Monday Market Monitor - India (WEEK 28) - Stable trend

After witnessing eruption during WEEK 25 and WEEK 26 and corrections in WEEK 27, India - Domestic steel market achieved a balance in WEEK 28 with minor corrections at some locations, due to lag and local factors.

Correction in long products was more or less over in WEEK 27, but correction was seen at flat products in several locations in WEEK 28.

Price movement for Mumbai market during WEEK 28 is given below

Price in INR per tonne
Inclusive of ED and VAT
Delivery – FOT

Chennai market, which was somewhat stable in WEEK 27, saw fall in steel prices in WEEK 28 across categories

Price in INR per tonne
Inclusive of ED and VAT
Delivery – FOT

This week is likely to see further corrections, as the buyers and stockiest are assured of no increase by steel majors at least during July 2008. This sentiment has prompted them to limit buying putting pressures on secondary steel makers and stockiest in short term.

Readers may note that the price levels indicated in this article represent the market fairly and are outlined to give trends only, but could be in variance with some transactions at different levels for smaller volumes etc.

(Sourced from www.steelprices-india.com)

Indian Steel: Opportunities and Strategic Options

The new report on Indian steel from Steel and Natural Resources Research, authored by Dr AS Firoz, Strategy Consultant, comes out with findings completely different from the popular growth stories told about the short and mid term potential of steel demand growth in the country. The report, yet to be officially released, blames much of it to the uncertainty in the policy regime and deep structural weakness in the economy.

The report says that India may see a drop in steel demand in the coming two years. The annual growth rates in finished steel consumption are likely to be 5.5% in 2008-09 and about 4.5% in 2009-10. This is in sharp contrast to the forecasts made earlier when growth rates were expected in the range of 9% to 12% for these two years. Demand growth for stainless and alloy steel also will remain far below potential. The study has predicted significant change in the structure of the market in the next 10 years from the earlier forecast scenarios with changes in the growth trends for specific products.

The report further goes on to project a rather pessimistic scenario in respect of production growth as new projects start ups have been significantly delayed. While the Brownfield expansion projects of the private companies and RINL are on course, SAIL, the study finds, is way behind the schedule.

The new supply and demand conditions in the market will leave their expected impact on the external trade. Imports will remain far above exports this year, but, the situation will start changing from 2009-10. Exports of steel, especially flat products will sharply rise to turn the country into a net exporter of steel once again.

The study forecasts prices of steel to come under pressure with weakening of demand and not so much due to government actions. With rising costs of coking coal, the integrated mills will see their margins eroding. Higher costs of other inputs such as iron ore, non-coking coal and ferroalloys will hit the secondary sector hard.

The steel companies will also find it hard to mobilize resources for their new projects, the report concludes.

130 pages with more than 70 charts and tables

Scheduled for release on 1st September 2008

Price on release: USD 5000 or equivalent in INR
Advance booking price: USD 4000 or equivalent in INR (valid till 31st July 2008)

You can order your copy to reports@steelguru.com

India - Domestic plate price trends (WEEK -27)

PLTS
GRB
12-20x2.5

Price in INR per tonne
Inclusive of ED and VAT
Delivery – FOT

(Sourced from www.steelprices-india.com)

MMTC invites bids for import of 10,000 tonnes of rebars

MMTC Limited has invites bids from manufacturers or their duly authorized representatives for import of rebars in FE500 Grade vide its Tender No MMTC/IMP/TMT STEEL/219/2008 sated July 10th 2008

Detailed terms and conditions are as follows:
TMT Steel in FE500 Grade
12 meters straight bars

In tonnes

Offers to be quoted on CIF basis any safe Indian Port

Tender Due Date - 21st July 2008 at 1500 Hrs (ISI)

India - Domestic rebar price trends (WEEK 28)

TMT (Local mills)
Fe 415
12mm

Price in INR per tonne
Inclusive of ED and VAT
Delivery – FOT

(Sourced from www.steelprices-india.com)

Kamdhenu Ispat and Profab Steel form JV for coated rebars

Kamdhenu Ispat Limited has announced last week that it has executed JV agreement with Profab Steel Private Limited to incorporate a Company in the name of Stelex Coating Limited, to set up a project in Wada at District Thana in Maharashtra, to manufacture and market epoxy coated, rust free steel bars.

India - Domestic pencil ingot price trends (WEEK 28)

Pencil ingot

Price in INR per tonne
Inclusive of ED and VAT
Delivery – FOT

(Sourced from www.steelprices-india.com)

POSCO hopeful for India project despite delay

Korea Times reported that POSCO, which is in the process of building a 12 million tonne integrated steel plant in Orissa, is expected to get the green light from the Indian government to secure land for the plant and mining leases in August this year.

Mr Lee Dong-hee senior executive VP of POSCO at an investor’s relation meeting held in Yeoui-do last week said that “Some technical issues still remain regarding the land acquisition process. However, I bet a positive result will come out sometime next month.”

He said that “Some back up words by the Indian Prime Minister Manmohan Singh about the plan are in line with such expectations.”

He added that “The Indian government has already approved POSCO to use essential materials such as electricity, water and roads.”

He said that “We expect to get a provisional license and start mining within next year, however, we can build a plant by buying the state owned property.”

POSCO hopes to buy a combined 16.5 million square meters of land including a private 1.65 million square meters.

In its MoU with the Orissa government signed three years ago, POSCO said it would set up a steel plant over three phases of 4 million tons each, with the first phase being completed by 2010 and steel production starting in 2011. Due to difficulties in acquiring land for mining and construction of the plant, it is highly likely POSCO will delay the production schedule to mid 2012 from the earlier projected 2010.

Indian Steelmakers Directory 2008

The fast developing Indian steel industries are continuing beyond what most believed was possible. As one of the world's fastest growing economies, India has become the most happening place among world steel market over last few years and thus is in the radar of not only Indian but most of global players associated with steel industry. But due to fragmented nature of industry, a comprehensive list of smaller steel makers is not readily available.

"Indian Steelmakers Directory 2008' is one the top sources of information available on steel making companies in India! 'Indian Steelmakers Directory' is one of the most comprehensive and accurate directory of Indian steel companies that have ever been published. This powerful directory is your connection to the entire Indian steel industries sector.

