June, 16 2007
TATA Steel may buy Ryerson's stake in TATA Ryerson - Report
Times News Network reported that TATA Steel is likely to buy out Ryersons 50% stake in their INR 743 crore TATA Ryerson JV to increase synergies between TATA Steel and recently acquired Corus. The report cites a source as saying that TATA Steel is evaluating options for negotiations with the American partner and that the size of the deal could be over INR 400 crore.
The report cites a senior TATA Steel official as saying that We would want to go it alone as it would help us in our efforts to integrate Corus. Although we are not keen on the US Company, it would be better to control the venture here.
The report also cites a TATA Steel spokesperson as saying that The company does not have any public statement to make at this point of time. It is an internal JV matter.
Meanwhile, Ryerson is currently on the block and a number of large players are in the race and any company that wins the bid to buy Ryerson globally will indirectly control a stake in the Indian JV. Therefore TATA Steels move in this matter would be crucial as TATA Steel does not have the first right of refusal in the JV.
Kolkata based TATA Ryerson is a leading player in steel processing and distribution in India with facilities at Pune, Jamshedpur, Faridbad, Kolkata and Singur.
ArcelorMittal hires MN Dastur for Orissa plant's DPR
Times News Network reported that ArcelorMittal has asked MN Dastur and Company Private Limited to prepare the detailed project report for its proposed INR 40,000 crore steel facility in Orissas Keonjhar district.
The report cites a senior ArcelorMittal official as saying that "The company officials have informed us that they have started efforts to ready their DPR. This is certainly a positive sign and we hope the project would proceed on time." The report added that ArcelorMittal plans to have DPR in place within the next 12 to 18 months.
MN Dasturco is a 5 decade old leading engineering consultancy and design company in India with in depth expertise in project planning & appraisal, economic evaluation, design and detailed engineering, project management and supervision of construction & erection.
ArcelorMittal signed an MoU with the Orissa state government for a 12 million tonne per annum Greenfield steel plant at Patna area of mineral rich Keonjhar in Orissa in December 2006.
ArcelorMittal had earlier hired Hatch to prepare DPR for its steel project in Jharkhand.
An iron ore JV with KIOCL may solve POSCO's problems
FE reported that the central government has suggested to Orissa government that a JV between POSCO and Kudremukh Iron Ore Company Ltd may be formed as a solution to ongoing tussle for iron ore mining rights for Khandahar in Orissa. The JV plan is likely to be discussed during the review meeting on POSC called by prime ministers office.
The report quotes a senior government official as telling FE that To break the deadlock on mining leases for PPOSCO, we have suggested to the Orissa government to consider a joint venture with KIOCL. It will be a win win situation for both parties.
According to the plan, the government would transfer the lease for mining specific minerals to the proposed JV, instead of handing it over to POSCO directly and the proposed JV would supply iron ore to POSCO on a commercial basis. Initial plans suggest that KIOCL would undertake the actual mining work while POSCO would carry out the processing of ore.
Orissa government had recommends granting of mining lease of Khandahar iron ore in Orissa containing about 600 million tonnes of iron ore to POSCO in December 2006. But this was objected by KIOCL as it was bypassed by Orissa government although it has spent substantial amount in doing preliminary work at Khandahar deposit.
On the other hand, access to iron ore mines is one of key issues for POSCO to implement its USD 12 billion investment plan. POSCO has been trying hard to get mines on lease but has failed to do so until now.
Vedanta's open offer for 20% in Sesa Goa delayed
UK listed diversified miner Vedanta Resources PLC's open offer to acquire up to 20% in Sesa Goa Ltd has been delayed by about a week, pending market regulator Securities and Exchange Board of India's nod.
ICICI Securities Primary Dealership Ltd, manager to the offer, on behalf of Westglobe Ltd of Mauritius and Richter Holding Ltd of Cyprus along with Vedanta Resources Plc of UK in an announcement to Bombay Stock Exchange said that In terms of Regulation 18(1) of the SEBI (SAST) Regulations, the draft Letter of Offer had been submitted to Securities and Exchange Board of India on May 9th 2007 on which observations in terms of first provision to Regulation 18(2) of the SEBI Regulations are awaited from SEBI. Hence, the proposed date of opening of the open offer stated in the public announcement i.e. June 21st 2007 is postponed till further notice in this regard is published by the Manager to the Offer. Subject to the observations from SEBI, all other terms and conditions of the open offer as set forth in the public announcement published on April 27th 2007 remain unchanged.
The release added that After receiving SEBIs observations, the revised schedule of the activities pertaining to acquisition of the equity shares of the Target Company will be announced through a public announcement by the Manager to the Offer.
