| Price Index - India | | | | 06-Mar | 05-Mar | Change | | ILPPI | 6662 | 6688 | -26 | | IFPPI | 6658 | 6658 | 0 | | INDSPI | 6660 | 6674 | -14 | | What is it? | | Poll Results | | Billet prices would go below USD 300 CNF? | | Yes | 70% | | No | 25% | | Can't Say | 5% | | View Current Poll | | Currency | | AUD | 1.5601 | | BRL | 2.3374 | | CAD | 1.2859 | | CNY | 6.8300 | | EUR | 0.7912 | | GBP | 0.7088 | | INR | 51.6796 | | JPY | 97.6130 | | RUB | 35.3387 | | USD | 1.0000 | | ZAR | 10.3896 | | View Current Currency | | Metal Rates Cash Seller & Settlement | | Zn | USD 1186 | | | Ni | USD 9780 | | | Sn | USD 11095 | | | Al | USD 1301 | | | Cu | USD 3640 | | | View Current Metal Rates | | Steel Futures | | NCDEX | 23900 (19-Dec) | INR | 0 |  | | DGCX | 448 (05-Mar) | USD | 0 | | | LME-M | 290 (05-Mar) | USD | 0 | | | LME-F | 305 (05-Mar) | USD | +5 |  | | 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
Sterlite Industries inks pact to acquire ASARCO LLC - 08 Mar 2009 Sterlite Industries has announced that it has signed a new agreement with ASARCO LLC, a Tucson based mining, smelting and refining company, for purchase of substantially all the operating assets of Asarco.
The purchase consideration comprises
(a) a cash payment of USD 1.1 billion on closing and
(b) a senior secured non interest bearing promissory note for USD 600 million, payable over a period of 9 years as follows:
(i) USD 20 million per year from the end of second year for a period of 7 years and
(ii) a terminal payment of USD 460 million at the end of the 9 year, totaling to USD 600 million.
In the event that the annual average of daily copper prices in a particular year increases beyond USD6,000 per tonne, the annual payment in that year will be proportionately increased subject to a maximum of USD 66.67 million and the terminal payment in the 9 year will be correspondingly reduced, keeping the total payment at USD 600 million. The principal amount of the Note will be adjusted for any variations in working capital on closing. The obligations under the Note are secured against the assets being acquired and are without any recourse to Sterlite.
The agreement is subject to the approval of the US Bankruptcy Court for the Southern District of Texas, Corpus Christi Division.
Asarco, formerly known as American Smelting and Refining Company, is a 110 year old company and is currently the third largest copper producer in the United States of America. It sold approximately 237,000 tonne of refined copper in 2008. Asarco’s mines currently have estimated reserves of 5 million tonne of contained copper. For the year ended December 31st 2008, Asarco had total revenues of nearly USD 1.9 billion and profit before tax of USD 393 million.
The integrated assets to be acquired include 3 open pit copper mines and associated mills and SX-EW in Arizona, USA, a copper smelter in Arizona, USA and a copper refinery, rod and cake plants and a precious metals plant in Texas, USA. The asset acquisition is on a cash free and debt free basis. Sterlite will assume operating liabilities but not legacy liabilities for asbestos and environmental claims for ceased operations. The consideration being paid is towards the gross fixed assets and working capital of Asarco.
Mr Anil Agarwal chairman of Sterlite said that “We are happy that we have reached agreement with ASARCO on these new terms. This acquisition is in line with our strategy of leveraging our existing skills to become a diversified global copper producer and creating long term value for shareholders.”
Sterlite Industries Limited Page 2 of 2 Acquisition of Asarco Assets Asarco is expected to create significant long term value for all stakeholders through:
1. Leveraging Sterlite’s proven operational and project skills to develop and optimise Asarco’s mines and plants
2. Access to attractive mining assets with long life
3. Geographic diversification in the North American market
4. Stable operating and financial platform for Asarco.
RBS Securities acted as financial advisor and Shearman & Sterling acted as legal advisor to Sterlite in this transaction.
Macroeconomic indicators - Indian core sector growth dips - 08 Mar 2009 BL reported that growth in the country’s 6 infrastructure industries slowed to 1.4% in January 2009 compared with 3.6% in January 2008 mainly on account of deceleration in coal production and electricity generation.
During April 2008 to January 2009, the 6 core infrastructure industries registered a growth of 3.2% as against 5.7% during April 2007 to January 2008.
According to an official, coal production registered a growth of 6.3%during January 2009, lower than 7.9% recorded previously, while electricity generation registered a growth of 1.4%compared with 3.7% previously.
During April-January 2008-09, coal production grew by 8.8% compared to an increase of 4.8% during 2007-08. Similarly, electricity generation grew by 2.5% during April-January 2008-09, against 6.3%. Finished steel production registered a growth of 1.2% compared to 2% in January 2007. Crude oil production declined by 8.1% compared with a marginal decline of 0.2% registered during January 2008, while petroleum refinery products reported a decline of 2.6% against a growth of 5.4% in January 2008.