Published in February 2008, “Indian Steelmakers Directory 2008” has been comprehensively researched and prepared, to bring you a fully up to date guide to India's rapidly growing steel makers. This Directory will be extremely useful to businesses that deal specifically with companies in the iron and steel industry, ferroalloys, consumable suppliers, raw material sellers, equipment makers and others.

Whether you are a product manager, in charge of marketing, raw material seller, in equipment business or simply interested to remain in touch with the latest developments in the Indian steel industries, this directory will save you time and effort in finding the information you need.

Why spend hundreds of hours searching for new contacts? Invest in a copy TODAY!

This directory covers name and details of 720 of Indian steelmakers in Alphabetical as well as location wise order.

Look at the information you'll get in the 'Indian Steelmakers Directory'

• Company name -723 entries
• Address-723 entries
• Phone number-723 entries
• Fax number -590 entries
• Email -446 entries

Report Summary:
1. Published: Feb 2008
2. Format PDF File (Delivery by Email on receipt of payment)
3. Total no of pages – 396

Price: USD 1250 or equivalent in INR
(Additional Charges would be levied for delivery of file on a CD or in printed form)

You can order your copy to reports@steelguru.com

ArcelorMittal to start Indian plants operations by 2012

PTI reported that ArcelorMittal's India plants are making good progress and are scheduled to start operations by 2012.

Mr Aditya Mittal CFO of ArcelorMittal in an interview to CNBC-TV18 said that "We are making good progress. We should be breaking ground in the early next year. We should be completing our first phase after we break ground within two years."

He added that "We should be selling steel, produced in India, by 2012."

ArcelorMittal has planned two Greenfield steel projects of 12 million tonne capacity each in Orissa and Jharkhand.

MMTC ties up with CRGO makers for regular imports

It is reported that MMTC Limited has tied up with global players in the area of CRGO for imports on long term basis to meet the booming demand of CRGO from transformer industry in India,

MMTC in a recent release said that” Buyers and manufacturers of transformers, willing to source prime quality CRGO electrical steel coils through MMTC, on long term basis, may contact them with their requirements indicating grade or specification of material required along with quantities and delivery schedule by July 25th 2008.”

The release added that terms and conditions can be discussed.

Directory of Electrical Steel Users in India

'Directory of Electrical Steel Users in India' is one of the top sources of information available on electrical steel users in India. It is one of the most comprehensive and accurate directory of electrical steel users in India.

Published in May 2008, 'Directory of Electrical Steel Users in India' has been comprehensively researched and prepared, to bring you a fully up to date guide to Indian users of electrical steel. This report will be extremely useful to businesses that deal specifically with companies in the electrical steel segment.

This report will enable you to profile electrical steel users in India, build new business prospects, generate new customers, discover who your competitors are and make vital contacts. You would save the time, money and effort of doing your own research. This directory has been especially compiled to assist with market research, strategic planning, as well as contacting prospective clients or suppliers.

Why spend hundreds of hours searching for new contacts? Invest in a copy TODAY!

This report covers name and product details of 340 of Indian electrical users in Alphabetical order.

Look at the information you'll get in the 'Directory of Electrical Steel Users in India'

• Company name -340 entries
• Address-340 entries
• Phone number-338 entries
• Fax number -317 entries
• Email -300 entries

Report Summary:
1. Published: May 2008
2. Format PDF File (Delivery by Email on receipt of payment)
3. Total no of pages – 190

Price: USD 625 or equivalent in INR
(Additional Charges would be levied for delivery of file on a CD or in printed form)

You can order your copy to reports@steelguru.com

India - Domestic HRC price trends (WEEK 28)

HRC
Tube
2.5x1250

Price in INR per tonne
Inclusive of ED and VAT
Delivery – FOT

(Sourced from www.steelprices-india.com)

Know domestic steel prices on daily basis

A steel user, however big or small, is always concerned about steel buying as it is normally a big ticket item, but there is no bench mark available to steel buyers to compare their transaction prices, which in a big way decided their bottom line. Lastly, steel has been very volatile in last 6 months and has effected many users in a very severe way making it all the more important to track the prices and trends.

www.steelprices-india.com is a new portal that provides domestic pricing information for benchmark steel products in each category at select location in China on a regular basis 5 days a week. In addition, FOB levels for commonly exported steel products from two of the major exporting nation Ukraine & Russia and China are also available on daily basis to give a sense of alternates.

This would assist persons, including steel makers, traders, users and others, who are connected with industry in some way to asses the steel pricing trends and utilize in their day to day working to take considered decisions.

Benchmark products at select locations cover the entire basket of garden variety of steel products including input material for steel making and processing.

All these features are accessible only to registered user who is provided with a login id and password after payment is received. To know more about the service, please logon to the web site and click on “Features”, “Subscription” and if you like the service on “Registration”.

www.steelprices-india.com is developed and run by none other that www.steelguru.com, which has become the largest English based steel portal in the world, with more than 1 million page hits per month in just 3 years of operations.

Directory of Autoparts Makers in India

Published in May 2008, 'Directory of Autoparts Makers in India' has been comprehensively researched and prepared, to bring you a fully up to date guide to Indian auto part makers. This report will be extremely useful to businesses that deal specifically with companies in auto part makers segment.

Whether you are a product manager, in charge of marketing, raw material seller, in equipment business or simply interested to remain in touch with the latest developments in the Indian auto part makers, this directory will save you time and effort in finding the information you need.

This report will enable you to profile auto part makers in India, build new business prospects, generate new customers, discover who your competitors are and make vital contacts. You would save the time, money and effort of doing your own research. This directory has been especially compiled to assist with market research, strategic planning, as well as contacting prospective clients or suppliers.

Why spend hundreds of hours searching for new contacts? Invest in a copy TODAY!

This report covers name and product details of 431 of Indian auto part makers in alphabetical as well as location wise order.

