June, 30 2007
Indian iron ore exports in May 2007 up by 9% YoY
It is reported that as per figures compiled by Indian Port Association, export of the iron ore in May 2007 has been 8.01 million tonnes up by about 9% YoY as against 7.37 million tonnes in May 2006.
However Indian mining industry counters the figures saying that though the data shows an increase, in actuality it has not since it includes transportation of raw material within the country also through sea routes. They claim that exports have come down by 10% due to rupee appreciation, imposition of export duty and recent increase in freight charges.
A steel industry representative said that the increase in exports not only compensates the loss of revenue due to rupee appreciation but also gives miners a substantial growth in their top line. The spot price of iron ore in the international market has also increased by USD 20 per tonne between January 2007 to May 2007 or up by 34% YoY.
Essar Steel net profit in 2006-07 slides by 21% YoY
Essar Steel reported a total income of INR 9019.68 crore for 2006-07 up by 28% YoY as compared to INR 7058.59 crore in 2005-06. Its Operating EBIDTA, excluding other income, stood at INR 1936.03 crore up by 31% YoY as compared to INR 1480.97 crore in 2005-06. The profit before tax has remained more or less steady at INR 683 crore as against INR 696 crore during 2005-06 but Essar Steel's net profit in 2006-07 was at INR 436.49 crores down by 21% YoY as compared to INR 530.18 crore in 2005-06.
Essar Steel said that “Rising costs of iron ore and energy and higher charge for depreciation due to investments in capacity expansion had an impact on the bottom line. The Company expects the benefits of the investments made to be reflected in the coming years.”
Essar Steel’s HR coil production for 2006-07 grew by 15% YoY to 2.95 million tonnes from 2.577 million tonnes in 2005-06. It produced 0.8 million tonnes of HR coils in January to March 2007 quarter as compared to 0.69 million tonnes in January to March 2006.
Essar Steel crossed the milestone of 1 million tonnes in exports with 0.246 million tonne in January to March 2007 quarter. Total domestic sales for the year showed a growth of 13% YoY at 2.8 million tonnes with a growth of 16% at 0.54 million tonne in January to March 2007 quarter. The share of value added products increased from 48% in 2005-06 to 60% during 2006-07.
Other highlights for 2006-07 are as under
1. Essar Steel received the Top National and Regional Exporters trophy from the Engineering Export Promotion Council.
2. Implemented a plan to increase net sales realization per tonne by selling to low freight areas in the domestic and export markets
3. Rationalizing its customer base to optimize order quantity levels.
4. Essar began a new initiative in the year to address the large and untapped potential in the retail market for steel products. In a bid to reach out to end users directly, it has set up over 80 retail outlets under the brand "Essar Steel Hypermart" in different parts of the country.
5. During the year, the Company completed its capacity expansion to 4.6 million tonnes per annum at Hazira
6. The pellet plant capacity at Vishakhapatnam was also increased to 8 million tonnes per annum to cater to the increased requirements at the steel plant
7. Additions at the Cold Rolling complex were also made.
ArcelorMittal applies for coal blocks for captive power plants
ET reported that ArcelorMittal has applied for two coal blocks in Jharkhand and three in Orissa to feed captive power plants required for its proposed steel plants in these states.
Mr Sanak Mishra chief of Arcelor Mittal India told ET that “We have applied for two coal blocks in Jharkhand and three in Orissa. They would be for our captive power projects that will come up along with the steel plants.”
Discussions on for Rio Tinto & OMC iron ore mining JV
It is reported that Rio Tinto Mineral Development, Orissa Government and Orissa Mining Corporation had several rounds of discussions for signing a new agreement to set up a JV company for developing the iron ore deposits at Gandhamardhan and Malangtoli in Bargarh and Keonjhar districts of Orissa.
As per report OMC and the RTMD had entered into an agreement in 1995 for development of iron ore deposits in these two places. However, the project could not progress because of non signing of the project development agreement between both the parties in time.
The JV was incorporated on September 18th 1995 as Rio Tinto Orissa Mining Private Limited but the project could not progress because of non finalization of key issues. During the eight year period between 1995 and 2003 no efforts were made to implement the project or rescind the JV. As per the decision of the Board the status of the JV was referred to the Solicitor General in August 2003, who observed that as the JVA has not been formally extended it stood terminated.
OMC proceeded for winding up the of the JVC as per the advice of the Solicitor General, but when the RTMD did not agree to it, the OMC moved the Orissa High Court for compulsory winding up of the JV. The RTMD moved the Company Law Board against the OMC’s decision. The Company Law Board has passed an interim order restraining OMC and State Government from transferring or making available for survey and exploration of mines to any other company. The winding up of petition filed by the OMC and the petition filed by the RTMD before the Company Law Board are pending for final disposal.
TATA Power considering shipping tie ups for coal
TATA Power Co has announced that it may buy vessels or acquire stakes in shipping companies to transport coal from Indonesia after acquiring major stake in 2 coalmines in Indonesia recently.
Mr Prasad Menon MD of TATA Power said that the company has appointed an adviser to look at the options including long term charters. He added that TATA Power is in talks with shipping companies and agents.
