| Price Index - India | | | | 12-Mar | 11-Mar | Change | | ILPPI | 6649 | 6652 | -3 | | IFPPI | 6662 | 6665 | -3 | | INDSPI | 6655 | 6658 | -3 | | What is it? | | Poll Results | | Would Indian domestic steel demand remain strong? | | Yes | 47% | | No | 44% | | Can't Say | 9% | | View Current Poll | | Currency | | AUD | 1.5432 | | BRL | 2.3305 | | CAD | 1.2870 | | CNY | 6.8292 | | EUR | 0.7804 | | GBP | 0.7226 | | INR | 52.4702 | | JPY | 96.9979 | | RUB | 35.0706 | | USD | 1.0000 | | ZAR | 10.0764 | | View Current Currency | | Metal Rates Cash Seller & Settlement | | Zn | USD 1187 | | | Ni | USD 9535 | | | Sn | USD 10975 | | | Al | USD 1302 | | | Cu | USD 3490 | | | View Current Metal Rates | | Steel Futures | | NCDEX | 23900 (19-Dec) | INR | 0 |  | | DGCX | 445 (11-Mar) | USD | 0 | | | LME-M | 260 (11-Mar) | USD | 0 | | | LME-F | 300 (11-Mar) | USD | -15 |  | | 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
Indian domestic steel prices stable due to lack of activity - 13 Mar 2009 The domestic Indian Steel prices remained stable on March 12th 2009. The Indian Long Product Price Index ILPPI and Indian Flat Product Price Index IFPPI dropped by 3 points each. The overall Indian Steel Price Index INDSPI too dipped by negligible 3 point.
| Class | 10-Mar | 12-Mar | Change
| | ILPPI | 6652 | 6649 | -3
| | IFPPI | 6665 | 6662 | -3
| | INDSPI | 6658 | 6655 | -3
| | | | |
ILPPI - Long Product Price Index
IFPPI - Flat Product Price Index
INDSPI - Indian Steel Price Index
Long Products| Category | 10-Mar | 12-Mar | Change
| | PI – TMT | 6412 | 6405 | -7
| | PI – WRC | 7160 | 7160 | 0
| | PI – Angle | 6278 | 6278 | 0
| | PI – Channel | 6328 | 6328 | 0
| | PI – Joist | 5823 | 5819 | -3
| | | | |
Flat Products| Category | 10-Mar | 12-Mar | Change
| | PI – Narrow Plates | 6293 | 6290 | -2
| | PI - Wide Plates | 6719 | 6719 | 0
| | PI - Hot Rolled | 6483 | 6478 | -6
| | PI - Cold Rolled | 7252 | 7252 | 0
| | PI – Galvanized | 6954 | 6954 | 0
| | | | |
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(Sourced from www.steelprices-india.com)
Indian steel demand likely to surge after June - Deloitte - 13 Mar 2009 PTI reported that domestic steel demand is likely to recover by the Q1 of the next fiscal on the back of a rise in construction activity pushed by the stimulus packages announced by the government.
Mr Kumar Kandaswami senior director of Deloitte India said that "Post June, demand for steel is likely to pick up as construction activity may improve especially in rural and semi-urban areas."
Mr Kandaswami, however, said that the real impact of the stimulus packages would be visible when the policy initiatives taken by the government actually help projects to get implemented.
He said that "Unlike the US, where the banking sector needs a boost, and China where export sector requires special attention, in our country it is the infrastructure sector which needs due care," adding that the worst is probably over for India.
He added that "The worst seems to be over. We will not go down below the 6.5% to 7% GDP growth level and that growth rate is decent as compared to many other economies."
With the government allowing state run infrastructure financing firm IIFCL to raise INR 40,000 crore through tax free bonds for refinancing PPP projects, as part of its fiscal packages, steel demand is likely to look upwards.
(Sourced from Press Trust of India)
BOC India commissions ASU at JSW Steel - 13 Mar 2009 BOC India has announced that the company has commissioned its 1,800 tonne per day Air Separation Unit at JSW Steel Works at Bellary on March 10th 2009.
According to the source, this comes after the company signed a 20 year long term gas supply contract with JSW Steel for supply of over 3,000 tonne per day of gaseous oxygen, nitrogen and argon.
The said plant has commenced commercial production on March 10, 2009 and has been operating satisfactorily.
However, it operates in the four business areas of industrial gases, medical gases, special gases and projects. Industrial gases include bulk atmospheric gases, carbon dioxide, hydrogen and a full range of compressed industrial gases excluding LPG.
(Sourced form myiris.com)
EMCO bags major TLT orders from PGCIL - 13 Mar 2009 It is reported that EMCO Ltd has bagged 5 prestigious orders worth INR 550 crores from M/s Power Grid Corporation of India Ltd. This is one of the largest 765 KV overhead transmission line order placed by PGCIL.
EMCO has bagged these projects after surpassing a stringent qualification requirement from the client and against very stiff competition. The orders also involve supply of galvanized steel towers from the company's facility located at Asoj, Gujarat.
RINL cautions job aspirants - 13 Mar 2009 The Hindu reported that the management of Visakhapatnam Steel Plant has cautioned job aspirants not to be carried away with the false promise by some unscrupulous elements to get them posting through the back door on payment of huge amounts.
A VSP official said that the management learnt that few unscrupulous elements were exploiting the candidates appearing for written test and interviews in VSP by promising selection and trying to extract huge amounts from them.
Official added that the selections to all the posts in VSP were made purely on the basis of merit by following the stringent procedures and laid down policies and guidelines which did not enable anyone to influence the selection process.
However, all the candidates are requested to note and desist from falling prey to persons who mislead with false promises of selection.
(Sourced from The Hindu)
Directory of Overseas Scrap Suppliers to India - 13 Mar 2009 India is large market for import of steel scrap and this is the directory which is going to help many interested group to know this industry.
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• Company name -1191 entries
• Address-1191 entries
• Email-1074
• Phone number-1140
• Fax number -431 entries
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Macroeconomic indicators - Statement of finance ministry on Inflation - 13 Mar 2009 The following is the statement of Department of Economic Affairs, Ministry of Finance on inflation issued here today:
Annual YoY rate of inflation declined by 60 basis points to 2.4% for the week ended February 28th 2009 from 3.0% in the week of February 21st 2009, continuing a progressive deceleration of inflation beginning end October 2008, barring a 2 week aberration in January 2009. Such a low rate was earlier recorded in July 2002, when inflation stood at 2.5%.
1. YoY inflation by commodity groups
Commodity group examination reveals that the fall in overall inflation in the current week is almost universally across the board, with few exceptions, as highlighted below:
a) In primary articles, inflation decreased to 5.8% in the week under reference, against 6.0% in the earlier week. In food articles, inflation remained stable at 8.3% in the current and previous weeks, but sub-groups such as fruits and vegetables, condiments and spices and other food articles have recorded increased rates of inflation relative to last week. In non food articles, inflation fell to 1.3% compared to 1.7% in the previous week, while in ‘minerals, the rate of decline remained steady at (-) 1.2% since the week ended February 14th 2009.
b) In fuel and power, prices continued to decline, at (-) 5.1% with (-) 4.0% last week, mainly on account of fall in non-administered oils.
c) In manufactured products, inflation rate decreased to 4.0% in the current week, from 4.5% last week. Within this group, notably edible oils, basic heavy organic & inorganic chemicals as also non ferrous metals depict a progressive decline in prices at (-) 8.3%, (-)11.2% & (-) 20.8% and (-) 9.7% respectively. Iron and steel has finally registered a negative rate of inflation of (-) 0.2%.
2. YoY inflation in the combined food index
Inflation in the food index (wt = 25.43%) for the week ended February 28th 2009 declined marginally to 7.5% compared to 7.7% last week, on account of fall in manufactured food products.
