| Price Index - India | | | | 20-Feb | 19-Feb | Change | | ILPPI | 6668 | 6672 | -4 | | IFPPI | 6549 | 6549 | 0 | | INDSPI | 6611 | 6613 | -2 | | What is it? | | Poll Results | | Chinese steel mills would reduce export levels to regain quantities? | | Yes | 54% | | No | 32% | | Can't Say | 13% | | View Current Poll | | Currency | | AUD | 1.5493 | | BRL | 2.3377 | | CAD | 1.2514 | | CNY | 6.8272 | | EUR | 0.7796 | | GBP | 0.6928 | | INR | 49.6850 | | JPY | 93.3030 | | RUB | 35.6010 | | USD | 1.0000 | | ZAR | 10.0730 | | View Current Currency | | Metal Rates Cash Seller & Settlement | | Zn | USD 1059 | | | Ni | USD 9570 | | | Sn | USD 10795 | | | Al | USD 1264 | | | Cu | USD 3145 | | | View Current Metal Rates | | Steel Futures | | NCDEX | 23900 (19-Dec) | INR | 0 |  | | DGCX | 448 (19-Feb) | USD | 0 | | | LME-M | 280 (19-Feb) | USD | -2 |  | | LME-F | 335 (19-Feb) | 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
Monday Market Monitor - India (WEEK 8) - Market hits the deck - 23 Feb 2009 Indian domestic steel prices decline ebbed for a change. The Indian Long Product Price Index ILPPI fell by fell by 33 points, whereas the Indian Flat Products Index IFPPI remained almost stable with a marginal correction of 7 points. The overall price index INDSPI dipped by 14 points.
Indian domestic steel prices seems to have bottomed out as there has not been any major dip in the week except for minor fluctuations due to transient local sentiments. The main dampener was belied hope of increment in import duty to 15% and economic revival package .This phase is expected to last without any significant variance owing to political fundamentals rather than economics till the new government is in place whereby anticipation of policy changes can give some succor to the market.
| Class | 13-Feb | 20-Feb | Change | %
| | ILPPI | 6701 | 6668 | -33 | -0.5%
| | IFPPI | 6542 | 6549 | 7 | 0.1%
| | IDSPI | 6625 | 6611 | -14 | -0.2%
| | | | | |
ILPPI - Indian Long Product Price Index
IFPPI - Indian Flat Product Price Index
INDSPI - Indian Steel Price Index
Long Products| Category | 13-Feb | 20-Feb | Change | %
| | PI - TMT | 6490 | 6476 | -14 | -0.2%
| | PI - WRC | 7184 | 7123 | -62 | -0.9%
| | PI - Angle | 6318 | 6288 | -30 | -0.5%
| | PI - Channel | 6335 | 6337 | 2 | 0.0%
| | PI - Joist | 5899 | 5891 | -9 | -0.2%
| | | | | |
Flat products| Category | 13-Feb | 20-Feb | Change | %
| | PI - Narrow Plates | 6187 | 6160 | -27 | -0.4%
| | PI - Wide Plates | 6562 | 6592 | 31 | 0.5%
| | PI - Hot Rolled | 6384 | 6393 | 9 | 0.1%
| | PI - Cold Rolled | 7092 | 7099 | 7 | 0.1%
| | PI - Galvanized | 6780 | 6786 | 6 | 0.1%
| | | | | |
To know more about these indices please visit
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Input materials slides
The scrap price was bag of mixed movements with stability at the metropolis but slide at small locations. The main reason for sluggishness is the lack of impetus in long demand, which is having a counter pressure on the scrap and ingot prices. This is also supplemented by the report that ship breaking scrap business is booming with an inventory of 1 million tonne at Alang and fresh arrivals at enhanced velocity which is having a cascading effect on the overall sentiments in secondary sector.
Sponge iron and pig iron prices remained almost stable with fall in Raipur being balanced by hike in Kolkata. However it is expected to remain depressed in the coming weeks as the prices of Iron ore has dipped by 10% in the last week as Chinese iron ore buyers vanished due to low demand and sentiment in Chinese steel market.
Melting scrap
80:20
HMS| Location | Change | %
| | Chennai | 255 | 1.6%
| | Kandla | -784 | -4.0%
| | Mumbai | 300 | 1.7%
| | Mandi | -174 | -0.9%
| | Kolkata | 0 | 0.0%
| | Kanpur | -174 | -1.0%
| | | |
Change is on February 20th is with respect to February 13th 2009
Change is in INR per tonne
Alang| Product | Size | Size | Change | %
| | Ships | Mixed | Mixed | -900 | -5.4%
| | Plate cuttings | 1” | 1” | -1000 | -5.2%
| | | | | |
Change is on February 20th is with respect to February 13th 2009
Change is in INR per tonne
Pencil ingot| Location | Change | %
| | Mumbai | -400 | -1.7%
| | Mandi | -725 | -3.0%
| | Raipur | -784 | -3.7%
| | Kanpur | -436 | -1.9%
| | Kolkata | 1421 | 6.2%
| | Ghaziabad | -400 | -1.7%
| | Muzzafarnagar | -697 | -2.9%
| | Ahmedabad | -800 | -3.5%
| | | |
Change is on February 20th is with respect to February 13th 2009
Change is in INR per tonne
Pig Iron| Location | Change | %
| | Raipur | -900 | -4.7%
| | Kolkata | 1143 | 6.2%
| | | |
Change is on February 20th is with respect to February 13th 2009
Change is in INR per tonne
Sponge iron| Location | Change | %
| | Raipur | -900 | -5.8%
| | Kolkata | 931 | 6.2%
| | | |
Change is on February 20th is with respect to February 13th 2009
Change is in INR per tonne
Long products prices show minor fluctuations
The Indian domestic prices for long products exhibited a definite pattern of no significant movement in all locations. The mild fluctuations had more to do with traders attempt to clear off stockpile by creating a transient positive sentiment in the market.
However certain exceptions were also seen during the week.
TMT
Fe 415
12mm| Location | Change | %
| | Chennai | 800 | 2.7%
| | Mumbai | 344 | 1.1%
| | Mandi | -312 | -0.9%
| | Kolkata | 0 | 0.0%
| | Delhi | -557 | -1.7%
| | Kanpur | -300 | -0.9%
| | Ahmedabad | -2065 | -6.6%
| | Indore | -700 | -2.1%
| | | |
Change is on February 20th is with respect to February 13th 2009
Change is in INR per tonne
WRC
SWR14
5.5/6| Location | Change | %
| | Chennai | -100 | -0.4%
| | Raipur | -436 | -1.5%
| | Kolkata | 0 | 0.0%
| | Delhi | -453 | -1.4%
| | Kanpur | -261 | -0.9%
| | | |
Change is on February 20th is with respect to February 13th 2009
Change is in INR per tonne
ANGL
GR A
65x6| Location | Change | %
| | Chennai | 0 | 0.0%
| | Mumbai | 0 | 0.0%
| | Mandi | 0 | 0.0%
| | Raipur | -1040 | -3.4%
| | Kolkata | 0 | 0.0%
| | Delhi | -520 | -1.6%
| | Kanpur | -400 | -1.3%
| | Ahmedabad | -1377 | -4.6%
| | Indore | -400 | -1.3%
| | Bangalore | 1000 | 3.3%
| | | |
Change is on February 20th is with respect to February 13th 2009
Change is in INR per tonne
CHNL
GR A
75/100| Location | Change | %
| | Chennai | 0 | 0.0%
| | Mumbai | 574 | 1.8%
| | Mandi | -312 | -0.9%
| | Raipur | -1040 | -3.4%
| | Kolkata | 0 | 0.0%
| | Delhi | 0 | 0.0%
| | Kanpur | -200 | -0.6%
| | Ahmedabad | -1377 | -4.6%
| | Indore | -400 | -1.2%
| | Bangalore | 1500 | 4.8%
| | | |
Change is on February 20th is with respect to February 13th 2009
Change is in INR per tonne
JSTI
GR A
250x125| Location | Change | %
| | Chennai | 0 | 0.0%
| | Mumbai | 574 | 1.7%
| | Mandi | -104 | -0.3%
| | Raipur | -1040 | -3.3%
| | Kolkata | 0 | 0.0%
| | Delhi | -312 | -0.9%
| | Kanpur | -1000 | -3.0%
| | Ahmedabad | -312 | -1.0%
| | Indore | -300 | -0.9%
| | Bangalore | 1000 | 3.1%
| | | |
Change is on February 20th is with respect to February 13th 2009
Change is in INR per tonne
Flat products prices decline ebbs
The flat product market remains stable despite the news of major import booking of nearly 200,000 tonnes of HRC and arrival of 3500 tonnes of plates from JSPL in Mumbai. The prices might take a dip in the coming fortnight as the after effect of these significant movements will take sometime to sink.