TATA Power has agreed in March 2007 to pay USD 1.3 billion to PT Bumi Resources for a 30% stake in PT Kaltim Prima Coal and PT Arutmin. The acquisition entitled TATA Power to purchase 10 million tonnes of coal from one of the mines, securing supplies of the fuel for its power plants to be built on India's west coast.
India and Pakistan agree on gas transportation tariff for IPI pipeline
It is reported that India and Pakistan have reached an agreement on the gas transportation charge for Iran Pakistan India gas pipeline.
Under the agreement, Pakistan will be paid a transportation tariff of USD 0.70 mmbtu to 0.75 mmbtu of gas as against India’s initial offer of USD 0.55 per mmbtu.
The issue of the transit fee, the fee for providing security for the pipeline, is also to be sorted out. The transit fee demanded by Islamabad is USD 0.493 per mmbtu while India has offered USD 0.20 per mmbtu.
The gas will cost USD 4.93 per mmbtu at the Iran Pakistan border and the cost in India will be about USD 7 per mmbtu, after paying Pakistan a transportation charge and transit fee.
The final agreement is expected to be signed by mid July 2007.
Electrosteel achieves financial closure for Bokaro plant
Electrosteel Castings Limited’s associate company Electrosteel Integrated Limited has achieved financial closure for its INR 4,956 crore integrated steel project at Bokaro in Jharkhand.
IL&FS were the financial advisors and sole arrangers for project financing and a consortium of banks and financial institutions has arranged debt financing.
Electrosteel Integrated Limited would set up a plant with a capacity of 1.3 million tonnes per annum, which would manufacture long products and ductile iron pipes.
Punj Lloyd to diversify in drilling rigs business
BS reported that Punj Lloyd is planning to foray into the drilling rigs business, for which it has set up a new subsidiary called Punj Lloyd Upstream Limited.
Mr Atul Punj chairman of Punj Lloyd said that it has decided to foray into onshore drilling rigs business for oil and gas companies in India and abroad as part of its diversification drive and is investing INR 40 crore in the first phase this fiscal which is likely to be increased to around INR 100 crore, for the first phase of the project by March 2008.
Punj Lloyd is also reported to be in talks with global equipment suppliers for a tie up to construct nuclear, hydro and thermal power plants on turnkey basis.
Mr Punj said that the company already had substantial experience in construction related activities of energy sectors such as oil and gas, but lacked expertise in building nuclear, hydro, coal or gas-fired power plants. He added that "Power sector is a big focus area and we are in talks with global equipment suppliers for a possible alliance so that we can set up power plants on turnkey basis. There are just a handful of 12 to 15 players like GE, Alstom, Siemens and we are talking to all of them."
Punjab to set up two thermal plants on BOO basis
It is reported that the Punjab government is planning to set up two thermal Power Plants in Mansa and Sangrur districts on build, own and operate basis.
The Talwandi Sabo Power Plant of 2,000 mw would be situated in Banawala village and Nagha Power Plant of 1,200MW would be at a site in Majhi and Bimbar villages.
Mr Parkash Singh Badal chief minister of Punjab informed the assembly that the developers for these projects would be selected on the basis of tariff based competitive bidding. He said “The selected developers will be required to sign a long term Power Purchase Agreement with PSEB.”
WB and Sikkim ink MoU for setting up hydro project by NTPC Hydro
It is reported that the governments of West Bengal and Sikkim has signed a MoU for a hydel power project to be built on the Rammam River that runs along the boundaries of the two states. Mr Sunil Sengupta power secretary of West Bengal and Mr DD Pradhan power secretary of Sikkim signed the MoU.
The 4x30MW Rammam Stage II hydro electric project at an investment of INR 650 crore project will be funded and built by NTPC Hydro Limited on build, own, operate and maintain basis. It is expected to be complete by 2011-2012 and will produce 120MW of hydel power.
Sikkim will get 14.4MW of power or 12%, NTPC will get 16MW or 15%, which it can sell either in West Bengal or outside the state. West Bengal will get the remaining 90MW which will improve the power situation of the state.”
A 4x12.75MW hydroelectric project had been established by the West Bengal State Electricity Board on the river Rammam in 1995, which functional.
US unit of Suzlon gets major wind turbine contract
Suzlon Energy Limited announced that its USA based subsidiary Suzlon Wind Energy Corporation has extended its contract with PPM Energy o3 f Portland Oregon in USA to add 300MW of wind turbine capacity to become one of the largest single contracts in the history of US wind energy industry.
The original agreement calls for delivery of 300MW of turbine capacity in 2008 and 100MW of capacity in 2009, but now has been extended to include an additional 300MW in 2009 for a total of 700MW over two years.
PTC board approves raising INR 1200 crores to fund expansion
Power trading firm PTC India Limited announced its plans to raise INR 1,200 crore through a share sale to fund its expansion plans after its board of directors approved a resolution for raising funds subject to shareholders’ approval.
