| 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 | 44% | | No | 49% | | Can't Say | 6% | | View Current Poll | | Currency | | AUD | 1.5626 | | BRL | 2.3509 | | CAD | 1.2902 | | CNY | 6.8303 | | EUR | 0.7882 | | GBP | 0.7237 | | INR | 51.6655 | | JPY | 98.6289 | | RUB | 35.0304 | | USD | 1.0000 | | ZAR | 10.4778 | | View Current Currency | | Metal Rates Cash Seller & Settlement | | Zn | USD 1237 | | | Ni | USD 9775 | | | Sn | USD 11145 | | | Al | USD 1281 | | | Cu | USD 3667 | | | View Current Metal Rates | | Steel Futures | | NCDEX | 23900 (19-Dec) | INR | 0 |  | | DGCX | 445 (09-Mar) | USD | 0 | | | LME-M | 250 (09-Mar) | USD | -30 |  | | LME-F | 310 (09-Mar) | USD | 0 | | | 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
Production pruning - Corus maintaining 40% cut - 11 Mar 2009 Press Trust of India reported that TTATA Steel said that the production cut at its UK subsidiary Corus continues to be around 40%.
Mr Koushik Chatterjee CFO of TATA Steel while speaking on the sidelines of CII annual regional meeting confirmed that production cut continues to be around 40%.
Mr Chatterjee added that the company will be able to save GBP 600 million pounds by March as envisaged. He said "The cost saving measures are on track at Corus in line with the target."
He however did not quantify the amount achieved so far.
(Sourced from PTI)
Indian Steel Price Index Stable on March 10 - 11 Mar 2009 The domestic Indian Steel prices remained stable on March 10th 2009. The Indian Long Product Price Index ILPPI dropped by 1 point and Indian Flat Product Price Index IFPPI remained unchanged. The overall Indian Steel Price Index INDSPI maintained stability with negligible dip of 1 point.
| Class | 9-Mar | 10-Mar | Change
| | ILPPI | 6653 | 6652 | -1
| | IFPPI | 6665 | 6665 | 0
| | INDSPI | 6659 | 6658 | -1
| | | | |
ILPPI - Long Product Price Index
IFPPI - Flat Product Price Index
INDSPI - Indian Steel Price Index
Long Products| Category | 9-Mar | 10-Mar | Change
| | PI - TMT | 6412 | 6412 | 0
| | PI - WRC | 7160 | 7160 | 0
| | PI - Angle | 6278 | 6278 | 0
| | PI - Channel | 6328 | 6328 | 0
| | PI - Joist | 5839 | 5823 | -17
| | | | |
Flat Products| Category | 9-Mar | 10-Mar | Change
| | PI - Narrow Plates | 6293 | 6293 | 0
| | PI - Wide Plates | 6719 | 6719 | 0
| | PI - Hot Rolled | 6483 | 6483 | 0
| | PI - Cold Rolled | 7252 | 7252 | 0
| | PI - Galvanized | 6954 | 6954 | 0
| | | | |
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(Sourced from www.steelprices-india.com)
Wheels India to enter steel fabrication for power sector - 11 Mar 2009 It is reported that the Wheels India Ltd wants to make steel structural components for power plants specially made steel products such as girders, columns and beams that support a boiler.
According to Mr Srivats Ram MD of Wheels India, they are planning to invest INR 40 crore in setting up a factory at Deoli near Nagpur.
The plant is coming up in the 30 acre plot in Maharashtra Industrial Development Corporation and will be operational in the second half of 2009.
Mr Ram told Business Line that initially, the plant will be able to process 1,000 tonnes of steel a month. When it reaches steady-state in three years, its capacity will be four times as much.
He said that “This is a marriage between our inherent welding competence and demand from power sector observing that the new venture would give Wheels India the necessary contra cyclic support. “It will buffer us from the volatility of our automotive market.”
He added that an added advantage is that the power sector bears with flexible pricing mechanism for the prime raw material steel, a highly volatile commodity, as was seen in 2008.
The current market size of power plant structural components is estimated at INR 4,000 crore and is set to grow in double digits in the next 10 years due to capacity expansion in energy sector under 11th and 12th five-year plans. The 11th Plan target is to add 78,000 MW; and the 12 Plan’s is 82,000 MW or about 16,000 MW annually for the next ten years. A lot of steel will be consumed.
(Sourced from Business Line)
Essar Steel needs help financing Iron Range plant - 11 Mar 2009 AP reported that Essar Steel is having trouble getting private financing for the construction of a USD 1.6 billion taconite to steel industrial complex near Nashwauk.
However Mr Madhu Vuppuluri president of Essar's North American operations stresses that the company is not seeking taxpayer money, just help getting a private sector loan.
The company executive said that Essar has used its own money to keep the project on schedule so far, including recently extending a multi million contract to grade the site.
Essar estimates the project will employ up to 2,000 construction workers and when complete will employ nearly 500 people at full production.
(Sourced from Associated Press)
Recovery signs - Indian economy to take a year to recover - 11 Mar 2009 Zee News reported that the year 2009 is set to be more difficult for the Indian economy and despite the government's stimulus packages, it would take at least a year before it starts recovering.
Ms Sherman Chan economist Moody's economy.com from Sydney said that "I don't think the stimulus is sufficient to start a recovery. The most it can do is to minimize the magnitude of a further slowdown. India will most likely start to recover in the March 2010."
