| Price Index - India | | | | 27-Feb | 26-Feb | Change | | ILPPI | 6692 | 6720 | -28 | | IFPPI | 6611 | 6594 | +17 | | INDSPI | 6654 | 6660 | -6 | | What is it? | | Poll Results | | India will increase import duty on steel? | | Yes | 59% | | No | 34% | | Can't Say | 7% | | View Current Poll | | Currency | | AUD | 1.5638 | | BRL | 2.3306 | | CAD | 1.2760 | | CNY | 6.8289 | | EUR | 0.7890 | | GBP | 0.6984 | | INR | 50.9750 | | JPY | 97.5402 | | RUB | 35.3730 | | USD | 1.0000 | | ZAR | 10.0679 | | View Current Currency | | Metal Rates Cash Seller & Settlement | | Zn | USD 1125 | | | Ni | USD 10100 | | | Sn | USD 10925 | | | Al | USD 1311 | | | Cu | USD 3442 | | | View Current Metal Rates | | Steel Futures | | NCDEX | 23900 (19-Dec) | INR | 0 |  | | DGCX | 448 (26-Feb) | USD | 0 | | | LME-M | 290 (26-Feb) | USD | +5 |  | | LME-F | 280 (26-Feb) | USD | -50 |  | | NCDEX :
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TATA Steel sees Indian steel demand up by 5% in 2009 - 01 Mar 2009 Reuters reported that TATA Steel sees Indian steel demand growing by 5% in 2009 and expects prices to remain stable.
Mr B Muthuraman MD of TATA Steel said that "In India I do believe that all the government packages have stimulated demand upwards, and I do expect steel demand to grow positively, by maybe about 5% this year as against the original figure of 10% to 12%."
(Sourced from Reuters)
Production pruning - TATA Steel Corus unlikely to restart idle capacity - 01 Mar 2009 Reuters reported that TATA Steel Ltd's Corus unit is unlikely to restart idle capacity as demand continues to be low. It is the world's sixth largest steel maker.
Mr Philippe Varin CEO of Corus said that "As I see market conditions, we won't extend output cuts but we are not likely to restart either."
He said that Corus has 40% of its European capacity sitting idle.
(Sourced from Reuters)
Stimulus plans - FMCG products may cost less - 01 Mar 2009 BL reported that FMCG products are likely to cost less after the fresh 2 percentage point cut in excise duty and service tax.
Industry sources said that the duty cut could translate between INR 500 a tonne and INR 750 a tonne across the board for steelmakers. They said that it would make HR coils cheaper by about INR 525 a tonne and in the case of plates about INR 550 a tonne. In all likelihood, the benefit would be passed on to the end users.
FMCG majors, which cut prices in the last 2 months are planning to pass on at least part of the relief as a result of the duty cut to consumers. An official of a FMCG major said that “We are in the process of working out the precise impact of the duty cut and will take a decision soon.”
An industry analyst said that “While 2008 saw some price increases due to rise in prices of commodities such as crude and palm, this should not happen in 2009.”
Industry analysts said that the excise duty cut may be prompting these FMCG companies to re-visit their prices earlier than planned.
(Sourced from Business Line)
Equipment to detect radioactive cargo at Major Ports vital - 01 Mar 2009 Exim News Service reported that the detection of traces of radioactivity in a consignment of steel exported to Germany recently has brought to the fore the dire need to equip Major Ports with sophisticated containerized cargo scanning and other detection equipment.
Major Ports do not have equipment to detect radioactivity or contaminated consignments, which exposes the cargo to quality, security and safety risks, besides damaging the reputation of the goods manufactured here.
An official familiar with the procedures related to exports said that one has to be very careful in importing even scrap metal.
According to government officials and exporters, some radioactive steel scrap was imported about 3 to 4 years back. This scrap was used to manufacture packaging material for heavy duty engineering goods consignments. Subsequently, consignments packed with the same radioactive steel were exported to the US in 2007.
But the fact that such contaminated material was not detected right at the time of import or even at the time of exporting as a packaging material shows that the Ports are not equipped to detect radioactive substances. This may prompt anti-national elements to easily import dirty bombs unsophisticated explosive devices that combine radioactive material and conventional explosives.
A Central Board of Excise and Customs official said that “The Department mostly paid attention to the valuation of export and import consignments and import of banned substances. There is a scanner for container surveillance at Nhava Sheva. The process to increase the number of scanners at ports is under way.”
Mr Rakesh Shah former chairman of the Engineering Export Promotion Council said that several exporters in East India had bought scanners to detect radioactivity in the materials they use.
(Sourced from Exim News Service)
Macroeconomic indicators - Indian government still expects 7% growth - 01 Mar 2009 Reuters quoted Mr Pawan Kumar Bansal junior finance minister as saying that India's government still expects the economy to expand by around 7% this fiscal year and had anticipated growth below market expectations in the December quarter.
Mr Bansal said that the central bank and the government would be responsive to the emerging situation. Data showed the economy grew a slower than expected 5.3% in the December quarter from a year earlier, slowing sharply from the previous quarter's 7.6% as the global economic crisis cut demand and exports.
Mr Bansal said that "It is not much off the mark. It is as per our anticipation. I suppose it should do better in the last quarter. We have faced the impact of the global meltdown in this quarter."
He said when asked that whether growth could still touch 7% for 2008-09, I suppose it should be in that vicinity.
(Sourced from Reuters)
CAPEX cuts - SCI reconsidering fleet expansion plans - 01 Mar 2009 Live Mint reported that SCI has scrapped a tender to buy 4 dry bulk cargo carriers as demand for ships declines in the face of a slowdown in global trade.
Mr UC Grover director technical and offshore services said that “Demand has changed supply has changed. The future looks uncertain. We didn’t want to keep the tender open till eternity. It makes sense to scrap the tender now.”
Mr Grover said that “In such a scenario, there is no benchmark price available today for these types of ships.”
He said that given the changed scenario, SCI will have to undertake a fresh market analysis to determine the internal rate of return for buying cape size ships. He added that SCI hopes to revisit the purchase plan when the market stabilizes.
Mr Grover said that “At that time, we may go for a limited edition tender by inviting price quotations from all those who had participated in the September round.”