Meanwhile, crude oil production contracted by 1.3% during April to January 2008-09 against a marginal growth of 0.3% recorded previously. Cement production registered a growth of 8.3% compared with to 5.6% recorded in January last.
(Sourced from Business Line)
JSW Steel sees 60% jumps in sales this quarter on good demand - 08 Mar 2009 PTI reported that JSW Steel expects its sales volume to surge by as much as 60% to 1.2 million tonnes this quarter on account of improved demand from sectors like automobile and construction.
Mr Sajjan Jindal vice CMD of JSW Steel said that "Post commissioning of a new blast furnace at our plant, we expect our sales to increase by nearly 60% to 1.2 million tonnes as against 0.7 million tonne in the Q3."
Mr Jindal said that on the industry, domestic steel producers should see their sales grow by about 15% to 20% in the Q4 of the fiscal.
As automobile sector posted a robust growth in February, it had a reflection on the domestic steel output too, which went up by 2.8% to 4.74 million tonne from 4.61 million tonne.
(Sourced from Press Trust of India)
Indian import parity price for Plates goes up - 08 Mar 2009 As per market prices prevailing at Mumbai on March 5 2009, import parity pricing for HRC in tube making grade is about USD 523 per tonne on CNF basis as compared to USD 519 per tonne as on February 26th 2009.
Following expenses are factored in
1. Port expenses at INR 400 per tonne for break bulk
2. Margin of INR 1500 per tonne
3. Conversion rate of USD to INR - 51.7
(Conversion rate on February 26th was 51.3)
Considering the existing FOB Black Sea and China, impost of prime made to order plates is difficult in general, but possible for low priced stock cargos it would be possible.
To know more details on steel prices subscribe to services of www.steelprices-india.com by registering or send a mail to admin@steelprices-india.com with contact details. Kindly note that this is a paid service
(Sourced from www.steelprices-india.com)
SAIL SSP bags SA 8000 certification - 08 Mar 2009 PTI reported that Steel Authority of India Limited’s Salem Steel Plant obtained SA 8000:2001 certification on Friday from the world renowned certifying agency TUV, Nord.
In a function held at the plant's auditorium Mr N Pradeep Kumar head of the Chennai branch of TUV India handed over the certificate to Mr BB Singh ED of Salem Steel Plant.
During the occasion, he also handed over the ISO 14001:2004 certificate for Environment Management System for Salem Steel Plant's township, Mohan Nagar, for the plant's commitment to improve the quality of life of its residents.
Salem Steel Plant, which has already been certified for ISO 9001:2000 Quality Management System since 1993, has now extended its scope by inclusion of the HR services. The certificate with the extended scope was also handed over at the function.
According to an official, Salem Steel Plant is the first Public Sector Unit in Tamil Nadu to receive the SA 8000:2001 certification
(Sourced from Press Trust of India)
Indian import parity price for TMT goes down - 08 Mar 2009 As per market prices prevailing at Mumbai on March 5 2009, import parity pricing for HRC in tube making grade is about USD 453 per tonne on CNF basis as compared to USD 474 per tonne as on February 26th 2009.
Following expenses are factored in
1. Port expenses at INR 400 per tonne for break bulk
2. Margin of INR 500 per tonne
3. Conversion rate of USD to INR - 51.7
(Conversion rate on February 26th was 51.3)
Import of TMT is viable at coastal locations with the current levels prevailing at Black Sea. But billet downtrend would result in further reduction in prices of rebars thus further improving import viability.
To know more details on steel prices subscribe to services of www.steelprices-india.com by registering or send a mail to admin@steelprices-india.com with contact details. Kindly note that this is a paid service
(Sourced from www.steelprices-india.com)
Bolivia plans to acquire land for JSPL El Mutun project - 08 Mar 2009 Bloomberg quoted Mr Luis Alberto Echazu Mining minister as saying that Bolivia plans to take 243 hectares of private land that contains part of the El Mutun iron ore deposit and deliver it to India’s Jindal Steel & Power Ltd.
The Regional Superintendent’s Office of Santa Cruz issued a resolution to expropriate two properties, covering 112 hectares and 131 hectares, owned by Osvaldo Monasterios.
Mr Echazu said that a dispute over the land delayed the mining project, which may produce as much as 2 million tonne of iron ore in its first full year of output. He added that Monasterios will be paid.
Mr Echazu said that “We had to move to expropriate via the mining code, and this is a positive result. This property owner is impeding the realization of the biggest industrial project in the history of our country.”
(Sourced from Bloomberg)
KEC bags 3 TLT orders - 08 Mar 2009 PTI reported that KEC International has bagged 3 orders aggregating INR 365 crore from different vendors for construction of transmission lines.
KEC in a filing to the Bombay Stock Exchange said it has secured 2 contracts of INR 340 crore from Power Grid Corporation India Ltd for construction related works. The first order worth INR 185 crore for construction of transmission lines in Assam and Arunanchal Pradesh and it is scheduled to be completed by November 2011.
It said in a statement that it has won another contract worth INR 155 crore from PGCIL. It would construct transmission lines in Gujarat and Maharashtra and the project is expected to be completed by December 2011.