3. Deseasonalized monthly WPI annualized inflation
Trends in deseasonalized overall inflation indicate slowdown of the rate of decline, though it still remains negative. The negative trend which began in September 2008 at (-) 3.2%, intensified to (-) 19.7% in November. In December 2008, it rose to (-) 14.4% and to 1.4% in January 2009. In February, deseasonalized inflation rate was (-) 6.8%. A similar pattern of volatility is observed in inflation in manufactured products, which increased from (-) 12.6% in November 2008 to (-) 0.6% in January and fell again to (-) 6.9% in February 2009.
Swaraj Mazda to set up facility in Punjab - 13 Mar 2009 Projects Today reported that Swaraj Mazda plans to invest INR 300 crore in medium and heavy commercial vehicle segment and set up a new facility near its LCV plant in Nawanshahar district of Punjab.
As per report, the plant will have a capacity for building 7,000 bus bodies and produce 12,000 medium and heavy commercial vehicles. The company's intra city buses, multi axle trucks, refrigeration trucks and tractor trailers in the M&HCV segment is expected to hit the roads by 2012.
(Sourced from Projects Today)
Volkswagen Chakan plant to commission by end March - 13 Mar 2009 Projects today reported that Volkswagen AG is expected to commission its Greenfield facility at Chakan on March 31st 2009.
As per report, it is likely to kick start the production of group company Skoda's hatchback Fabia from May 2009 from the Chakan plant. The plant will have an installed capacity to manufacture 110,000 units per year.
Apart from this, the company is likely to start the production of Indian version of the Polo car from March 2010.
(Sourced from Projects Today)
9 companies in fray for Chennai mega container terminal - 13 Mar 2009 Projects Today reported that the Chennai Port Trust has received RFQs from nine companies for the development of mega container terminal at the Chennai port at an estimated cost of INR 3,686 crore. The terminal, with an estimated annual capacity of 4 million TEUs is likely to become operational by 2012-13.
The companies which have submitted the RFQs are L&T Transco, Chennai, Navayuga Engineering Company, Chennai, DP World, Mumbai, IL and FS Maritime Infra Company, Mumbai, Vadinar Oil Terminal, Mumbai, Mundra Port and SEZ, Ahmedabad, Lanco Infratech, Hyderabad, FGI Group of companies, Malaysia and GVK-Leighton Consortium, Mumbai.
The short list of pre-qualified bidders who will be eligible to participate in the project bid will be drawn up after receiving the security clearance from the Union government.
Of the estimated cost, the Port Trust is expected to contribute INR 1,600 crore to build the breakwaters, for dredging and for navigational aids. The balance will have to be raised by the successful bidder to develop the terminal on BOT basis.
The infrastructure of the terminal is to be developed north of the existing Bharathi Dock, with 2 new breakwaters at a total length of 4 kilometer and continuous quay length with 18 meters alongside depth. The total basin area will be 300 ha, with a back up area of 100 ha.
(Sourced from Projects Today)
NCC bags 3 orders worth INR 263 crore - 13 Mar 2009 Projects Today reported that Nagarjuna Construction Company has won 3 orders worth a total INR 263 crore.
However, NCC has bagged the first order worth INR 119 crore from Maharashtra State Electricity Distribution Company, Mumbai for a turnkey contract for Infrastructure Plan Phase-II Project Works, to be completed in a span of 2 years.
The second order is from Coimbatore Municipal Corporation for different works at Coimbatore, Tamil Nadu valued at INR 83 crore, to be completed over a period of 24 months.
Institute of Chartered Financial Analysts has awarded a contract to the company worth INR 61 crore for the construction of academic block and related works at Tripura, to be completed in a span of 2 years.
(Sourced from Projects Today)
PAE invests INR 5 crore in Shurjo Energy Pvt Ltd - 13 Mar 2009 It is reported that PAE Ltd has made investments of INR 5 crore for 51% equity stake in Shurjo Energy Pvt Ltd in 3 tranches as the same was approved by the Board of Directors.
MTC Board declares interim dividend of 40% - 13 Mar 2009 MMTC Ltd has announced that the Board of Directors of the Company at its meeting held on March 12th 2009, inter alia, have declared an Interim Dividend 40% for the financial year 2008-09 on the paid up equity share capital.
BHEL invokes BG of Petron Engineering Construction - 13 Mar 2009 Petron Engineering Construction Ltd announced that Bharat Heavy Electricals Ltd Kolkata 700 091 has invoked 4 Performance Bank Guarantees issued by our Bankers, State Bank of India, Mumbai 400 071 (SBI) amounting to INR 201.76 million under their letter dated February 2nd 2009.
The release said that “The invocation of Bank Guarantee was totally arbitrary and unilateral action by Bharat Heavy Electricals Ltd.”
Indian iron ore spot export price decline continues for fourth week - 13 Mar 2009 The FOB East Coast prices of Indian iron ore have gone down further during last one week by another 6% to 9%.
The details are as under | Grade | Change | %
| | Fe 63.5/63% | -4 | -7%
| | Fe 63.5/62.5% | -4 | -7%
| | Fe 63/62 % | -4 | -7%
| | Fe 62 / 61% | -4 | -8%
| | Fe 61 / 60 % | -3 | -6%
| | Fe 60/59 % | -4 | -9%
| | Fe 59 / 58 % | -3 | -7%
| | Fe 58 / 57% | -3 | -8%
| | | |
Change is during March 12th 2009 and March 6th 2009
Change is in USD per tonne
Delivery FOB East coast of India
This reduction has brought down the spot prices of Indian iron ore down by 22% to 29% on March 12th 2009 for various grades as compare to prices prevailing on February 10th 2009| Grade | Change | %
| | Fe 63.5/63% | -17 | -23%
| | Fe 63.5/62.5% | -16 | -23%
| | Fe 63/62 % | -15 | -22%
| | Fe 62 / 61% | -16 | -25%
| | Fe 61 / 60 % | -13 | -22%
| | Fe 60/59 % | -15 | -26%
| | Fe 59 / 58 % | -15 | -28%
| | Fe 58 / 57% | -14 | -29%
| | | |
Change is during March 12th 2009 and February 10th 2009
Change is in USD per tonne
Delivery FOB East coast of India
The three major factors resulting in this slide are
1. Weakening of Chinese domestic steel prices due to sluggish demand and fall in exports to about 1.5 million tonnes per months in January and March. This has resulted in very weak sentiment in Chinese steel industry and steel mills are watching the developments cautiously without committing much on raw material front.
2. The total Iron ore stocks available at major Chinese Ports is about 61 million tonne as on March 10th 2009 out of which 17 million tonne is of India origin.
3. Chinese mills are in negotiation with global miners on iron ore contract pricing. Low spot prices put them in drivers’ seat during negotiations.
The prices are likely to decline further in the coming weeks and where the buck is going to stop is anybody’s guess.
To know exact levels, likely scenario, domestic iron ore spot prices at Bellary and Burbil and FOB East Coast spot prices subscribe to “Iron Ore Services” of www.steelprices-india.com by registering or sending a mail to admin@steelprices-india.com along with your full contact details. Please note that this is a paid service.
(Sourced from www.steelprices-india.com)
Recovery signs - Car sales in China reflect positive mood - 13 Mar 2009 It seems that the bail out package of CNY 4000 billion from the Chinese Government is starting to have some positive effect.
For the first time since 4 months, car sales have increased in February by 25%. This may be the result of tax reduction on some models. Therefore, China is consolidating the first place in the world car markets, having reached during February a total sale of 827,600 vehicles, including buses and trucks. January and February has given a cumulative increase of 2.7% with a total sale of 1.56 million vehicles, while USA has experienced a decrease of 39% down to 1.35 million.
However there also is a negative data, as the retail price index has decreased for the first time since 6 years by 1.6% as compared with February 2008. At that time the same index was showing an increase of 8,7% with a risk of deflation. For 2009 the Chinese Government has budgeted an inflation of 4% but the final data will possibly be much lower also in light of the production prices that, during February, have shown a decrease of 4.5%.
