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Dear Readers,

Prices of not only steel but of all the industrial as well as consumer products are rising and I feel that even the government has no clue on how to keep them under control. One of the obvious reasons of this uncontrolled rise is the hike in international oil prices. A rise in the cost of transport will naturally make all the commodities costlier, isn't it?
Apart from the above reason, steel price rise can be attributed to other factors too. The prices of raw materials such as met coke, iron ore, ferro alloys have increased to a substantial level. This, coupled with higher transport cost, will have a great impact on price and have pulled the price curve upwards. These factors may not subside in a short span of time and thus, in my opinion, steel prices also may not come down easily. But why the prices of iron ore, met coke, ferro alloys etc. have gone up? May be continued strong demand from China. Even the regions like Indian sub continent, SE Asia and gulf are showing signs of steep rise in steel demand and this will also have some effect on steel pricing structure.
Thus you will agree that steel pricing is a global phenomenon and has got nothing to do with situation in any single country (probably with an exception of China). What I mean is Indian domestic prices have rose because now Indian industry is thickly linked with the global one and thus can not have different steel prices than rest of the world. I do not believe that putting ban or tax on steel exports will soften domestic steel prices in.
India or for that matter, anywhere in the world. This price rise has nothing to do with shortage or non availability of steel. Indian government has already put export tax on iron ore in the past. Has this move helped to reduce domestic steel prices?
If government wants to reduce the burden on steel community, they may think of further reducing the excise duty, making finance available at special interest for projects in the areas of beneficiation, pelletization etc. This can ease out the pressure on the industry to some extent.

 D.A.Chandekar
Editor & CEO

 

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Ispat Inds looks at 10 mt steel capacity by 2014   

Integrated private sector manufacturer Ispat Industries is planning to raise its steel capacity to 10 million tonne by 2013-14, MD Vinod Mittal said. Ispat currently produces 3.6 million tonne steel a year and it has announced its plans to take its capacity to five million tonne in the next two years. “We have drawn up plans internally to raise our steel capacity to 10 million tonne, which we expect to meet by 2013-14,” Mittal said, on the sidelines of an extraordinary general meeting of the company.
The company has signed a memorandum of understanding with the Jharkhand government for an integrated steel plant with a capacity of 2.8 million tonne. “The 10 million tonne capacity will be achieved by increasing the capacity of our Dolvi plant to five million tonne and setting up a new plant in Jharkhand which will initially have a capacity of 2.8 million tonne, expandable to five million tonne later,” Mittal said. Apart from the capacity hike, Ispat Industries' expansion plan involves setting up a one-million-tonne coke oven plant in Dolvi, a 4.5-million-tonne pellet plant in Vishakhapatnam and enhancing the hot-rolled coil capacity of the Dolvi plant from three million tonne to 3.6 million tonne. “We expect the project to get executed within the next two years,” Anil Sureka, CFO, said. Once the projects go on stream, the company's EBITDA margins will double from 17 per cent now, Sureka said. The work on the green-field project at Jharkhand will start once the company gets iron-ore mines there.

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India may scrap import duty 

India, battling spiraling prices of commodities, asked steelmakers to lower prices within a month. “Prices must come down by 10 percent-20 percent,'' Commerce Secretary GK Pillai said. The government may scrap import duty on steel, impose a tax on steel-product exports and lower excise duty if domestic prices of the alloy don't recede, he said. “All of these measures are on the table,'' Pillai said. Meanwhile the country, the second-largest iron-ore supplier to China, said it won't ban exports of the steelmaking ingredient as a measure to curb inflation. “There is no such proposal,” Steel Secretary R.S. Pandey told reporters in New Delhi after a meeting with iron ore miners. The government has asked Sesa Goa Ltd. and other iron ore producers to ``help'' it contain inflation that's running at 13- month high, Pandey said.

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JSW not to hurt by withdrawal of DEPB

JSW Steel Ltd does not expect to be hurt by the withdrawal of tax refund schemes for exports as it sees benefits from other schemes making up, a senior official said. The tax refund scheme for exporters, Duty Entitlement Pass Book or DEPB, was withdrawn last week for a range of products including steel, cement, manganese, ferro-chrome and non-basmati rice.
"Basically, DEPB will affect, but there are other schemes like the Duty Free Import Authorization (DFIA), which can help," MVS Sheshagiri Rao, director of finance, said over telephone. JSW exports around 600,000 tonnes of steel annually, which accounts for 30 percent of its total revenue, Rao said. The company was entitled to the DFIA benefit, which will enable it to import raw materials such as zinc without paying duties, he said.
"If you take that into account, it would be equal or more than the DEPB benefit. However, unlike DEPB, which is tradable, DFIA is only for actual buyers." "And, for products, which doesn't have demand in India, we can still continue to export," he added. Last week, steel makers also agreed to curtail exports to ensure adequate domestic supplies but declined to cut prices because of rising input costs. "As on date, I'm not seeing any impact, unless the government takes some more measures," he said.

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Govt to go all-out to contain steel prices

Alarmed over the 25 per cent rise in steel prices during the last three months, the government will go all-out to contain the prices. However, the steel industry has said that price regulation would affect growth. “Steel prices have risen considerably, particularly during the last three months. This is a matter of concern. All possible measures will be considered to address the issue,” Steel Secretary Raghav Sharan Pandey said.
Prices of products like TMT bars, used by the common man, and flat steel have spiralled upward. “Steel makers have cited rising raw material prices as well as the rising international prices as reasons for such an increase. However, there is a need to contain prices which is possible by augmenting supplies through containment of exports,” Pandey said. He said that Steel Minister Ram Vilas Paswan has already told Parliament that the possibility of having a regulator for the sector would also be considered. However, he said it was also necessary that the prices of steel as well as inputs were contained.
In a recent letter to Prime Minister Manmohan Singh, Paswan suggested that the government should consider imposing 10 per cent export duty on steel and reclassify it as an essential commodity. Paswan also favoured withdrawing the Duty Entitlement Pass Book benefits for steel exports, which, if implemented, would likely hit the bottomlines of all steel majors by about Rs 600 crore. There is also a concern that rising steel prices is adversely affecting the wholesale price index-based inflation. The rate of inflation, calculated on the basis of this index, stands at 5.92 per cent. Pandey said the steel minister had recently suggested to Prime Minister Manmohan Singh to bring the steel under Essential Commodities Act. The minister also wanted a 10 per cent export duty on steel in tandem with abolition of duty on the products. The industry, however, is resisting the government's move for a regulator.
“The government should keep in mind that any proposal to appoint a regulator will open the Pandora's Box and there will be many demands to appoint a regulator for other commodities. We should not place ourselves in a situation where we go back to a controlled regime,” Indian Steel Alliance President Moosa Raza said. “Even state-owned NMDC raised contract prices by 50 per cent last year. Coke from China has hit the ceiling with a price of $523,” he said in the letter of the Prime Minister.