Meanwhile, KEC has also bagged an order valued INR 25 crore from Central Organization for Railway Electrification. The scope of work includes design, supply and construction of 25 KV of circuit lines and the said project is scheduled to be complete d by September 2010.
Mr Ramesh Chandak CEO & MD of KEC International said that “KEC has been bagging orders from various geographies in the last few months. Bagging orders from PGCIL has reinforced our position as world's leading player in the power transmission EPC business.”
(Sourced from Press Trust of India)
Orissa Sponge lands in corporate governance mess - Report - 08 Mar 2009 ET reported that Orissa Sponge, takeover target of 3 separate groups, is now facing corporate governance issues.
As per report, one of the independent directors on the board of Orissa Sponge put in his papers citing unfair corporate governance practices. One of the three independent directors on the board of the firm, Mr V Raghuraman, who represented India Renewable Energy Development Agency, resigned on Friday. He said that “Being a board member, I was not informed about the March 4th meeting. The incident has left me with no option but to resign.”
The report added that another director on the board has contradicted a disclosure made by Orissa Sponge to the stock exchange on Thursday. The director has written to the company and the Bombay Stock Exchange that an emergency meeting took place between four directors of the firm, including the promoter Mr PK Mohanty, on March 4th 2008.
The report added that Besides, Mr Mohanty, the meeting was attended by Mr AKK Meena MD of Industrial Promotion and Investment Corporation of Orissa and two nominees of IPICOL, Mr LD Sahoo and Mr RP Panda. State government owned IPICOL owns 5% stake in Orissa Sponge.
(Sourced from Economic Times)
JSW sees steel demand grow in Q4 in India - 08 Mar 2009 Reuters reported that JSW Steel Ltd sees a 15% rise in India's steel demand in January to March 2009 from the earlier quarter and expects prices to remain stable till June 2009.
Mr Sajjan Jindal MD of India's No 3 producer of the alloy said that "I would like to believe that is the foundation of a turnaround."
He said that there is demand from housing, auto and rural sectors.
(Sourced from Reuters)
Power Ministry considers one UMPP for every state - 08 Mar 2009 Projects Today reported that the Union Power Ministry is mulling over a proposal to allow one ultra mega power plant with a generation capacity of 4,000 MW to be set up in every state, as a large number of states have requested for UMPPs to deal with the demand and supply mismatch.
Before notifying the proposal, the ministry will have to assess some critical factors like fuel, water availability, social and environmental costs.
So far, the government has allotted four mega projects. Of which, Reliance Power has bagged 3, Sasan, Tilaiya and Krishnapatnam while TATA Power is developing the Mundra UMPP in Gujarat.
(Sourced from Projects Today)
Bharti Shipyard bags major contract from defense ministry - 08 Mar 2009 PTI reported that Bharti Shipyard has bagged a INR 281 crore contract from the Ministry of Defense for supplying 15 interceptor boats for Indian coast guard.
Bharti Shipyard in a filing to the Bombay Stock Exchange said that these vessels are lightweight specialized high speed crafts used for patrolling and interception.
With this contract, the order book of Bharti Shipyard has crossed the INR 5,000 crore mark and now stands at INR 5,093 crore.
(Sourced from Press Trust of India)
Chinese coke prices may plummet to USD 205 per tonne - 08 Mar 2009 INTERFAX-CHINA reported that coke prices in China may further slide to between CNY 1,400 (USD 204.77) per tonne and CNY 1,450 (USD 212.08) per tonne by the end of March if steel mills do not step up their coke consumption in the coming weeks.
(Sourced from INTERFAX-CHINA)
German February raw steel output fell by 31.6% YoY - 08 Mar 2009 Bloomberg reported that German raw iron and steel production plunged in February 2009 as industrial output fell and manufacturing orders extended the worst decline on record.
Federal Statistics Office said that German metallurgical plants produced 1.49 million tonnes of raw iron and 2.58 million tonnes of raw steel in February 2009, down by 35.8% YoY and 31.6% YoY, respectively. Raw iron production declined by 13.8% MoM and raw steel output fell by 3.3% MoM from January 2009.
Germany is fighting its worst recession since World War II and the International Monetary Fund expects the economy to contract 2.5% this year. ThyssenKrupp AG plans to halt 1 of its 4 active blast furnaces in to cut production further as orders tumble. It has cut the number of shifts worked by its employees and has fired temporary workers and contractors in an effort to rein in costs.
The German Labor Agency received short time work notices for 700,000 people in February 2009 as companies seek to avoid cutting jobs amid the global recession.
(Sourced from www.bloomberg.net)
Chinese SBQ plate market heavily over supplied - 08 Mar 2009 It is reported that during “China Shipbuilding Steel Supply and Demand Summit” held recently in Shanghai, attendees all believed the shipbuilding steel would see severe over supply this year as shipyard's orders decline sharply and new shipbuilding steel capacity increase evidently. They predicted the over supply would reach as much as millions of tonnes.
Mr Tan Naifang with China Association of the National Shipbuilding Industry said the maximum shipbuilding steel demand in 2010 would be 20 million tonnes, but the output of China shipbuilding steel reached 20.14 million tonnes in 2008 up by 63% from the previous year. And another several new production lines would be put into operation this year, hence the situation would be even tougher.