He said that “The advantage of this is that when the market improves, we can swing into action very quickly. As the technical specifications are frozen and known to the bidders, we can ask for price quotations and finalize the tender in a month.”
In September, South Korea’s STX Shipbuilding Co Ltd had offered to sell 4 Capsize ships at USD 94.10 million each. However, the rates for shipping dry bulk commodities such as coal, iron ore and steel have declined by more than 90% since September when the global credit squeeze started pinching world trade. Dry bulk cargo ship prices have plunged by as much as 70% since then.
SCI had plans to buy 72 new ships with an investment of USD 3.1 billion in the 5 year period beginning 2007. SCI has so far ordered 32 new ships worth at least USD 1.88 billion at various global yards to replace some of its ageing fleet, which has to be decommissioned in line with global maritime regulations. It plans to buy the remaining 40 new ships worth close to USD 2.6 billion over the next 4 years.
(Sourced from Livemint.com)
DLW, RCF and ICF and RWF are doing well - 01 Mar 2009 Diesel Locomotive Works produced 221 diesel locomotives against the target of 208 diesel locomotives whereas Chittranjan Locomotive Works produced 164 electric locomotives against the target of 164 electric locomotives during April 2008 to January 2009.
Rail Coach Factory produced 1295 coaches against the target of 1290 coaches where as Integral Coach Factory produced 1036 coaches against the targets of 1025 coaches during the same period.
Rail Wheel Factory produced 163131 wheels and 72071 axles during the same period against the target of 149946 wheels and 54425 axles during April 2008 to January 2009.
During the month of January 2009, CLW, DLW, ICF, RCF and RWF have produced 30 electric locomotives, 17 diesel locomotives, 116 coaches, 94 coaches, 16875 wheels and 7821 axles respectively against the target of 26 electric locomotives, 22 diesel locomotives, 110 coaches, 132 coaches, 14720 wheels and 5584 axels.
However, Railways have realized an amount of INR 24.75 crore approximately during the month of January 2009 through ticket checking.
PGCIL approves new investments - 01 Mar 2009 Power Grid Corporation of India Ltd has announced that the Board of Directors of the Company at its meeting held on February 24th 2009, inter alia has accorded investment approval to the new Projects.
PGCIL board gave investment approval for implementation of North East - Northern or Western Interconnector-I' Project at an estimated cost of INR 11130.19 crore with Commissioning Schedule of 54 months for Part A and 48 months for part B and C of the transmission system, from the date of investment approval.
It also gave investment approval for implementation of Transmission System associated with Korba-III generation project at an estimated cost of INR 276.61 crore with commissioning schedule of 28 months from the date of investment approval and investment approval for implementation of System Strengthening-XI in Southern Regional Grid with commissioning schedule of 28 months from the date of investment approval.
Western Railways records 27% growth in freight earnings - 01 Mar 2009 Western Railway recorded a 27% increase in freight earnings to INR 3,493.2 crore till January 2009 against INR 2,750.47 crore during same period last year. The loading also grew by 14.55% to 41.18 million tonnes from 35.95 million tonnes in the same period last year.
There has been an increase of 84.75% in coal to 4.97 million tonnes and 22% increase in fertilizer loading to 12.22 million tonnes on Western Railways up to January 2009. Mineral oil loading grew by 15.52% to 8.78 million tones.
On the passenger numbers, Western Railways carried 100.8 crore passengers on suburban trains up to January 2009 and 25.6 crore on the non suburban trains during the same period. WR earned INR 446 crore from passenger traffic on suburban trains and INR 1,560 crore.
Outlining the expenses incurred Mr RN Verma GM of WR said that “Compared to 2007-08, the operating ratio in 2008-09 will go up by 20% to 25% due to the impact passed on by the revision in employees salaries in the Sixth Pay Commission. However, we are looking at higher freight loads and passenger traffic to absorb that extra burden.”
He said the target freight load for the financial year ending March 31st 2009 is 48.5 million tonnes; however it is likely to breach the target and load 49.5 million tonnes registering a 12.78% growth over the same period last year.
Stimulus plans - CII lauds move to cut ED and service tax - 01 Mar 2009 welcoming reductions in excise and service tax announced by the Finance Minister, CII said that it will provide the much needed fiscal measures for slowing industry and economy.
Mr Chandrajit Banerjee director general of CII said that “The further reductions in excise and service tax by 2 percentage points and extension of the earlier 4% cut in excise duty beyond March 31st 2009 will go a long way in stimulating consumption demand.”
CII said that the reduction in excise duty on bulk cement to 8% will also help reduce costs of real estate and infrastructure development. These fiscal measures should be coupled with further monetary measures as inflation has now come down to below 4%. The repo and reverse repo rates could be reduced by 50 basis points together with a similar reduction in the CRR.
CII added that this will provide the necessary boost to investment and also consumption of automobiles and housing in addition to countering the rising pressure on bond yields due to increased Government borrowing.
(Sourced from Business Line)
Timken India net profit up at INR 53 crore - 01 Mar 2009 Timken India Ltd has announced the financial results for the year ended December 31st 2008. Its net sale was at INR 4044.9 million for the year ended on December 31st 2008 against INR 3387.9 million for the year ended on December 31st 2007.
The Net Profit / (Loss) was at INR 530 million for the year ended on December 31st 2008 against INR 374 million for the year ended on December 31st 2007.
(Sourced from Equity Bulls)
L&T eyes 30% rise in sales next fiscal - 01 Mar 2009 PTI reported that with a healthy INR 68,000 crore order book, the construction major L&T, it expects to maintain 30% growth rate in sales in the next fiscal despite slowdown in the economy.
Mr JP Nayak whole time director & President (Machinery and Industrial Products) of L&T said that "There will be sale growth of 30% during 2008-09. We are confident that we will be able to maintain that for the next fiscal. That is our hope."
As on January end, L&T is sitting on a hefty order book for projects to be executed over the next two years. Mr Nayak, however, said that "A lot will depend on the orders coming in the next few months."
He added that overall the company has not been affected by the slowdown. He said that "About 75% of our business is project based which has not seen a slowdown as of now. Our order backlog is for over 2 years so in our case there is no slowdown as such as you can see in the first 9 months, our sales have grown by 40% over the last year."