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Essar in race to buy Arcelor Mittal`s US mill  

Essar Steel has emerged as one of the potential suitors for Sparrows Point mill of Arcelor Mittal, with leading Russian steelmakers. “The most prominent suitors continue to be Russian producers, although Essar Group also has been mentioned prominently, according to market sources,” the Metal Bulletin (MB) reported, adding that Essar has been the most recent company to express interest and has begun negotiations with Luxembourg-based Arcelor Mittal.
JSC Severstal, Evraz Group and OJSC Novolipetsk Steel are all considered in the running for the plant, which the US Justice Department ordered Arcelor Mittal to divest as part of anti-trust concerns related to tinplate production in the eastern United States.
“Essar has been in, and so have Severstal and Evraz,” one industry source with knowledge of the situation said. “They all want it for the same reason: They see this market as a good one,” MB said. When contacted a Essar Steel spokesman said the company was open to good investment opportunities, but would not like to comment on any specific proposal.
Essar already owns Algoma Steel, Sault Ste Marie, Ontario, and the Minnesota Steel Industries operations that are set to begin construction this spring on the Minnesota Iron Range.

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TISCO Brews Price Hike for Stainless Steel Products in Apr  

It is reported that Taiyuan Iron & Steel (Group) Co., Ltd. (TISCO) plans to raise Apr prices for austenitic stainless steel to cope with high nickel price. The steelmaker's CR austenitic stainless steel price stood at RMB32100/ton in Mar yet the price is expected to rise by RMB1600-2000/ton in Apr. It pulled up price by RMB300/ton for ferritic stainless steel in March in response to ferrochrome price advance.

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Hebei's Iron Ore Imports Shoot up    

Steel capacity in Hebei Province maintained strong expansion in Feb, boosted by robust demand both at home and abroad early this year. Despite iron ore price jump, the province's iron ore imports kept swift growth to 3.38 million tons, down 4.2% from Jan yet up 23.4% over last Feb. Total value amounted to US$426.06 million, down 5.6% month on month but up 116% year on year. Average price recorded US$125.9/ton, down US$2/ton month on month yet up US$53.9/ton year on year. Australia and Brazil contributed as many as 62% of the total imports. Among the 24 enterprises that are qualified for imports, 13 eyed imports increasing to different extents.

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Iron Ore Stockpiles at China's Major Ports 

Till the close of last week iron ore stockpiles at China's 23 major ports rose to 56.44mln tons, out of which Indian spot ore climbed to 17.1mln tons. Most ports have seen thin trade during the week coupled with less offtake volume. The traders are holding out for further price hike while steel mills are sitting on the fence in light of steep raw material costs. Meanwhile, Indian exporters continue to drive up the offer price, with the import price for Fe63.5% fines from India firms at US$145-150/ton fob and US$195-200/ton cif respectively.
Most market participants believe the price rally of spot ore import has almost run out of steam as the steel market has faltered across the board and long products price even dips lower. Currently, the offtake price for benchmark Fe 63.5% Indian ore fine prevails at RMB 1550-1590/ton (FOV), while spot prices for grades of Fe 58% and Fe 62.5% advances to RMB 1160-1180/ton (FOV) and RMB 1480/ton (FOV) respectively. By contrary, the transaction price for Fe64.5% Brazilian ore lump reaches RMB 1640/ton (FOV), and Fe 66% Brazilian ore concentrate at RMB 1600/ton (FOV).

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HRC Market Still Under Downward Adjustment Pressure

Li Zhongshuang, General Manager of Shanghai Ruikun Metal Material Co., Ltd, said the HRC market would continue adjustments for some time and warned steel traders to be cautious in operation, having seen the prices keep shaking this period. In shanghai's market, the HRC prices declined to last, then rebounded the next trading day. Thick-sized Q 235B went from 5300 yuan/ton to 5100 yuan/ton and came up back to 5180 yuan/ton recently. Li said primary reason behind the undulating HRC market is that the demand has not clearly released and downstream end-users are still watching. With stocks grow, some traders holding cheap resources tend to undersell the products and facilitate downward movement of the market price. Subsequently, middlemen dare not get in resources and thus reduce demands as well, further frustrating the market. If the market sentiments remain unstable, there is a possibility the market may further decline.
Yet, he also noted slumps are unlikely. Because first, April and May would be mid-seasons, with downstream sectors, like home appliance, machinery, hardware and pipe manufacturing etc, to pose more demands, the big construction project to start up, and reconstructions in disaster-stricken areas also to speed up. Second, rising cost still serves a strong support; and third, the international steel prices keep surging, which drives up China's export offers and helps stabilize domestic prices. Based on these factors, the HRC prices are unlikely to slump, but before end of March, slight fluctuations may continue.

