| |
|
|
|
|
| DECEMBER 2005 | |
| From the CEO's Desk | |
|
The iron & steel industry today is behaving in such a way that one should expect the most unexpected to happen !! Last few years saw the emergence of mini sponge iron sector in India. many such units having capacity of 100, 200 or in some cases 300 tonnes per day (TPD) mashroomed in the states like Chattisgarh, Orissa, Jharkhand, Karnataka etc. The prime advantage of these regions was their richness in raw materials like iron ore and non coking coal. Further, many units employed co-gen module to restrict their emmissions under state pollution control norms and also to produce the power which could itself run the plant. All was well till the sponge iron price level was comfortable at around Rs.12,000/- per tonne. Infact many promoters were able to earn back their investment during this period. Gradually the sponge iron prices went down and simulteneously iron ore prices went up. Today, the landed iron ore prices for Chattisgarh SI units is around Rs.3000 and selling price of sponge iron is around Rs.8250/- thus leaving only Rs.5250 for purchase of non coking coal, power bill and the other running expenses of the plant. Obviously, no SI unit can make profit in such a situation and as on now according to our sources, 46 SI units in the state of Chattisgarh are closed. Also around 135 induction furnace units are closed. The major demands of these uints (both SI and induction) are two fold. The landed price of iron ore should be reduced to around Rs.2000 per tonne and the power tarriff should be reduced from the present level of Rs.3.40 to around Rs.2.50 per unit. Then only the operations like SI production and induction melting could be viable. It is also understood that the units in the states like Jharkhand and Orrissa are also going to follow the same way and would be closed soon. This is a tremendous blow to iron & steel sector in this region. Any enterpreneour would not close the plant unless it is really unviable. Also, there are limitations to what and how much a state government can do in such matters. I am also told about some kind of formula which can link iron ore price to the selling price of sponge iron. The SI price differs from state to state and it is very difficult to monitor as it can have even daily fluctuations. In any case, I feel this problem has to be solved with top most priority as the fortune of iron & steel industry in this country is strongly attached to it and also because the economies of these states depend largely on mineral and metals industry. D.A.Chandekar
|
ELECON Engineering Company Ltd.
|
|
VSP bags energy conservation award Visakhapatnam Steel Plant (VSP) has bagged the “National Energy Conservation Award” for the fifth consecutive year. The award is instituted by the ministry of power. The award was given to VSP for its dedicated efforts towards energy conservation and for making it a mass movement by taking it to the grass-root levels, according to a company press release. Various initiatives have helped VSP reduce its energy consumption by over 21 per cent in the last five years. The energy conservation efforts have helped the company save about Rs 350 crore and many of the energy conservation solutions have been no-cost or low-cost solutions, the press release added. |
|
|
SAIL approves Rs 348 cr investment proposal The SAIL board has granted in-principle approval to some project proposals involving an envisaged investment of around Rs 348 crore in the company’s meeting at Rourkela. Two of these proposals pertain to infusion of new technology and upgrade of production facilities at Rourkela Steel Plant (RSP). The projects sanctioned are in addition to the capital schemes, valued at over Rs 3,500 crore, which are currently under various stages of implementation.The projects form part of SAIL’s growth plan that envisages enhancing hot metal capacity to around 23 million tonne by 2011-12. SAIL has decided to rebuild RSP’s coke oven battery- 4 at an estimated cost of Rs 195 crore to meet environmental norms. This will help RSP meet its higher requirement of coke for enhanced hot metal production in the coming years. Another proposal to invest Rs 116 crore for installing a coal dust injection (CDI) system at RSP is part of Sail’s decision to install alternative fuel technologies in its 20 blast furnaces, keeping in view the uncertainty faced globally in terms of coking coal. CDI technology has already been introduced in four of Bhilai Steel Plant’s seven blast furnaces and two of Bokaro Steel Plant’s five blast furnaces. |
