian Railway has not been importing wheels for last few years Mr Lalu Prasad was keen that Railways should meet its wheel requirements through indigenous production capacity. The Railways is in the process of setting up wheel and axle plant at Chhapra in Bihar.
NCDEX to launch futures contracts of nickel
National Commodity & Derivatives Exchange Limited is set to launch Nickel Cathode Futures contract. Contracts would be settled on the basis of international prices in rupee denomination. Contract size, called delivery unit, is set at 250 Kgs. The exchange has marked Bhiwandi as base centre & Delhi as the additional delivery center.
There are no mines & smelters in India producing nickel and the entire requirement is met through imports.
About 65% of nickel is used to make stainless steel. The aerospace industry is a leading consumer of nickel-base super alloys. Turbine blades, discs and other critical parts of jet engines are fabricated from super alloys.
Bangladesh steel makers plan protest against TATAs steel plant
The Bangladesh Steel Mill Owners Association and the Bangladesh Re-rolling Mills Association in a joint meeting have decided to stage a mass rally May 29 to protest the government's decision to allow TATA group to set up a 2.4 million tonne capacity steel mill in Bangladesh. They will also stage a sit in the same day in front of headquarters of the Federation of Bangladesh Chambers of Commerce and Industry which is backing the project.
The domestic steel mills and re rollers have been campaigning against the TATAs proposal, which they see as a threat to their business. It is not clear that what is driving this protest as TATA is planning to setup a hot rolled coil plant, which will not harm domestic producers of long products. In fact the HRC plant would substitute imports of HRC by cold rollers helping the domestic steel industry.
Lanco group to buy coal mines in Indonesia
BL has reported that Hyderabad based Lanco group is planning to acquire coal mines in Indonesia for meeting the requirements of its power projects. The group's international consultants have already short listed some of the mines in this regard.
Mr L Madhusudhan Rao chairman said that they are targeting to have an installed capacity of 10,000 MW of gas, coal and hydel power projects spread across the country by 2015.
Currently, the group is producing 509 MW of power through five power projects and the company is setting up Lanco Amarkantak Power, a 1,200MW coal based power project and 800 MW hydel power projects in Sikkim and Himachal Pradesh.
Visa Steel to increase capacity at Kalinganagar plant
Visa Steel Ltd plans to expand its steel-making capacity in Orissa by over 31% to 2 lakh tonnes per year at a cost of Rs 1,400 crore. The site of the expansion would be close to the companys existing plant at Kalinganagar in Orissa and production is slated to begin from December 2007.
Mr Vishal Agarwal MD said that the expansion, funded through a combination of debt, equity and internal accruals, includes setting up ferro chrome, sponge iron, special and stainless steel plants and a 50MW waste heat recovery plant.
Vizag union leader unhappy with PMs visit
Vizags CITU district president Mr S Jyoteeswara Rao expressed unhappiness over Prime Ministers visit last week. He said that Prime Minister Dr Manmohan Singh has disappointed workers of BHPV, Hindustan Shipyard Limited and Visakhapatnam Steel Plant by not announcing specific packages for the revival of the first two ailing units and maintaining silence on the proposal for allocation of captive mines to RINL.
Mr Rao said that the Centre gave green signal for VSP expansion on one hand and proposed the construction of air separation plant and thermal power plant in VSP on BOT basis, thus making a move to privatize the plant in a phased manner.
Baosteel announces price hike for Q3
Shanghai Baosteel Group Corp announced that it will raise key product prices in the third quarter by an average of 6% to 7% to keep pace with recent price rises in major markets worldwide. Baosteel's latest price hike came after it raised steel prices for second-quarter delivery by an average of nearly 20% from the first quarter.
Baosteel said "prices of its key products were $100-$200 a tonne lower than those of similar products in U.S. and European markets and $50-$80 below prices in Japan and South Korea. China's steel prices are now at the bottom compared with their global counterparts, and have the potential to catch up. In addition, a rapid increase in prices of energy, some iron alloys and non ferrous metals such as zinc has added costs to steel manufacturing."
The Chinese firm's price rise appears partly intended to offset higher prices for iron ore.
