|From the CEO's Desk
Steel mills across the globe have drastically cut production in view of
present recessionary trends in the market. The problem is more serious
in developed world as their economies were already stagnated and the
jolt of recession was a bit too hard to get absorbed. Many steel
companies have completely stopped the production and have even started
Construction and automobile are the two major customer industries for
steel sector and unfortunately both of them are in deep trouble. Most of
the construction companies have hauled their new projects as even the
completed ones are awaiting buyers. Banks have also stopped financing
infrastructure projects for the time being. Auto companies have no
option but to stop vehicle production as it is difficult to find buyers
for the produced ones. Many auto giants from developed world are now
depending on bailout packages from the government to remain afloat.
The problem may have been originated from US or developed world but now
it seems that even Asian countries are getting affected. Dubai,
Singapore, Mumbai and Shanghai were said to be the business hubs of
Asian region with booming economy and ever rising real estate prices. In
last 4 to 5 months the real estate prices in these cities have dipped by
more than 50 %. Simply unbelievable!
Many construction companies have even put down the shutters. Everyone
will agree that steel industry will never improve unless these two
sectors are back on track.
The governments of many countries have announced huge financial packages
to improve liquidity position of the economy. The bank interest rates
are being reduced and domestic industry is being given extra protection.
Yes, all this will help the industry to move forward but I feel that
some thing more and different has to be done. Is it not the right time
to relook at our business model and strategy?
We have been saying for quite a few years that Asia is the growth engine
of world economy. I feel that there is a growing realization of this
theory and the process of shifting the businesses to Asia will be faster
in coming years. The objective of this shift should not be only to
capture the Asian markets but one has to even change the business
structure and model and adopt the Asian way of doing business, its
mindset and work culture. Only this will ensure sustainable growth in
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Domestic Steel Prices Likely to Come Down by June: Rastogi
The domestic steel prices
are likely to fall by up to Rs3,000 a ton after June, if the rates of
coking coal decline in the global market, steel secretary P K Rastogi
"It is likely that coking coal prices may decline after June. This may
have a reflection on domestic steel prices, which could soften by up to
Rs3, 000 a ton,” Rastogi said. The Indian steel major like SAIL, Tata
Steel, RINL and JSW have a long term contract (LTA) with overseas mining
firms in Australia and New Zealand for supply coking coal. As per the
2008 LTAs, the steel producers are buying coking coal for about $300 per
ton, whereas in the spot market rates have declined to around $200 a
Expecting the rates to dip after June following a decline in demand for
the raw material from steel sector, Rastogi said it would have a
positive implication on steel prices.
In the domestic market, demand for steel has plunged from sectors like
construction and automobile, resulting in over 40 percent fall in prices
of the commodity, which at present is selling at about Rs31, 000 a ton.
Though admitting the rates have come down, he said the prices could have
further dipped, but for high coking coal costs.
NMDC Iron Ore Sales Plunge
India’s largest iron ore producer NMDC Ltd.
posted 35 percent decline in iron ore sales in December, third straight
monthly decline, as the global recession cut demand for the steelmaking
materials. Sales declined 35 percent last month after slumping 65
percent in November and 40 percent in October. The October and November
decline exceeds the 30 percent drop estimate given by the steel ministry
A global financial crisis is curbing demand for steel from automakers
and builders, forcing steel companies worldwide to cut production and
delay purchases of iron ore and other raw materials. NMDC’s
third-quarter profit will fall from the 9.7 billion rupees reported a
year earlier. Analysts said that steel demand would not recover before
the second half and iron-ore prices would fall by as much as 40 percent
in the year starting April 1. NMDC was forced to cut prices for domestic
buyers by 25 percent from Dec. 1, partly reversing a 40 percent increase
announced in October. NMDC sells 90 percent of its 31 million ton annual
production in India. Iron ore stockpiles have increased in China, the
biggest buyer, because of the lower consumption. The nation has 220
million tons of ore reserves, including 90 million tons held at ports,
30 million tons with steelmakers and 100 million tons held by traders.
China buys most of its iron ore for immediate delivery from Indian
producers. Cash prices of iron ore imported by China fell 58 percent in
2008. Customers in China may ask BHP Billiton Ltd., Rio Tinto Group and
other global suppliers to accept an 82 percent price cut after steel
prices fell to 1994 levels, the China Iron and Steel Association said
last month. NMDC will increase production to 130,000 tons a day from
100,000 tons as demand improves. The company is also seeking to purchase
mines in India.
SAIL, RINL Seek Re-Negotiate Coking Coal Price Contracts for 2008-09
The Steel Authority of India Limited (SAIL),
India's largest steel producer and also the largest importer of coking
coal, is in talks to re-negotiate 2008-09 coking coal price contracts
with its overseas suppliers in view of the fall in steel prices and
global economic slowdown.
"We have already requested our leading suppliers to give us some relief.
Steel prices as well as demand have been declined following global
economic slowdown," said a senior official from the company. The
official also added that the negotiations have not moved on as per the
company's expectation because the overseas suppliers are unable to come
to India for further discussion. Due to recent terrorist attacks in
Mumbai, many countries have imposed travel restrictions to India. “We
hope them to come to India within this month as restriction may be eased
soon. “We would request them to cut the prices by certain percentage,"
the official said. Australia is the largest coking coal supplier to
SAIL. However, some amount of coking coal is import from New Zealand,
Canada and the U.S. For 2008-09 (July-June), the company had contracted
to buy about 12 million tons of coking coal at an average price of
around $300 a ton. The contract was signed in late May 2008, but global
recession pulled down steel demand and prices and now, steel makers are
looking for re-negotiation in contract prices.
Meanwhile, Vizag Steel Plant of Rashtriya Ispat Nigam Ltd, another
leading steel maker of the country, has asked its suppliers to cut in
coking coal prices compared with the contracted prices of around $300 a
ton. “However, there is no response so far," the official said.
CMPDIL, MECL to Tie up for Coal Exploration
Central Mine Planning and Design Institute
(CMPDIL), the exploration subsidiary of the country's largest coal
producer Coal India (CIL), will sign a memorandum of understanding (MoU)
with Mineral Exploration Corporation (MECL) to smoothen the process of
coal exploration in India. The step will allow CMPDIL to involve MECL in
undertaking its drilling work without inviting tenders. “CMPDIL will
soon sign a memorandum of understanding (MoU) with MECL for conducting
coal drilling project of 1 lakh meters,” CMPDIL chairman and managing
director A K Singh said.
