June, 14 2007
Indian SS demand to put pressure on world nickel market - CVRD
Brazilian miner Companhia Vale do Rio Doce recently said that the tight nickel market could see increased pressure in the years ahead if Indian economy increases its use of the key stainless steelmaking ingredient.
Mr Fabio Barbosa CFO of CVRD said that CVRD forecasts that nickel prices will remain elevated in a range between USD 40,000 and USD 45,000 a ton in 2008-09, unless the latent price pressures from India emerge. Mr Barbosa said that "Pressure from India is not yet included in the price. Demand could be even more intense if India effectively grows its use of the metal. The gap between supply and demand is growing rapidly."
He added that demand has continued to rise as China, India and other developing markets increase their production of stainless steel, with few new nickel projects coming on line to ease the shortage. The imbalance between supply and demand should be maintained for several years, given that the current nickel projects under development won't be in operation until between 2009 and 2011. He said "Our expectations are very positive for the next few years and decades.”
He said that CVRD plans to be the world's largest producer of nickel at a production of 500,000 tonnes a year by 2012. CVRD expects to produce 287,000 tonnes of nickel in 2007, up from pro forma output of 251,000 tonnes in 2006. In October 2006, it had completed its USD 17.6 billion purchase of Canadian nickel miner Inco.
Mr Barbosa added that CVRD is on target for a December 2008 completion of its much troubled Goro project in the French territory of New Caledonia. The Goro project is one of the world's largest nickel mines currently under development, with expected production capacity of 60,000 tonnes a year. Goro has 120 million tonnes of nickel reserves. CVRD's Onca Puma nickel project in Brazil's Para state is also scheduled for completion in the fourth quarter of 2008, Barbosa said. The USD 1.4 billion project is expected to start production in 2009, with output of 58,000 tonnes of nickel annually when it reaches full production.
SAIL’s RSP inaugurates a limestone screening facility
It is reported that Steel Authority of India Limited’s Rourkela Steel Plant has inaugurated a limestone screening facility inside its limestone dolomite brick plant. Mr AK Bhandari ED works of RSP inaugurated the new facility.
As per report, the major benefits of the facility include reduction in specific consumption of lime by about 6 kilograms per tonne of hot metal and fall in heat input in the calcinations process by 100 kilo calories per kilograms of lime which will result in significant savings of about INR 80 per tonne of crude steel.
AS per report, Limestone & Dolomite Brick Plant did not have any facility for separation of limestone, which was causing inconsistency in lime quality resulting in lance and hood jamming in the LD converter of steel melting shop.
Limestone & Dolomite Brick Plant had been providing bricks for the in house converters and other steel plants.
New Mangalore Port to reach 60 million tonnes by 2011-12
BL reported that New Mangalore Port Trust has planned to create more berths and other related infrastructure during the 11th Five Year Plan under the National Maritime Development Program. The port, which has the capacity to handle 38 million tonnes of cargo a year plans to handle 60 million tonnes by 2011-12.
According to the blueprint, NMPT wants to construct 3 berths with 14 meters at the new western dock arm, one for thermal coal, one for project cargo, and one multi purpose, all with a draught of 14 meters. It will also have a berth for petroleum, oil and lubricant cargo. To facilitate smooth movement of rail bound cargo, a railway line is also being planned inside the port. As per report, consultants have already submitted reports on the construction of the berths.
The need for the additional berths is justified with the good occupancy level at berth No 14, which was commissioned in February 2006. During 2006-07, this berth alone handled 3.68 million tonnes of cargo. The reason is the berth has a draught of 14 meters and can accommodate bigger vessels.
NMPT is also expecting growth in handling project cargoes in the coming years and to meet the requirements then it is envisaging the construction of a project cargo berth. The growth in bulk and break bulk cargoes in the past few years has made the port look to the construction of a multi purpose general cargo berth to meet the needs of this category.
Mangalore Refinery and Petrochemicals Ltd is planning to upgrade its refining capacity, Nagarjuna Power Corporation Ltd is building a 1015MW thermal power unit in the nearby Udupi district. Numerous projects are also planned in the Mangalore SEZ and wind power company Suzlon is putting up an SEZ in Udupi district.
Indian Railways to levy 2% surcharge and terminal charge on freights
It is reported that Indian Railway has decided to levy a 2% surcharge as development charge and additional terminal handling charge of INR 10 per tonne per terminal with effect from July 1st 2007. The terminal charges will be levied for bulk and loose traffic on terminals and sidings owned by Indian Railways only and not on the siding owned by customers. Both load and unloading of goods at terminals would attract INR 10 surcharge each.
Indian Railways in an order said that "These charges will be levied on loading and unloading terminals independently and separately on the basis of chargeable weight at the time of issue of railway receipt."
However, Indian Railways has spared those firms with whom it has already entered into long term contracts while levying the 2% surcharge, allowing them to use parcel and luggage vans on lease till the contract period ends.
As per report, as Indian Railways aiming to load 785 million tonnes of goods in 2007-08, these charges would give Indian Railway an earning of over INR 1,400 crore during the year.
As per report, Indian Railways has specified that the proceeds of development surcharge on parcel and luggage would go towards funding the dedicated freight corridor project, it has not done so for the 2% surcharge levied on goods traffic.
