June, 08 2007
HCC bags civil work contract for TATA Steel’s Kalinganagar plant
Hindustan Construction Company has bagged an INR 167.76 crore order from TATA Steel to execute civil work for its first phase of 6 million tonnes per annum integrated steel plant at Kalinganagar in Jajpur district of Orissa. The contract involves execution of civil works related to key installations at the plant, including the coke oven and raw material handling system.
As per report, HCC is planning to start the site mobilization for the project in line with requirement of TATA Steel by October 2007 and actual construction work by December 2007. It proposes to complete it within 24 months.
HCC would also be aggressively pursuing additional contracts for next phase of work including structural work for this project in addition to civil and structural works for TATA Steel’s upcoming Greenfield integrated steel projects in Jharkhand and Chhattisgarh as well as expansion projects in the Jamshedpur plant.
TATA Steel had signed a MoU with the Orissa Government in November 2004 to set up a plant at Kalinganagar. As per the MoU, the company was to set up the plant with an investment of INR 15,400 crore in two modules of 3 million tonne capacity each. The first module of 3 million tonnes includes a blast furnace, coke ovens, sinter plant and rolling mills. The project, however, faced some delay with the local tribals protesting against the project and the company encountering problems related to compensation and rehabilitation of the displaced persons. In January 2006, a police firing incident at the project site claimed 13 tribal lives.
Pakistan imports about 5,000 toners of GC sheets from India
Daily Times citing sources in the trade reported that Pakistan imported 4,000 tonnes to 5,000 tonnes of galvanized corrugated steel sheets from India in the early phase of 2007. The report cites the sources as saying that most of the steel sheets imported from India were brought through Wagah border and sold in the northern parts of the Pakistan.
Pakistani government had allowed import of mild steel reinforcement bars graded 40 and 60, mild steel angle iron sections graded 40 and 60 and corrugated galvanized iron sheets SWG from India up till March 31st 2007 via land route to facilitate construction of housing units in the areas of the country that were devastated by the earthquake of October 8th 2005.
Pakistan government had also allowed import of galvanized steel in 2006, when around 12,000 tonnes of galvanized steel sheets were imported from India. But as per reports in Pakistani media, although, these imports were meant for use in quake hit areas only, traders also sold them in other parts of the country. Keeping this in mind, Pakistan’s government placed a condition in 2007 that sheets could be imported only after corrugation, which resulted in reduced volumes of import.
SAIL identifies CDM projects in its steel plants
BL reported that Steel Authority of India Limited has embarked on the road to Clean Development Mechanism and has identified projects in the integrated steel plants to ensure a clean environment.
Mr G Ojha director personnel of SAIL and in charge of its Raw Materials Division at a program jointly organized by SAIL's Environment Management Division and the Growth Division on the occasion of World Environment Day in Kolkata said that “Rourkela Steel Plant is a pioneer in this process followed by the Bhilai Steel Plant.”
As per report SAIL board has cleared the wind farm project in Tamil Nadu. SAIL has also installed solar streetlights in villages neighboring its units and is working on similar projects in other areas.
Foundation stone for Brahmani Steel Plant on June 10th 2007
It is reported that Dr YS Rajasekhara Reddy chief minister of Andhra Pradesh will lay the foundation stone for the proposed Brahmani Steel Plant in Kadapa district of Andhra Pradesh on June 10th 2007.
Mr Anam Ramnarayana Reddy information minister of the state announced that the Andhra cabinet had earlier approved the allotment of about 10,670 acres worth at INR 18,500 per acre for the steel plant.
Bramhani Industries has short listed three Chinese companies Sino Steels, MCC and Showgang for the supply of equipment and erection for its integrated steel plant. The project will entail an investment of around INR 4,430 crore.
The phase 1 project of the steel plant with a capacity of 2 million tonnes is likely to be ready in 18 months. Phase II is expected to have an additional capacity of 2.3 million tonnes in 36 months. The reports also mention that it may reach 10 million tonnes per annum by 2017.
PMO to review POSCO’s project progress in mid June
FE reported that the prime minister’s office will convene yet another meeting to discuss the progress of POSCO’s steel project in Orissa on June 15th 2007. The report cites a senior Orissa government official as saying that “The PMO has called for a quarterly review meeting on the progress on POSCO’s project and is likely to discuss steps which could expedite the progress of the project.”
The meeting is likely to be attended by senior officials from various ministries including mines and steel as well as by the principal secretary of Orissa.
The meeting assumes significance as this is the 2nd one convened by the PMO in less than 2 months. The PMO is taking a keen interest in POSCO project, as it is the single largest foreign direct investment project so far in India.
POSCO’s 12 million tonne project likely to come up with an investment of INR 52,000 crore is facing stiff resistance from the local people on account of land acquisition. Delay in the processing of the mining lease application has turned out to be a major stumbling block.
TATA Steel and Essar deny interest in Stelco - Report
Canadian Globe and Mail reported that Indian steel giants TATA Steel and Essar have denied any interest in buying the Canadian steel maker Stelco Inc, which put itself on the block recently.