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China Steel Industry to Bear 60-70bln Yuan Additional Cost this Year 

Qi Xiangdong, deputy secretary-general of China Iron & Steel Association, has said that the iron ore price hike was beyond expectation. With the additional high freight rates, the CIF price comes to US$ 140/ton, or RMB 1200/ton on delivered-to-mill basis further considering 13% vat and inland transport fee. Per ton pig iron making, requiring 1.55t iron ore then costs 25% more, excluding other factors, like coking coal price rise. Speaking of why the long-term contract price keeps increasing these years, Qi said aside from impact of the spot market, there are other three points to mention.
First, the world economy holds on fast growth for seven consecutive years since 2002 and leads to additional steel demand. Second, the rise started from 2004. Before that, the supply was abundant and price tended to be low. It's thus rational to go up moderately, but further continuous hikes can hardly last.
Third, the dollar's depreciation is also important. If the term price does not rise, it means the actual price is on the decrease. In addition, oil price is up to US$ 100 a barrel, surging from US$ 20 a barrel.
Qi noted the ore price hike would bring China's steel industry 60-70bln yuan additional cost. To handle that, steelmakers are trying to take a part through restructuring, promoting inner management and improving production efficiency etc.
Being asked whether state-owned steelmakers should raise steel prices along with higher CPI, though the business is already profitable without such price hikes, Qi meant to find a balance, since large-medium steelmakers' average sales profitability was only 7.27% in 2007, while the loan interest rate also stands at 7.47%; but on the other hand, they should consider the nation's inflation pressure and take the initiative in keeping steel price rational. Qi said China's regulation has already taken effect, citing declining export. But the nation should not control steel prices. If the price is too low, export will resurge.

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Erdemir raises flat product prices

Erdemir has announced to increase its hot rolled, cold rolled, galvanized and tinplate prices by USD 155 per tonne. As per report, the new levels are HRC - USD 1,095 per tonne, CR - USD 1,115 per tonne, HDG - USD 1,225 per tonne, Tinplate - USD 1,190 per tonne, HR plate - USD 1,275 per tonne. The price increase had been expected by the Turkish market, but some traders find the USD 155 per tonne increase too steep.
Erdemir previously had lifted its prices. On that occasion, the increases were USD 80 per tonne for hot rolled, USD 70 per tonne for cold rolled coil, USD 100 per tonne for galvanized coil, USD 20 per tonne for tinplate and USD 200 per tonne for HR plate.

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Boulder Steel commences land leveling for its plant at Sharjah    

Boulder Steel Limited announced that the land leveling has commenced at the UAE Finishing Plant Project site in the Hamriyah Free Zone of Sharjah in UAE. The work is being carried out by UAE contractor Al Sahel General Transport and is due to be completed by July 2008.

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Dubai to spend USD 14 billion on transport infrastructure   

MEED reported that Dubai will spend about AED 52.5 billion (USD 14.3 billion) over the next five years building roads, bridges and a metro network as the emirate's population growth surges.
Mr Mattar al-Tayer chairman of Dubai's Roads and Transport Authority said “We are to spend AED 10.5 billion a year for the coming five years.” Mr Al Tayer said that last June the authority planned to invest at least AED 75 billion over the next five years on transport infrastructure to help meet demand as Dubai's population is expected to double to more than 2 million by 2015. RTA has already committed to projects worth AED 26 billion in the Gulf's tourism and trade hub, which is seeking to achieve economic growth of 11% per year to 2015.

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Gulf projects cross USD 2 trillion in value   

MEED reported that projects worth more than USD 2 trillion have been announced or are under construction in the Gulf Arab countries that form the world's largest oil exporting region. More than USD 1.2 trillion of these projects is in the construction sector, followed by the oil and gas sector at USD 430 billion. UAE accounts for 37% of total Gulf projects.
As per report, economies of Saudi Arabia, the United Arab Emirates, Qatar, Kuwait, Bahrain and Oman have surged on a 5 fold rise in oil prices since 2002 and the states are investing windfall oil revenues to develop everything from infrastructure to power.MEED said in a statement that the project boom has happened despite fears that rising construction costs would lead to a significant slowdown in the number of new projects being launched. It added that only about a quarter of the projects were now being built.
Mr Simon Howard GM of Meed said that “Despite fears that the bubble might burst at any moment, business in the Gulf is still booming. The last 12 months have seen huge investment poured into the region, with such developments as Masdar City and Saadiyat Island allowing Abu Dhabi to emerge as a market packed with the potential to one day rival Dubai as the bustling tourism centre of the UAE." The Meed Projects Index monitors investment within the construction, oil and gas, petrochemicals, power and water and waste sectors. According to Meed “Of the total projects tracked by the index, however, only one quarter are currently under construction, which implies a further three to five years of intensive construction activity to come. Such stand out success in the UAE indicates that there is still room for copious more investment in the surrounding GCC countries.

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Oman Cement to raise output by 1.2 million tonnes by 2008   

Oman Cement Company has announced that its USD 162 million expansion will raise output capacity by 1.2 million tonnes a year late in 2008. Mr Jamal Al Hooti CEO of Oman Cement said that "The expansion will cost USD 162 million to supply an extra 1.2 million tonnes per year by the end of 2008 to help increase supply in the market."
A cabinet minister said earlier in March 2008 that Oman Cement will raise production by 1 million tonnes per year in 2009 after expanding its plant, whose capacity stood then at 1.87 million tonnes per year.

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Qatar Steel to increase production in next 5 years   

Qatar Steel is boosting production capacity in the next 5 years. As per a report, Qatar Steel is aiming to increase production of rebars by more than 3 fold to 2.55 million tonnes in 2012 from 0.83 million tonnes in 2007. Qatar Steel is expecting a flat 1.75 million tonnes bars production in 2008 and the next 2 years. But with the phase II expansion expected to be completed by the first quarter of 2011, output is poised to grow to 2.15 million tonnes by 2011.
From 0.12 million tonnes in 2007, Qatar Steel is expecting production of wire rod coil to jump more than 154% to 0.30 million tonnes in 2008 and then to remain flat for the next 4 years. Billet production is expected to reach 2.85 million tonnes in 2012 as compared with 1.15 million tonnes in 2007. Output is expected to be flat at 1.60 million tonnes in 2008-10, after which it will grow to 2.15 million tonnes. Molten steel output, which is expected to be 1.63 million tonnes during 2008-10, is estimated to reach 2.90 million tonnes in 2012, while sponge iron production is to remain stable at 2.30 million tonnes during 2008-12.