India’s EPO market to touch USD 30 billion annually by 2015
Mr Kamal Nath union minister of commerce & industry while releasing “Growth of Engineering Process Outsourcing from India” at the All India Awards presentation function of the Engineering Export Promotion Council recently said that India is poised to become the hub of engineering process outsourcing with the size of the Indian EPO market expected to touch USD 30 billion annually by year 2015 from the current size of a little over USD 3 billion.
Mr Nath congratulated EEPC for bringing out a strategy paper on EPO indicating the potential that exists in this emerging sector and assured that the recommendations of the strategy paper would be carefully looked into by his ministry so that the EEPC could play a proactive role in promoting the EPO sector, besides export of engineering goods.
Mr Kamal Nath mentioned that the duty entitlement pass book had been extended till March 2008 and his ministry was working to develop an alternative duty neutralization scheme that would replace the DEPB Scheme, which would lapse next year. He further pointed out that the Annual Supplement 2007 to the Foreign Trade Policy had addressed the issue of Service Tax component that gets factored into exports price.
Mr Rakesh Shah chairman of EEPC informed that engineering exports from India had touched the USD 26 billion mark in 2006-07 and attributed this achievement to the outstanding performance of engineering exporters.
AS per report, the estimated demand for engineering process outsourcing to India has grown at 30% to 35% from 2004-06. The global EPO market is poised to grow to USD 110 to USD 140 billion by 2015.
Indian Railways earning in April to May up by 10.97% YoY
It is reported that the total approximate earnings of the Indian Railways on originating basis during April to May 2007 are INR 11,001.05 crore up by 10.97% YoY as compared to INR 9,913.49 crore during April to May 2007.
As per report the total goods earnings have gone up from INR 6,642.37 crore during April to May 2006 to INR 7,309.66 crore in April to May 2007 registering an increase of 10.05%.
Surana Industries’ 2006-07 profit up by 31% YoY
It is reported that Surana Industries Ltd has posted a profit of INR 30.74 crore in 2006-07 up by 31% YoY as against INR 23.44 crore in 2005-06. It has posted revenue of INR 777.96 crore during 2006-07 up by 23% YoY as against INR 627.56 crore in 2005-06.
Surana Industries in a press release said that the revenue in first quarter for 2007-08 ending June 30th 2007 is estimated to be at least INR 300 crore and for the full fiscal year at INR 900 crore.
Chennai Port to built a RO RO car terminal
It is reported that Chennai Port Trust is planning to construct a roll on roll off car terminal at a cost of INR 80 crore on a build, own and transfer basis for a period of 30 years. A roll on roll off berth will also be constructed in 250 meter length, 30 meter width and 12 meter depth.
The proposed terminal will be constructed on the southern end of the container terminal and will have a capacity to park around 5,000 cars in an area of 10,000 square meters to help transportation of wheeled vehicles that may be driven into and out of the ship.
In January 2007, the Chennai Port Trust had signed a 12 year agreement with Hyundai Motors India to increase export of cars through the port. The agreement offers concessions in wharfage and vessel related charges, including pilot charges, based on the number of cars exported by Hyundai and the gross registered tonnage of car carriers calling at the port in a financial year.
Cochin Port asks NTPC subsidiary to conduct study for powering SEZ
It is reported that Cochin Port Trust has entrusted National Therma Power Corporation’s subsidiary NTPC Electric Supply Co to carry out a feasibility study and prepare a detailed project report for providing electric supply to the port based SEZ at Vallarpadam and Puthuvypeen.
Cochin Port earlier considered various options like setting up a captive power plant on BOT basis, entrusting the supply of power to Kerala State Electricity Board for providing power supply to the various projects coming up in the proposed SEZ’s.
But KSEB informed that the approximate cost for bringing power supply to the SEZ's at 110 KV will be to the tune of INR 110 crore and that they would need 3 acres at Vallarpadam, 4 acres at Puthuvypeen and 15 acres at Chathiath. Considering the financial constraints and huge investments, the co developers of the SEZ project such as DP World, BPCL KRL and Petronet LNG are reluctant to share the cost of power supply and decided to carry out a detailed feasibility study in this regard by entrusting the work to NTPC Electric Supply Co.
NEEPCO to set up 2 hydel power projects in Manipur
It is reported that the North Eastern Electric Power Corporation Limited has decided to build 2 medium sized hydel power projects at Pabran and Khongnemchaka on the Barak River in Tamenglong district of Manipur.
While the Pabran project will churn out 190 MW of hydel power, the other one at Khongnemchaka will generate 69 MW. Barak's natural upstream flow will be used to produce power.
The Central Electricity Authority has already compiled a feasibility report for the projects with the help of a Delhi based water and power consultative services.
The Barak River springs in Nagaland, flows through Manipur and south Assam and terminates in Bangladesh.
SDI to double galvanizing capacity by acquiring The Techs
Steel Dynamics Inc announced that it has entered into a definitive agreement to acquire a privately held Pennsylvania based flat rolled steel galvanizing company The Techs. Steel Dynamics will pay USD 360 million for the company on a cash free debt free basis, subject to certain adjustments. The acquisition is expected to close on or about July 2nd 2007.