The report cites Mr Sanjay Choudhry chief of corporate communications at TATA Steel as saying that "We are interested in expanding our global access, but there is no truth in our being interested in Stelco. We are not interested in any acquisition at this point in time."
The report also cites Mr Manish Kedia spokesperson of Essar Steel as saying that "Stelco has circulated its memorandum of information, but I don't even know if we have taken a look at it. We have just acquired Algoma and Minnesota Steel. We have our hands full at this time."
The Economic Times had recently reported both TATA Steel and Essar Steel have shown preliminary interest in Canadian steel maker Stelco Inc, put up for sale by key shareholders last week. It cited sources as saying that the TATA Steel is attracted to the mines and the specialized steel making capabilities of Stelco while Essar is keen on the Ontario-based firm's iron ore assets. The paper quoted sources close to TATA Steel as saying that “Stelco 'is an option as we have interest in the high-volume, high margin markets of North America and want to get a footprint there.”
Development plan for Keonjhar area gets a much needed boost
The government is fully committed to implement infrastructure development program with the peripheral development by industries and mining companies in Keonjhar district of Orissa and is planning construction of roads on priority.
The union government has cleared Joda to Bamberi road, Bileipada to Murga, Barbil to Balani and Soso to Kanpur at a project estimate of INR 31 crore.
1. The Joda to Bamberi road has been allotted to TATA Steel and INR 5 crore has already been spent in the first phase
2. The Bileipada to Murga road would be developed with INR 9 crore by Sarada Jindal, TISCO and other mine owners
3. The Barbil to Balani road to a stretch of 5 kilometer from Barbil would be constructed by SAIL.
Padmanav Behera steel and mines minister of Orissa said that the Keonjhar administration had failed in collection of Peripheral Development Fund and had gone slow following the direction of the Orissa High Court. The High Court, in response to a petition filed by one Ray and Company challenging the collections for Peripheral Development Fund, had asked the Government not to take any coercive action in the matter.
The Keonjhar administration has managed to garner 67.74% of the fund projections till May 26th 2007. Under the fund stipulations, the companies would have to set aside 5% of their profits towards peripheral development.
SKF to build a new bearing plant in India
World’s leading roller bearing supplier SKF has announced that it will invest INR 270 crore to build a Greenfield factory in India for the manufacturing of large size bearings. The new factory is expected to start manufacturing in 2008 and will when fully utilized employ 300 persons.
The investment in the new facility will be carried out through SKF's existing 100% subsidiary in India SKF Technologies India Private Limited. The investment is in response to the strong global demand for large size bearings in the sectors of wind energy, mining, steel and off road applications.
SKF had earlier launched a factory for large size bearings in China and also announced its plans of increasing its capacity for the large size bearings in its Swedish factory in Goteborg.
Tender for new dredging JV soon
It is reported that Shipping Corporation of India will soon float a global tender inviting bid from firms interested in preparing a feasibility report for the dredging firm it plans to set up in association with the Kolkata Port Trust, Mumbai Port Trust, Jawaharlal Nehru Port Trust and Cochin Shipyards Limited.
The report added that currently a steering committee comprising the heads of all 5 organizations is undertaking preliminary works and the equity structure and other details would be finalized later.
A SCI spokesman said that "The feasibility report, once finalized, will be placed before the union cabinet for consideration and necessary steps will be initiated for the formation of a company once the approval has been obtained."
India's dredging requirement of both capital and maintenance type is increasing but Dredging Corporation of India is unable to handle more jobs due to capacity constraint. Maintenance dredging comprises the bulk of DCI's work of about 50 million cubic meters annually and dredging in Hooghly river accounts for the largest maintenance dredging work followed by the dredging for the Sethusamudram project.
The experience with foreign dredging contractors, mostly Dutch or Belgian, has not always been satisfactory for several port hence the proposal for another dredging firm with the participation of various state owned organizations has been planned.
Jharkhand to restart talk with NTPC for North Karanpura project
PTI reported that Jharkhand government will soon discuss with National Thermal Power Corporation about the fate of the proposed INR 10,000 crore North Karanpura thermal power project in Chatra district in Jharkhand for which foundation stone was laid by former prime minister Mr Atal Bihari Vajpayee in 1999.
Mr Madhu Koda chief minister of Jharkhand told newsmen recently that "We will talk to the officials of the NTPC regarding the project. It will also help Chatra's development.”
NTPC sources recently said that acquisition of land had been a stumbling block in the forward movement of the 1980 MW project at Tandwa in the Chatra district and out of the required 2,600 acre land, the NTPC could only acquire 200 acre.
Alstom to install control systems for DMRC
It is reported that French railway equipment major Alstom has bagged a INR 255 crore contract from the Delhi Metro Rail Corporation for manufacturing and installing its control systems.
The contract involves designing, manufacturing, supplying, installing and commissioning of train control and signaling system for DMRC's Metro Line 1 and Line 2 extensions.
