June, 15 2007
SAIL DSP May 2007 crude steel production up by 5% YoY
Steel Authority of India Limited’s Durgapur Steel Plant is reported to have produced 193,002 tonnes of hot metal, 171,402 tonnes of crude steel and 150,009 tonnes of saleable steel in May 2007 up by 11% YoY, 5% YoY and 3% YoY as compared to May 2006. During May 2007, DSP has achieved 109%, 112% and 111% of the rated capacity for hot metal, crude steel and saleable steel respectively.
DSP’s sinter production in May 2007 was 257,903 tonnes, blend mix 365,475 tonnes, wheel and axle plant 2,942 tonnes.
DSP’s oven pushing of average 310 units per day is also best ever May performances. Production at DSP’s continuous casting plant stood at 96,712 tonnes recording 145% of rated capacity.
A DSP release stated that special steel dispatches to SAIL’s Alloy Steels Plant stood at a high of 4,205 tonnes in May 2007 and the production of special steels stood at 36,057 tonnes 24% of the total saleable steel production.
CIL MCL to develop 3 opencast mines in Orissa
It is reported that Coal India Limited’s second largest coal producing subsidiary Mahanadi Coalfields Limited has embarked on a comprehensive plan of setting up 3 new opencast mines in the Bhubaneswar, Kulda and Kaniha areas of Orissa in addition to setting up of 3 new underground mines in the Talcher area.
The report cites a MCL official as saying that "The setting up of 3 new opencast mines are simultaneously being worked out with the 3 new underground mines. The line of investment will shortly be ascertained for the setting up of these 6 mines in the underground mines and opencast mines category."
In addition, MCL has decided to augment its existing production by 10% to 15% during 2007-08 and expansion program has been undertaken in 4 opencast mines of MCL under the Emergency Coal Provision Program.
MCL is projected to produce 99 million tonnes of coal in 2007-08 as compared to from the existing 88 million tonnes. It is further projected to achieve a target of 137 million tonnes of coal during 11th Plan. Out of total 20 mines in MCL, 13 are opencast and 7 underground.
As per report, CIL has 475 mines, out of which 350 are in the underground category and 125 are opencast. Of the 363 million tonnes of coal produced, the opencast contribute for 318 million tonne and underground produce only 45 million tonne. CIL wants to augment underground production to 75 million tonne in future and has instructed its subsidiaries to open new underground mines having capacities of producing 2million tonnes to 5 million tonnes each.
SAIL RSP develops C5 coating for CRNGO
BS reported that Steel Authority of India Limited’s Rourkela Steel Plant has developed a new semi organic insulation coating called C5 for electrical steel in house. RSP’s silicon steel mill has made modifications in the equipment as well as acquired the coating solution with appropriate composition.
As per report, the trial production of electrical steel with C5 coating commenced in April 2007 and 67 tonnes were produced. It has successfully producing 635 tonnes of steel in the second trial campaign that started on June 4th 2007.
C5 coated electrical steel is a non chrome environment friendly steel having a better weldability as compared to C6 coating. Being an environment friendly material the newly developed C5 coated CRNGO has a very good market in the European countries.
RSP is currently producing 3 different types of insulation coating namely C3 with organic coating, C4 with inorganic coating and C6 that has semi organic coating.
Acerinox confirms interest in India
Thomson Financial quoted Mr Victoriano Munoz chairman of Acerinox SA confirming recent press reports that it is studying a project in India with Japan's Nisshin Steel.
Mr Munoz while speaking to reporters ahead of the company’s AGM said that “Plans for the project, which would include a factory, are still uncertain.”
Indian Railways to set up wagon factory at Dalmia Nagar in Bihar
It is reported that Indian Railways has identified Dalmia Nagar in Bihar as the suitable site to set up a wagon factory on public private partnership model. Indian Railway is also reported to be in the process of creating a dedicated rolling stock special purpose vehicle, where private players will buy stakes.
The factory will manufacture 32.5 tonne axle load goods trains and double stack container trains which will be intensely used by the dedicated rail freight corridor.
It is noted that the private players will be involved in manufacturing trains with their own designs in accordance with special commodity wagons like iron ore, steel and coal etc and the wagon manufactures will be allowed to manufacture wagons of their own designs, with railways recommended bogies, coupler, draft and brake gear.
Global Steel may buy stake in Tunisian El Fouladh - Report
Times News Network reported that Global Steel Holdings is in talks with the Tunisian government to take a strategic stake in Tunisia’s largest steel maker El Fouladh.