It is said shipyard would see delivery delay or contact cancellation this year. In addition, over 60% of this year's contracts are bulk cargo ships which demand comparative less steel. Meanwhile, the steel demand from ship maintenance and modification sectors also decrease markedly. Therefore, insiders anticipate the shipbuilding steel demand will stay at 13.3 million tonnes of which 11.7 million tonnes are shipbuilding plate.
Mr Tan Naifang said the price of new ship is going to decrease continuously as the current shipping capacity is over the demand. And almost half of the contracts are facing capital-raising difficulties. It is predicted China could only receive 20 million DWT 30 million DWT of new ship orders in 2009 with the holding orders drop to 160 million tonnes.
The demand of shipbuilding plate, the major raw materials of shipbuilding, has plunged dramatically since the 2nd half of last year and the price then dropped continuously. Many shipbuilding plate producers are willing to switch their productions to common medium plate as they are suffering losses at the moment, but the price of common medium plate is also likely to further drop.
The shipbuilding plate export also shrinks. The demands from South Korea and Vietnam drop largely as shipyards in the countries all face difficulties. And companies like POSCO and JFE all cut their shipbuilding plate price, making the export harder.
An insider said to tackle the severe challenges many shipyards have turned their attentions to the ocean project such as offshore oil platform.
(Sourced from.Mysteel.net)
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Malaysia to build USD 1.6 billion stainless steel plant - 08 Mar 2009 Platts reported that Malaysia is set to become one of the largest stainless steel producers in Asia with the construction of a USD 1.6 billion plant in the Tanjung Langsat industrial area in the state of Johor.
The plant will be operated by JV Company Bahru Stainless, which is owned 67% by Acerinox and 33% by Nisshin Steel.
Mr Rafael Garvin Salazar MD of Bahru Stainless said that the fully integrated plant would be constructed in 3 phases and would be fully completed in 2020. He added that Malaysia is the only country in ASEAN to have a fully integrated stainless steel plant.
He said that for the first phase, construction of the plant, costing USD 320 million, would start next week and was expected to be completed by end of 2010. The plant will have a capacity of 240,000 tonnes per year, out of which 182,000 tonnes would be cold rolled steel. After the first phase, the company will embark on an expansion program.
He added that "When fully completed in 2020, the plant will have the capacity to produce 1 million tonnes per annum of stainless steel and 800,000 tonnes per annum of cold rolled steel."
Mr Salazar said that 70% of the output would be for export and 30% for the domestic market. He added that the ASEAN market for stainless steel market was growing and expanding whereas the European market was hit by limited growth. Malaysia would be Acerinox's gateway to the ASEAN and Asia stainless steel markets.
(Sourced from www.platts.com)
European steelmakers seek support for CO2 cutting project - 08 Mar 2009 European steelmakers said that they needed EU governments to help pay for EUR1 billion in climate change projects that could keep jobs in Europe as new rules penalize polluters.
The steel industry generates large amounts of carbon dioxide and may face heavy charges under a European Union cap and trade program to curb greenhouse gases. Companies claim that pay to pollute permits could eventually force them to relocate outside Europe.
Mr Michel Wurth executive of ArcelorMittal said that this was one of the reasons why his company and rivals Corus and ThyssenKrupp were seeking breakthrough projects to reduce CO2 emissions. But a pilot project to capture CO2 from a steel furnace and bury it underground would cost up to EUR 800 million and the companies say they want some of this to come from governments.
They plan to build two furnaces at two ArcelorMittal sites, in Eisenhüttenstadt in Germany and Florange in France, to find out if it is possible to recycle some of the carbon monoxide gas released during steel making and also to capture CO2 to pipe into a French aquifer. They say this need to be among several proposed multibillion euro projects that EU nations plan to have up and running by 2015 as Europe tries to slash greenhouse gases to limit climate change.
But it is not clear that European governments are ready to pledge large amounts of cash to a technology that is still largely unproven - and that opponents warn could be unsafe or, at the very least, unable to reduce greenhouse gas emissions significantly.
Governments have still not agreed to fund carbon capture and storage projects out of a EUR 5 billion economy stimulus package proposed by the European Commission late last year. They will likely make a decision
Chinese steel price dip amid inventory build up - 08 Mar 2009 Reuters reported that Chinese spot steel prices edged down, falling for a fourth consecutive week, and some small producers are reportedly preparing to reduce output again hit by mounting inventory and weak demand.
A trader said "Inventory continues to build up and prices have to come down as there's simply no business at all. But the trader said the market might see a temporary rebound as China announced plans this week to increase spending in areas including infrastructure and manufacturing, on top of the CNY 4 trillion stimulus package unveiled in November.
Weak spot prices are forcing big mills to cut their offer prices, with Baosteel, China's biggest steel maker, cutting hot rolled coil prices by 5% from April.
Goldman Sachs said analysts this week that "Spot prices could face further pressure as the inventory cycle potentially enters a de-stocking phase in the sales channels."