Mr Philippe Mellier executive VP of Alstom said that “India will have 10,000 kilometer of new line, heavy haul freight corridor, station upgrades, airport connectivity and capacity up gradation of the existing line. We are very excited and are keen to participate in this growth effort. "
Mr Mellier added that “Alstom is ready to execute projects on public private partnerships and was comfortable with the current PPP model and that Alstom is keen to participate in the big ticket sector as the transport sector in India had an exciting potential of EUR 62 billion.”
Alstom currently has operations in Delhi and a manufacturing unit in Coimbatore besides a signaling and a software facility in Bangalore. It has partnered with Infotech in running the facility wherein the signaling operations are controlled.
Mitsui OSKL India Ltd opens 4 more branch office in India
BL reported that Japanese Mitsui OSK Line’s Mitsui OSK Lines India Ltd has expanded its presence in India by establishing 4 branch offices in Chennai, Kochi, Tuticorin and Kolkata with 52 employees that will began operations from June 1st 2007. MOL India has now 7 offices in India and more than 150 employees with this expansion.
MOL India became a wholly owned subsidiary of MOL Asia in March 2002 with its head office in Mumbai and a branch office in New Delhi and in 2006 it opened a branch office in Ahmedabad.
MOL India has expanded its shipping business in southern and eastern India through the Chennai based International Clearing and Shipping Agency as its sole agency for many years. The new agency will retain ICSA employees ensuring a smooth operational transfer from the old agency to the new.
ACCC clears Smorgon, OneSteel and BlueScope transaction
The Australian Competition and Consumer Commission announced that it will not oppose either the proposed merger between Smorgon Steel and OneSteel or the proposed acquisition by BlueScope Steel of the Smorgon Steel Distribution Businesses. The ACCC has taken this decision following the provision of revised undertakings by OneSteel relating to unsuccessful anti dumping applications in relation to specified products made or supported by OneSteel over the next 5 years.
Mr Graeme Samuel chairman of ACCC said that the proposed acquisition is unlikely to substantially lessen competition. He said that "I think it's a recognition the steel industry is now a global industry and it is an industry where we've had rapid development of steel mills around Australia and the Asian region. From a domestic perspective, if OneSteel starts raising prices or reducing the range of products they provide to companies in Australia, those companies can look to imports. The merged entity is likely to face strong competition from imports of steel long products to Australia, so long as speculative anti dumping applications do not disrupt the supply of imported products."
The ACCC said that "The ACCC formed the view that the undertakings accepted by the ACCC will ensure that import competition is not impeded by speculative anti dumping applications. The undertakings impose an appropriate discipline on OneSteel's incentive to make speculative or strategic anti dumping applications which may otherwise have the effect of disrupting the supply of steel imports and lessening competition."
The ACCC said that its market enquiries raised concerns that anti dumping applications had the ability to significantly disrupt supply of imports of steel long products into Australia. It was also feared the acquisition would lead to a single domestic manufacturer of most types of steel long products. It also said that imports of steel long products have been growing in volume and market share for a number of years and that there was considerable scope for further growth in future.
Accordingly, BlueScope Steel, Smorgon Steel and OneSteel confirm that the ACCC conditions to implementation of the proposal which includes the merger and the BlueScope acquisition are now satisfied.
OneSteel and BlueScope reached a deal in March 2007 whereby BlueScope would snap up Smorgon's distribution business for about USD 700 million. The remainder of Smorgon's assets will merge with OneSteel in a USD 1.1 billion deal.
ThyssenKrupp Acciai to relocate its unit to Terni from Turin
ThyssenKrupp announced that its Italian unit ThyssenKrupp Acciai Speciali will close down its Turin facility and relocate equipments to its Terni to strengthen its competitiveness by expanding the capacity of the plant in Terni in the medium term and bring it to a standard comparable with the best of its competitors. As per release, the various measures will increase stainless production in Terni from 570,000 tonnes to nearly 700,000 tonnes of cold rolled per year in the future, creating the conditions at ThyssenKrupp Acciai Speciali Terni for the highest levels of steel quality, optimized processing capabilities and an extended product range.
ThyssenKrupp Acciai is now step by step relocating the entire production capacity of Turin to Terni as part of the further optimization. After the phasing out of production, the equipment in Turin will be completely dismantled and some items will be relocated to Terni. According to current plans, the closure of the site will be completed by the end of fiscal 2007-08
As per ThyssenKrupp, Turin site has significant disadvantages in terms of logistics, energy costs, infrastructure and environmental requirements and the high cost of transporting coils between the Terni and Turin sites is a particular disadvantage for ThyssenKrupp Acciai Speciali Terni compared with its competitors.
Dr Harald Espenhahn chairman of the management board of ThyssenKrupp Acciai Speciali Terni said that "The purpose of the investments we have made and those still underway is to expand the integrated stainless mill in Terni into an internationally competitive site. We have kept all the promises we made in connection with the ending of electrical steel production 2 years ago."
Dr Harald said that "This step is not easy for us but it is unavoidable for economic reasons and with a view to the future of the company as a whole. We want to create production and cost structures similar to those of our best competitors. We need skilled personnel to continue our successful growth course. Our company would not be the success it is without the reliability, commitment and professionalism of our employees."
