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| JULY 2005 | |
| From the CEO's Desk | |
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No doubt, metallurgical
industry in the country, especially the mineral sector has got tremendous
potential to grow. The major part of country's vast mineral reserves is
yet to be explored and this is the reason many overseas companies are
interested in India. D.A.Chandekar |
Beekay Engineering Corporation
Metal + Metallurgy China Returns In 2006
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| Headlines
Arcelor postpones plan to set up steel plant in India Q1 imports rise hits local producers J.P. Singh assumes charge as the Govt Director for SAIL and RINL Jindal Stainless Q1 net up 32% JSPL plans to set up integrated plant overseas Man Ind. starts new state of the art plant in Gujarat Steel Strips bags contract from PSA International steel, caught rails dampens pwr-plant coal prices Mittal Steel to cut production in Q3 by 1MT China’s new steel policy to encourage consolidation Russian coal to invest $120M in steel plant construction UK mill to source high-speed shears from Morgan JFE Steel to slash output of HRC
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Arcelor postpones plan to set up steel plant in India Arcelor has decided to postpone its proposed plan to set up a greenfield plant in India. “Arcelor is already present in the country through JVs (joint ventures) and technology tie-ups with Indian manufacturers. It is said that they want to first grow this business here. The company wants to watch the committed investments flow into the country before looking at its own steel plant here.” The paper says the Luxembourg-based steel company currently has a presence in India via investments in Imphy Ugine Precision, a stainless steel maker. |
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Q1 imports rise hits local producers Imports of steel to India has registered a 34 per cent increase in Q1 this year over the same period last year. Of the 6 lakh tonnes of steel imported between April-June, hot rolled (HR) coil constitute the lion’s share —5.3 lakh tonnes and this can be attributed to the competitive pricing by CIS countries like Ukraine, Russia and Iran as well. Initial estimates from the Joint Plant Committee under the steel ministry show exports have fallen, even as domestic consumption has fallen and inventories rise, reports said. Sources said that steel consumers had opted to import HR coil at low prices of $528 per tonne (Russia) and $533 per tonne (Ukraine). In fact, even China jumped in with a $520 per tonne price, compared to the global average of $590, $596 and $605 per tonne in April, May and June respectively. ‘While HR coil from Korea and Germany commanded $760 and $615 per tonne price, cheaper imports from CIS countries hit us badly,’ said a leading secondary producer. The trend has brought steel producers into a huddle, pointing fingers at the ’low protection’ given by the government. When global steel prices were at a high the government effected a substantial reduction in customs duty from 30 per cent to 5 per cent in four tranches. Now with prices falling by $150-$200 in just 3-4 months and domestic consumption not picking up, consumers prefer imports,” said another producer. Markets like the US which have duties of over 50 per cent with additional anti-dumping measures countervailing duties have led to diversion of exports from CIS countries to India, he added. |
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J.P. Singh assumes charge as the Govt Director for SAIL and RINL Mr J.P. Singh, Jt Secretary, Ministry of Steel, has been appointed as the Government Director on the boards of three steel companies in public sector, Steel Authority of India Limited (SAIL), Rashtriya Ispat Nigam Limited (RINL) and Indian Iron and Steel Company (IISCO). Known as one of the main architects of the draft Steel Policy of the Government of India, Mr Singh earlier won acclaim for successfully steering the formulation of the raw materials policy for the Steel Development Wing. As Deputy Secretary, Ministry of Steel, he was in charge of licensing during the critical period from 1990 to 1995 when the liberalisation process was in the transition phase. His contributions in drafting of the industrial policy for Delhi in 1998 were also well appreciated and recognised. A Gold Medalist in Mechanical Engineering, Mr Singh held various important positions in the states of Delhi, Goa and Arunachal Pradesh ever since he joined Indian Administrative Service in 1977. The other key posts that he held during his illustrious career include Collector of Goa (1982-85), Housing Commissioner in Delhi Development Authority (1987-90), Development Commissioner of the Union Territories of Daman and Diu (1995-97) and Industries Commissioner and CMD of Delhi State Industrial Development Corporation (1997-2001). |
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Jindal Stainless Q1 net up 32% Jindal Stainless Ltd (JSL) has reported a net profit of Rs 66.10 crore for the first quarter, marking a 31.88 per cent increase compared to Rs 50.12 crore for the corresponding quarter last fiscal, company sources said. Total income increased to Rs 857.99 crore (Rs 649.46 crore). The company also decided to increase the stainless steel melting capacity at its Hisar plant from 5.5 lakh tonnes to 7.2 lakh tonnes per annum along with downstream capacities. |