The Techs business operations consist of three facilities, GalvTech, MetalTech and NexTech. The Techs' three facilities, constructed in 1984, 1990 and 1996, have a combined annual galvanizing capacity of about 1 million tons. It shipped 958,000 tons of galvanized steel and generated revenues of USD 811 million in 2006. The Techs specializes in non automotive applications, serving a variety of customers in the HVAC, commercial construction, and consumer goods markets. About 85% of its sales are to customers in the eastern US and the Midwest.
Steel substrate used by The Techs is expected to continue to be supplied by a variety of nearby suppliers, which have also, in the past, included SDI.
Mr Mark Millett president & COO for Flat Rolled Steels and Ferrous Resources of SDI said "The Techs represents an excellent opportunity for Steel Dynamics to expand its participation in the value added steel coating business. Its management and employees have done a fine job building an outstanding company by focusing on quality and service, resulting in a very loyal non automotive customer base. This additional business complements our three existing galvanizing lines at Butler and Jeffersonville, Indiana, which utilize steel sheet produced at our Butler mill. Like our existing operations, these plants process both hot rolled and cold rolled steel in a range of gauges. This acquisition will approximately double SDI's hot dip galvanizing capacity.”
POSCO eyeing BlueScope - Report
The Australian, without citing sources, reported that South Korean steel firm POSCO has renewed its interest in BlueScope Steel Ltd.
The report added that POSCO had looked at possibly acquiring BlueScope at the time it was spun off from BHP Billiton in 2002 and the talk in investment banking circles is that the South Korean company is again considering a takeover.
The newspaper said the potential attraction of BlueScope to a major steel company is less its production capacity and more the downstream position it is building in Asia's construction materials markets.
BlueScope shares closed at AUD 10.39 putting its market capitalization at AUD 7.62 billion (USD 6.4 billion)
Coal & Allied declares force majeure on coal supplies from NSW
Rio Tinto’s Australian coal subsidiary Coal & Allied Industries Ltd has declared force majeure on a number of its sales contracts following severe storms in the Hunter region of New South Wales in Australia.
Coal & Allied said that it was unable to provide an estimate of the duration of the force majeure at this stage but added that these weather conditions have had an impact on the Hunter Valley Coal Chain and will prevent Coal & Allied from performing its obligations to deliver coal to the Port of Newcastle.
Coal & Allied is also presently assessing the impact of these weather conditions on production at each of its mines. It operates three mines in the Hunter Valley Mount Thorley Warkworth, Bengalla and Hunter Valley Operations.
Coal & Allied's decision to declare force majeure comes after BHP Billiton Ltd was forced to take the same action on coal exports from its Mt Arthur mine followed by Xstrata.
The Hunter Valley Coal Chain Logistics Team said that coal haulage in the Hunter Valley region had ceased, with flooding from the savage storms damaging parts of the rail network. HVCCLT said limited train services to mines south of Maitland should re start on Thursday afternoon, with limited services to mines north of Maitland to possibly begin from Friday evening. It added that "These estimates remain preliminary and subject to change depending on progress of repatriation work. It will take some time for the system to be returned to normal service beyond these times."
The storms are the latest issue to dog east coast coal miners, which are struggling to meet demand due to infrastructure constraints at a number of port facilities, including the Port of Newcastle.
China to cut export benefits on pipes
Rumors among Chinese traders suggest that the VAT rebate for the export of stainless steel seamless pipes from China may be cut to 5% after July 1st 2007. At the same time other rumor circulating among traders are that the export rebate for welded pipes including both carbon and stainless will be cut, on seamless carbon steel pipes may also be cut to 5% and the rebate for OTCG is set to remain at 13%.
Although all these rumors are unconfirmed, most of the Chinese pipe exporters and traders have already taken preemptive actions.
A Zhejiang based trading company revealed that they have obtained a notice listing the items that Beijing moves to further cut the tax rebate from the government sources. Sources from the Zhejiang trading company said that "All of us are rushing out the shipment in advance. If any exporter has booked the vessel after July 2007 they have to absorb all the extra cost from the likely tax change."
Meanwhile, some exporters have already delivered their shipment to bonded areas, which can shield them from possible tax movement in the future. Mr Han from a marketing manager of Tianjing trading company said that "The bonded area in Tianjin is full of steel products in April and June 2007. And as everyone is anticipating a cut on tax rebate at the moment, the exporters would again move the products for export order to bonded areas."
According to an industry source close to the Chinese government body said that "Tax rebate is definitely to be reduced sooner or later, and as far as I know the draft has already been submitted to the State Council for approval, and the date of the enforcement has yet to be finalized."
(Sourced from MySteel.net)
Rio Tinto to get firmer grip on iron ore trade
It is reported that Rio Tinto has renewed its focus on North America and Europe market to stem a potential decline of its 23% share of the world's seaborne iron ore trade. It has recently bolstered its efforts by increasing its promotion of a potential USD 6 billion iron ore project in West Africa and forming a dedicated Atlantic marketing team.