ThyssenKrupp said that 400 employees in Turin will be offered jobs within the company and older employees will also have the opportunity to take early retirement.
US steel pipe producer file AD case against Chinese pipes
It is reported that 6 US producers of welded standard steel pipe and the United Steelworkers filed petitions with the US Department of Commerce and the US International Trade Commission alleging that imports of welded standard pipe from China into the United States are being dumped and are being subsidized by the government of China. The petition alleges that this rebate is discretionary and excessive. The Government of China uses this particular program to provide an advantage to Chinese exports in global markets. They have urged the agencies impose duties to off set Chinese government subsidization and dumping.
Under the antidumping and countervailing duty statutes, the International Trade Commission will make a preliminary injury determination by the end of July 2007; the Department of Commerce should issue preliminary determinations in the countervailing duty and antidumping duty cases in October and November of 2007.
The petitioners in this case are Allied Tube & Conduit, IPSCO Tubulars Inc, Northwest Pipe Company, Sharon Tube Company, Western Tube & Conduit Corporation, Wheatland Tube Company and United Steelworkers.
As per the release, US’s domestic industry affected in this case employs approximately 2,000 hourly workers at some 35 plants nationwide, including in Alabama, Arizona, Arkansas, California, Illinois, Iowa, Kentucky, Louisiana, Missouri, Ohio, Oregon, Pennsylvania, and Texas. Most employees are represented by the United Steelworkers Union.
Mr Armand Lauzon CEO of John Maneely Company, parent company of petitioners Wheatland Tube and Sharon Tube, said that “For the past 15 months, we have been working hard to bring more consolidation to the pipe and tube industry in the United States and to further improve its worldwide competitiveness. He said unfair Chinese trade practices are severely hampering our efforts to achieve the desired rates of return necessary to attract capital and to maintain competitiveness in this critical US industry.”
Me Rick Filetti president of Allied Tube & Conduit said “Allied operates four of the most efficient pipe plants in the world geographically spread through the US market in Philadelphia Chicago Phoenix and Pine Bluff Arkansas to serve the entire US market in a freight beneficial manner. However, absent an end to dumping and a reduction in imports from China we will be forced to make reductions at our plants despite very strong demand for our products. It would be a tragedy for the United States if the most efficient and environmentally compliant plants in the world were shut down and the United States nonresidential construction market became dependent on products imported from inefficient environmentally noncompliant high freight costs mills in China for this essential product to the US economy. We are asking for the US government to restore the level playing field and allow the rules of comparative advantage to hold sway.”
As per release, Chinese imports of circular standard and structural pipe have increased from 10,000 tons in 2002 to 690,000 tons in 2006 a 6,800% increase. Since then, 4 US plants have ceased production and over 500 employees have lost their jobs. The surge continues with a 21% rise in imports in the first quarter of 2007. Imports of standard pipe from China represent over 60% of total US imports of such products.
China’s domestic steel prices to firm up further in June
China’s National Development and Research Commission, after revealing through a nationwide monitor over the major markets, concluded that China’s domestic steel prices have increased in May 2007 with the major varieties averaging CNY 4255 per tonne up by 3.34% MoM or by 7.81% YoY.
The monitor data showed that construction steel prices registered widest upward margin with average transaction price posting at CNY 3613 per tonne up by 7.12% MoM or by 12.61% YoY. Sheet, plate & strip prices averaged at CNY 4958 per tonne up by 1.56% MoM or by 6.28% YoY. Stainless steel, pipe & tube and sections also turned up to certain degree.
NDRC also forecasted that the steel prices would continue to rise in June 2007 as the seasonal consumption boom is approaching with project construction spreading over the nation. It said “Though the export tax turns unfavorable for steelmakers, the international price remains higher than at home, hence sustaining the export momentum. Also, costlier raw materials and fuel are set to drive up steel production cost and consequently bolster prices of the finished products.”
NSW government approves Anvil Hill coalmine
It s reported that New South Wales government has approved the controversial AUD 240 million Anvil Hill coalmine for the NSW Hunter Valley. Anvil Hill coalmine, which will produce 10.5 million tonnes of coal each year, has faced consistent opposition from environmentalists, as well as a challenge in the Land and Environment Court.
Mr Frank Sartor planning minister of NSW said that the approval followed a thorough, 10 month assessment by the department of planning and 84 strict conditions had been imposed to deal with dust and noise issues. He said that "This decision has not been taken lightly."
Ms Lee Rhiannon Greens MP said that the fight would continue. Ms Rhiannon said that “Greens MPs would take direct action to stop the construction of the mine. The approval of the Anvil Hill mine shows the government is not serious about climate change. They have been captured by the coal industry."
Mr Bob Cameron MD of Centennial said that "We are firmly committed to minimizing our environmental impact and working with Muswellbrook Shire Council and the broader community to promote local employment opportunities. It just goes to show what a sick joke the planning laws of NSW are."