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JSPL plans to set up integrated plant overseas After announcing two greenfield projects in Orissa and Jharkhand, Jindal Steel and Power Ltd (JSPL) is now looking beyond the Indian borders. The company plans to set up an integrated steel plant abroad, reports said. It is looking at several countries such as Iran, South America and Australia where iron ore and coal mines are available. JSPL plans to acquire coal and iron ore mines initially and eventually set up an integrated steel plant. The company is open to investing around $2 billion for setting up a greenfield steel plant abroad, sources said. But it would depend on whether the company is permitted to import coal and iron ore from that country initially for its domestic requirements, they added. JSPL has announced two greenfield ventures for setting up steel plants in Orissa and Jharkhand. The company recently appointed SBI Capital Markets Ltd for financial appraisal of its proposed two-million-tonne plant in Orissa. Officials said the financial appraisal is expected within the next couple of weeks. For the proposed 5-mt steel plant in Jharkhand, the technical report has been prepared by Mecon. |
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Man Ind. starts new state of the art plant in Gujarat Man industries (India) Limited, a leading manufacturer of LSAW Line pipes for oil, gas and water sector industries inaugurated its new state – of –the – art Pipe and Coating Complex at Anjar recently. The new complex has various comprehensive facilities for manufacturing line pipes, different types of coating systems on line pipes which has enhanced the cumulative production capacity of the company to over 2000KM of line pipe and over 5.00 million sq. meters of coating per annum. The location of the new facility in the vicinity of Mundra and Kandla Ports has fetched and added advantage for Man Industries in view of its competitiveness in the international market. The Spiral pipe production one in the line complex is the first facility in the country capable of producing the API Grade Line Pipe with a maximum random length of 18 meters. On the occasion of the inauguration, The Man Group, Chairman, Mr. R.C. Mansukhani said “ The new facility at Anjar is the one of its kind where in all the four facilities namely for LSAW Line Pipe. HSAW Line Pipe, External Coating and Internal Coating facilities are commissioned simultaneously. This unit is another milestone in our path of progress and it will take the company into the league of renowned global players in this field as one of the leading and competitive line pipe manufacturer from the Indian sub continent.” He also added “with the healthy order book position of approximately 1000 crores from India and abroad the new plant has gestation period which is an added advantage”. |
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Steel Strips bags contract from PSA Punjab-based Steel Strips Wheels Ltd has signed contracts with European company PSA Peigeot Citroen for supply of 2.25 million steel wheel rims worth Rs 120 crore, reports said. Steel Strips would supply these steel wheel rims to PSA’s plants in Spain and France for their car models including Berlingo Citroen and 407. The order is to be executed over a period of three years beginning calendar year 2006. During the financial year 2004-05, the company sold 3.55 million of wheel rims and total turnover was Rs 146.10 crore. |
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International steel, caught rails dampens pwr-plant coal prices The price of premium low-sulfur coal burned by power plants has fallen to its lowest level in recent months, as congested railroads in the East and weakness in the steel-making coal markets have softened bids for spot market coal. Low sulfur coal traded on CSX Corp.’s (CSX) rail lines reached as high as $62.50 per ton in late April and has fallen 13% since, trading recently at $54.25 per ton. Global coal prices had surged since the beginning of 2004, but the U.S. market now seems to be softening somewhat. That has puzzled market participants, who say the nation’s strong economic growth heading into the summer months, when demand for electricity is strong, should keep coal prices high. “The fundamentals don’t indicate prices should be falling, given the strength of the economy and the recent heat,” said Katharine Kenny, director of investor relations at Massey Energy Co. (MEE), one of the largest coal shippers on CSX’s rail lines. Continuing problems with rail transportation east of the Mississippi along the networks run by CSX and Norfolk Southern (NS) appear to be depressing spot market prices, observers said. Power companies that haven’t received coal they’ve bought under long-term contracts are unlikely to go out in the spot market and buy coal that might be more expensive. |
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Mittal Steel to cut production in Q3 by 1MT Mittal Steel Company NV said in a press statement that it plans to reduce its global production by one million tons in the third quarter of 2005. This follows similar reductions in the second quarter. The production cutbacks will be equally split between the Company’s North American operations and those in Europe and the Rest of the World. “The production cutbacks that we have announced will help to reduce the inventory build up that we currently have and help to restore equilibrium to the global supply and demand equation,” said Mittal Steel Chairman and CEO, Mr. Lakshmi Mittal. |