Goldman Sachs said "Russian and Ukrainian steelmakers are offering benchmark HRC products for export to Asian markets at prices as low as USD 350 a tonne free on board, versus the prevailing regional price of around USD 480."
JP Morgan analysts also warned that China's steel imports from Russia and Ukraine could reach 2 million tonnes in coming months, or 10% of its monthly consumption of flat products, and import prices could fall further as the cash cost is well below currently quoted FOB prices.
Asian prices, which saw a mini rally in December and January led by China, came under further pressure in recent weeks on increasing inflows of cheap steel products from eastern European countries.
(Sourced from Reuters)
Iron ore price negotiations - Benchmark system may end - 08 Mar 2009 Platts reported that Brazilian miner Vale, the staunchest supporter of annual pricing of iron ore, admitted that an eventual migration to a new pricing system, such as spot or index based is out its hands and that at the end of the day, Vale would have to follow the direction taken by the market
Mr Fidel Blanco MD of iron ore sales of Vale said that “If one decision prevails, we will have to follow. We might regret it, but we will do it.”
He added that “The decision lay in the hands of buyers. Vale is a supporter of the benchmark system. This has been quite harmonic until now, and we are not sure that the steel industry wants a commoditization of iron ore.”
Mr Blanco said that “Pricing based on the spot market had become attractive this year because of the difference with contract rates. Pricing based off indices was dangerous because indices were not representative of the market. They are based on reported sales of Indian iron ore by traders into a couple of Chinese ports. Is this reliable enough? Does it represent the market situation? We don't think so.”
(Sourced from www.platts.com)
BlueScope cancels iron ore shipments from Grange - 08 Mar 2009 The Australian reported that BlueScope Steel has cancelled four iron ore shipments from Grange Resources' Savage River mine in Tasmania as it brings forward a blast furnace reline because of slowing global conditions.
Grange said the shipments would instead be taken by major shareholder Shagang International, under existing contractual arrangements. It shut one of its blast furnaces early this year for a reline as part of a program to cut production.
BlueScope has said that it hopes to restart the blast furnace in June 2009, but could keep it closed if the outlook for steel does not improve. The cancellation is not the first. BlueScope refused to take three contracted shipments in December.
It may be noted that Grange, which completed a reverse takeover of Chinese controlled Australian Bulk Minerals this year, said one of its two autogenous grinding mills had some shell cracking and would be down for 8 to 10 weeks.
(Sourced from www.theaustralian.news.com.au)
CAPEX cuts - Wuhan Steel may delay Fangcheng Port project - 08 Mar 2009 Bloomberg citing Mr Deng Qilin GM of Wuhan as saying that Wuhan Iron and Steel Group, China’s third largest steelmaker may delay its Fangcheng Port project.
Mr Deng said the National Development and Reform Commission, the country’s top planner, may delay approval for the Fangcheng Port project as well as for Baosteel’s Zhangjiang project on concerns of overcapacity in China.
Both companies are seeking to build a 10 million tonne steel project.
(Sourced from Bloomberg)
Rio Chinalco deal hits first hurdle with ACCC scrutiny - 08 Mar 2009 Business Day reported that the first of many mile posts has come up for Rio Tinto and its USD 19.5 billion compact with China's Chinalco the closing date for submissions on anti-competition concerns to the Australian Competition and Consumer Commission.
Submissions from interested parties were due by the close of business and will be used by the ACCC in its review of the Rio Chinalco deal under section 50 of the Trade Practices Act.
Section 50 prohibits acquisitions that have the effect, or would be likely to have the effect, of substantially lessening competition in a market. The ACCC has previously set a proposed date of March 25th for an announcement of its findings. While Rio/Chinalco needs to clear the ACCC on competition issues, the biggest hurdle remains clearance from federal Treasurer Mr Wayne Swan on broader national interest grounds.
There have been suggestions out of the Rio/Chinalco camp that the ACCC is likely to wave through the deal on the basis that it gave the OK for the since abandoned BHP Billiton takeover bid for Rio. But industry soundings suggest that while ACCC clearance is likely, the commission will nevertheless be subjecting the application to intense scrutiny. The reason for that was the political heat surrounding the deal because of Chinalco's state owned consumer owner status. Areas of potential concern in the Rio/Chinalco deal include bauxite-alumina supplies and price-setting implications for Pilbara iron ore.
Clear passage for the deal would raise questions about the likelihood of Chinalco subsidiary Chalco proceeding with a bauxite-alumina project as is hoped for by the Queensland Government.
The ACCC will also be looking to satisfy itself that China does not intend using the compact with Rio as a method to assume pricing power over iron ore supplies. Meanwhile, there has been some push-back in the London market to Rio's suggestion earlier this week that investors were warming to its deal with Chinalco.
(Sourced from Business Day)
Aceros Arequipa to boost output by June - 08 Mar 2009 BNamericas reported that Peruvian steelmaker Aceros Arequipa is installing a new transformer at its Pisco plant that will boost output by nearly 300,000 tonnes per annum as of June 2009.
An Aceros executive said that "We hope to start the new production in June. That will push us from the current amount of 550,000 to 580,000 tonnes per annum to roughly 850,000 tonnes per annum." He added that although the furnace at the Pisco plant is considered a large one, the small transformer has limited the facility's production.