The move would speed up coal exploration activities by saving time lost
in the tender system. “After signing MoU with MECL, CMPDIL will not need
to outsource drill projects to MECL via tendering process," he said. The
company plans to increase coal exploration capacity from 2 lakh meters
per annum to 10 meters per annum by 2011-12. MECL will drill up to 1
lakh meters, outsource 5 lakh meters to private players and increase
in-house exploration capacity to 4 lakh meters, Singh said. In the
current fiscal, the company has outsourced 3.87 lakh meters of drilling
task for eight blocks across the country that may be developed by CIL or
allotted as captive blocks. CMPDIL is also in the process of finalising
another deal for outsourcing drilling activities with private players.
The exploration is likely to be carried out in another five years.
Tata Steel Appoints New CEO for Corus Unit
Tata Steel Ltd said that the chief
executive of its Corus unit, Philippe Varin, has resigned and Kirby
Adams, a former CEO of Bluescope Steel, would replace him.
Varin had agreed to stay on as CEO of Corus for two years when Tata
Steel bought the Anglo-Dutch steelmaker in 2007, the company said.
The company further said that he has met his commitment and has decided
to seek a new challenge. The acquisition had made Tata Steel the world's
sixth-largest steel maker with an annual capacity of more than 28
million tons. Varin will continue to serve on the boards of Tata Steel
Europe and Tata Steel as a non-executive director, the company said.
Indian Flats Buyers Seek Short Term Contracts
Indian automakers and white goods makers,
end users of cold rolled and coated flats, are looking for short term
supply contracts with re-rollers and galvanizers due to the uncertainty
in the steel market.
"We normally sign long term contracts with our buyers, especially the
auto companies who prefer lengthy contracts. But prices have dropped
sharply over the past six months, and the market has become so volatile
that buyers have become paranoid. The buyers prefer to play it safe by
signing only monthly or bi-monthly contracts," said a senior official
with a leading galvaniser.
According to another cold roller, its customers are now choosing to sign
on a monthly basis than the usual half-yearly or annual contracts. "This
works in favour of both parties since users benefit by getting steel at
low prices and suppliers can clear their accumulating inventory," said
The initiative came as an answer to minimize the risk of losing money
for both buyer or supplier because of the repeated price upheavals
witnessed by the market currently.
The cold rollers mostly purchase hot rolled coils from integrated mills
on a monthly basis, or even on spot sometimes. The long term contracts
are much less common. Indian cold rolled producers have pulled down
their list prices for 0.4mm coil by almost 50 percent to around Rs
35,000 per ton excluding taxes and vat from the peaking prices in July .
Mahindra Ugine and Forgings to Cut Output
Mahindra Ugine Steel Company (Musco) and
Mahindra Forging (MFL) will cut production through plant shutdown and
also through reduced working days due to slowdowns in demand from the
steel and automotive industries.
The company has reduced the number of shifts to one or two shifts from
three shifts earlier at its manufacturing plants. All its plants, except
the Nashik plant, will work for five days a week instead of seven days a
week. The decision has been informed to the Bombay Stock Exchange (BSE).
JSW Steel Advances Commissioning of Plant Expansion
JSW Steel has geared up the commissioning of
its additional three million-ton capacity line at Vijaynagar plant in
Karnataka by February as the company expects demand picking up in the
" We will commission the expanded line in Vijaynagar by February and run
it to full capacity from March as demand is like to pick up as there are
positive vibes in the market," JSW Group CFO Seshagiri Rao said. JSW
expects a rise in demand from various sectors such as construction and
auto sectors following a boost by the government to the infrastructure
sector and cross-the-board reduction of four percent in the excise duty.
The company had said that all its units would start production to their
full capacity from January, 2009 and the Vijaynagar plant will be
commissioned by March. The production capacity of the plant after
commissioning of the additional production is likely to go up to 6.8
million tons from 3.8 tons at present. The additional production line
was earlier scheduled to commission in December, but the company had put
on hold the plans following the steep decline in demand for the
commodity in the midst of global economic slowdown.
ISWP to Launch Wire Unit Expansion Plans
Indian Steel and Wire Products (ISWP) has
announced a Rs 20 crore expansion program aiming to become the leading
producer of metal wire in eastern India.
Under the expansion program, the company would come up with a new TMT
mill and procure wire drawing machine from Tata Steel's wire division,
based at Borivali in Mumbai. About Rs 6 crore will be invested in the
new TMT mill. The company proposes to pour another Rs 14 crore to
procure the wire drawing machine. “The expansion is important to boost
steel production in 2009," said Partho Sengupta, chairman of the
company. “The TMT mill will help us to achieve our production target of
3 million of TMT bar per annum. Similarly, the GF-1 machine coming from
Borivali will help increase the production of wires," said a company
official. The ISWP manufactures products like wire rods, cast iron and
steel based rolls. After being shut down for 6 years, ISWP was taken
over by Indian steel giant Tata Steel in 2003.
Steel City to Open 10 Branches
Visakhapatnam-based stock broking firm Steel
City Securities Limited (SCSL) will launch 10 more branches during the
current fiscal. The firm owns 250 branches in the south India, of which
85 percent branches are located in Andhra Pradesh. In the last three
months, SCSL had opened new branches at Bhubaneswar, Kurnool and Karur
(Tamil Nadu) among other places. “Though SCSL trading turnover dropped
by 30-35 percent, the volatile stock market had not impacted the company
much," said G Raja Gopal Reddy, executive director, SCSL. “The company's
trading turnover about Rs 300 crore a day," he added.
Chhattisgarh Allocates Mine Lease to MSP Steel
Secondary steel producer MSP Steel & Power Ltd
said the government has approved granting it a prospecting license for
iron ore mines, spread over an area of 150 hectares, in Chhattisgarh.
The license, approved by the Mines Ministry in Durgkondal forest range
of Kanker district, moves the company one step forward in having captive
iron ore mines for its manufacturing operations.
JSPL Seeks Mining Lease for Angul Project
The Jindal Steel and Power Limited (JSPL) has
asked the support of the Orissa Government for an iron ore mining lease
(ML) for its proposed 6-million ton per annum steel plant at Angul. The
project will require an investment of Rs 15,000 crore. JSPL claimed that
it has fulfilled all the conditions mandatory for recommendation of the
Naveen Jindal, the executive vice chairman and managing director, JSPL,
urged the state government to recommend its case for the mining lease to
the Centre since the company has fulfilled all the stipulation required
for initiation of the process. While the company has ordered equipments
and machineries worth Rs 4617 crore, it has achieved the financial
closure for the project. “JSPL has achieved the financial closure for
its steel project and requested the government to recommend its case for
issue of the ML," Ashok Dalwani, secretary, industries, Orissa
government said. According to sources, the company had not faced any
problem in the acquisition process of land for the project as the
project as the proposed site mostly consisted of barren land. JSPL has
already acquired 2,346 acres of land out the required 5,500 acres, its
has deposited Rs 198 crore with the state owned Industrial
Infrastructure Development Corporation (IDCO) for acquisition of the
remaining land. Jindal said the company hoped to commission the first
phase (3 mt) of capacity at Angul by December 2010. The company is
investing about Rs 15,000 crore in the facility and an additional Rs
5,000 crore is proposed for setting up a 1,500-MW power plant.