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China’s new steel policy to encourage consolidation China’s new steel industry development policy will aim to consolidate the country’s fragmented steel sector and encourage the production of higher quality, higher technology steel, a report by an industry association said. Li Xinchuang, vice president and chief engineer of the China Metallurgical Industrial Planning and Research Institute, said China’s State Council has already approved the policy and it could be released soon. Li, who was involved in the drafting of the policy, declined to give details of what the policy was about, but said it would be issued by the National Development and Reform Commission. However, a report written by a domestic industry association from a summary of the draft policy in the past month said the policy would raise the entry barrier to the steel industry, making it more difficult for smaller steel makers to remain viable, helping to consolidate the industry. An official at the association declined to have the association’s name identified. China’s top 15 steel makers produce about 45% of the country’s steel. The rest is made by small companies and comprises low-quality, cheap product, which is already in oversupply in China. According to the report, the NDRC aims for China’s 10 largest steelmakers to account for 50% of the country’s total production by 2010 and 70% by 2020. |
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Russian coal to invest $120M in steel plant construction Russia’s Russky Ugol (Russian Coal) plans to invest about U.S. $120 million in the construction of the first stage of the Rostov Electrometallurgical Plant, or REMZ, in the Rostov Region, an official with the press office of Gukovugol said. Russian Coal is a managing company of Gukovugol. REMZ’ production capacity is expected to amount to 730,000 tonnes of steel annually. The first stage of the construction is expected to be completed in October-December 2006, while the entire facility will likely be completed in 2007. Equipment for the plant is expected to be supplied by Italy’s Danieli and Switzerland’s Concast companies. The production from the plant may be exported, Russian Coal’s Chairman Vadim Varshavsky had said earlier. |
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UK mill to source high-speed shears from Morgan Morgan Construction Company has received an order from the Corus Group to upgrade company’s four-strand mill in Scunthorpe, United Kingdom. According to Steve Lidgate, Managing Director of Morgan-Europe, the company’s subsidiary in Sheffield, England, “As part of the contract, Corus ordered four high-speed trimming and chopping shears, water boxes and associated equipment that will be installed in the company’s existing Morgan wire rod mill.” He continued, “The new automated equipment will significantly improve the health and safety of Corus’ operators by removing the hazards associated with manual end trimming. The shears will also provide improvements in process consistency that allow increased customer satisfaction, improved yield, and reduced operating costs.” Lidgate said that the mill produces quality steel grades, including tyre cord, spring steels, low alloy steels, and lead-free cutting steels, from 5.0 mm to 13.5 mm in size, at 70 meters per second at a rate of 1,000,000 tonnes annually. He added that the first two shears will be installed this summer, with the remaining two to be installed in November of this year. |
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JFE Steel to slash output of HRC JFE Steel Corp. will reduce its production of hot-rolled coil for export by 500,000 tons in the July-September quarter due to a correction in steel market prices, sources said. The cut, which will be equivalent to 7-8% of the company’s steel sales volume in the year-earlier period, will be the first reduction in about four years dating back to its pre-merger predecessors Kawasaki Steel Corp. and NKK Corp. “The commodity-grade market in Asia is in a temporary correction phase,” says Tsutomu Yajima, a senior JFE Steel official, noting requests from customers in South Korea and other markets for pricing discounts. Because JFE Steel has just accepted a large price increase for raw materials such as iron ore, it will lower production in a bid to keep its sales prices intact. The domestic market has also seen a boost in inventory mainly among commodity-grade steel due to an influx of imports. To address this, other steelmakers such as Nippon Steel Corp. plan to slash production of such products for the domestic market. JFE Steel says that it plans to keep production for the Japanese market in line with supply-demand conditions, and if inventories rise, the steelmaker may opt to hold back its supply to the distribution market. |
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Taiwan-based China Steel Corp.’s June revenue rose 27.1% from a year ago to NT$16.93 billion, mainly on higher steel prices, a company official said. Taiwan’s largest steel producer reported NT$13.32 billion revenue for June 2004. Steel prices rose this year, resulting in a rise in revenue, said the company official on condition of anonymity. For the first six months of the year, China Steel’s revenue rose 30% to NT$99.0 billion from NT$76.14 billion a year ago. In May, the steel maker said it would keep most of its product prices unchanged or raise them only moderately in the third quarter, citing concerns that a large price hike would adversely affect downstream steel companies. |
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