Look at the information you'll get in the 'Directory of Autoparts Makers in India'

• Company name -431 entries
• Address-431 entries
• Phone number-431 entries
• Fax number -418 entries
• Email -403 entries

Report Summary:
1. Published: May 2008
2. Format PDF File (Delivery by Email on receipt of payment)
3. Total no of pages – 241

Price: USD 625 or equivalent in INR
(Additional Charges would be levied for delivery of file on a CD or in printed form)

You can order your copy to reports@steelguru.com

India - Domestic steel scrap price trends (WEEK 28)

Melting scrap
80:20
HMS

Price in INR per tonne
Inclusive of ED and VAT
Delivery – FOT

(Sourced from www.steelprices-india.com)

Sterlite gets LoI for 1,980MW Talwandi Sabo project in Punjab

Project Monitor reported that Punjab State Electricity Board has handed over the letter of intent to Sterlite Energy Ltd for the 1,980 MW Talwandi Sabo project.

The 3x660 MW coal fired project is coming up on BOO basis on the lines of the ultra mega power project series. The special purpose vehicle, Talwandi Sabo Power Ltd, currently a wholly owned subsidiary of PSEB, will be transferred to Sterlite Energy Ltd shortly.

Sterlite clinched the project quoting a levelised tariff of INR 2.84 per kwh, getting the better of other contenders like Reliance Power INR 2.88, Lanco Infratech INR 2.995 and Indiabulls Power Services INR 3.15.

Sterlite Energy, a subsidiary of Sterlite Industries Ltd and part of the Vedanta Resources Group, represents the group's commercial energy division. Currently, the group manages captive power plants aggregating over 3,000 MW through companies like Bharat Aluminum Company Ltd and Hindustan Zinc Ltd.

Zinc futures surge at MCX last week

It is reported that Zinc prices in futures market saw upward trend last week at MCX.

Zinc July contract was trading up 1.62%, at INR 78.45 a kg. It opened at INR 77.35 a kg as compared to its previous closing of INR 77.20 a kg.

Zinc August contract was trading up 1.21% at INR 79.50 a kg against its previous closing of INR 78.55 a kg, while it opened at INR 79.10 a kg.

Zinc September contract was trading up 2.09% at INR 82.90 a kg after opening at INR 82.40 a kg, against its previous closing of INR 81.20 a kg.

Athena Energy appoints Energy Infratech for Bhavanapadu power plant

It is reported that Delhi based Energy Infratech has been appointed as a consultant for Athena Energy Ventures 2,640 MW imported coal based power unit at Bhavanapadu in Srikakulam district of Andhra Pradesh.

According to the report, Athena Energy will implement the project under its subsidiary East Coast Energy Private Limited. The company has recently initiated the tendering process for the EPC work for the project. It has also applied for various land and environment clearances and expects them to be in place by September 2008.

As per the report, Energy Infratech has roped in private equity investor Zeus Infra Management for tying up the finances and the project is likely to be funded through a debt equity ratio of 80:20.

The report added that Phase I of the project which is estimated to cost around INR.5,300 crore, will be completed by March 31st 2012.

KSEB may put thermal surcharge to meet crisis

BL reported that a full board meeting of the Kerala State Electricity Board has proposed to the State Electricity Regulatory Commission and the Government a slew of measures, including a thermal surcharge, to meet with a crisis situation brought on by deficient rainfall.

According to the report, the southwest monsoon has not strengthened over the State even after five weeks of onset. This has brought down inflows into the hydel reservoirs to a trickle, entailing a cyclical half an hour load shedding schedule over the past few days. But this has not been able to make any material change to the power availability scenario.

According to the proposals made by KSEB, the High Tension and Extra High Tension consumers will be eligible to get 75 % of their requirement at the existing tariff. The rest will be made available at the same tariff that the KSEB manages to source it from the market.

As per the report, the board estimated that this would translate into bringing an additional burden of INR 2,330 crore, half of which would be borne by itself. The rest is proposed to be passed on to consumers as a temporary thermal surcharge, a step that requires concurrence of both the SERC and the Government.

Adding to the crisis is the reduced availability of power from the Central pool. The State’s share was 8,117 million units in 2006 to 2007. This had come down to 7,232 million units in the following year.

BHEL and NTPC JV to firm up business plan

BL reported that the JV formed by state owned equipment firm Bharat Heavy Electricals Limited and power major NTPC Limited is expected to firm up its business plan shortly.

According to the report, Mr Jairam Ramesh Minister of State for Power said that the business plan of NTPC BHEL Power Projects will be finalized by July 22nd.

As per the report, a six member search committee, headed by Mr SN Dash the Ministry of Heavy Industries Secretary, has been formed to appoint a CMD and two full time directors. Their names are expected to be announced by July 31st. The report added that two part time directors are already in place. The JV firm plans to invest around INR 5,630 crore over the next five years.

As per report, NTPC and BHEL formed the venture to carry out engineering procurement construction contracts for power plants and other infrastructure projects.

The report further added that the two companies had entered into the JV agreement in December last and a supplementary agreement was signed in January.

India - Ship plate cuttings prices at Alang (WEEK 28)

Alang
Plate cuttings
Rolling
1”

Price in INR per tonne
Inclusive of ED and VAT
Delivery – FOT

(Sourced from www.steelprices-india.com)

India - Domestic wire rod price trends (WEEK 28)

WRC
SWR14
5.5/6

Price in INR per tonne
Inclusive of ED and VAT
Delivery – FOT

(Sourced from www.steelprices-india.com)

India - Domestic light sections price trends (WEEK 28)

ANGL
GR A
65x6

Price in INR per tonne
Inclusive of ED and VAT
Delivery – FOT

CHNL
GR A
75/100

Price in INR per tonne
Inclusive of ED and VAT
Delivery – FOT

(Sourced from www.steelprices-india.com)

India - Domestic medium beam price trends (WEEK 28)

JSTI
GR A
250x125

Price in INR per tonne
Inclusive of ED and VAT
Delivery – FOT

(Sourced from www.steelprices-india.com)

India - Domestic CR price trends (WEEK 28)

CR
DSK
0.63x1000

Price in INR per tonne
Inclusive of ED and VAT
Delivery – FOT

(Sourced from www.steelprices-india.com)

India - Domestic GP price trends (WEEK 28)

GP / HDG
100Gms
0.4

Price in INR per tonne
Inclusive of ED and VAT
Delivery – FOT

(Sourced from www.steelprices-india.com)

India - Domestic patra price trends (WEEK 28)

Patra / Narrow strip

Price in INR per tonne
Inclusive of ED and VAT
Delivery – FOT

(Sourced from www.steelprices-india.com)

POSCO's Q2 earnings surge 34 pct on higher steel prices

World's 4th largest steelmaker POSCO announced that its second quarter earnings climbed to a record high on cost saving efforts, solid demand and higher steel prices. POSCO attributed its record quarterly earnings to increased export prices and higher steel prices.