AS per report, Global Steel Holdings had their first meeting late last month and that the talks are part of the Tunisian government’s attempts to raise resources to fund the company’s expansion.
The state owned El Fouladh is one of the only four steel companies in Tunisia and produce about 100,000 tonne of billets, wires and rebars.
GSH is the holding company of the Mumbai based Ispat Industries controlled by Mr Pramod Mittal and Mr Vinod Mittal and has operations spread in India, Philippines, Bulgaria, Libya, Nigeria and Zimbawe.
PMO meeting on POSCO rescheduled to June 26th 2007
PTI reported that the review meeting by the Indian prime minister’s office on the progress of POSCO’s 12 million tonne steel project in Orissa, earlier scheduled for today, has been postponed to June 26th 2007 following a request by Orissa government.
As per report, Orissa government informed the prime minister’s office that one week back that it would not be able to send the forest land diversion proposal to the ministry of environment and forest for clearance.
Rail movement resumes on Kottavalasa Kirandul line
It is reported that rail movement on the 450 kilometer long Kottavalasa Kirandul line under the East Coast Railway has resumed after having remained suspended for nearly 2 weeks due to the non availability of electricity after the Maoists had blown up transmission towers in Chhattisgarh and some of the dedicated rakes, which were withdrawn from the circuit, were now being brought back.
A spokesman for the East Coast Railway said that 10 rakes loaded with iron ore had been moved on the line for exports through the Visakhapatnam port as well as to meet the requirements of Rashtriya Ispat Nigam Limited. In normal situation, 15 rakes of ore are transported on the line every day 10 for Visakhapatnam port for exports and the 5 others for Visakhapatnam Steel Plant.
The spokesman, however, pointed out that the rake loading of coal at Talcher mines under Mahanadi Coalfields Ltd, which was disrupted by the agitation of the local people demanding rehabilitation and jobs, was yet to become normal. He said that "We're loading around 20/22 rakes a day against the targeted 26/27 rakes."
Double tax avoidance agreement with GCC likely
Exim News Service reported that Indian government is planning to enter into comprehensive double taxation avoidance agreements with the Gulf Cooperation Council for a free trade agreement which will help Indian businesses improve relations with the UAE, Kuwait, Saudi Arabia, Qatar, Oman and Bahrain.
A government official said that Indians working in these countries and Indian companies providing services in the GCC would be the main beneficiaries of the initiative.
Efforts are being made to implement the DTAA signed between India and Kuwait last year. The pact was not made operational since ‘internal procedures’ of the Kuwaiti side were not complete. The agreement would be notified soon after the authorities in Kuwait lay down detailed procedures for implementation.
In the case of Qatar, the government had proposed a review of the current DTAA.
Since the UAE is a key trading partner and a lot of Indians and Indian companies work there, the government has incorporated a limitation of benefits article to prevent misuse of the DTAA between the two countries. The updated agreement would be notified once the UAE authorities complete their internal procedures.
L&T seeks extension of subsidy for Indian shipping industry
It is reported that Larsen & Toubro has sought an extension of the subsidy policy for the ship building industry from Indian government.
Mr AM Naik C MD of L&T after meeting Mr P Chidambaram union finance minister said that “There is a need to extend the subsidy policy for the ship building industry. We discussed our entry into new areas such as power plant manufacturing and boilers. We also discussed L&T’s venture into the ship building business and support from the government for this sector.”
He added that there were hardly any ship builders to take advantage of the present subsidy policy, which comes to an end in September this year.
Simplex Infrastructure secure INR 1,006 crore orders in Middle East
It is reported that Simplex Infrastructures has bagged INR 1,006 crore orders from 2 overseas companies. Both the projects are scheduled to be completed in a period of 24 months.
The first order is from Qatar's Gulf Cement Company worth INR 654.6 crore. The scope of work includes various on shore mechanical, electrical equipment erection, commissioning assistance and civil work for cement plant.
The second order is worth INR 352.01 crore from Al Mazaya Real Estate of Dubai. The job description is execution, construction, completion and rectifying of defects of six independent buildings at Uwan, Dubailand in Dubai.
Mr Amitabh Mundhra director of Simplex Infrastructures said that "These two prestigious projects bestowed on us from Gulf Cement and Al Mazaya has helped us in not only strengthening our presence in the Middle East but also but also represent Simplex Infra's efficiency in handling huge projects.”
Simplex Infrastructures Ltd, incorporated in 1924, is one of the largest infrastructure solutions providers having completed more than 2000 successful projects in India and abroad. With this order, Simplex Infrastructures order book is around INR 7,000 crore with over 30% of it from oversea.