Ms Chan said that this year would be more difficult than last year. She said that "We probably won't see a solid rebound until early 2010. The US needs to recover first. Then global economic activity will begin to pick up."
The Indian economy grew by 5.3% in the Q3 of this fiscal, its lowest rate in over 5 years, against a whopping 8.9% a year ago, as agriculture and manufacturing output contracted.
She said that this has ensued debate between the government and the economists. While the government is still confident of achieving close to 7% growth this fiscal, economists at various global financial institutions see a further fall in the figures. When asked if the 'worst' is over for the Indian economy, she added that it is difficult to say as the whole year is expected to be extremely tough.
However, the slight improvement can be seen in the October to December 2009, because the US economy will slightly rebound by then, which should help to give global business confidence some support.
In addition to the 2 stimulus packages, recently, the India government announced a INR 30,000 crore boost to the slowing economy by cutting excise duty and service tax by 2% each.
According to Mr Kamal Nath Commerce Minister, the worst is over. He said that "I believe the worst is over," adding that the last 2 months of the current fiscal would be much better in terms of growth.
(Sourced from zeenews.com)
CIL quits DPSC race - 11 Mar 2009 Business Standard reported that Coal India said that it is not interested any more in bidding for 57% stake of Dishergarh Power Supply Company which had been put on the block by Andrew Yule.
It is learnt that the decision had been taken by the board of the PSU.
CIL had earlier expressed interest in DPSC because its subsidiary Eastern Coalfields had been a key consumer of DPSC.
But now, CIL is of the view that there would be no disturbance in power linkage to DPSC irrespective of change in the ownership of the utility, whose command area included the coal belt in the Asansol-Ranigunj region.
(Sourced from Business Standard)
Indian ports expected to flourish - 11 Mar 2009 ET reported that the domestic ports sector is expected to grow strongly in the coming years, driven by the country's rapid growing international trade and current port capacity constraints.
According to the Planning Commission, traffic at domestic ports is projected to grow to 1,225 million tonne by 2014 from 700 million tonne in 2007. It estimates that the port sector requires around USD 20 billion in investment over the next 5 years.
(Sourced from Economic Times)
Recovery signs - Hero Honda leads February rise in motorcycle sales - 11 Mar 2009 BS reported that February 2009, Hero Honda up by 24% to 329,055 units, against the 265,431 units sold in the same month last year. However, barring a 10% dip in sales for December 2008, it sales have grown since April last year, to post a 11% growth until February 2009. This is against the industry growth of only 1.7% for the period.
Analysts attribute this success to 3 factors:
1. The company's focus on the 75cc to 100 cc segment, where it derives as much as 88% of its sale volumes.
2. Its rural marketing initiatives, predominantly a cash down segment.
3. Its bestselling brands like Passion and Splendor that outsell competitors in the 100 cc and 125 cc segments. The company's market share, a little over 50% at the beginning of 2008, has increased to 56%.
| Company | Feb'08 | Feb'09 | Change
| | Hero Honda | 265,431 | 329,055 | 24%
| | Bajaj Auto | 159,508 | 132,393 | -17%
| | TVS Motors | 60,998 | 69,191 | 13.4%
| | Yamaha | 5746 | 15,033 | 162%
| | Total | 491,683 | 545,672 | 10.9%
| | | | |
Bajaj Auto, the number 2 has seen sales for February dipping by 17%, selling 132,393 units against the 159,508 units sold for the same month last year. However, the newly launched Bajaj XCD 135 DTSi motorcycle launched last month has sold 20,668 units in the first month of its launch, making it the largest selling model in this category after Hero Honda's Splendor.
The company has announced a slew of launches that include two new models in the high powered motorcycle category for 2009 and 4 brand refreshes in the 125 plus cc category.
Beside, TVS Motors posted a 13% rise in February sales, selling 69,191 units against the 60,998 units in this month last year.
Yamaha India posted a whopping 162% growth in February, selling 15,033 units against the 5,746 units for the same period last year. Much of this came from the runaway success of two brands launched last year, the YZF R15 and FZ16.
Analysts said that the single most important driver for the industry in coming months will be the ease with which financing is available. Many of the private banks and NBFCs that contributed almost all the two wheeler financing have reduced their exposure, following rising loan defaults. Following which, the level of financing that stood at 60% earlier has dropped to about 35%. Of this, private banks like HDFC contributed more than half the loans.
Industry executives said that the upcoming RBI guidelines on vehicle repossession will provide the necessary assurance for private financiers to re-enter the segment, which could boost two wheeler sales.
(Sourced from Business Standard)
States not spending workers welfare cess - ASSOCHAM - 11 Mar 2009 Out of INR 1353.92 crore collected for welfare measures of construction workers by levying 1% access on construction activities undertaken by various builders or developers in last 6 year, a meager INR 305 crore has been utilized for intended purposes and that too Kerala is the only state which spent 90% of access amount for its construction workers welfare during the period.
Until 2008, 15 states collected INR 1353.92 crore as cess from the cost of construction activities in their areas but spend only INR 305 crore for welfare activities of workers and remaining states have not yet collected any cess.
Of this amount, more than 90% spending has been done by Kerala only.
The names of states that have collected the cess comprise Delhi, Haryana, Rajasthan, Kerala, Gujarat, Bihar, Karnataka, Andhra Pradesh, Tamil Nadu, Himachal Pradesh, Punjab, Orissa, Mizoram, Maharasthra and Uttarakhand.