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Jordan Steel acquires remaining 50% of Jordanian Alliance    

Jordan Steel Plc has announced that it signed a purchase agreement to acquire the remaining 50% of the share capital of Jordanian Alliance for Iron Steel Company for a total value of JOD 30 million. It is now wholly owned by Jordan Steel Plc.

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Rising steel prices and load shedding hit industry in Pakistan    

Over 100% increase in raw iron prices in the last 3 months, coupled with unprecedented power load shedding, has crippled Pakistan’s local industry and brought production down to barely 30%.This was observed by agriculture machinery manufacturer Mr Muhammad Iqbal Mughal, auto parts manufacturer Mr Munir Mughal and surgical instruments manufacturers Mr Siddiq Azeem Moghul at a joint press conference. They said that small manufacturers were the worst hit in the present circumstances and asserted that several were facing starvation.
Mr Iqbal Mughal said that "All stakeholders associated with this sector have been badly affected, with high input costs and work in factories grinding to a halt for hours with every power shutdown." He added that the government fixed price of raw iron is PKR 60 per kilogram, but certain profiteers who have monopolized the iron market are selling at exorbitant rates.
Meanwhile, Mr Siddiq Mughal urged the concerned authorities to ensure implementation of the government fixed price of raw iron of INR 60 per kilogram, to save the national industry from total disaster. He added that "Some months ago raw iron supply to the industries in Daska stood at 2000 tonne per month, while now it has dwindled to 300 tonne, while some suppliers are not selling due to the erratic prices.

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Suez Canal increases transit tariff     

The Suez Canal Authority will implement its scheduled transit tariff increase starting April 2008. As per a report, transit fees will be raised by varying rates, ranging between 4.2% and 14.1%, averaging 7.1%, based on vessel and cargo type.The increase in fees is expected to generate an additional USD 300 million, at least, with additional revenues accruing from the rise in trade related traffic. Container vessels traffic constituted 51.6% of total traffic in 2007.
The completion of the deepening of the Canal to 66 feet, from the current 62 feet, will allow the passage of bigger vessels, with cargo exceeding 220,000 tonnes. Suez Canal Authority will continue to offer incentives to transiting vessels to encourage higher use of the waterway. Suez Canal revenues, representing Egypt’s third largest source of foreign currency, had reached USD 4.6 billion in 2007, up from USD 3.8 billion in 2006, on the back of higher non oil traffic.

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Russia t deliver fourth cargo ship to Iran     

Russia's Volgograd Shipyard has built its fourth double screw dry cargo vessel for Iran, thus fulfilling its contract with Iran. The four ship contract had been signed in August 2005. Fitted with 4 cargo tanks and boasting a total capacity of 10,800 cubic meters, the multi purpose ship meets all the requirements of international conventions. The vessel was designed to transport general and bulk cargo, timber and large size cargo.
According to MNP Group, 3 of the vessels were delivered to Iran's Irinvestship Limited in 2007 and the fourth ship is expected to be handed over to Iran in the near future.

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Bluescope steel update

Bluescope Steel has provided the market with an update of its performance. The company says it had a reasonable start to the year with first half underlying profit seen in line with market expectations. The second half is expected to be stronger however. Bluescope says global steel prices have increased from the fourth quarter but it is uncertain about its North American outlook. Demand from China is expected to remain strong, but the company says costs associated with developing plant in the Asian nation are uneconomical. Bluescope also sees global consolidation continuing throughout the year.

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Indonesia slaps antidumping duties on HRC 

Indonesia has levied anti-dumping duties ranging between 4.24% and 56.51% on imports of hot rolled coil from China, India, Russia, Thailand and Taiwan. The duties took effect 3 March 2008, Jakarta-based industry sources tell. The duties for imports from China range between 0- 42.58%, namely Wuhan Iron & Steel, 0%; Angang Steel and Baoshan Iron & Steel, 25.18%; and all other mills, 42.58%. For Indian exporters, the duties are: Essar Steel, 12.95%; JSW Steel, 22.25%; and all others, 56.51%. From Russia: Novolipetsk Steel, 8.96%; Magnitogorsk Iron & Steel Works, 30.86%; JSC Severstal, 5.58%; and all others, 49.47%. From Taiwan: Chung Hung Steel, 4.24%; China Steel Corp, 0%; Shang Shing Steel Industrial, 4.7% and all others, 37.02%. And among Thai exporters, Sahaviriya Steel Industries, 11.23%; Nakornthai Strip Mill, 12.78%; G Steel, 7.52% and all others, 27.44%. “Certain end-users in the downstream market are unhappy with the decision,” an Indonesian steel analyst tells SBB. An official of Chung Hung tells, “We export very little to Indonesia, maybe nothing now,” But he says his mill will still export to Indonesia if “the importer will absorb the duty.” PT Krakatau Steel filed the anti-dumping complaint in March 2006 with the support of another local producer, Gunung Raja Paksi. The tariff codes for HRC products covered in the investigation are 7208.10, 7208.25, 7208.26, 7208.27, 7208.36, 7208.37, 7208.38, 7208.39, 7208.90 and the period of investigation is calendar 2005.

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JFE Steel to Spend 50 bn Yen to Boost Steel Mill 

JFE Steel Corp. said Thursday it will spend about 50 billion yen to boost the production capacity of its steel mill in Fukuyama, Hiroshima Prefecture, western Japan. The buildup plan for the mill of its West Japan Works features the construction of a caster for steel slab, or semi finished steel, and relevant facilities. The major steelmaker said the new 2.4-million-ton caster, which will start operations in 2010, will increase its annual crude steel production by 1.5 million tons. The investment is part of JFE Steel's plan to spend 150 billion yen to expand its annual crude steel production to 33 million tons from 30 million tons, it said. Its parent, JFE Holdings Inc., separately said that it will issue 300 billion yen in convertible bonds with sharepurchase warrants for allotment to its three major creditor banks. Of the proceeds, 150 billion yen will be used for JFE Steel's production boost and 30 billion yen for mining investment abroad and joint production in China, JFE Holdings said. The holding company will earmark 120 billion yen for the purchase of own shares.