PTC release said “The requirement of funds for expansion of the company’s existing business is to be agreed to and is recommended to the next AGM for necessary enhancement of equity base.”
The cumulative capacity tied up through long term projects by PTC during 2006-07 was 6,676.3MW. PTC also entered into MoUs with another 35 projects, totaling a capacity of 16,703MW, for which power purchase and sale agreements were under negotiations. PTC is also planning to import coal from Australia and Indonesia to meet the needs of power utilities in the country.
China opposes US investigations against steel tubes imports
Xinhua reported that China is strongly opposing US move of imposing anti dumping and countervailing duties on import of welded steel tubes imported from China.
Mr Wang Xinpei a spokesman with China’s ministry of commerce said that the combined investigations violate WTO rules. He noted that given the fact the United States does not realize China as a market economy, use of anti dumping and anti subsidy measures also infringes the US' own rules and its tradition of not adopting anti subsidy measures against any non market economies which has been practiced for more than 20 years.
Mr Wang said the move would affect the Sino US trade in a negative way and China hopes the United States to abide by consensus reached by state leaders of the two sides on solving frictions in their economic and trade relationship through dialogues.
He said China would maintain all legitimate rights as a WTO member if the United States sticks to the current effort.
Norilsk Nickel acquires 90% of LionOre’s shares
OJSC MMC Norilsk Nickel announced that 201,089,154 common shares of LionOre Mining International Ltd, representing approximately 90% of the LionOre common shares outstanding, were deposited to Norilsk Nickel's offer to acquire all of the outstanding common shares of LionOre for CAD 27.5 in cash per share by the expiry time of the offer on June 28th 2007.
The release added that “All of the conditions of the offer having now been satisfied, Norilsk Nickel, through its wholly owned subsidiary, has taken up all of the LionOre shares that were deposited to the offer.”
Mr Denis Morozov GD of Norilsk Nickel said “We are pleased by this strong response from LionOre shareholders to our offer and will now proceed to complete this transaction and bring LionOre into the Norilsk Nickel Group. This addition to the Group brings growth in nickel, further diversifies our international presence, and will generate important synergy contributions to Norilsk Nickel's long term development.”
The release added that “In order to provide LionOre shareholders who have not yet accepted the offer with more time to do so, Norilsk Nickel has extended the expiry time of the offer to 8 PM Toronto time on July 10th 2007.”
On May 23rd 2007, Norilsk Nickel announced its increased all-cash offer to acquire all of the issued and outstanding common shares of LionOre for aggregate cash consideration of approximately CAD 6.8 billion.
Baosteel and Jiangsu Yinhuan JV to sets up seamless pipe mill
Baoshan Iron & Steel and privately owned Jiangsu Yinhuan Precision Tube incorporated a 65:35 JV Baoyin Steel Tube Corporation to produce seamless pipes for nuclear power plants in eastern China's Jiangsu province close to Yinhuan. Investment in the project totals CNY 790 million (USD 99 million), which will include iron and crude steel making, as well as rolling facilities.
A Yinhuan official said "We command the technologies to produce these special seamless but have no experience making iron and crude steel, while Baosteel is skilled at making special round billets.”
Yinhuan currently has a capacity for 50,000 tonnes per annum of seamless pipe, processed from round billets supplied by Baosteel.
Market analysts estimate that China would build up some 31 nuclear power plants by 2020, translating into demand for special seamless pipes of some 7500 tonnes with a value of CNY 24 billion at current market price. China largely depends on imports to satisfy its demand for seamless pipes for its growing number of nuclear power plants.
(Sourced from MySteel.net)
POSCO confirms cooperation talks with ArcelorMittal
POSCO confirmed that it is discussing cooperation with ArcelorMittal but clarified that no major progress has been made so far.
A POSCO official said that "Both sides have discussed cooperation in various ways such as overseas projects and raw material development but we have made no specific progress and no details have been decided yet." He said that both companies have talked about possible business cooperation since a senior official of ArcelorMittal visited POSCO in February 2007 but talk of a strategic alliance between the two companies is going too far."
The Seoul Economic Daily, citing Mr Lee Dong Hee CFO of POSCO had reported, that the POSCO is seeking to form a strategic partnership with ArcelorMittal. Mr Lee was quoted as saying that executives of both companies recently met to discuss ways of cooperation, including joint overseas projects and raw material development. The report added that a partnership would effectively remove the threat of a hostile takeover of POSCO by ArcelorMittal.
Mr Roland Junck a member of ArcelorMittal's management board met Mr Lee Ku-taek CEO of POSCO's in February 2007 and the meeting sparked market speculation on possible merger or acquisition.
POSCO, which has a fragmented foreign dominated share ownership structure, is seen by some as a prime takeover target in the wave of global consolidation that began last year when Mittal bought Arcelor.
WISCO and Noble laser welded blanks JV facility inaugurated
It is reported that Wuhan Iron and Steel Company and Noble International Limited’s 50:50 JV WISCO Noble Laser Welding Technology Co Ltd for producing laser welded blanks has inaugurated its facility at Wuhan Economic and Technological Development Zone in China on June 28th 2007.