CVRD seals iron ore prices with Taiwanese China Steel
Companhia Vale do Rio Doce has concluded the iron ore price negotiations for 2006 with China Steel Corporation. As an outcome of these negotiations, iron ore prices for Carajas (SFCJ) and Southern System (SSF) fines increased by 19% relatively to 2005. Blast furnace pellet price from Tubarao plants will be reduced by 3.0% compared to 2005.
During the last few days CVRD has settled prices for iron ore fines and blast furnace pellets with the world's major steel makers in all regions, Americas, Europe, Asia and Africa, consolidating the new global prices for 2006.
BHP tightlipped about iron ore price negotiations
BHP Billiton is still negotiating a benchmark iron ore contract price with Asian steel mills and is tight lipped about the annual negotiations saying only that talks with the mills were continuing and would not be drawn on whether the company was expecting price increases similar to those achieved so far Rio Tinto and CVRD.
Mr Chip Goodyear CEO of BHPB said "it's best that I stay away from that, there is a market out there and we are in the middle of negotiating season."
Teck Cominco makes formal bid for Inco
Teck Cominco Ltd has made its formal offer for Inco Ltd. The proposal, valued at C$15.7 billion ($14 billion) in stock and cash, will be evaluated, and investors will probably be advised next week. The offer expires on July 24.
Teck Cominco offered C$78.50 in cash or C$28 in cash and 0.6293 of a Class B share. The bid, announced on May 8, requires Inco to cancel its friendly takeover of Falconbridge Ltd. Xstrata Plc, which owns 20% of Falconbridge, made an unsolicited offer of C$52.50 a share for the rest of the company on May 17.
Mr Donald Lindsay CEO of Teck Cominco, the world's largest zinc miner, said that offer represents the best deal for Inco shareholders.
No new coalmine projects in next five years in Shanxi
Shanxi People's Congress has decided that Shanxi Province will not approve any new commercial coalmine projects in the next five years. There were signs that the coal sector in Shanxi had begun the transition from a seller's market to a buyer's market.
Mr Wang Shouzhen head of the Shanxi Bureau of Coal Industry said that Shanxi would lift output to 700 million to 750 million tons in the next five years in order to ensure the sustainable development of its coal industry and with the exception of deep processing projects no new commercial coalmine venture would be approved over the period as a matter of principle.
It is required that coalmines with annual production capacity lower than 90,000 tons will be forced to shut while those with annual output lower than 300,000 tons would not be given the go ahead to expand and will also be eliminated when resources are exhausted.
According to the report Shanxi will cut down the number of coalmines to 2,500 by 2010 and to 2,000 by 2015. Currently, there are over 9,000 mines in the province.
Mittal Steel to send business plan to Arcelor this week
Reuter has reported that Mittal Steel hopes to send its business plan to Arcelor by the end of this week citing sources familiar with the matter.
Reuters reported citing the source that "Mittal Steel is giving extensive details and working on providing its business plan to Arcelor this week. Mittal Steel is hoping to do this during the course of Friday, if not sooner."
BHPB confident of metals market to stay strong
Mr Chip Goodyear CEO of BHPB is confident the markets would remain strong although the prices of other metals on global commodities markets have slipped in the last week.
Mr Goodyear said "We have seen in the short term market place, both on the way up and obviously in the turmoil of the last week or so, that speculators and hedge funds have taken a significant interest in this business. But the underlying fundamentals of supply and demand around the world remain the same we see very good economic conditions around the world the supply side is still struggling to keep up."
Mr Goodyear said strong demand for investors looking for exposure to high metal prices would create ongoing volatility in the market. He said "You are going to get volatility when you have a huge amount of money trying to chase after what is in a world sense a relatively limited market."
Rescuers speed up pumping operations in flooded coal mine
Water level began to fall after days of pumping in north China's flooded coal mine where 57 miners are believed to be still trapped underground. By 6 PM on Tuesday, about 4,600 cubic meters has been pumped out of the mine and water level in it began to fall.
The flooding accident occurred at 8:30 PM on last Thursday at Xinjing Coal Mine in Zuoyun County, northern Shanxi. Latest check results show that probably 57 miners are still trapped underground while another 101 managed to escape.
Initial investigation shows that the mine owner did not report the accident immediately to local safety officials, only saying five miners were trapped when local pubic security officials came to investigate the accident after they got information from local residents.
