| Price Index - India | | | | 13-Feb | 12-Feb | Change | | ILPPI | 6701 | 6699 | +2 | | IFPPI | 6542 | 6542 | 0 | | INDSPI | 6625 | 6624 | +1 | | What is it? | | Poll Results | | Chinese steel mills would reduce export levels to regain quantities? | | Yes | 55% | | No | 33% | | Can't Say | 12% | | View Current Poll | | Currency | | AUD | 1.5209 | | BRL | 2.2748 | | CAD | 1.2348 | | CNY | 6.8297 | | EUR | 0.7771 | | GBP | 0.6963 | | INR | 48.2550 | | JPY | 91.8133 | | RUB | 34.4770 | | USD | 1.0000 | | ZAR | 9.8887 | | View Current Currency | | Metal Rates Cash Seller & Settlement | | Zn | USD 1121 | | | Ni | USD 10130 | | | Sn | USD 11200 | | | Al | USD 1340 | | | Cu | USD 3350 | | | View Current Metal Rates | | Steel Futures | | NCDEX | 23900 (19-Dec) | INR | 0 |  | | DGCX | 463 (12-Feb) | USD | 0 | | | LME-M | 305 (12-Feb) | USD | -15 |  | | LME-F | 330 (12-Feb) | USD | +20 |  | | NCDEX :
NCDEX Mild Steel Ingot Future Closing Price DGCX :
Dubai Steel Rebar Futures Closing Prices LME-M :
LME Steel Billet Future Buyer Prices (Mediterranean) LME-F :
LME Steel Billet Future Buyer Prices
(Far East) | | | | Others
Mr Roongta calls for higher import duty on steel - 15 Feb 2009 According to Mr S K Roongta chairman of Steel Authority of India Limited, Indian government should increase the import duty on steel products to protect domestic industry against cheap dumping of the commodity from countries like China and Ukraine.
Mr Roongta on the sidelines of a CII conference told reporters that "Industry has been asking for an increase in the import duty. Now the demand becomes stronger in the face of threat of cheaper imports coming to the country.”
He said that at present the import duty on steel items, both long and flat products used in sectors like construction, automobile and consumer durables is 5%.
Endorsing the industry&aposs concern over dumping of steel products, the steel ministry last week recommended increasing the import duty up to 15% on flat products like hot rolled and cold-rolled coils and up to 10% duty on long-products like TMT bars.
(Sourced from zeenews.com)
SAIL BSP orders Hydrogen BAF from Cleveland RAD-CON - 15 Feb 2009 It is reported that Steel Authority of India Limited’s Bokaro Steel Plant has selected Cleveland RAD-CON to provide a turnkey hydrogen bell type batch annealing facility.
The facility will process 860,000 tonne per year of cold-rolled steel, primarily destined for the automotive market. The contract is part of Bokaro’s capacity expansion of 1.3 million tonne per year.
Under the agreement, RAD-CON will oversee the complete production and turnkey installation of the company’s H2SHC annealing system, which consists of 47 bases, 26 furnaces and 20 forced coolers with associated controls.
The project also includes a post-cooling facility with 49 bases for dehumidified air cooling. RAD-CON is the technical leader of the project, working in consortium with Modern India Construction Co. and MACO Corp. The project is currently in the engineering/design phases and will be commissioned later this year.
CAPEX cuts - TATA Steel to go slow on fresh acquisitions - 15 Feb 2009 IANS cited Mr B Muthuraman MD of TATA Steel as saying that they will not focus on any acquisition for the time being. Mr Muthuraman said that “We will go slow on acquisition plans. We are not looking at any new acquisition for the time being.”
As per report, TATA Steel is instead focusing on its expansion program at its Jamshedpur plant and the upcoming project in Orissa, He said that “We are going to complete the expansion program in Jamshedpur on time. Our Orissa project is also in full swing.”
TATA Steel is expanding capacity at the Jamshedpur plant in Jharkhand from 5 million tonnes per annum to 7 million tonnes in the first phase and increase it to 10 million tonnes in the second phase by December 2010.
Alongside, the company is setting up a greenfield 6 million tonne steel project at Kalinganagar in Orissa’s Jajpur district on an investment of INR154 billion.
(Sourced from Indo-Asian News Service)
Sumitomo in talks with BSL for partnership in WB steel plant - 15 Feb 2009 BS reported that Delhi based Bhushan Steel Limited has initiated discussions with the Japanese trading company Sumitomo Corporation for investing in Bhushan’s proposed steel plant in West Bengal.
The report cited Mr Neeraj Singal MD of Bhushan Steel as confirming the development by saying that the partnership had not been firmed up as yet, but discussions were on.
Mr Singal said that the investment in the project was originally estimated to be 8,800 crore, which also included a 0.5 million tonne cold rolled and galvanizing plant for automobile grade steel.
Mr Singal said that Sumitomo is a technical partner in BSL’s Orissa project. He explained that Sumitomo wanted to invest in the Orissa project but that was not possible and BSL is willing to partner with Sumitomo in the Bengal project.
As per report Bhushan had initially planned a 2 million tonne integrated steel plant with a captive power plant in Bengal, but if the deal with Sumitomo materialises then the size of the project would be tripled.
(Sourced from Business Standard)
Mr Buddhadeb to lay foundation of Shyam steel plant at Purulia - 15 Feb 2009 It is reported that Mr Buddhadeb Bhattacharjee CM of West Bengal, Mr Ram Vilas Paswan union steel minister and Mr Nirupam Sen commerce and industries minister of WB will lay the foundation stone of an integrated Greenfield steel plant of Shyam Steel Industries at Raghunathpur in Purulia around 11 AM on February 17th 2009.
Mr Basudeb Acharia CPM MP from Bankura said the event will be held at Nambathan area of Neturia. Later in the day, he will distribute patta to tribals in forest lands.
Shyam Steel plans to set up a 1.1 million tonne steel plant, a 100 MW captive power project and a 3 million tonne cement plant. For this, the company needs 1400 acres.
Work at the Raghunathpur Thermal Power Project of DVC with production capacity of 1200 MW has started. The cost of this project is INR 6000 crore.
West Bengal industrial Development Corporation will acquire land for this project.
