| Price Index - India | | | | 10-Mar | 09-Mar | Change | | ILPPI | 6652 | 6653 | -1 | | IFPPI | 6665 | 6665 | 0 | | INDSPI | 6658 | 6659 | -1 | | What is it? | | Poll Results | | Would Indian domestic steel demand remain strong? | | Yes | 45% | | No | 47% | | Can't Say | 8% | | View Current Poll | | Currency | | AUD | 1.5460 | | BRL | 2.3211 | | CAD | 1.2825 | | CNY | 6.8311 | | EUR | 0.7862 | | GBP | 0.7263 | | INR | 51.9349 | | JPY | 98.2874 | | RUB | 34.9754 | | USD | 1.0000 | | ZAR | 10.2302 | | View Current Currency | | Metal Rates Cash Seller & Settlement | | Zn | USD 1216 | | | Ni | USD 9750 | | | Sn | USD 11050 | | | Al | USD 1300 | | | Cu | USD 3635 | | | View Current Metal Rates | | Steel Futures | | NCDEX | 23900 (19-Dec) | INR | 0 |  | | DGCX | 445 (10-Mar) | USD | 0 | | | LME-M | 260 (10-Mar) | USD | +10 |  | | LME-F | 315 (10-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
Indian power capacity target unlikely to be met - 12 Mar 2009 BL quoted Mr Kirit S Parikh Planning Commission Member as saying that the power generation capacity addition target of 78,700 MW set for the Eleventh Plan period is unlikely to be met.
Mr Parikh said that “I could say 40,000 MW is certainly achievable, 60,000 MW is a possible target 78,000 MW looks a bit difficult. He said we always remain hopeful as far as planned power generation capacity addition targets are concerned. But I could tell you that not many of the planned projects have done financial closures and there are other problems also.”
Mr Parikh said that ensuring energy security is one of the biggest challenges that the country faces, especially in light of the volatility that the international energy market is currently experiencing.
He said that to tackle them, it was important that we step up efforts to acquire energy assets abroad, create strategic reserves and build redundancies in the existing distribution system as also boost R&D in non conventional energy.
Mr Parikh’s statement comes close on the heels of the Power Minister, Mr Sushilkumar Shinde, exuding optimism that the Eleventh Plan power generation capacity addition target would be met.
Mr Shinde has maintained at recent public meetings and industry meets that the power generation capacity target would be achieved and inclusive of fresh captive power projects, the country would see a cumulative addition of 92,000 MW of new capacity by 2012.
Under the 11th Plan period, 59,693 MW is slated to come from thermal projects, whereas hydro and nuclear projects are expected to generate 15,267 MW and 3,380 MW, respectively. Currently, the country has an installed capacity of 1,47,402.81 MW, including 93,392 MW from thermal, 36,647,76 MW from hydro, 4,120 MW from nuclear and 13,242 MW from renewable energy sources.
(Sourced from Business Line)
TATA Metaliks wants refund of deposit money from WB - 12 Mar 2009 ET reported that TATA Metaliks Limited wants the West Bengal government to refund the money deposited by it for meeting land acquisition cost following the company’s decision to scrap its INR 800 crore steel project in Kharagpur.
The recent decision to scrap the project was in light of the inordinate delay faced by TML in acquiring 350 acres for its project.
As per report, it had made an upfront payment of INR 9.5 crore to the state government as part of the land related cost. This was 75% of the total land cost which was pegged at roughly INR 12.5 crore.
At the time, land price was estimated at INR 3 million per acre to INR 4 million per acre, while the company had requested the government for some 350 acres adjacent to its existing pig iron plant. The cost has since jumped to INR 10 million per acre.
Mr Harsh Jha MD of TML said that "We have asked the state government to return the entire sum deposited since we will not be going ahead with our plans in West Bengal for the time being."
Mr Jha said that "It is not an impulsive decision. The company’s board discussed and debated the issue at length. Since, there was nor firm indication on when we could get the land, we decided to lie low so far as Kharagpur goes and instead concentrate on expanding elsewhere."
He said that "Kharagpur was our first choice as TML started life there. So when we decided to set up a mini blast furnace and get into integrated steelmaking, it seemed a natural advantage to grow adjacent to our existing pig iron facility."
He added that we had plans to set up a manufacturing base in the western and southern region. And we had approached West Bengal and Karnataka governments around the same time in calendar 2005. But we decided to put the Kharagpur project on fast-track rather than choose a new environment.
He said that "TML’s plant near Kharagpur would have perhaps been the first major industry to come up in Midnapore. And it would spawn a number of industries in the area. Even then our proposal was overlooked."
Mr Jha said that "Our experience is one of promises not being kept. Despite repeated reminders and numerous letters to the state industries department, nothing seems to have moved. The latest deadline set by state government was October 2008 by which we were promised to be handed over the land. However, the deadline came and went. But things did not move an inch."
(Sourced from Economic Times)
Macroeconomic indicators - Manufacturing sector to remain in negative - FICCI - 12 Mar 2009 The Financial Express quoted a survey by industry body FICCI said the growth of the manufacturing sector, which contracted in the Q3 of this fiscal, pulling down GDP growth is likely to remain in the negative zone in the January to March period as well.
The survey said that "The Indian manufacturing sector could see a negative growth for the January to March quarter."
It, however, said that the sector is likely to perk up in the Q1 of the next fiscal as the stimulus packages announced by the government in December 2008 and January 2009, coupled with the RBI measures would start showing results.
It said that "The sector is quite likely to witness a positive growth for the April to June quarter 2009-10."