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Korean steel firms' investments to hit record   

The Korean steel industry is expected to spend the largest-ever amount of money on new plants and equipment in 2008 to meet growing domestic demand, a trade organization said.
The Korea Iron & Steel Association said facility investments by its 33 member companies are predicted to reach a record 7.06 trillion won ($7.37 billion) this year, up 63.2 percent from last year. “The jump in capital spending is based on expectations that domestic demand will remain strong, despite sharp increases in international prices for iron ore and scrap” the association said. By sector, the electric furnace industry is projected to spend 3.3 trillion won on new plants and equipment in 2008, up a whopping 122 percent from the previous year.
Capital spending by the integrated steel sector is likely to increase 21.3 percent year-on-year to 2.9 trillion won, according to the association. An association official said the local steel industry should make more facility investments to maintain growth momentum, stay competitive and overcome unfavorable external factors such as high raw material costs and competition from China.

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Taiwan's Formosa plans $6.1 bil. Vietnamese steel mill 

Taiwan's Formosa Heavy Industries Corp. plans to invest US$6.1 billion to build a steel mill in Vietnam, a report here said. The company was expected to secure Vietnamese approval in the first half of 2008 after Formosa Group chairman Wang Wen-yuan met with Prime Minister Nguyen Tan Dung last week, the Commercial Times said, citing unnamed sources. The paper said the mill's annual capacity will be 7.5 million metric tons while production is expected to begin in 2011.

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Thai Tinplate will increase production capacity 

The largest tinplate manufacturer in the Kingdom as well as in South East Asia, Thai Tinplate Mfg. Co., Ltd., will invest about 200 million baht to increase production capacity of tin free steel to meet ever growing local demand. Thai Tinplate now operates four lines consisting of 3 for tinplate and 1 for tin free steel. Production capacity of tin free steel will be expanded by 30% to 156,000 tons by the end of the year, increasing overall capacity to 552,000 tons from present 516,000 tons per year. Tin free steel is widely used for tuna can, crown cap and bottom end of can. In recent years its consumption has been steadily increasing by more than 10% annually.
The market of tinplate products last year is presumed to be about 570,000 tons, almost the same as 2006. The market share of local mills, Thai Tinplate and Siam Tinplate, sharply dropped from 76% in 2006 to 69% in 2007 because of huge inroads of low-priced alien materials. Last year about 176,000 tons of tinplate products were imported which is as much as 31% more than previous year. Those from South Korea, Brazil, Taiwan, China and Japan account for about 86% of total imports. South Korea is the largest exporter shipping out about 56,000 tons. Present combined local production capacity, 672,000 tons, is sufficient enough to meet domestic demand.

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Nippon and JFE Steel could win Thailand BF project 

JMB quoted Mr Suwit Khunkitti deputy prime minister and minister of industry of Thailand as saying that Nippon Steel and JFE Steel are in better position to be selected as investor for new blast furnace project in Thailand. Mr Khunkitti said that Japanese steel makers are well better position than Baosteel and Arcelor Mittal for the project when Thai government emphasizes technology level to make high valued steel, long term business experience for downstream operations, local customer base including transplants of Japanese automakers and environmental technology.

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Steel Pipe Producer Invests 165bn Dong In Two Big Projects 

Vietnam German Steel Pipe Joint Stock Co on February reported that last year it gained 500 billion dong in revenue, 17 billion dong in profit with the market share of 11%. Within this year, the steel pipe producer targets to complete two big projects worth a combination of 165 billion dong, including a 100 billion dong cold rolled steel mill capable of turning out 150,000 tonnes a year to supply for automobile and motorbike manufacturers and a 65 billion dong large sized steel pipe mill with a designed capacity of 100,000 tonnes a year.

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Vietnam Government allows iron ore exports to China  

Deputy Prime Minister Hoang Trung Hai has allowed the Viet Nam Steel Corporation to export iron ores for Chinese partner for the exchange of fat and coke coal, serving the domestic demand for steel production. In the second quarter of this year, the Ministry of Industry and Trade must report to the Prime Minister on coke coal demands and propose the import of fat and coke coal to feed local steel production plant.

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Australian regulator blocks Shougang buy of Mt Gibson stake from Gazmetal 

It is reported that Australian securities regulators had blocked Chinese steel maker Shougang from acquiring a 20% stake in Australian iron ore minor Mount Gibson Iron Ore Ltd from a Russian billionaire.The Takeovers Panel ruled that a relationship existed between Shougang and APAC and that there would be an unacceptable effect on the control or potential control of Mount Gibson if Shougang acquired Gazmetall's stake. It said it was canceling the agreement between Shougang and Gazmetall.
Mount Gibson said in a statement , it was pleased that its serious concerns had been addressed.Mount Gibson last month asked the regulatory body to block the sale after Shougang's Hong Kong listed subsidiary, Shougang Concord International Enterprises Co Ltd agreed to buy 19.73% of the Australian firm from Russian Gazmetall. Mount Gibson said the sale should be blocked because Shougang had not informed it that it planned to launch a takeover as required under Australia takeover rules in large stock purchases.
Shougang already owns 18% percent of APAC Resources Ltd, which in turn holds 20.22% of Mount Gibson.Mount Gibson operates the Tallering Peak mine 175 kilometers east of Geraldton and the Koolan Island mine off the Kimberley coast in Western Australia. It is expected to produce more than 6 million tonnes of iron ore this financial year.