In April, Vedanta Resources bagged Sesa Goa in April 2007 by paying USD 981 million to Mitusui.
Paradip Port outlines expansion plans
Statesman News Service reported that Paradip Port is aiming to become the no 2 port of India with a business and strategy plan for the next 20 years and an action plan for the next 7 years. . It will take up a total 30 projects in 2007-12 out of which 2 have been completed and others were in various stages of implementation. The charted course envisages investments to the tune of over INR 3,500 crore and it aims at handling capacity of 106 million tones in 5 years.
Out of the INR 3,500 crore investments, PPT will get INR 159.45 crore through budgetary support, while it will raise INR 1,190.36 crore through internal resources. Many of the projects will be completed through public private partnership with INR 1,362.60 expected from private players and another INR 762 crore from other sources.
Mr K Raghuramaiah chairman of Paradip Port said that all new berths being planned will be on PPA mode and the capacity which is 51 million tonnes will be increased to 106 million tonnes by 2011-12. Mr Raghuramaiah said that project consultants will be invited this week for 2 berths, one each for iron ore and coking coal and expression of Interest will be received soon after that.
Mr K Raghuramaiah also said that the single point mooring will be commissioned by November 2007 adding 15 million tonnes handling capacity.
There are plans and projects to deepen the channel up to 16 meters to accommodate 125,000DWT from its present 75,000DWT with an investment of INR 253 crore and is scheduled to be completed by August 2008. Simultaneously, enhancement of draught at the existing dock system from 12.5 meters to 14 meters has also been planned for completion by March 2008.
The number of berths for iron ore, coking coal and non coking coal will also be increased. Bids will be invited beyond this month and the license will be awarded by end of 2007 for at least 2 such projects.
Paradip Port is also planning to create southern dock system with an investment of INR 530 crore and 4 berths and is expected for commercial operation by March 2012. The approaches and connectivity have also been planned in a futuristic manner with enhancement of rail connectivity Haridaspur Paradip line slated to be over by March 2009, 4 laning of Chandikhole to Paradip road by March 2008.
DVC plans to generate 9,510MW power by 2010-11
ET reported that Damodar Valley Corporation has prepared plans to increase generation of thermal power to 9,510MW by 2010-2011 from the current 2,210MW with an investment of INR 24,000 crore with 70:30 debt to equity ratio.
Mr AK Barman chairman of Damodar Valley Corporation said that the additional 7,300MW would be added through nine projects to come up in Mejia, Chandrapura, Ragunathpur, Durgapur, Koderma, Bokaro and Maithon. Mr Burman added that Out of 7,300MW, 1,500MW will come from JVs like the 1,000MW Maithon Right Bank Thermal Power Station and the 500MW Bokaro Steel Thermal Power Station.
Damodar Valley Corporation has already secured mineable coal reserves of 683 million tonne, which will enable it to produce 4,000MW for 33 years. Mr Barman informed that Damodar Valley Corporation has coal blocks in Barjora with mineable reserves of 70 million tonnes, Khagra Joydeb with 103 million tonnes, Gondulpara with 60 million tonnes and Saharpur Jamarpani with 450 million tonnes and hopes to get more blocks in the coming years.
Damodar Valley Corporation is a 3 way venture between the centre, West Bengal and Jharkhand governments and supplies bulk power to industries in the area. It aims to increase its plant load factor to above 90% from the present 80% which would help in bringing down the cost of manufacturing power by 30% and in turn add to its profitability.
Ramsarup's 2006-07 profits up by 56.7% YoY
Kolkata based Ramsarup Industries Limited has posted total income of INR 419.66 crore for January to March 2007 quarter up by 31% YoY as compared to INR 320.36 crore during January to March 2006. Its profit after tax in January to March 2007 quarter was INR 11.32 crore up by 68.2% YoY as compared to INR 6.74 crore in January to March 2006 quarter.
Ramsarup Industries has posted total income of INR 1306.06 crore for 2006-07 up by 28.3% YoY as compared to INR 1018.02 crore in 2005-06.Its profit after tax in 2006-07 was INR 43.56 crore up by 56.7% YoY as compared to INR 27.8 crore in 2005-06.
AS per the release, Ramsarup Industries has completed a large chunk of its expansion projects at Kalyani, Shyamnagar and Durgapur plants, involving an aggregate investment of INR 222 crore. The TMT bar expansion project in Shyamnagar will produce an additional 90,000 tonnes and the wire expansion project at Kalyani and Durgapur, worth INR 124 crores, will produce an additional 79,000 tonnes. Its INR 98 crore Greenfield project at Durgapur to produce wire for infrastructure and power sectors is also reported to be in full swing and is expected to commence production by September 2007.