Elecon to supply material handling equipment to JSW Steel
Elecon Engineering Co Ltd recently announced that it has got an order worth INR 121.8 million from JSW Steel Ltd for supply of material handling equipment.
China’s domestic steel prices decline by 3.27% in the last 3 weeks
It is known that under the China's curbing tax policy, China’s domestic steel prices have been descending over the last three weeks. According to statistics offered by China’s National Development & Reforms Commission by monitoring over 22 major markets last week, comprehensive price for the four major steel varieties averaged CNY 4142 per tonnes down by 1.1% WoW or down by 2% YoY.
Since the China’s ministry of finance announced to levy steel export tax of 5% to 10% May 21st 2007 effective from June 1st 2007 the domestic steel prices have posted three consecutive weeks decline an accumulated fall of 3.27%.
From May 21st to 27th 2007 the four major varieties comprehensive price averaged CNY 4226 per tonnes down by 1.3% WoW or up by 5.7% YoY. During the next week May 28th to June 3rd 2007 the price fell further to CNY 4190 per tonnes down by 0.9% WoW or up by 2.1% YoY. Till June 10th 2007 the average price stood CNY 140 per tonnes lowers than before the announcement of tax hike by 3.27% fall in percentage.
Last week wire rod, rebar, medium plate and HR/CRC prices were posted at CNY 3679 per tonnes, CNY 3654 per tonnes, CNY 4227 per tonnes and CNY 5008 per tonnes respectively down by 1.7%, 1.4%, 1% and 0.7% in WoW comparison or YoY rise of 1.6% and 5.6% and YoY fall of 4.1% and 7.6% respectively.
Last week, the international steel price index stood at 175.3 up by 1.7% WoW or 10.4% YoY suggesting widening gap between domestic and the overseas prices.
(Sourced from MySteel.net)
18 Chinese steel pipe makers unite against US charges
It is reported that China's 18 steel pipe producers have teamed up in Beijing to respond to dumping and subsidy charges from their US counterparts and have appointed Mr John Larose from US law firm Vinson & Elkins LLP's Beijing office as attorney.
China Chamber of Commerce of Metals, Minerals & Chemicals Importers & Exporters spearheading the movement said that "We hope the US government will deliberate on the sensitive issue and deny the applications of the US steel pipe makers out of concerns for the long term development of the sectors in both countries.”
The statement said charging both anti dumping and countervailing duties on products from the same country were against the laws and regulations in US and the rules of the WTO and that they are unfair and discriminatory. The statement said trade penalties imposed by the US would not help solve the trade frictions and they are not good for the development of the US steel sector and against the interests of the downstream steel sectors and end users.
Chinese pipe makers said that they have conducted export business according to market demand and exports to US were made upon demands. The report cites an executive from one of the 18 Chinese steel pipe firms as saying that "We have thin margins and don't dump products in the US. We can not endure any anti dumping duties."
Mr Kong Linming secretary general of China Steel Pipe Association also refuted the US accusations. He however cautioned that the Chinese government will remove tax rebate for steel pipe exports sooner or later in an attempt to cut overseas shipment and alleviate trade frictions with other countries. He advised that "Domestic steel pipe producers should make full preparations for the expected cancellation of the tax rebate.”
Six US makers of welded standard steel pipes and the United Steelworkers union last week asked the US Commerce Department to impose anti dumping duties of up to 88% and extra countervailing charges on steel pipes from China which they said are being sold at unfairly low and subsidized prices. They blamed a 68 fold hike in imports from China between 2002 and 2006 for the loss of more than 500 jobs and the closure of four plants in the US. The US International Trade Commission will make a preliminary decision next month on whether Chinese steel pipes are damaging US companies.
Severstal to build a second part of polymer coating line at Cherepovets
Severstal has announced the construction of the second part of polymer coating line at its Cherepovets steel plant in Russia. The new line will be commissioned in two years.
The new line will be capable of manufacturing up to 200,000 tonnes of polymer coated products annually for the construction industry. On completion of the new line, Severstal’s annual production volume of polymer coated products will reach 400,000 tonnes.
The new line will be based in the existing coated products works at Severstal’s Cherepovets steel plant. The works started operations in December 2005 and reached its planned production capacity in H1 2006.
Mr Anatoly Kruchinin CEO of Severstal’s Cherepovets steel plant said “We plan to complete the new coating line at the same time as the reconstruction of the Continuous Hot Dip Galvanizing Line for our cold-rolled sheet production. This will allow us to increase the quality and steel stock production volume for the coated products works”.