Production prices are decreasing for the third month in a row, leading to a possible deflation, although general economic situation is definitely not looking as a deflating one.
Although every body in the world is wishing China taking clear measures for widening domestic market and thus imports, the Chinese Government seems still looking for strengthening export by that possibly leading to disputes with traditional commercial partners such as USA and EU. Global Chinese export was decreasing during Jan by 17.5% and by 25.7% in February.
To keep tab on steel prices in Europe, subscribe to services of www.steelprices-europe.com by registering or sending a mail to admin@steelprices-europe.com with full contact details. Please note that this is a paid service.
(Sourced from www.steelprices-europe.com)
Global hot band prices continue to slip - 13 Mar 2009 SteelBenchmarker reported that the US HRB spot price slipped by 3.5% to USD 531 per metric tonne, FOB the mill; for the fifteenth consecutive time, the World export HRB price dropped 3.8% to USD 427 per tonne, FOB the port of export; for the fourth consecutive, Chinese HRB ex-works price dropped 4.4% to $417 per tonne; for the third consecutive time and the Western European HRB price for March 9th dropped 6.3% to USD 479 per tonne ex works; for the sixteenth consecutive time.
USA
USD 531 per metric tonne, FOB the mill
Down by USD 19 per tonne from USD 550 two weeks ago
Down by USD 672 per tonne from the peak of USD 1,203 on July 28th 2008
Down by USD 99 per tonne from the previous high of USD 630 on April 9th 2007
Down by USD 29 per tonne from the recent low of USD 560 on August 13th 2007
China
USD 417 per metric tonne, ex works
Down by USD 19 per tonne from USD 436 two weeks ago
Down by USD 316 per tonne from the peak of USD 733 on July 14th 2008
Down by USD 70 per tonne from the previous high of USD 487 on September 10th 2007
Up by USD 39 per tonne from the recent low of USD 378 on November 10th 2008
Western Europe
USD 479 per metric tonne, ex works
Down by USD 32 per tonne from USD 511 two weeks ago
Down by USD 725 per tonne from the peak of USD 1,204 on July 14th 2008
Down by USD 217 per tonne from the previous high of USD 696 on June 11th 2007
Down by USD 184 per tonne from the recent low of USD 663 on July 23rd 2007
World Export Price
USD 427 per metric tonne, FOB the port of export
Down by USD 17 per tonne versus USD 444 two weeks ago
Down by USD 686 per tonne from the peak of USD 1,113 on July 28th 2008
Down by USD 169 per tonne from the previous high of USD 596 on March 26th 2007
Down by USD 123 per tonne from the recent low of USD 550 on July 23rd 2007
(Sourced from SteelBenchmarker)
Global stainless steel production in 2008 dips by 7% YoY - 13 Mar 2009 According to preliminary figures released by International Stainless Steel Forum, the world stainless steel production reached 25.9 million tonnes in 2008 down by 6.9% YoY.
After a decrease of 2% YoY in 2007, this is the second year in a row that world stainless steel production has decreased.
| Region | 2006 | 2007 | Change | 2008 P | Change
| | Western Europe/Africa | 10,000 | 8,669 | -13.3 | 8,255 | -4.8
| | Central/Eastern Europe | 376 | 364 | -3.3 | 333 | -8.6
| | The Americas | 2,951 | 2,604 | -11.8 | 2,315 | -11.1
| | Asia w/o China | 9,775 | 8,994 | -8.0 | 8,068 | -10.3
| | China | 5,299 | 7,206 | 36.0 | 6,943 | -3.6
| | Total World | 28,400 | 27,836 | -2.0 | 25,913 | -6.9
| | | | | | |
In ‘000 tonnes
Source: International Stainless Steel Forum
Overall stainless steel production in Asia, without China, declined by 10.3% to 8.1 million tonnes. Asia without China and China now account respectively around 31% and 27 % of the stainless steel produced in the world.
China has been the driving force behind the growth in stainless steel production however, in 2008 the country reduced production by 3.6% to 6.9 million tonnes.
The second biggest stainless producing area, Western Europe and Africa, reported a decrease in stainless steel production of 4.8% YoY to 8.3 million tonnes in 2008.
The Americas region decreased stainless crude steel melting by 11.1% to 2.3 million tonnes. Production in the Central and Eastern Europe region declined by 8.6%, more than the world average. However, with production of just 333,000 tons in 2008, the region remains a minor player in world stainless steel production.
ISSF said that “Beyond the normal seasonal factors of our industry, 2007 as well as 2008, turned out to have the same pattern: excellent first half, extremely depressed second half. The external raw materials price volatility and the overall worldwide economic situation added to the turmoil.”
It added that “The first half of 2008 turned out as being quite positive. By the third quarter, the financial and economic crisis combined with a massive drop in raw material prices - nickel being no exception - struck massively all cyclical industries. Our industry did not escape, on the contrary. Due to overstocks, reduction of excess inventories bought at inflated prices, complete stop of purchases from distributors and some end users, in a matter of weeks we moved from a bright future to a gloomy environment.”
Slowdown signs - Russian auto sales to decline by 36% - 13 Mar 2009 The Moscow Times quoting a study released by Boston Consulting Group reported that Russian automotive sales are likely to drop 36% to about 1.8 million units this year from 2.8 million in 2008, and foreign makes may have to localize if they want to remain competitive.
The most optimistic scenario would see 2.5 million cars sold this year, with growth resuming in 2011, while the worst-case scenario predicts sales of 1.4 million.
The study found the falling sales, along with high import tariffs, may force foreign carmakers to set up shop locally. The study said localization in a country with a 30% tariff translates into a savings of about 10%. Imports fell 73% in January after customs tariffs were hiked up to 30 percent on new cars.
Lack of reliable component makers continues to be an impediment to local production, however. Only 20 parts makers produce locally, meeting about 3% of the market's needs, the study found, while only 5% of local suppliers meet quality standards.
Mr Sergei Andreyev the firm's CEO for Russia and the CIS sad to increase its market share, German chemical company BASF has localized production of a number of its automotive products like paints and lacquers and is planning to launch a new plant for emission-control catalysts in the Moscow region soon. He said that "We are expecting the market to change in favor of cars produced in Russia."
Mr Martin Jahn deputy CEO said in an interview last month Localization has paid off for Volkswagen, whose sales in Russia increased 60% last year and 20% in January largely because of a new production site in Kaluga. He said that "We would not be competitive here without local production."
(Sourced from The Moscow Times)
Erdemir CFO announces strong order book - 13 Mar 2009 Reuters reported that Turkey's largest steelmaker Erdemir has 440,000 tonnes of confirmed and another 340,000 tonnes of potential steel orders.
Mr Cem Karakas CFO of Erdemir told Reuters that "Currently we have 440,000 tonnes of confirmed flat steel orders in the production process, 192,000 tonnes of which are geared towards export markets, including Italy, Spain, Greece, UK, Romania, Brazil, Israel.”
He added that "We have an additional 340,000 tonnes potential flat steel orders, including 170,000 tonnes export demand, whose technical and financial terms are being negotiated.”
Mr Karakas said the current order levels were better than the average monthly orders of 402,000 tonnes, in the first nine months of 2008, when demand for steel was booming.
(Sourced from Reuters)
APEAL sees 69% of steel packaging recycled in Europe - 13 Mar 2009 The latest figures from Association of European Producers of Steel for Packaging show that 69% of steel packaging is recycled in Europe. This represents over 2.5 million tonnes of food and drinks cans and other steel containers being recycled in 2007, saving 4.8 million tonnes of CO2.
According to the latest available data, this places recycling rates for steel above those of other packaging materials such as plastic, beverage cartons and glass at 19.7%, 32% and 62% respectively.
