September, 18 2007
Essar sets up steel retail chain
Essar Steel has set up over 80 retail outlets under the brand name Essar Steel Hypermart to cater to the requirements of small and medium enterprises across the country. Essar Steel Hypermarts are located in major industrial towns of Gujarat, Maharashtra, Madhya Pradesh, Delhi, Haryana etc and soon they will have a strong pan India presence as plans are already afoot to unveil more such outlets.
Essar Steel Hypermart is a one stop shop for a comprehensive range of flat steel for a variety of applications such as hot rolled, cold rolled and galvanized products. Going forward, other products like longs, structural, tubular steel will also be marketed through these retail outlets. The products are sold as per the published price list to lend transparency. In the first quarter of the current fiscal, Essar Steel Hypermart revenues were INR 565 crore, representing 20% of the total revenues.
A release from Essar said that “Research indicated that there was a large untapped potential for steel in India’s growing SME sector and companies willing to satisfy this volume demand could benefit from a win win relationship with these customers. Essar Steel Hypermart is truly changing the paradigms of marketing and promotion in the steel business. Small volume, prompt deliveries, transparent pricing and above all consistent and guaranteed quality are just some of the basic requirements of retail customers. Over the years servicing these requirements has been a challenge for large steel producers.”
Essar Steel Hypermart has tied up with a service provider to partner in this innovative promotion. Customer can now simply type ‘STEEL’ and send it to 3636 and a response from a Customer service representative is generated. Enquiry and order follow up is through a call centre operation backed by an effective distribution system. The call centres are equipped with latest product, price and delivery information.
McNally Bharat receives SAIL ISP By Product plant order
McNally Bharat Engineering Company Limited announced that it has received an Order for setting up of By Product Plant for IISCO Steel Plant at Burnpur from Steel Authority of India Limited valued at INR 258.68 crores, inclusive of all taxes and duties.
The completion period shall be 29 months from the effective date of contract.
Chhattisgarh to cancel 18 MoUs due to non start up
UNI reported that Chhattisgarh government has decided to cancel 18 MOUs, which it had signed with various industrial groups for investment, as they did not start work even after three years. The decision was taken at a recent meeting of State Investment Promotion Council, which met under the chairmanship Dr Raman Sing chief minister of Chhattisgarh.
The report mentions that these 18 companies had signed MOUs with the state government, more than three years ago, proposing an investment of INR 10,345.65 crore, but no work had started till date.
The list of companies includes Pushp Steel and Power, Texas Powerzone, Laitag Asia and Lenko Amarkantak Power Limited.
High iron ore prices leading to rush for mining leases in Karnataka
It is reported that with the spot price of Indian iron ore reaching an all time high in the international market, the demand for contract mining leases has gone up significantly in the last one month.
The report cited an official of Karnataka’s mining and geology ministry said Karnataka as saying that “We have received 36 applications for contract mining leases in the last 25 days. The applications are from some big iron ore mining companies as well as traders. We intend to award the leases at the earliest since Indian iron ore is in great demand.”
The official pointed out “Twelve contract mining leases are in operation in the state. We intend to sanction fresh contract mining leases in 30 days.”
The state governments award contract mining leases to private companies to mine iron ore from idle or abandoned mines, the leases of which are normally held by state PSUs. The same leases will be transferred on a contract basis to private miners by the PSUs for 8 to 12 months. The miners, who secure contract leases, will have to pay a royalty fixed by the state government. Though Karnataka has put on hold the processing of applications for fresh mining leases, it is not averse to granting contract leases. Mysore Minerals a PSU holds the highest number of iron ore mining leases in the state. It has several idle and abandoned mines in iron ore rich districts of Bellary, Tumkur and Chitradurga.
CIL seeks blanket okay on foreign mine deals
It is reported that in a bid to expedite the process of acquisition of coalmines abroad, Coal India Limited has approached the Centre for empowering it to decide on proposals for obtaining coal mines on lease in other countries. Mr Partha S Bhattacharyya chairman of CIL said "Once the Centre empowers us, we can take faster decisions on getting coal mines on lease in other countries.”
The move comes close on the heels of the Centre directing CIL to expedite the process of overseas acquisition of coal mines.”
CIL had also formed a special purpose vehicle with Steel Authority of India Limited and Rashtriya Ispat Nigam Limited for this purpose.
Iron ore mechanical loading breakdown at Paradip
BL reported that for over a week now, Indian Railway has been restricting the movement of iron ore rakes to Paradip port because of the breakdown of the port’s mechanized iron ore handling plant.
As per report, the conveyor belt has snapped, the tippler is not working and, as a result, the tippling of wagons has come to a halt and ships, which are earmarked for loading iron ore are being transferred to other berths for manual loading.
Since the output in manual operation is much less than that in mechanical handling, the unloading of a rake too is taking much longer, with the result the rakes are getting detained at the port.
As the Railways sources point out, the average daily handling of iron ore rakes has dropped by half to 3 rakes a day, on an average, compared to 6 to 7 rakes in normal times.
AS per report, the mechanical iron ore loading facility is likely to be restored towards the end of the week.