HRC
Tube
2.5x1250| Location | Change | %
| | Mumbai | 453 | 1.6%
| | Ludhiana | 181 | 0.7%
| | Kolkata | -1046 | -3.7%
| | Delhi | 453 | 1.6%
| | Ahmedabad | 0 | 0.0%
| | Indore | 0 | 0.0%
| | Bangalore | 0 | 0.0%
| | | |
Change is on February 20th is with respect to February 13th 2009
Change is in INR per tonne
Patra| Location | Change | %
| | Ludhiana | -272 | -1.0%
| | Mandi | -634 | -2.3%
| | Delhi | 0 | 0.0%
| | | |
Change is on February 20th is with respect to February 13th 2009
Change is in INR per tonne
PLTS
GRA
8x1.5| Location | Change | %
| | Chennai | 500 | 1.8%
| | Mumbai | 0 | 0.0%
| | Kolkata | -436 | -1.6%
| | Delhi | 0 | 0.0%
| | Kanpur | -87 | -0.3%
| | | |
Change is on February 20th is with respect to February 13th 2009
Change is in INR per tonne
PLTS
GRB
12-20x2.5| Location | Change | %
| | Chennai | 0 | 0.0%
| | Mumbai | 680 | 2.2%
| | Raipur | 0 | 0.0%
| | Kolkata | 0 | 0.0%
| | Delhi | 453 | 1.5%
| | Kanpur | 349 | 1.2%
| | Ahmedabad | 0 | 0.0%
| | Indore | 0 | 0.0%
| | Bangalore | 0 | 0.0%
| | | |
Change is on February 20th is with respect to February 13th 2009
Change is in INR per tonne
CR
DSK
0.63x1000| Location | Change | %
| | Chennai | 0 | 0.0%
| | Mumbai | 0 | 0.0%
| | Pune | 0 | 0.0%
| | Kolkata | -436 | -1.4%
| | Delhi | 453 | 1.4%
| | Kanpur | 436 | 1.3%
| | Ahmedabad | 0 | 0.0%
| | | |
Change is on February 20th is with respect to February 13th 2009
Change is in INR per tonne
GC
100Gms
0.4| Location | Change | %
| | Chennai | 0 | 0.0%
| | Mumbai | 436 | 1.2%
| | Kolkata | 0 | 0.0%
| | Delhi | 0 | 0.0%
| | Kanpur | 1307 | 3.7%
| | Bangalore | 0 | 0.0%
| | | |
Change is on February 20th is with respect to February 13th 2009
Change is in INR per tonne
To know exact prevailing steel prices in India in 22 locations on daily basis, subscribe to services of www.steelprices-india.com by registering or sending a mail to admin@steelprices-india.com. Please note that this is a paid service.
(Sourced from www.steelprices-india.com)
Mr Paswan keeps options open on steel import duty - 23 Feb 2009 BL quoted Mr Ram Vilas Paswan minister for steel as saying that import duty on steel could still be increased through a notification.
Mr Paswan said that increasing the duty does not have to be a budget decision.
Indian steel industry, which has been badly hit by the recession, has been demanding protection from imports. India’s finished steel production during October to December was down by 8% over the corresponding period in 2008. Consumption was down by 13%.
(Sourced from Business Line)
Indian steel long term fundamentals are intact - Ernst & Young - 23 Feb 2009 According to Ernst & Young Indian Steel Industry 2009 is squeezed but remains strong.
During Mining to Steel Summit 2009 organized by Indian Chambers of Commerce last week, sounding an optimistic note, its report states that though the world steel scenario is grim, India has the potential to grow at double digit rates and should target a production of 125 million tonne in the medium term.
Drawing a parallel with China, it goes on to say that during the 1998-03 period, when the finished global steel production grew at a compounded annual growth rate of 1.6%, the Chinese finished steel consumption doubled at a CAGR of 18%. The key drivers of Chinese steel demand were massive infrastructure development and high level of urbanization, escalating demand from housing, automobile and white goods sectors.
Mr Navin Vohra Partner & National Leader, metals & mining practice for Ernst & Young said that “The current Indian scenario is very similar to that of China in 1998 and we expect significant investments here towards large scale public infrastructure, urbanization, auto and white goods. Further, in the long term, capacity in the commodity industry has to move to low cost centers and India is well placed with abundant high quality iron ore, qualified manpower and competitive capital costs due to low land and construction costs. ”
According to the report, while the near to medium term future of the global steel industry is challenging, the outlook for India is also encouraging because unlike the last bear phase during 1993-94 to 2001-02 when the domestic sector was reeling under a supply overhang the supply demand scenario is more balanced this time.
The report added that the near term outlook for the industry is challenging as the growth in key end user industries such as construction, automobiles and manufacturing has taken a backseat. The downturn has also led to a decline in the prices for raw materials such as iron ore and coking coal, albeit at a lower rate than the dip in steel prices. Further, prices are expected to decline in 2009 as consumption levels are projected to continue plummeting.
As steel manufacturers have undertaken production cuts, this is likely to result in a surplus of iron ore and resulting weakening of ore prices. It is expected that the domestic steel companies will try to drive hard bargains for iron ore, though the consolidated nature of the raw material industry ensures that generally it is the input suppliers who have better bargaining power than the steel manufacturers, thereby impacting operating margins. Similarly, the coking coal market is also expected to turn into a surplus on account of the production cuts in the industry.
Ernst & Young said that “the companies with captive mines will be in a better position to combat the downturn. The key strategies which companies can adopt in this scenario is to focus on value added products, rationalize cost structure through better manpower planning, logistics and raw material sourcing. The companies with a focus on the domestic market are likely to be more favorably placed, given the relatively stronger demand from the local users.”
The report estimates M&A activity to rebound when the credit crunch eases and the economy picks up as domestic players will require iron ore and coking coal reserves for enhancing their raw material security. Further, there is a relatively high fragmentation in the industry in India and therefore a need to attain economies of scale and improve bargaining power with raw material producers. Increasing geographical spread to enter high-value steel markets is another imperative.
Macroeconomic indicators -India likely to grow 7% next fiscal - 23 Feb 2009 Zee News quoted Mr Montek Singh Ahluwalia deputy chairman of Indian Planning Commission as saying that the Indian economy is expected to grow at least 7% in the next financial year on the back of stimulus measures taken by the Government
Mr Ahluwalia on the sidelines of a seminar said that "The world economy expects a recovery in the H2 of the next fiscal in the coming year, India's growth will be at least 7%."
He, however, said that in the immediate term, the manufacturing, gems and jewellery and other export-oriented sectors would suffer some pain coupled with a rise in unemployment levels.
He said that "The pace of economic growth will be slower in the first-half but there will be a pick up in the H2. Post September 2009, there will be a revival in the economy."
He added that with inflation not a problem, the focus would now be on stimulating growth. Both fiscal and monetary policies would now be aimed at supporting growth. Growth is a problem, inflation is not a problem.
Mr Ahluwalia said that "Compared to other countries, we are doing reasonably well we are growing below our potential many sectors are feeling the pain. Right now, the foremost challenge is to restore the growth momentum of the economy."
He said that the fiscal and monetary measures have enough flexibility to respond to the prevailing economic situation. He added that with some sectors affected by the economic slowdown, NPA levels of banks may witness a rise, though these would not be significant.
Mr Ahluwalia further added that "Banks are sufficiently liquid banks should extend credit to needy segments like SME."
(Sourced from zeenews.com)
Himachal CM assures of another steel unit at Sirmour - 23 Feb 2009 It is reported that Mr Prem Kumar Dhumal CM of Himachal Pradesh assured that a steel plant of steel ministry would be installed in the Nahan constituency in HP. He said that after fulfilling all the necessary conditions of land, water and electricity, the execution of this plant would be started.
Mr Dhumal said that there was a detailed discussion with Mr Ram Vilas Paswan union steel minister and Mr Sk Roongta chairman of steel authority of India Limited on Saturday during the foundation stone laying ceremony of similar steel plant in Kandrori of Kangra district.
He said that confusion was created that a steel plant sanctioned for the Sirmaur district was shifted to Kangra district. He added that government was committed to make Sirmaur district as the pioneer in the race of the development.
(Sourced from nvonews.com)
Macroeconomic indicators - USD climbs above INR 50 - 23 Feb 2009 Exim News Service reported that the rupee has once again depreciated to a record low. On February 18th 2009, INR 50 fetched a dollar, though the day ended at INR 49.97 to the dollar.
The strengthening of the dollar was attributed to strong demand from central banks around the world for US treasury bills. Despite the slowdown and abysmal returns from US treasury bills, funds, banks and sovereigns are buying these bonds, which are still perceived as a safe bet.
It is feared that the exchange rate movements could upset the hedging strategy of several companies.
(Sourced from Exim News Service)
Stimulus plans - India hits out at US protectionist tendency - 23 Feb 2009 The Financial Express reported that India is opposing protectionist measures built into the US government's multi billion corporate bailout packages by terming them as worrying signs from the world's biggest economy.
Mr Pranab Mukherjee external affairs minister while inaugurating the 42nd Indian Labor Conference said that "We are already witnessing worrying signs of protectionism in the world's biggest economy. We need to argue against this trend at the international forum."
Mr Mukherjee said that "We will need to press for trade and aid flows to developing countries and look at regional cooperation to strengthen defenses against such crises."
He was apparently referring to the Washington's bar on firms receiving bailout money from hiring foreign workers if they are to replace Americans at work.
(Sourced from ptinews.com)
Slowdown signs - Half a million Indians lost jobs in 4 month - 23 Feb 2009 DPA reported that half a million people lost their jobs in India in the 4 month period ended December 2008 due to the economic slowdown.