Seamless tube major Vallourec being pursued - Report
An unconfirmed report in The Business mentioned that both Gazprom and ArcelorMittal have been preparing to bid for French seamless pipes manufacturer Vallourec. According to the report, investment bank BNP Paribas has been hired by a mystery client to examine the bid for Vallourec.
Vallourec is one of the few steel manufacturers that process an established brand and a proprietary technology. Vallourec also has a 97% free float and net cash on its balance sheet as compared to its main competitor Tenaris which is 40% family owned.
Observers said that the Vallourec is largely considered prey and it is only a matter of when a bid is made but added that there would be few political problems much of France has never heard of it.
On the other hand Vallourec recently said that it had the means to remain and could easily make an acquisition of over EUR 1 billion as part of its growth strategy. Verluca declined to comment on recent rumors of takeover interest from ArcelorMittal, Gazprom and billionaire Mr Roman Abramovitch. Mr Pierre Verluca management board chairman said that we absolutely don't need to link up with someone else although the steel tube maker would consider an offer if we are officially approached.
Cleveland Cliffs & Stelco to sell their stake in Wabush Mines to Consolidated Thompson
Cleveland Cliffs Inc and Stelco have announced that they have accepted an offer to their stake in the Wabush Mines JV. Under the definitive purchase agreement contemplated in the offer accepted, Consolidated Thompson Iron Mines Ltd would acquire the 71.4% of the Wabush Mines JV owned directly or indirectly by Cleveland Cliffs 26.8% and Stelco Inc 44.6%. Completion of the transaction is subject to the execution of definitive agreements and the receipt of all required third party consents and regulatory approvals.
Dofasco Inc, the owner of the remaining 28.6% interest in the Wabush mine JV, has a right of first refusal over the proposed transaction which may be exercised for a period of 90 days in accordance with the provisions of the project agreements governing the JV. It is expected that the completion of the transaction will occur shortly following the waiver or expiry of the right of first refusal in favor of Dofasco Inc.
Cleveland Cliffs sold its 26.8% stake for USD 64.3 million in cash and 3 million warrants of CLM common shares and assumption by Consolidated Thompson Iron Mines Ltd of ongoing employee and asset retirement obligations. Cleveland Cliffs' pro rata share would be USD 24.1 million in cash and warrants entitling Cleveland Cliffs to purchase approximately 1.1 million CLM common shares at CAD 5.10 per share for a two year period. As part of the transaction Cleveland Cliffs would enter into an off take agreement whereby CLM will sell to Cleveland Cliffs a portion of its pro rata share of the 4.8 million tons of committed annual pellet production from the date of closing until December 31st 2009.
Stelco Inc sold its 44.6% interest in for total consideration with an estimated value to Stelco of USD 163.4 million. The total transaction value includes cash of USD 44.4 million assumed liabilities estimated at USD 94.6 million approximately 1.9 million warrants to purchase shares of consolidated valued at USD 1.7 million and an agreement for Consolidated to supply iron ore pellets to Stelco until December 31st 2009 valued at USD 22.7 million. In addition, Stelco will retain its share of the Wabush iron ore inventory which is valued at approximately USD 35.7 million.
Mr Donald J Gallagher president of Cleveland Cliffs North American Iron Ore stated that "This is a good transaction for all of the parties involved. In addition to the cash proceeds Cliffs will be relieved of significant liabilities and will be able to allocate its available resources to longer lived assets in North America and its global growth strategies.”
Mr Rodney Mott President and CEO of Stelco said "The Wabush mine requires some redevelopment work which has an associated capital requirement. Consolidated is better positioned to complete this work given operating synergies available to them with their neighboring mining interests. This transaction will improve our financial position and accelerates our efforts to surface value in Stelco.”
The Wabush mine JV holds assets including the Scully iron ore mine and related assets situated near Wabush, Newfoundland and Labrador and palletizing facilities and related infrastructure located in Quebec.
Severcorr’s CR mill comes on stream
Severcorr announced that a second major cold rolling mill has come online at its Columbus facility. Severcorr said that the5 stand tandem cold rolling mill is one of only four in the United States which are coupled to a pickle line and is the only one capable of producing steel coils up to 72 inches wide.
Total capacity of the line is over 1.2 million tons, out of which 650,000 tons will be used to produce cold roll products including commercial, drawing, deep drawing, interstitial free ultra low carbon and micro alloyed grades of steel as well as full hard products. The mill's additional capacity will be substrate for the facility's galvanizing line which will come on line in third quarter 2007.
Mr Mike Wagner COO of SeverCorr said that “Our commitment to invest in only the best available technology can easily be seen in our cold mill. The term state of the art is often overused, but it is an accurate description in this case. As impressive as the technology behind our cold mill is, the real power comes when we combine that equipment with the team working on this line. Our cold mill team has over 120 years combined experience. It is that steel expertise, together with the enthusiasm of the team members working in the cold mill that is the force behind this launch.”
Currently, 62 employees are working in cold mill operations, which also includes the successful start up of the batch anneal furnaces and the temper mill.