EIA for Monnet steel project in Chhattisgarh run into trouble - Report
Downtoearth.org reported that Monnet Ispat & Energy Limited’s plan to expand its 0.3 million tonnes per annum integrated iron and steel plant in Raigarh in Chhattisgarh has further run into trouble with allegations of irregularities in environmental impact assessment. As per report, the public hearing at Raigarh was called off as it was unable to adequately answer issues raised by the public.
The report cited Mr Ramesh Sharma of Ekta Parishad NGO as saying that “People brought up many issues, including the impact on local water resources and biodiversity. The data provided in the report was questioned, with people pointing out that information on the study area of the environmental impact assessment was unclear. The consultant was unable to answer the queries.”
People demanded scrapping of the environmental impact assessment process. According to local activists, the collector said that the public hearing would be conducted only if the member secretary of the Chhattisgarh environment conservation board or some other competent authority sanctions it.
As per report, Monet, in its application to the union ministry of environment and forests, has said that it seeks clearance for a new 1.7 million tonnes per annum integrated new steel plant in Raigarh. On the other hand, the executive summary of the environmental impact assessment report, prepared by New Delhi based Min Mec Consultancy Private Limited, says that it is only an expansion project. It is alleged that the terms of reference do not take into account the fact that a plant already exists at the proposed site.
Orissa blames Indian Bureau of Mines for low bauxite price
Orissa government, unhappy with the royalty it gets on sale of bauxite, has said that faulty parameters adopted by the Indian Bureau of Mines while fixing the price of the mineral had caused this anomaly.
Mr UP Singh steel and mines secretary of Orissa said that "The state government has been incurring a heavy loss due to low valuation of bauxite mineral by the Indian Bureau of Mines." He added that, while a ton of bauxite was being sold at a price of INR 8,000 to INR 9,000 in the international market, the Indian Bureau of Mines had fixed the price at only INR 2,300 per tonne as a result the state is losing a good amount of revenue. Orissa got only 7.5% over sale of bauxite as royalty.
According to Mr Padmanabha Behera steel and mines minister of Orissa, the state government would soon lodge its protest with the IBM demanding fixation of the price of bauxite according to international price. He added that the IBM had fixed the price of bauxite mineral in February 12006 and expected to revise it in October 2007. Mr Behera said that "We would put forth Orissa's point of view before the IBM revises its new price in October 2007." He pointed out that fixation of mineral price at a low price affected both the centre and the state government while benefiting private mines owners.
TATA Group to raise its stake in TATA Steel - Report
BS reported that TATA Group is planning to raise its stake in TATA Steel by another 10%. It held 33.77% in TATA Steel on June 30th 2007 and wants to consolidate its holding by taking the stake to the level of 44%.
The report cited sources close to the development as saying that the stake hike would be done shortly but declined to specify a time frame.
Industry observers said that the preference shares could be the chosen routes, as money would then flow into the company. They said that “TATA Steel is building a number of new plants, entailing large investments. So the promoters may want money to go into the company’s coffers and not for buying shares from the open market.”
In the last 1 year, the promoters have raised the stake by almost 7% through an issue of preferential shares.
Within promoters, TATA Sons, the main holding company of TATA Group, holds 27.63% share, while TATA Motors and TATA Chemicals hold 4.29% and 0.51%.
Mr Koda against 15 month time frame clause in new mineral policy
It is reported that Mr Madhu Koda CM of Jharkhand said he does not approve the Centre's move to impose a 15 month time frame clause on the states for deciding on mining lease applications.
He said the proposed insertion of the time frame clause in new National Mineral Policy would not only curtail the power of mineral rich states but also cause greater harm to poor states like Jharkhand.
He added that Jharkhand would oppose any such move that were aimed at curtailing the say of states in deciding mining lease applications.
Mr Madhu Koda was reacting over a recent statement of Mr T Subbarami Reddy union minister of state for mines in which the latter had said that under the new NMP the states can not sit indefinitely on mining lease applications and would have to dispose off them within 15 months.
Vedanta may get alternate bauxite deposits in Orissa – Report
TNN recently reported that Vedanta Alumina is now looking for fresh bauxite reserves that could serve as an alternative mining site as its proposed USD 800 million alumina project in Orissa has been locked in legal dispute over its mining rights at Niyamgiri Hills.
Supreme Court has ordered a thorough environmental impact assessment study on the proposed mining area. The report has to be submitted by the environment ministry by October 5th 2007, when the case is scheduled to come up for hearing.
As per report, if the court rejects Vedanta’s mining right, the Sasbahumali bauxite deposits could be considered an alternative by the state government. The report cited source close to the developments as saying that “Most of the other reserves are located far away and have already been identified and earmarked for other projects. However, the Sasbahumali area is located 40 kilometer to 50 kilometer from the company’s refinery. Hence, it would necessarily add to the overall project cost. The bauxite mined in this area will have to be transported via conveyor belt or any other suitable system.”
Orissa government is committed to provide Vedanta Alumina bauxite mines with reserves of 150 million tonne. Vedanta’s plans in Orissa also include a 0.5 million tonnes smelter at Jharsuguda, which is nearing completion and first phase will be commissioned in the first quarter of 2008.
Vedanta Alumina is part of Vedanta Resources, a UK based metals and mining company with interests in iron ore, copper, zinc and aluminium sector in India.