As per report the assessment of the job losses was based on a quick sample survey by the Labor Ministry of seven sectors hit by the downturn. These included mines, textiles, metals, gems and jewellery, automobile, transport and the information technology and business process outsourcing.
Mr Prem Chand Gupta federal Corporate Affairs Minister said that the total employment in all the sectors covered by the survey conducted by the Labor Ministry went down from 16.2 million during September 2008 to 15.7 million in December 2008, resulting in job losses of about half a million people.
Mr Gupta said that the government had taken several measures to meet the situation including two incentive packages announced on December 7th and January 2nd aimed at stimulating the economy.
(Sourced from DPA)
India may sign FTA with ASEAN in April 2009 - 23 Feb 2009 The Financial Express quoted Mr Kamal Nath Commerce and Industry minister as saying that India is likely to sign a trade pact with the 10 nation economic bloc ASEAN in April 2009.
Mr Nath said that "Maybe at the ASEAN summit at the end of April," he said when asked that the Comprehensive Economic Cooperation Agreement with the regional body is expected.
He said that there were certain issues including duty cuts which are yet to be sorted out. Mr Nath after a bilateral meeting with New Zealand Trade Minister Tim Groser said that "We got a letter a day before yesterday, which is not acceptable to us."
A senior Commerce Ministry official said that the pact was scheduled to be signed on February 27th in Thailand.
If the agreement, seeking to make 95% goods trade able between India and ASEAN duty free, were to be signed later this month, the first phase of reduction would start in June to be followed by another tranche on January 2010. It would mean India cuts duties twice in 6 months.
Mr Nath said that "We cannot have cuts in 6 months that is one of the issues, so we are looking at it," adding that the summit was scheduled for April and the 2 sides have time to sort out the pending issues.
(Sourced from The Financial Express)
Slowdown signs - FM suggest pay cut to avoid job losses - 23 Feb 2009 Reuters reported that the Indian government has suggested that jobs must be retained even if it meant cut in compensation.
Mr Pranab Mukherjee Indian finance minister at International Labor Conference in New Delhi said that "Jobs must be protected even if it means some reduction in compensation at various levels,"
He said that the government is making all out efforts to ensure flow of credit to boost trade and investment, consumption and to stimulate additional demand through public and private expenditure.
Mr Mukherjee said that in the interim Budget he had talked of encouraging investments in infrastructure and in housing and real estate, adding that the government is providing adequate resources for program like NREGA and Bharat Nirman.
He said that "If the work can be stepped up to a considerable extent, these are directly linked with employment creation and also demand creation. If more and more good roads are constructed, cement, steel, every thing will be required. They will get jobs. These types of program should be expedited and adequate resources will be provided."
(Sourced from Reuters)
SIFL selected best performing industry - 23 Feb 2009 Express News Service reported that Steel and Industrial Forgings Ltd, Thrissur has been selected as the best performing industry under the Industries and Commerce Department and Mr K Shamsuddin CEO of SIFL has bagged the award for best corporate leadership.
The state government has instituted the awards as part of strengthening PSUs and rewarding meritorious performances.
The other awards are as follows
1. Corporate Leadership, Notable achievement - Mr AK Luke CMD of Kerala Minerals and Metals Ltd, Chavara, Kollam
2. Corporate Leadership Special Award - Mr S Venkadeesawaran MD of Transformers and Electricals Kerala Ltd, Angamali
3. Corporate Leadership Special Award - Mr A Devakinandanan CMD of Kerala Ceramics Ltd, Kundara, Kollam.
4. Pollution abatement award - Kerala Minerals and Metals Ltd, Chavara, Kollam
5. Journalists’ award for Industry Reporting - Mr R Jayaprasad, Sub Editor, Mathrubhumi Daily, Thiruvananthapuram.
The Public Sector Restructuring & Internal Audit Bureau is organizing the Award Ceremony 2008 for State Public Sector Units on February 24th at the Tagore Theatre here. Governor Mr RS Gavai will give away the awards.
(Sourced from Express News Service)
Slowdown signs - TATA Power not to bid for more UMPP - 23 Feb 2009 Reuter reported that TATA Power Ltd will not bid for any more large power projects as raising funds is proving difficult given current market conditions.
The report cited Mr Banmali Agrawala ED of TATA Power Ltd on the sidelines of a conference as saying that "We are not bidding because in the current financial scenario, it is difficult to raise resources of around INR 200 billion needed for each plant."
Mr Agrawala said that "The threshold for returns on capital is a little bit higher now. We have become more selective on what projects we do. He said that we still have about 6,000 MW under construction and we will focus on completing that." TATA Power currently generates 2,300 MW of electricity.
India has outlined plans to add 78,000 MW in generation capacity by 2012. The country, which faces a peak power shortage of 16% has announced it will build nine large coal based power projects, each with generation capacity of 4,000 MW.
As per report, TATA Power is currently building one of these plants in western India at a cost of INR 170 billion, but did not bid recently for a plant in eastern India, which was awarded to rival Reliance Power.
As the global financial crisis spreads, a slowdown in Asia's third largest economy has derailed infrastructure growth as firms struggle with thigh borrowing costs and a wary banking sector tightens lending norms.
(Sourced from Reuters)
Chinese domestic steel price slide likely to spur exports - 23 Feb 2009 After reversal of sentiments in Chinese domestic market, since the first week of February 2009, the prices of various steel products at Shanghai is reported to have gone down by 5% to 13% in a span of about just 2 weeks.
The market sentiments nose dived during this period after a period of hope after Chinese spring Holiday, which had looked up due to the Chinese government drive to support infrastructure spending through a major stimulus plan.
Many industry insiders think it its unlikely for the price downtrend trend to halt and move up in near term. They said that inventory write off coupled with lack of demand in the domestic market has resisted all attempts of market revival.
The fall in prices of various categories of steel products during this brief period at Shanghai is tabulate below
| Location | Product | Size | CNY | USD | %
| | Billets | 150*150 | CNY | -320 | -47 | -10%
| | WRC | 6.5mm | Common | -390 | -57 | -10%
| | Rebar | 20mm | HRB 400 | -390 | -57 | -10%
| | Angle | #5 | Common | -180 | -26 | -4%
| | Channel | #16 | Common | -180 | -26 | -5%
| | Beam | #25 | Common | -180 | -26 | -5%
| | Plates | 20mm | Common | -250 | -37 | -6%
| | HRC | 4.75mm | Common | -520 | -76 | -13%
| | CR | 1.0mm | Common | -480 | -70 | -10%
| | HDG | 0.5mm | Common | -280 | -41 | -6%
| | | | | | |
Change is on February 20th is with respect to 1st week of February
Change is per tonne
Due to higher realization in domestic market, Chinese mills had been maintaining high offer levels of exports, which badly hit their steel exports in recent months. Chinese finished steel export during January 2009 was only 1.910 million tonnes down by 54% YoY. Their total export during 2008 was reported at 59.23 million tonnes down by 5.5% YoY as compared to total of 62.65 million tonnes in 2007. In other words Chinese have been exporting at an average rate of 5 million tonnes per year, which is just about 10% of their total production, and could go back to this level with aggressive pricing thus displacing current suppliers.
Many closed steel mills in china resumed production during last 2 months on the hopes of revival of demand in this period lack of demand is likely to result in surplus availability with Chinese steel makers. As the gap in their realization between domestic and exports is narrowing, Chinese steel mills are likely to rationalize their export levels to very aggressive levels for capturing already subdued overseas global demand.
Moreover, Chinese government has been concerned over drop in steel exports and is planning various measures to support, which should further catalyze this move by steel mills.
Incidentally this view of reentry of china in steel export is echoed by many buyers in Europe, who are postponing their purchases due to this speculation.
This view also emerged during on line poll on www.steelguru.com during Week 07, wherein 54% polled “Yes” to “Would Chinese steel mills reduce export levels to regain quantities” with 32% “No” and 13% “Can’t Say”.
But the moot point is that “What would be the extant of Chinese aggression and how it would affect global prices? As the global demand of steel is abysmal and other steel exporting suppliers especially from Black Sea are already facing sever pricing pressures due to low demand.”
Readers are invited to send their views at admin@steelprices-china.com
To know exact prevailing steel prices in China on daily basis, subscribe to services of www.steelprices-china.com by registering or sending a mail to admin@steelprices-china.com. Please note that this is a paid service.
(Sourced from www.steelprices-china.com)
Short term forecast for HR prices in Europe - 23 Feb 2009 The onset of New Year had rekindled some semblance of positives in the European market for HR but it took less than a month for this euphoria to vanish.
HR demand shifted for sluggish to negative mode making the customers buy in spurts and thus weaning away from entering into any long term booking. Inventories are reported to be high at mills. In other words, HR market in EU remains dormant in absence of any demand propelling factor.
European HR market is exhibiting below par activity, which also is rapidly diminishing. The Banks reluctance to issue credit lines is a vital dimension to this problem inhibiting any revival in the cash strapped business environment, in addition to the root problem of actual demand.
The mills have adopted a fluctuating pricing depending on their negotiating strength in each case. Thus it is really difficult to obtain a precise price indication because mills prefer to negotiate each order uniquely.