Rio has spent more than USD 50 million studying the USD 6 billion Simandou project in Guinea as part of its push to increase its share of the Atlantic iron ore market, which is dominated by Brazil's CVRD. Simandou, which could produce 70 million tonnes of high grade hematite a year, has become an increasingly prominent feature of Rio's iron ore presentations.
Mr John Mackinnon a Deutsche Bank analyst told that Rio's management was very upbeat about the Simandou project's prospects and could approve it in 2010 and start production in 2013. He added that "Despite these aggressive plans, Rio's global market share would still decline hence the effort on offshore growth."
Rio is also studying projects at lease areas in India's iron ore rich state of Orissa. It has a 51% interest in Rio Tinto Orissa Mining a JV with state owned Orissa Mining Company.
About 25% of the world's iron ore exports are sold to Europe and North America but Rio last year shipped only 12% of its production to Atlantic markets as compared with 88% to Asia because most of its mines are in Western Australia. Rio already supplies the Atlantic market through its ownership of pellet producer Iron Ore of Canada and the Corumba mine in Brazil. It last year formed a dedicated Atlantic marketing team in London to help increase sales to Europe, Africa, the Middle East and the Americas.
Nippon Steel & Godo Steel strengthen capital alliance
Japan's Nippon Steel Corp and Osaka based Godo Steel Ltd announced that they have agreed to strengthen their alliance to win in their fierce battle with global competitors.
Under the new tie up Nippon Steel will buy new shares to be issued by Godo Steel valued at JPY 6.12 billion from the Godo Steel which will raise Nippon Steel's stake in Godo Steel to more than 15% in terms of the voting rights from the current 9.5%.
Godo will also buy certain number of Nippon Steel shares but didn't elaborate.
FMG to allow iron ore shipments of Atlas Iron from Port Hedland
It is reported that Mr Andrew Forrest backed Fortescue Metals Group has recently signed a MoU with Atlas Iron Limited to allow access to its new berth at Port Hedland for exporting iron ore. Fortescue's agreement with Atlas allows the companies 60 days to negotiate commercial terms for the port handling and ship loading services but is not legally binding.
FMG will sell its services through its wholly owned subsidiary The Pilbara Infrastructure to Atlas, in a one year deal from March 2008. The deal would allow Atlas to start shipping 1 million tonnes a year from Fortescue's port starting March 2008 subject to state environmental approvals.
Atlas will use the port handling, ship loading and rail haulage services provided by subsidiary The Pilbara Infrastructure at three of its projects Pardoo DSO, Pardoo Magnetite and Abydos DSO. Atlas plans to haul ore from its Pardoo hematite project 75 kilometers east of Port Hedland using road trains and will only use Fortescue's port until a new public facility is ready in 2009.
The deal would also allow Atlas to use FMG’s port facilities for a potential magnetite project and its railway and port for a second hematite project.
Mr David Flanagan MD of Atlas said that "Being able to load iron ore through the TPI ship loader until the new government facility is completed will minimize our impact on dust and road train traffic through the town of Port Headland. While Atlas is planning to haul Pardoo iron ore to Port Hedland by road transport, we believe that rail is the safest and most commercially viable means to haul iron ore. Wherever we can work with infrastructure owners to achieve a workable rail solution, we will."
FMG plans to ship its first iron ore from its USD 3.2 billion Pilbara iron ore project in May 2008 following cyclone damage to its facilities.
Major coal deposit found in Inner Mongolia in China
China Daily reported that a coalfield with reserves of 20.5 billion tonnes has been discovered in North China’s Inner Mongolia Autonomous Region. Located in Hunlunbuir east Inner Mongolia, the coalfield will mainly produce brown coal, which can be used in thermal power stations and in coal to chemical products. Analysts said the coalfield would help ease the demand for energy in Northeast China.
An official of the China National Coal Association said that it is expected to have a life output of more than 10 billion tonnes and its annual production could be between 10 million and 20 million tonnes.
Mr Wang Ye an analyst with CITIC Securities said that "The discovery will increase China's total coal reserves but it will not have a big impact on the nation's coal industry as a whole."
Last year Inner Mongolia discovered five 10 billion ton coalfields in Xilin Gol and a 6.4 billion ton coalfield in Baiyanhua and invested CNY 2.78 billion (USD 21.12 million) last year in geological exploration of 170,000 square kilometer of land doubling the investment between 2001 and 2005. The region produced 260 million tons of coal in 2005 and even more last year.
Coal continues to be the China’s most important energy resource according to the 11th Five Year Plan 2006-10 for the coal industry published by the National Development and Reform Commission. China has 1 trillion tons in coal reserves, ranking third in the world. Shanxi Province, Inner Mongolia and Ningxia Hui autonomous regions are the major coal sources accounting for 67% of the total reserves of China. China's coal output is expected to be 2.6 billion tons in 2010.
Cares advises stricter control on rebar quality in UAE
According to Cares, UK based Certification Authority for Reinforcing Steels, quality controls must be introduced into the UAE's steel supply chain to ensure reinforced steel products arriving on building sites are exactly as specified.
Mr Ben Bowsher ED of Cares said that a certification system must be employed in the UAE to ensure that rebar cutting and bending companies source from reputable steel mills. He said that poor quality steel or steel which is cut and bent incorrectly can lead to severe delays on building sites as parts are tested on site or replaced.