Mr Nayak said that the firm's manufacturing components business has witnessed some slowdown. He added that slowdown may impact future order booking, but it all depends on how economic situation unfolds.
(Sourced from Press Trust of India)
China steel prices fall again on inventory build up - 01 Mar 2009 Reuters reported that Chinese spot steel prices fell 5.3% in a third consecutive weekly fall, on rising inventory after a much anticipated demand recovery failed to materialize.
The report cited a trader said "Many mills are offering discounts to their list prices to reduce inventory as demand from end customers is quite weak."
The reversal in prices, triggered to a large extent by increased output in the absence of a strong demand recovery, may continue for the coming months as output continues to rise.
China raised steel output by 10% in January from the previous month on top of a 7% gain in December, expecting a surge in demand in a post-Chinese New Year holiday in February which failed to appear.
Citigroup analysts said "Over the Chinese New Year trader steel inventory increased from below average to 25% above average. This has left inventories up 17% for the course of February versus the prior year.”
Macquarie analysts also said in a note that steel inventory at Shanghai's warehouses surged after the New Year holiday in late January. China's increasing production and massive overcapacity is also a big threat to any global price recovery as the country ships almost a quarter of its output overseas, where demand remains poor and deep supply cutbacks are extended.
(Sourced from Reuters)
Berkshire raises stake in POSCO - 01 Mar 2009 It is reported that Mr Warren Buffett's Berkshire Hathaway Inc has increased its stake in South Korea steelmaker POSCO to 5.2% as of the end of 2008 from 4.5% a year earlier.
According to Mr Buffett's annual letter to Berkshire shareholders Berkshire owned 3.95 million POSCO shares at year end up from 3.49 million a year earlier,
Mr Buffett said that the investment cost Berkshire USD 768 million but was worth USD 1.19 billion at year end.
Berkshire first revealed an investment in POSCO two years ago.
Cyclone threatens West Australian iron ore ports - 01 Mar 2009 Bloomberg reported that Australian Port Hedland, used by BHPB and FMG, and Port Dampier, used by Rio Tinto, will close today amid the threat of a cyclone.
Mr Lindsay Copeland Harbor Master of Port Hedland said in a telephone interview that the closure of Port Hedland at noon local time is precautionary and the port may resume operations tomorrow afternoon.
Mr Steve Lewis CEO of the shipping center said that Port Dampier, is expected to close at 6 PM.
According to the Bureau of Meteorology an offshore tropical low 115 kilometers north of Port Hedland is likely to make landfall between Karratha and Port Hedland about midnight tonight,
It said that “The low remains weak but there is a chance it could develop into a tropical cyclone prior to making landfall. If the system does intensify into a tropical cyclone, gales may develop in coastal areas late today. Heavy rain in the area may create flooding.”
Rainfall of up to 200 millimeters a day may occur in the Pilbara from tonight. Flood warnings are current for the Pilbara, Goldfields and Gascoyne River catchment regions.
The cyclone alert is the fifth issued this summer for the Pilbara, the biggest iron ore mining region in the world.
Update on Chinese likely move to increase steel export incentives - 01 Mar 2009 It is reported that Beijing is reportedly to resume some 3% of import tax and 17% value added tax on the steel products under processing trade, and further increase export rebate for certain high value-added steel products.
As per report, this is understood to be very important to realizing the revitalization plan, which says to produce 460 million tonnes and consume 430 million tonnes crude steel and keep direct export at 8% of total production this year. In January 2009, China's export of steel product fell 54% in YoY comparison.
According to the data, nearly half of the imported steel products are destined for export after processing. Increasing tax on these products can promote the domestic steelmakers' market share while raising up the rebate for high value added products can sharpen their competitiveness on the global arena. Yet, this adjustment has nothing to do with trade protection.
1. It is just in accordance with economic cycle. In 2005, value added tax was canceled for toll trade and it is natural the policy is adjusted as the conditions have changed.
2. To raise import tax is for resuming fair taxation for homemade and imported steel products that was executed before 2005. It's not discrimination.
3. Increasing export rebate of high value-added products is a universal move taken by many countries rather than China only.
4. To revise the import and export tax is totally different from setting non-tariff barriers. US stimulus package directly prevents certain steel imports from being shipped in regardless of their competitiveness. In comparison, the tax policies are more transparent and fair.
(Source: the Beijing News)
Japanese steel mills loose out in CNPC deals - 01 Mar 2009 It is reported that Japanese integrated steelmakers are thought to have lost out to China's Baosteel Co Limited in the recent international tender held by China National Petroleum Corporation to purchase 100,000 tonnes each of X80 UO pipes and X80 heavy plates for UO pipes in relation to construction of China's new West-East natural gas pipeline project.
The Japanese steelmakers responded with separate offers of UO pipes and heavy plates at USD 1,000 per tonne FOB or beyond. But they made no offers of X70 UO pipes which CNPC also sought in its procurement tender this time. At the time, there was speculation that CNPC would opt to take the X70 UO pipes from local pipe manufacturers at the final stage.
By comparison, Baosteel is said to have offered X80 heavy plates at USD 750 per tonne FOB and X80 UO pipes at much lower than USD 1,000 per tonne FOB. Until now, the Japanese steelmakers have found themselves unable to make contact with CNPC. Accordingly, the Japanese steelmakers have concluded that it is impossible for them to firm up deals with CNPC.
CNPC has yet to make results clear in the wake of its international tender this time. But indications are that CNPC will decide to place the whole orders with Baosteel at the final stage. In this connection, it is likely that Baosteel will supply part of its X80 heavy plate production for local pipe producers such as Julong Steel Pipe Co Limited to let them put out X80 UO pipes on Baosteel's assignment.
(Sourced from TEX Report Limited)
CAPEX cuts - Australian miners slow to implement cuts - 01 Mar 2009 Mining Journal reported that Australia's mining sector surprisingly spent more on investment last quarter, despite falling commodity prices and a dire global economic outlook though firms did cut spending plans for the full fiscal year.
Government figures released recently showed that the latest estimate of spending for the fiscal year ending in June 2009 was AUD 38.21 billion. The comparable estimate for the 2007/08 fiscal year had been AUD 30 billion.
