Indian steelmakers cut hot band prices

All the major Indian steel makers have announce price cut for hot band steel to prevent imports of steel predominantly from Chinese mills which started making offers at $530 to $540 levels in the later part of August as against previous levels of $570 to $580.

As per information available from industry sources the quantum of price cut announced by various producers is as under

The new prices are with effect September 1st 2006.

With the adjustment, domestic price of 2mm CR grade HR coils is pegged at about Rs 27,500 per tonne, which is equivalent to about $525-$540 CNF India.

Mr Paswan asks NMDC to step up production

Mr Ram Vilas Paswan steel minister while reviewing the performance of National Mineral Development Corporation during 2005-06 and the first quarter of 2006-07, noticed a slippage in meeting its production target in the first quarter of 2006-07 and asked NMDC management to produce 21 million tonnes of iron ore by December 2006 and meet its annual target of 27.5 million tonnes for 2006-07.

Mr Paswan also asked the company to modernize itself by procuring better equipment to meet the production target set for it. The Minister underlined that a constant increase in productivity by all undertakings is a must under the National Steel Policy. He asked the management to pay better attention to the welfare of tribals living around NMDCs projects as a matter of corporate social responsibility.

NMDC produced 22.92 million tonnes of iron ore in 2005-06 earning a record net profit of over Rs.2889.89 crore and gave a total dividend of Rs.359.59 crore to the government.

Mittal Steel needs 1 billion tons of iron ore for project

For their proposed 12 million tonne integrated steel project in Orissa, Arcelor Mittal Steel will need 1 billion tonne of captive iron ore reserves. Mr Sanak Misra CEO of Indian operations is reported to have said, These days, the lifespan of a steel plant could be extended to 50 years from the normal lifespan of 30 years. A 12 million tonne per annum capacity plant will require 1 billion tonne of iron ore.

As per reports, Orissa has reserves of 5.43 billion tons of iron ore, out of which 3.11 billion tons are under leasehold with various companies and 2.78 billion tons have been committed to other steel companies. The leaves the state with a deficit of 500 million tons and it has still to accommodate the Arcelor Mittal demand for 1 billion tons.

It would be really interesting to see the solution to this riddle from Orissa Government.

JSL sees big market for its 200 series SS in Thailand

The stainless steel market in Thailand is estimated to be of $ 400 to $ 600 million size, mainly for 300 series. But due to sure in nickel prices the prices of 300 series SS have rocketed in recent past making Thai products uncompetitive as other countries such as China, Indonesia and Vietnam etc have switched to more use of low nickel and cheaper alternate in 200 series SS.

Jindal Stainless Limited entered the Thai market four years ago and supplies an average of $ 2 to $3 million per year plans to promote its 200 series SS products and grab a major share from the emerging market. Mr RK Goyal director commercial of JSL said that Thailand will lose its competitiveness in exporting with other countries such as China, Indonesia and Vietnam if it doesn't change to use grades in the 200s instead of the 304 grade."

JSL has promoted stainless steel grades in 200 series which have lower nickel content and Mr Goyal is expecting to garner a 20% to 25% of the Thai stainless steel market with more than 50% of the market in 200 series over the next three years.

Metals & minerals mega event on September 11th at New Delhi

Mr Bhairon Singh Shekhawat vice president of India will inaugurate the 6th International Trade Fair and Conference on Minerals, Metals, Metallurgy and Materials will be held here at Pragati Maidan in New Delhi during 11th to 14th September 2006.

As per government release, nearly 34 countries are participating in the event and delegations from 10 countries come to study Indias business potential in the metals and minerals sector.

The event is co sponsored by ministries of coal, mines, steel, external affairs, commerce & industry, heavy industries and public enterprises, small scale industries, science & technology, environment and forests, CSIR and planning commission.

Coal stocks pile up at ECLs Rajmahal mines

National Thermal Power Corporation has shown a preference for imported coal for their Kahalgaon and Farakka plants, over earlier supplies being used from the Rajmahal mines of Eastern Coalfields Ltd and has reduced its off take.