Demanding to empower builders and developers to make use of the cess amount for benefit of construction workers, the ASSOCHAM said that the real estate developers should be asked to create a separate fund on their own initiative and instead of depositing the amount to states concerned, they should themselves bring it for use of welfare of construction workers.
The ASSOCHAM further added that many of the states are their that have not constituted their welfare labor board and that is why, the amount collected by states remains unutilized and rots in their coffer. Since the builders and developers are in direct touch with their workforce, they can better make use of this amount and serve their dependence with great effectively.
Reliance Power signs transmission pacts with 8 companies - 11 Mar 2009 Reliance Power Transmission Ltd a subsidiary of Reliance Infrastructure Ltd, through its two special purpose vehicles, has signed power transmission agreements with eight power companies and departments from the western region.
The agreements are for two inter-State power transmission projects, under the Western Region System Strengthening Scheme II. The signing of the agreements will lead to financial closure for these projects, costing INR 1,800 crore.
In 2005, Power Grid Corporation of India Ltd had invited tariff based competitive bids for establishing 400kV Double Circuit Transmission Lines of around 1500 km under WRSSS- II, in the Western Region. Reliance Power Transmission has won the bid.
The company after prolonged deliberations with the western region beneficiaries have now signed the agreements. As per report by December 2010, the project is likely to be completed.
(Sourced from Business Line)
Recovery signs - Ford India posts 35% growth in February - 11 Mar 2009 Auto major Ford India has registered a 35% growth in month on month sales in February 2009 at 2,636 cars against 1,956 units in January 2009. In addition, the company has posted an 8% YoY growth in sales.
Ford in a release said that the new Ford Ikon continues to impress the entry level mid size segment customers, with leaderships across India seeing consistent bookings.
Mr Timothy Tucker vice president of sales of Ford India said that "Our product strategy was set in motion in 2008 with the launch of new versions of the Endeavour.” He said that Fiesta and Ikon models have started to pay off as we move into 2009.
Mr Tucker added that "We remain committed to making our products deliver the best value for money that our customers would look for in the current times.”
(Sourced from Economic Times)
Karnataka announces industrial policy for 2009-14 - 11 Mar 2009 Projects Today reported that the Karnataka government has unveiled new industrial policy for 2009-14 effective from April 1st 2009.
The new industrial policy prominently focuses on attracting investments to the tune of INR 300,000 crore and to create 1 million employment in the next 5 years.
Under the policy, the state government has offered a slew of sops to new industrial investments, expansion, modernization and diversification in 166 taluks.
Micro, Small and Medium industries will get production or employment linked investment subsidy of INR 5 million to INR 35 million and 20% of the developed land reserved for these industries.
However, Stamp Duty exemption to the extent of 75% to 100% in respect of all categories of industries for purchase of flat or sheds in approved layout and also for registering their term loan documents, besides exemption of conversion fee from 75% to 100% will be offered.
In order to attract more investment, the state government had decided to extend entry tax exemption to all categories of industries and APMC cess to Agro and Food Processing industries, exemption from payment of electricity duties, incentives and concessions to export oriented industries and 1,000 acre to 2,000 acre in each district to be acquired and developed to attract industries.
(Sourced from Projects Today)
Chinese steel exports in February lowest since 2006 - 11 Mar 2009 It is reported that Chinese steel exports in February dwindled to just 1.56 million tonne, the lowest level in last 52 months.
Chinese steel exports in February 2009 recorded 62% YoY and 1% MoM decline.
China imported 1.09 million tonne steel products during the same period down by 14.7% YoY and up by 25% MoM.
Chinese February crude steel output up by 4.2% YoY - 11 Mar 2009 China Business News reported that Chinese steelmakers produced 40.52 million tonnes of crude steel in February up by 4.2% YoY.
February daily output hit 1.44 million tonnes, the highest level since last August.
In January and February monthly crude steel output shook off the downtrend since the second half of 2008. Output in Jan climbed 2.4% from a year earlier to 41.52 million tonnes.
An analyst said that "Obviously this is the result of accelerating steel production restart, which is triggered by rebounding steel market in mid Nov of 2008, falling stocks and low costs."
Daily output in the whole year is estimated at 1.4 million tonnes to 1.45 million tonnes based on February figure, equaling to annual output of 520 million tonnes to 530 million tonnes.
(Source: China Business News)
Chinese February iron ore import surges - 11 Mar 2009 It is reported that China imported 46.74 million tonnes of iron ore in February 2009 up by 14.09 million tonnes January 2009 and by 10 million tonnes as compared to February 2008.
Russian Hr makers lower offer to China - 11 Mar 2009 It is reported that Russian mills have lowered their export offers for HR to China from Vladivostok Port to USD 375 per tonne to USD 380 CFR FO main Chinese Ports.
To keep tab on steel prices in Europe on daily basis, subscribe to services of www.steelprices-europe.com by registering or sending a mail to admin@steelprices-europe.com. Please note that this is a paid service.
(Sourced from www.steelprices-europe.com)
BDI continues upward climb on March 9th 2009 - 11 Mar 2009 It is reported that on March 10th 2009, Baltic Dry Index reached 2298 points up by 36 points as compared to March 9th 2009.