Government data showed that the mining sector spent a record AUD 8.33 billion in the Q4 of last year in inflation adjusted dollars, which analysts said helped account for the rise. Spending was up 4.9% from AUD 7.94 billion in the Q3 and well above the AUD 6.27 billion spent in the Q4 of 2007.
Mr Mark Pervan Australia & New Zealand Bank senior commodities strategist said that "The easy way to address declining cash flow expectations is to pull back on CAPEX, which is less painful than shutting down operations and firing people."
Australia's exports were a boon when global growth and commodity prices were strong. But now six of the country's top 10 trading partners are in recession and Australia is on the brink of one. Coal and iron ore prices roughly tripled in Australian dollar terms over the six years to mid 2008. But since the last round of lucrative price talks on bulk commodity sales, prices have plunged.
(Sourced from Mining Journal)
Recession reports - Japanese exports nearly halve - 01 Mar 2009 Reuters reported that Japan's exports nearly halved in January 2009 from a year earlier, with record slides in shipments to the United States, Europe and the rest of Asia pointing to a deepening recession across much of the world.
Japanese car exports fell by two thirds from a year earlier, accelerating from a 45% annual decline seen in December, as the value of overall exports hit a 10 year low.
Mr Takeshi Minami chief economist at Norinchukin Research Institute said that "We do not see any signs of a pick up in the Japanese economy in the near term. The economy will gradually worsen further. Exports to Asia, particularly to China, are tumbling at about the same pace as shipments to the United States, signaling that even China's economy may be shrinking."
Japanese exports to the rest of Asia sank 46.7% from a year earlier, the fourth straight month of decline, with shipments to China falling 45.1%. The decline in Japanese exports to other emerging markets is also accelerating. Sales to Brazil fell by 38%, more than six times the drop seen in December data. Japan’s economy shrank last quarter at its fastest pace since the first oil crisis of the 1970s and economists said the latest figures added to concerns that the recession was worsening.
Japanese car makers also reported sharp falls in their output in January, with Toyota Motor Corporation reporting its biggest fall in global output and with that at Nissan Motor Co Limited slumping to the lowest level in records going back to 1984. Japanese industrial output is expected to have fallen by 10% in January, even deeper than the record fall seen in December. The dismal export figures point to further production cuts in the coming months as companies try to clear inventories.
Shrinking exports pushed Japan's trade deficit to a record JPY 952.6 billion, in an export oriented country where sales of major brands from autos, technology and other manufacturing sectors have been major drivers of growth. It was the biggest deficit since 1980, in the wake of the second Middle East oil crisis, but smaller than a forecast by economists of JPY 1.1295 trillion.
The trade balance has been in the red for four straight months, the longest such sequence in Japan in nearly three decades. The sharp deterioration has prompted big exporters to cut jobs and threatened their small suppliers and many economists expect the economy to keep shrinking well into this year.
(Sourced from www.reuters.com)
Iron ore price negotiations - Delay dampens shipping market - 01 Mar 2009 DNA quoted industry observers said commodity shipping rates, which rose in early February giving some respite to shipping companies, are expected to fall in the near term. This is following a drop in demand for Indian iron ore from China, which is negotiating its long-term contracts with Australia and Brazil.
An executive from a leading Indian ship chartering company said that "We will see a temporary lull in the dry bulk freight market till China finalized its long term contracts. The contracts are expected to be finalized by the next ten days.”
According to a shipping agent “No China bound iron ore cargo has moved out of India in the past four days. The situation has worsened so much that exporters who have committed ships and have already brought the cargo in the port are faced with situations where buyers have withdrawn.”
Another shipping agent said that till early last week the trend was that of exporters taking the advantage of softer freight rates and booking as much cargo as they could before the year end. He said that “This had even seen the Baltic Dry Index, the index of commodity shipping rates, to rise from its December 2008 lows. However, the situation has changed in a week where now the end user and buyer is not confirmed and hence no fresh contracts are being signed. We are hoping this to be a short term event."
While China, the top iron ore importer in the world, sources most of its committed iron ore from Australia and Brazil, its short-term spot requirements are met by imports from India. About 80% of India's iron ore exports are to China.
(Source from DNA)
Production pruning - HDG line Severstal Warren shuts down - 01 Mar 2009 Severstal announced the temporary cessation of operations of the steel galvanizing line at its Severstal Warren facility.
Both the galvanizing line and the mill, which has been offline since October, will remain inoperative while the company balances production volume to match current demand.
The release said that “This decision has been taken to ensure that the company continues to carefully manage its operational and capital costs in the global economic downturn.”
It added that “Severstal will continue to review its production needs during rapidly changing market conditions and will make adjustments as necessary.”
Production pruning - ArcelorMittal Saldanha - 01 Mar 2009 Yieh reported that ArcelorMittal SA has suspended production at Saldanha mill recently due to technical problem.
Saldanha mill produces hot rolled coil, with design capacity of 1.2 million tonnes per annum. It is a competitive supplier of high quality HRC under 1.6mm thickness.
(Sourced from YIEH.corp)
Acerinox posts EUR 10.5 million net loss in 2008 - 01 Mar 2009 Spanish stainless steelmaker Acerinox has posted a EUR 10.5 million net loss in 2008 as demand crumbled and it wrote down EUR 128 million for the lost value of raw material inventories.
Acerinox was expected to report net profit of EUR 20.1 million after write downs, from a EUR 312 million profit a year ago. It had already made a EUR 51 million provision in the third quarter.
On outlook, Acerinox said that only that it was optimistic that in the medium and long term demand would return to historic annual growth rates of close to 6%. Revenue fell by 26.8% to EUR 5.05 billion, missing a forecast of EUR 5.16 billion, while core earnings dropped by 60% to EUR 300 million.
Acerinox, which has cut output by roughly half at its factories in Spain, South Africa and the United States, said that new cost saving measures in a 2009-10 plan would save the company EUR 133 million. It added that steel production for 2008 fell by 11.5% to 2.04 million tonnes.
Chinese HRC export prices drop - 01 Mar 2009 It is reported that Chinese steel export market has seen few activities recently and this is also the case with import market. Total Chinese steel export volume for January has dropped to 1.96 million tonnes which is mainly believed to be result of weak overseas demand. While HRC imports have also turned quiet on domestic price drop.