(Sourced from Times of India)
Indian Railways wagon buying to prop steel demand in India - 15 Feb 2009 It is reported that Indian steel sector is poised to get a shot in the arm as Railways has increased the procurement target for wagons to nearly 15,000 units from the current annual average of 6,600.
It will also increase the procurement of diesel and electrical locomotives in 2009-10 and step up investments in gauge conversion and laying of new lines.
Railways has proposed to increase its investment outlay by more than three times from INR 70,000 crore during 2004-05 to 2008-09 to INR 230,000 crore in the Eleventh Five Year Plan.
These measures will lead to higher demand for steel in India.
A spokesperson of Ispat Industry said that this will create demand for the steel industry, which at present is reeling under surplus capacity.
A senior official SAIL said that the new announcements will create more demand, helping the industry a great deal.
Industry observers, however, feel that the announcement will help only if the Railways start works at the ground level soon. As steel price is low, Railways can procure wagon and rail at highly competitive price. The fast implementation of the budgetary measures will also help the steel sector fight present downturn.
(Sourced from Times of India)
UK mulling TATA bailout plea for Jaguar Land Rover - 15 Feb 2009 Economic Times reported that British government has admitted that it is in talks with the TATA Group for a rescue JLR How the bailout adds up Crystal gazing: Cars of the future some gyaan from car audio makers package to bail out the luxury car-making firm.
Lord Mandelson business secretary of UK said that "We are analysing very carefully what is going on in the sector and we will make good judgements in good time if it is appropriate for the government to take any action or if it is possible for us to do so.
He said that "We are looking at the sector as a whole. I have had discussions with the owners and management of Jaguar Land Rover in particular, because they argue that they are under particular strain."
The business secretary, however, warned the JLR owners that the government does not have an open cheque book" for ailing private companies. Lord Mandelson said that "They have owners who are well-resourced, who have the first responsibility for sustaining the companies that they own in existence and in production for the future."
He added that it is too early to judge whether state help would be needed at JLR, which employs around 15,000 in Britain.
It is understood that Lord Mandelson and the treasury are considering granting a substantial loan guarantee to JLR. The guarantee, which would allow the company to raise bridging finance from commercial banks, would be made available for around 18 months. The government is aware that any bailout using taxpayers' money would invite criticism from the opposition. However, its options are limited. Experts said that considering the growing impact of recession on the British automobile industry.
The company announced last month that it was laying off around 850 IT and engineering staff because of severe global car market conditions. Its sales have been affected and the company has even cut down on working shifts in its plants. It is seeking government help for its cash flow.
(Sourced from Economic times.com)
NTPC and NPCIL ink MoU for to JV for nuclear power - 15 Feb 2009 India's largest power producer National Thermal Power Corporation, and the Nuclear Power Corporation of India Ltd signed an MoU to set up a Joint Venture to carry out nuclear power production activity.
The MoU was signed in Mumbai by Dr SK Jain CMD of NPCIL and Mr RS Sharma CMD of NTPC in the presence of Mr Jairam Ramesh minister of state for commerce & power and Dr Anil Kakodkar chairman of Atomic Energy Commission & secretary of the Department of Atomic Energy.
As per the proposal, NPCIL will hold the majority 51% equity in the venture while NTPC will hold the remaining 49% equity. The JV will set up a 2000 MW nuclear power plant at a location to be finalized later.
After successful conclusion of international agreements with US, France and Russia for cooperation and development of India's civil nuclear program, the DAE and NPCIL carried out discussions over NTPC's proposal. It was decided to give a go ahead to the JV considering the successful track record of NTPC in implementing and operating large power projects.
This would be the first joint venture in nuclear power generation in the country.
NPCIL is currently the sole agency generating nuclear power in the country with a capacity of about 4,120 MW.
Mukand Limited's promoters pledge 26.6% stake - 15 Feb 2009 Mukand Ltd a manufacturer of speciality steel maker said 14 of its promoters have pledged 26.6% stake in the company with lenders.
Mukand in a disclosure to the Bombay Stock Exchange, said that 14 of its promoters including the company & aposs co Chairman & MD Rajesh V Shah have pledged 1.95 crore equity shares representing 26.6 % stake in the company.
According to disclosure, the company’s two promoters Mr Rajesh V Shah and Mr Suketu V Shah have pledged 4.76% and 4.85% stake respectively.
Further, 12 other promoters, including Jamnalal Sons Pvt, Mukand Engineers and Jeewan Ltd have pledged remaining 16.99% stake
Mukand said that besides, five other promoters have pledged 9.71% amounting 0.546 million cumulative redeemable preference shares with the lenders.
(Sourced from PTI)
Indian steel sector disappointed on no freight cut in Railway budget - 15 Feb 2009 TOI reported that with freight rates remaining untouched in the Interim Railway Budget, there have been no direct benefits to India Inc, especially for sectors like steel and iron ore.
The report quoted Mr Ankit Miglani director commercial of Uttam Galva Steels as saying that "Development of freight networks is conducive for long term business plans because logistics is an issue in the country, especially for the steel and iron ore sector.''
Mr Seshagiri Rao director finance of JSW Steel said that the industry however is disappointed with no rollback of the freight rate hike which was announced last year, especially since fuel costs have come down. He said that "Freight rates coal and coke were increased by 8.5% recently. We were hoping that there would be a rollback, given the current environment where industrial production is lower and volumes are also low. It's going to be a very challenging year.''
The Indian Railway moves 68% of coal, 64% of iron ore, 50% of cement and 40% of steel within the country. However, with the recent reduction in diesel prices, railways is expected to lose out to road traffic.
(Sourced from Times of India)
Railway freight loading target retained at 850 million tonnes - 15 Feb 2009 Cautious after witnessing slump in freight traffic of steel and iron ore during November to December, railway ministry retained the freight loading target at 850 million tonne for 2008-09 financial year while keeping the freight rates unchanged.
Mr Lalu Prasad Railway minister has increased the freight target to 910 million tonne for 2009-10.
In his Railway budget Mr Prasad said that "There was a steep reduction in iron ore for export and container traffic. The growth rate of steel traffic also reflected a decrease."