CIL to implement integrity pact with vendors
It is reported that Coal India Limited has signed an integrity pact with its suppliers to bring transparency in transactions between the company and its vendors. CIL has signed a MoU with Transparency International to implement IP on procurement of equipment and services.
Mr PS Bhattacharyya chairman of Coal India Limited at a vendor meet said that "The integrity pact is a tool developed by Transparency International. The idea of signing the pact is to ensure that all procurement activities between a government body and its suppliers are handled in a fair and transparent manner. I hope it will bring in total transparency in our contracting practices." He added that a vendor would not be allowed to participate in a tender if he did not sign the integrity pact.
CIL will start rating of vendors in line with Asian Development Bank to select transparent and worthy vendors in terms of meeting delivery schedules and maintaining quality.
He said that CIL is also planning to appoint independent external monitors for tender evaluation from October 2007. Mr Bhattacharya said that CIL would have a panel of 12-13 independent external monitors for the deals. He said "The panel will be created and will have to be cleared by the Central Vigilance Commission.”
CIL has 7 wholly owned coal producing subsidiary companies operating in 79 areas and 465 mines, of which 284 are underground, 144 opencast and 37 mixed mines. It has set a target to produce 520 million tonnes of coal by the end of the 11th Five Year plan, which calls for an additional production of 159 million tonnes with an annualized growth rate of 9.7% YoY. It also envisages taking up 119 new projects with an ultimate capacity of 283 million tonnes during the current plan period. CIL spends around INR 10,000 crore annually on contracts and procurements.
Foundation stone laid for expansion of Simhadri power plant
Mr Sushilkumar Shinde union power minister laid the foundation stone for the INR 5,000 crore expansion project of stage II of Simhadri Super Thermal Power project at Visakhapatnam in Andhra Pradesh. Phase II would have an installed capacity of 1,000 MW.
Simhadri power plant has been under commercial operation since 2002-03. The first 500 MW of the 1,000 MW power station near Parawada Mandal in Visakhapatnam district has been commissioned in a record 39 months and the second 500 MW Unit has also been commissioned in just 45 months time.
During 2004-05, Simhadri super thermal power project achieved a record plant load factor of 92.72% and stood fourth among the top 10 performing power stations of India. It is the first coastal coal fired thermal power project of NTPC.
Kolkata Port to get private investors for Haldia Docks
BS reported that private players would contribute a bulk of the investment for expanding capacity at the Haldia Dock Complex of the Kolkata Port Trust by 25 million tonnes to 30 million ton in the next 5 years.
Mr AK Chanda chairman of Kolkata Port Trust said that “It has targeted to enhance the cargo volume at Haldia by 25 million tonnes to 30 million tonne in the next 5 years and most of the investment needed for this capacity addition will come from the private players.”
Mr Chanda said "The chemical hub at Nayachar is desirable as the port needs more cargo. We welcome the development of the chemical hub at Nayachar. However he did not give any figure on the cargo growth following the establishment of the chemical hub, adding that it would depend on the scale of the projects to be set up and also the composition of the cargo.”
Chinese rebar and wire rod prices under corrections
Chinese domestic rebar and wire rod prices are going down. HRB335 20mm rebar prices in Shanghai go at CNY 3890 to CNY 3910 per tonne, HRB400 material at CNY 4060 per tonne down by average CNY 100 per tonne than last week. Wire rod also go down to CNY 3950 to CNY 3970 per tonne from CNY 4030 to CNY 4050 per tonne.
The corrections are likely to last some time according to current situation. If HRB335 20mm rebar price in Shanghai could not maintain above CNY 3860 to CNY 3900 per tonne, it would probably drop to about CNY 3700 per tonne, Mysteel forecasts.
In the long run, rebar and wire rod prices are anticipated to go up again after the adjustment end. The robust demand home and abroad and high inputs are contributing its strong performance. The short supply in billet would also help its rise in the future.
Export prices also have hit new high in September. Most steel makers have raised HRB400 rebar 12mm to 40mm and BS grade rebar to USD 620 per tonne and USD 630 per tonne on FOB basis respectively. Quotations for wire rod are prevailing at USD 610 to USD 620 per tonne on FOB basis and there is extra of USD 10 per tonne for SAE1008 material.
Nevertheless, mill’s sale is slowing down at such high price levels, even in domestic market. There has been few transaction at USD 585 per tonne and up. Some are still requesting USD 570 to USD 580 per tonne. The export shipment to Middle East is on the decrease and some have cancelled recently. The worry of slow down in real estate industry aroused by sub prime debt problems would probably have adverse impact on international contraction steel prices
But Chinese wire rod and rebar export offers mainly depend on domestic prices since steel makers would not lower quotations when they could achieve better prices in domestic market.
(Sourced from MySteel.net)
Outokumpu to invest EUR 550 million at Avesta
Outokumpu has announced a EUR 550 million investment over the next three years in stainless steel special grades capacity in its Avesta Works in Sweden.
The investment in Avesta includes a new AOD converter increase of the melt size from 100 tonnes to 125 tonnes and a new slab grinding line, increasing the melt shop capacity to some 750 000 tonnes from the current 500 000 tonnes. The investment further includes a new state of the art 400 000 tonnes 2 meter wide annealing and pickling line with integrated edge trimming.