Stainless Steel Imports Slip 70% in December
The country's stainless steel imports declined
by 70 percent to 6,000 tons in December, which is weakening the
industry's demand for raising import duty on the alloy. After increasing
by over 60 percent to 20,000 tons in November, the imports declined by
14,000 tons in December, as demand weakened after buyers delayed their
purchases in anticipation of the prices to cooling down further.
At present, a ton of cold rolled stainless steel costs around Rs 1.18
lakh, whereas it was Rs 1.445 lakh a ton in November. "The prices showed
a stabilising trend in December end, but fluctuation in rates over the
last couple of months led to drop in sales as buyers delayed their
purchases," Joint Plant Committee executive secretary G K Basak said.
Domestic producers have been seeking increasing of import tariff to 15
percent from the present 5 percent on the alloy. They also want the
government to levy anti-dumping duty to curb cheap shipments from
countries like China and Ukraine.
However, now that imports have declined and the trend is likely to
continue on account of fiscal measures taken by the government, the
ministry may give a second thought to raising the import duty, according
to an official source.
Orissa Recommends Posco for Mine Allocation
In a major boost to Posco, Orissa government
has recommended the South Korean steel major's name for prospecting
licence (PL) over iron ore rich Khandadhar mines in Sundargarh district.
The state government, which had completed hearing of 227 applications
for the PL over Khandadhar reserve in October 2008, took over two months
for recommending the name of Posco. The other major competitors for
Khandadhar mines were - Kudremukh Iron Ore Ltd, Jindal Photo Ltd, Jindal
Strips Ltd, Bhusan Power and Steel Ltd, Uttam Galva Steels Ltd, SSL
Energy Limited, MSP M Metallics Ltd, Mesco Kalinga Steel Limited, Adunik
Metaliks Limited. The move come as a major boost for Posco which had
been struggling to set up its proposed 12 mtpa greenfield steel plant at
an investment of Rs 51,000 crore in Orissa.
Recession Impacts on RSP
The managing director of the Rourkela Steel
Plant (RSP) G N Singh said that global recession and its cascading
effect on the steel industry has had its impact on RSP but cost control
measures and production strategy had enabled it to withstand the crisis.
“Today, the company is going through one of the most crucial phases in
the glorious history of our steel plant with recession in the global
economy and its cascading effect. However by strategising its production
in response to the market demand and adopting various cost control
measures, the company has been able to withstand the crisis to a large
extent. The modernisation and expansion plan of RSP will continue
without any time and cost over runs. The modernisation plan envisages
capacity increase by more than double to 4.5 million tons of hot metal,
4.2 million tons of crude steel and 3.9 million tons of saleable steel
with establishment of fifth blast furnace. The MD appealed to the
workers to look for areas to control the cost of production and to
strive to ensure judicial use of resources and said with the whole
hearted support, commitment and dedication of each member, the RSP will
garner the strength to face any kind of challenge.
NMDC Cold to Essar Request for Additional Iron Ore
The National Mineral Development Corporation
Ltd (NMDC) has not shown interest to a request for additional 3.5
million tons (mt) of iron ore made by Essar group. The company chief
Shashi Ruia had written to Prime Minister Manmohan Singh in this
Talking on the matter, NMDC said the steel major has not been able to
lift the earmarked quantity for the current fiscal so far, therefore
there is no logic to supply it more. “Essar has not been able to lift
the allocated quantity (for 2008-09)... There is no logic for it to ask
for additional quantity,” the Navratna PSU has apprised the steel
ministry. The miner also said that mineral allocation to Essar's SEZ
unit would be considered deemed exports, which is not permissible under
the existing long-term agreement it has with the company. Earlier in his
letter to the prime minister, Ruia had sought his intervention for
allocation of 3.5 million tons of iron ore, reserved by NMDC for
exports, to feed Essar Steel's four million tons SEZ steel complex
coming up at a cost of about Rs 9,000 crore in Hajira next year.
“Availability of 3.5 million tons of iron ore would enable export of
minimum 2 million tons of value-added steel products, which would result
in additional foreign exchange earning of $1.5 billion,” Ruia had said.
At present, Essar Steel produces 4.6 million tons of steel in the
country and plans to scale up the capacity to 8.6 million tons by next
year. Post-capacity augmentation, its annual iron ore requirement would
be about 16 million tons.
While seeking more supply of iron ore from NMDC, Essar Steel had
expressed its willingness to compensate the PSU at par with the Free On
Board value being sought for export of iron ore to the Japanese and
South Korean steel mills. However, turning down the request, NMDC said
the offtake of iron ore earmarked for Essar Steel in the current fiscal
has declined to 45.8 lakh tons so far against the target of 69.5 lakh
tons, resulting in piling up of the mineral.
GMR Plans to Buy Coal Mine in Indonesia
GMR Group will buy a 100-150- million-ton
capacity coal mine in Indonesia to supply 1,500 megawatt power
generation capacity for 20 years. The deal is likely to be made within
"The company has plans to set up a 100-1500 megawatt coal fired thermal
power on the western coast and has already done the land survey in
Maharashtra and Gujarat," GNR Group chief financial officer Subba Rao
Amarthaluru said. Revealing details about the company's entry into the
power sector, he said, “The company would enhance its domestic power
generation capacity from 800 megawatts to 3,000 megawatts by 2013." The
company's 1,050-MW coal fired power plant in Orissa would be functional
by March 2010. While Amarthaluru did not speak about the group's future
investment plans, he nevertheless said the power sector has the
potential to deliver higher returns considering the EPC cost is down to
around Rs 4 crore per megawatt from the earlier Rs 5-6 crore. He added,
"Power is an essential commodity, you cannot postpone the demand.
Considering the huge demand of power in our country, this sector will
yield higher returns in the short term".
SEIL Ties up with Reliance Power
Mumbai-based Steel Exchange India Limited
(SEIL) has teamed up with Reliance Power to sell power from its
Ravulapalem unit in West Godavari district.