The facility with advanced laser welding equipment would produce tailor made laser welded blanks for automakers.
Noble International Ltd and Wuhan Iron and Steel Company had entered this JV agreement on December 4th 2006.
China's zinc surplus to further suppress price
China's zinc surplus is expected to further suppress zinc prices in the remaining months of 2007 while current zinc concentrate shortages continue to squeeze profit margins of domestic smelters.
Mr Wu Xijun chief analyst with Zhongjin Lingnan Nonfemet Co Ltd, a leading zinc smelter based in the city of Shaoguan in Guandong Province of China predicted that China's refined zinc output will rise 20%in 2007 as compared to 3.15 million tonnes in 2006, while domestic demand will only grow 15% resulting in a surplus of approximately 100,000 tonnes.
Mr Xu Zhongbo president of Shanghai Zhonglianwei International Trading Co Ltd, commented that the surplus can be clearly seen in the domestic market, with current stockpiles of between 170,000 tonnes and 200,000 tonnes, nearly 70,000 tons of which are in Shanghai. He claimed that the recent rapid growth in China's zinc smelting capacity is the main reason of this market surplus.
Based on statistics released by the National Bureau of Statistics, China's average monthly zinc production stood at over 260,000 tonnes last year, while this year's monthly output has increased to 297,940 tonnes in the first five months.
A number of government policies restraining steel product exports have slowed China's galvanized steel production this year, further pressuring domestic zinc prices. This is significant as more than 65% of domestic zinc output is used in the galvanizing sector.
On the other hand, despite the domestic zinc surplus, most Chinese smelters have been unable to reach full production capacity due to a zinc concentrate shortage. At present, 60% to 65% of domestic zinc concentrate demand is met by imports and actual production levels are 70% to 75% of designed capacity.
Mittal Steel publishes first step legal merger documentation
Mittal Steel Company NV has announced the publication of the legal documentation for its merger with Luxembourg based ArcelorMittal. This is the first step of the previously announced two step merger process between Mittal Steel and Arcelor SA.
In this first step, Mittal Steel will merge into its wholly owned non operating subsidiary ArcelorMittal and Mittal Steel shareholders will receive one ArcelorMittal share for each Mittal Steel class A or class B common share.
Mittal Steel shareholders will be asked to vote on the merger at an extraordinary general meeting of shareholders to be held on August 28th 2007 in The Netherlands and if the merger is duly approved by Mittal Steel shareholders and all other conditions precedent have been satisfied or waived, the merger of Mittal Steel into ArcelorMittal is expected to be effected on or about September 3rd 2007.
Upon the effective date, the ArcelorMittal shares that will be issued in this first-step merger will be listed on the same exchanges as those on which Mittal Steel shares are currently traded.
MMX seek about USD 1.4 billion loan for Minas Rio project
Bloomberg recently reported that Brazilian mining company MMX Mineracao e Metalicos SA would seek about USD 1.4 billion of state development bank loans for part funding its USD 2.5 billion Minas Rio iron ore project in Brazil.
Mr Paulo Gouveia MMX's legal director said that “Our project has been pre approved by BNDES. The project is on schedule and we plan to deliver our first ore in the last quarter of 2009.''
Anglo American agreed to buy a 49% stake in the Minas-Rio project for USD 1.15 billion in April. MMX and Anglo American plan to produce 26.5 million tonnes from the project's mine in Brazil's central highland state of Minas Gerais. The ore will be shipped to Acu a new port in Sao Joao da Barra, Brazil, about 270 kilometers northeast of Rio de Janeiro city using a 525 kilometer slurry pipeline.
MMX already has signed an agreement to ship 6.8 million tons of ore a year from the mine to the Gulf Industrial Investment Corp, which is producing direct reduction iron in the Gulf region. Negotiations are in advanced stages for a MoU to sell the remainder of the mine's 26.5 million tonne initial capacity to Japanese trading companies Sojitz and Sumitomo.
BHPB extends Yandi iron ore mining contract with Leighton
It is reported that Leighton Holdings Limited subsidiary HWE Mining has been awarded a 2 year contract extension by BHP Billiton Iron Ore worth approximately USD 400 million at Yandi located in Western Australia’s Pilbara region.
Under the extension, HWE Mining will continue to provide a complete mining service including drill and blast, load and haul, infrastructure management and maintenance to BHPB.
Mr Peter McMorrow MD of Leighton Contractors said the contract demonstrated the strong relationship between HWE Mining and BHP Billiton Iron Ore. He said “HWE Mining has been providing contract mining services at Yandi for BHP Billiton Iron Ore since 1991.
Henry Walker Eltin commenced operations at Yandi in 1991 with the construction of the first process plant producing 5 million tonne per annum where production has increased over the years and HWE Mining now produces more than 40 million tonne per annum of iron ore with 400 employees on site.
NLMK-Duferco JV completes the acquisition Winner Steel
It is reported that NLMK-Duferco JV has completed the acquisition of 100% in US based Winner Steel Inc for approximately USD 211.6 million.