The investment will increase the finished products capacity of Avesta from the current 250 000 tonnes to some 650 000 tonnes with mainly duplex grades, starting in 2010.
Demand for duplex grades grows faster than that of standard stainless grades. Annual growth is estimated to be over 20%. Duplex stainless steel is characterized with good corrosion resistance and high strength, as well as low nickel content. The high strength of the material enables the use of thinner gages in a variety of applications such as tanks, pressure vessels, piping, transportation, civil engineering and structures, thus bringing considerable savings in material costs.
Outokumpu has developed and patented the Lean Duplex grade, which contains only 1.5% of nickel making its price less dependent of the volatility of the nickel price. The corrosion resistance of LDX is similar to that of the standard austenitic 304 grade, but its strength is about twice as high. Outokumpu's Lean Duplex was introduced in 2002 and has met with great success in demanding applications. To further facilitate the market penetration of Lean Duplex, Outokumpu has earlier this year awarded manufacturing licenses to two other stainless steel producers in Europe and Asia.
Xstrata Coal announces bid for Austral Coal Limited
Xstrata Coal Pty Limited announced its intention to make an off market takeover cash bid to acquire 100% of shares in Austral Coal Limited for AUD 1.83 per share, valuing Austral at approximately AUD 557 million on a fully diluted basis.
Under Xstrata Coal’s proposal, Helios Australia Pty Limited, a subsidiary of Xstrata Coal, will offer to acquire all of the shares in Austral. Xstrata Coal, Austral and Helios have signed a bid implementation agreement under which standard exclusivity arrangements have been agreed. The Offer is subject to limited conditions, including an 80% minimum acceptance condition and regulatory approval.
Austral’s Tahmoor mine is an underground longwall hard coking coal operation in the southern coalfields of NSW, producing approximately 2.3 million tonne run of mine in the last financial year. Tahmoor exports via Port Kembla, near Wollongong.
Mr Peter Coates CEO of Xstrata Coal said “Xstrata Coal’s offer to acquire 100% of Austral is fair and in the interests of shareholders. The acquisition of Austral’s Tahmoor underground mine will increase Xstrata Coal’s exposure to hard coking coal at a time of significant growth within the market. It will also facilitate the Company’s entry into the southern coalfields and allow immediate access to an unconstrained port.”
Xstrata announces purchase of Anvil Hill from Centennial Coal
Xstrata Coal announced that it has signed an Asset Sale Deed with Centennial Coal Company Limited to purchase the Anvil Hill Project for AUD 425 million. Completion, together with management responsibility for Anvil Hill is expected to occur within 30 days, following Ministerial approval and the resolution of conditions precedent.
The Anvil Hill coal project is located in the Upper Hunter Valley of New South Wales in Australia, with the mine plan envisaging production of up to 10.5 million tonnes of both domestic and export grade thermal coal annually over a 20 year period.
Mr Peter Coates CEO of Xstrata Coal said “The acquisition of Anvil Hill will add significantly to Xstrata Coal’s NSW thermal portfolio and help to provide continued economic benefits and employment opportunities for the Hunter region throughout its construction and operation. Xstrata Coal is an industry leader with the business principles, experience and capacity to develop the Anvil Hill site in accordance with global environmental and safety standards. We also have a proven commitment to working with the communities which neighbor our operations.”
10 steel makers bid for steel plants in Egypt
Egyptian daily Al Alam Al Youm reported that ten companies including Egypt's Ezz Steel and ArcelorMittal have submitted bids to build four steel plants in Egypt.
The report quoted Mr Amr Asel head of Egypt's general authority for industrial development as saying that the plants, which will have a total annual capacity of 8 million tonnes, would require investment of about EGP 12 billion (USD 2.13 billion).
The paper added that the results of the bidding would be announced on October 20th 2007. Officials from the Egypt ministry of trade and industry could not immediately be reached for comment.
Egypt went from importing 2 million tonnes of steel annually less than 10 years ago to exporting 900,000 tonnes in 2006. According to an Egypt’s government data it produced about 4.3 million tonnes of steel in 2006.
Chinese coal price to increase due to environmental and safety costs
Bloomberg reported that coal prices in China are likely to rise as Chinese authorities strengthen regulations to improve environmental and safety standards at mines.
Mr Hou Shiguo deputy director in charge of industry policies at the National Development and Reform Commission in a telephone interview in Beijing said that “China's low coal prices are the result of a neglect of environmental and safety issues in the past. We will step up efforts on the policy level to make our coal mines cleaner and safer, and that will accordingly increase companies' production costs.''
He said that “The increase in prices is a long term trend as the government moves toward a more market based mechanism to price coal. Higher crude oil prices are driving up operating costs and contributing to making coal more expensive.
The Chinese government has pledged to reduce accidents at pits that killed 4,746 people in 2006, making the country's coal mining industry the most dangerous in the world.
WA EPA reverses decision on Rio Tinto iron ore mine
It is reported that Western Australia's environmental watchdog Environmental Protection Agency has reversed its decision to block a USD 12 billion iron ore development near Pannawonica to protect tiny underground troglobites after Mr David Templeman environment minister of WA instructed it to reassess its decision.