Capsize
| | BCI | Change
| | INDEX | 2,807 | -24
| | SPOT 4 TCE AVG | 28,083 | -299
| | March 9th | 28,382 |
| | Year Ago | 142,611 |
| | | |
All except INDEX in USD
Change is with respect to March 9th 2009 numbers
Panamax
| | BPI | Change
| | INDEX | 2,417 | 101
| | SPOT 4 TCE AVG | 19,387 | 825
| | March 9th | 18,562 |
| | Year Ago | 67,625 |
| | | |
All except INDEX in USD
Change is with respect to March 9th 2009 numbers
Supramax
| | BSI | Change
| | INDEX | 1,728 | 15
| | SPOT 4 TCE AVG | 18,064 | 156
| | March 9th | 17,908 |
| | Year Ago | 53,114 |
| | | |
All except INDEX in USD
Change is with respect to March 9th 2009 numbers
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(Sourced from www.steelprices-india.com)
MEPS Nordic steel price forecast for flat products - 11 Mar 2009 UK based MEPS said that Nordic's average HRC transaction price in February 2009 slipped by over EUR 20 per tonne. Hot rolled plate values recorded a larger fall of approximately EUR 60 per tonne. Inventory levels are higher than desired across the region, particularly at current low sales volumes. This is putting downward pressure on selling figures as distributors attempt to off load excess material. Further price deterioration is forecast over the coming months as customers continue to de stock.
MEPS added that "A recovery in transaction values is predicted to occur later in the year. Large reductions in 2009 raw material contracts could restrict price increases before this point. Government stimulus packages may take several months before they create any real increase in steel demand. Consequently, demand on the mills is forecast to remain below recent averages. The effects of ongoing financial restrictions are also likely to limit the purchasing power of many companies. However, these should begin to ease by early 2010."
(Sourced from European Steel Review Supplement by MEPS)
Downsizing deals - BHPB plans further job cuts at Olympic Dam mine - 11 Mar 2009 ABC reported that BHP Billiton cannot rule out further job cuts at its Olympic Dam mine after it laid off 85 workers and told another 50 they are being transferred to Adelaide. The cuts are part of 3,000 job losses the company announced worldwide in January.
BHP Billiton said that a big fall in commodity prices is partly responsible for job cuts at its Olympic Dam mine. The company said that 85 jobs will go from the mine, with a further 50 positions relocating to Adelaide to create a support services operating hub.
Mr Richard Yeeles spokesman of BHP Billiton said that big falls in the price of copper in the past six months have forced the company to continually review its operations.
He said that "Well site has been advised this morning that there will be 85 redundancies effective immediately. They are jobs across the operation, both mining and processing. What the company has said is that in the current economic climate all operations must remain under review."
Both blue and white collar staff is being affected. The Olympic Dam mine at Roxby Downs will still have a work force of more than 3,000 in its uranium, copper and gold operations.
BHP Billiton said that it still plans to expand the mine.
(Sourced from www.abc.net)
Billet and slab import prices continue slide in Italy - 11 Mar 2009 It is reported that import prices for billet in Italy are hovering around EUR 325 per tonne on CFR FO basis.
Slabs in Italy are around EUR 340 per tonne to EUR 350 per tonne on CFR FO basis, little higher than our previous indication. However, they are moving downward to EUR 320 per tonne to EUR 330 per tonne levels.
To keep tab on steel prices in Europe on daily basis, subscribe to services of www.steelprices-europe.com by registering or sending a mail to admin@steelprices-europe.com. Please note that this is a paid service.
(Sourced from www.steelprices-europe.com)
South African coal prices at lowest since 2007 - 11 Mar 2009 Bloomberg reported that prices for coal shipped from South Africa’s Richards Bay fell to the lowest in more than 1 1/2 years on weaker European and Indian demand.
The European Central Bank said last week that the port on South Africa’s northeast coast is Europe’s biggest single source of coal for energy. The continent is in recession, reducing the need for power and coal as companies cut output and jobs. The economy of the EUR 16 nations will contract about 2.7% this year and stagnate in 2010.
Mr John Howland an analyst at Petersfield, England based McCloskey Group Limited said that “Demand in Europe will be down on the slower economy. The Indians are seeing prices coming off and are stepping away from the market.”
Mr Santosh Bagrodia junior minister said that Coal India Limited may import 6 million tonnes of the fuel for power utilities in the year starting April 1st2009. India, the world’s second most populous nation, can buy coal from Richards Bay when it’s cheaper compared with other sources or when Asian supplies are limited.
According to McCloskey, export prices at Richards Bay declined USD 2.60, or 4.4% to an average of USD 57 a tonne in the week ended March 6th 2009. Prices have dropped 27% this year.
(Sourced from Bloomberg)
Thai domestic steel prices on downward trend - 11 Mar 2009 It is reported that Thailand's steel price has continued to dip, resulting in a big impact on the real estate and building materials companies and around 3,000 companies have gone bankrupt.
The steel price is dropping by a wide margin at present. It is estimated that the total market value of building industry this year may be reduced from the THB 650 billion of 2008 to THB 320 billion, signifying a decrease of 50%.
(Sourced from YIEH.corp)
Chubu agree 44% annual price cut for thermal coal - 11 Mar 2009 Reuters reported that Miners Xstrata and Rio Tinto Limited have sealed thermal coal contracts with Japan's Chubu Electric for fiscal year 2009/10 at prices as much as 44% lower than a year earlier.