According to the executive, Peru's domestic market is performing better than expected and the company is revising production plans to adjust to its new forecasts. He said that the market outlook is more positive because of public statements by President Mr Alan García urging Peruvians to invest in housing and infrastructure.
He said that "Those programs won't take place before June so the situation is expected to improve considerably in the second half of this year."
(Sourced from www.bnamericas.com)
Steel flat price might drop further in Turkish market - 08 Mar 2009 Yieh reported that Turkish traders were not willing to import flat steel product at this moment due to market downturn and only purchased for urgent demand.
As billet and long product price decreased lately, most market participants forecasted that the steel flat price in Turkey might drop further soon.
Currently, hot rolled coil from Ukraine was quoted at around USD 450 per tonnes CFR while the same product from Russia was quoted at around USD 400 per tonnes to USD 450 per tonnes CFR. However, Turkish mill’s hot rolled coil price was higher than Ukraine and Russian sources quoted at USD 450 per tonnes to USD 455 per tonnes.
(Sourced from YIEH.com)
MMK continues to implement its largest investment project - 08 Mar 2009 It is reported that the contract on equipment supply for plate mill 5000 and slab continuous-casting machine was concluded in November 2006 with the well-known German equipment producer SMS-DEMAG.
This complex will allow MMK producing high-profitable plate up to 4850 mm wide with the strength class up to 00-20 for oil and gas industry, ship-, bridge- and machine building. These products are in a big demand form large diameter pipes producers.
The productivity of the mill 5000 will be about 1.5 million tonnes per year including about 0.3 million tonnes per year of heat treated flat steel. This will be the most high capacity mill among its analogues. The mill includes full complex of equipment such as feeders of heating furnaces and cleaning devices in the finished products warehouse. The “core” of the mill is a unique rolling stand with maximal roll force of about 12,000 tonnes. The realization cost of this project is about USD 1.4 billion.
As the result of this project implementing MMK will get wide opportunities in high quality plate and HR flat steel production by the latest up to date metal forming technologies.
The management of MMK is planning to finish the mill construction in 2009. The estimated stuff number is 480.
The general designer of the project is Magnitgogrsk Gipromez. The general contractors are Prokatmontazh, Stroitelny Complex, and PO Montazhnik. About 2000 people are daily engaged in the construction works. The shop is built, roof works were finished. The stands of the most high-capacity in the world rolling mill were delivered to the construction site.
(Source: Rusmet.ru)
CIL awarded 2 blocks in Mozambique - 08 Mar 2009 BL reported that Coal India Limited has finally tasted success in Mozambique as it was awarded 2 exploratory coal mining blocks A1 and A2 by the Mozambique Government as part of its bilateral relationship with the Indian Government.
Mr PS Bhattacharyya chairman of CIL said that it was awarded 2 exploratory assets in Mozambique. He said that “We have promised to create a modern technology centre and a professional training institute in Mozambique.”
According to sources, of the two blocks A1 is the most promising and has both thermal and coking coal assets. Early estimates suggest that the block has over one billion tonne coal reserves.
The concession agreement, which will formally be announced during the Indo-Mozambique working group meeting later this month may indicate a prospective investment of INR 700 crore to INR 800 crore by CIL in coal mining and production in the two blocks in a span of 5 years.
According to early estimates, it may develop a production capacity of 5 million tonne a year in the first phase. The mines will be developed in JV with either the Mozambique Government or its nominee. The local partner will hold a minority stake of 10% to 15%. CIL can export 85% of the produce from the assets to India.
However, this apart the company has promised to spend over INR 100 crore towards distributing artificial limbs in the war ravaged country, creating a mine technology hub and setting up an institute in the lines of Indian Institute of Mines to create a human resource pool in Mozambique.
Sources, however, said that it aimed to complete the exploration and drilling activity in the blocks within 2 years at an estimated cost of INR 70 crore to INR 100 crore followed by development of mine in phases. Plans should also be drawn for evacuation of the coal from Mozambique to India.
(Sourced from Business Line)
American scrap price may drop by USD 30 - 08 Mar 2009 It is reported that American scrap price is expected to decrease by USD 20 per long tonne to USD 30 per long tonne as market demand kept weak. The current shred scrap price was USD 210 per long tonne.
The construction scrap price was USD 215 per long tonne to USD 220 per long tonne. And the price of heavy melting scrap was USD 185 to USD 190 per long tonne. T
The new price of Heavy Melting Scrap and shred scrap may fall to USD 180 per long tonne and price of construction scrap may fall to USD 190 per long tonne.
(Sourced from YIEH.corp)
Chinese HRC export prices remain weak - 08 Mar 2009 It is reported that both Chinese import and export market have seen few activities recently due to soft overseas demand and weak Chinese domestic market. Exporters have nothing to do but waiting for a change of export policy, which is believed to be announced in middle or late March.