Domestic hot rolled steel coil price continue its downward correction. On Shanghai market, commercial 4.75mm to 12mm*1500mm HRC goes at CNY 3350 per tonne down by CNY 500 per tonne from February 6th. That for 4.75mm to 12mm*1800mm goes at CNY 3460 per tonne a drop of CNY 540 per tonne from the same period of this month. Most believe that the decrease is expected to spread into next month.
Prevailing export quotation for commercial HRC is at USD 540 per tonne to USD 530 per tonne FOB as base, down from USD 560 per tonne to USD 600 per tonne in early February. There has been little transaction and price is negotiable as long as there is real order. Some traders mentioned that even USD 500 per tonne FOB for commodity grade HRC is workable at moment.
(Sourced from.Mysteel.net)
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NMDC in tie up with Stirling Resources for coal and ore assets - 01 Mar 2009 NMDC Ltd is reported to have entered into an agreement with West Australian mineral resources developer Stirling Resources Ltd to jointly identify and acquire coking coal and iron ore assets in Australia and New Zealand.
The partnership is likely to enable NMDC to use its expertise to tap resources in both the countries. It will also be able to lend its expertise in mineral exploration to the Australian company.
Mr Rana Som chairman of NMDC was unavailable for comment. But corporate and industry sources told DNA Money that NMDC will also have rights for the offtake arrangements for certain projects through this tie-up. Though indications are that this is an agreement, equity participation at a later stage cannot be ruled out.
NMDC, which has expertise in exploration, processing and marketing of minerals in India, had been scouting for investment opportunities in Australia for some time. A joint effort of the two companies could help in evaluating and developing new projects together.
Industry sources said that the Australian mining sector has been going through tough times due to the fall in commodity prices, which has hit the financial viability of projects because of credit squeeze and problems in equity funding. NMDC chairman Rana Som recently went to South Africa to look for opportunities in iron ore mining.
Things are yet to work out, as doing business in Africa is not so easy, said a source on the condition of anonymity. NMDC, which has a small office in Tanzania, is keen on gold exploration in this region.
(Sourced from dnaindia.com)
Chinese CRC export price remain weak - 01 Mar 2009 It is reported that Chinese domestic cold rolled steel coil market remains under pressure this week and price is expected to remain weak.
On Shanghai market, 1.0mm CR sheet by Anshan steel dropped by CNY 430 per tonne to CNY 4230 per tonne from February 6th. That for 1.2mm to 2.0mm CR sheet goes at CNY 4180 per tonne, 1.0mm CR coil by Maanshan at CNY 4130 per tonne a decrease of CNY 420 per tonne from the same period of this month.
As forecast, 1.0mm CR sheet by Anshan steel price has seen great fall since it failed to exceed CNY 4800 per tonne. Taking Shanghai price for 1.0 sheet by Anshan steel as benchmark, there would be further drop if it remains below CNY 4400 per tonne and the short target would be CNY 4000 per tonne if it could not stay above CNY 4200 per tonne
Export offer for DC01 1.0mm CRC goes at around USD 610 per tonne to USD 630 per tonne FOB down USD 20 per tonne to USD 30 per tonne from high level in early February. Traders say there is almost no transaction at moment and there is not expected to be improvement in Q1.
CRC import market remains quiet and there are few activities. Imports have suspended for several weeks on great drop in domestic price. Offers for 1.0mm CRC are prevailing at about USD 470 per tonne CFR Chinese ports down USD 30 per tonne to USD 40 per tonne. Import market is not expected to resume until local prices start to rebound again.
(Sourced from.Mysteel.net)
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CAPEX cuts - WSR plans to reduce plan by 60% - 01 Mar 2009 Interfax reported that West Siberian Resources plans capital expenditure of USD 194 million in 2009 a decrease of more than 60% from last year.
The total includes USD 58 million in upstream investment and USD 136 million in downstream.
West Siberian Resources said the investment program for 2009 will be financed entirely out of operating cash flow. WSR has moved back the dates for a host of projects reconstruction of the Khabarovsk Oil Refinery is now scheduled for completion in late 2012 compared with early 2011 previously and commercial production at the Kolvinskoye field will be launched in 2011 compared with 2010.
The report said the company targets oil production to decline 8% to 16 million barrels in 2009 and refining will fall 14.6% to 21 million barrels. It will focus on reducing short-term debt through repayment and extending the maturity of existing short-term loans.
WSR completed a merger with Alliance Oil Company in April 2008. As a result of the merger, Alliance became a WSR subsidiary, while the Alliance Group received a controlling stock interest in WSR.
CAPEX in 2008 totaled USD 541.4 million, including USD 177.06 million in explorations and production, USD 344.65 million in refining and USD 19.71 million in retail.
(Sourced from Interfax)
Changes in AD duties on ropes and cables in South Africa - 01 Mar 2009 It is reported that South African Revenue Service has published a notice in government gazette of February 13th 2009 with respect to the withdrawal and imposition of antidumping and countervailing duties on stranded wire, ropes and cables used in the mining industry.
1. The provisions for antidumping duties on stranded wire, ropes and cables, of iron or steel, not electrically insulated, of a diameter exceeding 8 mm (excluding that of wire of stainless steel, that of wire plated, coated or clad with copper and identifiable as conveyor belt cord), originating in or imported from the People’s Republic of China, Germany, South Korea and the UK, are withdrawn.
2. The provisions for antidumping duties on ropes and cables, of iron or steel, not electrically insulated, of a diameter exceeding 8mm originating in or imported from China, Germany, South Korea and the UK, are imposed.
3. The provisions for antidumping duties on ropes and cables, of iron or steel, not electrically insulated, of a diameter exceeding 8mm (excluding that of wire of stainless steel, that of wire plated, coated or clad with copper and identifiable as conveyor belt cord excluding that imported from Bridon International Limited, Bridon International GmbH and Pfeifer Drako, originating in or imported from China, Germany, South Korea and the UK, are imposed. The provisions for antidumping duties on stranded wire, of iron or steel, not electrically insulated, of a diameter exceeding 8mm (excluding that of wire plated, coated or clad with tin), originating in or imported from China and South Korea, are imposed.
