September, 08 2006
Rescuers find bodies of 30 coal miners
It is reported that rescuers found the bodies of 30 miners killed after an explosion and gas leak in Bhatdih coal mine in Jharkhand.
Mr Partho Bhattacharya chairman of Bharat Coking Coal Ltd, which owns the mine, said that rescue workers were searching for 23 other trapped miners, but chances of finding any survivors were bleak.
The miners were trapped some 200 meters underground after the explosion Wednesday night and a pocket of natural methane gas began leaking just after the blast. According to reports, there was an explosion at the mouth of the 17th level of the mine, 450-500 meters underground at about 9:00PM IST on Wednesday.
Indian Steelmakers and miners battling for iron ore
Iron ore exporters and steel makers in India have started lobbying against each other with the policy makers in New Delhi on the issue of iron ore exports.
As per reports iron ore exporters lobby led by Mr Rahul Baldota met Mr Kamal Nath commerce minister and Mr Prithviraj Chavan the minister of state in PMs office. To explain their stand, the ore exporters hope to meet Mr Montek Singh Ahluwalia deputy chairman of planning commission, Mr Subirami Reddy mines minister of state, Mr Ram Vilas Paswan steel minister and secretaries of all the departments concerned in the next seven days.
On the other hand a team of steel majors including Mr Sajjan Jindal, Mr B Muthuraman, Mr Vinod Mittal and Mr Ruia are expected to start their campaign on Friday by meeting the secretaries of steel, mines, finance, industry and commerce. They have also received the support of Chief Ministers of iron ore producing states such as Jharkhand and Bihar as well as the Left front.
The steel makers want India to gradually phase out export of high grade ore making the same available only to domestic steel producers being a policy similar to that followed by Russia and China.
Miners say that there is enough iron ore in India to satisfy the needs of steel mills and have enough leftover for exports.
Indian galvanizers increase HDG prices
Most of the Indian steel makers have announced increase in galvanized steel prices by Rs 500 to Rs 1,000 per tonne to offset recent steep increase of the zinc prices.
As per reports JSW Steel and Ispat Industries have hiked galvanized steel prices by Rs 500-750 per tonne while Uttam Galva has increased prices in the range of Rs 500-1,000 per tonne.
Zinc prices on the London Metal Exchange which were hovering around $3,100 per tonne a couple of weeks back were now at $3,750 per tonne.
Iran gives 2 months ultimatum to India on gas pipeline
It is reported that India and Pakistan have two months to agree with Iran on a $7 billion gas pipeline from Iran through Pakistan to India or Tehran will earmark more of its reserves for liquefied natural gas projects.
Mr Mohammad Hadi Nejad Hosseinian Iran's deputy oil minister for international affairs said at a conference in Singapore "They are not prepared to pay the real price of gas in the market therefore we are reviewing increasing the capacity of gas allocated to LNG. We may increase the capacity to these LNG projects and decrease capacity allocated to the pipeline." Separately he told Reuters: "We have to decide in a maximum of one and a half to two months.
Nejad Hosseinian said that they were now working to change the pricing formula to one based on LNG import prices to Japan, the world's biggest consumer of the fuel, taking into account the cost of freight and transport.
The talks have stumbled recently as Tehran has asked nearly twice the rate that New Delhi wants to pay. India, Pakistan and Iran agreed last month to appoint an outside consultant to suggest a price for the gas.
Iranian officials had offered a price linked to Dated Brent crude that equated to about $8 per million British thermal units while New Delhi wants to pay about $4.25 per million British thermal units.
New ladle furnace ordered by TATA Steel
In order to increase production to 6.8 million tons annually in their Jamshedpur works through expansion, TATA Steel has ordered a 160 tonne 24 MVA ladle furnace. The furnace is scheduled for commissioning in August 2007.
The supply on a turnkey basis will cover engineering, as well as installation and commissioning of the mechanical, electrical, automation systems of Level 1 and the hydraulic system of the ladle furnace.