Xstrata's coal unit in Australia and Rio Tinto Coal struck an agreement with Chubu early this week at prices of between USD 70 per tonnes and USD 72 per tonnes, compared with last year's benchmark prices that were set at around USD 125 per tonnes.
A trader based in Japan said that "Chubu has reached an agreement with Xstrata at between USD 70 and USD 72 a tonne."
At least two trader sources who are familiar with the negotiations confirmed Xstrata's headline price, which was based on free on board prices for coal with a heating value of 6,322 kcal per kilogram. And four other sources from Australia and Japan without direct knowledge of negotiations said the settlements for Xstrata and Rio hovered at about USD 70 per tonnes for coal with the same calorific range.
Xstrata's and Rio's settlement price marks a near USD 10 premium to current spot prices, which are around a 21 month low of USD 61,75, based on latest globalCOAL's Newcastle price index.
The first major price deal between big Australian coal miners and the Japanese utilities that are their main customers normally sets the tone for further negotiations for contracts that cover the April to March Japanese fiscal year, affecting power plant costs and miners' revenues for the year.
Thermal coal prices have shed nearly 70% since striking a record high USD 201 per tonnes last July, pressured by slumping demand from the industrial sector and increased supplies as producers divert more low grade coking coal material to power generation market as demand from steel mills slump.
(Sourced from Reuters)
Downsizing deals - Erdemir asks employees to opt for VRS - 11 Mar 2009 TODAY'S ZAMAN reported that Turkey's largest steelmaker Ereğli Demir Çelik has decided to reduce its workforce by encouraging its workers to leave their jobs voluntarily with extra compensation in addition to a severance package.
Erdemir, released a written statement to the İstanbul Stock Exchange saying that employees working at the Erdemir Group's five subsidiary companies Erdemir, İsdemir, Erenco, Erbor and Ersem will be encouraged by means of a financial incentive to leave their jobs.
The company said all employees in these five companies, including those entitled to a pension, stand to benefit by taking advantage of such an incentive.
The company did not cite any particular reason for the decision, but the move is likely in response to possible problems stemming from the ongoing global financial crisis. Erdemir primarily manufactures flat steel for durable white goods and the automotive sector.
(Sourced from TODAY'S ZAMAN)
MMK plans to start new plate mill in July - 11 Mar 2009 It is reported that Russia steel mill, Magnitogorsk Iron and Steel Works plans to start its Plate Mill 5000 in this July.
The new mill is capable of producing annual production of 1.5 million tonnes. MMK has continued its installation at its number 6 slab continuing casting machine.
The new equipment system is provided by Australia SMS Demag, which can produce the steel plate size by 4,850 mm width and strength by X-100 to X-120.
Those steel plates will supply for oil, nature gas, shipbuilding, bridge construction and machinery usages. The total investment value of the project will be around USD 140 million.
(Sourced from YIEH.corp)
Downsizing deals - US Steel Serbia to reduce working to 4 days - 11 Mar 2009 Serbia & Montenegro Today reported that US Steel decided to reduce the working week to 4 days in the coming period, leading to a 7% monthly drop in wages.
Sources said that US Steel will halt primary production in its Smederevo plant as of April. After shutting down first blast furnace, the other blast furnace might also be switched to silent run. The plant's steel production is expected to be cut until the end of this year.
Mr Richard Vietch MD of Smederevo plant said that the crisis has affected significantly the steel industry and market, resulting in lower demand.
He added that in order to adapt to the current situation, the company has decided to consolidate production in Europe, which means temporarily halting certain production lines in Serbia.
(Sourced from Serbia & Montenegro Today)
Iron ore price negotiations - ANZ sees 40% reduction - 11 Mar 2009 The Australian Business reported that falling steel prices in China spell clear warning signs that may lead to iron ore prices declining as much as 40% in 2009.
ANZ said this is far deeper than market expectations of a 20% to 30% drop.
Mr Mark Pervan ANZ commodity strategist said “China is the key market for iron ore demand accounting for a massive 48 per cent 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 said 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 Mark Pervan said “The timing couldn’t be better for steel mills currently locked in negotiations with iron ore producers.”
In a note published over the weekend, Macquarie Bank said a recent slide in iron ore spot prices over the past few weeks was worrying, with prices trading at USD 61.50 to USD 62.50 a dry metric tonne, cost, insurance and freight basis to China late last week, down 23% from a recent peak at USD 80.50 per tonne.
That fall has effectively reversed a 47% rally in prices from around USD 55 per tonne in November that spurred some hopes of iron ore miners ability to limit contract price falls to about 20%. The fall in prices means the spot market is now trading at a 40% discount to Australian 2008 to 2009 price benchmark, suggesting more downward pressure on prices during current annual benchmark talks.
(Sourced from The Australian Business)
Chinese steel market needs output cut - Mr He Yonghua - 11 Mar 2009 According to Mr He Yonghua GM of Shanghai Baoxia Metal Co market prices of construction grade steel products like rebar and wire rod continue to drop since February, making operators puzzled about the future market. Steel market was no likely to warm up without mills' production cut.
He considered that it was no easy to analyze the shape for the construction grade steel products trend of this year at this moment, however, the increasing growth of output exceeded that of the demand. Thus, oversupply would run through the whole year, leading to a stiff situation for steel market with weakening demand and rising resource.