Mr Guillaume de Formanoir president of APEAL said that "Given concerns about climate change, the smarter use of resources should be at the forefront of all our minds. We hope that the standard set by steel for packaging will help to drive further growth in the recycling of all packaging materials across Europe."
In 2007, the recycling rate for steel packaging continued to grow throughout Europe rising by 3% from the 2006 total. Top performers were Belgium and Germany where more than 90% of steel packaging was recycled. Switzerland, Austria and the Netherlands follow closely behind, recycling over 80% of their steel containers.
CISA for immediate VAT rebate increase on steel exports - 13 Mar 2009 Interfax China quoted CISA official said the China Iron and Steel Association which represents major Chinese steel mills is lobbying the government for an immediate value added tax rebate increase of up to 17% on exports of most steel products, to take some pressure off steel mills.
(Sourced from Interfax China)
Chinese iron ore import surges by 23% MoM - 13 Mar 2009 Oriental Morning Post reported that China's iron ore import has risen a surprising 22.4% from the month before to 46.74 million tonnes in February which comes against the backdrop of almost halving steel export from the year ago in the month.
Steelmakers and traders are adopting bottom fishing attitude on excessive optimism towards future economic outlook.
According to Mysteel senior analyst Mr Zeng Jiesheng that domestic steel price has started to pick up after touching the bottom in mid-November and many mills have achieved profit and begun to replenish ore stock in light of cheaper ore imports due to falling ore imports price and freight cost. He said that however, massive steel capacity utilization roars on despite export plunge, and ore importers should be more cautious in purchasing iron ore given the economic grim.
Domestic steel market is going through downward corrections from mid February after an upward blip in previous two months. The gross profit of most products has plummeted to CNY 200 per tonne right now, and steel mills may suffer further loss if steel export shows no sign of uptrend in following months. In fact, steel export is expected to drop further in Mar as a result of much worse economy in overseas market. Market insiders suggest that Beijing hike the tax rebate for steel exports to help shore up the market, and the ugly export figure might prompt the authority to unveil that policy within March.
(Sourced from Oriental Morning Post)
US ITC to review AD duties on carbon steel plate from China - 13 Mar 2009 It is reported that US International Trade Commission will conduct full five year sunset reviews of antidumping duty orders on cut to length carbon steel plate imports from China and review the suspended rates on steel plate from Russia and Ukraine.
The reviews will determine whether revocation of the orders would likely lead to the continuation or recurrence of material injury to domestic producers of the material.
Interested parties wishing to participate in the reviews can file a notice of appearance in the next 45 days. As part of its investigation, the commission has scheduled a hearing on September 9th 2009 in Washington DC.
The current AD rate on Chinese cut to length plate ranges from a low of 17%, rising to 31% to 38% and a top rate of 129%, depending on the producer. The AD rates for Russia and Ukraine were suspended in 2003.
(Sourced from www.platts.com)
Chinese slack demand offers little support to steel prices - 13 Mar 2009 China Securities Journal reported that top Chinese steelmakers Baosteel and WISCO both lowered April ex works prices while the rebar price in Shanghai market fell below last year's valley low during the week ended March 6th. Steel analysts believe the steel prices are questing for bottom for the second time, under the joint effects of slack demand, increasing inventory and slipping exports.
Baosteel cut HRC, CRC and galvanized steel products by CNY 200 per tonne on March 3rd followed by WISCO which reduced wire rod, HRC, CRC and other products by a range of CNY 50 per tonne to CNY 1000 per tonne. In particular, WISCO's knockout product silicon steel was chopped by CNY 1000 per tonne. This reflects prudent prospect of the steelmakers amid capacity and demand imbalance.
Mr Shan Shanghua secretary general of CISA said the price change was abnormal since big mills are still on the edge of loss-making, as learned by China Securities Journal, which suggests both big and smaller mills should further restrict outputs. He said that the prices are further declining rather than questing for a bottom, and it's still uncertain where the bottom is with quite a few small and medium-sized mills resumed production and pushed up rebar stockpile by 80% in MoM comparison and wire rod's 40% in February.
The previous rebound in steel price was deceptive and triggered a round of production resumption, which in turn threw the price down. Last week, prices of majority steel varieties fell to the levels of last year's lowest.
Visible weakening of demand from the end users can explain further declining steel price. Last year, the market sentiment was better given low rebar inventory, that's why the price stayed around CNY 3300 per tonne after a plummet; but the 4 trillion stimulus package drove up long product production this year and then the stockpiles.
Shan predicted February steel exports to worsen and further weigh on the domestic steel prices. As thus, it's too early to say the steel sector would see return of warmth in the second quarter.
(Source: China Securities Journal)
World dependence on energy coal set to grow - Report - 13 Mar 2009 Mining Weekly cited Mr Dr John Topper MD of Clean Coal Centre as saying that the world's dependence on coal for more than 40% of its power needs was not showing any signs of decreasing, but was instead poised to increase slightly in the next 20 years.
Mr Topper whose Clean Coal Centre in the UK operates under the auspices of the International Energy Agency said that the Fossil Fuel Foundation's Clean Coal Indaba in Johannesburg that coal was expanding on a global basis at a rate equal to, if not more than any of the other energy minerals.
He said that "So, getting coal to be used cleanly is becoming very much a focus area for many governments and many industries. Coal demand had grown considerably faster than the demand for oil, gas and other energy sources from 2000 to 2007. The biggest increase in the demand for coal had been from non Organization for Economic Cooperation and Development countries, which was projected to continue to 2030."
He added that "India would become a huge importer of coal, owing to all the super critical coal fired power stations that India was building and China, which had been a small net exporter of coal, would become a significant importer. India was planning, through 18 projects, to introduce an additional 30,000 MW of capacity, more than H1 of which would be coastal, which meant that India would be importing the necessary coal. India, which had begun its new build program was experiencing difficulty in securing its coal supplies and was buying reserves in Indonesia."
Mr Topper said that he was expecting changes to the dynamics of the international coal trade, which would put upward pressure on prices. Currently, only 15% of the world's coal use was traded, with the rest sourced indigenously. He added that "Over 40% of the world's power comes from coal today. Most projections show that that is not going to decrease. If anything, it is going to increase slightly over the next 20 or so years."
(Sourced from www.mininweekly.com)
Update on Canadian AD review on stainless steel wires - 13 Mar 2009 On November 12th 2008, the Canadian International Trade Tribunal, pursuant to subsection 76.03(3) of the Special Import Measures Act, initiated an expiry review of its findings made July 30th 2004, in Inquiry No. NQ/2004/001, concerning the dumping of certain stainless steel round wire originating in or exported from the Republic of Korea, Switzerland and the United States of America, and the subsidizing of such product originating in or exported from India.
As a result, the President of the Canada Border Services Agency commenced an investigation on November 13th 2008, to determine whether the expiry of the findings was likely to result in the continuation or resumption of dumping or subsidizing of the goods.
The investigation has now been completed and, on March 12th 2009, pursuant to paragraph 76.03(7)(a) of SIMA, the President has determined that the expiry of the findings is likely to result in the continuation or resumption of dumping of the goods from the Republic of Korea, Switzerland and the United States of America and the subsidizing of such product from India.
A Statement of Reasons containing additional details concerning the determination made by the President will be issued within fifteen days. The Statement of Reasons will be posted at the following website: www.cbsa-asfc.gc.ca/sima-lmsi/er-rre/menu-eng.html.
The Tribunal will now conduct an inquiry to determine whether the expiry of the finding is likely to result in injury or retardation to the Canadian industry and will make its decision by July 29th 2009.
BDI continues sliding down on March 12 2009 - 13 Mar 2009 It is reported that on March 12th 2009, Baltic Dry Index reached 2201 points down by 70 points as compared to March 11th 2009.