However, the manufacturing sector contracted by 0.2% in the Q3 of this fiscal against a substantial expansion of 8.6% a year back. This together with the fall in farm and services sectors, pulled down GDP growth for the Q3 to 5.3%.
The survey said that as of now, the stimulus packages have shown no significant impact. It said that "No significant impact of the first 2 packages is seen on sectors like textiles, leather, tyres, auto-components. Monetary policy easing and policy rate cuts announced by the RBI also had limited impact." The survey was done in February to study the impact of the stimulus packages on the sector.
(Sourced from The Financial Express)
No green light for Vedanta plan - 12 Mar 2009 BS reported that INR 11,500 crore Jharsuguda plant expansion faces delay over environmental issues. The INR 11,500 crore expansion plan of Vedanta Aluminium at Jharsuguda in Orissa may be delayed due to environmental issues.
As per report, the company put up its expansion proposal before the Industrial Promotion and Investment Corporation of Orissa Ltd 2 months ago. It proposed to increase the Jharsuguda smelter’s capacity to 1.4 million tonne per annum from the current 0.5 million tonne.
However, the proposal is yet to be placed before the State Level Single Window Clearance Authority. Sources said the environmental carrying capacity study being commissioned by the Orissa State Pollution Control Board in the Sambalpur to Jharsuguda belt and the state government reported reluctance to provide more bauxite mines to VAL are delaying matters.
The proposed expansion was discussed when Mr Anil Agarwal chief of Vedanta chief, called on Naveen Patnaik CM of Orissa in the first week of January 2009.
It has indicated that if timely approval is given, it would like to complete the expansion by the end of November 2010. The aluminium rodding shop and the bake oven of the smelter project are expected to be completed by April and July 2010, respectively.
Sources said the process for the study on environmental carrying capacity of industries in Sambalpur to Jharsuguda has been set in motion by SPCB. It has invited technical offers from five IITs, the Nagpur based National Environment Engineering Research Institute and The Energy and Resources Institute from Delhi, for the study.
The report added that these institutes are to give their offer by the end of this month. The selected institute will take up the study within a 35 kilometer radius around Rengali. The study is expected to consider the existing level of emissions, water and air pollution and project future levels.
Based on the study, it will recommend how many industries, particularly in sectors like power, aluminium and steel, should come up in the area. Since the seasonal data for a year will be required, the study is likely to take more than a year.
Sources added that the state government has asked SPCB to give a preliminary report on the carrying capacity in about three months, suggesting environmental mitigation measures to be taken by the new industries. It will be incorporated in the memorandum of understanding to be signed between the state government and the companies and will facilitate the government in taking decisions on some important projects.
Sources further added that however, with the model poll code of conduct in force and the outcome of the carrying capacity study yet to be known, the investment plans of different companies in that area will be delayed.
(Sourced from Business Standard)
Power transmission firms demand TDS waiver - 12 Mar 2009 BS reported that power transmission utilities including Power Grid Corporation India Limited have sought relaxation in tax deducted at source on wheeling charges, which they say are higher than their tax liability. Wheeling charges are levied by the transmission utilities for use of their network.
Following strict enforcement of TDS rules and show cause notices, state electricity boards and distribution companies have started deducting TDS on wheeling charges paid to transmission firms from January 2009. No TDS was being deducted prior to that.
PGCIL met the Central Board of Direct Taxes on Monday to seek the relief as it feared more cash outgo than its actual tax liability would result in cash blockage. Like most transmission companies, PGCIL also pays the Minimum Alternate Tax.
However, MAT is levied at 10% of the adjusted book profits in the case of companies where income tax payable on the taxable income according to the normal provisions of the Income Tax Act, 1961, is less than 10% of the adjusted book profits. With TDS also being deducted at 10%, the cash outgo is likely to be higher as tax is being deducted on the entire transmission bill.
A PGCIL official said that “Our concern is that if TDS is higher than the tax liability, then it will result in cash blockage. We have requested the Central Board of Direct Taxes that wheeling charges should not come under TDS net.”
PGCIL is expected to pay MAT of INR 200 crore in the current fiscal year. It had a transmission income of INR 4,188 crore in 2007-08.
India government sources said that while the transmission companies are keen to get a favorable response from CBDT, it is unlikely that the Board will agree to their request at a time when tax authorities are desperately trying to overcome a slowdown in tax collection.
(Sourced from Business Standard)
TATA Group carbon footprint higher than benchmark - 12 Mar 2009 BL reported that the carbon footprint of TATA Group companies is 20% higher than global benchmark. The group has been lagging behind in controlling emissions.
TATA Sons is a member of the GLTE, which has been by set up by Xynteo, the London based advisory group. The consortium, apart from the TATAs, includes Gazprom, General Motors, Det Norske Veritas, StatoilHydro and Yara.
Dr JJ Irani director of TATA Sons Ltd said that individual companies have computed their footprints and are now trying to reduce it. He said a consortium of companies addressing the issue of carbon emissions.
Dr Irani said that “The group has identified the common issue of emission in power, steel and chemical businesses. Even a software company like TCS has footprint as large number of people travel regularly. Steps are being taken to mitigate it.”
He did not disclose the emissions levels of the group companies nor the targets for emission reduction. He said that the developing countries cannot afford to reduce their pace of economic development but attempts can be made to reduce emissions.
(Sourced from Business Line)
PGCIL plans investment in telecom biz - 12 Mar 2009 Projects Today reported that Power Grid Corp of India plans to invest INR 1,200 crore over the next 3 years in its telecom venture.
PGCIL is holding discussions with a few television channels for providing its network for video streaming facilities, decision on which will be taken in a few months. It will be providing its fibre optic network mounted over its overhead transmission network to provide the required bandwidth to television companies to air their video contents.