Coal minister orders inquiry into mining accident
Mr Soren union coal minister has ordered a departmental inquiry into the accident where more than 30 coal miners have died. A 3 member high level committee under the chairmanship of Mr S Choudhry CMD of Central Mine Planning and Design Institute Limited has been constituted for conducting Inquiry. Other members are Mr L Jha director technical of CIL and Md. Salim Uddin director projects of CIL.
The Inquiry would be carried out to ascertain the causes leading to the accident, fixing responsibility if any for the same and suggest measures to avoid recurrence of such accidents in future. The Committee has been asked to submit its Report within 15 days.
Russian Power Machines joins BHEL for power plant upgrade
Russian power engineering concern Power Machines (Siloviye Mashini) and Bharat Heavy Electricals Ltd have signed a contract for the joint modernization of 5 200 MW each power producing units at the Obra Power Plant in India. The client is Uttar Pradesh Rajya Vidyut Utpadan Nigam Ltd.
The total value of the contract is $275 million and Power Machines' share is $57.3 million.
Supplies of equipment would begin at the end of 2007 and end in mid 2008. The launch of the last upgraded power producing unit should take place in December 2008.
Bharatpur opencast coal mining of fast track
Situated in the Angul district of Orissa, the Bharatpur Opencast Project received the approval of the Cabinet Committee on Economic Affairs for outsourcing of production and incremental overburden removal. It will produce 20 million tons of F grade coal for supply to linked customer such as State Owned thermal power stations and NTPC.
CCEA also approved floating of tenders to outsource incremental overburden removal corresponding to 9 million tonne per year additional coal production for 10 years for effecting economies due to life time utilization of the equipment deployed by the outsourcing agencies and floating of tenders for construction of Coal Handling Plant for 20 million tonne per year capacity.
Coal India Limiteds subsidiary Mahanadi Coalfields Ltd with its head quarter situated at Burla in Sambalpur district of Orissa has 21 operating coal mines including on going projects with annual capacity of 74 million tones per year in Talcher and Ib-Valley coalfields. MCL has produced about 69 MT of coal in 2005-06.
US auto majors join to end tariffs on steel imports
It is reported that for the first time the 6 automakers in US including General Motors Corp, Toyota Motor Corp, Ford Motor Co, DaimlerChrysler AG, Honda Motor Co and Nissan Motor Co have joined to end tariffs on certain types of steel saying that the measures make them difficult to remain competitive in the global marketplace.
Mr Ken Cole VP of government relations of GM wrote in a letter to members of Congress that the 6 companies collectively buy more than $200 billion a year in materials, parts and services for their US operations and all 6 buy the overwhelming amount of the steel used in our US operations from US steel mills. He said "The strength of our vehicle assembly operations is reliant upon the ability to obtain key materials dependably and at globally competitive prices."
The US International Trade Commission is holding a sunset review hearing on October 17th to consider whether it should end current penalty tariffs on corrosion resistant carbon flat steel products. The orders were first put in place in 1993. US ITC will decide whether they should remain for another 5 years.
US based steel manufacturers have always said that the protections are necessary to help them remain financially viable while implementing technical improvements and fund retiree benefits.
Millhouse to catalyze Russian consolidation through Evraz
It is reported that Mr Roman Abramovich's Millhouse does not want control of Evraz Group SA but wants to use it as a center of consolidation in the steel industry.
Mr Eugene Shvidler CEO of Millhouse told a briefing that Millhouse's designs were simple. He said "We had a lot of money and wanted to invest it in an area where it could grow organically or through consolidation. This is simpler in Russia than elsewhere." Mr Shvidler acknowledged that doing this won't be a quick business, but a difficult one adding that it may take Millhouse five years to realize its ambitions. He said that During this time there will be a lot of changes one way or the other, both in Russia and the rest of the world."