Ramsarup Industries is one of the largest maker of steel wires after TATA Steel and is also engaged in laying power transmission lines.
L&T bags major contract from ONGC for Mumbai High
India's largest engineering and construction conglomerate Larsen & Toubro Ltd has announced that Oil & Natural Gas Corporation has awarded an INR 877 crore turnkey project order for the NQ reconstruction project in Mumbai High North fields. The project will be executed on a lump sum turnkey basis with the completion scheduled by May 8th 2009.
The project comprises of reconstruction of offshore facilities at the NQ complex including the replacement of the existing booster compressor with a new process gas compressor module, revamp of produced water conditioning system, hot oil system, gas dehydration unit and other utilities.
The turbo machinery for the process gas compressor module will be supplied by Japanese Kawasaki Heavy Industries and the module will be fabricated and delivered from the L&T's modular fabrication facility at Hazira.
AES to expand presence in Indian power sector
Times News Network reported that the production of power equipment in India may receive a boost with US power major AES exploring the possibility of locating its first wind energy turbine manufacturing unit in India.
Mr Mark E Woodruff executive VP and president of AES Asia and Middle East said that as wind energy is one of the fastest growing sectors. He said that We are looking at a low cost destination and India fits into this category. We would also pursue wind opportunities in India, where the company has been present since 1992. However, no decision has yet been taken on the investment requirements for our wind energy equipment foray.
AES is already producing 420MW of power from Orissa power Generation Company where it owns 49% stake. The capacity of OPGC is proposed to be expanded by an additional 1000MW. Besides, it is also exploring Greenfield opportunities in West Bengal and Maharashtra. It plans to expand its coal based power operations in India before looking at renewable energy and plans to invest over USD 1 billion over the next 5 years to increase its installed capacity between 5000MW and 6000 MW. A large part of this investment would go into setting a 1000 MW pit head coal project in Chhattisgarh.
AES is a big player in wind energy with over 600 MW of wind facilities in US, another 200 MW under construction and an additional 3,000 MW projects in various stages of development in several growing markets.
If the AES venture comes through, it would be the second major recent investment by an overseas power company in the equipment business after French power major Alstom, which plans to set up a manufacturing unit for hydro electric projects.
HC approve Raipur Alloys scheme of amalgamation
Raipur Alloys & Steel Ltd announced that the Bombay High Court Nagpur Bench and Chhattisgarh High Court Bilaspur have approved the scheme of amalgamation of Chhattisgarh Electricity Company Limited and Raipur Gases Private Limited with it.
The release added that Raipur Alloys has received the certified copies of the HC orders and it is in the process to file the same with the respective registrar of companies to complete the formalities.
Evraz to combine Raspadskaya and Yuzhkuzbassugol
Evraz Group SA announced that Evrazs board of directors has made the following decisions regarding the Yuzhkuzbassugol coal company
1. The board has approved a plan to combine businesses of Yuzhkuzbassugol and Raspadskaya coal companies. Exact terms and structure of the transaction are expected to be finalized in the second half of 2007. The combination is subject to Raspadskaya shareholders as well as various regulatory approvals.
2. Upon completion of this transaction, Raspadskaya will own 100% of shares in Yuzhkuzbassugol. Evraz will continue to hold its shares in Raspadskaya through Corber Enterprises Limited, a joint venture with Raspadskaya coal company management. As a post transaction result, Evraz will exercise management and shareholder control in both Corber and Raspadskaya.
The Board has also agreed to appoint Mr Gennady Kozovoy, Raspadskaya CEO, as the new CEO of Yuzhkuzbassugol with effect from June 16th 2007. Mr Kozovoy said I look forward to this new challenge. My top priority is to improve safety standards at all the mines of the combined company and ensure maximum control over the companys operations in order to achieve superior results of the combined company in the interests of all companys stakeholders.
Mr Alexander Frolov chairman & CEO of Evraz said Through combination we will create a Russian coking coal leader and a top three global coking coal producer distinguished through the best resource base, world class management team, strong growth profile and significant export potential. The combined company will have Evrazs steel mills located in Siberia and the Urals as its main and largest customers. This combination will serve the best interests of both companies shareholders.
Iron ore miner Ferrexpo floats in London
Ukraine focused iron ore producer Ferrexpo has placed a total 25% of its shares in London on Friday at 140 pence each valuing the company at about USD 1.671 billion. The global offer by Ferrexpo comprises 72.5 million new shares or approximately 12% of the 606.1 million ordinary shares offered. An over allotment option of up to 7% has been granted. If this is not exercised, the selling shareholder, directors, employees and associates would continue to hold approximately 75% of the company.