TMK posts annual performance
The net profit of Russia's largest pipe maker, TMK, under International Financial Reporting Standards increased by 9.4 folds to Ruble 7.597 billion ($280.37 million) in 2005. The company's net income rose by 42.9% to Rubles 79.175 billion ($2.92 billion). Gross profit increased by 88.4% to Ruble 20.486 billion ($756.04 million), operating profit stood at Ruble 12.402 billion ($457.7 million) and EBITDA was Ruble 15.880 billion ($585.05 million).
TMK's strong performance is attributed to favorable global market conditions underpinned by high oil prices and a growing demand for pipe products on the part of oil companies, as well as the realization of a program to renew production capacities, and measures to boost the efficiency of corporate governance.
Siemens to supply automation and drives for new tandem line of Tianjin
The Siemens Industrial Solutions and Services (I&S) Group is supplying the complete automation and drive technology for a new, five stand coupled tandem line of the Chinese Tianjin Tiantie Metallurgical Group Steel Plate Co Ltd.. The project is part of the company's comprehensive changeover to flat steel production. The new plant is scheduled to start production at the beginning of 2008.
Located in Hebei province in China, TTMG is planning to completely change its production from long products to flat products. To do this, the company will expand its steel production capacity and build new hot and cold rolling facilities. A new cold rolling mill is being built in Tianjin. The core of the plant will be a tandem line with an annual capacity of around 1.5 million tons per year.
Siemens is supplying the drive technology and the entire automation system for the new tandem line. Cylindrical rotor synchronous motors will be used as the main drives and will be supplied with power via DC link converters. Automation of the plant will be based on the Siroll CM family of products and will include the technological control systems as well as the complete process automation.
MMZ resumes exports to CIS countries
Moldovan Metallurgical Plant has resumed exports after a break of more than two months by temporarily registering with the State Registration Chamber of Moldova. Temporary registration permits exports and imports only with CIS member states. To trade with other states, a company is supposed to receive a permanent registration with Chisinau.
MMZ suspended exports on March 3 when Ukraine and Moldova introduced a new customs regime for Transnistrian companies. Due to two months pause in exports MMZ has built up high inventory. MMZ exports almost 90% of its production.
China's GDP grows by 1.3% in Q1
The Chinese economy grew by 10.3% in the first quarter of this year, a tenth of a percentage point higher than earlier reported by the National Bureau of Statistics. A circular released by the NBS said that China's gross domestic product in the first three months of 2006 reached 4.339 trillion yuan ($542 billion), 7.7 billion yuan more than data released last month showed.
Of the total, primary industries scored 324.2 billion yuan in value added registering 4.5% growth YOY. Secondary industries reaped 2.1614 trillion yuan registering 12.5% YOY, while tertiary industries reported 1.8534 trillion yuan in value added registering 8.9% growth.
Kennametal plans expansion at Fallon plant
Kennametal has announced a $1.67 million expansion of the company's production facility north of Fallon.
Carlos M. Cardoso president and CEO said that the expansion will help maintain a competitive advantage by lowering costs, both internally and to customers worldwide. Improvements will begin immediately with a target date for completion of spring 2007, consisting of primarily the installation of new equipment in existing buildings.
Kenmetals Fallon plant's currently produces tungsten carbide powder, which is used to harden steel parts in aircraft engines, oil rig drills and other tools used harsh environments.
Massey Energy promotes Mr Grinnan as VP
Massey Energy Company announced the promotion of Mr Richard R Grinnan to Vice President and Corporate Secretary. In his new role, Grinnan assumes responsibility for legal matters involving securities law and corporate governance and will work closely with Massey Energy's Board of Directors. Mr Grinnan will continue to work in Massey Energy's corporate headquarters in Richmond and will report to Mr Baxter F Phillips Jr Massey Energy Executive VP and Chief Administrative Officer. He will also oversee legal activities for acquisitions and financial transactions originating in the Company's corporate office in Richmond Virginia.
Mr Grinnan joined Massey as Senior Corporate Counsel in July 2004.
Massey Energy Company, headquartered in Richmond, Virginia, with operations in West Virginia, Kentucky and Virginia, is the fourth largest coal company in the United States based on produced coal revenue.