Currently, PGCIL offers end to end leasing of bandwidth to telecom operators, through its overhead transmission infrastructure. It has a fibre optic network length of 20,000 kilometer and is expected to increase it to 25,000 kilometer by the end of next fiscal.
(Sourced from Projects Today)
No sign of financial crisis in India - RBI - 12 Mar 2009 Reuters quoted Ms Usha Thorat deputy governor of Reserve Bank of India as saying that there are no signs of financial crisis in India.
Ms Thorat said that "The Indian financial sector has shown resilience and there are no signs of a currency crisis or a banking crisis."
(Sourced from Reuters)
Central PSUs turnover up by 36% in H1 this fiscal - 12 Mar 2009 Zee News reported that the state owned companies have performed well during the H1 of the current fiscal recording an impressive increase of about 36% in turnover.
Mr Santosh Mohan Dev minister of Heavy Industries and Public Enterprises said that "As per the information received from CPSEs (Central Public Sector Enterprises), the turnover during April to September 2008-09 is likely to grow by about 36% over the corresponding period last year." This is significant as the turnover of the CPSEs during the whole of 2007-08 went up by 12.13% to INR 10.82 million crore.
However, the 36% increase in turnover recorded by the central PSUs during the H1 does not reflect the impact of the global financial meltdown on the performance of the state owned companies.
The impact of the financial crisis, which hit the world in mid September following collapse of iconic investment banker Lehman Brothers will become manifest during the H2 of the fiscal.
Describing the performance of the CPSEs encouraging, Mr Dev in his foreword to the Public Enterprises Survey 2007-08, expressed the confidence that the CPSEs would continue to play an important role in helping the country to achieve a high growth rate in the years to come.
(Sourced from zeenews.com)
Volvo Buses diversifying in India - 12 Mar 2009 Volvo Buses India has announced that a foray into the consultancy services business expecting 50% of its revenues to come from engagements other than sales in 5 years.
Mr Akash Passey MD of Volvo Buses said that Volvo Buses India sold 440 buses in the country in the calendar year 2008, up from 200 in the previous year. But for 2009, it is expecting a sales growth of 20%.
Mr Passey said that the company expects soft offers consultancy services, activities pertaining to managing customers fleet and any engagement other than sales of buses to constitute 50% of its total annual revenues by the end of 5 years.
He said that Volvo Buses is looking for partnerships and collaborations with civic and transport authorities to decongest cities, help create a more efficient system and take up projects to provide sustainable solutions customized for a city's transportation needs.
Under this initiative, global Volvo experts would soon interact with Bangalore Metropolitan Transport Corporation.
(Sourced from zeenews.com)
DnB NOR opens a representative office in Mumbai - 12 Mar 2009 It is reported that DnB NOR yesterday officially opened a representative office in Mumbai, the first such office for the bank on the Indian sub-continent. The office was formally opened by Mr Rune Bjerke group CEO of DnB NOR ASA, at a ceremony attended by the Norwegian Ambassador to India, Her Excellency Ms Ann Ollestad.
Mr Bjerke said that “We are truly excited about our new office in Mumbai and it underlines DnB NOR’s commitment to this exciting market place. Opening this office in the present economic climate underscores more than ever our recognition of the importance of India to DnB NOR's future in this region and our commitment to building our presence in Asia in the long term.”
The Mumbai representative office will complement DnB NOR’s Asia presence. It already has offices in Singapore and Shanghai. The bank’s representative office in Mumbai is headed by Mr Derick Dias a senior representative from India’s corporate banking sector, who has been appointed CEO.
(Sourced from SeaTradeAsia-Online
Deutsche Bank and Stemcor forge trading alliance in steel derivatives - 12 Mar 2009 Deutsche Bank, a leading global investment bank and Stemcor, the world’s largest independent steel trader, have forged a strategic alliance to trade financial steel products.
The two organizations will offer hedging services to their combined client base via Deutsche Bank’s sales and trading teams. The agreement creates the world’s strongest financial steel product offering, putting Deutsche Bank’s acknowledged expertise in commodity market making, financial trading and broking together with Stemcor’s global presence in physical steel trading.
The alliance, which will be managed by Mr Ray Key, Global Head of Metals Trading at Deutsche Bank and Mr Jean-Luc Fiorenzoni, Director of Stemcor Risk Management, covers steel products and raw materials for making steel. Deutsche Bank and Stemcor are developing a business model that will leverage the skills of both parties and offer clients a structured approach to price risk management.
Mr Ray Key said “This agreement is another initiative to build upon our diverse metals platform. While Deutsche Bank is already a leader in the LME and CME steel contracts, as well as the OTC iron ore swap, the alliance with Stemcor expands our product offering. Clients will benefit from the synergy between the bank’s financial expertise and Stemcor’s in depth knowledge of the physical steel market.”
Mr Jean-Luc Fiorenzoni added “We are marrying together a world leader in commodity trading and the leading steel trader with nearly 60 years’ experience in meeting the critical needs of the steel supply chain. The extremes of the past year have proved how volatile steel prices can be. Using a range of derivative tools, such as exchange traded futures and OTC swaps, our aim is to offer solutions for mitigating risk exposures and protecting operating margins”.
Production pruning - Erdemir sees no recovery in steel demand - 12 Mar 2009 Reuters reported that Turkey's largest steelmaker Erdemir has left its options open for further production cuts as it does not expect collapsed steel demand to recover any time soon.
Currently the Eregli plant in northern Turkey was running at full capacity, while production at Isdemir, located in southern Turkey was at 70%.