Ferrexpo said in a statement that gross proceeds from the initial public offering, the first in London by a Ukrainian company, would be around USD 419 million pounds. Ferrexpo said that out of this, GBP 111 million pounds would go to the selling shareholder and the remainder would be used to expand existing operations, repay debt and for possible acquisitions. The statement did not name the selling shareholder.
Mr Mike Oppenheimer CEO of Ferrexpo CEO in a statement said "The support of our shareholders will enable us to continue to develop one of the world's great iron ore assets and to deliver on our growth strategy.
JPMorgan Cazenove is the sole sponsor and sole global coordinator for the proposed global offer and joint bookrunner together with Deutsche Bank. JPMorgan Cazenove is sole financial adviser to the group.
Ferrexpo operates an iron ore mine, concentrator and pelletising plant in the city of Komsomolsk in Ukraine's Poltava region. The company produced 8.6 million tonnes of iron ore pellets in 2006 as compared with 7.8 million tonnes in 2005. It plans to increase production to 16 million tonnes of pellets and up to 3.5 million tonnes of concentrate a year by the end of 2014. The main owner of Ferrexpo is the Minco Trust, one of the beneficiaries of which is Ukrainian national Mr Kostyantyn Zhevago.
Iron ore seaborne trade to hit 800 million tonnes in 2007 - CVRD
Robust market demand will boost iron ore seaborne trade volume to 800 million tonnes rather than the 780 million tonnes previously expected, but Mr Jos Carlos Martins CEO of CVRD said that whether there would be enough resources to meet the demand is still in the air.
Earlier CVRD forecasted that China would demand 380 million tonnes or even 400 million tonnes of iron ore this year if supply is sufficient.
CVRD produced 271 million tonnes in 2006. The figure in 2006 is expected to reach 300 million, one third of which will flow into China.
(Sourced from MySteel.net)
Arcelor minority shareholders disputing Mittal Steel's offer
It is reported that French senator Mr Philippe Marini has sided with rebel minority shareholders who say they are being squeezed out by steel giant and has joined forces with rebel hedge funds in a campaign to stop ArcelorMittal's buyout of buyout of minority shareholders. As per report, Mr Marini has submitted a written question to the French finance minister in which he stated that ArcelorMittal's behavior could set a worrying precedent for the treatment of minority shareholders in France and asked the minister to respond.
It is also reported that Mr Jon Wood of Monaco based hedge fund SRM Global has also joined the fray and met French market regulator Autorites de Marches Financier and have also written to the Luxembourg and Paris regulators to urge them to stop Mittal Steel's buyout at the price it is offering. As per report, he is leading a campaign by hedge funds that have a minority 6% stake in Arcelor that was not bought out when Mittal Steel tabled its offer last year.
The opposition camp is also reported to be backed by French shareholder action group ADAM and the Association of Arcelor Shareholders, which are also pressuring the AMF to intervene.
Het Financieele Dagblad newspaper reported that several shareholders including hedge funds Trafalgar Asset Managers and SRM Advisers have demanded that Dutch market regulator AFM suspend trading in the shares until the dispute is resolved claiming that they were misled during the ongoing takeover process of Arcelor and want Mittal Steel to raise its offer.
Mittal Steel offered 11 of its shares for 7 Arcelor shares last year at the time it made its offer for the whole of Arcelor, but after receiving a fairness opinion on the value of the shares, the group reduced the ratio to 8 for 7 Arcelor shares for the remaining minority, cutting its offer by 38%.
Incidentally, Areclor Mittal last month was forced by Brazilian market regulators CVM to raise its offer to buyout minority investors in its Brazilian subsidiary Arcelor Brazil.
Anglo's Brazilian Minas-Rio iron ore JV to start in September
It is reported that Anglo Americans new Brazilian iron ore JV will transport the ore from the mines in Minas Gerais state to a port in Rio de Janeiro state in slurry form through a 550 kilometer long pipeline. The Minas-Rio JV mining operation has resources of some 714 million tons, and production will start in the first half of 2009. Annual production capacity will be 26.5 million tons.
The iron ore will be turned into slurry and pumped down the pipeline to the coastal terminal. The pipelines capacity will be 26.6 million tonnes a year. The coastal terminal will include a pelletising plant, with a yearly production capacity of 7.6 million tons. The pellet plant will enter operation in 2010. The port will be built specifically to export the iron ore produced by the JV and will be able to berth very large ore carriers of 250 000DWT or more at its piers. The piers will be linked to the onshore terminal by a 4 kilometer long bridge.
The project has the support of both the Minas and Rio state governments. The environmental license needed for the construction of the port has been granted by the state government of Rio de Janeiro and construction work is expected to start in September.