As the coal from the Rajmahal mines was evacuated with a merry go round railway system owned by NTPC and there is limited infrastructure for carrying coal by road to the nearest Eastern Railway railhead at Pir Painty, for distribution to other consumers, stocks of over 3 million tons of coal have built up at the mine head.

Indian forging industry reports 27% growth in 2005-06

The Association of Indian Forging Industry has reported a 27% YoY growth in the production of forgings in 2005-06 with quantum produced reaching the 930.000 tonnes level. The growth of this industry is directly linked to various industrial sectors especially the automobile segment.

As per AIFE, capacity utilization has jumped to 85% from about 40% to 50% couple of years ago and forging units are now going global with exports in 2005-06 touching $310 million.

As per AIFE, environmental concerns in developed countries and cost competitiveness of Indian forging units has seen an increasing demand worldwide for Indian forgings. Technological up gradations have also helped several players in achieving OEM status in the automobile sector.

Volkswagen to make cars in India

To meet increasing demand for their automobiles and to overcome the constraints of high custom duties on imported cars, Volkswagen, Germany is planning to set up a factory in India with an investment of Euro 400 Million as reported by Der Spiegel magazine.

NDRCs report points to difficult times for Chinese steelmakers

Chinas National Development and Reform Commission in its recently released report on the steel sector scenario during January to June 2006 has admitted that steel output growth has increased month by month and that the new capacities are coming on stream too fast and that in all probabilities investment would be continued. It said that all these factors are likely to have severe impact on the Chinese steel sector in the later half year. To counter the situation, NDRC has stressed to the steelmakers to take effective steps including forcing out outdated capacity, strengthening M&A and quickening restructuring.

As per report, driven by slowed output growth, surging export, import substitution, rising costs of iron ore, coal, coke, electricity, transport etc steel product saw price recovery in China in the first half year, though again followed by dips from later June, jointly affected by supply, demand, financial pressure and macro regulation. It added that boosted by rising prices and generally balanced supply demand, the profitability also recovered.

Net export of steel product and billet & slab in H1 posted 7.68 million tonnes and 2.89 million tonnes respectively, greatly easing pressure on the domestic market. Yet, large export ignites trade conflicts apart from huge energy consumption and environment pollution. The expected adjustments to tax rebate is to contain surging export, and would also exert impact on the domestic market. Lastly further capacity expansion is possible given faster growth of investment in steel sector which doubled in Q2 over Q1 to reach 67.2 billion yuan.

NDRC repeated four countermeasures to upgrade China's steel industry in the report. It called to fulfill the industry policy and firmly force out backward capacity; to follow nation's requirement on cutting 20% energy consumption for per unit GDP and decreasing 10% pollutant discharge, promote the steel enterprises' regrouping, strengthen industrial restructuring and breed internationally competitive large steel mills.

CVRD gets regulators approval for its bid for Inco

Brazil mining giant Companhia Vale do Rio Doce SA announced that it has received clearance from Canadian and US regulators to take over Canadian Inco Ltd, if it can win shareholder support for its $17 billion all cash bid.

Inco shareholders are expected to vote September 7th on the takeover bids.

Inco, the world's 2nd largest producer of nickel last week announced that it continues to support a cash and stock offer negotiated with Phelps Dodge Corp. worth about $17.4 billion.

BlueScope submits offer fro Smorgon assets Report

As per Australian Business Daily, BlueScope Steel through its corporate adviser Carnegie Wylie, has pitched an offer to buy Smorgon Steel's distribution division. The report said that the written offer, detailing the assets it wanted to acquire and ascribed a price for the assets, was delivered to advisers of merger partners Onesteel and Smorgon Steel before they requested a pause in talks with the competition regulator.

The report said BlueScope's interest in buying parts of the Smorgon business extended beyond the Australian distribution network of 80 sales outlets. The other big prizes for BlueScope are Smorgon's pipe and tube arm and the Litesteel beam business which sit within the group's distribution division.