Domestic hot rolled steel coil prices keep going down. On Shanghai market, commercial 4.75mm to 12mm*1500mm HRC goes at CNY 3300 per tonne to CNY 3320 per tonne down by CNY 50 per tonne from WoW. That for 4.75mm to 12mm*1800mm goes at CNY 3370 per tonne to CNY 3400 per tonne a drop of CNY 70 per tonne to CNY 110 per tonne.
Prevailing export quotation for commercial HRC is at USD 520 per tonne to USD 530 per tonne FOB as base, down from USD 530 per tonne to USD 540 per tonne in late February. There has been little transaction and price is negotiable as long as there is real order. Some producers are said to be exporting commodity grade HRC at USD 500 per tonne FOB.
(Sourced from.Mysteel.net)
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Mr Putin threatens to cut Ukraine gas flow - 08 Mar 2009 Bloomberg Mr Vladimir Putin Prime Minister of Russia threatened to cut Russian gas flows to Ukraine, the main transit route for a quarter of Europe’s supply, in two days if February supplies aren’t paid for.
Mr Putin said during a government meeting broadcast on state that “If, as a result of the use of the security services and the arrest of company officials, the payment isn’t made, it will lead to a stoppage of our deliveries.”
OAO Gazprom, Russia’s gas exporter, said today it has received USD 310 million of the USD 360 million that Ukrainian state energy company NAK Naftogaz Ukrainy owes for February. Naftogaz has until March 7 to pay the rest under a contract the two sides signed in January.
Mr Oleksandr Shlapak Ukrainian Deputy Chief of Presidential Staff said “The pending USD 50 million will be accumulated and sent to Russia either today or tomorrow.”
Ukraine’s state security service yesterday raided Naftogaz’s Kiev offices as part of a probe into company’s acquisition of UAH 7.4 billion worth of gas meant for shipment to Europe. The security service failed today to enter the offices of Naftogaz’s pipeline unit DK UkrTransGaz.
Mr Ilya Savvin Naftogaz spokesman said “They wanted to get in and get access to documents but we prevented them.”
(Sourced from Bloomberg)
Nippon Steel to skip new contract on high carbon FeCr import - 08 Mar 2009 Nippon Steel & Sumikin Stainless Steel so far expressed to skip with nil of new contract on import of high carbon ferrochrome for shipments to Japan in the first quarter of 2009 but said on March 2nd 2009 that, as a result of adjustment of the existing contracts, a margin to purchase some quantity of high carbon ferrochrome has been found out and, therefore, started to contract again this ferroalloy on the basis of benchmark price of 87 cents per pound of chromium CIF.
The benchmark price of high carbon ferrochrome settled for shipments in October to December quarter of 2008 was 193 cents per pound of chromium CIF Japan and, accordingly, new price to be revised for shipments in January to March quarter of 2009 has to have a considerable reduction of 106 cents per pound of chromium.
In consequence of that stainless steel companies of Japan have entered into the structure to decrease their production of stainless steel to a sudden and large extent, the quantities of ferrochrome received under the contracts for shipments in October to December quarter of 2008 have been stocked at Japanese mills and carried over to January to March quarter of 2009. Because of these excessive stocks of ferrochrome in Japan, Nippon Steel & Sumikin Stainless Steel expressed to skip new contracts for shipments in January to March 2009 quarter.
However, special steel companies of Japan have been producing special steels to be delivered to the automobile industry but have been not driven to reduce so drastically their production of special steels as that done by stainless steel mills. Therefore, special steel mills have still held a space to purchase high carbon ferrochrome for shipments in January to March 2009 quarter and negotiated to conclude contracts in February with reference to 87 cents per pound of chromium CIF as the benchmark price in this occasion.
(Sourced from Tex Reports)
BHPB bid for Rio - Rio still open to synergies with BHPB - 08 Mar 2009 The Australian reported that Rio Tinto is talking up the potential of a merger of its massive Pilbara iron ore operations with BHP Billiton, driving speculation the combination could still be on the cards despite Rio's USD 19.5 billion plans to bring in Chinalco.
Mr Tom Albanese CEO of Rio said that synergies of an iron ore merger were never in question and that it had always been appealing. He added that "An iron ore joint venture with BHP is more workable than a corporate solution."
While Mr Albanese made it clear a JV, or a takeover, would not be precluded by the deal with state owned Chinalco, the talk is bound to fuel more speculation that an iron ore merger is a back up plan if Treasurer Ms Wayne Swan or shareholders block the rescue package. It has also driven talk that Rio, which has said it will listen to alternative proposals to Chinalco's but not seek them out may be open to any plans BHP has to spoil the China rescue package.
Mr Albanese said that relations between the two big miners were cordial. Earlier this week, he confirmed there had been some talks between the pair about asset sales since BHP walked away from hostile scrip bid in November.
Rio confirmed Mr Albanese's statements quoted by Deutsche, but stressed they were in answer to a specific question on an iron ore merger and were in the context of the Chinalco deal not precluding this, or a takeover.
BHP is barred from another tilt at Rio until November, unless the pair can agree on a merger at board level. BHP would not comment on a potential iron ore tie up, but it has been suggested the miner would be uneasy with the state owned Chinalco having a stake in the assets, as opposed to just being on its register.