He however said that "Wagon production would go up to 15,000 vehicle units from 6,600, while new design of covered and open wagons would help increase loading capacity by over 22% and earnings by 9% to INR 59,059 crore.”
Industries earlier had demanded cut in freight rates citing thinning margins owing to economic slump.
Mr RK Sharma general secretary of Federation of Indian Mineral Industries, said that "We had asked to categorise iron ore under 120 as against 180 at present. The industry is also worried as the budget is silent on the discounts offered during the slump period."
Mr Suresh Neotia chairman of Gujarat Ambuja Cements said the industry was expecting under 5% cut in freight charges, but it is disappointing to note that the railway budget did not make provisions for the same.
(Sourced from The Asia Age)
Sahara signs MoU with Orissa for power plant - 15 Feb 2009 Sahara India Power Corporation Limited, the subsidiary of Sahara India Pariwar’s real estate company Sahara Prime City Limited signed Memorandum of Understanding with the Government of Orissa for setting up a 1320 MW (2 x 660) Coal Based Thermal Power Plant in Turla Tehsil of Balangir District of Orissa at an investment of about INR 5604 crore.
The MoU was signed by Mr Pradeep Jena commissioner Cum Secretary of Power on behalf of the Government of Orissa and Mr Ashok K Bhargava chief advisor and head of Sahara Power Projects.
Mr Ashok K Bhargava said that “We extend our sincere gratitude to the Government of Orissa for their kind support, cooperation extended to us at all levels of our efforts to initiate the power projects in the state. We are confident that our project will not only serve the Energy requirement of the state and the country but will also bring in all round integrated development in the region of Turla district.”
The project to be built on an area of 1,500 acres, Sahara Power’s Turla plant is planned to commission its first Unit of 660 MW by 42 - 48 while the second unit of 660 MW is expected to be commissioned within 6 to 8 months thereafter. The plant is planned to be set up through Joint Venture Participation with Power Companies from different parts of the world.
Sahara India Power Corporation Limited will develop fuel based or non conventional power plants using the latest and emerging technologies. Sahara Power will set up a 5 MW Grid Interactive Solar Photo Voltaic Power Plant in Dhenkanal District of Orissa at an estimated investment of about INR 125 Crore.
The Company has already received an in principle approval from the Government of Orissa through Orissa Renewable Energy Development Agency. Sahara Power has tied up with Solar Integrated Technologies Inc of USA, as its strategic partner for supply and installation of the required plant and equipment. In addition to this, Sahara Power is also planning to set up 25 MW of Wind Power projects in Orissa through a reputed Wind Energy Company which has already set up wind masts at 7 locations. The company plans to proceed with the project once it receives data, gathered by the masts in next 6 to 9 months.
Stimulus plans - US reaches accord on USD 789.5 billion package - 15 Feb 2009 It is reported that Congress and White House has reached accord on a USD 789.5 billion economic recovery package that would shower hundreds of billions of dollars in tax relief on individuals and businesses and spark an infrastructure building boom, from the nation's ports and waterways to its schools and military bases. The deal all but clinches passage of one of the largest economic rescue programs since Franklin Roosevelt launched the New Deal.
Defying two decades of mostly Republican led efforts to diminish federal authority and focus on lifting the economy through tax cuts, the legislation would expand unemployment insurance, tilt federal assistance to the poor, launch major efforts to streamline health care delivery and give Washington a larger hand in local education spending.
The plan may be only a down payment on the Obama administration's effort to turn around an economy that has shed 3.6 million jobs since December 2006. Both Mr Obama and Democratic leaders lowered their work creation expectation. They had originally said their goal was to create or save four million jobs.
The agreement came after last minute dickering over education and school construction funds that dramatized the intensity of negotiations. The House and Senate convened a conference committee to bless the legislation and clear the way for action in the House as early as Thursday. Both chambers are expected to pass the compromise shortly. Full details were not released as aides met late to draft formal language and said tinkering was still possible well into the night.
The package includes a provision requiring materials purchased with funds from the bill to be US made. That has spurred criticism from trading partners around the world. But the measure was softened from the original versions and now includes a requirement that the provision be implemented consistent with US international trade obligations, according to individuals familiar with the bill.
The final deal included a USD 5.3 billion tax break that allows corporations to speed up deductions for investments in plants and equipment, and other allowing small businesses to deduct business expenditures of up to USD 250,000 directly from their tax liabilities.
The stimulus accord is a major win for the high tech industry, which will receive billions of dollars in subsidies to expand broadband access to rural and other underserved areas and a huge infusion of funds to computerize health care records.
(Sourced from online.wsj.com)
Iron ore price negotiations - Credit Suisse sees better deal - 15 Feb 2009 Dow Jones cited a Credit Suisse Group report as saying that iron ore miners negotiating with Chinese steel mills to set a benchmark for the commodity may surprise the market with a better settlement than expected.
Mr Roger Downey, analyst at Credit Suisse for Brazil said that "It seems that sentiment regarding iron ore prices has moved in the direction of a more optimistic outcome rapidly in recent weeks. In an improved scenario, we estimate iron ore prices could be adjusted between 0% to minus 9% for Brazilian fines and minus 20% for Australian fines."
The Credit Suisse assessment of iron ore prices is the most optimistic to date. Chinese mills are understood to be demanding a 40% cut in ore prices on the back of the global economic slowdown.
(Sourced from Dow Jones Newswire)
Export tax changes possible for steel after dip in January - 15 Feb 2009 Shanghai Securities News reported that both China's steel imports and exports fell in the first month of this year, with exports hitting record low since March 2006, fanning concerns that related depts. may further adjust tax policy to support exports
According to data released by customs steel exports in January declined 53.8%YoY or 39.7%MoM to 1.91 million tonne.
Domestic leading steel mills have reported low orders in the first quarter. Baosteel, the top steelmaker in China, reported normal orders in the first trimester and planed to ship out 2.7 million tonnes of products this year, leveling with the tonnages recorded last year. Hebei Iron & Steel Group also eyes low exports at the moment. And Angang forecasts its shipment to fall by 50% from last year to 1.26 million tonnes in 2009.