BlueScope, which last month acquired a 19.9% stake in Smorgon, is opposed to the merger of OneSteel & Smorgon in its current form and is demanding a cut of Smorgon's assets before allowing the deal to proceed.

NSM plans to cut production by 50% due to lack of orders

Thai Nakornthai Strip Mill Plc will cut down its steel production this month if demand continues falling as it would produce steel only against firm orders placed by customers to reduce the risk of stocks without orders.

Mr Sawasdi Horrungruang. Chaimand said ''We are considering a plan to cut our steel production by 40,000 to 50,000 tonnes per month or 50% of total production.''

However, he expressed optimism that the steel industry would improve later this year and that steel prices would be steady at around US$540 per tonne.

Steel demand has been declining as a result of the economic slowdown and protracted delays in starting major government infrastructure projects. In addition, production costs have risen significantly, with NSM's electricity bill alone up by two million baht per month.

NDRC warns of coal pile up scenario in China

Chinas National Development and Reform Commission said that the slow increase in domestic coal demand in the first half of this year has resulted in excessive coal supply and a drop in the coal price in some regions. NDRC said "The main problem for the country's coal market is the gap developing between a slow rise in demand and a marked acceleration in supply."

NDRCs report said that China produced a total of 995 million tons of coal in the first half year an increase of 8.3% from H1 of 2005 but sold only 970 million tons up by 4.4% resulting in increase of Chinas coal inventory to 153 million tons by the end of June 2006 up by 9.4% as against year beginning levels and taking it to its highest level since 2003.

NDRC said that the tight macro control policies of the central government slowed down growth in some high energy consumption industries resulting in a slower demand growth rate. In addition, the surging social investment in the coal industry may also bring more coal into the domestic market, as well as more coal imports in the first half year.

NDRC predicts that though China's domestic coal demand may increase in the second half of this year, the growth rate will continue to decline. The NDRC official warned that if investment in the coal industry can not be controlled effectively, the country will face worsening problems as supply begins to dwarf demand.

ACCC aggress to request for delay on OneSteel -Smorgon merger

At the request of OneSteel and Smorgon Steel, the Australian Competition and Consumer Commission has agreed to a pause of approximately two weeks in its consideration of the proposed OneSteel and Smorgon Steel merger. At the end of that time, the companies will discuss new timeframes with the ACCC. The ACCC will then determine a new decision date.

OneSteel and Smorgon Steel made the joint request in order to obtain more time to finalize their responses to the ACCCs Statement of Issues of 14 August 2006.

OneSteel and Smorgon Steel said that they had already made further submissions and are now seeking extra time to provide additional information on some complex commercial issues. The companies considered that it was not possible to complete these assessments in a timeframe that would enable the ACCC to announce its decision on the previously indicated date

Maverick Tubes shareholder to vote on October 2nd for merger

Maverick Tube Corp announced that it has set October 2nd 2006, as the date for its shareholders to vote on its proposed acquisition by Tenaris SA.

Maverick Tube said in a merger proxy filed with the Securities and Exchange Commission that only common share holders of record at the close of business on Aug. 31 are eligible to vote and that the company agreed to pay Morgan Stanley a fee of about $15 million for serving as financial advisor for the deal if it closes.

Maverick Tube entered into an agreement in June 2006 to be acquired by Tenaris for $65 a share, a deal valued at $3.2 billion including Maverick Tube's net debt.

Usiminas to fix JV partner for 5 million tonne plant by year end

BNamericas has reported that Brazil's largest flat products producer Usiminas is expected to decide on a foreign partner for its new plant in the country's southeastern region by end 2007.

A Usiminas press official told BNamericas that Usiminas would have a 51% stake in the project and that specific location for the plant has not been defined. He added that the new 5 million tonne steel plant is due to target exports although it could supply steel to Cosipa.

Usiminas operates its plant in Minas Gerais' Ipatinga city and subsidiary Cosipa's mill is located in S Paulo's Cubat. Usiminas and Cosipa currently have combined installed capacity of 9.5 million tonnes.