Capsize
| | BCI | Change
| | INDEX | 2,580 | -126
| | SPOT 4 TCE AVG | 25,232 | -1,664
| | March 11th | 26,896 |
| | Year Ago | 146,828 |
| | | |
All except INDEX in USD
Change is with respect to March 11th 2009 numbers
Panamax
Panamax
| Panamax | |
| | | BPI | Change
| | INDEX | 2,287 | -114
| | SPOT 4 TCE AVG | 18,326 | -929
| | March 11th | 19,255 |
| | Year Ago | 69,448 |
| | | |
All except INDEX in USD
Change is with respect to March 11th 2009 numbers
Supramax
| | BSI | Change
| | INDEX | 1,727 | -8
| | SPOT 4 TCE AVG | 18,060 | -79
| | March 11th | 18,139 |
| | Year Ago | 54,437 |
| | | |
All except INDEX in USD
Change is with respect to March 11th 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)
Severstal to develop cooperation with Belarus in 2009 - 13 Mar 2009 BelTA reported that Cherepovets based metallurgical plant Severstal will develop further cooperation with Belarus in 2009.
Severstal and BelAZ signed a contract. In line with the signed contract, Severstal will supply 5,000 tonnes of rolled metal to BelAZ per month. Nowadays, Severstal's rolled metal is used to produce one of world's largest 320 tonne dump truck which has been already successfully certified.
Besides, Severstal fruitfully cooperates with other Belarusian machine-building companies including Gomselmash and the Minsk Tractor Works. In 2008, Severstal delivered more than 60,000 tonnes of metal products to the MTZ.
Mr Dmitry Goroshkov sales director of CherMK Severstal said "We made sure once again that our strategy on the CIS market is right. Our work here and promotion of our products through Severstalbel company allow us to develop our presence in the region."
JSC Severstal is the leading Russia's metallurgical plant with cyclical turnaround. It is one of the most powerful, modern and dynamic companies producing ferrous metals. Various machines and technologies allow the plant to produce hot-rolled and cold-rolled sheets, rolled section steel, joist webs and tubes.
(Sourced from BelTA)
Rio maintains force majeure on iron ore cargoes fro WA - 13 Mar 2009 Bloomberg reported that Rio Tinto Group iron ore deliveries from Western Australian mines are disrupted more than three weeks after rain stalled rail operations. Rio said that it may postpone February and March shipments after rail lines connecting the Pilbara mines with the coast were flooded.
Inchcape Shipping Services Private Limited said that while berthing and ship loading has resumed, Rio’s force majeure, a legal clause allowing delays if an incident happens outside a supplier’s control, stays in place. It added that Rio Tinto Iron Ore’s mine, rail and port operations remain impacted and the FM period remains valid.
Mr Nick Cobban spokesman of Rio said that the company doesn't comment directly on any force majeure.
Rio said that it suspended some mining operations and rail movements, adding a week later that a partial resumption of rail services would start on February 28th 2009. Cobban today confirmed that had taken place, without giving further details.
It added that Pilbara is where most of Australia’s oil, gas and iron ore production is located. Rio's 11 mines in the area produced 175 million tonnes last year.
(Sourced from Bloomberg)
Downsizing deals - US Steel lays off more workers at Clairton - 13 Mar 2009 Pittsburgh Post-Gazette reported that US Steel announced that its is idling more production at its Clairton coke plant, citing continuing weak demand. The company did not say how many workers will be laid off.
Workers were notified today that four more of Clairton's 12 coke batteries will be idled, bringing the number of batteries to be idled to seven. The company announced late last month that production would be halted on three other batteries.
Ms Courtney Boone spokesman said that "The dramatic downturn in the economy has negatively affected our overall business. We continue to adjust production across all operations to stay in line with customer demand.”
She added that “Decisions to restart idled production facilities will be based on market conditions.”
The union estimates plant layoffs at 200 based on the seven batteries being idled. That would bring the number of layoffs announced by U.S. Steel since November to more than 7,000. Another 500 nonunion workers have accepted early retirement offers.
The move follows last week's announcement that about 1,500 workers at two of the steel producer's Canadian mills would be laid off.
(Sourced from Pittsburgh Post-Gazette)
Handan Steel orders for automation and electrical for 3 new lines - 13 Mar 2009 Siemens VAI Metals Technologies has received an order from the Chinese company, Handan Iron & Steel Corporation, to supply the automation and electrical equipment for a new annealing line and two hot galvanizing lines.
This includes all the drives plus the basic and process automation systems. The order is worth around EUR 20 million.. The strip processing lines are part of cold rolling mill No. 2, which is currently being constructed and is scheduled to start production at the end of 2010.
For the three processing lines of the new cold rolling mill, Siemens is supplying all the drive technology and the basic automation, which includes technological control systems for the built in skin pass mills and stretch levelers as well as measuring and control equipment for strip cleaning and post-treatment.
The project also encompasses process automation, control desks and HMI equipment with user-friendly process and plant diagnostic functions. Automation will be completely based on Simatic S7 programmable logic controllers, whereby standardized application modules will be used for actual programming to facilitate commissioning and maintenance. The process automation system and the HMI system for the almost fully automated production plants will contain standard server components with a partially redundant design to enhance plant availability. All the main and auxiliary drives are based on three-phase technology.
In order to ensure a uniformly high product quality, the annealing line is to be fitted with a fully automatic strip surface inspection system (SIAS). In the two hot galvanizing lines, systems from third-party companies will be integrated.
Siemens is also responsible for supervision of the installation work as well as for commissioning, acceptance-test support and customer training.
The annealing line will be built in collaboration with SMS Demag AG, Duesseldorf, Germany, and Drever International S.A., Liège, Belgium, and the two hot galvanizing lines will be installed in conjunction with Drever International and CMI Groupe, which is located in Seraing, Belgium.
Established in Handan in Hebei province in 1958, Handan Iron&Steel Corporation has an annual production of around 9 million tons of steel. Since the middle of 2008, the company has been part of the Hebei Iron & Steel Group, the leading steel producer in China.
Babcock resumes coal loading after cyclone - 13 Mar 2009 Bloomberg reported that Babcock & Brown Infrastructure Group owner of Australia’s second biggest coal export terminal expects to resume loading ships at the port in Queensland after a stoppage due to a tropical cyclone.
Mr Greg Smith GM of operations at the Babcock Infrastructure unit that owns the port said that all the ships that sailed away from Dalrymple Bay to escape a tropical cyclone have now returned to the site except for one. He said that rail deliveries of the coal to the port, south of Mackay, remain disrupted after a train accident earlier in the week.
Australian authorities evacuated resort islands off Queensland’s coast during the weekend and put emergency services on alert as Tropical Cyclone Hamish brought damaging winds and high seas. The storm has since abated to a low weather system and is continuing to weaken as it moves northwest back up the Queensland coast, the Bureau of Meteorology said.
Mr Smith said that “In terms of ship loading, provided the ground-swell has come down enough for the harbor master to be comfortable we will berth ships as soon as we are able to. We have those five assembled cargoes, those ships are there, so we are all ready to roll.”
Coal rail deliveries, which were halted March 10 after a train derailment at rail company QR’s Coppabella yard in central Queensland, resumed yesterday afternoon before being stopped again, Smith said. The rail system supplying the port may be out of action until about 10 p.m. local time tonight, Smith said.
(Sourced from Bloomberg.net)
Turkish scrap import prices fall - 13 Mar 2009 It is reported that Turkish scrap import prices continued to fall.
Last week, Europe's H1 and H2 (70:30) mixed scrap price dropped to CFR USD 208 per tonne CFR from last two week's USD 219 per tonne CFR.
US shredded scrap prices fell to USD 189 to USD 197 per tonne in February, down by USD 25 to USD 30 per tonne. At present, the US H1 and H2 (80:20) mixed scrap prices hit USD 215 per tonne CFR, shredded steel scrap price reached USD 220 per tonne while P&S scrap was priced at USD 225 per tonne CFR.