Mr Shvidler outlined a role for Millhouse as the catalyst of a consolidation process within a Russian steel sector dominated by owner managers, arguing that Millhouse, in contrast to the other major players in the sector, wasn't afraid of losing control by making deals. Apart from Evraz, all of Russia's largest steelmakers are majority owned by their respective chairmen. Mr Alexei Mordashov owns Severstal, Mr Viktor Rashnikov owns Magnitogorsk Iron & Steel Works, Mr Vladimir Lisin owns Novolipetsk Steel and Mr Igor Zyuzin owns Mechel.
Mr Shvidler termed Corus s too expensive and ThyssenKrupp as complicated but noted that Millhouse is in constant talks with all major players in the Russian steel sector and was willing to consider any doable deal that would add value to its $3 billion investment. He noted that his list of possible targets includes Metalloinvest the iron ore mining based empire of Mr Alisher Usmanov.
Severstal reports 54% dip in H1 profit
Russian steelmaker OAO Severstal has reported a 54% drop in net profit for the first half of 2006 blaming lower steel prices and higher operating costs. Its net profit under IFRS fell to $405 million during January to June 2006 as against $877.2 million in H1 of 2005. Its revenues dropped by 3.9% to $3.99 billion in H1 of 2006.
Severstal said that the operating profit at its flagship mill in Cherepovets fell to $536 million from $955 million due to higher costs for scrap, fuel, energy and labor and that the performance at the group's North American operations improved with operating profit rising to $62 million from $54.1 million in H1 of 2005.
Mr Dmitri Kolomitsyn an analyst with Aton Capital in Moscow said that the results showed problems with energy, transportation and labor costs that could hurt Severstal's planned initial public offering in London scheduled for later this year.
Chinas state council approves export rebate cut Report
Reuter has reported that Chinas state council has approved plans to cut VAT rebates for exports of energy consuming and resource intensive products quoting unnamed government sources, which would pave way for cuts in tax rebates on a wide range of goods produced by industries including steel, textiles and metals.
The report cites the sources as saying that the cuts are scheduled to take effect before a major trade fair to be held in the southern city of Guangzhou in October and that the companies would be given a three-month transitional period to adapt to the tax changes.
The move is aimed at slowing the over rapid rise in exports, taking some of the heat off the yuan and help China to move up the value chain. Under the plan, tax rebates for exporters of coal and certain mineral ores would be abolished, while tax rebates on certain high tech products would be increased.
The rebates currently range from 13% for aluminium products, lead and copper products to 11% for steel products and 5% for tin and refined copper and zinc.
RNCOS publishes US Steel Industry - Future Outlook
US steel industry has prospered and geographically diversified along with the economic growth in America. Past decade had been quite tough for the industry because of the adverse market conditions and inherent problems of the steel industry. RNCOS has published a report on the future outlook of US steel industry titled US Steel Industry - Future Outlook.
The report highlights US industry performance, analyses key players, future potential for the industry, the success & sensitivity factors for the industry and major driving forces for the industry. Based on secondary research, the report gives an insight in to the emerging trends and the future forecasts for steel sector in US.
This report may be of interest to business analysts and consultants who are closely following the developments in the US steel industry, probable investors who are interested in investing in US steel Industry, management operating in US steel industry and for the people who want to attain working knowledge of the US Steel industry.
To know details of this report please visit http://www.steelguru.com/ussteelfuture/index.php
Global zinc output needs to go up by 22% to 2010
According to Australian zinc explorer Mount Burgess Mining NL global zinc output needs to grow by 22% on 2006's production estimate of 10.6 million tonnes to meet expected demand by 2010 and that the increased output will have to come from the net result of new mine start ups, production upgrades and mine closures to fill the expected shortfall of 2.38 million tonnes.
Mr Nigel Forrester chairman of Mount Burgess during a conference in Perth said that China would remain the driver for higher zinc production globally. He said "If China increases consumption by an average 345,000 tonnes per year to 4.8 million tonnes total by 2010, and the rest of the world increases consumption by a modest 2%, total world production within three years must reach 13 million tonnes.