The company will sell the entire power from its plant to Reliance Power
at Rs 7 per unit. SEIL has a 150,000-ton capacity steel melting unit at
Ravulapalem. In the same unit, it has an 8 Mu gas-based power plant for
which it procures natural gas from GAIL. “Normally, the power is
utilised to run steel melting unit. But, due to the global recession, we
had stopped steel production activity since the last three months though
we are continuing with power generation," said Satish Kumar, managing
director of SEIL. SEIL was hopeful of starting production at the newly
acquired Gold Star mill at Kothavalasa near Visakhapatnam soon. The
company had acquired the 250,000-ton sponge iron mill of Gold Star Alloy
India Limited for about Rs 150 crore and is converting it into an
integrated plant. As part of this, SEIL recently imported 250,000 ton
capacity steel rolling mill equipment from Taiwan. “We are likely to
start the production at the rolling mill by June 2009 and later can take
up the steel melting shop work too,” he said.
BSP Set To Export Boiler Quality Plates
Bhilai Steel Plant (BSP) will export boiler
and other special quality plates. The company had been exporting mild,
high tensile and shipbuilding quality plates all over the world till
The first 1,350-ton order - of 8 to 40 mm boiler quality grades ASTM
A285 Grade C and ASTM A516 grade 70 - was produced at the plant. The
plates satisfy stringent impact test requirements and mechanical
properties after having undergone simulated heat treatment. BSP will now
be able to enter the European markets for boiler and pressure vessel
quality plates. The order is bound for Kuwait and will be exported via
Unitech to Sell Orissa Sponge Stakes
Realty major Unitech, promoted by Ramesh
Chandra and his family, is in talks with leading Indian and global steel
companies to sell their 25 percent stake in Orissa Sponge Iron and Steel
According to a report, Chandras, who had bought the stake in sometime in
2006 and 2007, are in talks with Korean steel major POSCO and
Delhi-based Bhushan steel. "The company is also in talks with two global
giants and two domestic companies," said a source. A POSCO spokesperson
denied to comment on transactions, while Neeraj Singhal, Managing
Director, Bhushan Steel also denied that the company was negotiating
with the Chandras. “It is an investment decision. They are not
interested in staying invested because steel prices are expected to be
under pressure,” he added.
The Chandras are expecting to close the deal at an enterprise value of
around Rs 2,000 crore, which means they expect Rs 500 crore for their
stake. The move is part of a series of measures Unitech, India's
second-largest realty company is taking to raise funds and reduce debt
of Rs 8,000 crore.
Tata Steel's Q3 Sales Decline 14%
Tata Steel Ltd, the world's
sixth-largest steel maker, reported steel sales of 1.07 million tons in
the December quarter from its Indian operations, down 14 percent from a
year ago. Sales in the fiscal third quarter were weighed down by the
economic slowdown, Tata Steel said in a statement. However, sales of
long products rose an annual 27 percent in the period. Crude steel
production during the quarter rose 17 percent to 1.50 million tons.
Saleable steel production was stagnant at 1.24 million tons, despite a
planned shutdown at its hot-strip mill.
Turkey Increases Import Duty
Turkey increased import duties by up to 8
percent on coated and uncoated strip mill products with effect from
January 1. The step will be benefited for local producers, as well as
exporting countries with which Turkey has a free trade agreement.
For hot rolled coil the import duty is now 13 percent, up from the
previous 5 percent; CRC goes up from 6 to 14 percent; pre-painted is 15
percent, up from the previous 12 percent; and for hot-dip galvanised the
duty rises to 15 percent from 14 percent. The HRC import duty for
re-rollers is five percent, up from the previous three percent.
Turkish producers and traders expect the move will be to the advantage
of Erdemir and other local producers. Chairman of Kayseri Metal Centre
(KMC), a Turkish steel service centre and cold roller, thinks Erdemir
will be the star of 2009 in Turkish flats market. Turkish market players
also said that countries such as Egypt, Tunisia and Morocco, which have
free trade agreements with Turkey, will increase their share of the
Turkish import market.
European mills are not expected to benefit because, Turkish sources say,
their prices are uncompetitive and European supply is not sufficient for
Turkey which imports about seven million tons of strip products
annually. Russia and Ukraine are among the largest suppliers. Traders
who have cargoes on the way to Turkey are expected to suffer losses in
the short term, sources say.
Danieli Bags $1 bln UAE Steel Plant Deal
Danieli, one of the leading foundry equipment
makers, won a $1 billion contract to expand a steel plant in Abu Dhabi.
“The deal was part of a $4.5 billion plan to expand our its Emirates
Steel Industries plant,” said Abu Dhabi state-owned General Holding Corp
(GHC) in a statement.
The company will fetch 70 percent finance through borrowing for the
deal, GHC said, adding that it had approached banks and financial
institutions for loan. The company did not reveal the further details.
The second-phase expansion of Emirates Steel Industries will increase
capacity to 3 million tons per year from the current 2 million tons, the
"Emirates Steel Industries will become, on completion of the current
expansion projects within four years, one of the largest steel producers
in the region with total investments exceeding $4.5 billion," Sheikh
Hamed bin Zayed al-Nahayan, chairman of GHC said.
"The agreement signed reflects the strategy of Abu Dhabi to promote
basic industries and transforming the emirate into a regional industrial
hub." said al-Nahayan. The expansion includes building a new direct
reduction plant, a steel melt shop with continuous casting for
production of steel billets and beam blanks as well as a steel rolling
mill. Work would start immediately and full commercial production was
expected to start by the first quarter of 2011.
Infrastructure and Housing to Boost UAE Steel Demand in 2009
Infrastructure development and housing will
boost the demand for steel in the UAE and the region in 2009, say
experts. They also predicted that 2009 will not be the same as 2008.