Mr Coskun Ulusoy chairman of Erdemir said that "I do not see the demand recovering significantly. Global steel demand and prices have tumbled since mid 2008, as recession slashed demand from key steel consumer sectors such as automotive and construction, forcing steelmakers across the globe to reduce production sharply. We are talking about five years to go back to the good, old days."
Mr Ulusoy said that “We can go to 50% in Isdemir if circumstances warrant it. The Group has total crude steel capacity of 10.8 million tonnes. The Eregli plant was producing a form of specialty flat steel, used in pipelines, which allowed production to be kept high as demand for that product remained resilient. But for long products, which are used in construction, he predicted a grim picture.”
He said that “Long steel is not going to be a happy story this year, adding that the demand from Dubai, the main export market for that material, has dried up. The bleak demand outlook in the USD 800 billion steel industries has forced the company to give a second thought to its expansion plans. He added that the company had some USD 1.7 billion worth of investment plans for the next several years, which are now frozen due to the economic downturn.”
He said that the deterioration in demand in the Q4 will be visible in the year end results, due later this week. The end year results will not be as favorable we hoped, simply because of the last quarter.
(Sourced from Reuters)
Severstal reports good FY 2008 results - 12 Mar 2009 Severstal has announced results for 2008 as under
| | 2008 | 2007 | Change
| | Revenue | 22,393 | 15,503 | 44.40%
| | Profit from operations | 4,226 | 2,807 | 50.60%
| | EBITDA | 5,366 | 3,688 | 45.50%
| | Net profit | 2,034 | 1,850 | 9.90%
| | | | |
In USD million
Highlights
1. Revenues up 44.4%YoY to USD 22,393 million from USD 15,503 million
2. EBITDA of USD 5,366 million up by 45.5%YoY including USD 423 million of one-off gains
3. Net profit up 9.9% to USD 2,034 million including USD 821 million of one-off gains
4. Net non-operating loss of USD 279 million from foreign exchange differences
5. EPS up 9.8% to USD 2.02 from USD 1.84 YoY
6. FY08 dividend up 61.8% to USD 1.23; payout ratio of 60.9%
7. Net cash flow from operations increased by USD 1,199 million from USD 2,236 million in 2007 to USD 3,435 million in 2008
8. Cash, cash equivalents and short-term bank deposits increased by USD 1,183 million from USD 2,289 million as at December 31st 2007 to USD 3,472 million as at December 31st 2008.
9. Net debt/LTM EBITDA ratio of 0.9x as at December 31st 2008
Mr Alexey Mordashov CEO of Severstal said “Severstal achieved good results in 2008 as we benefited from volume growth, price increases and margin improvement. However, the unprecedented slump across all our markets in the last quarter has resulted in weakening demand for steel and subsequent falling prices.”
He said that “We have taken decisive action in the light of these new challenges, reducing production and cutting our capital expenditure program for 2008 and 2009. We are looking at our fixed costs across the business and have implemented more efficient working capital management.”
Iron ore price negotiations - Present conditions favoring buyers - 12 Mar 2009 It is reported that imported iron ore stockpiles at China's major ports increased by 1.29 million tonnes to 60.6 million tonnes by the end of last week this coupled with the recent deep steel price corrections would tip in favor of buyers in fiscal 2009 to 2010 ore talks.
Staffs at the port unveiled that Tianjin port, one of China's major handling ports of ore imports, also eyes stockpiles increased to 5.01 million tonnes by last week end from 4.81 million tonnes in the week before and added some 0.6 million tonnes from last year end.
Mr Shan Shanghua vice-secretary general of China Iron & Steel Association said that "It's still too early to determine it would tip in favor of buyers or suppliers right now, since two sides are in the midst of negotiations, and myth may come at anytime. He said that however, the steel price falls last week, which break the lowest point of last November is tipping in favor of buyers' market and thwarting the world Top Three ore miners' small trick of postponing ore talks in the hope that improved market conditions would give them more clout in the talks.”
Authority from the steel association said price for construction steel is still on the wane in domestic market. And steel price downtrend would drag into next month.
Mr Deng Qilin general manager of Wuhan Iron & Steel said the Top Three dreams a 5% term ore price rise for 2009 compared with a 40% to 50% price cut demanded by Chinese steelmakers. "2009 ore price is set to fall, and will fall to a reasonable and acceptable level for domestic mills."
It's widely expected in China that iron ore price would fall by 30% to 50% while steel mills in European market insisting on price returns to 2005 levels, or a 50% drop. Japanese mills claimed the price should retreat to 2007/2008 levels at least on the reference of the 41% drop settled between MMK and ENRC in early February.
(Sourced from.Mysteel.net)
Visit www.Mysteel.net for real time access to China steel news!
Recession reports - Global economy to contract below zero - IMF - 12 Mar 2009 Zee News quoted the head of the International Monetary Fund as saying that the world economy is likely to shrink to below zero this year, in what many are now referring to as the "Great Recession.
Mr Dominique Strauss-Kahn MD of IMF said that "The IMF expects global growth to slow below zero this year, the worst performance in most of our lifetimes."
Mr Strauss-Kahn said that "Continued de-leveraging by world financial institutions, combined with a collapse in consumer and business confidence is depressing domestic demand across the globe, while world trade is falling at an alarming rate and commodity prices have tumbled."
As advanced countries focus on problems in their own economies, Mr Strauss-Kahn called on the international community not to forget Africa, where regional growth is expected to slow sharply to 3% this year, half the rate of the past 5 years. He warned the projection for 3 percent may be too optimistic.