Official from Ma'anshan Steel told reporters "It is quite difficult to win orders at the moment due to severe competitions despite they are generally lower priced ones."
According to senior Mysteel analyst Mr Xu Xiangchun, China's steel export is set to slump in light of the withering foreign markets and that related government bodies should further adjust steel export duties to stabilize the materials' export.
Official from China Iron & Steel Association said the less than 2 million tonnes of steel exports are marginal compared with the 500 million tonnes to 600 million tonnes of production capacity. However, the tariff policy on the industry is the most rigorous compared with other sectors, since a considerably part of products in the sector suffers export duty.
The official said "The low export tonnages in January have sent a signal that current industry policy are not so forceful to help boost market recovery, and hope related dept. can made further adjustments on export taxes."
(Sourced from Shanghai Securities News)
BDI down again by 81 points on February 13 2009 - 15 Feb 2009 It is reported that on February 13th 2009, Baltic Dry Index reached 1908 points down by 81 points as compared to February 12th 2009 and down by 147 points as compared to February 11th 2009.
Capsize
| | BCI | Change
| | INDEX | 3,335 | -232
| | SPOT 4 TCE AVG | 33,427 | -2,917
| | February 12th | 36,344 |
| | Year Ago | 114,772 |
| | | |
All except INDEX in USD
Change is with respect to February 12th 2009 numbers
Panamax
| | BPI | Change
| | INDEX | 1,399 | -85
| | SPOT 4 TCE AVG | 11,207 | -690
| | February 12th | 11,897 |
| | Year Ago | 52,000 |
| | | |
All except INDEX in USD
Change is with respect to February 12th 2009 numbers
Supramax
| | BSI | Change
| | INDEX | 1,190 | 42
| | SPOT 4 TCE AVG | 12,443 | 435
| | February 12th | 12,008 |
| | Year Ago | 42,373 |
| | | |
All except INDEX in USD
Change is with respect to February 12th 2009 numbers
To keep tab on steel prices in India on daily basis, subscribe to services of www.steelprices-india.com by registering or sending a mail to admin@steelprices-india.com. Please note that this is a paid service.
(Sourced from www.steelprices-india.com)
Steel consumption in ASEAN may reach 25 million tonnes - 15 Feb 2009 It is reported that apparent steel consumption in ASEAN countries in the first half of 2008 was estimated to reach 25.2 million tonnes, up by 10.2% YoY. The region's steel output for the same period was estimated at 15.2 million tonnes, up by 13% YoY. Import rose by 13% YoY to 15.6 million tonnes, while export jumped significantly by 28% YoY to 5.6 million tonnes.
For the first 6 months of 2008, Indonesia's steel consumption registered the highest growth rate of 24% YoY to 5.5 million tonnes. Production rose by 13% YoY to 3.6 million tonnes. In the same period, Indonesia's trade figures for steel products also increased substantially. Import jumped by 58% to 2.86 million tonnes and export registered a 64% increase to nearly a million tonnes.
Thailand's steel consumption also registered a significant growth rate of 13.6% YoY to 7.45 million tonnes in the first half of 2008. Thailand's long steel production registered a huge increase of 23% YoY to 2.56 million tonnes, while flat steel production of 2.06 million tonnes represented a moderate surge of 2% YoY.
Vietnam's producers of long products also enjoyed significant output growth of 10% YoY to 2.2 million tonnes. In the year, it also started its production of hot rolled coil which registered 150,000 tonnes for the first 6 month period. Import soared dramatically by 35% YoY to nearly 4 million tonnes, of which more than 80% comprised the import of flat steel product. Export of long product doubled in volume to 196,000 tonnes while flat product export increased more than ten folds to 0.8 million tonnes. Apparent steel consumption in Vietnam was estimated to reach 5.3 million tonnes in the first half of 2008, an increase of 10.5% YoY.
Malaysia's steel consumption was estimated to have registered a moderate increase of 5% YoY to 6% YoY to 4 million tonnes. Singapore and Philippines, on the other hand, seemed to be the only two countries in the region that experienced a negative growth rate in the first half of 2008. Philippines' steel consumption was estimated to have dropped by 9.5% YoY to 1.57 million tonnes. Production increased by 20% YoY to 1 million tonnes. However, import dropped by significantly by 34% to 0.66 million tonnes. Singapore's steel consumption registered a decrease of 12% YoY to 1.3 million tonnes.
The negative impact of the global economic downturn started to kick in the second half of 2008 and many steel companies around the world initiated production cuts in response to the sharp fall in steel prices. Many steel producers in ASEAN countries also resorted to similar measures.
Despite the slowdown in the second half of 2008, SEAISI estimated that the apparent steel consumption in the ASEAN 6 increased by 4 YoY to 5% YoY to 45 to 46 million tonnes. This is because of the high consumption registered in the first 6 months of 2008.
(Sourced from SEAISI)
BHPB bid for Rio - Why Chinalco is buying - 15 Feb 2009 Business Week reported that the state owned Chinese aluminum giant Chinalco's new stake in the mining outfit is seen as Beijing's attempt to head off a BHP Billiton takeover to protect supply of iron ore although Mr Xiao Yaqing chief of Chinalco said that it has no plans to increase its stake further.
Chinalco insists that it is not acting on behalf of the Chinese government. The company has strongly denied unconfirmed reports over the past few days that China's sovereign wealth fund, China Investment Corp has assembled a USD billion war chest for Chinalco to use in blocking any possible BHP bid for Rio Tinto.
Mr Yaqing said that the investment in Rio is entirely Chinalco's own decision.
Regardless of Mr Xiao's denials, there is little doubt that Beijing has a strong interest in preventing a BHP-Rio Tinto deal, which was first proposed last November. If a merger were to go through it would create the largest single producer of iron ore, as well as of aluminum and other resources. The new company would have immense pricing power, potentially raising costs for Chinese steel producers.
Mr Ren Baifeng of Antaike however said that "From what we understand, is representing the Chinese government in this deal. Two Fridays ago, there was word that Rio Tinto's management was secretly in Beijing for talks about this deal."