As per earlier reports, the deal cost Anglo American USD 1.15 billion, and forms part of its program of investing USD 3.1 billion in iron ore and nickel in Brazil. Anglo reportedly plans to invest a further USD 750 million in the Minas Rio JV in a second phase and could take its shareholding to 50%.
Anglo Americans Brazilian partner in the JV, MMX, is part of the EBX group, which is active in mining, metallurgy and logistics; real estate; energy; renewable resources; and entertainment. MMX incorporates the groups mining, metallurgy and logistics interests.
Minority investors rejects Evraz offer for Highveld
South African Business Day reported that another institutional investor has protested against Russian steel maker Evraz's USD 11.40 a share offer for Highveld Steel and Vanadium, recommending that minorities reject the offer.
Imara SP Reid a regional financial services group said that Evraz had indicated at a presentation to analysts last year that it did not have a problem with Highveld remaining listed and that its offer to minorities therefore came as a surprise. Mr Steve Meintjies an analyst of SP Reid in a note to investors said that "No doubt Evraz thought it would not mind 100% at a bargain basement price. We therefore recommend shareholders reject the offer."
According to media reports, other minorities with substantial holdings have indicated that they will hold out for more, with Rand Merchant Bank Asset Management, Stanlib Asset Management and Peregrine Capital holding informal discussions last week on ways to block the offer. For the buyout to go ahead, minorities holding 90% of the free float must accept the offer.
Before the offer, when the Highveld share was at ZAR 95, Imara SP Reid punted the share as a buy based on the investment merit of the stock. Meintjies put fair value at around ZAR 100, as opposed to Evraz's ZAR 83, based on the current exchange rate. Highveld shares fell to ZAR 88 from a high of ZAR 96 after Evraz's opportunistic offer, but the share has bounced since, trading 1,4% higher at ZAR 93.
Evraz was non committal about whether it wanted Highveld to remain listed. Mr Pavel Tatyanin VP & CFO of Evraz who recently visited the Witbank based company for the first time said that it could go either way. He added that "We will make a decision later, depending on our analysis and issues like the cost of keeping it listed." Mr Tatyanin also said increased investment was on the cards to up production capacity at Highveld, with the Russian group expecting strong demand for steel in the local market as a slew of public and private infrastructure expansion projects come on stream.
Mittal Steel Galati to cross EUR 2 billion mark in 2007
Ziarul Financiar reported that ArlerMittals Mittal Steel Galati is expected to overshoot the EUR 2 billion turnover mark in 2007 as compared to EUR 1.72 billion in 2006, although it is only operating at two thirds of its capacity.
Mr Augustine Kochuparampil CEO of Mittal Steel Galati in an interview with Ziarul Financiar said that the plant in Galati has benefited from a favorable market in the first half of this year, with rising demand and higher prices.
He said that "With the help from sales offices in the West we were able to sell our products more easily in the first part of the year and achieve better operational results. We sold 10% more than we produced in the first quarter because demand was very high, with the second quarter looking equally good. Under the circumstances, we believe we can overshoot the EUR 2 billion mark."
Mr Kochuparampil added that "The plant in Galati is one of the production centers owned by the group that is not currently used at capacity. In theory, the plant's production capacity stands at 8 million tonnes of liquid steel, yet it is only operating at two thirds of its capacity right now. We want the investments to enable us to reach 90-95% capacity. At capacity, we should exceed EUR 3 billion euros. Mr Kochuparampil informed that to achieve this target, investments worth more than US 300 million are required out of which USD 120 million dollars are scheduled for 2007.
Mr Kochuparampil outlined the strategy of the ArcelorMittal for the plant in Galati. He said We will be to turn it into a centre of excellence for the production of thick plates used in the manufacturing of gas & petroleum pipelines, shipbuilding, windmills and pressurized containers.
China H-beam producers to reduce H beam output
It is reported that 5 major H-beam producers in China Ma'anshan Steel, Laiwu Steel, Rizhao Steel, Jinxi Steel and Changzhi Steel, jointly held a seminar regarding to current H-beam market situation and future trend recently in Shanghai.
Based on balanced supply and demand relationship normal inventories and stable price the five steelmakers forged several consensuses.
1. Price policy remains unchanged. Price in June and July will go flat with that in early June. Price inversion for some products in certain regions will not enjoy post-subsidies.
2. Second, output of H-beam will be reduced and that of other products will be raised modestly.
3. Development of overseas markets including that in Europe, Middle East, America and Africa will be strengthened and export volume will be increased.