As for A3 scrap in the Black Sea, Romania's A3 scrap price has fallen to USD 205 per tonne CFR.
(Sourced from YIEH.com)
Oil may touch USD 75 as China hedges US treasury risk - 13 Mar 2009 After falling from USD 147 to USD 35 per barrel towards the end of last year, crude oil has once again gained and touched USD 45 per barrel on increased speculation that China’s stimulus plan may spur demand for the commodity near term. However, some experts are of the view that this is not just speculation but real purchases driving the prices up.
China is said to be considering buying crude oil as part of its strategy to diversify holdings from US Treasuries. This is to hedge against the risk of US Treasury prices dropping and dollar depreciation in the long run, with the Obama government issuing government bonds worth dollar trillions to finance economic stimulus measures.
Japanese business daily Nikkei reported last week that the Asian giant, which has been building a national oil stockpile since 2004 is planning to stock 100 million barrels by next year.
According to the business daily China has about USD 2 trillion in foreign reserves, the largest in the world. It put Japan behind as the No 1 holder of US Treasuries last September. Two-thirds of China's foreign reserve assets are said to be dollar denominated.
Mr Suresh Chandra, analyst at Horizon Capital Management said “The next bubble to burst will be the US treasuries. Over the past 15 months, the Arab oil countries have been the biggest buyers of US treasury bills worth USD 245 billion. The next biggest buyer is China at USD 233 billion. He said that “However, the current economic situation has changed the game of the business. With the slump in the global economy and US running huge fiscal deficit, the dollar is expected to depreciate heavily in the mid to long term. And hence, a country like China, which has huge foreign reserves in dollars and US treasuries, is trying to hedge against their dollar denominated holdings.”
With the US economy in the doldrums, these government bonds aren't as attractive as they used to be. China has already said they want to diversify away from them, though nobody thinks there will be a wholesale dumping of US bonds.
One of the Chinese top brass recently hinted that the country may review its large purchases of US Treasuries, saying that future buying will be adjusted to meet the nation's need to maintain the value of its foreign currency reserves.
Even Mr Warren Buffet has warned of low US government debt yields in his recent letter to the shareholders. He said “The US Treasury bond bubble of late 2008 may be regarded as almost equally extraordinary to previous bubbles in housing and internet stocks. He added that the government stimulus efforts will likely generate an "onslaught of inflation.”
Although the scale of the potential oil purchases by China is unknown, buying 100 million barrels would amount to US4 billion at current market prices representing only 0.2% of China's foreign reserves.
(Source: The Economic India Time)
Update on CSC production and sales for February 2009 - 13 Mar 2009 Taiwanese steel major China Steel Corporation has announced its results for January 2009 as under
| Item | Feb'09 | Accumulated for '09
| | Production Volume | 532,271 | 877,922
| | Sales Volume | 586,642 | 1,023,255
| | Revenue | 12,446 | 22,733
| | Sales Revenue | 12,245 | 22,378
| | | |
Volume in tonnes
Amount in millions of TWD
Macroeconomic indicators - Mr Jiabao sees 8% growth target within reach - 13 Mar 2009 Bloomberg citing Chinese premier Mr Wen Jiabao as telling delegates in his annual speech to China’s parliament in Beijing recently that China’s 8% growth target for this year is within reach, indicating the government doesn’t see the need to increase a CNY 4 trillion economic stimulus. It’s possible for us to meet this target. He said the nation needs to reverse the economic slide as soon as possible.
Mr Wen’s prediction that China will ride out a global recession and his pledge to “significantly increase” investment helped the Shanghai Composite Index to add to its biggest rally in four months.
Collapsing exports have dragged the world’s third largest economy to its weakest growth in seven years and cost the jobs of 20 million migrant workers.
Mr Stephen Green head of China research at Standard Chartered Plc in Shanghai said “They are keeping ammunition in reserve. Every day the world economy gets worse and they’ve probably got two years of very slow global growth to get through.”
The 8% growth target compares with the International Monetary Fund’s forecast that the nation’s economy will expand 6.7% the least in almost two decades.
1. Policy Complacency
Mr Frank Gong head of China research at JPMorgan Chase & Co in Hong Kong said “We would continue to highlight the risk of policy complacency. Policy makers appear to be satisfied with the recent initial yet still quite fragile recovery in the economy. The drop in China’s growth rate has put severe pressure on employment. We face unprecedented difficulties and challenges.”
2. Unemployment
With 20 million rural laborers who previously found jobs in cities now unemployed, and 7.1 million college graduates seeking work, authorities are alert to the danger of social unrest.
3. Record Budget Deficit
The budget showed the 2009 budget deficit was set at a record CNY 950 billion as the slowdown cuts revenue and the government keeps spending. Tax cuts already in place will save companies and households CNY 500 billion this year. The deficit, up from CNY 111 billion last year, is forecast to be within 3% of gross domestic product, compared with a 12% shortfall budgeted by the US.
4. Very Confident’
Statistics bureau head Ma Jiantang said he was “very confident” that China could achieve its growth target, citing the third monthly increase in the official manufacturing index in February. While China’s economy is the only one of the world’s five biggest still growing, the pace has slowed for six straight quarters. The expansion in the three months through December was 6.8% from a year earlier, compared with 13% for all of 2007. Mr Wen said public spending, mostly on infrastructure, will more than double to CNY 908 billion. Spending on social security and employment will rise 22% to CNY 335 billion.
4. Low Cost Housing
The medical and health budget will climb 38% to CNY 118 billion. The allocation for welfare homes and low-rent housing will almost triple to CNY 49.3 billion.
Mr Wen’s report showed China is targeting inflation of 4% compared with an actual rate of 5.9% in 2008. He said that the global financial crisis “is still spreading and is yet to bottom out, adding that a trend toward global deflation was becoming more obvious. Trade protectionism is rising.
Mr Wen’s report contrasted with a year earlier, when he pledged to rein in lending and growth in money supply to cool inflation. This year, the government spurred record new loans in January by pressing banks to support the stimulus program. He said that this year’s target for new loans is more than CNY 5 trillion up from last year’s CNY 3.6 trillion. Banks’ actual new lending in 2008 was CNY 4.9 trillion.
The government stimulus plan announced in November spans spending through 2010 on public housing, railways, highways, airports, power grids and earthquake reconstruction work.
(Source: Bloomberg)
Recovery signs - Caterpillar orders show 18 month turn in mining - 13 Mar 2009 US mining equipment manufacturer Caterpillar said that its largest customers are looking for a return to growth in the mining industry in the next 18 months and view the price of copper as a key indicator of a turnaround.
US copper futures on the New York Mercantile Exchange's COMEX division have risen from USD 1.38 per pound at the start of 2009 to current levels above USD 1.65 per pound. When copper sinks below USD 1.10 per pound, more miners shut some operations completely and copper at USD 1.40 serves as a break even level for many producers.
Mr Chris Curfman president of Caterpillar's global mining division said that "It's really the copper price that we watch. At USD 2.00, I'd go on a camping trip. But it's got to get up to USD 1.80. Once I see that level I'll feel really comfortable."
Mr Curfman said that Caterpillar is close enough to the big copper producers to see at what price level they would become active again and USD 1.60 per pound seemed a threshold prompting some miners to put idle equipment back to work. When copper went to USD 1.65 last week, Baghdad copper mine put their trucks, which were parked, back in the dirt. Copper at USD 1.65 isn't all bad, depending on the ore quality. While some mining customers seem convinced that copper will slide as low as 90 cents, Mr Curfman thinks demand from China and other infrastructure building countries will keep the price from falling much further than its recent four year low around USD 1.27 per pound.
He said that if you talk to the copper producers, they think that because of China and India and the urbanization process, copper is going to come back. It's just a matter of how quickly. Given the rapid downturn in metals mining recently, the Peoria, Illinois based heavy equipment manufacturer was hit with an onslaught of delays and cancellations.