The cold mill is the second major production area to come online at SeverCorr following the launch of the pickling line earlier this year. The line will produce 1.25 million tons of hot roll pickled and oiled steel a year. Much of the production will be used in downstream processing and the balance will be sold directly to SeverCorr customers requiring pickled and oiled product.
SeverCorr currently is purchasing hot roll bands from third parties for pickling until its own hot roll product is available in third quarter 2007.
The SeverCorr was formed in 2003 to design, engineer, build and operate a state of the art steel facility to service growing manufacturing opportunities in the Southern United States.
US’s steel import permit applications for May up by 9% MoM
Based on the US Commerce Department’s most recent Steel Import Monitoring and Analysis data, the American Iron and Steel Institute reported that steel import permit applications for the month of May 2007 totaled 3.01 million tons the highest monthly amount so far in 2007. This was a 1% increase from the 2.99 million tons recorded in April 2007 and a 9% increase from the April preliminary imports total of 2.76 million tons and 13% greater than the 2005 monthly average.
Import permit tonnage for finished steel in May 2007 was 2.62 million tons up by 20% above the preliminary imports of 2.18 million tons in April 2007 and 25% higher than the monthly average of 2.09 million tons in 2005.
For May 2007, the largest volumes of steel import permit applications for countries outside of North America were
China 487,000 net tons
Korea 215,000 net tons
Brazil 213,000 net tons
Finished steel import permit applications for Chinese steel were 486,000 net tons up by 46% in May 2007 as compared to the preliminary imports total for April. This tonnage for China, while still below the 2006 record tonnage amounts that occurred in the second half of 2006 was 153% higher than the 2005 monthly average of 192,000 net tons for China.
Mr Andrew G Sharkey III president & CEO of AISI said that “The significant increase in May import permits, for China in particular, is a reminder that the United States remains an attractive market for the excess steel capacity of less efficient, subsidized foreign producers. This is why competitive American steel producers are supporting the close monitoring of imports, strict enforcement of current trade laws and prompt passage of legislation to strengthen trade laws.”
Roche Bay to form iron ore JV with Advanced Exploration
Roche Bay plc has announced the formation of a JV with Advanced Explorations Inc of Toronto to develop part of Roche Bay's extensive iron ore deposits in northeastern Canada.
As part of the agreement, Advanced Explorations becomes the operator of the project and as a consequence Roche Bay has become a holding company of iron ore assets rather than an operating mining exploration company.
Advanced Explorations Inc and Roche Bay plc had signed a JV agreement on January 29th 2007 and amended it on February 5th 2007 to undertake the required work to complete feasibility studies and exploit Roche Bay's extensive magnetite iron deposits in Nunavut, northern Canada. The agreement gave AEI an option to acquire up to a 50% equity interest in Roche Bay's Eastern deposits and to become operator of the exploration and construction project.
AEI assumes responsibility for raising financing and managing the completion of feasibility studies. Once these are completed, the agreement provides for formation of a joint venture, for which AEI will be responsible for the financing, design, build and operation of a mine and plant producing at least 6 million tonnes per year of iron concentrates or pellets.
Metalico acquires specialty scrap recycler Tranzact
Metalico Inc announced the purchase of Tranzact Corporation a recycler of molybdenum tantalum and tungsten scrap. Consideration for the purchase was provided by a combination of draws on Metalico's credit facilities and seller notes. Financial terms of the acquisition were not disclosed.
Tranzact Corporation is located in Quarryville Pennsylvania where its metal warehousing processing and trading operations are housed. Its operations are characterized by low unit volumes purchased and sold but with high dollar value transactions. Tranzact focuses on sourcing, sorting, certifying and assuring that scrap metal meets its quality control requirements and those of its consumers before metals are shipped. It principally generates scrap from world class industrial corporations located in the US and abroad and sells to a diverse group of consumers. Tranzact generated sales of approximately USD 25 million during each of the two previous years.
Metalico Inc is a rapidly growing holding company with operations in two principal business segments ferrous and non ferrous scrap metal recycling and fabrication of lead based products. It operates 6 recycling facilities through New York State and 5 lead fabrication plants in 4 states.
Norilsk ties up funding to purchase LionOre and gets approvals
It is reported that GMK 'Norilsk Nickel' signed an agreement with BNP Paribas and Societe Generale on the extension of USD 3.5 billion for the purchase of Canada's LionOre Mining International Ltd. Under the agreement signed with the banks, NorNickel can obtain required funds on first demand.
Norilsk Nickel Offer for LionOre has received approval from the Swiss Competition Commission under the applicable Swiss merger control laws. The Competition Commission concluded that it had no objection under Swiss competition law to Norilsk Nickel's that all cash offer to the shareholders of LionOre and therefore Norilsk Nickel's offer is not subject to further competition review in Switzerland.
Norilsk Nickel also announced that it has received notice that Norilsk Nickel’s proposed acquisition of control of LionOre Mining International Ltd has been approved by the Australian Federal Treasurer under the Foreign Acquisitions and Takeovers Act 1975. The Federal Treasurer as the body responsible for the foreign investment review in Australia concluded that Norilsk Nickel’s all cash offer to the shareholders of LionOre was not contrary to the national interest and, therefore, Norilsk Nickel’s offer is not subject to further review under the Act.