|
|
Hannover Fair 2006 - the most important technology event around the globe, is scheduled to take place between April 24-28, 2006. This gains significance this time for Indian technology leaders, entrepreneurs and all others who want their technological upgradation as India is being honoured to be a partner country for which it has been offered a separate pavilion. The separate Indian pavilion would be one of the largest exposure ever of technology advances and prowess. Spread over an area of more than a lakh square feet, this opens opportunity for Indian technology leaders to showcase their innovations and sign business deals with the kings of the respective industries. The Hannover Fair 2006 is likely to be inaugurated by the honourable Prime Minister of India and the Chancellor of Germany. Concurrently, there would be a number of technological seminars and one-to-one discussions for the technological upgradation which would benefit not only to displayers but also to visitors. |
|
|
Prakash Industries moves towards integration Prakash Industries Ltd. is moving towards backward and forward integration of its plants in Chhattisgarh. The company is currently operating a steel plant at Champa in Chhattisgarh with manufacturing facilities for production of sponge iron, steel billets/blooms/ingots, power generation and ferro alloys. In a planned move towards the self reliance and ensuring the uninterrupted supply of consistent quality of raw materials for its manufacturing facilities, company has taken important steps towards backward integration. The company has been allotted two captive coal blocks (Chotia and Madanpur) by the central Govt in Chhattisgarh which are expected to start operating by next year. The company has also been allotted iron ore mines by the state Govt. (Nergaon and Metabodali mines in Chhattisgarh and Sirkagutu mines in Orissa). Consistent efforts are being put to start the mines with state of the art technology equipments with highest automation levels including coal washery and crushing plant. To get consistent availability of crushed Iron Ore for the DRI Kilns, company has a crushing and screening plant at Koira, Dist- Sundargarh in Orissa which will be further expended for its operating capacities after start of mining operations. |
|
|
Tata‘s Bangladesh foray hits gas pricing snag The Tata group may shelve its proposed Rs 5,000 crore Bangladesh project if it does not get the required concession from the local government. Tata Sons director J J Irani told reporters that the proposed projects of Tata Steel and Tata Chemicals critically hinged on the availability and pricing of gas in Bangladesh. “If we do not get it at a price which we are looking at there is no point (in) doing the project. This is simple because Bangladesh does not have iron ore. So, only advantage there is gas,” he said. The Bangladesh government was reportedly not willing to give gas at a concessional rate to the group. However, the group is confident that its telecom business would be in the top league among other group outfits in five years. The telecom business is likely to start making money in another two-three years, felt Irani. “The telecom should join the big league of Tata Steel, TCS and Tata Motors - the top three profitable entities of the Tata group,” Irani said. He also made it clear that Tata Teleservices (TTSL) would eventually be merged with Tata Teleservices (Maharashtra). “This (the merger) is going to happen but when we cannot say,” Irani added. TTSL, which had been incurring losses, should tide over gradually in the coming years. TTML, which operates in the Maharashtra circle, was in a comparatively better financial position hovering around the break-even, but was yet to establish as a profitable venture on a sustained basis. Tata Motors, Tata Steel and TCS are the top three companies of the group in terms of turnover and profit. Tata Motors tops the turnover chart of the group, while Tata Steel heads the profit chart. Earlier, commenting on the steel scenario, Irani said he opposed the export of high grade iron ore from the country, saying the raw material should be given to those who would make steel in india. |
|
|