China’s domestic steel prices depress iron ore import trade
It is reported that volumes of spot iron ore imports into China have fallen to 27.62 million tons in May 2007, the lowest import since October 2006, as traders try to gauge the impact of new export taxes on the steel market. After Chinese government's announcement on May 21st 207 to raise the export tax on steel products from 5% to 10%, effective June 1st 2007, domestic steel product prices have begun their descent for last three weeks, which had a downward effect on both pig iron and billet prices and also affected the whole iron ore market.
Although ore imports price appears to be firmer compared, with slipping steel price, most buyers are staying out of the market for now in anticipation for future price decline. In fact, most Chinese steel mills have replenished ore stock to a desirable level after active buying in the first four months.
Market analysts note that falling steel export is set to lead more supply to the domestic market and press down the domestic price in due course. That would again widen the price gap between domestic and export price and sparkle a rebound in steel export, forcing Beijing to introduce tighter grip on steel export. They are concerned that the impact of the curbing policies would be fully felt in iron ore market in the third quarter, and ore imports market has little chance to expect such hectic buying in last two months.
Lower freight rate has also contributed to the slack buying amid seasonal slowdown in demand. Ocean freight rates for iron ore and coal have retreated from the peak that they reached in mid May. Brazil to China rates for iron ore have come back below USD 50 per tonne, with most recent fixtures at USD 43 per tonne and Western Australia to China iron ore trade rate also dipped to USD 17 per tonne. Freight charges are expected to weaken further in near future. Therefore, most Chinese mills are showing little interest in spot Indian or Australian ore imports being offered at USD 103 per tonne to USD 105 per tonne.
Meanwhile, ore import is also facing more competition from mounting supply of domestic ore concentrate, which has maintained a rapid growth rate of 35.8% in the first four months of this year. In the mean time, ore imports volume has only expanded by 23.4% and pig iron increases 18.3% in the same time frame. Most mills have stepped up usage of domestic ore concentrate since May 2007 and market observers believe domestic ore supply is set to continue strong growth in following months. Ore imports market prospect is not so optimistic, as the shipments signed at steep price level in previous months are scheduled to arrive in near future. The mounting pressure may force the traders to lower the price for boosting sales.
(Sourced from MySteel.net)
Cleveland-Cliffs to acquire PinnOak Resources
Cleveland Cliffs Inc announced that it has agreed to acquire PinnOak Resources LLC and its subsidiary operating companies for USD 450 million in cash plus approximately USD 150 million in debt. Payment of 25% of the cash portion will be deferred until December 31st 2009. The transaction is expected to close within 60 days and is subject to regulatory clearances.
The transaction is expected to increase Cliffs 2008 revenues by approximately USD 400 million and add approximately USD 100 million in EBITDA. Due to customer transition issues, full year 2007 revenues are expected to be approximately USD 300 million. The transaction will have minimal earnings impact to Cliffs in 2007 as it covers acquisition and integration costs.
PinnOak's operations include two complexes comprising 3 underground mines the Pinnacle and Green Ridge mines in southern West Virginia, and the Oak Grove mine near Birmingham in Alabama. Combined, the mines have the capacity to produce in excess of 7 million tonnes of premium quality metallurgical coal annually. Approximately 80% of PinnOak's total 2007 production is slated for the international steel market, with the balance committed to integrated steelmakers in the United States. The company produced approximately 3.9 million tonnes of coal in 2006 and has current estimated reserves of 140 million tones.
Mr Joseph A Carrabba chairman, president & CEO of Cleveland Cliffs said that "This acquisition represents an attractive expansion opportunity for our Company. When combined with our Australian coking and thermal coal operation, the Sonoma Project, the Company will control a 10 million ton position, with the majority being for export. It marks yet another step in the execution of our strategy to deepen Cliffs' exposure to faster growing international markets and further diversify its mineral sales. We are excited to welcome the PinnOak team to the Cliffs organization as they provide a depth of experience and an additional growth platform consistent with the Company's strategic objectives."