(Sourced from MySteel.net)
Norilsk to borrow USD 7 billion to fund acquisition of LionOre
Bloomberg reported that Norilsk Nickel will borrow as much as USD 7 billion to finance the acquisition of Canadas LionOre Mining International Ltd and that Societe Generale SA and BNP Paribas SA are arranging a syndicated loan.
The report cites Mr Victor Borodin a spokesman for Norilsk as saying that Norilsk will use its own cash to make up any shortfall in funding. He said "How much of our own money we use will depend on the volume of credit we attract." Mr Borodin declined to confirm or deny this figure.
A banker familiar with the transaction said on June 6th 2007 that Norilsk is seeking to borrow USD 3.5 billion to fund its USD 6.41 billion takeover of LionOre.
Iran's steel production capacity to reach 28 million tonne by 2010
Iranian Mehr news agency reported that Iran is planning to incraese its steel making capacity to 28 million tonnes by 2010 and 55 million by 2021.
Mr Mohammad Rahim Rasti MD of National Iranian Steel Company said that "By the end of the Fourth Five Year Development Plan (2005-2010), Iran's steel production is expected to surpass 28 million tonnes of which some 6.5 million tonnes are produced by the NISC.
Mr Rasti also predicted that Iran's annual steel production is foreseen to reach a total of 54.6 million tons in 2021.
With current 10 million tonnes output, Iran accounts for a mere 1% of world's steel production. The figure is expected to rise to 2.25% by the end of the fourth Irans development plan and 3.5% by 2021.
China puts 0.3 million tonnes barrier for coal mines
China Securities News reported that Chinese National Development & Reform Commission, State Administration of Work Safety and State Administration of Coal Mine Safety have jointly announced that coal mines with annual capacity of less than 300,000 tonnes shall not be approved.
The announcement requires the immediate halt to construction of previously approved coal mines that produce less than 30,000 tons per year. Besides, apply of coal mine exploitation right will also be suspended.
According to the announcement, projects unapproved or disagreeing with industry policies and development plans will be called off and mines that failed to pass all the procedures should apply for approval again and constructions will be supervised in line with approved plan.
(Sourced from MySteel.net)
Malaysian builders oppose automatic price mechanism for rebars
Malaysian Business Times reported that Master Builders Association of Malaysia said that new proposal to set the price of rebars using an automatic price mechanism is unfair, would hurt the construction industry and would guarantee profits for steel millers at the expense of contractors who use steel bars.
Mr Patrick Wong president of Master Builders Association of Malaysia said "APM proposal includes a floor price that guarantees profit margin for the steel millers at the expense of steel bar users like us. This is unfair trade practice and against the fundamentals of free trade. If implemented, many contractors will not be able to afford the steel bars because of the floor price. If the Government gives in to the steel millers' APM incorporated with a floor price, many infrastructure projects will come to a standstill."
Mr Wong said that "The best solution for construction projects, to be carried out on time and within budget, is free trade. We need access to cheaper imports of steel bars."
Since April 17th 2007, Malaysias ministry of domestic trade and consumer affairs has increased the ceiling price for steel bars by 20% to MYR 1,884 per tonne from MYR 1,570. The billet ceiling price was lifted to MYR 1,553 per tonne from MYR 1,294. Recently Malaysia Government in a closed door meeting between steel millers and steel users had agreed in principle to lift the ceiling prices higher by another MYR 150 per tonne.
While ceiling prices are meant to help curb inflation and help keep construction costs within budget contractors still pay more than the ceiling prices. This is due to a lack of government enforcement to ensure adequate supply in the market and extra fees in transportation costs by steel millers.
Port of Indiana to ship first steel export in two years
It is reported that Port of Indiana is exporting 11,000 tons of steel coils from Mittal Steel in East Chicago Indiana to Pasajes in Spain aboard MV Julietta.
Port of Indiana said that this is the first export shipment of steel through the port since 2005. There were a few export steel shipments between 2003 and 2005 just over 55,000 tons total. In 1995, the port handled an all time high 243,000 tons of exported steel.
Mr Ian Hirt GM of Federal Marine Terminals, which serves as the ports general cargo stevedore, said that Historically, the majority of steel moving through the port is imported from European countries. But changing market conditions and a weak US dollar can trigger export opportunities. There is a possibility for more export shipments this year.
Since the Port of Indiana also has year round access to the inland river system, it does ship out some steel by barge which can eventually be exported to world markets after it is transshipped to ocean going vessels in or around New Orleans.
The Port of Indiana generally handles more oceans going cargo than any other US Great Lakes port and about 15% of all US steel trade with Europe. In 2006, the port set a new record with USD 584 million in steel shipments up by 57% from 2005. Indiana's three port system, including the Ohio River ports of Jeffersonville and Mount Vernon, handled a total USD 995 million in steel shipments, contributing the USD 1.89 billion in overall cargo handled by the Port in 2006.