He said that "Even though the crisis has been slow in reaching Africa's shores, we all know it is coming and its impact will be severe. We must ensure that the voices of the poor are heard. We must ensure that Africa is not left out."
He added that the crisis threatens to unravel Africa's economic and social success over the last decade and that millions of people will be thrown back into poverty.
He said that "This is not only about protecting economic growth and household incomes it is also about containing the threat of civil unrest, perhaps even war. It is about people and their futures."
He added that the combined impact of economic and financials shocks on Africa's growth will be severe. Financial flows are becoming more scarce, trade financing even scarcer and more expensive and foreign investment in Africa's stock and bond markets has fallen.
Mr Strauss-Kahn said that "As growth around the world has almost come to a halt, demand for Africa's products is plunging. Tourism revenue is likely to decline as consumers around the world are tightening their belts."
(Sourced from zeenews.com)
Iron ore price negotiation - ANZ sees 40% fall - 12 Mar 2009 ANZ said that falling steel prices in China spell clear warning signs that may lead to iron ore prices declining as much as 40% in 2009. This is far deeper than market expectations of a 20% to 30% drop.
ANZ in a note said that prices for hot rolled coil steel in China have slid 15% since the start of February, after picking up on speculation of improving demand triggered by the CNY 4 trillion (USD 924 billion) stimulus package announced in November.
Mr Mark Pervan ANZ commodity strategist said that “China is the key market for iron ore demand accounting for a massive 48% of seaborne supply in 2008. The problem is that China steel prices are still trading at an average 20 per cent premium to international prices, suggesting the high level of domestic steel stocks will unlikely be reduced by increased exports.”
He added that “The worry for iron ore and coal producers is that high steel stocks will allow steel consumers to delay purchases for some time creating further downward pressure on China steel prices and ultimately, iron ore prices.”
Mr Pervan said that “The timing couldn’t be better for steel mills currently locked in negotiations with iron ore producers.”
(Sourced from Dow Jones Newswires)
Production pruning - Tenaris Tamsa operating at 80% capacity - 12 Mar 2009 BNamericas reported that Mexican steel tube producer Tenaris Tamsa is operating at 70% to 80% of its capacity.
A company executive said that "We are reducing our production in line with current demand. Because oil prices have fallen drastically, oil companies have opted to push back drilling projects which caused demand for tubes to shrink. Also, credit restrictions on the market have tightened cash flow, which has pushed demand down."
The executive said that despite the situation, Tamsa has not carried out any maintenance stoppages. He added that "We are trying to minimize the impact of the crisis as much as possible. We are focusing on training activities and encouraging staff to take their vacations."
TenarisTamsa is fully owned by Luxembourg based Tenaris and has installed capacity of 780,000 tonnes per annum and employs some 3,000 workers.
(Sourced from www.bnamericas.com)
SBQ plate price sinking in China - 12 Mar 2009 China Association of the National Shipbuilding Industry said that shipbuilding plate price will continue the downward movement in future.
CANSI predicts the possible demand for shipbuilding plate will be 20 tonnes in 2010, while the outputs in 2008 had already flied to 20.14 million tonnes up by 63%YoY.
What's more, there are many shipbuilding plate lines in China will be put into production this year. Thus, the output will predicatively exceed the demand by 2010, leading to price drop and cut throat competition.
In addition, Anshan Steel kept its position as the top producer in ship plate with its production of about 2.07 million tonnes in 2008 up by 31%YoY.
Insiders think that back orders and order cancellation for ships will appear in 2009, and demand of shipbuilding steel will shrink accordingly.
As per CANSI, the six year old seller's market will die this year, meanwhile, decreasing ship demands and slumping sales will sharply drag down steel demands. However, the heavy plate projects for large ship are to put into operation in Yingkou Steel, etc, further embittering the imbalance then.
According to PPI looking back on February, steel prices generally fell down. Ex-factory prices for large scale steel products went down 6.3%; those for medium size products down 11.1%; those for wire rods down 14.7%.
Domestic steel prices step into correction this week, following last week's fall. And market sources expect that some traders are looking to buy cheap resources.
(Source: Guangzhou Daily)
Brazil iron ore output could fall by 30% in 2009 - 12 Mar 2009 According to head of Brazil government's mining department DNPM, Brazilian iron ore output could fall 30% and investment in the country's mining sector could plunge even more in 2009.
Mr Miguel Nery director general said that interest in prospecting for mineral resources and opening new mines had flagged amid the global economic downturn but investments were continuing on established projects or those close to becoming operational.
He said that production of gold, grown popular as an investor safe haven amid volatility on global markets, would rise by around 10% this year.
(Sourced from Reuters)
China exports1.56 million tonnes of steel product February - 12 Mar 2009 It is reported that China's exported 1.56 million tons of finished steel in February 2009 down by 18.3% MoM from January 1.91 million tonnes, while steel export in January 2009 down by 34.1%YoY
Export
| Products | Feb'09 | Jan-Feb'09 | Jan-Feb'08 | Change
| | Coal | 1.44 | 5.11 | 8.75 | 6.6
| | Coke & Semi-coke | 0.03 | 0.10 | 1.69 | -93.1
| | Semi Steels | 0 | 0.00 | 0.08 | -98.5
| | Finished Steel Products | 1.56 | 3.47 | 7.23 | -34.1
| | | | | |
In million tonnes
Import
| Products | Feb'09 | Jan-Feb'09 | Jan-Feb'08 | Change
| | Iron Ore | 46.74 | 79.39 | 74.92 | -34.9
| | Semi Steels | 0.31 | 0.44 | 0.03 | 203.5
| | Finished Steel Products | 1.09 | 1.96 | 2.67 | -20.8
| | | | | |
In million tonnes
(Sourced from.Mysteel.net)
Visit www.Mysteel.net for real time access to China steel news!