Mr Curfman said that they were substantial in North America and Australia as well as emerging markets where Greenfield projects were not being funded over the next year to 18 months. Caterpillar has several thousand delayed customer orders. Where possible, customers opted to delay rather than cancel for fear of losing their place in the queue when the industry does turns around. It's simply a delay, because a lot of people think this thing is going to bounce right back up. With mine plans running 10 to 20 years, some of Caterpillar's largest customers, like BHP Billiton are expecting 18 month delays on some mine projects and remain optimistic longer term.
He said that "We are seeing some cancellations. We are seeing a clump of orders still being sat on by most of our big alliances. They are reluctant to cancel for fear of losing their position on the order board, which are out 2010, 2011 and 2012. We're still negotiating with the big guys and still doing deals but for delayed activity. Still other customers are adding new orders, mostly among gold miners in Latin American.”
(Sourced from Reuters)
US steel plate mills are undercut by service center deals - 13 Mar 2009 Platts reported that a lack of demand and a strong effort to clear service center inventories are combining to sharply drive down steel plate prices in the US.
The Platts benchmark price of structural carbon plate was adjusted downward by USD 90 per short tonne to a new midpoint of USD 650 per short tonne ex works Southeast mill within a narrow price range of USD 640 to USD 660 per short tonne. This represents a 12% decline from just a week ago and is the reference price for mill orders of 5 short tonne or more loaded at the mill.
A Houston based distributor who supplies plate to fabricators throughout the Southeast said that "Due to the continued destocking by service centers, prices continue to fall to dangerous levels. At the current pace we are at, we could see transaction prices going to sub USD 30 a hundredweight. Import offers are cheaper, however no transactions are being done due to stock positions sitting at ports already."
The Platts import price assessment lies in a narrow range between USD 580 to USD 600 CIF Houston, down about USD 50 per short tonne from the previous price. The US plate mills do not have much on their order books, according to sources contacted by Platts. In fact, it seems some mills have no backorders.
(Sourced from www.platts.com)
Deloitte appointed as administrators to Lockley Stainless and CPC Stainless - 13 Mar 2009 Creditman reported that Mr Dominic Wong and Mr Richard Hawes of Deloitte, the business advisory firm, were appointed as Joint Administrators to Lockley Stainless Limited and CPC Stainless Limited, a subsidiary of Lockley on March 10th 2009.
Mr Richard Hawes, partner and Joint Administrator commented that “Lockley invested substantial capital for a new service centre in 2008, which combined with falling commodity prices and sales volumes, have resulted in profitability and cashflow problems. These problems have been exacerbated by current economic difficulties. We will continue to trade the business whilst a buyer is sought. We are hopeful that a suitable buyer will be found for what is the UK’s only independent, stainless steel service centre.”
He added that “CPC traded stainless steel in East Anglia. Prior to our appointment the Company took steps to close the business. Buyers will now be sought for the remaining assets.”
Lockley trades sheet stainless steel and operates a new purpose built stainless steel service centre in Wolverhampton. The service centre decoils, cuts and polishes sheet stainless steel to customer requirements. Lockley and its subsidary, CPC, employ a total of 25 employees.
(Sourced from Creditman)
NLMK and DBO Holdings Inc ink settlement agreement - 13 Mar 2009 NLMK and DBO Holdings Inc have signed a settlement agreement with respect to their dispute concerning NLMK’s proposed acquisition of John Maneely Company, which NLMK terminated in November 2008.
According to the release, the agreement provides for the full mutual release and discharge by NLMK and DBO from their claims arising from the transaction. Pursuant to the terms of the settlement agreement, NLMK will pay DBO a settlement amount of USD 234 million within four business days of signing.
Shougang in talks to buy Guiyang Steel - 13 Mar 2009 According to Mr Zhu Jimin president of Shougang Group, Shougang is in talks to buy Guiyang Special Steel Co Ltd, which has annual production of less than 1 million tonnes.
Mr Zhu said "I hold the firm view of its long-term development. Shougang has previously regrouped Shuicheng Iron & Steel Co Ltd, also in Guizhou. He said that, Shougang's Caofeidian new plant will be put into fully operation by 2010, and the first-stage project, or 4.85 million tonnes of annual capacity, is slated to start commissioning in March end or April. The first-phase capacity makes up half of the total in the new factory.
Mr Zhu said "The steel revitalization plan encourages domestic steel mergers and acquisition however, it may need at least three years to fulfill the process."
The Beijing based steel group, one of China's steel majors, also joins in the steel consolidation flow after the releases of steel support plans in January. The mill is likely to wholly control Shanxi Changzhi Steel by May at the soonest.
After Shougang's relocation, its old factory in Beijing will be acted as its' headquarter and research & development center.
Ukrainian iron ore export down by 33% - 13 Mar 2009 NRCU reported that iron ore exports decreased by 32.4% or by 455,610 tonnes to 951,070 tonnes against December 2008.
The State Statistics Committee informed that exports of non sintered ore dropped by 39.7% to 460,190 tonnes. Export of sintered ore reduced by 23.8% to 490,880 tonnes. Against January 2008, iron ore export dropped by 49.7% or by 939,050 tonnes in January 2009. In 2008 against 2007, iron ore export increased by 9.8% or by 2,030.72 million tonnes and made up 22,778.79 million tonnes.
(Sourced from NRCU)
Erdemir hit by Q4 loss - 13 Mar 2009 It is reported that leading Turkish steel maker Erdemir posted net profit of TRL 211.47 million (USD 122 million) in 2008, sharply below a poll forecast of TRL 1.08 billion pointing to a huge fourth quarter loss of more than TRL 1 billion.
Erdemir had previously posted nine-month net profit of TRL 1.4 billion indicating that it suffered a TRL 1.19 billion lira loss in the fourth quarter. A year earlier, the company reported a net profit of TRL 679.43 million. Its sales rose 27% to TRL 6.809 billion last year from TRL 5.357 billion a year earlier.
According to Reuters poll of 11 analysts, Erdemir had been expected to post a TRL 325 million loss in the fourth quarter due to rapidly declining steel prices.
Mr Coskun Ulusoy chairman of Erdemir said that the company had left its options open for further production cuts as it does not expect collapsed steel demand to recover any time soon.
Mr Ulusoy told in London that Erdemir's USD 1.7 billion worth of investment plans for the next several years were frozen due to the economic downturn.
(Sourced from Reuters)
Macroeconomic indicators - Chinese industrial output growth slows down - 13 Mar 2009 Interfax China quoted according to figures released by the National Bureau of Statistics that China's industrial output in January and February rose by just 3.8%YoY.
The growth rate represents a 1.9 percentage point drop from that of 5.7% in December 2008.
The data provides the first look at China's industrial production activities in 2009 as the NBS did not release the monthly industrial output figure for January.
The industrial output figure was calculated with output from all state-owned and privately owned enterprises operating in the country with annual revenues larger than CNY 5 million.
Industrial output for coal, cement and steel products all witnessed positive growth in the January and February period compared with the same period a year ago. However, output from the automobile, power and nonferrous metals sectors shrank on an annual basis in the first two months of the year.
Mr Li Yizhong China's Minister of Industry and Information Technology, said at the 11th National People's Congress in Beijing on March 10th that the global financial crisis has been a blow to China's industrial sector but thanks to massive government stimulus policies, the sector has shown signs of recovery in the past two months.
The table below shows China's industrial output by major products or sector in the first two months of 2009.
China's industrial output by products or sector
| Product | Jan-Feb'09 | Change
| | Crude coal | 368.91 | 3.60
| | Crude steel | 81.62 | 2.40
| | Steel products | 90.35 | 3.10
| | Alumina | 3.23 | -7.50
| | Cement | 158.70 | 17.00
| | | |
In million tonne
(Source: National Bureau of Statistics)
Severstal to scrap dividend in 2009 - 13 Mar 2009 RBCnews reported that Severstal will not pay any dividend for the fourth quarter of 2008 and 2009 unless the economy picks up, the steel producer said in a statement.