Chinalco had teamed up with Pittsburgh based Alcoa earlier to spend USD 14 billion for a 9% stake in Rio Tinto making the largest overseas purchase by a Chinese company ever. Chinalco put up the lion's share, with Alcoa just pitching in USD 1.2 billion. The two paid USD 117.97 a share, a 21% premium over Rio's closing price the previous day.
Beijing based, majority controlled by the Chinese government, Aluminum Corp of China is a behemoth. Founded in 2001 in Beijing, it now has more than 200,000 employees, with 25 subsidiary companies. In 2007 it expanded its overseas investment into Australia, Peru, and Vietnam. And its Hong Kong listed company has a market cap of USD 20.2 billion. Its revenues grew 24.1% to USD 18 billion last year, while profits reached USD 2.78 billion.
(Sourced from Businessweek)
Shipping rate rebound seen as short lived by analysts - 15 Feb 2009 Bangkok Post reported that shipping rates have rebounded sharply this year thanks to China, but both analysts and the sector's representatives say the quick recovery will not last long and the outlook remains weak.
Analysts said the sharp rebound was mainly driven by higher dry bulk demand from China, which endorsed a USD 586 billion economic stimulus plan. However, supply and demand imbalances for ships as well as the global economic slowdown would continue to pressure short-term charter prospects.
Mr Khalid Hashim MD of Precious Shipping Plc said ''Our only hope is that the recently announced stimulus package to be spent on infrastructure and other developments during 2009 will lessen the impact from major Chinese steel mills cutting production. He said that I think we are still quite far from a normal situation and I expect the BDI will bounce between 500 and 2,000 points over the next 18 to 24 months.''
Mr Hashim said ''January's number, as we understand it, is even higher. He said that if freight markets continue at their extremely low but volatile levels, we expect the world fleet in our sector to shrink 3% to 5% per annum the next few years. 'This will help redress the imbalance between supply and demand and consequently allow spot market rates to rise in a couple of years.''
Mr Hashim said PSL is working with lenders to secure sufficient credit lines to replace 25 aging ships with younger, economical second-hand vessels.
According to Syrus Securities, the global fleet is going to expand by 14% in 2009 amid slow demand for world cargoes. Last year, the world fleet in the handy-sized sector increased from 3,164 ships to 3,219 at the end of the year. On the other hand, PSL said the number of ships sent to scrap shot up recently, totaling 2 million DWT in November and 2.4 million DWT in December.
(Source: Bangkok Post)
IMIDRO to increase crude steel production by 20% - 15 Feb 2009 Mr Ahmad Ali Harati Nik MD of Iran’s Mines and Mining Industries Development & Renovation Organization said that it plans to boost its crude steel output by 20% in the next Iranian calendar year starting March 21st 2009.
According to Mr Ali Harati Nik, crude steel output will be increased from the current figure of 11.4 million tonnes to 13.6 million tonnes per annum. He predicted the output of steel products will also grow to 11.3 million tonnes by 7% in next year.
He added that the implementation of 10 large projects worth IRR 524 billion is among other plans of the organization.
Mr Ali Harati Nik sees a flourishing future for Iran’s industries and mines sector due to Iran’s numerous energy and mineral resources, easy access to marine transportation and the open waters via the country’s southern ports, educated manpower, and the investment of domestic and foreign private sectors in industries and mines sector.
He said that the Isfahan Mobarakeh Steel Complex with the production capacity of 5 million tonnes of raw steel per annum, the Khuzestan Steel Complex with 2.4 million tonnes capacity, the Khorassan Steel Complex with 630,000 tonnes, and Almahdi Aluminum Complex with the production capacity of 110,000 tonnes of aluminum bars a year have been constructed during the past 30 years in the country.
(Sourced from Mehr News Agency)
South Korean utilities eying low USD 70 range for 2009 coal deals - 15 Feb 2009 Reuters reported that South Korean utilities are looking to fork out about 5% to 7% more for thermal coal in 2009 as they begin to enter annual supply negotiations with miners in Australia.
As per report, South Korea's five utilities are hoping to buy about 2 to 3 million tonnes of coal at a headline price in the low USD 70 ranges based on coal a heating value of 6080 kilocalorie per kilogram. This compared with an average price of USD 67 per tonne they had agreed with Xstrata Plc, Rio Tinto Limited and Peabody Energy in 2008.
A regional coal importer said that low USD 70 ranges are the price the South Korean utilities are seeking adding that the price difference between the sellers and the utilities may be USD 10 per tonne or more.
Industry participants said there were signs already that some South Korean power firms had begun posturing ahead of the negotiations. It was reported last week that South Korean power firms had snared some 2009 term tonnage in the low USD 70 range with unnamed Australian producers, but utility and producer sources have denied the reports.
Industry sources said the rumored settlement price was close to what the South Korean utilities, under power monopoly Korea Electric Power Corporation had been pushing for and would be a dampener since it was about USD 5 below spot price levels then.
The industry typically regards the settled price between Australian miners and Japanese utilities as a regional benchmark and South Korean power firms are traditionally price takers. But with the market still facing demand pressures and threats of a supply glut, traders are eyeing negotiations closer than ever and an early price agreement between South Korea and Australian sellers would set the tone for Japanese negotiations.
A Sydney based trader said that "The South Korean buyers were very clever to have sealed prices ahead of the Japanese for last year's term contract and they got a good price. So the market is watching and there are expectations that they might do it again."
Industry sources said negotiations between Australian miners and Japanese utilities are expected to kick off later this month. Several analysts, including Macquarie Bank, are forecasting miners to agree to a 40% cut in Japan's fiscal 2009 coal contract prices to USD 75 per tonne.
(Sourced from Reuters)
Production pruning - LKAB postpones iron ore projects in pipeline - 15 Feb 2009 Sweden's LKAB has postponed for an indefinite term the launch of the Gruvberget project with design capacity some 2 million tonnes of iron ore per year.
As per reports, LKAB was planning to start production in Q1 of this year, but has reviewed its plans due to continuing low demand on the global markets although necessary works have been completed.
The report added that “Due to the same reasons, it has also stopped the MK3 and Svappavaara pellet plants producing in total 6.3 million tonnes of the product per year. According to preliminary plans, the facilities are going to be re launched in April and May of this year respectively, but the company does not exclude a longer period of standstill.”