NLMK Duferco JV had reached a definitive agreement with Winner Steel INC and its controlling shareholder to acquire substantially all the assets of Winner Steel IN and certain of its liabilities on May3rd 2007. The acquisition was to be effected through Duferco US Investment Corporation a wholly owned subsidiary of Steel Invest & Finance SA a 50:50 JV between the Duferco Group and NLMK. The acquired assets and liabilities were to be held by Duferco US Investment Corporation through a newly created entity Winner Steel LLC.
Winner Steel is one of the largest independent galvanized steel producers in the United States. Its operations are located on a single site in Pennsylvania and include three galvanizing lines with combined annual capacity of around 1.2 million tonnes.
Xstrata Zinc Handlebar Hill zinc mine gets approval
Xstrata Zinc announced the approval of the Handlebar Hill open cut zinc lead mine north of Mount Isa at a capital cost of USD 61 million (AUD79 million). The commencement of the Handlebar Hill mine development is subject to approval of a mine plan amendment by the Queensland Department of Mines and Energy. A contracting firm will commence pre stripping activities at the mine once approval has been granted.
Mr Santiago Zaldumbide CEO of Xstrata Zinc said the approval is a further demonstration of Xstrata Zinc’s commitment to the future of the business in Mount Isa. He said “The new mine approval we are announcing recently will further builds upon the commitment we made last August to expand the Mount Isa zinc-lead concentrator capacity by 60% and the significant progress we have made in improving the operating efficiency and long term viability of our zinc lead business at Mount Isa over the past four years.”
Recent drilling, metallurgical testing and design has confirmed a 4.3 million tonne open pit reserve in an area south of the George Fisher underground mine, located 22 kilometers north of Mount Isa. Ore will be mined at a rate of up to 1.75 million tonnes per annum, crushed at George Fisher and trucked to the Mount Isa zinc-lead concentrator from mid 2008. The concentrator is currently being expanded from 6.5 million tonne per annum to 8 million tonne per annum at a capital cost of.
Mittal Steel SA increases galvanizing capacity at Vanderbijlpark
ArcelorMittal’s Mittal Steel South Africa has commissioned its new galvanizing line No 5 at Vanderbijlpark. The total cost of the new galvanizing line, which included freighting, civil work and relocation of an overhead crane, amounted to ZAR 110 million. The new galvanizing line created 21 employment opportunities at Mittal Steel South Africa’s galvanizing and color coating facility. The total capacity of the new line is 100 000 tonne per year.
Mr Rick Reato CEO of Mittal Steel South Africa’s said that a key element of the company’s sales and marketing strategy is to increase sales of manufactured value added products. He said that “The galvanizing strategy aims to increase market penetration with our own manufactured products, particularly in the South African and sub-Saharan African markets.”
Mr Reato says the new capacity being brought on line by Mittal Steel will assist in alleviating the current shortage in galvanized products. By adding a further 100 000 tonnes per year to the domestic market, Mittal Steel will significantly reduce the need for imported galvanized products. Mr Reato added that in the context of the emerging market economies of South Africa and sub Saharan Africa, the main node of growth for roofing applications is the thin gauge product.
Baosteel to increase zinc purchases in 2007 by 16.7% YoY
Interfax China reported that BaoSteel Group will increase zinc metal purchases in 2007 by 16.7% YoY to 70,000 tonnes, in order to feed its growing galvanized sheet capacity.
Mr Chen Xiangming a Baosteel Alloy Development and Trade Department official during 2007 China Lead, Zinc and Downstream Market Forum held in Hangzhou said that the BaoSteel will increase galvanized sheet production from 2.5 million tonnes in 2006 to 3 million tonnes in 2007.
Mr Chen also added that the company is planning to purchase refined zinc with zinc content of more than 99.995% and other zinc containing alloys to the tune of 70,000 tonnes in 2007 up by 16.7% YoY from 60,000 tonnes in 2006.
Mr Chen said that "Our galvanized sheet capacity will grow to 4 million tonnes when 3 new production lines commence operation next year. By which time zinc metal purchases may reach 80,000 tonnes." He added that BaoSteel also aims to increase zinc metal procurement to 140,000 tonnes by 2010, in line with the rise in galvanized sheet capacity.
Major Chinese zinc smelters including Huludao Nonferrous Metals Co Ltd, Zhongjin Lingnan Nonfemet Co Ltd and Zhuzhou Smelter Group are all long term zinc suppliers to Baosteel. It has also recently begun to purchase zinc metal from Yunnan Chihong Zinc and Germanium Co Ltd.
Mr Chen said that "Since our zinc supply is fully secured through long term suppliers, we don’t have any zinc stockpiles whatsoever." But he added that although company zinc consumption has risen dramatically it still does not attempt to take advantage by hedging in futures markets.
According to Mr Chen, 45 kilograms of zinc metal is used to produce a 1 tonnes of galvanized sheet.
ArcelorMittal becomes LME member – Report
Platts reported that the London Metal Exchange confirmed that ArcelorMittal has begun the process to become a member of the LME by applying to buy 10,000 B shares. The acquisition of B shares would give ArcelorMittal Category 3 member status, enabling the company to trade on the exchange.