Its net profit in the April to June 2008 period reached KRW 1.49 trillion (USD 1.49 billion) up by 34.2% YoY as compared with KRW 1.11 trillion a year earlier. Its sales increased by 28.3% YoY to KRW 7.46 trillion and operating income gained 51% YoY to KRW 1.88 trillion.

POSCO said its steel output rose 7.8% YoY to 8.42 million tonnes in the second quarter and its sales of steel products reached 8.01 million tonnes up by 6.2% YoY. Export of steel products increased by 35.3% YoY to KWR 2.27 trillion.

Its accumulated profits in the first six months of the year amounted to KRW 2.52 trillion up by 20.4% YoY. First half sales increased by 17.4% YoY to KRW 13.5 trillion and operating income rose by 51% YoY to KRW 3.16 trillion.

Capesize freight market seen tight for rest of 2008

Shipbrokers Simpson, Spence and Young said that record Chinese steel demand and booming commodity markets should ensure the key Capesize dry cargo freight market remains tight for the remainder of this year.

Mr Peter Norfolk director of Simpson, Spence and Young at a media briefing said that “Capesize freight rates soared to record highs earlier this year, buoyed by surging demand and port congestion which slowed the return of available ships to the market. Congestion in Chinese iron ore ports and coal ports such as Newcastle in Australia has eased in the last couple of months and Capesize freight rates have fallen sharply from the record peaks.”

Mr Norfolk said that "The latest reversal appears to result from inventory and logistical factors rather than a decisive change in the supply and demand fundamentals which continue to show a tight tonnage balance for the remainder of 2008.”

He said that Capesize has been the most dynamic sector of the dry cargo shipping market this year, driven partly by growing Chinese demand for iron ore imports for its booming steel industry.

Mr Norfolk however warned that a possible drawdown in iron ore stocks in China could weigh on rates along with any slowdown in industrial activity in the Beijing area during the Olympics driven by a desire to improve air quality. He also noted that the pace of deliveries of new vessels and tanker conversions would influence available supply.

NSC offers half year contracts for rail exports to US

It is reported that Nippon Steel Corp has offered half year supply contracts in its rail exports under negotiation with major railroad corporations in the USA for shipments in and after October 2008, offers that break with Nippon Steel's long standing tradition of concluding annual supply contracts with the US railroads.

Nippon Steel assumes that the initial half year contract will cover October 2008 to March 2009, with a second one for April to September 2009.

Last year, Nippon Steel settled its contract renewal negotiations with the US railroads in September to October, during which time it was difficult to forecast an advance in raw materials prices for fiscal 2008. As a result, no passalong applies to Nippon Steel’s negotiated prices of rail exports to the US railroads.

In the past, Nippon Steel aimed to win massive orders in its annual rail export negotiations with the US railroads. But NSC is attaching importance to supplies of high grade rails in its half year contracts on offer this time.

Rail exports out of Japan to the USA totaled 161,416 tonnes in calendar 2007. In the case of Nippon Steel, though, the company's contract volumes of rail exports to the USA this time are forecast to fall considerably from the level of last year. Nippon Steel's new marketing policy for rail exports to the USA has two points. One is to seek a price level on C&F terms that will double what was settled last year. The other is to give priority to sales of high grade heat treated rails while rejecting those of ordinary carbon rails.

(Tex Reports)

South Africa may drop AD duties on steel pipe

Bloomberg reported that South Africa may scrap antidumping duties on more than 20 products after the country's Supreme Court of Appeal ruled that the government had miscalculated their expiry date.

Mr Siyabulela Tsengiwe chief commissioner of the International Trade Administration Commission said that the government will drop duties against certain A4 paper imports. In light of the ruling, the state agency know as ITAC also recommended scrapping five other duties, including those on welded galvanized steel pipe from India and aluminum hollowware.

The court found ITAC used the wrong start date for the five year duration of the duties and as a result missed the deadline to review them. A final decision has yet to be made.

EUROFER reacts to ORGALIME statement

EUROFER vide a release on weekend expressed surprise and disappointment on the misinformation being peddled by the European Engineering Industries Association ORGALIME and its members. EUROFER said that “The unfounded accusation, that the steel industry is unjustly manipulating price levels in Europe, is designed to completely mislead.”

EUROFER release said that these are the facts, based on publicly available information which is verifiable.
1. Steel prices are rising worldwide not just in Europe.
2. This is due to massive cost increases as raw material prices rise. Raw materials now represent 75% of steel producers’ total costs, up from just 40% in the year 2000.
A) Iron ore contract prices in 2008 rose by 65%.Since 2004 iron ore prices have increased by more than 200%. Spot prices are up 300% percent.
B) Coking coal prices in 2008 rose by 300%.
C) Metallurgical coke prices in 2008 are up by 500%
D) Scrap prices are up 87% since December 2007
E) Transport prices have massively increased
F) Energy prices are at unprecedented levels.

It said that “Recent steel price increases are a global phenomenon caused by continuing strong steel demand growth in emerging countries putting pressure on the supply of raw materials resulting in rapid price increases. The explosion of the cost side of steelmaking is forcing in turn steel producers worldwide to raise prices to pass on these cost increases. Whatever steel users or traders might claim in reaction to surging steel prices, the EU is not isolated from the rest of the world.”

EUROFER highlighted that imported, fairly traded, steel can flow freely to Europe and rightly so. It said that “There are no trade measures against any main-stream steel product in Europe, unlike in nearly any other part of the world. However, we live in a rules based trading system and when steel is dumped or subsidized we reserve the right to take action to protect our competitive steel industry in Europe and our workforce’s jobs.”

EUROFER filed three anti dumping cases against China last year. The release said that “These concerns only a small proportion of Chinese exports to Europe and there are no measures yet in place. China therefore is free to continue exporting to Europe. Many other trading partners have increased exports to Europe. China has chosen not to do so until now, for tactical reasons and because domestic costs and prices in China have risen making exports less attractive. Even if EU anti-dumping measures were imposed, the impact on ORGALIME members would be negligible. For example, a 15% duty on hot-dipped metallic coated steel products would increase the price of a typical domestic appliance by around 0.3% only (0.02% taking account of the current Chinese market share in the EU.”