Hot band prices on a downward trend
SteelBenchmarker has reported an all around weakening in HR prices. The four benchmark prices for hot rolled band included in the June 11th 2007 report are as follows
US
USD 597 per ton FOB the mill
Down by USD 11 per ton from USD 608 two weeks ago
Up by USD 26 per ton from the low of USD 571 on January 22nd 2007
Down by USD 101 per ton from the previous high of USD 698 on July 24th 2006
World Export Price
USD 571 per tonne FOB the port of export
Down by USD 9 per tonne from USD 580 two weeks ago
Up by USD 72 per tonne from the previous low of USD 499 on December 11th 2006
Down by USD 39 per tonne from the peak of USD 610 on June 12th 2006
Western Europe
USD 696 per tonne ex works
Up by USD 8 per tonne from USD 688 two weeks ago
Up by USD 140 per tonne from the low of USD 556 on November 27th 2006
Up by USD 65 per tonne from the previous peak of USD 631 reached on July 24th 2006
China
USD 422 per tonne ex works
Down by USD 19 per tonne from USD 441 two weeks ago
Up by USD 49 per tonne from the low of USD 373 on July 24th 2006
Down by USD 42 per tonne below the high of USD 464 on June 12th 2006
SteelBenchmarker publishes steel benchmark prices for HR band, CR coil, rebar, and standard plate in the US, Western Europe, mainland China and the world export market twice each month,
Alcan may partner with BHPB to fend off Alcoa bid
Bloomberg reported that Alcan Inc who is fighting a takeover offer from rival aluminum producer Alcoa Inc may look to BHP Billiton Ltd for assistance.
Mr Christel Bories president & CEO of Alcan’s engineered products unit in an interview in Paris said that "All these options are credible. We know that these big mining companies have a lot of money and Alcan is an interesting target."
Mr Bories said that "Alcan is in a very strong position to open other options than the Alcoa one. Our board is working on all these other options and they are numerous. We will know in the following weeks which one is preferred."
Mr Mark Lidiard a spokesman of BHP in London said that he had nothing to comment.
Montreal based Alcan has rejected a USD 27.7 billion bid from rival Alcoa and has been in talks with other suitors.
Chinese coke prices upward despite capacity addition
China Securities News cited Mr Huang Jingan director of China Coking Industry Association as saying that China's planned new coke producing capacity is set to exceed 50 million tonnes this year and next, almost quadrupling the fresh capacity coming on stream last year.
However, Mr Huang Jingan believes the tight supply in coke market is underlying the strong price rally. Last year, China's fresh coke producing capacity amounts to 12.5 million tonnes, while the coke consumption hit 30 million tonnes. Therefore, limited capacity addition moves the market fundamental into better balance.
Mr Lu Ping an analyst with Merchant Bank Securities said that with increasing coke prices, Chinese coke producers are also able to improve their profit margins. Mr Luping estimates that the gross margin of coke products ranges from CNY 100 to CNY 200 per tonnes at the moment.
Bolstered by surging coal price and new government tax, Chinese coke price index has already risen to 242.9 from 224.95 in the year start. An official with the Shanxi Coke Industry Association tells that coal companies in Shanxi now have to pay higher fees for environmental management in the region, which has pushed up their costs. This has provided impetus for the increase in price.
Data released by commerce department in Shanxi province said that domestic coke price has extended strong gains in May 2007 following the price increase of CNY 120 per tonnes pushed through by Shanxi Coke Alliance in late April 2007. Meanwhile, the export price has also risen by 30% YoY to USD 169.45 per tonnes on average in April 2007.
China’s coke industry has made a total profit of CNY 6.9 billion in 2006 up by 82% from the year 2005. However, a third of Chinese coke producers still record losses in 2006 despite recovering market sentiment.
(Sourced from MySteel.net)
Australia cancels import tax on billet from Thailand
YIEH reported that according to the Ministry of Commerce Thailand, Australia has cancelled the import tax on billets from Thailand starting from June 1st 2007.
This is mainly because that the domestic demand in Thailand dropped continuously, and export volume of the billets reached 70% to 80% of the total output.
Australia ranked the first of Thailand billet export with USD 1.97 million in the first 4 months of year 2007 showing an increase of 118.32% YoY.
Langfang Xingang to build 1450mm HSM
North China's Hebei Province based Langfang Xingang is going to build a 1450mm hot rolled strip production line, which features a combination of all advanced technologies.
The new designed line will produce 2 million tonnes of hot rolled strips per year including bridge steel, automobile structural steel, pressure vessel steel, weather resisting steel, pipeline steel, low alloy steel, quality carbon steel, and common carbon steel etc.
The products will have a thickness of 1.2mm to 18mm and a width of 800m to 1300mm.
(Sourced from MySteel.net)
US Steel completes Lone Star acquisition
US Steel has announced the completion of its purchase of Lone Star Technologies following a special meeting of Lone Star shareholders to approve the USD 2.1 billion merger. Documents were filed following the meeting and now Lone Star is a wholly owned subsidiary of US Steel.