The report cites some of industry observers as telling that ArcelorMittal's move into the LME may represent a change in attitude about futures markets, but ArcelorMittal being one of the world's largest consumers of base metals, particularly zinc, nickel and tin, a move to LME membership may be related to base metals trading.
The report also cited that a source also told Platts that Mr LN Mittal president & CEO of ArcelorMittal has been invited to speak at this year's annual LME Week dinner.
Mr LN Mittal last week during Success Strategies conference in New York maintained that steel futures contracts were not the solution for lowering steel product prices. He said “Some customers have been saying that steel futures could help bring stability to volatile pricing. I do not believe this is the case.” Mr Mittal citing nickel's performance on LME emphasized that what's really needed is for steel buyers and sellers to better trust each other rather than trusting an exchange.
Chinese ferroalloy market on downturn
YIEH Corp reported that China’s ferroalloy market shows plunged in the recent weeks and main markets of ferromolybdenum, ferrosilicon and ferromanganese are not strong.
Reasons for the low sentiment in the molybdenum market are cited to be the requirement of export license and restricted quota for exporting, the withdrawal of certain favorable policies and the price slip of iron ore and quiet bidding activities are also reasons causing a flat molybdenum market mood.
It is expected that the future market after July will become more active with the stabilization of China’s macro economy policies and the price offered for ferrosilicon remains stable as a whole while the manganese market remains weak with low order settling rate.
In general, the prices of ferrosilicon and ferromanganese went to the high end rapidly in the first year half but followed by a graduate decrease afterwards. This trend has brought a negative effective to the buyers’ action for placing further orders. According to the current market sentiment and prediction for possible future growth in silicon-manganese, the price will be maintained at around CNY 8,000 to CNY 8,500 per tonne.
POSCO orders for 18 high CR mill at Pohang for SS
It is reported that POSCO has awarded a contract to SMS Demag for the supply of the world's first continuous tandem mill with 18 high cold rolling stands for the economical production of high quality special steel strip. With this high performance CR mill, POSCO intends to expand its production capacity at the Pohang location in order to be able to meet the growing demand for stainless steel strip.
The new plant is designed for an annual production of 500,000 tonnes of stainless steel cold strip and would processes both hot strip as well as rolled cold strip of the AISI 300 and AISI 400 grades. In the new plant, strips with widths of up to 1,350mm and a maximum entry thickness of 5mm can be rolled down to minimum final thickness of 0.4 mm.
The centerpiece of the tandem mill comprises four 18 high cold rolling stands with slim work rolls with high forming capacity are ideally suited for the rolling of stainless steel strip. Another significant feature of the plant is the inline strip inspection, facilitating direct quality control of the finished product. For the cooling and ultra fine filtration of the rolling oil used, provision is made for a regenerative filter system so as to ensure careful handling of the resources used and of the environment.
Sally Malay releases results of a feasibility study on Copernicus nickel mine JV
Australian nickel miner Sally Malay has released the results of a feasibility study on the Copernicus nickel mine JV near to its existing operations in Western Australia.
Sally Malay said that “Given the high nickel price environment the JV is keen to develop the open pit and will continue to review the economics of the underground.”
The study on a combined open pit and underground mine shows that Copernicus would yield 6,500 tonnes of contained nickel and 4,750 tonnes of contained copper over a 4 year mine life starting the June quarter of 2008. Both underground and open pit operations would be economically robust at current nickel prices of around USD 35,000 per tonne. Sally Malay said that however, at lower prices below USD 20,000 tonnes, the underground part of the mine would be more marginal.
Sally Malay owns a 60% interest in Copernicus with the balance held by Thundelarra Exploration. Sally Malay’s stated goal is to ramp up production from its mines to over 20,000 tonnes contained nickel in the 2008-2009 financial years.
China’s special steel makers hold a coordination conference
Special Steel Enterprises Association of China held a conference in Beijing which was attended by representative from it 19 members including Shougang, Shijiazhuang Steel, Laiwu Steel. The following is the outcome of the conference.
1. Macro control policies released recently have resulted in sliding steel market. Price for certain quality steel in some regions falls yet it is a short term abnormal performance. Dominant market remains stable.
2. Steel makers report summer overhauls. Resource supply is expected to decline by 165,000 tonnes in Jul. Inventory stays at a low level.
3. Market demand keeps robust both at home and abroad. Orders are fully booked amid generally balanced supply and demand relationship. The market is likely to run on a stable track next month.
4. Producers stick to producing according to sales and stand firm against market principle breaking measures.
5. Regional coordination plan is hammered out with following mills taking the lead.
North China - Shougang Group and Shijiazhuang Steel
Shandong - Laiwu Steel
Jiangsu - Huaigang and Nanjing Steel
Zhejiang - Hangzhou Steel
Mid South - Xiangtan Steel
Southwest China - Shougang Group and Xiangtan Steel.
Next conference is to be held at Laiwu Steel, where reference prices for each variety will be fixed.