As reported earlier, Severstal paid out interim dividend of RUB 5.2 per share for the first quarter of 2008, RUB 18.35 for the first half of 2008, and RUB 7.17 for the first nine months of 2008.
(Sourced from RBCnews)
Mr Bergstrom becomes president and CEO of BE Group - 13 Mar 2009 Mr Lars Bergström, who has been appointed President and Chief Executive Officer of BE Group AB, took the position on March 11th 2009.
Mr Bergström is fifty years old and holds an MSc in engineering from the Swedish Royal Institute of Technology and an MBA from Uppsala University. He has a long professional history in the Swedish engineering sector, including several positions with the ABB Group. He also has experience leading a multinational in a listed environment from when he served as President and CEO of KMT, Karoline Machine Tools, which was a listed company during his five years at the helm. Most recently, he was President and CEO of HTC Group, which provides professional floor treatment systems.
BE Group AB, listed on the OMX Nordic Exchange, Stockholm since November 2006, is one of the leading trading and service companies within steel and other metals in Europe. The company has about 10,000 customers, primarily within the construction and engineering industries. BE Group provides service in the steel, stainless steel and aluminium sectors. The company's sales in 2008 were SEK 7.7 billion. BE Group has more than 1,000 employees in ten countries in northern Europe, where Sweden and Finland are its largest markets. The head office is in Malmö, Sweden.
Production pruning - Hyundai Steel resumes production - 13 Mar 2009 Reuters reported that the second largest South Korean steel maker Hyundai Steel said that domestic long product market had experienced certain degree of improvement, but still had not seen its worst yet, because construction activities are still weak.
Mr KimSang-gyu the director of Hyundai Steel's management and planning department in Reuters Global Mining and Steel Summit said "The economic recession has brought a heavy blow to us. Although demand is recovering and stock has come back to the normal level it's still too early to say the market had experienced its worst time.
He said that “Our production has been resumed up to around 80%.
He also revealed no matter how the economic background would be, it won't postpone the utilization of its new furnace. He said that SBQ late supply is still insufficient and that Hyundai Steel will push all its laid-up capacities into production, and will produce 3.5 million tonnes of steel through its new furnace.
He predicts that Asian steel producers may get 50% drop in iron ore price from Brazil. If that is the case, the iron ore price would come down to USD 43 per tonne the level in 2005.
Colombia to double coal output by 2019 - 13 Mar 2009 Reuters reported that Colombia expects to double its annual coal output by 2019 to 145 million tonnes, but must overcome the challenges of the economic crisis and delays in improving its infrastructure.
The report quoted Mr Hernan Martinez mines and energy minister as saying that the country's mining sector contribution to the economy should grow 6.7% a year after comparing the domestic industry with the region's mining leaders such as Chile and Peru.
Mr Martinez during a coal conference organized by McCloskey Group said that "Despite the current world financial crisis and the prices of coal, Colombia is still among the best not only in terms of low costs but also because of its quality.”
Colombia is among the top six producers of thermal coal, which is sold mostly to U.S. and European markets. But its road network, ports and cargo rail system are underdeveloped and in some cases insufficient to meet demands of expansion projects proposed by major exporters working in the Andean country.
Mr Martinez said plans for improving infrastructure include the construction or rebuilding 5,000 kilometers of roadway with an investment of USD 560 million. Caribbean port work and the construction and improvement of 1,300 kilometers of railway lines for cargo are also planned. It has has proven reserves of 7,000 million tonnes of coal, but could reach as much as 17,000 million tonnes. Most of the reserves are located in the northeast of the country in Cesar, Guajira, Santander and Norte de Santander departments.
(Sourced from Reuters)
Recession reports - Japanese stock market sinks to record low in 26 year - 13 Mar 2009 It is reported that Japan's Nikkei 225 stock index plunged by 1.2% and stock markets in Asia have fallen with Japan's benchmark tumbling to a 26 year closing low amid the global economic slowdown. Japan lost 87 points to close at its lowest level since October 1982.
Hong Kong's Hang Seng also fell 4.8% while other major Asian markets plunged on concerns about the fate of US banks and auto industry. This came after Japan recorded its first current account deficit in 13 years in January.
Japan's ministry of finance said that the deficit had reached USD 1.7 billion, as exports plummeted in the face of shrinking demand overseas, particularly in the United States.
Semis return to October level - Rusmet - 13 Mar 2009 Rusmet reported that Semis prices in global market continue to decrease. The demand for semis dropped in February due to objective reasons such as the crisis in European and Middle East construction industry and frustrated hopes for spring rally. Moreover, there are negative expectations in the market. The customers do not conclude contracts and prefer to wait. At that new rebate from the suppliers make the situation even worse cutting the prices, they encourage the customers to increase their pressure in order to gain further quotations decrease.
By the end of the first decade of March Russian and Ukrainian semis dropped to $300 per ton FOB and less. There are the reports about Ukrainian semis supplies to Turkey at USD 300 per tonne CFR. Even in Iran, where Russian steel reached USD 400 per tonne CFR in late February, the prices dropped to USD 360 per tonne to USD 370 per tonne CFR. According to the data from local sources Iranian traders and rolling mills have substantial stockpiles of semis. That is why they are not interested in new purchases despite very advantageous conditions offered to them.
Semis of other manufacturers have also dropped. In particular, Turkish companies began to quote their products at USD 300 per tonne to USD 310 per tonne FOB. Large volumes of CIS and Turkish products appeared in South-Eastern Asia markets in late February and prices dropped to USD 335 per tonne to USD 350 per tonne CFR. The quotations in Vietnam were higher in early March USD 400 per tonne CFR. This can be explained by some rally in local construction industry in February due to the release in credit market and by the fact that old stockpiles were partially used. However, Vietnam will unlikely be the island of welfare against the world recession for long.
Current recession can not be compared with the situation in August to October 2008 when metallurgists had to decrease the prices by 3 to 4 times and the volumes by 2 to 3 times. However, the prices have almost reached the minimal level of late October early November USD 270 per tonne to USD 300 per tonne FOB for the deliveries from CIS. They kept at this level for two or three weeks till the return of the consumers to the market. After that the quotations began to grow and reached USD 400 per tonne FOB by late November.
This scenario will likely to repeat in late March early April. For this supply slump and the end of damping is needed. Eventually, having made sure that the prices stopped to drop, the customers will return to the market to use the advantageous situation for concluding agreements. Semis prices in Turkey are undervalued by USD 20 per tonne to USD 40 per tonne comparing to scrap. However, now the situation is complicated by the fact that the exporters need cash at once.
(Source: Rusmet.ru)
HBIA 2008 output up by 4% YoY - 13 Mar 2009 Platts reported that production of hot briquette iron among members of the Hot Briquetted Iron Association rose to 5.6 million tonnes in 2008, up by 4% YoY from 2007.
According to data from HBIA's transportation committee, almost 4.5 million tonnes was exported internationally, with steelmakers in Europe receiving the largest portion with 39% or more than 1.7 million tonnes, up by 4% YoY. North America received almost 1.2 million tonnes of HBI in 2008, up by 3% YoY, followed by Asia at 566,000 tonnes or 13% of shipments, Africa at 514,000 tonnes or 11% of shipments and South America at 469,000 tonnes or 10% of shipments.
HBIA producer members include COMSIGUA, CVG Ferrominera Orinoco, MATESI, Orinoco Iron, and VENPRECAR, all of Venezuela, India's Vikram Ispat and JSC Lebedinsky Mining & Dressing Plant. Qatar Steel Company was an HBIA Producer Member for part of 2008.
(Sourced from www.platts.com)
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