Mr Gordon Moffat Director General of EUROFER said that he is disappointed that ORGALIME did not study steel industry figures adequately or consulted the EUROFER website before publishing press releases with false information: he said that “European steel industry provides not 250.000 but 370.000 jobs and is not represented with manufacturing plants in just ‘a few European countries’ but in 23 of 27 EU member states.”

China influencing global trends for steel prices

A steel user, however big or small, is always concerned about steel buying as it is normally a big ticket item, but there is no bench mark available to steel buyers to compare their transaction prices, which in a big way decided their bottom line. Lastly, steel has been very volatile in last 6 months and has effected many users in a very severe way making it all the more important to track the prices and trends.

www.steelprices-china.com is a new portal that provides domestic pricing information for benchmark steel products in each category at select location in China on a regular basis 5 days a week. In addition, FOB levels for commonly exported steel products from two of the major exporting nation Ukraine & Russia and China are also available on daily basis to give a sense of alternates.

This would assist persons, including steel makers, traders, users and others, who are connected with industry in some way to asses the steel pricing trends and utilize in their day to day working to take considered decisions.

Benchmark products at select locations cover the entire basket of garden variety of steel products including input material for steel making and processing.

All these features are accessible only to registered user who is provided with a login id and password after payment is received. To know more about the service, please logon to the web site and click on “Features”, “Subscription” and if you like the service on “Registration”.

www.steelprices-china.com is developed and run by none other that www.steelguru.com, which has become the largest English based steel portal in the world, with more than 1 million page hits per month in just 3 years of operations.

Global metal majors in Fortune Global 500 list

The table below shows the global metals players included on the Fortune Global 500 list for 2008.

Revenue in USD million in 2007
Profit in USD million in 2007

Czech ministry and ArcelorMittal reach settlement

Bloomberg reported that Czech Finance Ministry and ArcelorMittal agreed to settle a dispute over the 2005 sale of a steel mill.

As per report the agreement, which was signed by Mr Miroslav Kalousek finance minister and ArcelorMittal binds the company to drop its CZK 26 billion (USD 1.7 billion) claim against the Czech Republic.

In return, the Czech administration agreed to sell 1.36 million shares in ArcelorMittal's Ostrava unit to the parent company for 6.8 billion koruna.

The ministry said that Mr Kalousek is ready to submit the agreement to the government for approval.

The dispute was over the government's sale of a Czech steel mill to Evraz Group SA, which competes with ArcelorMittal. Luxembourg based ArcelorMittal claimed it was due damages because it was excluded from the competition.

ELG Haniel acquires Utica Alloys

Germany based ELG Haniel GmbH has acquired Utica Alloys based at Utica in New York.

Utica Alloys is a processor of a range of recycled scrap, primarily super alloys. The company was established in 1965. The company has facilities in North America, Europe and China. Mr Joseph Jiampietro will remains as Managing Director and Utica Alloys will continue to operate under the direction of its founder.

Mr Jiampietro together with Mr Dimitrij Orlov ELG's head of this segment will take a seat in the board of Utica Alloys and the management teams of both Utica Alloys and ELG will continue to provide high quality service to customers while strengthening development and expansion of business worldwide.

ELG is involved in the trading and recycling of a range of metals for the stainless steel industry. The company operates 39 locations in North America, Europe, Asia and Australia.

With the acquisition, ELG unites its existing activities in the super alloys and titanium market segments with strengthening logistics and processing services to particularly aerospace, power generation and chemical industries worldwide.

ThyssenKrupp putting pressure for renegotiating contracts

It is reported that German steelmaker ThyssenKrupp is succeeding in passing higher raw material costs on to consumers.

Mr Ekkehard Schulz CEO ThyssenKrupp AG told Der Spiegel newspaper that customers, which did not do this, risked being put at the back of the queue for steel in 2009.

He said "Customers would have to reckon with a significantly higher price rise in 2009. And we can not guarantee that you would get your desired quantities in 2009, because there's a shortage of our high-quality steel," he said.

Mr Schulz also said that it will increase steel prices sharply next year for those customers who insist on their 2008 fixed price contracts not being renegotiated.

Mr Schulz said that ThyssenKrupp is prepared to offer its clients new contracts running from July 1 this year to end of June 2009.

Spot prices make up only 10% of ThyssenKrupp's steel pricing contract mix, while some 60% consists of annual or multi annual contracts, a higher share than at some of ThyssenKrupp's peers.

Steel makers are struggling with surging raw material costs, and ThyssenKrupp has a high share of long-term supply contracts at fixed prices in its contract mix for the steel products it supplies.

OneSteel announces USD 200 million private placement notes

Mr Geoff Plummer MD & CEO of OneSteel Limited said that OneSteel has successfully completed the issue of USD 200 million of private placement notes. The purchasers of these notes with maturities of 7, 10 and 12 years comprised a number of US insurance companies.

Mr Plummmer said that the funds will be used to refinance maturing debt and also assist to extend the duration of OneSteel’s debt portfolio.

He said that “This is the fourth issue of bonds in the US Private Market and the success of this issue demonstrates the ongoing confidence of investors in OneSteel.”

Japanese export deals for container grade HRC to China

TEX reported that Japanese integrated steelmakers have settled export deals of container grade HR coils for shipments to China in the July to September quarter.

The base price under contract compares with the settlement in the Japanese steelmakers' HR coil exports to South Korea's steel rerollers for July to September shipments. Also, the supply volume agreed in the Chinese deals this time is described as much less than a normal level.

At first, the Japanese steelmakers got no Chinese inquiries for imports of container grade HR coils from Japan. At the time, China's container demand was said to have plunged due to its decreased commodity exports in containers to the West. Later, though inquiries from China's major container manufacturer flowed in and the Japanese steelmakers entered negotiations on their exports of container grade HR coils.

In China, major steelmakers have shifted to increased production of hot dip galvanized sheets for reefing in construction of temporary homes for suffers in the Sichuan earthquake disaster. As a result, local container manufacturers face the prospects of delayed HR coil supplies from local steel mills.