(Sourced from MySteel.net)
Siemens to supply welding machines to Tangshang Hengtong and Tangshan Bainite
It is reported that Siemens Metals Technologies will supply new welding machines for their strip processing lines to two Chinese steel producers located in the north of China. The Tangshan Hengtong Accurate Sheet Metals Co. is to receive four LW 21 L laser welding systems for their hot dip galvanizing lines and Tangshan Bainite General Steel Works is equipping its new coupled tandem pickling line with FB 21 S flash butt welding machines. The machines are scheduled to start operating in the fall of 2007 and summer of 2008 respectively.
Tangshang Hengtong aims to increase the performance and production flexibility of the plant, which was built five years ago by using laser welders for coil preparation enabling continuous operation of the strip processing facility. This HDG line can process strips with thickness between 0.3 mm and 2.5mm in widths between 1000 mm and 1250 mm.
At Tangshan Bainite, the flash butt welding machines will be used in the entry section of the new coupled tandem pickling line. The Chinese plant construction company CISDI ENGINEERING CO LTD is building the 1450 mm cold rolling mill with connected pickling line. The FB 21 S flash butt welding machines have integrated shears and operate with direct current.
South Korean metalworkers strike spreading
It is reported that a strike by members of the Korean Metal Workers Union is now in its fifth day to oppose a proposed free trade deal between South Korea and the United States.
South Korea and the US reached a free trade agreement in early April 2007 after 10 months of negotiations. The agreement expected to be signed by the two governments by the end of June 2007 needs to be ratified by the legislative bodies of both countries. The unionized metal workers vow to block the deal, arguing that it would threaten their job security.
A Korean Metal Workers Union official told local media that they will carry out four hour and six hour work stoppages on Thursday and Friday, respectively, following two hour daily strikes from Monday through Wednesday. The official added that "An increased number of workers will join the strike as many unions agreed to participate in the two day massive strike."
South Korean labor ministry said that around 3,000 to 5,000 workers joined the strikes over the last 3 days. The number is likely to grow to 45,000 across the country. The ministry added that the government is in no mood for conciliation, calling the strike politically motivated and illegal. A local court has issued arrest warrants for Korean Metal Workers Union leader Mr Chung Kap deuk and 14 other union members for organizing illegal rallies.
Mr Talbot steps down from MD post at Macarthur Coal
It is reported that Mr Ken Talbot has retired from his role as MD of Macarthur Coal after being at the helm for 20 years and will remain as a non executive director of the company.
Macarthur Coal will ask shareholders to endorse Mr Nicole Hollows as the new MD at the annual general meeting in November 2007.
Mr Keith De Lacy chairman of Macarthur Coal in a statement to the stock exchange said that Mr Talbot wanted to put to rest speculation about his future role in the company.
As per report Mr Talbot is facing 35 charges relating to a loan deal with Mr Gordon Nuttall former Health Minister of Queensland and is due to face court again shortly.
Italian distributors to cut price of flat rolled products
YIEH reported that due to upcoming holidays in Southern Europe in July and August, Italian dealers are planning to cut price of flat rolled products by EUR 30 to EUR 35 per tonnes.
The report added that distributor have been purchasing a great amount of flat rolled products in the first quarter of 2007 and it caused stocks at high levels in the second and third quarter.
According to traders, current hot rolled coil price is at EUR 480 per tonne in domestic market, cold rolled coil price is at EUR 550 per tonnes and hot dip galvanized steel sheet is between EUR 570 to EUR 580 per tonnes.
Nucor has only 4 layers between CEO and shop floor workers
AP cited Mr Daniel R DiMicco chairman, president & CEO of Nucor as saying that Nucor has stayed nimble by keeping only four layers of management between the shop floor and the CEO's office and by communicating with workers constantly.
Mr DiMicco during the Fortune Leadership Forum told that “When the company made the decision to buy a seven seat jet for the executives it sent a lengthy letter to employees explaining the purchase and most employees told him they appreciated the explanation and some even tracked the tail number of the jet to see where it was traveling, emailing him to say they were keeping tabs.”
Mr DiMicco said that the average salary on the Nucor's shop floor was USD 75,000 in 2006. Two thirds of workers' pay is incentive based tied to meeting production and safety standards.
Nucor has 11,900 employees, with 70 in its corporate offices. It has never laid off employees in bad economic times. Mr DiMicco said that “We never call it a no layoff policy because you never know what's going to happen down the road. But our policy is to have a no layoff practice.”
Brazilian steel distributor sales in May surge by 50% YoY
Brazilian steel distributors institute Inda in its latest report said that the sales volume of its members amounted to 308,600 tonnes in May 2007 up by 49.9% YoY as compared to 205,900 tonnes in May 2006.
The report added that inventories in May 2007 among associates fell by 27.2% YoY to 468,800 tonnes while distributors tied with Inda acquired 269,200 tonnes from steel makers in May 2007 up by 26.2% YoY from 213,300 tonnes in 2006.
Their shipments in the first five months of 2007 reached 1.37 million tonnes as compared to 1.05 million tonnes in January to May 2006.