Mr Nigel Forrester said that "Stocks and output will be at critical levels by early in 2008. The decline has been evident over recent years with London Metals Exchange stocks of 780,000 tonnes in April 2004 dwindling 606,500 tonnes in just 27 months to 173,500 tonnes by just a few weeks ago." He said this represented an average daily decrease of 728 tonnes per day over the 27 months but worsening to 907 tonnes per day this year.
Mount Burgess is developing the Tsumkwe diamonds and base metals and the Kihabe base metals projects along the Namibia-Botswana border in Africa.
Severstal to consolidate Lucchini SpA
Severstal has announced its intention to increase its equity stake in Lucchini SpA to 70.82% by purchasing, from a company controlled by Mr Mordashov, a 50.82% equity stake for a total consideration of Euro 550 million consisting of a cash component of Euro 182 million and balance by assumption of debt, in addition to the 19.99% equity stake in Lucchini Severstal already owns. The transaction is expected to close in October 2006, and it is expected that thereafter Lucchini will be consolidated in Severstals accounts.
As per the release this acquisition is part of a natural reorganization of the group and is consistent with its intentions expressed earlier this year. Severstal said that it is keen to further develop Lucchini as a core centre of competence within the group for value added specialty long and railway products. Severstal believes that Lucchini has attractive growth opportunities ahead and Severstal is keen to support the development of this core business unit within the group and offer to all its shareholders the benefits of this profitable growth strategy.
Severstal and a company controlled by Mr. Mordashov acquired an aggregate equity stake of 70.82% in Lucchini in 2005. Lucchini reported sales and EBITDA of Euro 2.421 billion and Euro 321 million respectively for 2005 under Italian GAAP.
Vietnams rebar makers under crisis due to Chinese rebar imports
It is reported that Vietnams rebar makers are facing the brunt of low price imports of rebars from China and that import price for billets is about $400 CNF wile that of rebar is $405 CNF although the conversion cost is between $35 and $60 per tonne.
As a result rebars were imported into Vietnam at prices lower than those of domestic product by VND300,000 to VND 400,000 per ton during last few months
The reports revel that under these circumstances many local rebar makers have reduced their volumes and have even stopped producing rebars.
Vietnam Steel Association recently met to discuss solutions to the situation. As per reports VSA has asked state agencies for help and that the ministry of trades competition management agency is instructing manufactures to file a law suit if enough proves are collected.
Westpac Bank forecast nickel to crash in 2007
Despite the booming demand and surge in prices for nickel, an analyst has forecasts that prices of the alloying metal will plunge next year as slower US growth curbs demand and mine and smelter expansions increase supplies. He also said that rising interest rates globally will help to slow raw materials demand in the months ahead.
Mr Justin Smirk senior economist with Sydney based Westpac Banking said The key is the downturn in US dwelling activity and the impact of a more cautious US consumer. In 2007, industrial production growth will turn from being a pillar of base metal price inflation to a drag.''
Westpac Banking believes that LME spot nickel prices could end up somewhere between $17,845 per metric ton and $22,919 per metric ton this year and then drop to $14,350 in 2007.
For the first eight months, spot nickel traded on the London Metal Exchange has averaged $20,266.LME spot delivery prices for nickel surged one day in late August to $34,750 per metric ton, its highest level ever.
Isdemir orders converter gas recovery equipments
Prokon Manufacturing & Erection Company of Turkey has awarded SMS Demag a contract for the installation of a converter gas recovery plant at the Iskenderun works of Iskenderun Demir ve lik AS at Isdemir. Commissioning is scheduled for the end of 2007.
The plant will recover around 680 million meter cube of converter gas per year for power generation, which corresponds to 950,000 MW hour per year.
The scope of work includes the planning and layout of the integrated facility as well as the supply of all core components such as the gas change over stations, pressure booster station for delivery of the gas to a power station including electrostatic precipitators for post cleaning of the converter gas, basic engineering for the electrical equipment and automation of the system.