The Japanese steelmakers found themselves in pricing difficulties in their negotiations because the Chinese container producer demanded a price level to meet domestic prices of HR coils from Baosteel Co Ltd. Baosteel's domestic price of HR coils translated into a level of USD 741 per tonne in the April to June quarter. Baosteel has raised the asking price by JPY 300 per tonne each for July and August shipments. As a result, the new Baosteel price is estimated at a level of USD 800 per tonne. By comparison, Japanese export prices of HR coils are settled at beyond USD 1,000 per tonne FOB for July to September shipments to Asian destinations. At the final stage, though, the Chinese customer conceded on price in favor of an agreement with the steelmakers.

(Sourced from TEX Report Ltd)

One killed at ThyssenKrupp Alabama steel plant site

It is reported that a man was killed Friday at the future site of the ThyssenKrupp steel plant in north Mobile County.

Mobile County Sheriff's Deputies said that 37 year old Mr James Hall of Montgomery, died after a heavy piece of equipment that he was operating ran over him. Authorities said that he was dead when they arrived at the scene.

Authority said that the accident happened while Mr Hall was working on an overpass at the multi-billion dollar steel mill that is under construction right now in Calvert.

Malaysian government called to abolish import duty on steel

Daily express reported that Malaysia Hardware, Machinery and Building Materials Dealers Association wants the government to abolish the import duty and approved permits scheme on steel items that are not manufactured in the country.

Mr Datuk Steven Siah president of Malaysia Hardware, Machinery and Building Materials Dealers Association said that they would forward a memorandum on this when they meet the International Trade and Industry Minister Mr Tan Sri Muhyiddin Yassin in next month's annual dialogue.

Mr Siah during the Seventh MHMBA Committee meeting at Hyatt Regency told reporters that "Every year we will submit our memorandum pertaining to issues faced by this industry.”

Mr Siah said that "Steel, which are not manufactured in Malaysia, like heavy steel plates, ship plates and boiler plates are items that the Government imposed the AP and import duty. We will continue to appeal to the Ministry to abolish the AP and import duty, to open up the market for our members to import and supply to downstream sectors like the Small and Medium Enterprises.”

Mr Siah said that the MHMBA also supported the decision by the Government to lift the ceiling price of steel bars and cement recently. He said that "We welcome this move, which causes the supply and demand to be balanced up. Hopefully, with this move, it will help accelerate the construction of projects, especially under the Ninth Malaysian Plan.”

POSCO forming consortium to bid for Daewoo Shipbuilding

Korea Times reported that POSCO is all set to bid for Daewoo Shipbuilding & Marine Engineering and is in the process of forming a consortium.

Mr Lee Dong-hee senior executive VP of POSCO at an investor’s relation meeting held in Yeoui-do last week said that POSCO would minimize the number of hopefuls in forming a consortium for the Daewoo Shipbuilding & Marine Engineering bid.

He said “We will bid for the world’s third-biggest shipyard by forming a consortium. However, cash is not a point. We want shipyards to join the consortium for synergy.’’

According to industry sources, POSCO asked SK and STX to jointly bid for Daewoo. SK and STX officials were reviewing requests by POSCO, positively.

Gas leak prompts evacuation at ArcelorMittal Burns Harbor

Chesterton Tribune reported that portions of the ArcelorMittal facility at Burns Harbor were evacuated on Thursday after a coke oven gas pipe ruptured.

Mr Brent Valpatic of the CFD told the Chesterton Tribune that firefighters were dispatched to the mill at 10:19 to go on standby at the ArcelorMittal fire station after a six inch hole in the pipe began releasing coke oven gas into the atmosphere.

Mr Valpatic said that coke oven gas, a byproduct from the coking process used as energy source at the mill for other applications, is an especially potent source of carbon monoxide and a strong southerly wind prompted the evacuation of the basic oxygen furnace facility, the castor facility and some nearby offices.

Burns Harbor Fire Chief Mr Bill Arney said that the BHVFD also responded and was similarly placed on standby as the atmosphere was being monitored for concentrations of CO.

Horsehead targets major share of North American market

Platts reported that US zinc recycling giant Horsehead Corp is on track to capture three quarters of the North American market for the recyclable zinc dust generated by steelmakers,

Mr Jim Hensler CEO of Horsehead told Platts that “Despite the arrival of a competitor armed with new recycling technology and designs of its own on a large chunk of the global zinc recycling market. We have been growing our business quite significantly over the last few years. We are the largest recycler in North America. That business is the recycling of electric arc furnace dust, the waste byproduct produced by steel mills when steel is galvanized.”

Mr Hensler said that Horsehead will process about 570,000 tonne of the dust into zinc products this year and have the capacity to recycle nearly 750,000 tonne of the material by 2009. The firm's actual EAFD recycling should top 700,000 tonne by 2010. He said that "In a market that's roughly a million tons in the US and Canada, we're a fairly significant recycler in the EAFD market in North America.”

Mr Hensler said that Horsehead's capacity ramp up consists of the addition of a waelz kiln the technological cornerstone of Horsehead's technology to the zinc firm's Rockwood, Tennessee plant, upping the plant's recycling capacity by about 90,000 tonne. The company is also completing a facility in South Carolina, slated to be fully operational by 2009, where two waelz kilns will increase capacity by another 180,000 tonnes. Horsehead has three other recycling plants in Pennsylvania, Illinois and Texas.

Mr Hensler said that about 60% of Horsehead's end products zinc metal and zinc oxide are made from recycled EAFD, while the other 40% are the result of recycling other waste byproducts, like skimmings from hot dip galvanizers. He said Horsehead's recycling process also produces an "iron-rich residue" that the firm sells to companies making cement and asphalt.

TUI releases statement on Hapag Lloyd sale

The executive Board of TUI AG informed the Supervisory Board about the status of the process to separate from container shipping. Furthermore the Board also dealt with the demands raised by one of the shareholder groups. In this regard, the Supervisory Board notes: The separation process is continued according to plan.

The Supervisory Board expects an initial evaluation of non binding bids by mid August. A final evaluation of the different separation options will only be possible once binding bids will have been submitted by this autumn. Only then will the Board be able to take a balanced decision with due care and in the interest of all shareholders. However, an important consideration already to be mentioned at this point is that a spin-off would require a prior repurchase of TUI AG bonds in excess of two billion Euros. Due to the resulting balance sheet and funding structures, this would not only weaken the credit standing of the two companies emerging from the transaction in a lasting manner. The spin-off would also necessitate a refinancing of the two groups that would be practically impossible to implement without an injection of new capital (a share issue). From today’s perspective, a spin-off would destroy value and would thus not be in the interest of shareholders. Moreover, a spin off would require a 75% majority of votes at a general meeting.