The aggregate purchase price is approximately USD 2.1 billion, which US Steel financed through a combination of cash on hand and financing under its existing receivables program, new bank facilities and a portion of the proceeds of its recent offering of USD 1.1 billion in senior unsecured notes.
Lone Star shareholders will receive USD 67.50 in cash for each issued and outstanding share of Lone Star. US Steel has appointed Mellon Investor Services LLC as paying agent for this transaction.
Mr John P Surma chairman & CEO of US Steel said that "This acquisition significantly expands our tubular product offerings, our production capacity and our geographic footprint. We welcome Lone Star's employees, customers and communities to the US Steel family."
Lone Star Technologies manufactures, markets, and provides custom services related to oilfield casing, tubing, couplings, and line pipe. In addition to its specialty tubing products, it offers flat rolled steel. US Steel plans to combine the operations of Lone Star with its Tubular Division under the leadership of Mr Joseph Alvarado, who served as president and COO of Lone Star. He has been named VP of Tubular Operations of US Steel.
China & EU starts trade negotiation
It is reported that Chinese delegate represented by Mr Bo Xilai commerce minister of China met the EU delegation headed by Mr Peter Mandelson to have discussions on several bilateral trade issues. At present, both sides are confronted with new problems and challenges as along with enlarged bilateral trades, more and more trade frictions are triggered off. It is known that both sides will have concrete discussions on bilateral trade issues at the end of this month or the start of next month and those on iron and textile are possible to become the first topic.
Mr Mandelson before the meeting was reported to have said that “He would warn Chinese government to cancel some unfair trade barriers.” He also disclosed that EU is likely to take measures, such as filing WTO cases like what US did if Chinese government had no effective actions. Actually, the EU filed over 130 anti dumping cases on China only in 2006.
Local media even said that the EU especially had their eyes on iron & steel industry as they feared China possessed dramatic capacity based on which they worried that China tended to dump steel products at very low prices in European market. Mr Mandelson said that “In consideration of China's surprisingly overcapacity of iron & steel industry we foresee the possibility of abnormal prices in European iron & steel market and market disorder caused by this situation.”
As per the EU's statistics, China's surplus amounted to some EUR 128 billion in 2006 and is expected to reach some EUR 170 billion in 2007. The bilateral trade value amounted to USD 129.87 billion during January to May 2007 up by 29% YoY. Therefore, EU has a lot of complaints and urges Beijing to take steps to trim the imbalance.
The meeting attracts widely attention as it happens against China's unexpectedly rocketing trade surplus, which jumped to USD 16.9 billion in April 2007 and USD 22.45 billion in May 2007.
(Sourced from MySteel.net)
FMG in trading halt pending announcement
Australian Fortescue Metals Group Ltd announced that it has requested a trading halt pending an announcement where its shares will remain suspended until the announcement or until the market opens.
The Australian Financial Review reported that the group is preparing to raise AUD 1 billion in fresh capital through a mix of shares and convertible notes to fund expansion of its iron ore operations in Western Australia's Pilbara region. As per report the group wants to raise more cash to expand the operation to possibly as much as 180 million tonnes of annual iron ore production by 2012.
Fortescue is currently developing a project with output of 45 million tonnes of iron ore a year involving the construction of port and rail infrastructure as well as mine development.
Mittal Steel Poland upgrades wire rod mill
It is reported that ArcelorMittal’s Mittal Steel Poland’s wire rod mill at Sosnowiec underwent a major modification aimed at increasing plant efficiency, enhancing product quality and extending product mix.
As per report the wire mill plant was extended with the installation 160 tonnes per hour Danieli’s centro combustion walking beam furnace, a four stand twist fee high speed roughing mill, new DSC lines for online heat treatment of wire rod loops downstream of the existing wire rod blocks and new coil forming and finishing facilities.
With the upgrade, the mill has an overall capacity of 750,000 tonnes per hour up by 50% more than before, with a product range of 5.5mm to 21mm diameter quality wire rod in 2.35 tonnes coils.
Taigang completes new CR stainless annealing and pickling line
It is reported that China's biggest stainless producer Taigang has finished the world's largest CR stainless annealing & pickling line construction on June 6th 2007.
This line is part of Taigang 's new stainless project with the main body is designed with annual capacity of 700,000 tonne of 0.4mm to 8mm thick and 1500mm to 2100mm wide products.
(Sourced from MySteel.net)
Leighton bags two major coal mining contract in Indonesia
Australia’s construction giant Leighton Holdings Ltd announced that it has been awarded 2 new mining contracts in Indonesia worth close to USD 700 million (AUD 834.38 million). The contracts are for the provision of mining services at 2 coal mines in South Kalimantan and East Kalimantan.