Buyer also fee that they would see low priced offers from overseas suppliers soon, especially China. A deal at EUR 335 CFR FO has been reported to have been closed last week from an Australian mill.
It is anticipated that prices are expected to reach its nadir in the next few months and following levels may be reached
| Country | Domestic | Import | Prediction
| | Italy | 360-370 | 340-360 | 300-320
| | Spain | 350-360 | 330-350 | 300-310
| | Germany | 400-420 | 350-370 | 320-340
| | | | |
In EUR per tonne
All prices are net to the final customer with following payment terms
A. Italy & Spain
1. Domestic prices are EXW or DDP with payment 90 days from delivery
2. Import prices are CIF FO with LC at 90 days from B/L date
B. Germany
1. Domestic prices are EXW or DDP with payment on the 15th of the following month
2. Import prices are CFR FO with open term payment at 30 days from date of arrival
It is also said that the HR pricing dynamics is awaiting alteration in second half once the mills attain reduction in raw material prices during the forthcoming negotiations. This impasse will be prolonged till the end of 3rd Quarter as the current demand levels are abysmally low and it will take sometime to normalize.
However, market sources have also reported, on the optimistic note, that some of the European HR mills are delaying their price announcements for April 2009, hoping the spot market could recover next month so that they can set a higher price. Mills suggest that now that the stock level is very low and the end users will soon return to the market, which will increase demand and the price will rise.
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(Sourced from www.steelprices-india.com)
Monday Market Monitor - CIS (WEEK 8) - Slide starts again - 23 Feb 2009 The prices of various steel products, except HRC, at Black Sea witnessed downward slide last week due to pressure on sellers amid lack of buying.
The demand remained weak during last week and the general mood of the market was subdued. The buyers are reported to be making purchases in spurts, just to cover their immediate needs and that too after scanning the prices for all available sources. The usual frenzied mood of transactions remained missing.
| Item | Grade | Size | Change
| | Billets | 3-5 sp/ps | 125-150 mm | -20
| | Rebars | A300C-A500C | 12-32 mm | -10
| | Wire rod | Mesh | 5.5-6.5 mm | -10
| | HRC | ST1-ST3 kp/sp/ps | 2-8 mm | 0
| | HRC | ST1-ST3 kp/sp/ps (Rus) | 2-8 mm | 0
| | Plates | A36 | 8-30 mm | -20
| | CRC | 08 kp (Ukrainian origin) | 0.5-1.5 mm | -20
| | CRC | Russian origin | 0.5-1.5 mm | -10
| | | | |
Change is on February 20th is with respect to February 13th 2009
Change is in USD per tonne
Delivery FOB Black sea
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(Sourced from www.steelprices-india.com)
Indian iron ore exporters facing tough times - 23 Feb 2009 It is reported that despite reduction in spot prices of iron ore fines FOB East Coat of India by 5% to 11% depending upon grade and rejection level, Indian exporters of iron ore are facing a very tough situation
The spot FOB East Coast prices of various grades of iron ores exhibited downward trend on February 18th and February 19th 2009 as compared to February 11th 2009 are as under
Grade Change
Fe 63.5/63% -7%
Fe 63.5/62.5% -5%
Fe 61 / 60 % -5%
Fe 59 / 58 % -11%
Fe 58 / 57% -8%
Change is during February 19th and February 11th 2009
Change is in USD per tonne
Due to the negative sentiment, market sources have informed that Chinese buyers have disappeared in one go and there feeling of nervousness is creeping among sellers.
Some instances of non opening of LC after signing of contracts by Chinese buyers have also been reported.
Market sources point to a very difficult situation for Indian iron ore exporters in coming week as some of the buyers may want to renegotiate existing contracts under which shipments are underway.
The source added that the chances of new deals are remote in short term.
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(Sourced from www.steelprices-india.com)
Monday Market Monitor - China (WEEK 8) - Sheen vanishing - 23 Feb 2009 It is reported that Chinese steel prices have reversed the short term uptrend and continued on downward course during last week. And many insiders think it its unlikely for the price downtrend to halt and move up in near term.
They said inventory write off coupled with lack of demand in the domestic as well as international market has resisted all attempts at market revival.
Billets
150*150
Q235
| Location | CNY | USD | %
| | Jiangsu Province | -200 | -29 | -6.3%
| | Shandong Province | -200 | -29 | -6.3%
| | Hebei Province | -250 | -37 | -8.5%
| | Shanxi Province | -200 | -29 | -6.6%
| | Shaanxi Province | -100 | -15 | -3.1%
| | Tianjin | -100 | -15 | -3.2%
| | Fujian Province | -200 | -29 | -6.3%
| | | | |
Change is on February 20th is with respect to February 13th 2009
Change is per tonne
WRC
6.5mm
Common
| Location | CNY | USD | %
| | Shanghai | -250 | -37 | -7.3%
| | Hangzhou | -250 | -37 | -7.0%
| | Nanjing | -280 | -41 | -7.8%
| | Hefei | -200 | -29 | -5.5%
| | Changsha | -320 | -47 | -9.2%
| | Zhengzhou | -200 | -29 | -5.7%
| | Chengdu | -240 | -35 | -6.4%
| | Guiyang | -350 | -51 | -9.4%
| | Kunming | -280 | -41 | -7.4%
| | Lanzhou | -340 | -50 | -9.2%
| | Urumchi | 0 | 0 | 0.0%
| | | | |
Change is on February 20th is with respect to February 13th 2009
Change is per tonne
Rebar
20mm
HRB 400
| Location | CNY | USD | %
| | Shanghai | -230 | -34 | -6.6%
| | Hangzhou | -220 | -32 | -6.2%
| | Nanjing | -150 | -22 | -3.9%
| | Jinan | -100 | -15 | -2.7%
| | Hefei | -170 | -25 | -4.4%
| | Fuzhou | -200 | -29 | -5.4%
| | Nanchang | -210 | -31 | -5.6%
| | Guangzhou | -200 | -29 | -5.1%
| | Changsha | -460 | -67 | -11.9%
| | Wuhan | -370 | -54 | -10.2%
| | Zhengzhou | -150 | -22 | -3.9%
| | Beijing | -100 | -15 | -2.7%
| | Tianjin | -330 | -48 | -9.5%
| | Shijiazhuang | -190 | -28 | -5.2%
| | Taiyuan | -200 | -29 | -5.2%
| | Shenyang | -130 | -19 | -3.5%
| | Harbin | -80 | -12 | -2.1%
| | Chongqing | -170 | -25 | -4.3%
| | Chengdu | -200 | -29 | -5.0%
| | Guiyang | -350 | -51 | -8.8%
| | Kunming | -250 | -37 | -6.2%
| | Xian | -360 | -53 | -9.6%
| | Lanzhou | -350 | -51 | -8.9%
| | Urumchi | 0 | 0 | 0.0%
| | | | |
Change is on February 20th is with respect to February 13th 2009
Change is per tonne
HRC
4.75mm
Common
| Location | CNY | USD | %
| | Shanghai | -180 | -26 | -5.1%
| | Hangzhou | -160 | -23 | -4.6%
| | Nanjing | -200 | -29 | -5.6%
| | Jinan | -200 | -29 | -5.7%
| | Hefei | -350 | -51 | -9.7%
| | Fuzhou | -150 | -22 | -4.2%
| | Nanchang | -300 | -44 | -8.3%
| | Guangzhou | -170 | -25 | -4.7%
| | Changsha | -250 | -37 | -6.7%
| | Wuhan | -180 | -26 | -5.0%
| | Zhengzhou | -200 | -29 | -5.7%
| | Beijing | -200 | -29 | -5.8%
| | Tianjin | -150 | -22 | -4.4%
| | Shijiazhuang | -250 | -37 | -7.2%
| | Taiyuan | -280 | -41 | -8.2%
| | Shenyang | -250 | -37 | -7.4%
| | Harbin | -150 | -22 | -4.1%
| | Chongqing | -230 | -34 | -6.2%
| | Chengdu | -260 | -38 | -7.1%
| | Kunming | -150 | -22 | -3.9%
| | Xian | -400 | -59 | -11.3%
| | Lanzhou | -400 | -59 | -11.3%
| | Urumchi | -350 | -51 | -9.3%
| | | | |
Change is on February 20th is with respect to February 13th 2009
Change is per tonne
Plates
20mm
Common
| Location | CNY | USD | %
| | Shanghai | -250 | -37 | -6.7%
| | Hangzhou | -270 | -40 | -7.3%
| | Nanjing | -250 | -37 | -6.8%
| | Jinan | -160 | -23 | -4.3%
| | Hefei | -160 | -23 | -4.3%
| | Fuzhou | -100 | -15 | -2.6%
| | Nanchang | -170 | -25 | -4.4%
| | Guangzhou | -190 | -28 | -5.1%
| | Changsha | -200 | -29 | -5.1%
| | Wuhan | -1280 | -188 | -36.1%
| | Zhengzhou | -150 | -22 | -4.1%
| | Beijing | -250 | -37 | -7.2%
| | Tianjin | -280 | -41 | -8.2%
| | Taiyuan | -370 | -54 | -10.9%
| | Shenyang | -300 | -44 | -8.6%
| | Harbin | -200 | -29 | -5.5%
| | Chongqing | -200 | -29 | -5.2%
| | Chengdu | -280 | -41 | -7.7%
| | Kunming | -200 | -29 | -5.2%
| | Xian | -250 | -37 | -6.8%
| | Lanzhou | -280 | -41 | -7.5%
| | Urumchi | -100 | -15 | -2.6%
| | | | |
Change is on February 20th is with respect to February 13th 2009
Change is per tonne
CR
1.0mm
Common
| Location | CNY | USD | %
| | Shanghai | -230 | -34 | -5.4%
| | Hangzhou | -270 | -40 | -6.4%
| | Nanjing | -200 | -29 | -4.5%
| | Jinan | -300 | -44 | -7.1%
| | Qingdao | -150 | -22 | -3.4%
| | Hefei | -100 | -15 | -2.2%
| | Fuzhou | -250 | -37 | -5.7%
| | Nanchang | -130 | -19 | -2.8%
| | Guangzhou | -250 | -37 | -5.7%