Wuhan cuts October delivery prices for flat products

MySteel reported that Wuhan Steel has decides to cut October delivery prices for most of its flat steel products by a range of RMB 200 to RMB 600 from September levels.

The quantum of major price changes is as under

JFE develops auto grade HT steel

JFE Steel announced that it has developed new automotive high tensile steel sheets with better pressing formability including galvannealed steel with 780 mega pascal of strength and cold rolled steel with 1,180 MPa of strength.

JFE has developed the improved galvannealed steel for Suzuki Motor Corporation, which is already uses the JFEs galvannealed steel for structural parts of its MR wagon.

JFE Steel already shipped sample of the new cold rolled steel for automakers and is closing the deal with an automakers for material of structural parts around cabin. JFE is targeting monthly sales off 3,000 tonnes of the galvannealed sales and 1,000 tonnes of the cold rolled steel sales in 3 years.

Steel of West Virginia strike likely to end soon

As per reports in local media week long strike at Steel of West Virginia in Huntington may soon be over as United Steelworkers of America Local 37 officials plan to recommend that union members approve the new offer. Members will look over the contract on Saturday and Union members will vote on the company's revised proposal on Sunday

According to Mr Carlton Hall the International representative for the USWA, the latest offer addresses insurance premiums and co pays for union members, vacation status, and pension payments.

Almost 400 Union workers walked of the job last Friday and started to picket after they rejected the company's final offer with a vote of 388 to 19.

Union offers counterproposal to AK Steel

AK Steel Corp. and its union met Friday morning, and the union presented the company with a contract proposal. Negotiators are yet to set a date for their next meeting.

AK Steel had given a new comprehensive contract proposal to the leaders of the International Association of Machinists Local 1943 on last Wednesday.

ONeal Steel purchases Ferguson Metals

O'Neal Steel has announced purchase of Ferguson Metals without disclosing the purchase price.

Ferguson's Symmes Road operation started in 1982 and had sales of $48 million in 2005. Ferguson supplies precision cut steel and alloy primarily to the aerospace industry but also serves automotive, medical, chemical, food service and electrical businesses.


O'Neal Steel is a family owned company based in Birmingham with 68 locations worldwide. Other subsidiaries include Metalwest, Aerodyne Alloys, Leeco Steel, TW Metals and Timberline Steel. Ferguson Metals is the third company O'Neal has acquired this year.

Samancor Chrome on capacity expansion drive

South Africa's leading chrome ore miner and ferrochrome producer, Samancor Chrome has beneficiation projects worth $1 5 billion under progress to doubling its output by 2015.

Dr Danko Konchar chairperson told a media briefing that several expansion projects are already under way, which would lift its ferrochrome output to 1.3 million tons to 1.35 million tons as against its current output of less than 1 million tons a year. As per reports about 200 000 tonnes increase would be achieved through a series of low capital de bottlenecking initiatives and about 100 000 tonnes to 140 000 tonnes through the construction of a second dc furnace at Middelburg facility in Mpumalanga. The combined capital cost for all the projects is expected to be less than $100 million.

For the medium term, Samancor Chrome would be pursuing a $1.3 billion, 3 phase Greenfield projects, which would add 1.4 million tons of additional ferrochrome capacity between 2010 and 2015. The expansion was being studied for its Tubatse facility, a project that had been studied extensively by the previous Samancor Chrome owners, BHP Billiton and Anglo American before the company was sold to the Kermas group for $469 million in September 2005.

It would also have to scale up its mining from its current 3.2 million tons a year to around 6.5 million tons a year. But the company stressed that all this new capacity would, eventually, be adsorbed into its beneficiation projects. Three mining sites were being considered in and around its Eastern Chrome Mines and the company would soon begin the process of seeking all the necessary internal and external authorizations to proceed. It was in ongoing dialogue with the Department of Mineral and Energy about the conversion of its old order mining and mineral rights, which included proved reserves of 650 million and many more unproved resources.