Leighton said that the largest contract is a 6 year USD 610 million deal to provide mining services at the Wahana coal mine in South Kalimantan for PT Wahana Baratama Mining. Leighton said mobilization will commence immediately with first production expected shortly subject to Wahana receiving final government approval. The project is expected to be completed by late 2012. It is the largest mining project Leighton Asia (Southern) has ever been awarded.
Leighton said a second coal mining project, worth USD 70 million has been secured with PT Multi Harapan Utama at its mine near Samarinda in the Tenggarong region of East Kalimantan. The two year contract involves land clearing, drill and blast, load and haul of overburden, coal mining, and haulage of coal to port.
Mr David Savage MD of Leighton Asia Southern said that "We have built a reputation in the Indonesian mining industry for efficient project delivery, and as a result we are in the fortunate position of being able to capitalize on the ongoing growth in this market. These projects take our work in hand in Indonesia to USD 800 million (AUD 954 million), underwriting our business there for the next few years and providing us with a solid platform for future growth."
Leighton Asia is the group's operating company covering operations in Malaysia, Brunei, Sri Lanka, Indonesia, India and the Arabian Gulf.
Different perspectives on steel futures
Reuter recently reported that steel makers, traders, bankers and analysts across the globe have different perspective on steel future contracts.
Mr Michael Widmer an analyst at French investment bank Calyon said that "We have had interest about steel futures from the same types of guys that play the metals market, such as hedge funds and mutual funds."
Mr Fabian Somerville Cotton head of listed products at Dresdner Kleinwort said that "We have had broad interest expressed from the whole client spectrum, hedge funds to proprietary traders. The successful contract should be able to engage both hedgers and speculators."
Mr Wolfgang Eder CEO of Austrian steelmaker Voestalpine said that "The big issue is that steel contrary to what some believe is not a globalize product. If I cannot trade globally with this product, then it will be rather tricky to build something up on a broad and sustainable basis."
Mr Craig Bouchard president of US steel services firm Esmark said that "There has to be an underlying piece of steel somewhere. The underlying component adds the tangible, measurable guts to a product that is traded across the world. And a synthetic can be manipulated with bad information. The synthetic, I do not think, will have the confidence with the real derivative players."
Mr Brian Olson head of metals trading at Barclays Capital said that "We will wait. We'd rather the process take longer if that means the contracts have been developed and launched with the full consultation and support of banks, trade houses, producers and industry."
The International Iron and Steel Institute, which represents over 190 steel producers, said at the Reuters Global Mining and Steel Summit last month that it doubted the current proposals would succeed and it was wrong to view steel as a commodity at all. It would reduce steelmakers' power to set prices for their own products.
Another problem is that steel comes in different shapes and types. Whereas other exchange traded metals like copper or tin are chemically identical, steel differs hugely depending on where it was made, the proportion of iron, carbon and other elements that go into it and the shape in which it leaves the production line.
Dubai Gold and Commodities Exchange had slated the launch of steel futures for June 27th but postponed it recently citing various reasons. LME has also announced its intention to do so next year. New York Mercantile Exchange and Shanghai Futures Exchange are also preparing for the same.
Czech Metalimex net profit in 2006 down by 22% YoY
Prague Daily Monitor reported that audited net profit at Czech trading house Metalimex went down by 22% YOY to CJK 361.2 million in 2006 and that its sales also reduced to CJK 23.1 billion in 2006 from CJK 31.3 billion in 2005. Trading in non coal products contributed CJK15.8 billion to 2006 sales. Revenues from export activities and trading outside the Czech territory accounted for 59% of Metalimex overall turnover in 2006.
Metalimex management attributed the decline in profit and sales to the sale of its fuels division to Czech black coal mine OKD in 2006. In its 2006 annual report Metalimex management said that "For this reason the company no longer trades in coal products and its activities are focused on the area of trading in ferrous and non ferrous metals, semi finished products thereof and raw materials other than coal."
Mr Petr Otava CEO & board chairman of Metalimex said "The decisive commodities traded last year included black coal and coke, non ferrous metals and semi finished products thereof, iron ore, ferrous alloys and steel products, that is, strategic raw materials in the long run."