| | Changsha | -100 | -15 | -2.2%
| | Wuhan | -250 | -37 | -5.7%
| | Zhengzhou | -150 | -22 | -3.3%
| | Beijing | -250 | -37 | -5.8%
| | Tianjin | -200 | -29 | -4.7%
| | Shijiazhuang | -200 | -29 | -4.4%
| | Taiyuan | -100 | -15 | -2.2%
| | Shenyang | -200 | -29 | -4.5%
| | Harbin | -150 | -22 | -3.3%
| | Chongqing | -70 | -10 | -1.4%
| | Chengdu | -50 | -7 | -1.1%
| | Kunming | -50 | -7 | -1.1%
| | Xian | 0 | 0 | 0.0%
| | Lanzhou | -100 | -15 | -2.2%
| | Urumchi | 0 | 0 | 0.0%
| | | | |
Change is on February 20th is with respect to February 13th 2009
Change is per tonne
HDG
0.5mm
Common
| Location | CNY | USD | %
| | Shanghai | -130 | -19 | -2.7%
| | Hangzhou | -400 | -59 | -8.8%
| | Beijing | -250 | -37 | -5.5%
| | Tianjin | -50 | -7 | -1.0%
| | Boxing | -250 | -37 | -5.7%
| | Guangzhou | -230 | -34 | -4.7%
| | Zhengzhou | -200 | -29 | -4.2%
| | Xian | -300 | -44 | -6.1%
| | Shenyang | -150 | -22 | -3.1%
| | Harbin | -100 | -15 | -2.1%
| | Nanchang | -200 | -29 | -4.1%
| | Fuzhou | -150 | -22 | -3.0%
| | Chongqing | 0 | 0 | 0.0%
| | Wuhan | 0 | 0 | 0.0%
| | | | |
Change is on February 20th is with respect to February 13th 2009
Change is per tonne
After reversal of sentiments in Chinese market since the first week of February 2009, the total slide for various products is as under
| Location | Product | Size | CNY | USD | %
| | Billets | 150*150 | CNY | -320 | -47 | -10%
| | WRC | 6.5mm | Common | -390 | -57 | -10%
| | Rebar | 20mm | HRB 400 | -390 | -57 | -10%
| | Angle | #5 | Common | -180 | -26 | -4%
| | Channel | #16 | Common | -180 | -26 | -5%
| | Beam | #25 | Common | -180 | -26 | -5%
| | Plates | 20mm | Common | -250 | -37 | -6%
| | HRC | 4.75mm | Common | -520 | -76 | -13%
| | CR | 1.0mm | Common | -480 | -70 | -10%
| | HDG | 0.5mm | Common | -280 | -41 | -6%
| | | | | | |
Change is on February 20th is with respect to 1st week of February
Change is per tonne
Exports
The export levels remain unchanged despite almost negligible transactions. But it is now expected that Chinese mills will relinquish the arbitrary export levels in their drive to get overseas orders as the domestic demand is not supporting the increased production levels after many mills resumed their units.
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(Sourced from www.steelprices-china.com)
FOB Black Sea billet prices dip by USD 20 last week - 23 Feb 2009 It is reported that the prices of billets FOB Black Sea came under severe pressure last week and witnessed USD 20 per tonne reduction.
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(Sourced from www.steelprices-india.com)
BlueScope Steel delivers strong half yearly results - 23 Feb 2009 BlueScope Steel announced a reported Net Profit After Tax for H1 of FY09 of AUD 407 million up from AUD 116 million in H1 of FY08 and an underlying NPAT of AUD 479 million an increase of 57% on 1H FY08.
Mr Paul O’Malley MD & CEO of BlueScope said that "This excellent first half result was driven predominantly by improved spread and the weaker Australian dollar in the first quarter which delivered an underlying Q1 NPAT of approximately AUD 430 million.”
He added that "However, in the second quarter of the reporting period, export sales from Australia were materially curtailed by the economic downturn around the world and the substantially lower demand for steel globally and in Australia. We are also seeing lower international steel prices while still experiencing peak raw material costs."
Coal mine blast leaves at least 73 dead in Shanxi - 23 Feb 2009 Bloomberg reported that at least 73 Chinese miners died in a coal-mine explosion today in China’s northern Shanxi province.
China’s official Xinhua News Agency reported that the gas blast occurred at 2:17 AM in the Tunlan coal mine in Gujiao a city about 50 kilometers from the provincial capital of Taiyuan.
It said that 436 people were working underground at the time of blast and 65 remained trapped as of 1PM local time. Xinhua reported that trapped workers contacted relatives by cell phone from inside the mine.
Today’s report said among 113 hospitalized miners, 21 are in critical condition.
The State Council said Mr Luo Lin head of the State Administration of Work Safety is on his way to the scene to investigate the cause of the accident.
Shanxi Coking Coal Group, is China’s largest coking coal producer. The mine has an annual production capacity of 5 million tonnes.
Production pruning - US steel shipments dip by 46% in December - 23 Feb 2009 The American Iron & Steel Institute reported that for the month of December 2008, US steel mills shipped 4,617,000 net tons, a 45.7% YoY decrease from the 8,495,000 net tons shipped in December 2007 and an 11.6% MoM decrease from the 5,223,000 net tons shipped in the previous month of November 2008.
A year to year comparison of year to date shipments shows the following changes within major market classifications
1. Service centers and distributors, down by 6.2% YoY
2. Automotive, down by 11.2% YoY
3. Construction and contractors’ products, down by 11.6% YoY
4. Oil and gas, up by 5.6% YoY
AISI serves as the voice of the North American steel industry in the public policy arena and advances the case for steel in the marketplace as the preferred material of choice. AISI also plays a lead role in the development and application of new steels and steelmaking technology.
(Sourced from www.steel.org)
Saudi London Iron JV findings on iron ore mining and palletizing plant - 23 Feb 2009 London Mining on behalf of Saudi London Iron, the JV between London Mining plc and National Mining Company of Saudi Arabia, announced key findings from its feasibility study on the first 5 million tonne per annum phase of Saudi London Iron 's planned iron ore mining and palletizing operation in Saudi Arabia.
Key findings from a market study on the same project regarding long term iron supply needs in the Middle East and North African region are also announced.
The feasibility study shows that the Wadi Sawawin mining, beneficiation and 5 million tonne per annum DR pellet production project is feasible with a NPV of USD 1.6 billion. The Market Study shows a significant and growing supply gap for DR pellets and supports the objectives of SLI's to produce up to 20 million tonne per annum of DR pellets in Saudi Arabia.
1. First phase (5mtpa DR pellet) Wadi Sawawin project proved feasible
2. Project economics indicate NPV of USD 1.6 billion, with CAPEX of USD 1.8 billion.
3. Early funding commitment from Saudi partners would allow production in 2012
4. External market study commissioned on Middle East region indicates significant supply gap for DR pellets over the next 10 years and strong long term economic growth prospects supporting potential project expansion up to 20 million tonne per annum.
The key financials from the feasibility study indicate a potential NPV of USD 1.6 billion, even with conservative inputs and higher than ultimately anticipated CAPEX of USD 1.8 billion. In addition, the findings in the Market Study confirm possible pricing improvements over modeled long term pellet prices of USD 115 per tonne FOB Red Sea, which would further improve the project economics.
The first phase of the project is for 11.6 million tonne per annum open pit mine, a 60 km slurry pipeline to beneficiation and palletizing facilities on the Red Sea which will produce 5 million tonne per annum of DR pellets.
The above project represents the first 5 million tonne per annum phase of the total targeted production of 15 to 20 million tonne per annum. The further phases anticipate the combination of production of high quality DR pellet feed from London Mining's Isua project in Greenland with the ore to be produced from the initial and subsequent mining areas from Wadi Sawawin. The proposed port and pellet site in Saudi Arabia offers proximity to customers and palletizing cost advantages, such as low natural gas costs, to maximize margins available in DR pellet production. London Mining's and the National Mining Company of Saudi Arabia's objective are to create a globally competitive low cost, premium product operation.
The Market Study confirms that the MENA economic outlook is strong and that the market for DR pellets is undersupplied and growing. A sustained significant MENA supply gap of DR pellets is forecast in the medium term, even after planned new projects in the region, which should provide the opportunity for further production capacity expansion from 5 to 20 million tonne per annum.