Mr He Yonghua said "The root for rebar price decrease since Spring Festival in Shanghai is the unbalance of supply and demand. He noted, the stock was piling up at 0.6 million tonnes for mills' production capacity release. It is known that construction grade steel products prices bottomed out since last November hence lots of steelmakers turned to produce rebar, some of them even quitted producing slab. For those mills who had suspended their outputs before started to fully produce again.”
Further more, the demand of construction grade steel products were heavily impacted by New Year's day and Spring Festival holiday as well as more than 15 rainy days since February. Rebar price tumbled all the time and the market price dropped to CNY 3200 per tonne on March 3rd and some transaction price only posted at CNY 3170 per tonne to CNY 3180 per tonne. It was possible slumped to CNY 3000 per tonne referring to the present trend.
He figured that the price rebound of construction grade steel products was mainly based on plants' efficient control of their production capacities, especially for rebar as its low investment. He added that "Yet, it is not easy to control mill's production release. Mid-and-small steelmakers would rush to produce products as soon as the market price edges up little. Of course, the price would fall back again or even be much cheaper later on just as the iterative rebar price drop only happened in one day on Shanghai market.”
He said "The market in the H2 is expected to be relatively better than the first quarter of this year for China's stimulus package, which will take some time to reveal its value. In general, the best way to propel steel market at this very moment was to slash production actively.”
(Sourced from.Mysteel.net)
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Kremikovtzi workers demand 30 wages if retired - 11 Mar 2009 Bgnewsnet reported that one of the demands of the protesting workers from Bulgaria's Kremikovtzi steel mill is to receive compensations, valuing as much as 30 monthly wages if they retire.
The workers took the streets in downtown Sofia, protesting against the government's failure to reach an agreement with possible investors in the troubled enterprise. Even though Brazil's CSN is the only company left bidding for the steel mill an agreement hasn't been struck yet.
A representative of the protesters met with a member of the Cabinet administration and presented a declaration with the workers' demands. Syndicates also met with minister of economy and energy Mr Peter Dimitrov who according to DeltaNews had agreed with their demands that concern the company.
Workers pointed out that in some tobacco companies in Bulgaria there had been agreements between the boards and the employees for compensations for retirement, valuing up to 36 monthly wages, depending on the employee's working experience. They also want a compensatory program that includes re-qualification to be implemented in the company.
Mr Petar Dikov Sofia's chief architect told the Bulgarian National Radio that Kremikovtzi however is doomed for closure. According to him the company had run pout of possible solutions for its situation and the workers were right to seek retirement compensations.
(Sourced from Bgnewsnet)
Downsizing deals - Samancor Chrome to retrench workers - 11 Mar 2009 South African chrome miner and ferrochrome producer Samancor Chrome said that it is preparing to retrench workers as a consequence of its planned 55% cut in smelter production and 50% cut in chrome mining during 2009.
Ms Deidre Bredell human resources head at Samancor Chrome said that of the 4 800 employees, not more than 900 would be considered for retrenchment at this stage and the consultation process under way with unions would seek to reduce that number still further.
She added that "Despite the implementation of several measures at all the business units of the organization over the past three months, such as extended paid leave granted over the shutdown period, discontinuance of contractors, reduction of overtime and the opening of voluntary retrenchment packages, the continuous uncertainty of the global stainless steel market has forced us to issue section 189 notices to all the recognized unions representing staff at our two mines and three smelters."
Ms Bredell said that "The most important portion and the one we are busy with at this stage is retrenchment minimization to lessen the impact on the workforce. There are unlimited things one can do creatively with the unions to find alternatives to forced retrenchment. We have already reduced contractor numbers. Where we could, we employed full time employees in the contractor positions to avoid the impact on our own workforce. But we are running at such reduced capacity that the company doesn't have a choice but to look at how labor costs can be reduced."
In October 2008, Samancor Chrome launched a broad based employee empowerment trust in which ZAR 2 billion of its shares were offered for sale to the Ndizani Workers Employees Share Ownership Program Trust for ZAR 400 million, with the purchase being be financed by a 5 year loan from Kermas, Samamcor's parent, which would be repaid at a reduced interest rate of 4.5%.
Mr Jurgen Schalamon CEO of Samancor Chrome said at the time that the establishment of the trust represented the company's commitment to serving its employees by not only redressing historical inequalities, but also creating a real opportunity for our people to share in the success of the company.
In April 2007, Samancor Chrome announced that it would spend ZAR 1.4 billion on beneficiation projects in South Africa over the next two years, including a new pelletier plant, a direct current furnace and a smelter.
(Sourced from www.miningweekly.com)
5 strand caster commissioned at Zhangjiagang Rongsheng - 11 Mar 2009 The Chinese Zhangjiagang Rongsheng Steel Making Co Ltd of Shagang Group and the Swiss Concast AG commissioned a five strand continuous casting machine with hot charging facilities. The customer has now granted the Final Acceptance of this plant which is producing mild carbon steel billets for the Chinese market.
The new continuous casting machine now enhances the two existing Concast five-strand casters that are in service in the same meltshop which now operates with a total of 15 strands. In the same organization, Zhangjiagang Shajing Steel Co. Ltd. Has also given Final Acceptance for the successfully upgraded meltshop No. 2. This order comprised the installation of final stirrers in the Concast continuous casting machine, new strand guiding equipment, new rigid dummy bars and secondary cooling modifications.
The ladle furnace was retrofitted with an automatic lance system, a new ladle cover and a wire feeder. For the electrical automation system, Concast supplied the new level-2 control ware with metallurgical data management, equipment life tracking and material tracking for scrap yard, EAF, LF and continuous casting facility.