13 steel plants on stream in Orissa Out of the 43 companies which had signed MoUs with the Orissa government for establishing steel plants in the state in last two years, 13 have since reached the commissioning stage. These 13 projects include six steel-cum-sponge iron units, five sponge iron units, one pig iron plant and another ferro chrome plant, according to Orissa steel and mines minister Padmabah Behera. Again six steel and sponge iron plants have started commercial production, while three of them have qualified for recommendation of captive mining lease as they had fulfilled the condition of attaining financial closure and 25 per cent capital investment mark. Steps are being taken for recommending mining lease to these three steel plants, he said. Responding to a query of Congress MLA, Lalatendu Bidyadhar Mohapatra in the Orissa assembly, the minister said, of the six steel and sponge iron projects commissioned till date, Bhusan Group of Companies had already produced 35,215.74 tons of steel and 87,156.23 metric tons of sponge iron from its plant set up at Lapanga in Sambalpur district. Production figures of other five steel-cum-sponge iron plants are as follows: Aarti Steels Limited (at Ghantikhal near Athgarh) - 1242. 2T steel and 8150T sponge iron, Neepaz Metalicks Private Limited (at Chadrihariharpur near Rourkela) - 16,500T steel and 1. 10 lakh ton sponge iron, Scaw Industries Private Limited (at Gundichapada near Dhenkanal) - 5402.201T steel and 40,546.910T sponge iron, SMC Power Generation Limited (at Hirma in Jharsuguda) - 36,586.95T steel and 57,166T sponge iron and Sree Metaliks Limited (at Loidapada near Barbil in Keonjhar district) - 48.616T steel and 1,18,944T sponge iron. Except the steel plant of Bhusan Group, other five projects are mini-steel plants of 500,000 ton capacity or below. Other five companies - SPS Sponge Iron Limited, Maheswari Ispat Limited, Orissa Sponge Iron Limited, Orissa Cement India Limited and Deepak Steels & Power Limited - are producing sponge iron from their plants located at Rampei near Khuntuni in Cuttack district, Govindpur in Sambalpur district, Rajgangpur in Sundargarh district and Topodihi near Barbil in Keonjhar district respectively. Besides, Visa Industries Limited is producing pig iron and Jindal Stainless Limited ferro chrome. Both the plants are located at Duburi in Jajpur district. |
|
|
Al Tuwairqi group orders SMS Meer Al Tuwairqi Trading & Contracting Est., Dammam, has awarded an order to SMS Meer, Italy, for the supply of a bar mill plant for their UK-based Thamesteel Ltd., Wellmarsh, Sheerness, Kent, reports said. The mill is designed for an annual capacity of 500,000 to 600,000 tonnes of steel products. With this new mill, Thamesteel Ltd. aims to serve the market with the full spectrum of long products including merchant bars and wire rod. The product mix includes rounds with diameters from 16 to 63 mm, rebars with diameters from 12 to 50 mm, flats 40 x 5 mm to 160 x 6 to 25 mm and equal angles 40 x 4 mm to 60 x 8 mm. Furthermore, the mill will supply the stock for the existing finishing block and wire rod line. The SMS Meer scope of supply includes a high-pressure descaler, 18 housingless mill stands, quenching and self-tempering facilities, lifting roller conveyor and a 102 m long rake-type cooling bed, stacking device, bundling, weighing and transfer units and all auxiliary facilities. As a system supplier, SMS Meer will also be responsible for the electrical equipment and automation system as well as for the software of the rolling mill and finishing line. Supervision of erection and commissioning and training are also included in the scope of supplies and services. The bar mill is scheduled to go into full production in the second quarter of 2006. SMS Meer S.p.A. forms part of the Tube, Long Product and Forging Technology Business Area of the SMS group. |
|
|
Buildco to set up reinforcing steel plant Abu Dhabi National Company for Building Materials (Buildco), is setting up a Dh225 million steel plant with an annual production capacity of 300,000-350,000 metric tonnes, reports said. The new facility will produce reinforcing steel. The Company is going to sign the supply contract by the first quarter of 2006. Already the Company has acquired a piece of land measuring 445000 square meters in the up-coming Industrial City of Abu Dhabi (ICAD)-2 for the project, which is to be called as. |
|
|
Al Usaimi to start steel bar and wire rod rolling mill Al Usaimi plans to start their 65,000/year steel bar and wire rod mill very soon in Dammam - new industrial area, reports said. The mill will produce wire rod in diameters 8 up to 30mm, and round bars up to 102mm diameter. The same line will also be able to produce steel angles, U channels and later on small I beams. A large part of the steel wire rod in coils and round bars will be used for production of shafting bars up to 100mm, in their existing shafting bar factory. Billets will be imported or bought from neighbouring Al Ittifaq, but Al Usaimi might add a small billets mill, to feed their rolling line, at a later stage. |