The feasibility studies were performed by Ausenco/SEI with support from Sandwell, Corus Consulting, Snowden, Vector, PSI and others. CRU Strategies performed the market study.
Mr Graeme Hossie MD comments that "The feasibility results on the first 5mtpa phase of the Wadi Sawawin project demonstrate that a new, high tonnage, high margin iron mine and palletizing operation can be established in the Middle East through the London Mining and National Mining Company joint venture. Given the current commercial situation and trends with suppliers, we will be aiming to reduce the final CAPEX spend and also expect upside in pricing due to the ongoing supply gap in the region and globally. The Wadi Sawain project has the ability to establish a significant new DR pellet production hub in a region with growing steel production and a deficit of supply. Through our partners, we anticipate full funding for the project will be made available on attractive financing terms."
SSINA releases market data for November 2008 - 23 Feb 2009 The Specialty Steel Industry of North America has released statistical data on imports, US consumption and import penetration for November 2008. The data represents US consumption, imports, and import penetration for YTD November 2008 as compared to the same 2007 eleven month period.
The following data is presented by specialty steel product line, total stainless steel, and total specialty steel:
1. Stainless steel sheet strip: Imports in YTD November 2008 were 423,593 tons, an 8.9% increase compared to YTD November 2007, US consumption was 1,191,478 tons, a 15.0% decrease, and 11 month import penetration was 35.6%, a 7.8 percentage point increase from 2007.
2. Stainless steel plate: Imports in YTD November 2008 were 89,124 tons, a 35.4% decrease as compared to YTD November 2007, US consumption was 222,110 tons, a 30.1% decrease and 11 month import penetration was 40.1%, a 3.3 percentage point decrease from 2007.
3. Stainless steel bar: Imports in YTD November 2008 were 113,340 tons, a 0.6% increase compared to YTD November 2007, US consumption was 214,934 tons, a 2.2% increase and eleven month import penetration was 52.7% a 0.9 percentage point decrease from 2007.
4. Stainless steel rod: Imports in YTD November 2008 were 28,779 tons, a 0.7% increase compared to YTD November 2007, US consumption was 58,228 tons, a 0.7% decrease and eleven month import penetration was 49.4%, a 0.6 percentage point increase from 2007.
5. Stainless steel wire: Imports in YTD November 2008 were 40,420 tons, a 5.4% decrease compared to YTD November 2007, US consumption was 68,946 tons, a 4.0% decrease and eleven month import penetration was 58.6%, a 0.9 percentage point decrease from 2007.
6. Imports of total stainless steel in YTD November 2008 were 695,256 tons, a 2.2% decrease as compared to YTD November 2007, US consumption was 1,755,696 tons, a 14.8% decrease and eleven month import penetration was 39.6%, a 5.1 percentage point increase from 2007.
7. Alloy tool steel: Imports in YTD November 2008 were 89,563 tons, a 5.5% decrease compared to YTD November 2007, US consumption and import penetration was not calculable.
8. Electrical steel: Imports in YTD November 2008 were 110,895 tons, a 7.2% increase compared to YTD November 2007, US consumption was 318,134 tons, a 19.9% decrease from November 2007 and eleven month import penetration was 34.9%, an 8.8 percentage point increase from 2007.
9. Imports of total specialty steel in YTD November 2008 were 895,714 tons, a 1.5% decrease compared to YTD November 2007, US consumption was 2,144,133 tons, a 15.4% decrease and eleven month import penetration was 41.8%, a 5.9 percentage point increase from 2007.
Production pruning - PSM sales drop sharply - 23 Feb 2009 Mr Mueen Aftab Sheikh chairman of Pakistan Steel Mills said that they have shown a sharp decline in its sale of steel during July to November 2008, in July 2008 its sale was PKR 5026.83 million which has dropped to PKR 1,576.89 million in November 2008.
Mr Aftab while addressing a press conference in Pakistan Steel Mills said that the s sales are going up as it recorded PKR 1.5 billion in November 2008, PKR 2.8 billion in December 2008 and in January 2009 the sales were recorded at PKR 3.8 billion.
While providing information about the low sale, Mr Aftab said that low sale of Pakistan Steel Mills is due to the fact that the country has been facing economic slowdown.
He said that “The international market is also facing economic recession due to which iron and steel products showed declining trend. The prices of POL products were high during the mentioned period. Electricity and gas prices also hiked up. Due to these facts 60% re rolling and pipe manufacturing industries faced shut down.”
He said that “Due to the global recession, the PSM is operating at 75% capacity instead of 90%. Market share of PSM prior to recession was 20% to 45% for long and flat steel products and the rest of demand was being met through imports in case of flat products, whereas, long products were being produced locally through melting scrap or ship breaking.”
He said that “Another reason for the low sale of Pakistan Steel is the fact that we have lost market in Afghanistan due to the war on terror. The export of steel products to Afghanistan was of USD 200 million previously.”
He added that “The government has also reduced its public sector development programs. Due to this the steel industry suffers badly. Pakistan steel is the major supplier of steel for all these projects. This has reduced the sales of Pakistan steel significantly.”
He said that “we are making efforts to incorporate clause in PPRA rules authorizing any government department committee to negotiate with suppliers to adjust the contracted prices equivalent to difference of current international prices of raw material and other consumables.”
Mr Aftab said that “We have initiated a project for making briquettes of coke dust 0mm to 15 mm, as in the past around 40,000 tonnes of coke dust was wasted every year, but the coke briquette made from this dust would be worth USD 20 million per annum.”
Mr Aftab also said that “They have started using local Sharigh coking coal to the tune of 5% in the plant. The price difference between local and imported coal is USD 275 per tonne. To cut down the surplus contents PSM is also procuring a desulphurization plant to use more local coal as substitute of expensive imported coal.”
(Sourced from Daily Times)
Macroeconomic indicators - IMF sees rough patch in 2009 - 23 Feb 2009 Reuters quoted Mr Dominique Strauss Kahn head of the International Monetary Fund as saying that the world economy will go through a rough patch in 2009 and governments and central banks must revise the way they operate, adding that global cooperation was beginning to take root.
He said that recent data on the world economy pointed to downside risks to the IMF's latest forecasts, which forecast global growth of 0.5% in 2009, the weakest since World War Two.
Mr Kahn said that "I am expecting that 2009 really will be a bad year. We need cooperation to be heightened and reinforced. Honestly, I think that this is starting to happen, that head of states and governments are conscious of this need for cooperative policies."
He said that "Even if I think we are a little behind the curve at the global level, altogether it's not that bad. The most important task today is to clean balance sheets and to be able to have a banking sector playing its role in growth policies. We need credit to resume and we need business to be able to create jobs. There's no way for recovery without the banking sector working."
He urged governments to review everything from supervision and governance issues to the way monetary policy is handled. Monetary policy should be capable of taking more into account the accumulation of risks that it had left a bit to one side before.
(Sourced from www.reuters.com)
Stimulus plans - China likely to regulate steel export policy - 23 Feb 2009 It is reported that China will accomplish policy adjustment on import and export duty of steel products in March aiming at keeping iron and steel export above 15% of total output and achieving fair trade environment internationally.
The new policy will continue to impose 10% to 25% export tax on pig iron, ferroalloy, slab/billet, steel ingot, as well as low value-added products like wire and rebar.
On the other hand, China government will encourage export of high-tech and high value-added steel products by enhance according export tax rebate.
Rebar and wire rod prices at Black Sea go down - 23 Feb 2009 It is reported that the prices of rebars and wire rods FOB Black Sea came under severe pressure last week and witnessed USD 10 per tonne reduction.
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(Sourced from www.steelprices-india.com)
Iron ore price negotiations - FMG wants seat at table - 23 Feb 2009 Morning Star reported that Fortescue Metals Group is expecting to participate in annual benchmark iron ore price negotiations once it completes a staged expansion to 120 million tonnes of annual production.
Mr Graeme Rowley ED of FMG said that "When you become big enough, you are in a position to influence those discussions."
Mr Rowley said that Fortescue was examining a staged expansion to 120 million tonnes, with help from outside investors. The Herald understands this could include Valin and the China Investment Corporation.
He said that “FMG’s first priority is reaching its initial targeted rate of 45 million tonnes and then 55 million tonnes a goal that has yet to be achieved. That does not mean we've lost sight of the need to expand if the opportunity presents itself and there are two parts to that opportunity: the marketplace and the comfort the market can absorb our expansion and secondly that we can finance it.”
The Herald understands Fortescue is considering issuing equity to Valin in a proposal that could be combined with an institutional placement or a rights issue to allow Australian investors access to new Fortescue shares. Valin and CIC would also participate in a separate note issue.
Fortescue had initially hoped to finance a USD 2 billion expansion to 80 million tonnes of annual production from its own cash flows, but the economic downturn has forced it to look for other funding sources.
(Sourced from Morningstar.com)
POSCO HRC prices go down - 23 Feb 2009 South Korean Steel Daily reported that sales price of HRC by POSCO has dived by KRW 0.02 per tonne to KRW 0.03 million per tonne from KRW 0.8 million per tonne to the present KRW 0.78 to KRW 0.79 million per tonne since early February 2009.
Industry insiders said that POSCO's HRC stock is piling up as four times as import volume for its higher price than both imported one and Hyundai Steel's and therefore, some traders start the underselling.