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Large coalmines account for half of Chinese coal output 

According to a report published by the National Development and Reform Commission large coal enterprises groups have kept growing strong and big in 2007 and coal enterprises with annual sales revenue exceeding CNY 300 million mined 1.29 billion tonnes of coal in the year accounting for over half of China's total raw coal output. The report also shows that coal enterprises with annual sales revenue exceeding CNY 300 million accounted for three fourths of the main operating income and 70% of the gross profit of large scale coal enterprises in China in the year.
Statistics show that China's coal output reached 2.536 billion tonnes in 2007 up by 6.9% YoY; coal consumption, 2.58 billion tonnes up by 7.9% YoY; and coal export, 53.17 million tons and import, 51.02 million tonnes, leaving a net export of 2.15 million tonnes. The report points out that China's coal industry is still in a rehabilitative development period, and coal enterprises still face many difficulties:
1. The irrational mining structure and low level technology and equipment
2. The increasing pressure of resources and environment protection
3. Rapid growth of production cost of coal as policy cost keeps increasing and many problems left over by the history.

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Chinese HRC export price may see corrections  

It is reported that export offer for HR coils, which have continued upward movement in the first week of April 2008, and are likely to rise further in the short term, may witness downward adjustment in the near future. Prevailing HRC offers for June shipment are at USD 875 per tonne to USD 880 per tonne FOB up by USD 15 per tonne to USD 20 per tonne than late March. It is also heard that a tier one steel producer has even shoot up quotation to around USD 890 per tonne FOB basis.
On Shanghai market, commercial HRC in 4.5mm to 11.5mm thickness and 1500mm width was being quoted CNY 5380 per tonne up by CNY 80 per tonne to CNY 100 per tonne from recently. Prices for 1800mm wide material have jumped by CNY 70 per tonne to CNY 5650 per tonne. Low alloyed 1500mm wide HRC goes at CNY 5550 per tonne, 1800mm wide cargo at CNY 5750 per tonne a jump of CNY 100 per tonne to 120 per tonne from early last week. Taking price for 4.5 mm to 11.5mm*1500mm HRC as benchmark, it will reach CNY 5500 per tonne on Shanghai market. If it is not able to exceed CNY 5500 per tonne, there would be swift downward corrections. However, strength above CNY 5500 per tonne would further bolster the bullish outlook to CNY 5800 per tonne or even CNY 6000 per tonne
Accordingly, export quotations for commodity grade HRC may rise to USD 950 per tonne FOB at most in April and then start to drop to drop. Mysteel conjectures that it would go back to around USD 700 per tonne FOB even if it approach USD 1000 per tonne FOB in next three months..

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East West gas pipeline to add second main source in 2009  

It is reported that China's West East trunk gas pipeline line is expected to have a second key reservoir soon with the development startup of Dina-2, China's largest condensate gas field. Dina-2 located in southern Xinjiang has 175.218 billion cubic meters of cumulative proven natural gas reserves and 13.389 million tonnes of proven condensate reserves, which make it the second gas field with reserves over 100 billion cubic meters in Tarim after Kela-2, the West East pipeline's current main sources.
CNPC plans to complete the production buildup of Dina-2 gas field by June 2009, by which time it will be ready to supply natural gas to the west east gas pipeline. Upon completion, Dina-2 is expected to produce 4.5 million tonnes per year of oil equivalent, which breaks down to 5 billion cubic meters per year of natural gas and 560,000 tone per year of condensate oil.

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Chinese coal contract price hike may exceed 90%  

It is reported that coal price in China has presented overall upswings since March 2008 as market insiders forecast coal enterprises will benefit a lot as coal contract price will increase over 90% in the price negotiation. As per report during the ongoing negotiation between Japan and Australia, both sides have agreed with a preliminary 100% price advance. According to usual practice, contract price for China's coal will modestly exceed that for Australian ones due to geographic proximity. Mr Han Yong, an analyst with China International Capital Corporation Limited said contract price for China's coal will gain more than 90%. As 2008 price will be implemented from April 1st 2008 a 90% price advance can be translated into a 70% hike for average export price this year.
China National Coal Group Corp, China Shenhua Energy and Yanzhou Coal Mining contribute 20.25%, 12.47% and 7.6% respectively of total coal exports. China National Coal Group Corp. is expected to become the largest winner. China's coal exports keep declining. Last year the first batch of export quota accounted for 60% of the total amount of the year. As per the proportion, the first batch in 2008, 31.8 million tonnes, implies total quota of some 53 million tonnes in whole this year down 17 million tonnes from the 70 million tonnes in last year. The figure goes in line with actual exports in 2007.

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Global coke price levels to stay high in 2008 - CCIA  

According to the China Coking Industry Association the price of coke will continue to stay at a high level this year amid surging demand and rising cost. Mr Huang Jingan chairman of China Coking Industry Association (CCIA) said that increasing demand from the steel industry will largely boost the price for the key residue used in the smelting process. He said China's steel industry produced about 959.2 million tonnes of crude steel and iron last year and consumed 90% of the country's coke output. He added that "Consumption will continue to rise amid growing steel and iron output this year.”
Mr Huang said "As the government has raised duties and charged more pollutant tax on coke products, the coke plants have to afford more expense. The growing expansion of coke production will certainly be passed onto the price." According to a Union Bank of Switzerland report, coking coal output in the world is expected to stand at 211 million tonnes this year, while the demand may hit 221 million tonnes. Demands from China, India and Brazil will remain robust among other countries. China is the largest coke producer in the world, accounting for 60% of world production in 2007.

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China may consume 10% more manganese in 2008  

It is reported that Commodity trader Zhejiang Materials Industry International Co forecasts that China, the world's largest steel producer, may consume 10% more manganese alloys this year helping to bolster prices in the next two months. Mr Yang Jian manager of steel raw materials department at the Hangzhou based company said demand for the alloys used to strengthen steel will rise from last year's 5.38 million tonnes.
He said “Manganese prices will keep increasing in the coming months and may hike in April and May and some Chinese buyers may not be able to obtain the material. Prices could come down in the second half when Chinese steel mills slow production in the summer months.''Zhejiang Materials supplies manganese alloys to mills including Anben Steel Group and Jiangsu Shagang Group Co. China is the largest producer of manganese alloys, accounting for almost half of world's output.