Mr Bowsher said that "In the construction industry it's not always easy to ensure you get the steel that you specified. You can have faults all the way down the supply line. You won't see a building fall down because of it but you can certainly have costly delays while testing is done. If the results come back wrong sometimes construction will have to be altered."
Iron ore miners at BHPB’s Mount Whaleback mine raise safety concerns
Australian media last week reported that a section of iron ore mines at BHP Billiton's Pilbara iron ore mines are angry about belligerent and overbearing treatment from management over the workplace agreements. As per report, about 200 miners have signed a petition complaining of threats, stress, low morale and risks to safety as miners have been placed in areas where they lack experience because they did not have union backing to raise safety concern.
However, as per another report by ABC, up to 10% of the total workforce at BHP's Mount Whaleback mine in Western Australia, believed to be about 2000, had joined the protest.
The petition said that employees have been continually looking over their shoulders and fear harsh treatment by management. It said that those who complain about safety are considered obstructionist and resistant to change, not champions of higher standards.
Most miners blamed a company culture under AWAs, the Howard Government's individual employment agreements, which have been spread to 80% of BHP's iron ore workforce. Some of them said that the workers had been given no choice by management about signing AWAs and were intimidated by management when they tried to raise safety issues adding that an accident waiting to happen at Mount Whaleback mines.
However, Mr Ian Ashby president of iron ore operations of BHPB was quoted by ABC as saying that he was disappointed if employees felt they could not report safety incidents because of feared repercussions. Mr Ashby said that safety was a primary concern and had improved. He encouraged employees to report safety concerns directly to him, if necessary. BHPB said that the Mount Whaleback mine is statistically among the safest in the country.
Saldanha Bay eying 93 million tonne iron ore expo by 2013
It is reported that good progress is being made with of ZAR 5 billion plans to drastically increase iron ore exports from Saldanha Bay’s deep water port to meet the growing international demand for South Africa’s high quality iron ore. The project involves major engineering contracts and plans to treble the export capacity of Saldanha within the next 6 years.
The project is reported to be well advanced on the drawing board and Transnet has recently given notice of an Environmental Impact Study for post 47 million tonnes per annum up to a possible 93 million tonnes per annum. Massive new infrastructure is being planned at Saldanha as part of phases 2 and 3 of the bulk handling capacity that will be pushed up to 93 million tonnes per annum once completed. On the ship side this involves one or two new berths to tie up bulk ore carriers between the existing berths and the coastline. In March 2007 the green light was given to expand the facility to 47 million tonnes per annum from 41 million tonnes per annum by DEAT.
Environmental impact approval is being sought for the establishment of new infrastructure on some 141 hectares of land. This part of the proposed project could have the biggest impact on the sensitive environment of the bay and lagoon. The plan is to reclaim an additional 50 hectares of land within Saldanha Bay. This will be done by dredger. The shipping channel will be deepened and the material recovered will be used for the construction of new shipping berths.
Another footprint area which could be impacted is 35 hectares of land in the undisturbed dune area on the coast between the iron ore quay and the Saldanha Mittal Steel Plant. The intention is also to fill in the so called Oyster Dam to create more space for stockpiling iron ore within the confines of Saldanha Bay.
Yet another part of the project involves the upgrading of the Salcor railway yard, five kilometers to the north. The size of trains and the number of ships calling at Saldanha’s port will also increase when the facilities are enlarged to handle more iron ore. Railway engineers have already tested one iron ore train on the Sishen Saldanha line, which has 342 trucks instead of the normal 216. These tests are to be repeated later in the winter.
The new plans for Saldanha follow the imminent completion of the first phase of extensions to the iron ore bulk handling facilities which is a ZAR 951 million projects designed to increase export capacity of iron ore from 18 million tonnes to about 41 million tonnes. Phase 1 is due for completion in July 2007. It involved improvements to the bulk handling capacity on the quayside and in the stacking areas at Saldanha. A second tippler was built, 3 stacker reclaimers were commissioned, 2 new ship loaders were taken in use, and a second conveyor belt was installed.
The world demand for iron ore remains very buoyant and the export market can take all SA can deliver. SA Port Operations is under continual pressure from the Northern Cape mining operations to increase export capacity. Both Kumba Resources and Assmang are opening up new mines in the Northern Cape, following the discovery of new ore reserves and the Northern Cape mines are gearing up for increased exports. The rail and harbor network need to match these projections.
Benxi to supply 240,000 tonnes HRC to Union Steel
It is reported that Chinese steel major Benxi Steel has signed contract with South Korean Union Steel to supply 240,000 tonnes of HRC during 2007-08. This is largest contract in Benxi Steel's history demonstrating that Benxi Steel's products has penetrated into international high end steel product market.
Cooperation between these two sides has deepened since December 2006 when Benxi Steel signed the first batch of HRC export contract with Union Steel. In 2006 Benxi Steel exported 60,000 tons of HRC to Union Steel. It maintained the same export volume during the first half of 2007.
In addition, two sides also have wide cooperation in technology innovation as well as product development and have reached cooperation agreement on high end steel product research.