(Sourced from Metal Experts)
Fletcher sees global steel demand recovering in 6 months - 15 Feb 2009 Bloomberg quoted Mr Paul Zuckerman CEO of Fletcher Building Limited as saying that global steel demand may take at least 6 months to recover as job losses slow in the US and people resume buying cars and home appliances.
He said that “Production cuts and public works projects should start reducing stockpiles of heavy beams, pipes and other long steel products in the next 2 to 3 months. Demand for sheet steel may take longer to recover.”
He added that "I do not think we are seeing real demand yet. It will be another quarter or so until we really start to see whether or not we have hit the bottom. Then the real underlying demand will kick back in, or not."
Mr Zuckerman said that still, prices are holding up, a sign producers are cutting output rather than dumping steel in overseas markets. He added that "Typically, with an inventory overhang you had expect prices to drop if people thought they could work their inventory through more quickly by dropping the price and selling more. It is fairly well acknowledged that demand just is not there.
Fletcher's Pacific Steel mill in Auckland is New Zealand’s largest steel producer after BlueScope Steel Limited's Glenbrook factory. Fletcher is the largest steel roofing maker in New Zealand and their Stramit units in Australia accounts for about 30% of that nation’s painted and roll formed steel market.
(Sourced from www.bloomberg.net)
Indian iron ore industry disappointed with Rail Budget - 15 Feb 2009 Hindu reported that Indian iron ore industry on last Friday expressed disappointment with the interim railway budget, saying that no correction in the freight rates will push commodity's traffic down, hitting the producers, who are yet to come out of the slowdown blues.
Mr Rahul Baldota president of Federation of Indian Mineral Industries said that "We are disappointed. We wanted it to go down."
He said that “At present, iron ore spot prices have come down by about USD 5 per tonne since last week, when it had touched USD 70 per tonne. Iron ore prices had touched the peak of USD 150 a tonne last year and then fell by over 60%.”
He added that “Miners, who saw the off take improving in January mainly on renewed demand from China, said that the present freight structure will discourage the movement of the vital steel making mineral.
He added that "The traffic is bound to fall and thus will the exports."
(Sourced from Hindu news.com)
Mitsui OSK sees signs of recovery in Chinese steel market - 15 Feb 2009 Reuters reported that Mitsui OSK Lines Ltd operator of the world's biggest fleet of bulk carriers for shipping iron ore and coal sees recovery in Chinese steel market, which would help in sea borne trade of raw materials.
Mr Masafumi Yasuoka senior managing executive officer of Mitsui OSK said that demand for steel is recovering in China due to the government's economic stimulus package.
He said that “It is prompting small steel mills to increase spot purchases of iron ore from Brazlil's Vale and Australia's BHP.”
He added that "Chinese mills need to buy more iron ore, due to the economic package. That in turn has made some iron ore miners bullish in price talks on iron ore with mills.”
He however expects China's big steelmills like Baosteel Group to start buying iron ore after the 2009/10 contract price is set, pushing up the freight rates further after April.
(Sourced from Reuters)
Outotec inks bio energy power JV with Skelleftea Kraft - 15 Feb 2009 Outotec and Skellefteå Kraft AB have agreed to establish a JV company called GreenExergy AB, which will focus on the development, marketing and delivery of technologies to bio energy power plants for the production of bio energy from forestry and sawmill residues.
Outotec's stake will be 45%, Skellefteå Kraft's 33% and three Swedish companies will each have a minor stake in the JV. The new company is expected to start operation in the first half of 2009 in Sweden. The joint venture partners estimate that the market potential for the bio energy technology in Scandinavia and Western Europe is a few hundred million euros and that it will increase markedly in future.
The bio energy technology of GreenExergy will complement Outotec's existing energy related competences in coal charring, gasification and combustion, oil shale pyrolysis, roasting of sulfidic ores and off gas cleaning. Outotec maximizes the energy efficiency in all its processes that operate at elevated temperatures by using the off-gas heat in other plant areas as an energy source. This reduces the carbon dioxide emissions of the plants using Outotec's technology.
Mr Tapani Järvinen CEO of Outotec said that "This JV supports Outotec's growth strategy, brings significant synergy benefits and complements our know how of sustainable energy production technologies. We are looking for opportunities to expand our business outside the mining and metals industry to other process industries. Energy and environmental technologies are areas close to our expertise and we see big business potential there."
Chinese iron ore stockpiles drop to 58.07 million tonnes - 15 Feb 2009 Interfax China reported that iron ore stockpiles at China's 22 major ports stood at 58.07 million tonnes on last Friday February 13th decreasing by 1.74% from February 6th, while Indian iron ore stockpiles increased by 4.17% to 14 million tonnes.
(Sourced from Interfax China)
Stimulus plans - Australia approves AUD 42 billion package - 15 Feb 2009 It is reported that Australian Parliament has narrowly passed an AUD 42 billion stimulus package in a bid to stave off recession in the face of the global economic crisis.
The package includes spending of AUD 28.8 billion on schools, housing and roads over four years, tax breaks for small businesses and cash handouts of AUD 12.7 billion to eligible workers, farmers and students.
As per report, the Parliamentary approval leaves the government free to immediately implement its spending plans, with Prime Minister Mr Kevin Rudd stressing the need for swift action throughout protracted negotiations during the bill's passage.
Mr Rudd said that the package was in the national interest and would help Australia's centre left Labor government fight the global economic recession. He added that "The most irresponsible thing to do today, with the worst global economic recession since the 1930s staring us in the face, would be to do nothing."
Mr Rudd said that the treasury estimated the plan would boost economic growth by 0.5 percentage points in 2008-09 and 0.75 to 1.0 points in 2009-10, supporting up to 90,000 jobs. He added that "Without Parliament's support for this plan, growth would be slower and unemployment would be higher."
Opposition leader Mr Malcolm Turnbull said that the package, which includes an AUD 900 cash windfall for many taxpayers, was Mr Rudd's attempt to stave off recession using collective retail therapy. He added that "Our children and their children will pay for all of it. The Prime Minister is plunging our nation into enormous and unprecedented debt. Billions of that debt will be incurred for measures that will have no enduring economic effect."