4. The provision for antidumping duties on stranded wire, of iron or steel, not electrically insulated, of a diameter exceeding 8mm, originating in or imported from Germany and the UK, is imposed. The provision for countervailing duties on ropes and cables of iron or steel, not electrically insulated, of a diameter exceeding 8mm is withdrawn.
5. The provision for a countervailing duty on ropes and cables of iron or steel, not electrically insulated, of a diameter exceeding 8mm manufactured or exported by Usha Martin, originating in or imported from India, is withdrawn. The provisions for an countervailing duty on ropes and cables, of iron or steel, not electrically insulated, of a diameter exceeding 8mm originating in or imported from India, are imposed. The provision for a countervailing duty on stranded wire of iron or steel, not electrically insulated, of a diameter exceeding 8mm originating in or imported from India, is imposed.
(Sourced from www.engineeringnews.co.za)
Iron ore price negotiations - EU and Japanese should lead - Analysts - 01 Mar 2009 It is reported that iron ore price talks between world's leading ore miners and Chinese steel mills were continuing and market insiders suggest that Chinese mills should concede the position of leading negotiator to their counterparts in Europe and Japan, who are grappling with more grim economic recession.
Japan has suffered GDP decline of 0.7% last year, the first drop in nine years. And the economic recession is set to linger on this year. EU central bank predicts that economic growth in euro zone would either keep flat or shrink by 1% in 2009. Nevertheless, leading institutes are confident that China would maintain growth rate between 5.5% and 8% this year, and China's economy has already shown sign of recovering supported by Beijing's stimulus package.
As a result, domestic steel price has steadily rebounded for three straight months since last November with price rally of 15% to 30% from the bottom level. And spot ore import price has increased 20% from three months ago, while domestic ore price also climbs over 15%. By contrary, European steel price has skid 18% to 20% in the same review period. Meanwhile, Chinese pig iron output has returned above 40 million tonnes in January after falling below the benchmark line in past four months. And the imported iron ore tonnage has also hit a eight-month high of 32.65 million tonnes in January.
Industrial sources, however, steelmakers around the world are cutting production, shutting plants and laying off workers. EU 27 countries have reported pig iron output halved to 5.2 million tonnes in February and Japan has seen a sharp decline of 27% to 5.5 million tonnes in the same month. Therefore, European and Japanese mills are more eager to push for sharp cut on contract ore prices due to plummeting demand for iron ore. Chinese mills should better hold back and let them lead the ore talks this time.
(Sourced from.Mysteel.net)
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Stimulus plans - Details of Buy American clause - 01 Mar 2009 US President Mr Obama had signed the USD 787 billion stimulus package into law on February 17th 2009. The package is aimed at stimulating production in the US as well as job creation.
However, it includes the following clause
SEC 1605, use of American iron, steel and manufactured goods
(a) None of the funds appropriated or otherwise made available by this Act may be used for a project for the construction, alteration, maintenance, or repair of a public building or public work unless all of the iron, steel, and manufactured goods used in the project are produced in the United States.
(b) Subsection (a) shall not apply in any case or category of cases in which the head of the Federal department or agency involved finds that (1) applying subsection (a) would be inconsistent with the public interest (2) iron, steel, and the relevant manufactured goods are not produced in the United States in sufficient and reasonably available quantities and of a satisfactory quality or(3) inclusion of iron, steel, and manufactured goods produced in the United States will increase the cost of the overall project by more than 25%.
(c) If the head of a Federal department or agency determines that it is necessary to waive the application of subsection (a) based on a finding under subsection (b), the head of the department or agency shall publish in the Federal Register a detailed written justification as to why the provision is being waived.
(d) This section shall be applied in a manner consistent with United States obligations under international agreements.
Many economists have voiced their concern regarding this clause, labeling it as protectionism.
(Sourced from www.africacan.worldbank.org)
Minmetals awaits approval for OZ minerals takeover - 01 Mar 2009 News Jongo reported that OZ Minerals has confirmed the Chinese state owned company Minmetals has lodged its takeover application with the Foreign Investments Review Board.
Minmetals has launched a USD 2.6 billion bid for OZ Minerals, which is struggling to refinance more than USD 1 billion of debt. OZ Minerals has won an extension of the term of its loans from its banks a key pre condition of the takeover going through. The next major hurdle for the company to clear is federal government approval of the offer.
(Sourced from www.news.jongo.com)
Taiwanese firms decrease HR and CR prices - 01 Mar 2009 It is reported that Taiwan's China Steel Corporation and Chung Hung Steel have decreased the price due to an unoptimistic global market.
As per report, CSC's price of HRC and CRC has decreased by TWD 3,000 per tonne for April and May 2009 and CHS's price of HRC went down to around TWD 1,500 per tonne for March 2009.
Currently, the price of HR has reached TWD 16,800 to TWD 17,000 per tonne, most downstream mills have not accepted the price due to the week demand and import products are more competitive.
Meanwhile, the dealers said that the leeway products are more popular at this moment and the price is acceptable around TWD 16,000 to TWD 16,300 per tonne for buyers.
(Sourced from YIEH.corp)
Iron ore price negotiations - Miners seeking rise - 01 Mar 2009 WSJ, citing people familiar with the negotiations, reported that despite concerns about the length and depth of the global recession, iron ore miners are pushing for as much as a 5% increase in the annual contract price beginning in April.
The reports aid that “The miners, which only a month ago were hoping to avoid a decline and keep prices flat, say a recent uptick in demand from China may signal that the market has bottomed out. They also note that spot prices have inched up since late last year.”
At this point, China is the only country showing increased steel production and although it is the world's largest steel producer, consumer and exporter, it may not be enough to buoy the entire market for iron ore. China was the only major country last month to record an increase in steel production up 2.4% from January 2008. According to the World Steel Association, steel production by all countries fell 24% in January from the year earlier month. Increased steel usage in China tends to tighten supply in other countries and provide a lift in pricing.
However, a price increase of 5%, though well below the 70% to 85% levels of last year, will be strongly opposed by the biggest consumer of iron ore the global steel industry.