(Sourced from www.theaustralian.com)
Baosteel in talks with Rio de Janeiro government on steel plant - 08 Mar 2009 China Knowledge reported that China's Baosteel Group Corp is currently in talks with the government of Brazil's Rio de Janeiro to set up a steel plant there.
Mr Sérgio Cabral Filho the governor of Rio de Janeiro State will visit China to deliver an promotional video to Chinese representatives.
The proposed steel plant would be located in the logistics and industry zone near Rio de Janeiro Port.
Previously, Baosteel and Brazil-based iron ore maker Companhia Vale do Rio Doce dropped their plans to set up steel plants in Brazil
(Sourced from China Knowledge)
Interested buyers for Kremikovtzi disappearing - 08 Mar 2009 Focus News Agency reported that once again there is no one to save Kremikovtzi, though its economic administration has been trying for months on end to convince the workers and the public in the insatiable interests of foreign investors to buy the steel mill.
Mr Petar Dimitrov minister of economy & energy of Bulgaria said that "We cannot find investors for Kremikovtzi using force. CSN is still interested, but according to its projections such a deal will not be profitable at the moment."
It may be noted that Kremikovtzi workers will be back on the streets in Sofia on March 9th 2009, now that the Municipality has cleared the way for the strike. Protesters threatened to pitch tents in front of the Council of Ministers.
(Sourced from www.focus-fen.net)
Datang says breakeven coal price is CNY 400 (USD58) - 08 Mar 2009 Reuters citing Mr Zhai Ruoyu general manager as saying that China Datang Corp, the parent of Datang International Power can break even when coal prices are about CNY 400 per tonne
He said that "We can solve the problem of losses if coal prices fall to around CNY 400 per tonne."
Datang, along with other major Chinese power firms, has been locked in negotiations with coal miners for months about a term price for 2009. But Mr Zhai said he was not worried about the failure to sign a deal because some coal firms were still supplying even though no new contracts had been agreed. He said Datang would increase generating capacity by 13 gigawatts to more than 90 gigawatts this year.
(Sourced from Reuters)
Wuhan Steel shifts to spot buying of iron ore - 08 Mar 2009 Reuters cited Mr Deng Qilin president of Wuhan as saying that Wuhan Iron and Steel Group, China's third largest steel mill, has bought iron ore only on spot markets since January as it cannot afford 2008 term prices because steel oversupply is hurting profits
He said that "We buy iron ore from whoever offers the lowest price."
He declined to say whether the company, which normally imports more than 18 million tonnes a year through term contracts, had bought the spot iron ore from term suppliers.
Mr Deng said after a parliament meeting during the key annual session held in Beijing that "We are capping the prices we pay for iron ore now"
Mr Deng is also the newly selected chairman of the China Iron and Steel Association, which is cooperating with Baosteel, the country's biggest steelmaker, in annual iron ore price talks with top ore suppliers BHP Billiton, Rio Tinto and Brazil's Vale.
Mr Deng said "We are still in talks with the miners after two rounds of negotiation. He said that "But the miners must lower the price, otherwise, who can afford it. We produced 500 million tonnes last year and the capacity is about 600 million tonnes."
(Sourced from Reuters)
Middle East shipping industry to grow by 5% in 2009 - 08 Mar 2009 Emirates Business cited Mr Sharfuddin Sharaf president of UAE Ship Owners as saying that Middle East shipping industry would grow by 5% this year, a drastic drop from last year's double digit growth.
He said that "If you can have 5 % growth that would be good," told. "It is lower than last year but the growth here in the Middle East will be faster than other parts of the world as countries near the GCC like Iraq, Iran & India would still need infrastructures."
Mr Sharaf, who is also the vice chairman of Sharaf Group said that although shipping trade in the Middle East would grow, people should be cautious at various projections by different analysts.
He said that "Growth rates of 30% to 35% have been quoted however in my opinion it is more likely to be less than last year's 25%. The region is more likely to fare better than its peers because most of the shipping companies here are still cash rich. Companies here are more diversified. Most of the ship owners here have their own businesses surely they are not dependent on their maritime business only.
Mr Sharaf said that "And the banks in this region are still lending although that comes with stricter policies. In some areas they are not lending at all. Now however they look at what you own besides shipping before they lend you."
He said that the high demand for oil worldwide, the increasing demand for commodities within the Middle East and the positioning of the region as a major logistics hub are helping the regional shipping industry to continue to grow. The cuts in the long term may affect the oil transport business but the demand for oil will not vanish, adding that the region is also home to the emergence of new markets and is poised to gain from the growing demand for Brazil, Russia, China and India. This system has greased the wheels of trade for over 400 years. The credit collapse is the first and foremost of the concerns that the shipping industry is facing today.
According to United Nations Conference on Trade and Development, the world's merchant fleet had expanded to a record 1.12 billion deadweight tonnes with the order book for new vessels reaching a peak of 10,053 ships. But from the middle of last year, companies were canceling new ships on order, even when they were losing their 10% deposit.
Mr Sharaf said that "In real terms, this translates to millions of dollars in real term."
(Sourced from Emirates Business)
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