T?Ks shipments to oil and gas sector up by 26% in H1
Russian pipe major TMK has shipped about 0.7 million tonnes of drilling, casing and oil well pipes to oil and gas pipeline customers during the first half of 2006 up by 26% YoY, out of which 30% were exported.
Compared to the same period of the previous year oil well tubing and casing piping supplies to Russian oil and gas companies grew by 51.6%, drilling pipes supply rose by13.5%. The share of new high technological pipes in the total volume of shipped drilling pipes amounted to circa 60%. In general, supply of high strength drilling pipes increased by 15%.
Founded in 2001, TMK is Russia's largest producer and exporter of pipe products with 6 production facilities in Russia and Romania including Volzhsky Pipe Plant, Seversky Tube Works, Taganrog Metallurgical Works, Sinarsky Pipe Plant, TMK-ARTROM SA and CS Resita SA. . It produced a total of 2.84 million tons of pipes in 2005. TMK supplies pipe products to more than 60 countries. Its customers include Shell, AGIP, Repsol, Saudi Aramco, Wintershall, Anadarko Petroleum, Gazprom, Transneft, Lukoil, Rosneft, TNK-BP and Surgutneftegaz. Besides the oil and gas industry, TMK pipes are used in other sectors such as chemical and petrochemical industries, engineering, energy, construction and agriculture.
Hyosung to supply tire cords for $3.2 billion to Goodyear
World's largest tire cord maker Seoul based Hyosung Corp.will supply tire cords worth $3.2 billion to the Goodyear Tire & Rubber Co.
Hyosung said in a statement "The supply contract would push up Hyosung's global market share to 30% from the current 25%, which strengthens its No 1 position in the global market."
This is seen as a move to expand its North American foothold after taking over 4 tire cord plants in the US, Brazil and Luxemburg. Industry watchers believe that Hyosung's recent global expansion and mammoth deals with major tiremakers would further rev up its sales in the coming years.
Aztec Resources signs iron ore sales deal with Marubeni
Aztec Resources Limited announced that it has signed a long term sales contract with Marubeni Corporation for annual sale of 1 million tonnes of iron ore based on a full production rate of 4 million tonnes per annum for up to 15 years or the life of the mine whichever is less.
Mr Koji Morihiro GM of iron ore division of Marubeni said 'We are pleased to reintroduce Koolan ore to the Japanese steel mills who previously consumed the majority of iron ore produced during mining operations at Koolan Island by BHP from 1965 to 1993. Mr Morihiro said that Marubeni also plans to supply Koolan ore to the fast growing Chinese market.
Aztec now has 2 sales contracts in place with CITIC Group and Marubeni covering nominal annual sales of 2.5 million tonnes.
MAR forecasts MoM decline in US steel import in August
It is expected that after 10% MoM decrease in August 2006 to 3.5 million metric tonne from 3.9 million metric tonne in July 2006, the number of US steel imports will decline further in September.
Michelle Applebaum Research has released its latest Steel Market Intelligence report on the steel industry, "Steel Imports - August Import Licenses Fall Nearly 10%." In this report, analysts at MAR discuss the decline in August U.S. import licenses and the outlook for declining steel imports in coming months.
MAR said that lower import levels would continue in September as late first quarter pricing parity between domestic and foreign steel will be reflected in the amount of steel coming into the US in coming months.
But MAR cautioned that the import respite may be temporary as quotations for Q1 2007 delivery were beginning to appear in the marketplace.
IMF pegs global economy growth at 5% in 2006 & 2007
The International Monetary Fund said that global economy has been resilient in the past year and growth prospects are still very good estimating it to clock close to 5% in 2006 and 2007.
Mr Rodrigo Rato chief of IMF in a speech to the Brookings Institution in US said "In the United States, the speed of the expansion is moderating to a more sustainable pace, largely reflecting the slowdown in the housing market and the effect of higher interest rates. But elsewhere in the world, growth prospects are encouraging. Japan appears to have put deflation behind it. China and India continue to be engines of growth and many other countries including in sub Saharan Africa are enjoying a continuation of the strong growth that we saw last year. We expect next year to be another year of solid growth."