Union Steel, founded in 1962, is able to produce 3.8 million tons of steel per year. Its major products include CR, galvanized and color coated products mainly for home appliance and automobile. Union Steel imports about 600,000 tons of HR from China per year among which about 40% are from Benxi Steel. It has also signed such a contract with Baosteel Group, China's top steel maker.
Benxi Steel has set its presence into South Korea since 2001 and has an office there. During these years, Benxi Steel constantly expands its overseas sales channel through product quality promotion and good service.
(Sourced from MySteel.net)
Pakistan’s cement makers to increase import of SA coal
Reuters has reported that Pakistani cement makers are expected to increase sharply their imports of South African coal during the financial year beginning July because of the shortage of Indonesian material. The report cites some insiders as saying that "For this financial year Pakistan is likely to import 4 million tonnes of coal. If there is a shortage of Indonesian then maybe most of this will have to come from South Africa."
A senior executive at one of Pakistan's largest cement makers said that "We did not expect there to be a shortage of Indonesian coal as China has stopped exporting. We will have to buy more South African coal even though it is at least USD 5 more expensive than Indonesian. We almost had to shut down our plant because of problems with Indonesian supply. But we were able to get South African coal instead."
Another Pakistani cement maker said that his company is actively seeking offers of South African coal for delivery from July onwards and complained there were too few suppliers offering to Pakistan.
An official of the All Pakistan Cement Manufacturers' Association said that increased cement production is expected to fuel further growth in coal demand over the next few years. He said the Pakistani government's planned public sector development program that will increase domestic demand for cement. In addition Pakistani cement makers are expecting to increase their export sales to India.
Demand from India for South African coal this year has more than compensated for the lack of demand from Europe which takes the vast majority of South Africa's coal through long term contracts. India could take 10 million tonnes in spot cargoes of South Africa's likely 67 million tonnes of 2007 exports, up from 3 million tonnes in 2006. A surge in Indian buying led has helped to push prices of prompt South African coal cargoes. The rise in demand by Pakistan is further expected to boost already strong prices for South African coal because supply is limited for the rest of this year.
Some suppliers estimate that 750,000 tonnes has been booked for delivery to Pakistan between April and September. Pakistan imports 3.5 million tonnes to 4.00 million tonnes a year of coal, which is used as a fuel and raw material in cement production.
US’s ARA steps up certification programs
It is reported that the US’s Automotive Recyclers Association has added new stricter guidelines to its Certified Automotive Recycler and Gold Seal certification programs.
To apply under the CAR program's rules, each automotive recycling facility must now submit more than 30 photographs of its operations and copies of its licensing documentation along with a signed agreement that it adheres to the program's code of conduct.
A panel of automotive recyclers and environmental experts then reviews each application to determine if the facility meets CAR program standards. Each facility also must undergo an environmental audit and provide ongoing self audit documentation to maintain CAR certification.
Also new this year CAR program members are required to participate in the National Vehicle Mercury Switch Removal Program in which automotive recyclers must locate and remove mercury switches from end-of-life vehicles then safely ship the switches to a third party for treatment.
As per report the Gold Seal program is designed for CAR certified facilities that wish to achieve best in class status especially regarding customer service. Additions to this program include a new minimum composite Customer Service Index score minimum warranties on mechanical parts mandatory use of the ARA Parts Grading system for parts inventory and the use of the Gold Seal Customer Complaint Hotline number on all parts tags.
BHPB to increase manganese ore price
YIEH reported that BHP Billiton has quoted manganese ore price for third quarter of 2007 at USD 6.4 to USD 6.5 per tonne unit CIF for Chinese market.
It is at much higher than initial anticipations from buyers and end users. The contract price to Japan was USD 3.9 per tonne unit and to South Korea was USD 3.6 per tonne unit in the second quarter o 2007.
The demand for manganese ore in China has been increasing since 2006 because of strong demand in Chinese steel market but the supply of manganese ore in China was decreased as result of raw material cost rise, limitation on use of electricity, transportation charges and macro control by Chinese government.
The global manganese ore supply from South America and Australia is decreased due to reduction of output and cyclonic influence. Those are the main reason to make the manganese ore price up.
Mincor to start Carnilya Hill nickel project in WA
It is reported that Australia based nickel producer Mincor Resources has added further momentum to its production growth strategy in the Kambalda region after announcing formal approval for a new AUD 28 million nickel mine development at its 70% owned Carnilya Hill project in Western Australia. Site works will start immediately and full scale development is expected to start in July. First production is targeted for January 2008.
The Carnilya Hill project is forecast to operate at a production rate of about 15,000 million tonnes per month of ore or 5,000 million tonne per year of nickel for an initial period of just less than three years based on current ore reserves. Cash costs for the life of the current reserve are estimated at an average of AUD 5.10 per pound nickel. Total capital costs for the life of the current ore reserve are estimated at AUD 28 million. Mincor will be responsible for 70% of this capital cost in line with the JV arrangement.
All ore will be trucked to the BHP Billiton concentrator plant at Kambalda, where it will be toll treated and the resulting concentrate sold to BHP under a long term off take agreement.
As per report the project, which has been given the go ahead less than a year after the initial discovery, represents Mincor's 5th new mine development in the Kambalda District since 2001.