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China Shipping Group to form JV with Baosteel  

It is reported that China Shipping Group would set up a shipping company in Hong Kong with the country's biggest steelmaker Baosteel Group. Mr Li Shaode president of the shipping giant said the joint venture is likely to be founded in the early half of this year. China Shipping will take a 51% stake with the remaining going to Baosteel. He said the JV would be equipped with annual transportation capacity of 20 to 30 million tonnes by 2015. As the JV can not tailor make ships until late 2009 or early 2010 it will rent six ships in the early stage.

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Jiugang plans to produce 8 million tonnes steel in 2008  

Jiuquan Iron and Steel Corporation hold the fifth staff meeting, where, general manager Mr Zang Qiuhua made the administrative report of the company. He outlined the achievement in 2007 and the tasks and key work in 2008. In 2007, the outputs of iron, steel and steel products of Jiugang were respectively 6.575 million tonnes, 7.639 million tonnes and 7.006 million tonnes. The revenue and profit of the company reached respectively CNY 30.509 billion and CNY 1.276 billion. Per capita income of the company was CNY 35,000 up by 15.8% YoY.

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Handan Steel adjusts EXW prices  

It is reported that Handan Steel publishes its latest EXW prices for some products. Prices of wire rod, rebar and round bar kept unchanged. Q235 6.5mm common carbon wire rod is quoted at CNY 5050 per tonne, Q235 6.5mm high speed wire rod is quoted at CNY 5090 per tonne ,HRB335 12mm rebar is quoted at CNY 5370 per tonne, HRB335 14mm rebar is quoted at CNY 5320 per tonne, HRB335 16mm to 25mm rebar is quoted at CNY 5170 per tonne, Q235 16mm to 25 mm round bars is quoted at CNY 5210 per tonne.
Medium Plate price up by CNY 100 per tonne, Latest EXW price for Q235B 20mm medium plate stands at CNY 6050 per tonne. Ship building Plate price up by CNY 400 per tonne; CNY 50 per tonne higher for those with thickness of 50mm or more.
CCSA20mm ship building plate is offered at CNY 6595 per tonne. Prices listed above are inclusive of 17% VAT.

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Chinese Construction Steel Export Offer Shoot Up Again   

Construction steel export offers have been raised again by steel makers on the news that Dubai has lifted the duties on imports of steel products. Domestic market prices are largely unchanged. On Shanghai market, HRB335 20mm rebar was being quoted at RMB4730-4750/ton, HRB400 at RMB4820-4850/ton. Commercial wire rod was at RMB5020/ton, hi-speed material at RMB5060/ton, recently.
In the short term, the downward correction is expected to continue. Take Shanghai price for HRB335 20mm rebar as example, the supportive level is forecasted to be at RMB4600/ton, above which the upward strength is intact. Otherwise, the downward adjustment will bring price to around RMB4300/ton.
Prevailing export offers for rebar are at US$860-870/ton fob, another increase of US$30-40/ton from early last week. Wire rod is being quoted at US$880-890/ton fob. Some steel makers are tagging at US$850/ton fob for material with boron.
Trading sources say that the news that Dubai lifted the customs duties for steel imports has stimulated the rise of export quotation. Steel producers believed that there would be more demand from Middle East area and they are upbeat on export price in the near future.
In addition, Turkey is head to have also shot up export offer again for construction steel shipments to Dubai. Both wire rod and rebar offers are forecast to approach US$900/ton fob soon.
Hence there is strong likelihood that export quotations would stay at high level, but it remains to see how the transaction would be at the updated levels.

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Posco aims to raise sales to 100 trillion won by 2018 

Posco, Asia's third-biggest steelmaker, said it is aiming at 100 trillion won ($102 billion) in sales by 2018 on a consolidated basis. The company will also try to boost its annual crude steel output, including overseas production, to more than 50 million metric tons over the next decade, the steelmaker said in statement recently. Posco produced 31.1 million tons of crude steel last year. Posco is seeking to boost capacity through expansion into nations including India and Vietnam amid growing competition in the wake of large-scale consolidations.
Mittal Steel Co. bought Arcelor SA in 2006 to form ArcelorMittal, the world's largest steelmaker, and India's Tata Steel Ltd. bought Corus Group Plc for $12.9 billion last year to become the sixth-biggest producer. The Korean steelmaker plans to increase the proportion of imports of raw materials including iron ore and coking coal from Posco-owned mines in its total materials imports to 30 percent over the next decade from about 17 percent now, spokeswoman Ko Min Jin said.
South Korea relies on imports for 97 percent of its energy and minerals needs to feed the fourth-biggest economy in Asia. Meanwhile, the company will raise prices of its stainless steel products by as much as 400,000 won ($404) per metric ton later this month because of rising costs of raw materials. The price of hot-rolled 300-series stainless steel products will raise to 4.05 million won, Ko Min Jin, a spokeswoman for the Pohang, South Korea-based Company, said.