Transnet offers to handle double volumes for ARMs iron ore

South African Transnet has offered African Rainbow Minerals an opportunity to accelerate its iron ore exports to 16 million ton from the ARM's proposed Khumani project in the Northern Cape from mid 2009, the date originally envisaged for the ramp up to 8.4 million tons. ARM ferrous CEO Jan Steenkamp said that negotiations had opened with Transnet for the long term 16 million tons a year export level.

The boards of directors of ARM and Assmang would, however, have to approve additional capital expenditure of R1.8 billion, which would take Khumani's total capital value to R5 billion. Mr Steemkamp said that R1 billion had already been committed in orders placed, with only one large civil engineering order still outstanding.

Openpit mining at Khumani, formerly Bruce, King and Mokaning mine, would be by conventional drill, blast and loading into trucks for hauling to the primary and secondary crushers. From there, ore would be conveyed to stockpiles ahead of the plant. The run of mine ore would be stockpiled on blending beds in two categories on grade and off grade. On grade material would then be washed and screened to produce the final products incorporating tertiary crushing of the oversize material from the screening plant. Off grade material will also be washed and screened and the oversized material crushed in the tertiary crushers and, thereafter, beneficiated through jigs to remove contaminants. Three products would be produced lumpy, medium sized and fine iron ore for railing to Saldanha Bay and then on shipping to export markets.

Central and local governments to split proceeds from mining rights

State run Shanghai Securities News has reported that the proceeds earned from selling rights to prospect and tap state owned mines shall be divided among China's central government and local governments in a 20:80 ratio from September 1st 2006

China's ministry of finance, ministry of land & resources and People's Bank of China released a joint statement on August 14th 2006 setting the splitting ratio of 20:80 for mining rights sales proceeds between central government and local ones.

The proceeds splitting ratio applied among all levels of local governments were then left to the discretion of governmental authorities of provincial level.

International Metal to buy Globe and Stein Ferroaleaciones

International Metal Enterprises Inc announced that it has entered into a merger agreement with Globe Metallurgical Inc and agreed to buy Stein Ferroaleaciones for a total consideration of $166.21 million, with the two acquisitions expected to constitute a reverse takeover. The aggregate consideration includes the assumption of around $50.5 million in debt. Both acquisitions are expected to complete in October and are subject to shareholder approval and certain other conditions.

International Metal said that Globe and Stein are operators in the specialty metals industry, with partially overlapping product lines and customer bases, using similar manufacturing technologies. It added it believes combining the two businesses will provide immediate opportunities for redistributing production and sharing services, improving margins and fixed costs, as well as opportunities for significant growth.

Globe has manufacturing facilities in Ohio, West Virginia, Alabama and Niagara Falls, New York and is the leading North American producer of silicon and silicon based alloys and recorded a net revenue in the year ended June 30 of $170 million. The purchase price for Globe will involve issuing to its shareholders 8.37 million International Metal shares and a cash consideration of $32.19 million.

Argentina based Stein produces specialty alloys and cored wire for the steel and foundry industries and recorded net revenue for the year to June 30 of $36 million. The cash consideration for Stein will be around $37.46 million.

Sims Recycling Solutions appoints Mr Kumar as VP

Sims Recycling Solutions has appointed Mr Kumar Radhakrishnan as senior VP of Sims Recycling Solutions. His responsibilities will include developing the Asian e-recycling business to boost Sims global client relationships. Mr Radhakrishnan will also coordinate commodity sales from Sims e-recycling facilities globally.

Mr Graham Davy MD of Sims Recycling Solutions said "Kumars appointment symbolizes our ability to offer e-recycling solutions across four continents North America, Australasia, Asia and Europe, which puts us very much at the forefront of the global recycling industry."

Interpipe appoints Mr Gorodetsky as first deputy CEO

As per reports in Interfax, Dnipropetrovsk based Interpipe Corporation announced that it has named Mr Oleksandr Gorodetsky, the president of TNK-BP Ukraine, as the corporation's first deputy CEO.