Chelyabinsk Zinc’s 2006 profit zooms 20 fold
It is reported that Russian zinc major Chelyabinsk Zinc Plant has boosted it net profit almost twenty fold to USD 109.1 million in 2006 after selling more of zinc at record prices. Its EBITA rose to USD 186.9 million from USD 25 million.
Chelyabinsk said that its revenue rose by 213% to USD 569.1 million, Zinc sales rose by 27% in volume and prices more than doubled while sales of by products including indium and cadmium rose by 40%.Its 2006 revenues also included USD 53.5 million 9.4% of total revenues from sales of zinc and lead concentrate by Nova Zinc the operator of the Akzhal mine in Kazakhstan acquired last year.
Mr Sergei Moiseyev chairman of Chelyabinsk Zinc said that "We are proud to exceed the consensus expectations on our first year as a public company. Zinc production in 2007 would rise to about 165,000 tonnes as the company processes more raw materials. The company plans to boost output to 200,000 tonnes a year to be self sufficient in raw materials in 2010”
Chelyabinsk produced 148,384 tonnes of zinc last year 56% of Russia's total and sold 133,807 tonnes of zinc and zinc alloys in 2006 up from 105,500 tonnes in 2005.
BlueScope appoints Mr Murray as president for New Zealand Steel
BlueScope Steel has announced that Mr Ross Murray president of Iron and Slab at Port Kembla Steelworks would succeed Mr Bill Jacob as president of New Zealand Steel and Pacific Islands effective July 1st 2007. Mr Jacob will be returning to the United States to take up the role of President Northstar BlueScope Steel based at Delta in Ohio.
Mr Jacob commenting on his departure said that “I have appreciated the opportunity of leading this fine organization for the past four years. If asked to describe New Zealand Steel in one word it would be unique. Unique, for its operation process but more importantly unique for the strength of its people. New Zealand Steel has some of the best steelmakers in the world with a drive and passion to beat the odds and make the business a success.”
He added that “My four years with New Zealand Steel have been the most challenging and personally rewarding of my career, and I take many positive experiences and key learning from this New Zealand experience to my new role in the United States. The past few years have seen the fortunes of New Zealand Steel and its future prospects change dramatically. In 2003 the Board of BlueScope Steel confirmed the continuation of the iron and steel making operations. This meant that New Zealand Steel would continue as a fully integrated steelmaking business rather than become a secondary processor of imported steel.”
Mr Jacob said that “While the future is not without its challenges, I believe New Zealand Steel is now strongly positioned for further growth and to make a significant contribution to the economic well being of this country. I have known Mr Ross Murray for4 years as a colleague and a friend and he is an excellent leader with over 30 years experience in the steel industry. I am confident that he is the right person to lead New Zealand Steel and the Pacific Islands business with growth and prosperity.”
CNX Gas to acquire CBM and gas interest from Peabody
It is reported that CNX Gas Corporation has entered into a definitive agreement to acquire the coalbed methane and gas interests to approximately 1,037,000 gross acres from Peabody Energy. Closing of the transaction with Peabody Energy is subject to a number of conditions; however, the transaction is expected to close before the end of the second quarter.
The transaction will increase CNX Gas' gross acreage position from 2.5 million gross acres at year end 2006 to 3.6 million or an increase of 44%.
The transaction involves three parties CNX Gas will first acquire certain coal assets from CONSOL Energy Inc for USD 45 million cash plus a future payment which has an estimated present value of approximately USD 6.5 million. CNX Gas will then convey those coal assets plus USD 15 million cash to Peabody Energy in exchange for Peabody Energy's CBM and gas rights to approximately 1,037,000 acres including 654,000 acres in the Illinois Basin, 153,000 acres in Northern Appalachia, 171,000 acres in the San Juan Basin, 47,000 acres in the Powder River Basin, and 11,000 acres in the Rockies.
Mr Nicholas J DeIuliis president and CEO of CNX said "This is a substantial deal for CNX Gas. It enables us to significantly increase the size of our already large inventory of low cost low risk opportunities. This deal is significant for CNX Gas from another perspective and is continuing to consolidate our position in the New Albany Shale. Some of Peabody's acreage in the New Albany Shale is near our existing acreage allowing for increased economies of scale in the important exploratory play we refer to as Cardinal. We believe that when the Peabody deal closes CNX Gas will be the leading acreage holder in the New Albany Shale with control of 254,500 gross acres.”
CNX Gas Corporation is an independent natural gas exploration, development, production and gathering company operating in the Appalachian Basin of the United States.
South African metals sector workers to declare dispute with employers
Engineering News Online cited Mr Mziwakhe Hlangani Spokesperson of National Union of Metalworkers of South Africa as saying that workers in the metals and engineering industries in South Africa, who have reached a deadlock with employers over wage increases, will lodge a formal dispute.
Mr Hlangani said that once the 48 hour notice to strike had been delivered the bargaining council and it would be notified that the industry would only go on a full blown strike at the end of the month.
At a meeting held recently, the employers tabled a final wage increase offer ranging from 6.8% for skilled workers to 7.3% for unskilled workers, which the unions rejected. Trade union's demands for a skills allowance improved shift allowances and more family responsibility leave were all rejected by the employers.