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Ferrexpo H2 profit rose 82% on price, output  

Ferrexpo Plc, the Ukrainian iron-ore producer that held an initial public offering in London in June, posted an 82 percent gain in second-half profit after output and prices of the steelmaking ingredient increased. Net income climbed to $87.4 million from $48.1 million a year earlier. Earnings were calculated by subtracting first-half profit from full-year figures released today by Baar, Switzerland-based Ferrexpo. Profit beat the $78.2 million median estimate of three analysts surveyed.
A ``robust outlook statement on volumes, costs, pricing and development opportunities should see the shares trade higher,'' Michael Rawlinson, head of mining, resources and energy at Liberum Capital Ltd. in London, wrote in a report. Iron-ore prices have risen for a sixth year to a record because of demand from steel mills. Asia's three biggest steelmakers in February agreed to pay Brazil's Cia. Vale do Rio Doce, the world's biggest exporter of the raw material, at least 65 percent more than last year.
``Iron ore is currently in short supply, driven by demand from developing nations,'' Chairman Michael Abrahams said in a statement. Prices should rise further and the company is in talks with possible partners to quadruple output in 10 years, he said.
The stock has more than doubled since Ferrexpo sold shares at 140 pence each in June. The company plans to spend $4 billion over the next 10 years to increase annual output to 32 million metric tons, from 9 million tons now. It wants to build two mines at Yeristovskoye and Belanovskoye in Ukraine. Price gains may make financing the expansion plan easier, the company said Feb. 21. Full-year net income climbed to $124.1 million, or 20.33 cents a share, from $63.6 million, or 10.47 cents, a year earlier. Sales rose 28 percent to $698 million.
The company proposed a full-year dividend of 3.2 cents a share. The company's cash cost to produce iron-ore pellets rose 8.6 percent, Ferrexpo said. Fourth-quarter output gained 1.6 percent to 7.18 million tons, Ferrexpo said in January. Full-year production rose 9.5 percent to 28.9 million tons.

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Chinese steelmakers want to invest in Roy Hill    

Hancock Prospecting Pty, controlled by Australia's richest woman Gina Rinehart, said Baosteel Group Corp. and other Chinese steelmakers want to invest in its Roy Hill iron ore project as prices surge to a record. Hancock is considering three options, including ventures with steelmakers or mining companies, to develop the project in Western Australia and plans to appoint a financial adviser in the next few days, Executive Director Tad Watroba said.

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Tangshan Steel to raise exports of ship plates to meet demand  

  Tangshan Iron & Steel Group, China's fourth-biggest steelmaker, plans to increase exports of ship plates this year to meet rising demand, President Wang Yifang said.
Demand from shipyards in China and South Korea will result in plates supply shortages until 2010, Mirae Asset Securities Co. said in February. The rising consumption helped South Korea's Dongkuk Steel Mill Co. raise prices by 13 percent this year. Demand growth in ship plates and so-called long products, used in construction, will outpace gains for cold-rolled sheets this year, Qi Xiangdong, vice chairman of the China Iron and Steel Association, said. Cold-rolled sheets are used to make automobiles and appliances. ``Ship plates prices will be very good as there's strong demand in China and South Korea,'' Qi said without giving a forecast.

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Samarco wins 87% pellet-price rise in Indonesia, Saudi Arabia 

Samarco Mineracao SA, the second- biggest iron-ore pellet producer in Brazil, said it will raise prices for Indonesian and Saudi Arabian steelmakers by a record 87 percent this year. Samarco, a joint venture of Cia. Vale do Rio Doce and BHP Billiton Ltd., reached an accord with Indonesia's PT Krakatau Steel and Saudi Arabian company Dricl, Belo Horizonte, Brazil- based Samarco said today in an e-mail statement.
This brings the new price for pellets for direct-reduction ironmaking, a process used in steelmaking, to $2.42 per iron unit, it said. “The combined volume of the two contracts is for more than 1.5 million metric tons,'' Samarco press officer Pedro Grossi said in the statement. ``Samarco has already confirmed the new prices for more than 60 percent of its total contracted direct- reduction volume, always following its commitment to the benchmark pricing system,'' Grossi said. The premiums paid for the pellets, a processed form of iron ore, have risen this year because of strong demand from steelmakers, especially in the Middle East.

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Baosteel sales to Europe to fall on anti-dumping probes  

Baosteel Group Corp., China's biggest maker of the alloy, expects to sell less to Europe this year because of anti-dumping probes. Sales to Europe and Africa will probably fall to 500,000 metric tons this year, from 800,000 tons last year, Zuo Jingui, a company's sales manager for Europe, said today at a conference in Beijing. The company will raise sales to Africa and cut shipments to Europe, Zuo said.

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Another record Stainless Steel Output Forecast for 2008  

Global stainless steel production is still expected to reach a record level of 29 million tonnes this year. During the first quarter, most markets across the world have been quite soft. This was the result of unexpectedly large increases in steelmaking during the final trimester of 2007 in the EU and China.
These actions prompted us to make an upward revision to our estimate for 2007 global crude stainless supply, to a figure near to 27.9 million tonnes. This represents a modest one percent reduction on the outturn in the previous twelve months. The market was extremely tight in 2006 but last year it was in surplus. This is likely to be the picture throughout most of 2008.
The steel mills in the EU have lost substantial volumes of export business to China over the past two years. Local market demand is fair but is not rising sufficiently quickly to make up for weaker foreign sales. Consequently, we predict total output this year rising marginally from 2007 but falling well below the 2006 outturn.
In Japan, inventory levels are excessive. The mills continue to regulate availability. A small output gain is forecast for 2008. Severe production cuts in South Korea have helped to control the oversupply situation. This is likely to continue to mid year. Rising steelmaking is anticipated in the second half. A similar picture is forecast for Taiwan.
Inventories in the US are at a low level. Demand on the mills should improve during the second half of this year - pushing up total production to slightly above the 2007 figure but below the outturn in the boom year of 2006. Import volumes are likely to be reduced due to the weak dollar.We anticipate stainless steel production rising in 2008, year on year, in India, Brazil and South Africa. The gains will be limited due to relatively weak export markets.

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Steel prices in US increase even as durables demand declines  

Steel prices in the US rose this month even as demand for durable goods fell, according to Purchasing magazine. Hot-rolled steel sheet, the benchmark product used in cars and appliances, rose 11 percent to an average of $740 a ton in March from $665 in February.
“Although domestic steel demand remains weak, inventories are at all-time lows and imports are needed but unavailable, so steel mills are announcing price increases,'' sources said.
Orders for U.S. durable goods, or products expected to last at least three years, fell in February, led by a drop in demand for machinery, the Commerce Department said. The 1.7 percent drop in demand in February followed a 4.7 percent decline the month before.

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