Rio's Robe River Mining division provided the minister with new information last month to do with a changed mine plan to protect the troglobites and evidence they could live under the pit after mining.
Mr Barry Carbon chairman of EPA said that it has been an unusual but constructive assessment process. He said “The EPA's worry was that were little critters called troglobitic fauna that live underneath the mine site that could become extinct if the plan went ahead, the company has come back, it's changed its mine plan and it has done some more research to show that the troglobitic fauna can live underneath the mine site even after the mining, The EPA has acknowledged the relevance of the extra information and has recommended that the proposal be considered environmentally acceptable.”
WA’s Environmental Protection Agency had rejected plans by Rio Tinto to develop an iron ore mine near Pannawonica in the Pilbara region to protect tiny underground troglobites unique to the mine site in March 2007. EPA had ruled the Rio Tinto proposal was environmentally unacceptable because research done by the company itself had discovered five new species of the troglobites, known as schizomids and unique to the mine site.
The WA Museum says the troglobites are relics from a time when Australia was covered in rainforest, and in arid regions they are totally restricted to subterranean environments. The troglobites, four millimeter long distant relatives of the spider, have existed in Australia for millions of years, feeding on organic matter on rocks deep underground. They have no eyes, but they have long front legs, which they use as feelers, and move very quickly when disturbed.
POSCO sees strong global steel markets
Reuters reported POSCO expects that global steel markets would remain strong through next year backed by buoyant demand from shipbuilding and steady economic growth.
Mr Lee Dong-hee CFO of POSCO told Reuters that "Fundamentals in global steel markets are stronger than we expected as worries about a supply glut in China have eased and demand for steel, particularly from the shipbuilding sector is strong. I believe that the trends will continue until next year."
Mr Lee added that stainless steel businesses, which have struggled with weak nickel prices will revive in October as the nickel market has already hit a bottom. He said that Customers have delayed ordering steel, anticipating drops in the price of nickel.
Living Steel announces winners for design competition
Three architect firms, from Brazil, Israel and the UK, have won the Living Steel competition. The winning proposals were selected from a shortlist of 18 entries. Architects were asked to design a concept for a location in one of three countries.
1. Brazil - Local firm Andrade Morettin Arquitetos Associados Ltda
2. China – Isreal’s Knafo Klimor, Architects And Town Planners
3. UK - Cartwright Pickard Architects
The Living Steel International Competition for Sustainable Housing awards innovative approaches to sustainable housing. The 18 finalists in this year's competition were chosen out of 1,100 proposals from 88 countries. Entrants were asked to submit designs for responsible and innovative housing demonstration sites in Brazil, China and the UK. With a total prize fund of EUR 300,000, the competition is one of the largest architectural design initiatives in the world. Winners receive a EUR 50,000 prize and a contract to complete their designs for construction of a demonstration building in the target location. The remaining 15 short listed finalists receive a EUR 10,000 honorarium.
Chernobyl gets new steel cover
It is reported that Ukraine has signed deals to build a giant steel cover over the site of the world's worst nuclear disaster at fourth energy block of the Chernobyl nuclear power plant, which was damaged in April 1986. The project is due to be completed over four to five years and cost USD 1.39 billion.
Mr Viktor Yushchenko president of Ukraine signed a deal with the French led Novarka consortium to erect the new shelter. A second deal was signed with US based Holtec International to build a facility to house spent fuel from the station's other three reactors. A total of EUR 285 million has so far been allocated for that project.
Mr Yushchenko told ceremony participants that "We are talking about a unique project for this planet. The danger linked to the site of the accident is not confined to Ukraine's borders.”
The new tomb will take the form of an arch 105 meters high, 150 meters long and 260 meters across built form steel. It will be built onsite and then slid over the fourth reactor, providing conditions for the complete dismantling of its nuclear inventory, most of which is still inside.
The second facility is to house more than 20,000 spent fuel assemblies used by the other three reactors during the plant's 23 years in operation before it was shut down in 2000.
Various projects have been proposed since the mid 1990s to replace the sarcophagus hastily erected by workers and troops over the reactor in the weeks and months following the April 26, 1986, fire and explosion at the plant. But agreement on financing, overseen by the European Bank for Reconstruction and Development, was only announced last month. Donors, mostly foreign governments, have so far contributed EUR 739 million.
MMX awards iron ore slurry pipe line supply and construction work
MMX Mineração e Metálicos SA announced that its MMX Minas Rio Mineração SA signed a letter of intent with the consortium formed by Confab Industrial SA, Siat SA and Marubeni Itochu Steel Inc for the supply of pipes required for the construction of the Minas-Rio System slurry pipeline.
The contract envisages the supply of approximately 539 kilometers of welded steel pipes with 24 inch and 26 inch diameter. Deliveries are scheduled between March and December 2008.
LLX Minas-Rio Logística SA and the consortium ARG-CIVILPORT also signed a letter of intent for the offshore construction work of the Açu Port. The construction of the Açu Port commenced today.
The slurry pipeline will connect the iron ore mines in Minas Gerais to the Açu Port, which compose the MMX Minas-Rio System that is being developed by MMX’s subsidiaries, MMX Minas-Rio and LLX Minas-Rio.