Production pruning - Suez Steel closing billet mill - 12 Mar 2009 Suez Steel has announced that closure of its billet producing mill since the first week of March 2009 because of the losses incurred by the company.
According to the sources, the drop in imported billet prices from CIS and the fall of the Turkish rebars prices in the Egyptian market are cited as the reason. The company's management sent a memorandum to the Egyptian Ministry of Industry and Trade informing it of putting the mill out of production.
Suez Steel was established in the Industrial Zone in Suez Governorate in 1997 and started with production in 2000. Its production capacity is 600 thousand tonnes of steel billets, using scrap and iron pellets produced by direct reduction. Egyptian National Steel Company bought the government's share in Suez Steel amounting to 82% for EGP 1.1 billion in September 2006.
(Sourced from ArabSteel)
Vietnamese February steel sales up by 47% MoM - 12 Mar 2009 Vietnam Steel Association said that its members produced a steel output of about 237,000 tonnes to the end of February 2009, up by 43% MoM and posted the steel sales of over 257,000 tonnes, up by 47% MoM. In January to February 2009 period, the steel sales totaled 433,475 tonnes, down by nearly 29% YoY.
VSA also said that the domestic steel price dropped by VND 400,000 to VND 600,000 per tonne in February. At present, the rolled steel price (VAT exclusive) ranges between VND 10.3 million and VND 10.657 million per tonne in the north and VND 10.080 to VND 10.570 million per tonne in the southern market.
VSA's stockpiled output of finished steel products estimated at about 200,000 tonnes along with steel billets at manufactories of about 450,000 tonnes will ensure sufficient material supply for construction steel production in March and April 2009.
(Sourced from www.intellasia.net)
SA needs 40 new coal mines by 2020 - Eskom - 12 Mar 2009 South African power utility Eskom said that South Africa would need to invest up to ZAR 110 billion in coal mining by 2020 and dig at least 40 new coal mines in that time.
State owned Eskom said Africa's biggest economy which is in the grip of a power shortage, will need to produce 374 million tonnes of coal by 2018 to meet growing demand.
Mr Johan Dempers Eskom's coal specialist said that with current projects in place and taking closures of old mines into account, South Africa is expected to produce 385 million tonnes by the same time, creating a safety margin of only 3%. He said that "We will need 40 mines to be opened requiring a large number of mining rights to be awarded in a short period of time...we will need between 90-110 billion rand to be invested in coal mines by 2020.”
He added that demand would be driven by higher private and commercial consumption, a rise in exports to meet growing demand, both from Europe and Asia and the need to feed coal into coal to liquids plants planned by petrochemicals group Sasol.
Mr Dempers said that by 2018 Eskom itself would require 200 million tonnes of the coal to supply all its power stations, including two currently under construction and another two power stations the utility said it would need by then. He added that the two new plants, Medupi and Kusile, will provide 4,800 MW of electricity each, and are due to come on stream in 2015 and 2016 respectively.
Mr Dempers said that the company was studying three potential sites for a third plant, expected to produce around 5,000 MW. The utility, in cooperation with other government and industry stakeholders has launched a study to provide an updated assessment of coal reserves in South Africa and the Southern African Development Community region.
(Sourced from Reuters)
Recession reports - Global financial markets loose USD 50 trillion assets - 12 Mar 2009 Zee News reported that financial markets across the world lost a whopping USD 50 trillion including USD 9.6 trillion in the developing Asian market, which were the hardest hit by the global economic crisis.
As per report, the global financial turmoil which sliced the value of the worldwide financial assets by as much as 50 trillion has cost the developing Asian markets as much as USD 9.6 trillion last year.
The Asian Development Bank said Asia was hit harder than other parts of the developing world because the region's markets have expanded much more rapidly.
Mr Haruhiko Kuroda President of ADB said that "This is by far the most serious crisis to hit the world economy since the Great Depression. While this crisis originated in the US and some European countries, by now no region or country is insulated. I am afraid things may get worse before they get better."
Mr Kuroda, however, added that I remain confident that Asia will be one of the first regions to emerge from it and it will emerge stronger than ever before.
ADB said that a recovery can now only be envisaged for late 2009 or early 2010.
The study said that "Most emerging market economies, including in developing Asia and Latin America are at a crossroads, and the next 12 to 18 months will be very difficult."
(Sourced from zeenews.com)
Steel industry unlikely to recover in H1 - Shougang - 12 Mar 2009 Mr Zhu Jimin president of Beijing Shougang Group told China Business News during the annual parliament session that "China's steel industry is unlikely to revive in the first half, but there is also no space for further drop since current prices have fallen below costs line."
Mr Zhu said "It will be difficult for steel prices returning to normal level if these problems cannot be solved. And prices will finally fall down impacted by the negative factors even though it might post a brief rally sometimes. He said the steel support plan is only an introductory outline, and more detailed schemes should be released as soon as possible to jolt up the industry. Meanwhile, various standards in the sector should also be raised from that mapped out in earlier years.”
Mr Zhu noted that "About 30% of home-made steel products are used in building industry, therefore, the usage can be saved by as much as 15% if the standard for construction steel can be raised by a grade, and which will help reduce resources exhaustion and wastes emission."
Beijing announced a support package for the steel sector on January 14th to boost the pillar industry and to cope with the spreading global financial crisis. However Mr Zhu is not so upbeat about the sector's movement in days to come.