It may be noted that Australian government forecast an AUD 21.7 billion surplus in May 2008 but now concedes there will be a hefty deficit, arguing that spending is needed to keep the economy ticking over. The government pumped AUD 10.4 billion into the economy in December 2008 to boost consumer spending.
(Sourced from www.news.com.au)
Downsizing deals - Berong slashes 600 jobs in Philippines - 15 Feb 2009 Berong Nickel Corporation of Philippines said that it has temporarily stopped nickel production amid poor demand and falling prices and has cut more than 600 jobs.
Berong Nickel, in which Toledo Mining Corp has a 56.1% stake, said it has more than enough stock to ship to client BHP Billiton. It has an agreement to supply up to 500,000 tonnes of nickel laterite ore to BHPB annually until 2013.
BHPB only agreed to buy 400,000 tonnes of nickel laterite ore for 2009 and negotiations to raise the annual volume to 1 million tonne were unsuccessful as per Berong shareholder’s Atlas Consolidated Mining and Development Corporation.
Atlas said that with more than enough stock to meet the initial shipments to BHP Billiton, all production activity at Berong has ceased for the time being adding that more than 600 employees and contractors were laid off and fewer than 50 staff were still employed in the mine site.
Atlas said half of the 400,000 tonnes intended for BHPB can be supplied from stockpiles, which means full scale mining operations can be deferred until the second half of 2009.
The first shipment to BHPB is scheduled for April 2009 followed by monthly shipments. Apart from BHPB, the Berong project was shipping ore with an average grade of around 1.5% to producers in China although shipments had fallen.
Nickel earlier traded at USD 10,250 per tonne on the London Metal Exchange, less than a fifth of its all time high of USD 51,800 per tonne reached in May 2007.
(Sourced from www.miningjournal.com)
Slowdown signs - Newcastle has smaller queues of ships - 15 Feb 2009 ABC News reported that in recent years, rail and port bottlenecks have been blamed for the ship queue blowing out to as many as 80 vessels.
However, in previous week’s Friday there were 21 vessels at anchor.
The Hunter Valley Coal Chain Logistics Team expects about 6.5 million tonnes of coal will go through the Port of Newcastle in February 2009. It said that, based on that forecast, the vessel queue should be down to 13 by the end of the month.
(Sourced from ABC News)
Production pruning - Evraz idles production at Czech plant - 15 Feb 2009 Reuters reported that Russian steel maker Evraz Group said on Friday it has temporarily idled its NS 230 rolling mill plant and the 220 steel plant at its Vitkovice facility in the Czech Republic due to declining demand.
As per report, Evraz is performing maintenance work on the rolling mill from February 7th to February 22nd and shutting down the steel plant for maintenance and repairs from February 1st to February 15th.
Evraz however told Reuters that Vitkovice's other facilities will work with the maximum possible efficiency during the period.
(Sourced from Reuters)
Downsizing deals - BlueScope lays off 53 at Varco Prude plant - 15 Feb 2009 It is reported that BlueScope Steel has shut down its third shift and laid off 53 workers at its Varco Pruden division in St Joseph due to unprecedented economic conditions.
Mr Geoff Miller VP of human resources for BlueScope said that "In a typical year, we are seasonal, but it’s much worse than normal. There is just no telling, with what the economy is doing."
Mr Miller said that they would like to get part of the expansion, which would create 33 jobs, started this year. The company received USD 75,000 in incentives from Buchanan County for the expansion.
Mr Ted Allison president of St Joseph Area Chamber of Commerce said that "I feel very badly for each and every one of those families. The local unemployment rate was 5.8% in December 2008. My thinking is as soon as we get consumer confidence established, our local economy will snap back nicely. I hope we don’t lose any more factories that close their doors."
BlueScope hopes to rehire its workers at some point in the future. In addition, it also plans to go ahead with plans to add a production and paint line.
Meanwhile, BlueScope expects the facility to be viable in the long term, but said that the layoffs were necessary to align staffing with short term orders.
(Sourced from www.stjoenews.net)
Downsizing deals - Rio Chinalco deal will save 2000 jobs - 15 Feb 2009 Reuters cited Mr Tom Albanese, CEO of Rio Tinto as saying that the Chinalco deal will save thousands of jobs.
Mr Albanese noted that the move will alleviate debt and save jobs.
He said that "This transaction will alleviate about 2,000 job reductions including contractors on projects in Australia. It does position the company to benefit from the trends that are continuing to emerge through the resource industry driven by China."
Rio Tinto has been accused of acting out of desperation in striking an AUD 30 billion deal with Chinalco. Some experts said that Rio failed in its negotiations with BHP and is now desperate to reduce some of its debt.
Under the deal, Chinalco will spend USD 7 billion in convertible bonds and take a USD 12 billion minority stake in Rio's mining assets. The transaction will double Chinalco's stake in Rio to 18% and requires both shareholder and Australian government approval.
(Sourced from Reuters)
Oz Minerals facing asset write downs up to USD 2.8 billion - 15 Feb 2009 Oz Minerals said that as part of the preparation of its annual accounts, it has reviewed the carrying value of its assets, as required under relevant accounting standards.
Based on an initial review, it has formed the view that write downs of between USD 2.3 billion and USD 2.8 billion will be recorded in its annual accounts for 2008.
Initial indications of the breakdown of this amount are as follows
1. Impairment for current mines and development projects, advanced exploration projects such as Canada and deferred projects such as Avebury of between USD 1.9 billion and USD 2.2 billion.
2. De recognition of deferred tax assets in respect of tax losses of between USD 0.2 billion and USD 0.3 billion.
3. Negative mark to market adjustment of listed equity investments, mainly Toro &Nyrstar based on their December 31 2008 share price of between USD 0.2 billion and USD 0.3 billion.
Mr David Lamont, CFO of OZ Minerals commented that “As a consequence of the significant falls in commodity prices seen across all of our operations, the carrying value of many of our assets has declined considerably. While we continue to address this through our ongoing cost reduction programs, these efforts have not been sufficient to offset the decline in asset value.”