According to Shyam Bhatia, Chairman of Alam Steel, one of the major
driving forces in 2009 will be the exit of non-traders. He said, "As the
demand for steel increased in 2008, there was a flurry of activity with
non-steel traders entering the market, resulting in a glut in the UAE
market. Today we have stocks available that far exceed the local
requirement." Once the non-steel trader exit the market, regular traders
will be able to sell as before depending on the need of ongoing
projects, said Bhatia. According to some analysts, by the end of the
second quarter, the industry will get a clear picture on how the
construction industry will perform during the rest of the year. “With
the slowdown in ongoing construction projects and the unclear picture
about new projects, it will be difficult to forecast. By the end of
April, we will get a clear picture,” said an analyst. Riad Bsaibes,
Chief Operating Officer - Corporate at Amana Contracting and Steel
Buildings said that the demand will get some boost from various fiscal
packages being announced by governments across the world. According to
Bsaibes, a large part of the amount of the packages will be spent on
infrastructure and this will consume a good amount of the globe steel
inventory. The pace of this consumption coupled with the reduced
production rates will determine the supply-demand dynamics of the
industry and the resulting price points. The other main drivers for the
steel industry in 2009 will be current high inventories, the cost of
iron ore and oil, and the effect of the various fiscal stimulus packages
being announced across the world. Bsaibes said, “Due to the dramatic
change in the supply and demand chain in the industry over the last 6
months, huge amount of steel inventory exist in the supply chain across
the globe. This has naturally led to depressed prices. The ability to
absorb this inventory will depend on the industry's coordinated
reduction of supply coupled with the ability to consume the current
It may be pointed out that steel, which was priced AED 3,200 per ton
during the first quarter of 2008, increased to AED 4,000 during the
second quarter and further increased to AED 5,500 during the third
before dropping to AED 2,400 in the fourth quarter of 2008. Meanwhile,
rebar prices continue to remain stable at around AED 1,850 to AED 1,900
per ton for eighth week in a row. Prices had hit a low of AED 1,500 in
November 2009 following an oversupply and a slump in global demand. This
has resulted in an increase in orders being placed.
Ezz Steel Records 56% Increase in Profits for 9 Months Of 2008
Egypt's Ezz Steel posted net pretax
profit of EGP 3.4 billion in the first 9 months of 2008, a 56 percent
increase over the period of 2007.
Paul Chekaiban MD of Ezz Steel said that record prices and demand for
steel products had driven the firm's growth. He said, "This has enabled
us to build a robust balance sheet, which will help us to effectively
confront the global slowdown that has taken place since the close of the
Egypt's largest steel producer said that it had cut production in recent
months as the global slowdown hampered consumption in key industries
such as construction and automotives. As a percentage of total sales,
exports have shrunk this year, with flat product exports dipping to 37
percent from 47 percent and long product exports dipping to 2 percent
from 11 percent.
Jazeera Steel Completes Hot Trial of Merchant Bar Mill
Al Jazeera Steel Products Co completed
hot trials of its newly constructed merchant bar Mill ahead of a planned
start up early in the second quarter of this year. “We expect the demand
will increase, especially in the new year after most of the units close
their accounts for the year 2008. We are quite hopeful under the present
circumstances and with the export demand outside GCC, we should be in a
comfortable position in Q1 of 2009. Furthermore, from Q2 onwards we
expect normality in demand in the GCC region.” Chairman of Al Jazeera
Steel Products said. “We are thus quite confident of a very reasonable
performance both in volume and value in 2009.”
According to the Chairman, the first three quarters of 2008 were highly
profitable for the company. However, in Q4 the whole steel business
suffered a significant downward trend both in demand and prices.
Further, with the IMF scaling down economic growth forecasts for 2009,
most steel plants are now operating at less than 50 per cent of their
capacity, while several units in the GCC have either announced closures
or are laying off staff. He said that “We in Jazeera however have tided
over these problems in Q4 and expect to show a reasonable profit for the
year 2008. In comparison to 2007 our volumes have registered a 22
percent growth and turnover by 75 percent.”
He further noted, was going ahead with its capital expenditure planning
for its projects. The hot trials of its merchant bar mill was made
possible through the installation of a synthetic/substitute natural gas
system for want of natural gas supply, he said, while urging the
government to consider lowering the price of SNG to help offset the
additional costs incurred by the company.
SABIC to Continue Expansion Plans
Saudi Basic Industries Corporation (SABIC)
denied that it was closing steel plants and said that it hasn't canceled
projects due to weakening demand.
Mohammed Al Mady CEO of SABIC said, “It won't change its current plans
and will go ahead with its domestic and overseas projects.” Meanwhile,
SABIC is expected to report a 48% plunge in its 2008 fourth quarter net
profit to SAR 3.6 billion from SAR6.86 billion in 2007.
POSCO CEO Quits as Results Down
South Korean steel major
POSCO's chief executive officer (CEO) Lee Ku Taek has resigned as the
company posted a fourth quarter profit that missed analysts' estimates
after the global recession curbed demand from auto makers and builders.
POSCO recorded net income 721 billion won (about Rs2,558 crore) in the
fourth quarter ended 31 December, compared with 713 billion won a year
ago. Lee, who will step down next month after a successor is appointed,
said POSCO needs young and new leadership to core the crisis. It looks
like demand in December from construction to auto makers to appliance
makers was lower than what a lot of people were expecting, said an
For the quarter, sales gained 53 percent to 8.31 trillion won from 5.43
trillion won a year earlier. Operating profit, or sales minus the cost
of goods sold and administrative expenses, rose 60 percent to 1.40
trillion won from 875 billion won. Global steel demand growth, including
in Russia, India and West Asia, may stagnate this year, the first time
since 1998, Posco said. Chief executive Lee will depart on 27 February
when a successor will be announced, the company said. During Lee's
tenure, which started from 2003 and was to last until February 2010,
POSCO's shares more than trebled, outperforming the benchmark index that
The likely candidates to succeed Lee include Yoon Seok Man, president of
the steel maker, and Chung Joon Yang, head of unit Posco Engineering and
Construction Co., according to a report. Crude steel production for 2009
may be between 29 million tonnes (mt) and 32mt, a drop of as much as 12%
from 2008, the company said on Thursda.
Nippon Steel to Cut Output
Nippon Steel Corp, the
world's second-biggest steel maker, is likely to reduce output further
as it struggles with weak demand and pressures for price cuts from
battered auto makers in the downturn. Referring to its previous plan for
production cut in its second half ending March 2009, a company official
said, “Nippon Steel said in November it would slash output by 2
million-2.2 million tons in October-March, doubling the reduction size
from its initial plan unveiled in October.” Nippon Steel could announce
details of the output cut by February or March once the figure is set,
the official added, without elaborating. Japanese carmaker Toyota Motor
Corp is planning to source car grade steel from South Korea's Posco in a
bid to cut output costs. A deal with Posco would be a blow to Nippon
Steel and rival JFE Steel Corp, as Toyota has so far mainly relied on
Japanese steel makers for its local car production. Recently, the Nikkei
said Toyota planned to ask Nippon Steel and other steel firms for a
price cut of about 30 percent in light of slower steel and vehicle
demand. The deepening global downturn has hit sales in steel-consuming
industries from auto to home appliances. In November, ArcelorMittal, the
world's largest steel maker, doubled its output cut to some 30 percent.