Steel production capacity in the country has exceeded consumption by over 20% which is set to cast adverse effect on the industry's healthy development. Meanwhile, the high reliance on foreign export will also hinder its expansion in light of the global demand collapse. And furthermore, it takes time for the stimulus measures to take effect.
(Sourced from.Mysteel.net)
Visit www.Mysteel.net for real time access to China steel news!
Production pruning - ENRC to review output cutbacks in Q2 - 12 Mar 2009 Reuters quoted Mr Jim Cochrane head of marketing at Kazakh mining group Eurasian Natural Resources Corporation Plc as saying that it will review its heavy production cuts in the second quarter, but it's still too early to draw conclusions from a few positive economic signs.
Mr Cochrane added that "We don't see an improvement in the broader economy in the first half of the year, but the cutbacks will depend on the destocking, what's happening in Russia, what the steel situation is, so we haven't made a final decision. The cutbacks are running through to the end of the first quarter we'll have a look at what sales are in the second quarter and make a decision."
He said that some areas and sectors were doing slightly better, but it was hard to get much visibility about the overall economic picture for the second quarter. He added that "You can read about the iron ore, there was stronger buying in the first quarter than had been anticipated in China but I don't think at this point in time we can be clear to say that the situation is going to be dramatically better than it was in the first quarter."
He said that ENRC is being offered possible acquisition opportunities since it was in a very good position with a very strong balance sheet. At the end of the first half of 2008, ENRC had USD 2.65 billion in liquid funds available. He added that "I think we are in a good position and people know it we probably have to work less hard at seeing what's out there. We are looking to add value to the company so we're not in a hurry, we'll be very careful about how we spend the money."
ENRC, which is due to release annual results on March 25th 2009, is one of the world's biggest producers of ferrochrome and the sixth biggest exporter of iron ore by volume.
(Sourced from www.reuters.com)
Indian iron ore spot prices continue weakening last week - 12 Mar 2009 The China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters has released the average reference prices for import transactions of Fe 63.5% Indian iron ore concluded last week on March 9th 2009.
| Delivery | This week | Last week
| | FOB Indian port | USD 60-USD 64 | USD 63-USD 65
| | CIF Chinese port | USD 70-USD 71 | USD 74-USD 76
| | | |
The change is with respect to prices posted on March 2nd 2009
The CCCMC reference prices are average prices for import transactions of Fe 63.5% Indian iron ore concluded the week prior to issuance date of such reference prices. The reference price practice is intended to regulate the domestic trading of Indian iron ore and avoid speculation on the raw material for China's booming steel industry.
UNISTEEL to begin billet production by early 2010 - 12 Mar 2009 Al Watan cited Mr Awaad Al-Khaldi chairman of UNISTEEL as saying that the United Steel Industrial Company is expected to start production at its billets mill by January 2010. The capacity of this mill is 1 million tonnes per year
Mr Al-Khaldi said that the company is running at less than its production capacity of rebars amounting to 1 million tonnes per year. It is producing 600 000 tonnes per year, the reason for which he says as the decision issued due to which rebar exports were prohibited while the domestic market is open for imports free from customs duties.
(Sourced from Al Watan)
TMK ships first batch of pipes for Bovanenkovo Ukhta gas pipeline - 12 Mar 2009 TMK announces that it began shipments of 1420mm large-diameter longitudinal welded pipes to Gazprom. The pipes will be used in the construction of the Bovanenkovo-Ukhta gas pipeline.
During the month of March, TMK will ship 5,000 tonnes of 1420mm longitudinal welded pipes with 26.4 mm wall thickness and K60 grade with internal and external anticorrosion coatings. The pipes will be produced at Volzhsky’s newly-commissioned large-diameter longitudinal welded pipe mill.
Volzhsky’s new mill, a key part of TMK’s strategic investment program, can produce longitudinal welded pipes with diameters of between 530mm to 1420mm, wall thickness of up to 42mm and strength groups of up to X100, in line with Gazprom and Transneft standards for new pipelines, including Nord Stream, Eastern Siberia Pacific and others.
The 1,100 kilometer Bovanenkovo-Ukhta gas trunkline is a part of Gazprom’s Yamal megaproject and will supply the Yamal-Europe gas pipeline with gas from the Bovanenkovo field, the largest on the Yamal Peninsula.
Commercial dispute cripples CSN Kremikovtzi deal - 12 Mar 2009 Dnevnik reported that the deal between Bulgarian debt saddled steel mill Kreimkovtzi and Brazilian firm CSN is hamstrung by a mere commercial dispute. The two sides are now in talks over coke production that will be purchased by the prospective investor.
As per report, CSN will finance the purchase and transportation of the coking coal and then pay only the positive difference between the price of the produce and the loan for raw material and shipment. In spite of the dispute, the scheme is the optimal solution and has won the support in principal of Kremikovtzi, CSN and the government.
As per report, CSN would not pledge any investment in the insolvent plant without guarantees it would be assigned the implementation of the rescue plan and be a potential new owner.
The report added that “After the court has considered the appeals against the list of creditors drawn up by receiver Tsvetan Bankov, Kremikovtzi's creditors will meet to decide whether to launch a recovery plan or wind up the business.”
(Sourced from www.dnevnik.com.mk)
Downsizing deals - Severstal may cut 9000 jobs - 12 Mar 2009 Reuters reported that Russia's largest steelmaker Severstal hit by the financial crisis planned to cut production costs at its plants in the United States and jobs at its Cherepovets plant in Russia.
Mr Alexei Mordashov CEO of Severstal said during a conference call that "We are developing an action plan to reduce our US costs.”