Maxi Invest to set up steel mill at Tatrstan - 15 Feb 2009 Komsomolskaya Pravda reported that the Cabinet of Tatarstan Republic signed the protocol between the government of Tatrstan Republic, Leningorsk municipal district and Maxi Invest on metallurgical works organization.
The construction of steel melting plant Tatstal of the 1st stage is to be done in 2 steps. The first step includes the construction of electric steel melting facilities, infrastructure, and assisting facilities such as railway and energy workshop.
After the 1st step implementation the mill will produce by 980,000 tonnes a year of continuous cast square billet.
The second step will include light section mill construction. After the implementation of the 2nd step the plant will produce by 950,000 tonnes a year.
(Source: Komsomolskaya Pravda)
Alfa Celik and Zeman Group completes merger talks - 15 Feb 2009 Today’s Zaman reported that Austrian based Zeman Group and Turkey’s Alfa Çelik have successfully completed merger talks after 6 months of negotiations, forming a partnership to operate in the steel hungry Turkish market.
Mr Rıdvan Murat GM of Alfa Çelik said that the real winner in this partnership will be Turkey even though both companies will reap benefits by merging their strengths.
He added that "The opportunities of Alfa Çelik to do business in other countries around the world will increase with this partnership."
Mr Murat further said that the partnership will also make Alfa Çelik more interested in projects in Turkey.
He added that "We have gained power and technology with Zeman and our exports will surely increase parallel to these new capabilities. We have set a target of USD 5 million in exports for 2009.”
Mr Hans Zeman, head of the Zeman Group said that "With our partnership, we have now gained a much stronger presence in the Turkish market."
(Sourced from www.todayszaman.com)
Downsizing deals - Severstal and USW talks progressing well - 15 Feb 2009 It is reported that contract bargaining between steelmaker Severstal North America Inc and the United Steelworkers is making some progress during one of the toughest industry downturns in decades.
Mr Gary Steinbeck director of USW sub district office in Niles said that ''They are difficult negotiations. We are making some progress, but we still have a ways to go.''
Mr Steinbeck declined to give specifics of the talks, which cover all of Severstal North American mills, noting the weak economy makes bargaining tougher than past ones. He added that ''It is not a good climate. We certainly want to see the industry get back on its feet. "But the pattern has been set for the industry. We need to stay with the pattern and we will do that."
He said that the pattern was set by US Steel negotiations in 2008. The Warren workers have been operating under an extension of the contract that expired on November 1st 2008. He added that ''We are confident we will get through it and get an agreement.''
He also knocked down a rumor that Severstal Warren mill would start recalling laid off workers to resume steel production by March 2009.
Mr John Dudzinsky spokesman of Severstal said that it did not have a comment on the rumor.
The Warren mill, which was purchased by Moscow based OAO Severstal in July 2008 has 800 to 1,000 of its 1,200 workers idled by lack of demand for steel as the global recession continues.
(Sourced from www.tribtoday.com)
US pig iron market remains dead - 15 Feb 2009 It is reported that US pig iron market sees no buyers most American consumers continue to refrain from making new deals for pig iron. Market operators report most steelmakers now do not even ask for quotations.
The lack of interest is attributed to pessimistic expectations concerning recovery of demand for finished products and shortage of liquidity steelmakers are facing.
Offer prices of suppliers from northern Brazil have gone slightly down. In particular, pig iron prices are USD 300 per tonnes to USD 305 per tonnes fob on this destination, by USD 5 per tonnes less than at the beginning of February. Pig iron from south Brazil has gone down too, by about USD 10 per tonnes to USD 280 per tonnes to USD 285 per tonnes fob.
Russian material is estimated at USD 305 per tonnes to USD 310 per tonnes fob, Ukrainian one at USD 280 per tonnes to USD 290 per tonnes fob.
(Sourced from Metal Experts)
Production pruning - Grande Cache Coal cuts production by 25% - 15 Feb 2009 Timmins press reported that Grande Cache Coal Corporation is cutting 100 jobs and scaling back production by 25% over the next six months to deal with a weak steel production outlook that has caused its customers to defer metallurgical coal shipments into 2010.
The Calgary based miner said that it has seen a negative impact on contract negotiations for upcoming coal year, driven by the worldwide economic slowdown.
The company said in a statement that "Grande Cache Coal has received further indications from its customers that additional shipments originally scheduled for delivery by March 31st 2009 will be deferred into fiscal 2010."
It said that "The global slowdown is expected to reduce the amount of coal the corporation's customers will require under new contracts at least in the initial months of fiscal 2010."
The production cut, to be reassessed on an ongoing basis as coal contracts are negotiated for 2010, will trim Grande Cache's annual production rate to about 975,000 tonnes from about 1.3 million tonnes.
Mr Robert Stan president and CEO of Grande Cache Coal Corporation said in a statement that "The continued uncertainty in the marketplace and further indications of lower demand for coal has led us to our decision to reduce production in the short term."
He said that "It is unfortunate that these measures have to be taken, however they are necessary and prudent and will allow us to preserve capital and better position the corporation to weather the current downturn and succeed in the next recovery."
(Sourced from Timminspress.com)
Steel & Tube Q1 interim profit up by 143% YoY - 15 Feb 2009 NZPA quoted Mr Nick Calavrias CEO of Steel & Tube Holdings as saying that strong demand and high steel prices gave the company a big lift in the first quarter of the year and enabled it to report a 143% YoY rise in interim profit.
He warned that the slump in global demand had already started to flow through towards the end of the half year and the second half result would be reduced substantially due to deteriorating trading conditions.
Steel & Tube reported an unaudited after tax profit of USD 20.79 million in the 6 months to December 31st 2008, up from USD 8.56 million in the same period last year. The profit included an after tax provision for impairment of trade receivables of USD 3.18 million.
Directors declared an interim dividend of 10 cents per share, payable on March 30th 2009. Revenue rose by 11 per% YoY to USD 273.78 million due to the effect of higher steel prices.
Mr Calavrias said that it encountered variable market conditions. He added that construction activity overall was down, led by a substantial drop in housing starts. Commercial construction activity did not suffer to the same extent. He added that Steel & Tube would be tendering for work on the new roading projects and that would all help as the company negotiated the wider downturn.
(Sourced from www.nzpa.co.nz)
|