In December, Posco, the world's No. 4 steel maker, announced its first
ever output cut and it might cut production further in the current
Thainox to Stop Output for 1 Month
Thailand's largest stainless steel producer, has planned to stop
production for one month due to weak global demand. The company hopes to
carry out maintenance work and save costs at its plant in Rayong during
"However, during this period, the customers will still be able to place
an order and we continue to deliver the finished products as usual as
the Bangkok office and other departments not directly related to
production continue to work," said the company.
Thainox, Southeast Asia's largest stainless steel maker, has an annual
capacity of 300,000 tons of stainless steel, used in the construction,
automobile and household sectors. Around 60 percent of its output is
sold on the domestic market and the rest exported, according to the
company. Thainox gets its raw materials, including hot-rolled coils,
Vietnam Coal Exports down by 59.9% in Oct
Vietnam's coal exports
declined by 59.9 percent to 1.09 million tons (mt) in October 2008
compared with the same month last year with an average FOB export price
of $ 107.86 which was up by 258.93 percent.
Consequently, the cumulative exports during January to October 2008 also
dropped by 31 percent to 18.17 mt compared to the corresponding period
last year with an average FOB export price of $69.83, which appreciated
by 125.54 percent, as stated by Tex Report data. Coal exports by Vietnam
in October 2008 slipped to 1.09 million tons (mt), down by 59.9 percent
compared to the same month last year with an average FOB export price of
$107.86 which was up by 258.93 percent.
Japanese October Stainless Steel Output Down by 1% YoY
Japanese stainless steel
reached 268,509 tons in October 2008, down by 1 percent YoY as against
274,429 tons of the same time 2007.
According to a report, amongst the production, ferritic stainless steel
production accounted for 132,094 tons, nickel based stainless steel
accounted 136,415 tons. In addition, special stainless steel accounted
for 6,896 tons.
Japanese Crude Steel Output May Hit 21.1 Mt in Q4
Japan's Ministry of
Economy, Trade and Industry forecast domestic crude steel production at
21.1 million tons (mt) in fourth quarter, down 31.6 percent from the
corresponding period last year and 22 percent lower from the third
Tex Report said that the estimate means a low level for Japan's fourth
quarter crude steel production for the first time in 39 years. The
ministry said that demand for ordinary steel products at 18,070,000
tons, down 20.2 percent year-on-year (YoY) and 8.9 percent quarter on
quarter (QoQ). Of this, domestic demand is likely to account for
13,810,000 tons, down 14.3 percent YoY and 8.1 percent QoQ.
Demand for specialty steel products is estimated to total 35, 90,000
tons, down 37.7 percent YoY and 24.7 percent QoQ. Domestic demand
accounts for 26, 00,000 tons, down 37.6 percent YoY and 24.5 percent QoQ.
Tswana Steel Shuts Down
Tswana Steel has decided to
close its steel plant and at least 250 employees have lost their jobs.
“The company's operating costs had increased considerably, while
revenues had dropped. This was mainly due to increases in the cost of
raw materials and declines in the price of steel.” said Jemister
Chininga MD of Tswana Steel.
According to Chininga the company is still negotiating with some
companies in South Africa to supply them with material. However he added
that the retrenchment of workers was a last resort as they had
negotiated for an unpaid leave but the workers did not buy the idea.
Meanwhile, the company's workers are complaining that they have not been
given their retrenchment packages as promised. Workers said that they
were given retrenchment letters and told that the package included
severance benefit, leave and notice payment, which would be paid by the
end of December. But they said only notice payment has been paid.
Vietnam to Import 5mt of Steel in 2009
Vietnam is set to import
about 5 million tons of steel to meet domestic demand which is estimated
at 10.5 million tons in 2009. The demand would be increased by the
construction, auto and other industries.
The Ministry of Industry and Trade expects the demand for construction
sector in the country and for export would be 4.95 million tons but the
industry had to import 800,000 tons to meet it as local steel mills
would only supply about 4.15 million tons. The ministry has asked local
producers and investors to boost steel production and expedite iron ore
mining projects that are set to commence operations this year in order
to address the imbalance in the local steel market.
The country imported 7.92 million tons of steel worth US$6.57 billion
last year, including steel for construction and auto industries,
according to the General Statistics Office. The steel imports dropped
nearly 2 percent in volume but increased 28.56 percent in value
year-on-year. The industry faced a minus growth last year as it consumed
and exported about 4.45 million tons, a drop of 300,000 tons compared to
2007, according to the Vietnam Steel Association. The association said
the drop was due to a decline in local demand, mainly from construction
firms hit seriously by the global economic downturn. It said the demand
would be affected by a hike in value added tax which took effect on
January 1, 2009.
The tax has increased to 10 from 5 percent, raising retail steel prices
by more than VND500,000 or $28.57 a ton, according to the association
which asked the government to defer the hike until after July.
China Steel Demand may be 500 mt tons in 2009 Say Analysts
Chinese steel demand in
2009 will be reached about 500 million tons (mt), said Yang Jianlong,
Chief of the Economy Research Office of South China Metal Transaction
Center in Guangzhou.
Rong Gang, Chief Researcher with Lange Steel Information Study Center
also holds same opinion and said that crude steel production may be
about 500 million tons next year. Rong said steel prices in 2009 would
swing in the beginning, then go up slightly and become relative stable
in the final. He added that "The effect of the policy of expanding
domestic demand will probably come out in the second half of next year.
China Allocates 2009 Coal Coke EL to 37 Exporters
The Chinese government has
issued the first installment of export licence (EL) for 5,780,000 tons
of coal coke in 2009. The licence was allotted to 37 exporters of
general trade who had been selected in advance. According to a Tex
Report data, these companies include some names like Sinochemk
International Corp. which got EL for 440,000 tons, Sinosteel Corp. which
got EL for 330,000 tons, and China Minmetals Corp. which got EL for
400,000 tons, China Coal & Coke Holding Ltd. which got EL for 260,000
Baosteel to list group for 10 year plan
Baosteel Group, China's largest steelmaker, plans to list its
entire group and buy domestic competitors as part of a 10-year plan,
said Xu Lejiang, chairman of Baosteel Group.
According to Lejiang, merger and acquisition of the domestic steel
companies and listing the group are the strategic development goals of
the company in the next 10 years." Cast with negative effects by the
spreading world financial crisis, China's steel industry has posted
across the board monthly loss in the Q4. The market has not recovered
yet despite start up of the national rescue package," he added.