He said 9,000 to 9,500 jobs may be cut at Cherepovets.
(Sourced from Reuters)
LME nickel price unlikely to be sustained - 12 Mar 2009 LME nickel prices have currently strengthened a pace to fall and LME nickel stocks as of February 25th 2009 came to 98,600 tonnes, which indicated a power to reach 104,000 tonnes as recorded in May 1995 and corresponded to 8% of the world nickel production.
LME nickel price for 3 month futures at March 2nd 2009 was USD 9,700 per tonne, fall by 15% for 2 months from the beginning of 2009. LME nickel prices have still inclined to fall further on a basic tone and an analyst has a view that the next resistant line for a fall of nickel price will be USD 8,850 per tonne.
In the course of these movements for LME nickel prices, it was informed from China that the Central Government of China is considering to stockpile nickel metal produced in China. However, the authorities concerned in Chinese Government so far did not confirm a plan to purchase nickel metal for stockpiling and the parties concerned in nickel do not evaluate this plan as a factor to sustain nickel price, having still maintained a basic tone to fall further.
As regards CNY 4 trillion of the emergent expenditure, which the Central Government of China has adopted as the measures to raise up Chinese economy, local governments of provinces and autonomous regions are planning various measures to encourage their economy and drawing on their resources in order to obtain necessary funds from the Central Government of China.
According to information from China spread over in the beginning of this week, the State Reserve Bureau of China is planning to purchase 30,000 tonnes of nickel metal from Jinchuan Nickel for stockpiling as one of the projects to rehabilitate the nonferrous metal industry of China.
Nevertheless, this is true that the activities to purchase excessive stocks of nickel, aluminum, zinc and copper for stockpiling in China have existed. The provinces, producing these nonferrous metals, are supposed to be now negotiating with the authorities on purchases of these metals for stockpiling. Owing to the reduced production of stainless steel in China for 2008, the situation of nickel in China has certainly become an oversupply and, in order to relieve the depression of nickel smelters in China caused by a sharp fall of nickel price, the reason to purchase nickel metal for stockpiling was informed in this time.
China produced 6.94 million tonnes of stainless steel in 2008, having decreased compared with that of 7.20 million tonnes in 2007 and nickel became an oversupply because of the excessive quantity of nickel supplied from nickel contained pig iron. Therefore, this aspect has put a substantial pressure on nickel price and there is a view in the market that nickel production in China for 2009 is anticipated to come to a similar scale to that for 2008.
(Sourced from TEX Report Limited)
Ukrainian coal production down 10.5% in 2 months - 12 Mar 2009 Ukrainian Journal reported that Ukraine reduced coal production approximately 10.5%YoY in January to February to 11.823 million tonnes.
Coking coal production fell 21.5% to just over 3.7 million tonnes and steam coal fell 4.5% to 8.127 million tonnes.
Coal production was still 6.5% above the target set by the Coal Ministry, including 13.5% above for coking coal and 3.7% for steam coal.
(Sourced from Ukrainian Journal)
Recession reports - WB gives pessimistic scenario - 12 Mar 2009 The World Bank said that the global economy is likely to shrink for the first time since World War II and trade will decline by the most in 80 years. The World Bank's assessment is more pessimistic than an International Monetary Fund report in January predicting 0.5% global growth this year.
World Bank did not provide a specific estimate in its report. It said that world growth will be 5% below its potential. It added that developing nations will bear the brunt of the contraction. They will face a shortfall of between USD 270 billion and USD 700 billion to pay for imports and service debts.
Mr Robert Zoellick president of World Bank said that "We need to react in real time to a growing crisis that is hurting people in developing countries. Action is needed by governments and multilateral lenders to avoid social and political unrest."
The World Bank said that a surge of debt issuance by rich nations risks crowding out many developing country borrowers, both private and public. It added that emerging nations that can access capital markets will be forced to pay higher rates of interest.
The report said that 94 out of 116 developing countries had experienced a slowdown in economic growth, with poverty increasing in 43. The economic crisis will swell the ranks of the poor by 46 million this year, the report says. The result would be growing dependence on foreign aid.
Mr Justin Lin chief economist at World Bank said that developed nations should funnel part of their stimulus spending to poorer countries where it would be more effective at boosting demand. Channeling infrastructure investment to the developing world can have a bigger bang for the buck.
(Sourced from www.nineoclock.ro)
Japanese trading firms avoid mining bargains because of debt fears - 12 Mar 2009 It is reported that big Japanese trading houses like Mitsubishi and Mitsui could lose out to state backed Chinese rivals in a fire sale of distressed mining assets because they do not want to take on more debt and hope there will be even better bargains coming up.
Cash strapped and debt heavy global mining companies are putting prized assets up for sale, but Japanese trading houses, once the country's biggest risk takers are choosing for now to conserve cash and protect balance sheets.
Mr Kenichiro Yoshida analyst at Goldman Sachs said that "The chances of them sealing a USD 1 billion deal in the near future is very small. They'll wait and see at least in the next six months, until the credit crunch eases."
He said that "Some of them think they need to see an increase in shareholder equity based either on better net profit, a recovery in Japanese stocks and a weaker yen before they resume big spending.”
It said that Mitsubishi and Mitsui have already accumulated large, competitive coking coal and iron ore assets maybe enough to serve declining demand in Japan's maturing market and analysts said that they would prefer to wait for even cheaper bargains later on.
Mr Janet Lewis a senior analyst at Macquarie Capital Securities of Japan said that "They feel there will still be assets available for sale in 12 months' time and the price will keep coming down.”
(Sourced from Herald Tribune)
|