On May 23rd 2007 Norilsk Nickel announced it’s increased all cash offer to acquire all of the outstanding common shares of LionOre for aggregate cash consideration of approximately CAD 6.8 billion. The offer is open for acceptances until 8:00PM on Monday June 18th 2007, unless extended or withdrawn.
MEPS forecast increase in North American SS prices
UK based Steel analyst MEPS forecasted that stainless steel selling values are to rise again in June 2007 when alloy surcharges are set to increase as both nickel and chrome costs climb. It said “Further basis price erosion is expected to compensate for some of this growth. Transaction prices over the summer months should then be relatively stabile as the upward movement in the alloy surcharge finally comes to an end.”
MEPS said that the average monthly nickel prices moved up further in May 2007 recording new record highs on several occasions. MEPS said “However we anticipate values slipping slightly in June 2007. This is due to Norilsk being unable to ship until mid June 2007 as a result of a port closure. The second half of the year is then forecasted to record sharper declines as slowing nickel demand from stainless steel mills in all regions takes its toll.”
MEPS said “During May 2007 nickel inventories on the LME rose to their highest levels so far this year, with stocks over the past three months showing a definite upward trend. Many stainless mills are producing more nickel-free or low nickel containing grades as customer demand for these products increases. This is now causing upward pressure on Chromium figures. The nickel market is expected to return into balance by the end of the year with the risk of a potential severe downward correction of LME prices. Values are predicted to reduce to around USD 35,000 per tonnes by December 2007, before stabilizing during the first half of 2008.”
MEPS added that stainless type 304 cold rolled transaction values are now expected to rise next month with a small further increase predicted in July 2007. It said “We anticipate this to be the peak. At this point the alloy surcharge should represent approximately 78% of the transaction price for grade 304 cold rolled coils. MEPS said that in the longer term we forecast a decline in stainless values as nickel prices reduce and demand continues to slow. In the first half of 2008 we should see stainless selling figures stabilize as mill order books begin to rebuild.”
CMC Steel Texas to cut mercury at Seguin plant
CMC Steel Texas announced that it has partnered with the Environmental Protection Agency to reduce mercury at its Seguin Texas plant. The steel mini mill has pledged to complete mercury reduction measures as part of EPA’s National Partnership for Environmental Priorities program.
Mr Richard E Greene regional administrator of EPA said that “Taking mercury out of our business processes keeps mercury out of our environment. The efforts of partners like CMC Steel Texas are helping EPA change our environmental future for the better, while also inspiring other facilities to do the same.”
Mr Mike Peters VP & manager, environment of CMC Steel Texas said that “The CMC Steel Group is pleased to participate in a program such as this. The act of replacing our fluorescent lamps with a non hazardous alternative at our Texas steel mill takes on new significance when added to the efforts of others across the United States.”
The NPEP program encourages public and private organizations to go beyond regulatory requirements by forming voluntary partnerships with EPA that reduce the use or release of 31 priority chemicals. Priority chemicals are long lasting substances that can build up and cause harm to humans and the environment.
CMC Steel Texas is the first steel mini mill to successfully join the NPEP program in EPA Region 6. . As a member of NPEP, the steel mini mill will continue reducing its environmental footprint by decreasing the use of mercury products at its facility.
Taiyuan Iron to build stainless steel seamless pipe mill
YIEH reported that China's Taiyuan Iron & Steel Co Ltd plans to build up a 50,000 tonne stainless steel seamless pipe mill to increase its pipe production output and market share. As per report Tisco has already started to evaluate the feasibility and they will finish the project evaluation recently.
PT Inco increase mine able reserves estimate of nickel
It is reported that PT International Nickel has raised the estimate of its mine able reserves by a fifth as the use of newer technology has helped extend the life of its mine.
Mr Arif Siregar president of PT Inco during a mining conference in Manila said that “PT Inco has extractable mineral reserves of 177 million tonnes of ore containing 1.77% nickel. That compares with a 2005 estimate of 145 million tonnes of ore with 1.8% nickel. With current technology, we estimate that our reserves can support operations for more than 30 years."
PT Inco plans to boost output to 300 million pound to 165 million pound forecast this year to benefit from record prices. Prices of Nickel have risen almost 7 times in the past 5 years on rising demand from China for the metal.
AK Steel increases SS alloy prices by 10% to 16%
AK Steel has announced that it will increase transaction base prices by 10% to 16% for stainless steel alloys used primarily in automotive exhaust applications effective with shipments on July 1st 2007.
The transaction price will increase by 10% or USD 120 per ton for Type 409 and by 10% or USD 180 per ton for Type 439. Transaction prices will also increase by 10% for Type 409 Ni, Aluminized 409 and Aluminized 439. Due to recent increases in the cost of columbium, transaction base prices for 18 Cr Cb (TM), 15 Cr Cb (TM) and 410 Cb will increase by approximately 16%. It also added that all of its existing raw material surcharges will remain in effect.