Pakistan's steel industry hit hard by budget
Pakistani Media reported that the changes announced in the budget 2007-08 have adversely affected the entire steel sector in Pakistan and the price of mild steel bars will surge to PKR 50,000 per tonne.
Mr Latif Chaudhry vice chairman of Pakistan Steel Re Rolling Mills Association a press conference at the Karachi Press Club said that the changes made in the taxation of steel sector would adversely impact the steel sector builders and the common man. He said this puts additional burden on the steel sector, which is already under pressure due to skyrocketing international prices.
Mr Chaudhry said their association wants the Pakistan government to restore the previously applicable fixed tax system with recommendations mutually agreed between Central Board of Revenue, Engineering Development Board and Ministry of Industries to bring down the steel prices.
Mr Chaudhry added that the prices of steel bars made out of billets stood around PKR 43,000 per tonne and if the changes made in the budget were implemented steel products would not be available below PKR 48,000 to 50,000 per tonne. He said the taxation changes would have an impact of PKR 4000 to PKR 4500 on the prices of all steel products.
Mr Chaudhry also urged that import of billets and pallets from India should be allowed to overcome the shortage of raw material.
CNMC's Burma nickel ore project got green signal from NDRC
Shanghai Securities News reported that China Nonferrous Metal Mining Group Co Ltds proposed nickel ore project in Burma has got National Development and Reform Commission's approval and construction will officially start once it receive approval from Burman government.
Mr Luo Tao GM of China Nonferrous Metal Mining Group Co Ltd said that it has made full preparations. The USD 600 million nickel ore project is the largest mining project jointly built by China and Burma and once put into production it will produce 85,000 tonnes of ferronickel every year.
(Sourced from MySteel.net)
Xuanhua Steel to commission medium section mill soon
Hebei Province based Xuanhua Iron & Steel Group is ready to commission the continuously rolling medium section project which started construction October 30th 2006.
Xuanhua said that the project involves annual production capacity of 700,000 tons, mainly for 10 to 28 channel steel, 8 to 20 angle steel, 10 to 25 I beam and round steel with diameter of 50mm to 100mm.
(Sourced from MySteel.net)
Heavy duty car shredder built at Elkhart in Indiana
Buffalo News reported that Mr Thomas Wendt Sr, a veteran of the US scrap industry who has been turning cars into scrap since 1977, has now built what he calls the world's largest auto shredder.
As per report, the heavy shredder built for Sturgis Iron & Metal at Elkhart in Indiana is a USD 14 million machine that spans several acres and is capable of shredding 6 cars a minute and producing 400 tons of steel an hour.
Mr Wendt started his company in 1977 repairing shredder mills, eventually expanding the business into manufacturing through acquisitions. The company now makes about 14 shredders a year. After shredding flattened cars into pieces, Wendt's machinery uses magnets, X-rays and precisely timed jets of air to separate glass, rubber and cloth which go to a landfill from the steel, copper and aluminum that are sold to mills. For every ton of metal processed, the shredder loses 4 to 5 pounds of its own equipment, essentially recycling itself with the scrap.
Mr Wendt estimated that there are about 230 shredders operating in the United States and about 14 million cars are processed annually.
Mr Bryan McGannon of Institute of Scrap Recycling Industries Inc recently said that as global demand for scrap metal has driven prices to record levels along with demand for recycling equipment.
EZDK to upgrade its EAF at Alexandria
It is reported that Egyptian Al Ezz Dikheila has selected Danieli Centro Met to perform a significant revamping for the existing No 1 Electric Arc Furnace located at Ezz Flat divisions meltshop in Alexandria.
As per report the project aims at enhancing plant efficiency, operation reliability and at enlarging the production capacity to about 1.2 million tonnes per year.
The scope of work entails installation of the FastArc injection technology and to the new advanced process optimization and automation system. The EAF modification will also involve a new EBT design shell fitted with water cooled panels and the upgrading of the existing FTP water cooled duct. The new Level1 and Level2 automation system will allow the existing EAF automatic process setting, control and interface with the existing ladle furnace and conticaster.
Mittal Steel Poland starts new slab caster
It is reported that Mittal Steel Poland SA is successfully operating a 2 strand continuous slab caster at its Dabrowa Gornicza works. The slab caster is supplied by SMS Demag and has started just 16.5 months after the contract placement.
The project included mechanical portions including workshop equipment, utility systems, electrical and automation systems and turnkey start up services. The casting bay was extended, as were the water supply and treatment systems. The slab yard, crane construction, and all structural work also were provided by SMS Demag.