An official with the China Iron & Steel Association, which is leading negotiations with the world's top three iron ore producers, said that "We are not conceding anything yet.”
Mr Fabio Barbosa Vale's finance director said that it has seen an uptick in iron ore demand in China. He said that "This is very positive development. It is still too early to say that a turnaround is near. Vale shipped nearly twice as much iron ore, 30 million short tonnes to China in January compared to December.”
BHP has also noted that there seems to be a slight recovery in iron ore demand in China.
(Sourced from WSJ)
Chinese 2008 stainless steel output down by 3.8% YoY - 01 Mar 2009 According to the data compiled by China Special Steel Producers Association, China produced 6.94 million tonnes of crude stainless steel in the calendar year of 2008, down by 3.8% YoY as compared with that of 7.21 million tonnes in the preceding year of 2007.
It was informed from China that the matter to decrease stainless steel production in China had shown a sign in May of 2008 to cope with an increase of the stocks and has been materialized on a substantial scale from September. Some of medium and small stainless steel mills in China have been driven to suspend their production and major mills are also unable to escape from a considerable cutback of their stainless steel production. Namely, such major stainless steel companies of China as Taiyuan Iron & Steel, Zhangjiagang Stainless Steel, Baosteel Group and so on have been reducing their stainless steel production by 40% to 50%. China so far produced crude stainless steel on a scale of 490,000 tons per month but has been forced to shrink their production to a scale of 280,000 tonnes per month from October.
According to data released by the Stainless Steel Section of China, this country produced 1.57 million tonnes of 200 series stainless steel in 2008 as their specialty, which exceeded that of 1.18 million tonnes in the preceding year of 2007 and shared 22.6% of the whole production of stainless steel in China for 2008 as compared to 16.4% for 2007.
China expanded their production of 200 series stainless steel in 2008 but, contrarily, decreased their production of 300 series stainless steel in 2008 to 3.51 million tonnes, which had a considerable decline of 16.2% compared to that of 4.19 million tonnes in 2007. For a reference, China produced 1.86 million tonnes of 400 series stainless steel of containing high chrome in 2008, having remained as nearly unchanged from that of 1.84 million tonnes in 2007.
China has been producing stainless steel on a substantial scale from 3 years ago and is anticipated to increase further their production of 200 series stainless steel. Nickel prices had continued to rise steeply for the last 3 years in the international market but have turned to fall from the second half of 2008 and, therefore, it is now marked to see how many quantity of manganese metal will be used to produce 200 series stainless steel, which contains low nickel and high manganese.
For a reference, according to the customs-statistics released in China, the quantities of stainless steel products imported and exported by China in January to November of 2008 were imports of 1,406,644 tonnes, down by 28.05% YoY and exports of 958,450 tonnes, down by 28.02% YoY. In November of 2008, when a crisis of the world economy commenced, China imported 47,941 tonnes of stainless steel products and exported 88,302 tonnes of stainless steel products.
(Sourced from www.texreport.co.jp)
Japan to start talks on Q2 wire rod export to Asia - 01 Mar 2009 Tex reported that Japanese integrated steelmakers are expected to start negotiations this week on their wire rod exports to Asian destinations for shipments in the April to June quarter of 2009.
As per report, there are dim prospects of sales growth as local customers have yet to complete their inventory adjustment of wire rods.
The report added that “Besides, non Japanese users look set to press hard for decreased prices in what they negotiate, which indicates the prospects of tough negotiations for the Japanese steelmakers.”
Among principal Asian customers, automakers are expected to continue their inventory adjustment of wire rods until April or May 2009. As to manufacturers of industrial or construction machinery, they are expected to see their inventory adjustment of wire rods drag even into the July to September 2009 quarter.
The report said that “It may be noted that POSCO is conducting its wire rod export deals for Asian destinations, with lower prices on offer by USD 100 per tonne what the company charges for domestic sales. POSCO's current domestic price of wire rods is settled at KRW 910,000 per tonne. On the basis of POSCO prices on offer, non Japanese users indicate a position to seek a price reduction in preliminary contacts on wire rod imports from Japan for April to June 2009 quarter shipments.”
The Japanese steelmakers, though, find it difficult to execute a considerable price reduction in what they negotiate anew for wire rod exports to Asian destinations. They cite a continued burden of imported raw materials at high prices on their wire rod production. As to wire rod exports for Q2 shipments, they are contemplating struggling to maintain at least the currently contracted levels.
In China, Anshan Iron & Steel Group Corporation has told domestic customers that the company intends to increase wire rod prices by CNY 350 per tonne for March 2009 shipments except wire rods for steel tire cords. Meanwhile, Baosteel Co Limited is expected to inform domestic customers February 26th 2009 of the company's domestic steel prices for April shipments onward.
(Sourced from TEX Report Limited)
Production started in Shibao Iron Ore Group - 01 Mar 2009 It is reported that Shibaoi Iron Ore Group in Damaoqi, Inner Mongolia has started its iron concrete processing, steel making, and iron smelting and rolling production lines since the start up of steel-making production line in Baoxin Special Steel Company on February 19th.
Shibao Iron Ore Group, the pillar industry in Damaoqi, presents a stable economic growth for a long time. The volume of tax has broken CNY 100 million per year for successive 5 years since 2002, ranking 2nd in the private enterprises of Baotou. 2008 financial crises made the operation fall into a hot water, with large price dives in leading products. In late Sept of last year, only rested iron concrete plant could sustain the production.
Damaoqi government tries to help the group to bail out the operation downturn through monetary subsidy, tax reduction and favorable bank loan policies etc.
(Source: http://bt.nmgnews.com.cn)
Venezuela renewed endeavor to bolster steel industry - 01 Mar 2009 It is reported that Venezuela has renewed endeavor to bolster a national overarching iron steel plan under the aegis of the Corporación Siderúrgica de Venezuela SA.
On January 30th 2009, the government advanced USD 120 million from the Chinese Venezuelan Joint Fund to Brazilian corporation Andrade Gutiérrez to start working on the national iron and steel social production business.