Metalimex is the second largest Czech company trading in steel, metals and iron ore behind Moravia Steel. Metalimex was acquired last year by Mr Petr Otava, former partner in the company. Through the company MTX CZ, Otava now controls 90% of Metalimex shares, while the remaining 10% is held by RPG Industries, which sold its majority stake in Metalimex to MTX CZ. RPG Industries is backed by Czech financier Mr Zdenek Bakala.
Murchison Metals in trading halt pending announcement
It is reported that Australian Murchison Metals has been placed in a trading halt, pending an announcement that is expected to relate to the development of infrastructure in the mid west.
Although Murchison did not say what the announcement is all about, but there is speculation that may relate to the resolution of an ongoing dispute with Midwest Corporation over infrastructure.
Murchison Metals owns the key Jack Hills deposit 380 kilometers north east of Geraldton.
Midwest Corporation last week scrapped plans to build the Oakajee port and a rail line with Murchison in favour of Yilgarn Infrastructure group and said it would consider allowing Murchison to join the alliance.
Belgian steel industry on firm ground
It is reported that the 6 companies that make up the Belgian steel industry produced a total of 11.6 million tonnes of steel during 2006 close to record 12 million tonnes in 2004. The Francophone financial daily L'Echo reported that 4.8 million tonnes of flat steel and 1.5 million tonnes of special steel were produced in 2006.
The Belgian Steel Producers' Association said that the increase in production during 2006 has continued into the first half of 2007 but there is no indication that this is likely to change during the second half of this year.
As per report the 6 companies, which are involved in steel production in Belgium, are ArcelorMittal, Duferco, Riva, Ellwood, Corus and Beltrame. The Belgian steel industry has annual turnover of EUR 9 billion and around 17,000 people work in the Belgian steel industry.
MMK announces termination of transaction between Mintha and Deutsche Bank
The Magnitogorsk Iron and Steel Works has announced the early termination of the repurchase transaction entered into by Mintha Holding Limited and Deutsche Bank on June 19th 2006.
The releases said that “In accordance with the terms and conditions of the repurchase transaction Mintha sent a notice to Deutsche Bank regarding such termination and repurchased 783,000,000 OJSC MMK shares.”
The shares were transferred to Mintha's account on June 8th 2007. Thus, Mintha currently owns 5,168,708,498 OJSC MMK shares which accounts for 44.28% of the total OJSC MMK shares outstanding.
Tokyo Steel’s new slab caster commissioned in early 2007
It is reported that Siemens Metals Technologies has commissioned a continuous slab caster for Tokyo Steel at its Kyushu Works in January 2007, which is the first European designed plant of its kind installed at a Japanese steelmaking plant.
The new caster has an annual capacity of 1.2 million tons and is part of a new production line for high quality flat products. The single strand slab caster included an EAF with a tapping weight of 130 tonnes for supplying the caster with liquid steel. Slabs of 150 mm thickness and 1,500mm to 2,500mm width can be cast at 1.8 meters per minute and then are processed in the heavy plate mill.
Metals Technologies designed and supplied the entire slab casting plant, including mechanical equipment, hydraulic, cooling, lubrication, electrical, automation, and instrumentation systems.
Toyko Steel is Japan's largest EAF steelmaker, with three mini mills. In 2005, it installed a heavy plate mill at Kyushu also supplied by Metals Technologies.
ISTIL’s crude steel production in 5 months up by 36.6% YoY
Interfax reported that Ukrainian ISTIL mini steel mill in Donetsk has increased its production of finished roll by 36.1% YoY during January to May 2007 to 392,000 tonnes. Its production of crude steel grew by 36.6% YoY to 414,000 tonnes in January to May 2007
ISTIL’s production of finished roll in May 2007 was 84,000 tonnes and crude steel production was 91,000 tonnes.
ISTIL’s production of finished roll grew up by 17.3% YoY to 863,000 tonnes in 2006 when it smelted 920,000 tonnes of steel up by 13.4% YoY.
Improving communications in coal mines in West Virginia
It is reported that in a workshop recently organized by the US’s West Virginia Coal Forum, the members of mining communities from state got a chance to see some of the new technology for wireless communication in underground mines, which could be of immense help to improve mine safety and rescue operations in case of a mishap.
Mr Chris Hamilton of West Virginia Coal Association said that "The whole idea is to perfect the wireless communication for application in underground mining operations so we can have communication with individuals 24/7. There's just a lot of concern over proper procedure for installation necessary all the components to make these systems work but every body's working together."
He added that the clock is ticking for coal mine operators to meet a July 31st 2007 deadline. That's when they must submit plans for tracking and communications systems that comply with new state and federal requirements. Once plans are approved this summer systems are set to be purchased and installed by the end of 2007.