The plant has an annual production volume of 3 million tonnes for slabs with thicknesses of 220mm and 250mm and up to 300mm in the future and ranging in widths of 1,000mm to 2,190 mm. The ladle turret capacity is 2x500 tonnes with a 330 tonnes maximum. The caster features mold level control and resonance oscillation to ensure that the slabs have a high surface quality. Enhanced internal quality of the slabs is achieved through dynamic segment adjustment with patented soft reduction technology.
Mittal Steel Poland is in the midst of a comprehensive modernization and is replacing existing ingot casting facilities.
China to apply export on Indium and molybdenum
China's Ministry of Commerce and the General Administration of Customs recently said that China will apply export quota and license management to indium and molybdenum beginning from June 18th 2007.
According to the release, export indium, molybdenum and products manufactured with both items companies, need to go to local commerce departments to get the license and export quota and they would have to present the license at the customs.
According to the two departments China will also introduce export licenses for standard sand from June 15th 2007.
Both indium and molybdenum are unrenewable rare metals which are widely used in defense industry, aviation and space sectors, information industry and the manufacturing sector.
UK's scrap export in Q1 down by 19% YoY
YIEH reported that the total export of British scrap was about 1.34 million tonnes in the first quarter of 2007 down by 19% from 2006.
As per report, Spain has become the biggest country that was imported the scrap about 389,000 tonnes from UK although down by down by 16.9% YoY. UKs export of its scrap to Turkey was about 331,000 tonnes down by 22 % YoY. Portugal imported about 150,000 tonnes up by 58.8% from 2006.
NSW & BlueScope sign pollution agreement for Port Kembla works
It is reported that New South Wales Government will sign a pollution reduction agreement with the Port Kembla steelworks in an attempt to improve air quality in the Illawarra.
As per report the Pollution Reduction Program is a 5 year agreement between the NSW Government and Bluescope Steel which will see USD 30 million invested towards environmental improvement.
Mr Phil Koperburg Environment minister of NSW said that the funding represents the next phase of the Bluescope's pollution reduction program at the steelworks in addressing various issues. He added that "Clean air on the one hand to doing a biological assessment of Port Kembla harbor on the other to ensuring that the habitat of endangered species not the least the green and golden bell frog is a subject of a management plan to ensure their longevity."
Bulgarian OTZK to produce 25,000 tonnes of zinc in 2007
Metals Insider reported that Bulgarian zinc lead producer OTZK plans to double lead production to around 20,000 tonne in 2007. OTZK Kardjali complex produced 23,000 tonnes of zinc in 2006 and is planning to raise that to around 25,000 tonne in 2007.
OTZK's owner, Intertrust Holding, has planned a big investment program at Kardjali with the double goal of improving the plants performance and lowering its environmental impact. The medium term goal is to lift annual zinc production to around 45,000 tonne per year by 2010.
China Gas to set up a CNY 400 gas pipeline in Inner Mongolia
Shanghai Daily quoted China Gas Holdings Ltd as saying that said it will invest in a CNY 400 million (USD 52 million) long distance natural gas pipeline in northern China's Inner Mongolia to transport fuel to meet rising demand.
China Gas said that new pipeline called Chang Meng is due to start construction in July 2007and can carry 1.2 billion cubic meters of gas when commercial operation starts in the middle of 2008.
Mr Eric Leung CFO of China Gas said that it may sell 400 million cubic meters of gas this year, compared with 176 million cubic meters in 2006 and sales in 2008 may reach as much as 800 million cubic meters.
China Gas in a statement said that "The project will not only help improve the group's cash flow and bring lucrative rewards to the shareholders but will also give the group a steady supply of natural gas for improving competitiveness in the downstream market."
China Gas Holdings Ltd, which operates 61 mainland gas projects, has the right to take as much as 85% of a 230 kilometer long pipeline from China's largest gas field Sulige gas field to the city of Erdos in Inner Mongolia. China Gas plans to add as many as 8 projects this year to take advantage of China's push to use more cleanly burning fuels to cut pollution and reduce its reliance on coal and oil. China wants gas to account for 5.3% of total energy consumption by 2010 from about 3% now.
Mr Ruane named new VP purchase & materials of Olympic Steel
Cleveland based Olympic Steel has promoted Mr Frank Ruane to its VP of purchasing and materials management.
Mr Ruane has served as Olympic Steels director of purchasing and materials management for the past 8 years. During his this career, he has held metals distribution leadership positions in logistics, inventory management, marketing and sales management.
Olympic Steel is US metals service centers with shipment of USD 981 million worth of processed carbon, coated and stainless sheet and plate steel products in 2006 from its 16 facilities.