They added that "Although POSCO has not decided to decrease the price, yet its HRC offer is expected to drop further by KRW 0.1 million per tonne."
(Sourced from Steel Daily)
Slowdown signs - Metso lays offs in Tampere Finland - 23 Feb 2009 Metso has concluded the employee negotiations initiated on January 12th 2009 regarding temporary lay offs at their conveyor belt factory in Tampere, Finland.
The temporary lay off notice applied to 40 employees in production. In addition, one person was reduced. The personnel negotiations were concluded on February 16th 2009.
The temporary lay offs will begin in the beginning of March. The duration of the lay-offs will be 24 to 26 days.
It said that “The measures are caused by the weakening of the global market situation, which has led to decrease in the order backlog.”
Metso is a global supplier of sustainable technology and services for mining, construction, power generation, automation, recycling and the pulp and paper industries. We have over 29,000 employees in more than 50 countries.
Update on CSC production and sales for January 2009 - 23 Feb 2009 Taiwanese steel major China Steel Corporation has announced its results for January 2009 as under
| Item | Jan'09 | Accumulated for 2009
| | Production Volume | 345,651 | 345,651
| | Sales Volume | 436,613 | 436,613
| | Revenue | 10,288 | 10,288
| | Sales Revenue | 10,133 | 10,133
| | | |
Volume in tonnes
Amount in millions of TWD
Downsizing deals - Acerinox Gibraltar staff agrees to adjustment plan - 23 Feb 2009 It is reported that the staff of Acerinox factory located in Campo de Gibraltar has approved by 82.66% the corporate plan attached to the Temporal Labor Adjustment Plan, which soon will be presented to the labor authorities, as part as the adjustment measures program until demand recovers.
Release said that “These measures do not observe the removal of jobs in the factory, but a reduction of the activity during the necessary time until the recovery of production takes place. The flexibility, realism and commitment of the parties involved in the business project have resulted in the high level of the consensus achieved.”
It added that “The Temporal Labor Adjustment Plan will be duly presented to the labor authorities and the company and the Works Committee will issue the details of the plan, which will include the generic principles about which the staff has already expressed its opinion.”
The release also said that “Contrary to other companies of the sector, Acerinox does not foresee in the short term either a significant reduction of jobs or the cancellation of its investment programs all over the world.”
South African coal shipment to UK decline in 2008 - 23 Feb 2009 According to customs statistics, UK coal imports in 2008 increased by a modest 1.5% to 43.2 million tonnes.
The year saw shipments from the UK’s main supplier, Russia, rise by 1.4 million tonnes to 21.1 million tonnes with US exports to the UK climbing 1.6 million tonnes to 4.3 million tonnes and imports from Colombia up 1.5 million tonnes to 5.3 million tonnes. At the same time, shipments of South African coal to UK destinations declined by 3.1 million tonnes to 4.2 million tonnes.
(Sourced from Bloomberg)
BDI restarts upward climb on February 20 2009 - 23 Feb 2009 It is reported that on February 20th 2009, Baltic Dry Index reached 2099 points up by 42 points as compared to February 19th 2009.
Capsize
| BCI | Change
| | INDEX | 3768 | 35
| | SPOT 4 TCE AVG | 39401 | 660
| | February 19th | 38741 |
| | Year Ago | 115537 |
| | | |
All except INDEX in USD
Change is with respect to February 19th 2009 numbers
Panamax
| BPI | Change
| | INDEX | 1439 | 55
| | SPOT 4 TCE AVG | 11504 | 431
| | February 19th | 11073 |
| | Year Ago | 61580 |
| | | |
All except INDEX in USD
Change is with respect to February 19th 2009 numbers
Supramax
| BSI | Change
| | INDEX | 1300 | 29
| | SPOT 4 TCE AVG | 13597 | 305
| | February 19th | 13292 |
| | Year Ago | 50398 |
| | | |
All except INDEX in USD
Change is with respect to February 19th 2009 numbers
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(Sourced from www.steelprices-india.com)
Consolidation among Chinese yards inevitable - 23 Feb 2009 SeaTradeAsia-Online reported that China's shipbuilding industry, which last year suffered its steepest annual decline since 2003, is likely to be squeezed further this year by shrinking order books and order cancellations as the global economy remains in recession. The industry, the world's second largest by capacity, will see more small shipyards swallowed by big players as mergers and acquisitions are expected to pick up pace this year.
According to market research company Clarkson Research Services, Chinese shipyards saw their orders plunge 40.9%YoY in 2008 to 58.18 DWT against an average global fall of 43.2%.
The China Association of the National Shipbuilding Industry said in its latest report shipyards worldwide will see orders further plunge to 40 to 60 million DWT in 2009, while the new orders Chinese shipyards receive is likely to drop to 20 million to 30 million DWT a 48.4% to 65.6% fall form a year earlier.
Mr Ye Zhigang analyst with Haitong Securities said in a report that 15% to 25% of Chinese yards' orders or 300 million DWT to 500 million DWT are likely to be canceled over the next three years, five percentage points higher than the global average. He said that the industry will remain in depression during the next three years and another period of growth will come after 2013.
The State Council, or the Cabinet, on February 11th approved a stimulus package for the country's shipbuilding industry, after similar plans for the auto, steel and textile industries. The stimulus package includes support in financial credit and technology upgrades, new capacity control as well as encouragement of mergers and acquisitions within the industry. No new yards will be allowed in China for the next three years.
Mr Guo Yalin an analyst with CITIC Securities said, "The package comes as a boost to a sector that has been struggling for new orders and in retaining old ones. Large shipyards are more likely to survive over the next three years but life for small ones will be hard.”
A PingAn Securities analyst who declined to be named said "Large state-owned shipyards in China have better capacity to tackle the difficulties. Compared to small private shipyards, they have higher skills and their clients are of better quality. But for small and medium-sized private shipbuilders in China, the situation is serious."
Mr Shi Weidong board secretary of CSSC said China State Shipbuilding Co Ltd, one of the country's largest shipbuilders, is now considering offering discounts to its clients to avoid order cancellation. Mr Zhang Jincan, an analyst at Guotai Junan Securities said, "The number of shipyards in China is sure to decrease over the next few years. Some small private yards will go bankrupt, while more mergers and acquisitions will take place, but is hard to predict the scale of this."
(Source: SeaTradeAsia-Online)
Monday Market Monitor - Middle East (WEEK 8) - Unchanged - 23 Feb 2009 The domestic prices of various steel products in MEA remained static during last week for the second consecutive week.
| Class | 12-Feb | 19-Feb | Change
| | MLPPI | 4074 | 4074 | 0
| | MFPPI | 5964 | 5855 | -109
| | MEDSPI | 4647 | 4614 | -33
| | | | |
MLPPI - Middle East Long Product Price Index
MFPPI - Middle East Flat Product Price Index
MEASPI - Middle East Steel Price Index
Long products
| Category | 12-Feb | 19-Feb | Change
| | PI - Rebar | 3501 | 3501 | 0
| | PI - WRC | 4126 | 4126 | 0
| | PI - Angle | 5004 | 5004 | 0
| | PI - Structural | 4941 | 4941 | 0
| | PI - HEA | 5759 | 5759 | 0
| | | | |
Flat Products
| Category | 12-Feb | 19-Feb | Change
| | PI - Narrow Plates | 5773 | 5773 | 0
| | PI - Wide Plates | 7887 | 7887 | 0
| | PI - Hot Rolled | 4970 | 4470 | -500
| | PI - Cold Rolled | 5565 | 5565 | 0
| | PI - Galvanized | 5467 | 5467 | 0
| | | | |
To know more about these indices please visit
http://steelprices-middleeast.com/spi_services/spi.html
Hot Rolled prices in Saudi Arab dipped by 10 % in the last week owing low import offers from Ukraine, which are reported to be at USD 400 per tonne on CFR terms, thus having a spiralling effect in domestic market wherein stockiest with old high priced inventory emerged to neutralize their losses.
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(Sourced from www.steelprices-middleeast.com)
Agreement in place for future Kiruna railway bypass - 23 Feb 2009 It is reported that LKAB and the Swedish railway authorities, Banverket have signed an implementation agreement for a railway bypass in Kiruna. The 18 kilometers bypass will enable continued mining.
The new track will be operational in October 2012 and LKAB’s investment is estimated at about 3 billion Swedish kronor. The first phase of construction will begin in the spring of 2009. Over a four year period, between 70 and 150 people per year will work on the project.
Under the terms of the implementation agreement, LKAB will finance the new railway at a level corresponding to the function of the existing rail infrastructure. Banverket will assume responsibility for upgrades in connection with construction of the new railway bypass.
The actual construction work will be divided between LKAB and Banverket. Banverket will lay the new track and build bridges and viaducts, while LKAB will be responsible for new roads, dams within its own industrial site, and the company’s own rail access to the new line.
The existing track will be affected by ground deformation caused by mining, which is why the new track will be laid behind the mine mountain Kiirunavaara. Freight trains that now pass through Kiruna will in the future bypass the town.
The location of a future passenger terminal is still under investigation, but the new route allows for numerous possibilities. One objective has been to utilize existing structures such as the railway station and rail yards for as long as possible before replacing them.