Inda boasts members such as Comercial Gerdau, controlled by Porto Alegre based long steel maker Gerdau and metal products maker Mangels.
Macarthur to ship coal through Abbot terminal to make up DBCT shortfall
It is reported that port and rail constraints at Dalrymple Bay Coal Terminal south of Mackay in Australia have forced Macarthur Coal to begin shipping extra coal through another terminal.
Macarthur Coal in a statement said that “We will recommence exporting coal through the Abbot Point terminal near Bowen. About 500,000 tonnes from the Moorvale and Coppabella mines will be sent through there in the next 9 months.”
Mr Michael Gray senior manager of Macarthur Coal said that the additional services would not fully recoup the shortfall from the Dalrymple Bay terminal. He said that "No not entirely. Cutbacks at Dalrymple Bay have been significant, primarily due to the expansion works at the terminal."
Mr Gray further added that "The coal we'll send through Abbot Point really won't supplement our reduced entitlement, but it will certainly assist in meeting the supplies we have to our customers."
Worthington reports Q4 and fiscal year results
Worthington Industries Inc announced its results for the forth quarter and financial year ended May 31st 2007. Its net earnings for the full year of USD 113.9 million were down by 22% YoY from USD 146.0 million in previous year although they remained the third best in the company’s history, after fiscal 2005 and fiscal 2006. Its full year, net sales of USD 2,971.8 million rose by 3% from USD 2,897.2 million in 2006.
Worthington’s fourth quarter, net sales were USD 786.6 million down by 4% YoY as compared to USD 822.0 million for the fourth quarter of fiscal 2006. Fourth quarter net earnings at USD 38.2 million fell by 36% YoY from fourth quarter 2006 net earnings of USD 59.4 million.
Mr John McConnell chairman & CEO of Worthington Industries said that “The fourth quarter was significant in that it represented an impressive turnaround from the third quarter and helped make fiscal 2007 our third best year. Our Pressure Cylinders segment and WAVE joint venture were major contributors with their record results. In addition, results in our Steel Processing segment were better than expected given the weak conditions in its two major end markets, automotive and construction. Lastly our Metal Framing segment was significantly improved.”
Some of the highlights of fourth quarter and full year are as under
1. Quarterly net sales, operating income and units shipped for the Pressure Cylinders segment were a record USD 169.3 million, USD 26.1 million, and USD 13.6 million, respectively.
2. Annual net sales and operating income for the Pressure Cylinders segment were also records in fiscal 2007.
3. Equity income, from 6 unconsolidated JV totaled USD 16.7 million for the quarter and USD 63.2 million for the year. Worthington Armstrong Venture had record sales and earnings for the year. 4. Cash dividends received from JV totaled USD 44.8 million for the quarter and USD 131.7 million for the year. Worthington Armstrong Venture contributed USD 40.5 million and USD 121.5 million of the cash dividends received for those periods.
Mittal Steel SA lifts headline earnings 19% QoQ
ArcelorMittal’s Mittal Steel South Africa announced a 19% increase in headline earnings to ZAR 1.50 billion for the quarter ended March 31st 2007 as compared with the previous quarter.
US Steel appoint Mr Quirk as manager for Longview Operations
US Steel Corporation announced an additional appointment to the operations organization of its tubular business unit following the completion of its acquisition of Lone Star Technologies Inc and its related companies. Mr Dennis G Quirk has been named plant manager of Longview Operations effective immediately and will report to Mr David S Mitch, who was appointed GM plant operations on June 26th 2007.
Mr Quirk began his career with US Steel in 1976 as a summer student trainee at National Duquesne Works, a tubular facility near Pittsburgh. He moved through a series of increasingly responsible positions in tubular and flat rolled operations and was named manager tubular operations at Fairfield Works in 2001. When US Steel acquired Granite City Works in 2003, Mr Quirk was appointed plant manager finishing operations, a position he held until being named GM of Minnesota Ore Operations in 2005. In January 2007, he was named plant manager of Edgar Thomson Plant, which is the primary operation of US Steel's Mon Valley Works near Pittsburgh.
Mr Joseph Alvarado vice president of tubular said that "Dennis's extensive background in tubular operations as well as his proven leadership skills, technical expertise and strong track record at a variety of US Steel operations make him a solid choice to fill this role."
Vietnam industrial value grow by 16.9 YoY in H1
According to a statistics released by Vietnam’s General Statistics Office, Vietnam industrial value during January to June 2007 topped VND 275.7 trillion (USD 17.23 billion) up by 16.9% YoY. Vietnam’s General Statistics Office said that during January to April 2007, production has grown by 16.6% YoY which is already 5% to 5.5% YoY over the National Assembly’s target of 10% to 10.5% growth for 2007.
Vietnam’s state sector had the lowest rate of growth at 8.5% YoY while the private economic sector grew by 20.5% YoY and the foreign sector performed the best with 39.4% YoY.
Rolled steel mills produced over 2 million tonnes up by 17.2% YoY while automobile and motorcycle factories assembled 21,149 and 1,257 million units respectively. The electricity, water and gas industrial sector only grew by 11.5% YoY.