Ohio based AK Steel produces flat rolled carbon, stainless and electrical steel products, as well as carbon and stainless tubular steel products, for automotive, appliance, construction and manufacturing markets.
Belvedere Resources starts mining nickel in Finland
Belvedere Resources Ltd announced that its 100% owned subsidiary, Finn Nickel Ltd has received all mining approvals and started blasting waste rock in the new open pit over the Sdrkiniemi West Orebody at the Sdrkiniemi Nickel Mine in eastern Finland.
Belvedere Resources said that the first ore shipments are scheduled for late June 2007 at a rate of 6000 to 10000 tonnes per month for a period of 10 months. Ore will be transported to the concentrate facilities at the Hitura Nickel Mine located in Nivala town and the nickel copper concentrate will be delivered to Norilsk Nickel Finland Oy's smelting and refining facilities at Harjavalta in Western Finland.
Mr David Pym CEO of Belvedere said that "The commissioning of Sdrkiniemi represents the successful implementation of the first phase of the Finn Nickel business plan and is a tribute to the commitment and experience of the Finn Nickel team. A further two mines are planned for commissioning in the Kotalahti region over the next three years capitalizing on Finn Nickel's strong internal growth profile."
The release adds that “Infill definition drilling will be started over the Sdrkiniemi East mineralization in July 2007 to upgrade the resource status in preparation for a desktop mining study. This drill program is part of a much larger summer drilling campaign covering several Finn Nickel projects in the Kotalahti region including further delineation drilling on the Valkeisenranta nickel project.”
Oslo Marine buys Vyborg Port from Rosa Holding
Interfax citing an Oslo Marine spokesman reported that the Oslo Marine group has acquired the Vyborg Commercial Sea Port in the Leningrad region from Moscow's Rosa Holding. The report cites the spokesman as saying that "We confirm that the deal to acquire the Vyborg port took place in May 2007, but Oslo Marine's management has decided not to disclose its details until the middle of June 2007."
The Vyborg port increased cargo turnover by 40% to 1.253 million tonnes in 2006.
Oslo Marine group includes insurance broker Scanmarineconsulting, insurer Scandinavia, medical insurance company Medstrakhkom the Scandinavia pension fund investment and finance company Scandinavia, leasing firm Scandinavia and the Scandinavia trading house.
Rosa Holding founded in early 2005 runs the Kyrgaiskaya deep mine and Prokopyevsky coal pit in the Kemerovo region through Rosa Kuzbass as well as the Prokopyevsk Tractor and Bulldozer Depot and Prokopyevsk automobile depot.
Xstrata gets nod for LionOre acquisition from SA tribunal
Xstrata plc announced that it has received approval from the South African Competition Tribunal for its proposed acquisition of LionOre Mining International Ltd and now no further regulatory approvals are required for Xstrata's offer for all of the issued and outstanding LionOre shares.
Xstrata's offer will remain open for acceptance until midnight on June 15th 2007 and all of the terms and conditions of Xstrata's offer described in its offer and offering circular dated April 5th 2007 as varied amended and supplemented by Xstrata's notice of variation dated May 15th 2007 remain unchanged.
Switzerland based Xstrata is a global diversified mining group, listed on the London and Swiss Stock Exchanges. Xstrata's businesses maintain a meaningful position in seven major international commodity markets: copper, coking coal, thermal coal, ferrochrome, nickel, vanadium and zinc, with recycling facilities. Xstrata Group's operations and projects span 18 countries and employed approximately 43,000 people including contractors.
Toronto based Xstrata Nickel is one of Xstrata Group's global commodity businesses, comprising 5 mines and processing facilities in Ontario and Quebec Canada. It has a significant portfolio of growth projects, including Nickel Rim South in Canada, Kabanga in Tanzania, and Koniambo in New Caledonia. Xstrata Nickel is the world's 4th largest nickel producer with annual managed production of more than 110,000 tonnes of refined nickel.
Comprehensive report on Indian steel sector
The Indian steel industry is poised for massive expansion. Dramatic consumption growth over the last few years has stimulated enormous expansion plan, facilitated by unexploited iron ore raw material base. India is now being hailed as the new China, where crude steel production soared from less than 100 million tones in 1995 to over 400 million tones in 2006.
Indian crude steel output at just 38million tonnes in 2005 is starting from a much lower base, and the economic steel- consuming structure of China is substantially different from India. Nevertheless, India has recently established a long-term goal of raising crude steel production to 100 million tonnes per annum by 2020.
UK based GFMS Metals Consulting in an innovative way and value for money report on Indian steel industry includes complete statistical coverage of the industry, an unbiased and frank assessment of growth expectations, a base case outlook for each steel product & the industry as a whole with a clear view of potential risks, an assessment of raw material availability and trends and production, trade and consumption forecasts out to 2011.
The report coverage includes historic production, trade & apparent consumption of carbon steel both long and flat products, raw materials, producers, economic environment, political and other risk factors.
If you are interested to know more about it please visit GFMS Indian Steel Report or send a mail at research@steelguru.com