Baosteel will involve in domestic merger and acquisition on the basis of
restructuring Bayi Steel and Guangdong Steel, insist in absolute
capacity elimination and creating premium products and take part in
development of the downstream industries in the chain to make
contribution to gaining bigger presence in the global scenario.
Second, it will further improve the management mode as a super size
enterprise better governance system in the subsidiaries with the purpose
of realizing overall listing.
Additionally, it aims at obtaining more complete technical innovative
capability meaning to create some world influential know how; looks to
mutual development of the steel business and the side lines for sharper
competitive edge of the five leading sectors; it also wants to be built
into a environment friendly and resource economical clean production
Starting construction in December 1978, Baosteel has aggregately made
pig iron, crude steel and steel product of 228 million tonnes, 272
million tonnes and 229 million tonnes respectively with cumulative sales
income and pretax profit coming to CNY 1330 billion and CNY 237.7
billion. It shipped out billet and products of over 30 million tonnes in
total earning USD 16 billion from export.
China Exports 11.9 mt Coke during Jan-Nov
China's coke exports
accounted for 11.90 million tons (mt) of during January to November in
2008, down 16.9 percent year-on-year (YoY) worth $5.71 billion, up 110
November exports stood at 0.324 mt, down 72.4 percent YoY or 38.4
percent month-on-month, the lowest monthly export level in 2008,
according to a report. The average coke export price was $479.7 per ton
during the period, up 150 percent YoY. After exporters rushed to ship
materials in August, September coke exports started reducing. Exports
fell sharply during October-November as China imposed a coke export tax
of 40 percent. Volumes in October shrank further to 0.526 mt, a massive
YoY downturn of 63 percent. During January to November, China coke
exports by general trade were recorded at 11.56 mt - down 17.4 percent
YoY - accounting for 97.1 percent of China's total exports during the
China Approves Package for Steel and Auto Sector
The mid of recessionary
market, Chinese steel producers and auto makers would get some relief.
China, the world's biggest steel producer and second largest auto maker,
will implement tax cuts and offfer subsidies as part of measures to help
as the economy slows. The Chinese government will ban expansion of
steel-making expansion and cut sales tax on vehicles with engines
smaller than 1.6 liters to 5 percent between January 20 to December 31,
said the State Council in a statement. The government will encourage
mergers and acquisitions in both sectors, the statement said.
The Chinese State Council will not allow any new steel mill expansion
projects and try to help stabilize the domestic and global steel market.
China vowed to stop its steel mills from expanding further as industry
figures showed the sector carrying massive overcapacity which risks
swamping domestic and foreign markets. The State Council said that it
would allow no new steel capacity expansion projects and would adopt a
flexible tax policy on steel exports to stabilize China's share of the
global steel market. According to China Iron and Steel Association that
Chinese steel capacity reached 660 million tons at the end of 2008
although CISA officials later told Reuters the proper figure should be
616 million tons.
China will also adopt flexible steel export taxes to maintain the
industry's share of the international market, today's government
statement said. China's biggest mills posted combined losses in the
fourth quarter as steel prices fell faster than raw material prices.
Baoshan Iron & Steel Co. may post its first quarterly loss when it
reports in March.
The government will give 5 billion yuan in subsidies from March 1 to
December 31 to farmers to upgrade light vehicles or buy small passenger
cars with engines less than 1.3 liters, the statement said. The
government also earmarked 10 billion yuan for technological innovation
and the development of alternative fuel cars and components over the
next three years.
China is spending $584 billion to stimulate its economy through
infrastructure projects as its faces the weakest economic expansion
since 1990 after trade growth collapsed because of the global recession.
Waning demand has reduced China's car sales and cut steel prices,
causing losses among the major mills. “The impact on consumption and on
these industries remains unclear because of lack of details about how it
will be executed," said an analyst at Daiwa Associate Holdings Ltd.
"restructuring in the auto industry will take time."
China Set to Raise Coal Output by 30% by 2015
China has set to increase
its coal production by about 30 percent to meet its energy needs.
According to Hu Cunzhi chief planner of land and resources, said that
the country plans to increase annual production to more than 3.3 billion
tons by 2015. According to the ministry, the output planning, approved
by the State Council is up from the 2.54 billion tons in produced 2007.
While production is expected to lag demand growth, the planners forecast
China's coal consumption to surpass 3.5 billion tons by 2020. China will
further increase efforts on coal exploration, and plan to raise coal
reserves by 210-250 billion tons in 2008-2010, and 500 billion tons in
2011-2015. According to statistics, China identified 286.2 billion tons
of coal resources in the period from 2001 to 2007.
Chinese Stainless Steel Production may Rise in 2009
China's stainless steel
companies are planning to increase production for January 2009, with the
market for nickel stabilising.
According to a report, Taigang mill may continue to follow the orders
for production arrangement. However, Baosteel could moderately increase
the production, which has actually been started from December 2008,
while ZPSS is said to cut output further. According the report, Baosteel
Stainless production plan for 2009 could be stood at 1.1 million tons
(mt), down 8.3 percent year-on-year from 1.2 mt. The company must
operate at its full scale to meet this target, and possibly the
production will go up in the next periods and weigh on the market
Taigang Stainless would produce 2.02 million tons in 2009, down by 8.2
percent year-n-year from 2.2 million tons. In early 2008, Taigang
Stainless had set to produce 2.4 million tons, but the target was
adjusted later to get in line with the market changes.
EC Imposes Temporary Duty on Steel Rods from China, Moldova
The European Commission
(EC) will impose temporary duties on steel wire rods from China and
Moldova. The duty will be about 25 percent and 4 percent on China and
Moldova respectively. According to a report, the EC was still
considering whether permanent duties were necessary. If it does on
permanent duties, it must seek approval from 27 EU member governments.
The move comes in response to a complaint from the European
Confederation of Iron & Steel Industries, which said Chinese and
Moldovan producers were dumping products into the EU at prices below the
cost of production. EU imported about 713 million euros worth of wire
rods from these two countries in 2007.
US Steel Production may down by 35%
US steel makers
have landed in a critical time, where they are facing some harsh reality
like dwindling orders, production cuts and layoffs. The steel industry
had been enjoyed its heydays earlier in 2008 , as surging demand from
China and other countries, coupled with soaring prices for materials
used in steel making, produced the most lucrative market for the metal
in more than 60 years. Analysts forecast production in 2009 to down 35
percent year-on-year and revenues to drop 35 percent or more.