US July 2007 steel shipment down by 1.9% YoY
American Iron and Steel Institute reported that for the month of July 2007, US steel mills shipped 8.844 million net tons down by 1.9% YoY as against 9.016 million net tons shipped in July 2006 and down by 0.9% MoM as against 8.920million net tons shipped in June 2007.
YOY comparison of YTD shipments shows the following changes within major market classifications:
1. Service centers and distributors down 11.2%
2. Automotive down by 1.6%
3. Construction and contractors’ products down by 2.5%
4. Oil and gas down by 9.3%
AISI’s estimate is based on reports from companies representing about 75% of the US’s raw steel capability and includes revisions for previous months and year.
VSA urges prudent licensing for steel project fearing overcapacity
It is reported that Vietnam’s steel industry association has urged the government to thoroughly consider licensing mammoth steel projects that might produce a surplus.
In a recent petition to the Mr Nguyen Tan Dung PM of Vietnam, Mr Pham Chi Cuong chairman of Vietnam Steel Association expressed industry concerns over the massive amount of approvals given to major to steel complex proposals by foreign investors and joint ventures recently.
According to industry’s statistic Vietnam will need an estimated 20 million tonnes of steel products by 2020. But the statistics said that both foreign and domestic steelmakers would provide over 20 million tonnes by 2015.
Five steel complexes and several smaller plants were approved in the first half of the year. All of which are proposed to churn out between 3 and 5 million tonnes annually when in place 2015.
1. TATA Steel and state run Vietnam Steel Corp will build a USD 3.5 billion steel complex in the central Ha Tinh province to produce 4.5 million tonnes of products annually.
2. Essar Global Limited has joined forces with VSC and Vietnam Rubber Group to build a USD 527 million hot rolled steel mill in Ba Ria Vung Tau province. It will have an installed capacity of 2 million tonnes per year and use imported semis.
3. POSCO has recently started work on a cold rolled steel facility in its steel complex at a total investment of USD 1.13 billion in the Ba Ria-Vung Tau province.
4. POSCO is also planning another steel complex at a cost of USD 4.5 billion in the central Khanh Hoa prince with annually capacity of 5 million tonnes.
5. Thai Tycoons Worldwide Steel Group has applied to up its USD 1.1 billion investment in the central Dung Quat steel complex in Quang Nam province to USD 1.8 billion.
According the VSA, steel makers in Vietnam had a combined annual production capacity of some 6 million tons by late last year.
Timken to buy Purdy for USD 200 million
Associated Press reported that Timken Co has agreed to buy Purdy Corp for USD 200 million, expanding its aerospace business.
Timken expects the deal to close this year, pending receipt of customary approvals. It anticipates Purdy will add to earnings during the first year under its ownership.
Manchester based Purdy is a precision manufacturer for commercial and military aviation markets. It makes transmissions, gears and rotor head products.
Red Sea Iron Company acquires 94.8% of Suez Steel
Egyptian media recently reported that Red Sea Iron Company has acquired 94.8 % of shares in Suez Steel SAE under a deal valued EGP 318.9 million. The deal involved 1,293,854 shares sold at EGP 246.5 per share.
The report indicated that the buyer is involved in iron & steel trade, port operations & forwarding services. It is 60% owned by Vigora Company Ltd of Cyprus & 39.9 % by a company identified as Al Wehda Company for Industrial Development.
Reports have also indicated that Suez Steel Company invested on a steel factory in Suez City to produce steel billets & has huge potential for both vertical & horizontal expansion.
Suez Steel is 94.07% held by Attaka Steel, which won a tender last year to acquire a majority stake in the company.
Shanxi Province to build new national coal trading center
China daily reported that central government has approved a plan to build a national coal bourse in Taiyuan a capital city of North China's Shanxi Province, the biggest coal production hub in the country.
Analysts said the establishment of the bourse, named China Taiyuan Coal Trading Center, would represent a bold step toward the reform of the nation's coal distribution system. It will replace an annual coal ordering conference, a remnant of China's planned economy system of the past. But no timetable has been set for the opening of the national coal bourse.
Sources said that the center, which will expand the activities of the existing Taiyuan Coal Trading Exchange set up in 1993, will provide a reliable and transparent e-business platform for coal producers, consumers and transporters across China, who will be able to conduct spot coal transactions and coal futures there. It added that in the initial stage, trading volume at the center is expected to reach 500 million tonnes a year, compared with more than 200 million tonnes at the Taiyuan Coal Trading Exchange.
Analysts said prices at the national bourse would be the benchmark in China, which will help form a unified domestic coal market. The coal sector is very fragmented in China, the world's top producer of the mineral, with more than 20,000 suppliers of the raw material. They added that the formation of the national coal center would also help enhance the say of Chinese companies in international coal price bargaining.
Chinese entrepreneurs are keen to invest in the coal bourse, which will be a shareholding enterprise mainly controlled by the State. By the end of July, domestic companies led by Shanxi Coal Transportation and Sales Co, a State owned coal distribution giant, had invested a total of CNY 900 million in the center.
According to industry statistics coal production in Shanxi rose by 11.2% YoY to 268 million tonnes in the H1 of 2007, accounting for almost a quarter of the China's total. Meanwhile sales revenue of the coalmining sector in the province up by 26.6% to CNY 88.5 billion boosted by hikes in production and prices.