This upgrade allows the customer to successfully produce SBQ steel grades for the Chinese markets. In total the Zhangjiagang Group operates billet casters comprising a total of 45 strands, all supplied by Concast.
Production pruning - Severstal Wheeling to idle arc furnace - 11 Mar 2009 Weirton Daily Times reported that employees at Severstal Wheeling Inc. got an update today on the economics of the steel industry, and they learned the temporary idling of the arc furnace at Mingo Junction is imminent.
Union members present said they learned the Mingo Junction facility would be idled at the end of March for an expected two months, and this fact was confirmed by an official at Severstal Wheeling Inc.
Mr Wilbur Winland vice president and general manager of Severstal Wheeling Inc said orders, meanwhile, will continue to be filled at other Severstal Wheeling operations.
Mr Winland presided over a closed meeting Monday morning at the McLure Hotel in Wheeling for Severstal employees. It was the first of four scheduled by the company to speak with workers about current economic conditions in the steel industry. He said that "It was an internal communications meeting to give everybody an update on economic conditions and what plants are going to be running in the future."
Mr Winland said "We'll probably have to slow some plants down in the coming months and hope the economy turns around. He said that the Martins Ferry and Yorkville plants, as well as the coke plant at Follansbee will continue to run as they have in recent weeks at least for now. He added that everybody is concerned about the economic condition of the US and the world. We have to do what we can to save cash. There could be some temporary layoffs, and the numbers could fluctuate as orders come in."
Mr Winland continued that employee numbers could change on a weekly basis He said temporary layoffs at local Severstal operations have been instituted since late last year. But just how many more layoffs and how soon they will happen isn't yet clear and will be determined by the marketplace.
(Sourced from Weirton Daily Times)
Colombia approves extension of Prodeco Port license - 11 Mar 2009 Prodeco, Xstrata Coal’s wholly owned, world class thermal coal operation in Colombia has received authorization from the Colombian government to operate its proprietary port at Santa Marta, Puerto Zuñiga for a further 12 months.
Prodeco is a member of a consortium of coal companies which will construct Puerto Nuevo, a new, multi user, direct ship loading port facility at Cienaga. Early stage technical work has recently commenced at Puerto Nuevo.
The port is currently expected to be completed at the end of 2012. As part of the authorization to continue operating at Puerto Zuñiga, the Colombian government will review progress in constructing Puerto Nuevo on a rolling six-monthly basis.
Xstrata Coal recently acquired Prodeco from Glencore International AG.
Feng Hsin keeps rebar and section price unchanged this week - 11 Mar 2009 Taiwan's Feng Hsin Iron & Steel has announced to remain its prices unchanged for rebar and section this week. Its rebar price is now about TWD 17,500 per tonne, while that of section is in a range of TWD 18,500 to TWD 18,700 per tonne.
It has also unchanged its scrap purchasing price in the range of TWD 6,600 to TWD 7,100 per tonne. Actual deal price is between TWD 7,200 to TWD 7,700 per tonne.
(Sourced from YIEH.corp)
CISA proposes to increase steel export rebate - 11 Mar 2009 China Securities Journal reported that stung by the low levels of steel exports in January and February 2009, China iron & Steel Association has submitted a proposal to raise up steel export rebate with relevant department including the Ministry of Finance.
A CISA official said falling exports are expectable, not disclosing more details about the proposal, but as learned from some well informed source, the suggestions involve all steel varieties that are enjoying an export rebate.
In detail, present 5% refund for high value added products such as CR sheet, galvanized and alloyed steel products is suggested to lift to 17% and the badly oversupplied HRC is also hope to attract a 13% rebate from zero.
Mysteel analyst Xu Xiangchun said the deteriorating export situation is attributable to losing of price advantage relative to the international market. Falling demand globally, RMB appreciation against euro, won and other currencies as well as domestic price rise lead to backflow of the steel products.
(Source: China Securities Journal)
CIS pig iron export prices slip amid lull in buying - 11 Mar 2009 It is reported that pig iron transactions in the CIS remain stagnant, with its price mired in incertitude due to the falling pig iron price in the EU and lower purchase levels from East Asia.
Its current price is USD 230 per tonne having dropped by USD 60 per tonne compared with last month. One trader said that the pig iron price to Italy was around USD 250 per tonne to USD 270 per tonne, but the CIS said that the transactions do not happen at that price as buyers are bidding at USD 250 per tonne.
Trader said the possible price is estimated at around USD 280 per tonne, depending on the quantity.
(Sourced from YIEH.corp)
China slump threatens iron ore projects in Australia - 11 Mar 2009 Bloomberg quoted the nation’s commodity forecaster said China’s slowing appetite for iron ore threatens plans to develop more than AUD 10 billion of low grade iron ore projects in Australia.
Mr Jammie Penm chief commodity analyst at the Australian Bureau of Agricultural and Resource Economics said a forecast drop in contract iron ore prices may combine with the global financial crisis to delay magnetite ore projects.
The worst recession since World War II has slashed demand for minerals and forced producers to delay or shelve projects as banks reduce lending. Atlas Iron Ltd. and Gindalbie Metals Ltd. are among companies planning magnetite mines in Australia as Chinese steel mills, the world’s biggest producers, press for the first iron ore price cut in seven years.