In the light of the ongoing decision making process, the demand currently raised by a shareholder group for a decision by the Executive Board to apply for a shareholder’s resolution to decide on the separation process for the container shipping operations is premature. It goes without saying that TUI AG will ask its shareholders for their consent in due time should this be required by statutory law.

In addition, the Supervisory Board again reviewed the change of control clause for Executive Board members and established that this clause is not unusual and legally not objectionable. It also reviewed the business relationships between TUI AG and the tourism-oriented shareholder groups. In this context, the Supervisory Board noted that both the general business relations and the purchase options are subject to customary market conditions. In the case of a purchase option being exercised, the value has to be determined by an independent auditor. The purchase options do not grant the right to acquire shares below market value.

End of auto bundle auction highlights need for a new indicator

Purchasing.com reported that Chrysler has followed Ford Motor and General Motors in discontinuing monthly scrap auctions, making it impossible to track this grade of prime steel scrap. Many in the steel industry have relied on the auto industry's factory bundle auctions as a pricing indicator.

Chrysler was the last of the Detroit Three to abandon the practice of auctioning factory bundles each month, apparently since the automaker was disappointed bids hadn't been as high as prices for such comparable dealer scrap grades as No 1 bundles, No 1 busheling and shredded auto scrap.

General Motors sells its auto bundles back to the steel mills on a formula price. Ford is doing the same with much of its bundle output and swapping the rest back to mills for a discount on new steel coils. Chrysler reportedly is selling its bundles through monthly price adjustments to Omnisource, the scrap subsidiary of the Steel Dynamics mill.

Various market analysts have been seeking new marketplace information sources without much luck so far.

Mr Charles Bradford at Bradford Research said that “The issue is important because scrap pricing is the usual leading indicator for steel prices.” Mr Bradford said that “The data collected by Management Science Associates may be a good indicator of the market, but the data does not come out until the 20th of the month. Thus, it will become important to highlight scrap pricing coverage of No 1 heavy melt steel scrap bundles and shredded steel scrap.”

Aluminum hinge alternatives to steel

With the price of steel rising at unprecedented rates, aluminum can be an attractive alternative in many design applications. The cost of all metals has been increasing, but mild steel prices are moving up at a substantially higher rate than aluminum and stainless steel.

Aluminum is typically used as a less expensive alternative to stainless steel in applications that call for corrosion resistance and or lighter weight. But in today's marketplace, with plain steel and plating costs going up so fast, aluminum can be competitive to steel too, especially when corrosion protection is required.

Recognizing the value of using aluminum in this economic environment, HA Guden Co Inc has introduced a new, lower cost line of aluminum continuous hinges. Guden's new AL Series aluminum hinges are made of 3003 Series alloy and are stocked in various widths in .040, .050 and .060 inch leaf thicknesses with .50 inch knuckles. This commercial strength alloy is considerably less expensive than Guden's type 5052 hinge and can be used for most standard applications. In addition, due to its softer properties, it is a more desirable alloy for hinges being machined or put through secondary processes.

For applications requiring more strength and durability, Guden also offers 5052 alloy AA Series aluminum hinges. In military applications, which are in high demand and not always easy to find, Guden stocks a tremendous amount of Mil Spec continuous aluminum hinges, including the MS20001, MS20257 and A-A-55500 series.

MEA - Domestic rebar price trends (WEEK 28)

Rebar
8mm-25mm
BS 4449 Grade 460 B

Price in per tonne
USD rates derived on current exchange rates

(Sourced from www.steelprices-middleeast.com)

SAFCO and Hadeed to set up a flat product plant at Jubail

SABIC affiliates, SAFCO and Hadeed have signed an agreement to construct a 50:50 owned facility in Jubail Industrial City for the production of flat steel products with an annual capacity of 1.7 million tonnes.

In addition to this project, Hadeed will construct a rebar and wire rods production facility to add 500,000 tonnes annually.

The facility will utilize the quantity of gas allocated to SAFCO plant in Dammam, which will be closed down during the next two months to enforce the Royal Decree No 258. The Ministry of Petroleum and Mineral Resources has allocated additional quantities of gas for this project.

During the construction phase of the flat products facility, SAFCO has reached agreement with SABIC affiliate, the Saudi Methanol Company to make use of the above referenced gas quantity to produce methanol for SAFCO for an interim period until the completion of the flat steel products project, scheduled for a period estimated at four years.

Mohamed Al Mady vice chairman & CEO of SABIC affirmed that such agreements will positively impact the results of the companies and help SAFCO maintain the level of profitability.

He said that “They will contribute to promoting steel industry in the Kingdom, where the new capacities amounting to 2.2 million tonnes annually represent an annual increase of 28% of the Kingdom’s steel production. This will meet some of the products which are imported and currently required for the construction and downstream industries now and in future.”

MEA - Domestic plate price trends (WEEK 28)

Plates 2x6
6-20x2x6
A36/SS400

Price in per tonne
USD rates derived on current exchange rates

Plates 3x12
8-40x3x12
S275 JR

Price in per tonne
USD rates derived on current exchange rates

(Sourced from www.steelprices-middleeast.com)

Stroytransgaz to extend Dolphin gas pipeline from Abu Dhabi to Fujairah

It is reported that Russia's Stroytransgaz is understood to be the front runner for the USD 350 to USD 400 million contract to extend the Dolphin Energy gas pipeline from Abu Dhabi to Fujairah on the federation's east coast.

The Moscow based contractor is thought to have made the lowest offer for the design and build contract when bids were submitted in February. The next closest offers were submitted by Athens based Consolidated Contractors International Company and Italy's Snamprogetti and Saipem. Three of the other nine companies that had originally been pre qualified for the project also submitted bids.

Stroytransgaz also had the lowest bid following submission of revised commercial bids when additional options to install more heaters were included in the scope of works.

An award on the contract is expected to be made by Dolphin Energy in the near future. If Stroytransgaz wins the contract, it will be its first major deal in the UAE.