Mr Pedro Olivieri president of Chinese Venezuelan Joint Fund said that these are grand, long term projects, aimed at keeping the country's development over the next decades. He added that "Sure enough, there is a global financial crisis, but it is mainly focused on the capitalist world. Venezuela, along with other Latin American countries, like Brazil, would rather seize the opportunity to boost those sectors with great potential; this is the case for iron and steel."
He commented that the oil, petrochemical and gas industries need significant input, such as steel, to deploy their infrastructure in offshore projects and refineries, including pipes and tanks. The steels to be produced by the new iron and steel industry will have special features, dimensions and qualities.
Mr Olivieri added that the products to be manufactured at that factory will be also used to continue the railroad plan, and renovation of ports and shipyards that are being built in eastern Venezuela. He said that "And to sustain all those development plans, where the country would stop playing its role of mere exporter of raw materials to transform them and add value to them."
Venezuela concentrates on the Guayana region, where the national iron and steel industry is to be built, ore reserves of more than 14 billion tonnes. Such a huge potential has been taken into account as part of the Iron and Steel Sector Layout Plan, within the framework of the Simón Bolívar national blueprint for 2007-2013, in order to put the country in a broad industrial business; something very different from what is happening in the world.
(Sourced from www.silobreaker.com)
Noble Group update on offer for Gloucester Coal - 01 Mar 2009 Noble Group has announced an offer to acquire all of the shares in Gloucester Coal at a price of USD 4.85 per share.
Noble Group has advised that the proposal is subject to the Gloucester Coal bid for Whitehaven Coal Limited not proceeding and certain prescribed occurrences not occurring Gloucester Coal is currently considering the proposal and will respond on it in due course. Gloucester Coal shareholders should take no action with respect to their Gloucester Coal shares, pending further announcement.
Chinese steel imports into Philippines hit domestic industry - 01 Mar 2009 Manila Standard Today quoted industry association as saying that hundreds of steel workers were displaced last year when seven steel angle bar manufacturers shut down their milling plants amid the influx of cheaper but substandard imports from China.
In a news briefing in Makati City, Mr Henry Leungson, vice president of the Steel Angles, Shapes and Section Manufacturers Association of the Philippines Inc said only two companies, Lunar Steel Corp and Cathay Metal Corp operated their mills in 2008, at below their capacity levels.
Mr Leungson said the capacity utilization rate among the nine registered local manufacturers of steel angle bars dropped to just 10 percent in the past three years, because of the entry of imported products from China that do not meet local standards.
He said companies such as 21st Century Steel Mill Inc, Dragon Asia Rolling Mills Inc Legacy Steel Corp, Maxima Steel Mills Corp, Philippine Nails and Wires Corp, Primary Steel Corp and Unicorn Metal Corp were forced to stop production of steel angle bars last year or shifted to manufacturing of other steel products because of unfair competition posed by imported products.
Mr Ramon Tan, an executive of Lunar Steel Corp said this translated into loss of hundreds of jobs, representing more than half of the workers of the industry.
(Sourced from Manila Standard Today)
Japanese small bar output down by 28% YoY in January - 01 Mar 2009 According to Japan Iron & Steel Federation, Japan's nationwide production of small bars totaled 579,100 tonnes in January 2009, down by 27.9% YoY and by 1.2% MoM.
Meanwhile, Japanese small bar production totaled 8,483,200 tonnes in April 2008 to January 2009 period, down by 14% YoY from the corresponding period of fiscal 2007.
(Sourced from YIEH.corp)
Yemen lays foundation stone for zinc mining project - 01 Mar 2009 Yemen Times reported that Mr Ali Mujawar PM of Yemeni laid last Monday foundation stone for the first mine project in Yemen for finding out zinc in Sulb Mountain in Nehm area here with investment cost estimated at USD 200 million.
Mr Mujawar inspected the previous location of the mine and the general diagram of the new project and was briefed on the new mine and the component of the project which will use the latest developments for finding out the zinc.
Mr Ismael al-Janad Yemeni Authority for Geological Survey and Mineral Resources Board and the director of the company which will carry out the project clarified that the production output could reach to 80,000 tons annually. The project they said will provide 400 direct jobs to Yemenis and 1500 indirect jobs. They indicated that the project would includes constructing 400 housing units to its workers and that the first shipment of the Yemeni zinc would exported in mid of 2010.
Director of the Project said developing this project would make Yemen in the world map of mines. He noted that Jabal Sulb Company Limited which started studying the project since 1999 is keen on providing developed techniques fitting the nature of the area.
(Sourced from Yemen Times)
China unlikely to shut coal mines due to accident - 01 Mar 2009 Chinese State Administration of Coal Mine Safety Supervision said that Chinese government is unlikely to shut coal mines extensively after an explosion at a shaft in northern China’s Shanxi province killed 74 workers.
Mr Huang Yi spokesman of the work safety bureau said Authorities will intensify checks of mines. The number of fatalities at Chinese mines, the world’s most dangerous, fell 15% last year from 2007. Mining accidents in China killed 3,770 people in 2007.
The Shanxi Youth Daily reported that Mr Hu Jintao President of China and Mr Wen Jiabao Premier called for an all-out rescue effort yesterday after the explosion early that morning rocked the Tunlan Coal Mine in Shanxi’s Gujiao City as 436 miners were working underground, Xinhua said. Shanxi, the nation’s biggest coal producing province, had 16 relatively big mining accidents last year, exceeding government targets.
Mr Hao Xiangbin an analyst from the China Coal Transport and Distribution Association said “Coalmine accidents won’t be solved over the short term. He said that it will be a major threat to the mining industry and adds uncertainty to the market.”
Mr Huang the coal safety administration’s said closure of the Tunlan mine, able to produce 5 million tonnes of coking coal a year, will affect the output of Shanxi Coking Coal Group Co. Mr Liu Jianzhong deputy general manager of Shanxi Coking, didn’t pick up calls made to his office.
According to a statement filed today to Shenzhen’s stock exchange, Shanxi Xishan Coal and Electricity Power Co a listed unit of Shanxi Coking Coal Group said that the explosion wouldn’t affect its operations.
Xinhua citing a source from the work safety bureau said three officials with the Tunlan mine were removed from their posts in the wake of the fatal explosion. Five miners injured in the blast are in a critical condition. A total of 114 miners are currently hospitalized.
(Sourced from Bloomberg)
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