Mr Mark Pervan senior commodity strategist at Australia and New Zealand Banking Group Ltd Magnetite mines said it will certainly be put on hold or delayed. He said that “The iron ore price is likely to be falling in the order of 40% to 50%.”
Mr Penm said from Canberra that “A major consideration is the cost and there will be issues in terms of financing. There have not been a significant amount of announcements about cancellations yet, but they could come and we are closely monitoring that situation.”
According to Gindalbie, Magnetite needs greater processing than higher-grade hematite ore, which accounts for about 96 percent of Australia’s output.
Mr Michael Weir a spokesman for the Perth based company said Gindalbie’s partner, China’s Anshan Iron & Steel Group, is arranging the USD 1.2 billion of funds needed to start the Karara magnetite mine,. The terms and conditions are being negotiated and the funding may be completed by June or July.
(Sourced from Bloomberg)
CSN talk with Kremikovtsi still under way - Mr Dimitrov - 11 Mar 2009 Focus News Agency quoted Mr Petar Dimitrov economy & energy minister of Bulgaria as saying that talks with Brazilian CSN about Kremikovtzi steel mill were still under way.
He added that ministry of labor & social policy should provide information about the workers' compensations, trade unionists announced after their meeting.
(Sourced from www.focus-fen.net)
Wuhan to buy in iron ore mines in Australia and Cambodia - 11 Mar 2009 According to Mr Deng Qilin board Chairman of Wuhan Steel noted on March 6th that the company would purchase iron ore mines in Australia and Cambodia. However, details aren't provided. Meanwhile, Wuhan Steel is to take part in iron ore project in Madagascar. And the mill still waits for notice after local government put off the public bidding.
Despite these, Mr Deng president of China Iron & Steel Association told to the media that the two rounds of iron ore talks ended without results. But, the pricing power leans to China, due to weak situations remain in occident and Japanese markets. To be clear, those ore exporters have to cut price to maintain their businesses. He added Wuhan Steel had suggested Ministry of Commercial to further elevate the rebate for quality steel export.
He still hopes that Govs will underscore the elimination of obsolete capacity, the release of quality capacity and the deeper regroup in steel sector.
(Source from sina)
Mr Putin pledges support for shipbuilders - 11 Mar 2009 The Moscow Times citing Mr Viktor Khristenko Industry and Trade Minister as saying that Russia plans to triple orders of state ships in the next six years to RUB 680 billion and build a new shipyard near the Baltic Sea port of Primorsk.
Mr Khristenko said the state's spending should help shipbuilders boost their share of contracts in Russia to 28% from 8%t last year and cushion slowing sales to companies.
Mr Vladimir Putin Prime Minister of Russia said at the meeting that Gazprom and Rosneft will order 307 vessels over the next two decades. Another 791 transport and 265 fishing vessel orders are expected by 2030. He said that the government plans to complete the formation of United Shipbuilding Corporation this month, hoping that the state-run enterprise can compete with foreign companies better than individual Russian shipyards.
Mr Putin said United Shipbuilding should focus on niche products, such as floating nuclear power stations, ice-class vessels and ships transporting commodities. He said that the state's support program for the shipbuilding industry may total RUB 136 billion to 2016.
Mr Khristenko said one of the projects designed to help the industry may be the building of a shipyard near Primorsk, which would cost more than RUB 40 billion in total. He said that the government revised its industry sales forecast to RUB 170 billion this year from RUB 180 billion.
(Sourced from The Moscow Times)
Hebei Steel wins 1.2 billion tonnes iron ore reserve - 11 Mar 2009 It is reported that Hebei Iron & Steel Group wins two iron ore deposits with a total reserve nearly 1.2 billion tonnes.
The two deposits allocated by the Land and Resources Department of Hebei Province are located in Luan County, Tangshan City, Hebei Province.
Hebei Iron & Steel Group, China's largest iron plant by output said the new reserve will help them to strengthen the supply of steelmaking raw materials and resist risks from waving iron ore price.
The Group intends to lift its annual steel output to 50 million tons in 2010 in line with its Fifteenth-Plan.
(Source: Shihua Financial Information)
Macroeconomic indicators - SA manufacturing likely fell the most in 16 years - 11 Mar 2009 Bloomberg reported that South African manufacturing probably fell the most in more than 16 years in January 2009 as export demand plummeted, forcing factories to scale back and fire workers. According to the median estimate of 6 economists surveyed by Bloomberg, production dropped by 8% YoY in January after contracting 7% in the previous month. The statistics office is scheduled to publish the data on March 12th 2009.
Manufacturers such as ArcelorMittal South Africa Limited and Volkswagen AG have cut output and jobs as sales plunged. Recessions in the US, Europe and Japan, which together take 60% of exports, are also undermining factory production, which makes up 16% of the economy.
Mr Danelee van Dyk economist at Standard Bank Group Limited said that "The strains of the sharp global growth slowdown on the South African economy are becoming more evident. The steep decline in exports in January presages further weakness for the manufacturing sector."
The statistics office said on February 24th 2009 that the economy contracted for the first time in a decade in the fourth quarter, dropping an annualized 1.8%. Vehicle sales plunged 36% in February from a year ago, the biggest decline in a quarter of a century.
South African Revenue Services said on February 27th 2009 that exports fell by 25% in January from the previous month, mainly due to a fall in vehicle and commodity shipments.
(Sourced from www.bloomberg.net)
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