Downsizing deals - ArcelorMittal to idle workers at East Chicago plant - 23 Feb 2009 AP reported that ArcelorMittal is going to idle its steel mill in East Chicago for up to three weeks because of the slump in the industry.
Mr Tom Hargrove president of United Steelworkers Local 1010 said that about 450 hourly workers are at the facility. He does not yet know how many people will be laid off.
ArcelorMittal said that it has done everything possible to minimize work force reductions.
(Sourced from www.ap.org)
Chinese overseas investments may prevent next commodities spike - 23 Feb 2009 Reuters reported that China, which triggered the biggest commodity price spike in a generation, is now making deals that could prevent another surge in the coming decade by helping finance new production during the low ebb of the cycle.
While the deepening global recession has focused traders on trying to pick a bottom to the current price collapse, more far sighted analysts have already begun ringing alarm bells over the cancelled investments and delayed projects that threaten to leave the world short of raw materials once growth resumes.
According to a Barclays Capital survey enter China, which has committed up to USD 55 billion over the past week in a slew of deals to help cash strapped producer nations or companies weather the over 60% collapse in resource prices. That sum is almost identical to the expected drop in global capital spending among oil and gas companies this year.
Mr Mark Pervan senior commodity analyst at ANZ Bank said by investing through a downturn that veterans say has reinforced the feast or famine nature of commodities markets, China is helping head off another surge before it happens. He said that "Look at iron ore. In the past BHP and Rio have increased output more incrementally. With support from a major customer, which is also an owner, they might take a more aggressive approach to expansion and development during a downturn."
He said China did not want to see a repeat in the volatility and extent of price rises of the past two to three years. Like any consumer, they want price stability. They also want first say on supply and of course this is a perfect time for them to be buying.
Some of the recent investments are
1. A week ago State owned Chinalco unveiled a USD 19.5 billion investment in Rio Tinto for minority stakes in some of Rio's most prized assets, including a slice of the world's biggest copper mine, Escondida
2. Days later state owned trading house Minmetals agreed to buy Australia's debt laden OZ Minerals Ltd, the world's No.2 zinc miner, for USD 1.7 billion.
3. China has also closed a months long deal to lend Russian oil companies USD 25 billion in return for East Siberian supplies from the world's No.2 exporter
4, China is finalizing a deal to extend a USD 10 billion line of credit to Brazil's state owned Petrobras for future supplies.
5. Australian iron ore miner Fortescue Metals Group said this week it had held investment talks with a range of parties including China's sovereign wealth fund.
(Sourced from Reuters)
Saudi Arabia to issue restrictions on steel and cement exports - 23 Feb 2009 Jeddah based Okaz daily reported that Saudi Arabia's Ministry of Commerce and Industry is expected to issue soon new restrictions on steel and cement exports.
As per report under the new regulations, exporters should get an export license from the Ministry of Commerce and Industry.
It said that exports should be from surpluses in the domestic market and they should not be detrimental to economic development in the kingdom and shouldn't lead to higher prices.
(Sourced from Dow Jones)
Stimulus plans - JISF concerned over Buy American clause - 23 Feb 2009 Mr Shoji Muneoka chairman of Japan Iron & Steel Federation has expressed concerns about the so called Buy American clause contained in the new US economic stimulus package.
He said that "It is quite regrettable because this kind of measure that prioritizes products made in one's own country might spread protectionism around the world."
Mr Muneoka also president of Nippon Steel Corporation noted that the United States agreed with other nations to promote free trade at last November's financial summit of the Group of 20 major industrial powers and emerging economies.
He said that "We will wait to see whether the United States will implement the provision in question in an appropriate manner."
(Sourced from www.manufacturing.net)
Plate prices FOB Black Sea reduce further - 23 Feb 2009 It is reported that the prices of plates FOB Black Sea witnessed USD 20 per tonne reduction.
To know exact prevailing FOB prices at Black Sea, as they change, subscribe to services of www.steelprices-india.com by registering or sending a mail to admin@steelprices-india.com. Please note that this is a paid service.
(Sourced from www.steelprices-india.com)
HC orders for inspection of iron ore storage at Karwar Port - 23 Feb 2009 DH News Service reported that Karnataka High Court has recently expressed unhappiness over environmental pollution due to heaps of iron and manganese ore stored illegally and parking of trucks violating norms at Karwar Port.
A High Court division bench comprising Chief Justice Mr PD Dinakaran and Justice Mr AN Venugopal directed the State government to send a team comprising top officials of Revenue, Land Authority and Pollution Control Board departments to inspect the spot and submit a detailed report within February 27th 2009.
The bench also directed the government to take steps to prevent anything taking place illegally at the port premises.
However, the Chief Justice made a mention of what he saw during his visit to Karwar recently and how illegal things were adversely affecting the nature and human being. He said that it was extremely difficult for anyone to stay in such an atmosphere and expressed anguish over the government’s negligent attitude in taking any action in this regard.
Environmental pollution due to storage of iron and manganese ore has adversely affected human being and water resources, argued Uttara Kannada Zilla Balakedara mattu Nagarika Kshemabhivriddhi Sangh in a petition.
(Sourced from DH News Service)
Downsizing deals - Columbus Stainless to cut 160 jobs at Middelburg - 23 Feb 2009 It is reported that South African steelmaker Columbus Stainless might cut 10% of its workforce at its Middelburg operation in response to the continuing challenging global economic conditions.
Columbus said that it expected to retrench 160 employees, but stressed that the negotiations on possible job cuts were at an early stage. The retrenchments formed part of the company’s interventions to ensure the competitiveness of its operations. Columbus has already reduced temporary and contractor positions significantly.
Mr Dave Martin CEO of Columbus Stainless said that the Middelburg plant had been operating at 40% capacity over the past quarter, and that any recovery in global market demand would be gradual and over a long period. He added that "These cost reduction measures involving employees are unfortunate but necessary to ensure Columbus remains competitive and cost efficient in these challenging economic times."
(Sourced from www.engineeringnews.co.za)
US ITC makes determination on refined brown aluminium oxide from China - 23 Feb 2009 The US International Trade Commission determined that revoking the existing antidumping duty order on refined brown aluminum oxide from China would be likely to lead to continuation or recurrence of material injury within a reasonably foreseeable time.
As a result of the Commission's affirmative determination, the existing order on imports of this product from China will remain in place.
All six Commissioners voted in the affirmative.
Today's action comes under the five-year (sunset) review process required by the Uruguay Round Agreements Act. See the attached page for background on this five-year (sunset) review.
The Uruguay Round Agreements Act requires the Department of Commerce to revoke an antidumping or countervailing duty order, or terminate a suspension agreement, after five years unless the Department of Commerce and the ITC determine that revoking the order or terminating the suspension agreement would be likely to lead to continuation or recurrence of dumping or subsidies and of material injury within a reasonably foreseeable time.
The five-year review concerning Refined Brown Aluminum Oxide from China was instituted on October 1st 2008.
On January 5th 2009, the Commission voted to conduct an expedited review. All six Commissioners found that the domestic group response was adequate and the respondent group response was inadequate and voted for an expedited review.
Peiner Trager orders de dusting plant to Paul Wurth - 23 Feb 2009 It is reported that Peiner Träger GmbH increases the capacity of the existing EAF steelmaking plant in Peine in the frame of the largest ever investment program of the company’s history.
Under the project name, PTG 2010 Stahlwerk, the EAF shop is currently being extended by a second production line which includes a new electric arc furnace, two new ladle furnaces and two vacuum degassers.
The dust loaded air emitted by these production units will be collected and led via suction ductwork to a new de dusting plant of Paul Wurth design, where it will be cleaned by means of fabric filters. The design flow rate of processed off gas is 1.6 million cubic meters per hour.
In addition to the de dusting system, PTG’s order to Paul Wurth Umwelttechnik GmbH comprises also the water treatment plant for the new EAF. Paul Wurth Umwelttechnik’s scope of supply and services consists of engineering, manufacturing, supply and erection of the complete installations including steel supporting constructions and ductwork, for both the de dusting plant and the water treatment system.
The order has been placed in December 2008, the execution period until commissioning for trial operation shall not exceed 12 months.
Russian and Ukrainian CR producers reduce prices - 23 Feb 2009 It is reported that the prices of CR from both Russian and Ukrainian steel mills came under severe pressure last week and witnessed USD 10 per tonne and USD 20 per tonne reduction respectively.
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(Sourced from www.steelprices-india.com)
Shenhua Group denies slashing coal price - 23 Feb 2009 China Knowledge reported that Shenhua Group Co Ltd, parent of China Shenhua Energy Company Ltd denied the rumor that it will lower its coal price.
There were reports of offers by Shenhua Group to sell coal at a price reduced CNY 50 to CNY 490 per tonne. Lowering its price might enable Shenhua Group to make contracts with the five power giants in China, China Huaneng Group, China Guodian Corp, China HuaDian Corp, China Datang Corporation and China Power Investment Corporation.
The five power companies established a coal price union refusing to buy coal above a certain price from domestic coal companies. They are seeking opportunities to buy coal overseas to exert further control over domestic coal prices.
The rumored price reduction by Shenhua Group, a major coal company in China, would impact the whole coal industry.
(Sourced from China Knowledge)
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