The Dolphin gas pipeline project involves the engineering and installation of a 240 kilometer long, 48 inch diameter gas pipeline between Taweelah in Abu Dhabi and Qidfa in Fujairah.

Stroytransgaz is not the only firm to recently enter the UAE pipeline sector. Last year, China Petroleum Engineering Construction Corporation won an engineering, procurement and construction contract from Abu Dhabi-based International Petroleum Investment Company to build the Habshan-Fujairah trans-emirates oil pipeline.

MEA - Domestic HRS price trends (WEEK 28)

Sheets HRC
4-20xuptox1500XL
SS400/A36

Price in per tonne
USD rates derived on current exchange rates

(Sourced from www.steelprices-middleeast.com)

Iranian HDG demand surpasses 1 million tonnes

It is reported that the demand for hot dip galvanized steel coil and sheet in Iran has surpassed 1 million tonnes per year.

The report added that “Most of production came from domestic mills amounting to 600,000 tonnes to 700,000 tonnes with remaining 300,000 tonnes was imported from India and China.”

(Sourced from YIEH.com)

MEA - Domestic HDG price trends (WEEK 28)

HDG
0.7x1000
COILS

Price in per tonne
USD rates derived on current exchange rates

(Sourced from www.steelprices-middleeast.com)

Pakistan to invest USD 65 billion in manufacturing sector

Khaleej Times reported that the Planning Commission at Pakistan's government announced last week that it is seeking USD 65 billion investments in the manufacturing sector to double its weakening exports.

According to officials, the investment would include
1. Textile and garments – USD 20 billion to USD 23 billion
2. Steel & engineering goods – USD 13 billion to USD 16 billion
3. Chemical & pharmaceuticals – USD 5 billion to USD 8 billion
4. Leather and leather products – USD 3 billion to USD 6 billion
5. Sports & surgical Instruments – USD 3 billion to USD 5 billion
6. Gems and jewelry – USD 2.5 billion to USD 4 billion
7. Marble and granite – USD 2 billion to USD 3 billion
8. Fish & fish products – USD 1 billion to USD 2.5 billion

The Planning Commission prepared the export plan in consultation with the stakeholders from both public and private sectors to enhance exports to 15% of GDP in next six to seven years,

The plan gives a detailed review of all major exports, highlighting constraints impeding exports and presents a strategic framework to achieve a quantum leap in exports from USD 16.4 billion in fiscal year 2006 to USD 40 billion to USD 45 billion by fiscal year 2013.

The plan sought to raise the skill base and competitiveness by establishing more technical and vocational training institutes. Capacity of the existing public sector training institutions will be enhanced. Institutional measures are also needed to strengthen industry and academia linkages.

Steel pricing trends in Middle East Asia

A steel user, however big or small, is always concerned about steel buying as it is normally a big ticket item, but there is no bench mark available to steel buyers to compare their transaction prices, which in a big way decided their bottom line. Lastly, steel has been very volatile in last 6 months and has effected many users in a very severe way making it all the more important to track the prices and trends.

www.steelprices-middleeast.com is a new portal that provides domestic pricing information for benchmark steel products in each category at select location in China on a regular basis 5 days a week. In addition, FOB levels for commonly exported steel products from two of the major exporting nation Ukraine & Russia and China are also available on daily basis to give a sense of alternates.

This would assist persons, including steel makers, traders, users and others, who are connected with industry in some way to asses the steel pricing trends and utilize in their day to day working to take considered decisions.

Benchmark products at select locations cover the entire basket of garden variety of steel products including input material for steel making and processing.

All these features are accessible only to registered user who is provided with a login id and password after payment is received. To know more about the service, please logon to the web site and click on “Features”, “Subscription” and if you like the service on “Registration”.

www.steelprices-middleeast.com is developed and run by none other that www.steelguru.com, which has become the largest English based steel portal in the world, with more than 1 million page hits per month in just 3 years of operations.

Qatar evaluating bids for New Doha Port

MEED reported that Qatar is evaluating bids for two key contracts on the multi billion dollar project to develop New Doha Port on the country's east coast. As per report, bids have been submitted in recent weeks to the government steering committee for the consultancy contract to oversee the final design stages of the project, and for the program management contract.

New Doha Port is intended to be able to handle 6 million TEUs by 2025. In addition to the container capacity, the site will have cargo and livestock berths, a military port and a large free zone in the hinterland. Road and rail links will join the port to Doha and to the nearby oil, gas and petrochemicals port at Mesaieed.

Qatari government had abandoned plans for an offshore site on reclaimed land and linked to the capital by an 8.5 kilometer long bridge. Instead, an onshore site 35 kilometer further along the coast was chosen, between Mesaieed and Al-Wakrah, which should provide more space to expand the port in the future.

The report cited an official as saying that “The first phase will see 2 million TEUs of space built by 2014.We will then add 2 million more by 2020, and will have 6 million TEUs by 2025. The new site gives us much more room to grow."

The offshore project was originally expected to cost USD 5.5 billion. Sources close to the scheme say the current plan will come in at a similar price or higher, given the rising cost of raw materials and worldwide scarcity of engineering resources.

MEA - Domestic HEA price trends (WEEK 28)

HEA
Medium
S275 JR

Price in per tonne
USD rates derived on current exchange rates

(Sourced from www.steelprices-middleeast.com)

MEA - Domestic light structural price trends (WEEK 28)

Structural Light
Light
Commercial

Price in per tonne
USD rates derived on current exchange rates

(Sourced from www.steelprices-middleeast.com)

MEA - Domestic CR price trends (WEEK 28)

CRS
0.7x1000
Commercial

Price in per tonne
USD rates derived on current exchange rates

(Sourced from www.steelprices-middleeast.com)

Monday Market Monitor - China (WEEK 28) - Down trend

Chinese domestic steel price continue to go down last week. The closing levels at Tianjin are given below with USD equivalent to give a sense of prevailing domestic prices in China on representative basis

Raw material and semis

Price in per tonne
Including VAT
Delivery FOT

Long products

Price in per tonne
Including VAT
Delivery FOT

Flat products

Price in per tonne
Including VAT
Delivery FOT

The downward correction in domestic prices is expected to continue this week.

Export offers remained largely unchanged except for HRC, which saw weakening and a small dip in offers and transactions.