The Steel Engineering Industries Federation of South Africa which represents employers in the sector said that an attempt would be made at the meeting to explore possible options to resolving the dispute affecting the 280,000 employees in the industry.
Puda Coal to acquire Chongjie coal washing plant in Shanxi
Puda Coal Inc announced that it has signed an asset exchange agreement with Linshi County Jinliao Coal & Chemical Co Ltd for the acquisition of the Chongjie coal washing plant in Lingshi County of Shanxi province in China. Puda Coal will commence coal washing operations at the new plant immediately upon the closing of the transaction, which is expected to be completed before the end of June 2007.
The transaction will add 800,000 million tonnes processing capacity to Puda Coal's operations, bringing total annual coal washing capacity to 3.5 million tonnes.
Under the terms of the agreement, Puda Coal will acquire a coal washing plant with 1.2 million tonnes of annual coal washing capacity from Jinliao Coke. In consideration Puda Coal will pay Jinliao Coke USD 6 million in cash and transfer its Shanxi Liulin Dongqiang coal washing plant which is valued at USD 1.5 million and has 400,000 million tonne of annual coal washing capacity.
The new plant is located in Lingshi County, one of Shanxi's largest high grade raw coal reserves, utilizes advanced dense medium coal washing technology to produce high grade cleaned coking coal. Puda Coal plans to implement its advanced mix control technology and management system at the Lingshi plant in order to enhance its operational efficiency.
Mr Zhao Ming chairman & CEO of Puda Coal said that "Our expanded coal washing capacity of 3.5 million tonnes solidifies Puda Coal's position as the largest cleaned coal processor in the Shanxi province and allows us to meet the large orders requirements of steel manufacturers and coking companies. Major infrastructure projects continue to drive demand and we intend to further increase capacity to 4 million tonnes by year end."
Puda Coal through its affiliates and controlled entities supplies premium grade coking coal to the steel making industry for use in making coke. Puda currently possesses 3.5 million tonnes of annual coking coal cleaning capacity and management believes it is the largest coking coal cleaning company in terms of capacity in Shanxi Province of China.
POSCO to maintain SS prices
It is reported that South Korea's POSCO will keep stainless steel prices steady even though prices of nickel have recently tumbled at London Metal Exchange.
An official at POSCO said that "Only a few days have passed since the exchange's intervention. We need more time to confirm the trend in nickel prices before lowering stainless steel prices."
The official added that "A series of increases in stainless steel prices since early this year did not fully reflect soaring global nickel prices. So we don't need to hurry to reflect nickel prices' fall."
Another POSCO official said the LME's move to combat speculators was hurting the company in the short term. He said that "A smooth fall of nickel prices will be positive in the long term but the recent sharp decline is definitely not good news for POSCO and customers have stopped issuing new orders as they anticipate a further fall in nickel and stainless steel prices."
Indonesian PLN inks long term coal purchase agreements
Antara News agency reported that Indonesia’s state run electricity firm PT Perusahaan Listrik Negara has signed a 20 year contract to buy 8.02 million tonnes of coal per annum from four suppliers.
Under the terms of the contract the price of the coal will be in the range of IDR 230,000 to 280,000 per tonnes. The first delivery is scheduled in 2009.
The report cites Mr Tonny Agus Mulyantono deputy director of PLN as saying that coal would be supplied to five power plants including PT Baramutiara Prima, PT Titan Mining Energy, a consortium of PT Arutmin Indonesia & PT Darma Henwa and a consortium of PT Kasih Industri Indonesia & PT Senamas Energindo Mulia.
Mittal Steel Galati planning another golden handshake - Report
Romanian Bursa reported that ArcelorMittal’s Mittal Steel Galati is preparing for a new wave of voluntary layoffs. Depending on the length of their service with the company, leaving workers will receive a lump sum of RON 16,000 or RON 18,000 or RON 20,000 plus the equivalent of their last salary for 6, 9 or 12 months.
As per report, at least 1000 of workers are interested in leaving in order to receive the severance offered by the company. Mr Emil Mihaila VP of the steel union federation said that "Very many people want to leave the steel works."
However, the report mentions that Mr Dorian Dumitrescu a spokesman of Mittal Steel Galati declined to comment on the information about the voluntary layoffs.
This would be the sixth wave of voluntary layoffs in the history of the steel works. The latest one took place in July 2006, when 1,500 workers chose to leave their jobs. Mittal Steel Galati currently has some 14,500 employees, which is half as much they did in the fall of 2001, when the steel works was acquired by Mittal Steel.
Newcastle Port to lose 2 million tonnes in coal
According to Australia’s Newcastle port operator it will lose around 2 million tonnes of coal exports after a storm and floods halted ship loadings and rail transport.
A spokesman for Waratah port coal services said that a couple of coal ships that have already been loaded may leave the port but rail shipments of coal into the terminal will not resume due to flooding in the Hunter Valley.
Market sources said that the news of the severe weather prompted a sharp rise in Newcastle prices as shown by flurry of trades on electronic trading platform globalCOAL during the European morning. The source added that coal availability in Asia is extremely tight so any supply interruption will prompt a scramble for replacement tonnage.