Rio extends offer for Alcan to October 23rd 2007
Rio Tinto Canada Holding Inc announces that the expiry date for its offer to acquire all of the common shares of Alcan Inc is being extended from September 24th 2007 to October 23rd 2007.
The release added that “The extension is necessary to permit conditions to the offer to be satisfied, including obtaining various regulatory approvals. A formal notice of extension is being mailed today to all Alcan common shareholders.”
As of the close of business on September 14, 2007, 495,139 shares had been deposited with the depositary under the offer and not withdrawn, representing less than 0.2% of Alcan's outstanding common shares on a fully diluted basis. The offer is conditional on acceptances representing 66.33% of Alcan shares.
Bowen Energy finds new coal deposit in Queensland
Bowen Energy announced that it has found a two meter thick seam at west Rolleston in Queensland.
Mr Mark Shepherd director of exploration said that there would be further exploration in the area. He said “We have started a program now of more detailed mapping. We are about to commence some time in the next quarter a preliminary scout drilling program.”
He added that "All previous exploration and government surveys have not intersected the upper part of the Bandana formation, which is the coal bearing part of the sequence. We are going to start a program of targeting, where we believe the most prospective coal horizons are."
Coal export from Shanxi to further reduce
Reuters reported that coal exports from China’s largest producing and exporting region Shanxi will continue its fall this year due to tightening domestic supply and government curbs on exports.
Mr Jin Shanzhong deputy governor of Shanxi province said that rising power needs for the fast growing economy and limited supply due to a clampdown on small miners for safety reasons are putting a strain on the domestic coal market.
He said that "Shanxi's coal shipments to foreign countries were some 40 million tonnes a year in the past, but it fell last year and will likely decrease to below 30 million tonnes this year. In the first eight months of this year, coal exports from the province fell more than 19% from a year earlier."
China cancelled tax rebates on coal exports in September 2006 to keep more of the fuel at home and later reduced import taxes, making it a net coal importer for the first time in January this year.
Murchison to fight claim on Jack Hill iron ore deposits
It is reported that emerging Mid West miner Murchison Metals has vowed to fight any attempts by a one time failed explorer to claim ownership of its flagship Jack Hills mine. Mr Paul Kopejka executive chairman of Murchison hit out at former Perth based explorer Chameleon Mining, which disclosed that it might have a claim against Murchison based on the material and records available to it.
But Mr Kopejka said the claim was baseless. He said “The facts are that Chameleon wrote to Murchison last year outlining the basis of its so called claim. This correspondence was reviewed by Murchison’s lawyers and deemed to have no foundation whatsoever.”
Chameleon said “These potential claims vary in nature and quantum Given the breadth of documentation and range of issues involved, the company will work with its legal advisers to ensure that the advice and or any potential actions are dealt with in a timely fashion.”
It is understood the claim relates to the ownership of the Jack Hills tenements and dates back to events related to various companies and corporate promoters before Murchison was even formed in 2005.
The NSW Supreme Court put Chameleon into liquidation in December 2004 after Mr Robert McLellan a former consultant geologist to Chameleon cried foul about an alleged USD 200,000 debt and the company’s dealings with a group known as Zenith Development.
CR prices in Pakistan surge
Pakistan’s Daily Times reported that the prices of cold rolled coils have increased by 4,000 per tonne in the local market during the last one month following the surge in its demand and prices of this metal in the international market.
The report cited a Pakistan steel trader as saying that “The prices of cold rolled coils have surged to PKR 54,000 per tonne against PKR 50,000 per tonne a month before. In the international market the prices of this metal have surged to USD 650 per tonne from USD 600 per tonne. Besides this, the prices of less thick cold rolled coils have surged by PKR 2,000 to PKR 3,000 per tonne.”
It added that the domestic demand of cold rolled coils has been limited during the last one month in the country which is stabilizing the market prices for a sharp hike, however they predicted that as the domestic demand will increase the prices are likely to surge further in the domestic market.
Pakistan imports around 1 million tonnes of cold rolled coils per annum from USA, Far East and European countries. However, Pakistan Steel Mills also produces this category of steel, which is hardly enough to cater the local demand.
US Steel files legal papers to idle Texas plant
News Journal.com reported that US Steel has filed the required legal notifications of plans to shut down operations affecting about 200 workers at its Texas Operations plant near Lone Star.
However, what happens to workers after the end of that period is in dispute. The report cited Mr Randy Dean president of United Steelworkers Union Local 4134 as saying that "The contract says they have a right to be placed in a layoff pool." He added that the status would allow workers to retain their seniority and keep their recall rights, which would allow them to fill vacancies coming up at the plant.
Mr Dean said that "That's a big difference from what the company told them in meetings this week." He said company management told workers once the 60 day WARN Act period is up, the company's responsibility and its relationship with the union workers will end.
According to Mr John Armstrong manager of public affairs for US Steel company's WARN Act notice takes effect Sunday and continues until November 14th 2007. The notice said the company plans the permanent discontinuation of operations in its rolling mill and electric arc furnace departments.
Mr Armstrong said that a final determination on the workers status past the WARN Act period would have to be worked out between the company and union officials. He added that he was not familiar with language in the contract between the company and local workers.