John Anton, a steel economist with IHS Global Insight, said that US
steel production to come down in 2009 and the steel companies will be
lucky to make about 65 percent as much as they did in 2008. Revenues
could fall by 35 to 40 percent and pre slowdown production levels may
not return until 2011. Anton further said that the US steel industry has
been particularly hard hit by a decline in the number of new houses
being built after multiple years of excessive construction. While little
steel is used in new residences, they bring shopping centers, hospitals
and schools, buildings made from larger amounts of the metal.
The US dollar strengthened, dampening exports and steel distributors
liquidated their inventories. The drop in demand has pulled down prices.
Scrap steel, used by steel mills, recently slid to about USD 90 per
gross ton after trading around USD 550 in July 2008. The metal, from
junked cars and other refuse, is considered a market indicator. Analysts
said that hot rolled sheet steel dropped to about USD 785 per ton a few
weeks ago from USD 1,080 in July 2008. It had reached that lofty level
after surging from USD 570 at the end of 2007. US steel mills are now
probably operating at less than half their capacity, down from full
capacity in August.
They added that the domestic industry has changed drastically since the
1970s and 1980s, when it collapsed partly due to competition from
imported steel and broader economic problems. US mills have become
consolidated among relatively few international players. In North
America, about 40 percent of steel demand comes from the devastated
construction market, while 20 percent comes from hard hit automakers and
another 20 percent comes from industrial equipment makers.
Nucor Delays Commencement of Galvanizing Plant
Nucor Corp., the largest US
steelmaker, is delaying the start of production at a $150 million
galvanized-products plant completed in the fourth quarter because of a
drop in demand. The facility can produce 500,000 tons of galvanized
steel a year using sheets produced at Nucor's four existing mills in
Decatur. Charlotte, North Carolina-based Nucor planned to spend $150
million to build the new mill. The company was scheduled to start it up
at the end of 2008. But, because of market conditions the plant only did
cold trials. US steelmakers have announced capacity shutdowns and job
cuts in the past two months to cope with declining demand from
automakers and builders caused by the global economic slump. US steel
demand fell to an estimated 104 million tons last year, from 120.5
million in 2007. AK Steel Holding Corp., the fourth-largest US-based
steelmaker by market value, said it began laying off some of its 1,500
salaried workers because of declining demand. US Steel Corp., the
largest U.S.-based steelmaker by 2007 sales, announced plans on Dec. 2
to cut output at three facilities because of a slump in demand, leaving
about 3,500 workers temporarily laid off. That move followed a Nov. 13
announcement that the company will eliminate 677 jobs in North America
amid a 'dramatic downturn' in the economy. The average price for hot-dip
galvanized steel coil in the US fell to $729 per short ton as of Jan. 4
from $788 on Dec. 7. Capacity use among US makers of raw steel fell to
43 percent as of Dec. 20, down from 88 percent a year earlier.
ArcelorMittal Halts Bosnia Plant
ArcelorMittal, the world's
biggest steelmaker, suspended production at its plant in Bosnia because
of a serious reduction in gas supply after Russia's OAO Gazprom cut off
supplies to Europe through Ukraine. The coke plant will continue to
operate at a higher level to generate more coke-oven gas and compensate
for the natural-gas shortage, spokesman Giles Read said. The blast
furnace at the plant in Zenica is being placed into maintenance mode.
Gazprom, the Russian monopoly that provides a quarter of Europe's gas,
cut supplies after a dispute with Ukraine over prices and debt.
Meanwhile, the company along with ThyssenKrupp AG, Europe's biggest
steelmakers, may write down the value of assets in coming quarters after
demand for the metal declined. ArcelorMittal acquired several assets
during the past 12 months, many of which were purchased at the time of
high raw material and steel prices. Thyssenkrupp may write down between
400 million euros ($545 million) and 800 million euros last quarter.
Steel demand isn't set to recover until the second half of the year,
Fitch Ratings said, as producers cut output, jobs and investment because
of slumping global economic growth. Luxembourg-based ArcelorMittal has
unveiled plans to cut as many as 9,000 jobs and slash production by more
than 30 percent."
US Steel Shuts Texas Tubular Project
US Steel Corp.,
the largest US- based steelmaker by 2007 sales, said it will stop making
some tubular products at a subsidiary in Texas, affecting 50 workers. US
Steel Tubular Products Inc. shut its drawn-over- mandrel tubular
business and will take a pretax charge of about $25 million in the
fourth quarter of 2008, Pittsburgh-based U.S. Steel said in a statement.
Drawn-over-mandrel products are welded tubes drawn and shaped to exact
specifications. The cuts follow US Steel's elimination of more than
4,000 North American jobs announced on Nov. 13 and Dec. 2 amid a decline
in demand. Capacity use among U.S. makers of raw steel fell to 43
percent as of Dec. 20, down from 88 percent a year earlier. Sales of all
tubular-steel products accounted for $420 million, or 29 percent, of the
company's total operating revenue of $1.46 billion in the third quarter.
Western Canadian Coal Cuts Output at 2 Mines
Western Canadian Coal Corp
will reduce production at two mines in British Columbia due to rising
inventory levels. Customers have been delaying shipments and coal
markets have been uncertain.
According to a report, the company may slash operation from May 18 at
Wolverine mine, which primarily produces hard coking coal. The mine is
currently producing 1.6 million tons (mt) of coal per annum. Western
Canadian Coal said the Brule mine, which produces low volatile PCI coal,
expects to be operating at an annual run rate of around 7,50,000 tons at
the end of January, down from 1.3 mt currently.
Fortescue Metals Ships 15 mt
Group, Australia's third largest iron ore producer, has shipped its 15
million ton (mt) of iron ore in 2008. Fortescue Executive Director
Operations Graeme Rowley said," The mine, rail and port operations teams
worked hard throughout 2008 to achieve the 15 million ton milestone as
the company continues to ramp-ups its operations." “In December we
shipped 2.6 mt which is the highest monthly rate achieved to date. The
fourth quarter result was 6.3mt shipped, noting that this period
included a 10 day port shut down to commission the second wharf. In
addition, the tons mined at Cloudbreak during 2008 totaled 19.5 mt. just
1 percent less than our target." Fortescue exported more than 14.8mt of
high quality iron ore in 2008, after loading its First Ore on Ship on
May 15, 2008. Fortescue also shipped 60,000 tons for Atlas Iron in
December, which marked the historic first shipment of iron ore by a
third party from a Pilbara port. “We are continuing to our operations
and will increase mine, rail and port tonnage through 2009.
Commissioning of the company's desand plant at the Cloudbreak mine site
is proceeding as planned, which will ensure Fortescue's ore
specification in quality and quantity is maintained,” Rowley said.
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