But Mr Rato warned that there are more clouds on the horizon than there were a year ago. He said "Inflation risks are a concern as output gaps narrow, high oil prices could adversely affect both inflation and growth, and there has been a major setback in the Doha Round. The risks of a disorderly adjustment of global economic imbalances have not gone away, and could be exacerbated by the other risks. Policymakers around the world are facing an increasingly challenging environment, and should be proactive in addressing the risks.
Aim Resources to start Perkoa zinc mine 12 months ahead
AIM Resources Ltd announced that the adoption of a new mining method has helped it bring forward by 12 months production at its flagship 500,000 tonne per annum zinc mine project Perkoa in the Sanguie Province of Burkina Faso in South Africa is now expected to begin mining mid 2007.
Mr Marc Flory MD of AIM while speaking at a mining conference in Perth said that The most influential factor was a decision to put in larger box cuts to 25 meters width as opposed to the original 10 meter section proposal. We were aiming for a 2008 start but this decision will allow that to be brought forward by a minimum six months but nearer 12 months on Perkoa.
He added that Our initial rate will be 500,000 tonnes per annum but we have the capacity at Perkoa and with the changes proposed by DRA to lift that in a short time to 650,000 tonnes, with a high recovery rate annually of 65,000 tonnes of zinc concentrate.
Foundation Coal acquires coal reserves near Pax mine
Foundation Coal Holdings announced that it has acquired the reserves and equipment adjacent to its operating affiliate, Pax surface mine in West Virginia. The purchase integrates 7.3 million tons of proven coal reserves to the Pax Mine, operated by Foundation Coal affiliate, Pioneer Fuel Corporation. At full capacity the new operation would add up to 720 thousand tons annually to existing production.
Mr Jim Olsen senior VP of development and information technology of Foundation Coal said "The advantages of combining this new asset with our existing operation are significant. The properties are close to one another and utilize similar mining methods and equipment, which will provide the operation with flexibility at reduced overhead. The fact that all production can move through the new rail loadout is equally important."
Universal Stainless hikes prices for high grade steel products
Universal Stainless & Alloy Products Inc announced that it is raising base prices 3% for air melted and premium melted stainless and high strength low alloy grade products. The increase on air melted products takes effect for new orders and shipments as of September 11th 2006. For premium melted products, the price increase begins January 1st 2007. The company said the material and energy surcharges will remain in effect.
Mr Richard Hack VP of sales and marketing said While the surcharge mechanism addresses changes in pure commodity costs, other costs not covered have continued to increase as well. These hidden costs have become a more significant share of our total product cost, necessitating this increase in base pricing.
Asha Steel Works ups output 5% in 8 moths
Asha Metallurgical Works has produced RUR 4.645 billion worth of goods during January to August 2006 up by 5.1% YoY. Its steel and rolled metal output amounted to 424,982 tonnes up by 3.9% YoY and 308,174 tons up by 6.2% YoY respectively.
AMZ also produced 46.251 tonnes of amorphous strip up by 45% YoY and 1.1 million magnetic circuits up by 14.5% YoY.
Chelyabinsk region based AMZ is a producer of rolled, amorphous and electrical sheet steel.
ISTILs crude steel output up by 6.7% in H1
Donetsk based ISTIL mini steel mill has increased crude steel production to 0.57 million tonnes during January to August 2006 up by 6.7% YoY and finished steel production to 0.536 million tonnes up by 12.1% YoY. As per reports, ISTIL has missed its H1 target by 100,000 tonnes due to shortage of scrap.
ISTIL produced 90,000 tonnes of crude steel and 99,000 tonnes of finished steel in August 2006.
ISTIL had produced 0.812 million tonnes of crude steel and 0.74 million tonnes in 2005.