US Steel acquired the former Lone Star Steel in a USD 2 billion deal finalized in July.
Substitution by low nickel SS has accelerated
Purchasing.com reported that as increased use of low or no nickel steels continues to erode the market share of nickel bearing 300 series stainless grades.
As mills continue to use a surcharge mechanism, which operates on market prices two months after the price of nickel is set, meaning that there is a lot of high priced stainless inventory still in the hands of stainless mills and service centers made with nickel purchased at its peak. So, reduced purchasing of stainless steel overall has been occurring in North America, according to service centers who just reported the lowest monthly shipments rate since last winter.
Based on five month statistical data released by the Specialty Steel Industry of North America in Washington, Annualized US consumption of stainless steel sheet and strip is on pace to decline by 14% to 1.58 million tons, Overall use of stainless steels of all kinds and shapes is expected to drop 8% in 2007. It added that distributors aren't buying as much stainless steel as before because high inventories at the start of the summer haven't been run down. The nickel price decline has made their stocks overpriced in a weakened steel-purchasing period. Still, buyers continue to seek ways to switch to lower-cost alternatives as prices for traditional stainless steel sheet mill products continue to sell 90% higher than did 18 months ago.
Notably, the use of 200 series steels, sometimes referred to as chrome manganese stainless, has increased recently. The most durable of these grades, including 201 and 202, contain 3.5% to 6.0% nickel, compared with 8% to 10.5% nickel in Type 304, the most commonly used stainless grade. Other 200 series grades, such as Type 205, use as little as 1% nickel. Recently, however, new types of 200 series steels have been developed that use little or no nickel. Lower cost manganese, usually in combination with nitrogen, is usually used in place of nickel in these grades.
While they are less expensive to produce and are often harder and stronger than most 300 series steels, the 200 series steels are also less corrosion resistant and are more difficult to form and weld. Still, global end use for 200 series stainless grades has increased to 10% from 6% in 2002. By comparison, 300 series steels now account for 60% of stainless use down from 72% in 2002.
Bucyrus confirms order for new 8750 Dragline for Canadian coalminer
Bucyrus International Inc announced that that it is manufacturing a new 8750 AC Walking Dragline for a major coal mining company in Canada. Bucyrus initially received a letter of intent for this dragline earlier this year and finalized the formal contract for the sale in the second quarter. The 8750's capabilities and the advanced technologies that are incorporated into this machine helped to secure the order.
This newest dragline, with a contract value in excess of USD 100 million will have a complete AC IGBT electrical drive system for all motions. Bucyrus with its partner Siemens Energy & Automation pioneered the use of AC drive systems on mining equipment nearly 30 years ago. Due to the reliability and maintenance reducing advantages of the AC systems, AC drives have become the norm for heavy excavating equipment in the surface mining industry. Their use on draglines is no exception.
Ultimately the combined drives for the hoist, drag, swing and walking motions of this 8750's AC system will have over 37,300 applied horsepower. When in full operating mode, it will be able to lower its 84.1 cubic meter bucket to a maximum depth of 250 feet and drag it until it is filled with nearly 136,500 kilogram of overburden material. That full bucket can then be hoisted to a maximum height of 182 feet while turning and finally dumping the material 399 feet away. This machine's operating weight is approximately 7,319,000 kilogram.
Mr Tim Sullivan president & CEO of Bucyrus confirmed that machine demand is expected to remain strong. He said that "The sale of this dragline highlights the ongoing global demand for our products and services. We continue to expedite the expansion of our manufacturing facilities to meet this growing demand.''
Bucyrus International, Inc is a world leader in the design and manufacture of high productivity mining equipment for the surface and underground mining industries. Its surface equipment is used for mining coal, copper, iron ore, oil sands and other minerals and Bucyrus' underground equipment is used primarily for mining coal.
China increases nickel import in July 2007
It is reported that China imported 7,798 tonnes of nickel in July 2007, down by 1.2% MoM from one month ago and imported 3,767 tonnes of ferronickel up by 39% MoM. The report added that China imported 7,956 tonnes of nickel ore up by 48.8% MoM.
The main suppliers of nickel are
Australia: 1,898 tonnes
Canada: 2,685 tonnes
Russia: 2,144 tonnes.
The import volume totaled 617,000 tons in January to July 2007. The main suppliers of nickel ore are
Philippines: 1,391,000 tonnes
Indonesia: 684,000 tonnes
New Caledonia: 197,000 tonnes
The export volume of nickel was 1,421 tonnes, down by 16.5% MoM.
Gerdau Ameristeel receives consents in Chaparral acquisition
Gerdau Ameristeel announced that it has received consents from the holders of nearly USD 299.9 million in aggregate or 99.96% of Chaparral Steel's outstanding 10% senior notes due 2013 as of the close of business on September 14th 2007.
Gerdau Ameristeel said that the consents received exceeded the number needed to approve the adoption of the proposed amendments to the indenture under which the notes were issued. Holders who have not yet tendered their notes may do so until the close of business on September 28th 2007, unless extended by the company.
Gerdau Ameristeel is 4th largest steel maker overall and the 2nd largest mini mill steel producer in US. It is the US arm of Brazilian steel maker Gerdau Group.