|
|
Capital Steel to start new rolling mill in Q1 2006 In March 2006, Capital Steel is expected to start their new rolling mill in Jeddah, which will be producing 250-300KT of rebars per year, reports said. The steel melting shop, with a planned capacity of 850KT/year is planned to start operation somewhat later in june 2006. This meltshop will feed both their rebar plants in Jeddah as well as their existing rebar rolling plant in Riyadh, producing at present about 450KT/year of rebars in dia 8 to 32mm. Capital Steel (Al Assema) sells their rebars through Al Rajhi Steel centers , mainly located in Riyadh and Al Qasseem area + through a number of independent stockists in Saudi Arabia. They also export some quantities to neighbouring GCC countries. The present Saudi steel rebar consumption is around 4.8 million tons. |
|
|
Hadeed starts teardrop pattern HRC production Hadeed - after successful trial production - started booking teardrop pattern coils orders for the Arab market, reports said. The thickness range produced will be from 1.8 up to 8mm. Up to now, thinner thicknesses teardrop coils used to be imported to Saudi mainly from Turkey and Hungaria, while most of the thicker pattern HRC were imported from East European countries. |
|
|
Unicoil - Jubail start trial runs on CR/GP unti Saudi Arabia’s Universal Metal Coating Company (Unicoil) is expected to start trial runs on its steel cold rolling line and on its galvanizing line very soon. Danieli designed and supplied this 250,000-metric tons/year cold-rolling and galvanizing complex in Jubail. The facilities include a push pull pickling line of 280,000 tpy a cold reversing mill of 270,000 tpy, a hot dip galvanising line of 270,000 tpy, along with a slitting, and a recoiling & inspection line. The 25-metric ton HR coils to be processed will be 1.6-4 mm thick and 650-1,400 mm wide. Finished CR coils, also up to 25 metric tons, will be 0.25-1.5 mm thick and 600-1,350 mm wide, and zinc coating thicknesses in the range of 100 to 350 grams/meter2. Commercial production is to start early 2006. Unicoil’s existing 120KT/year coil coating line, which is capable of painting galvanised steel, zinc aluminium coated steel, aluminium, tinplate and cold rolled steel. |
|
|
3M Packaging installing tinplate coil cutting line in Jeddah A new tinplate cutting line will be installed in Jeddah, to start operation in February 2006. The new company 3M will cut tinplate coils to sheets, for tinplate can makers in the area. The line is of Chinese make, with German technology, and would be able to cut 70 sheets per minute, reports said. 3M also plans to produce steel cans of 20 litres, as well as large square cans. |
|
|
Hadid Oman doubling rebar capacity Hadid Oman will be increasing it’s steel reinforcing bar production capacity from 8.000tonnes/month to 15.000tonnes/month by March 2006, reports said. Equipment is from Indian origin and will allow Hadid to manufacture also qualtiy BS4449 quality rebars (at present they only produce astm grade 60). Present rebar diameters produced are 8-25mm. About 80% of Hadid’s rebars sales goes to the Omani local market while about 20% is sold for export, mostly to the UAE market. Most billets are procured from the adjacent steel billet producer Modern Steel. |
|
|
The UAE government is actively studying public-private partnership finance options to build an emirates-wide freight railway costing up to US $3.8 billion (AED14 billion), reports said. The freight network would stretch from 700 to 1000 km in length and link up with a raft of other major rail schemes currently under study throughout the Gulf. The most likely financing option for the project is a PPP-style deal whereby a consortium would build and operate the railway following completion, according to Dr Nasser Saif Al Mansoori, assistant under-secretary at the Department of Planning and Economy. He outlined plans for the railway at this week’s Gulf Traffic exhibition in Dubai, where several other multi-billion dollar rail projects were also discussed. The Emirates Railway would extend from the Ruwais Industrial Area in Abu Dhabi to Ras Al Khaimah’s Port Saqr and link up with Fujairah and Jebel Ali ports. German consultant Dornier is already working on a feasibility study for the railway, which would cement the UAE’s position as the distribution hub of the Middle East. The project is just one of several rail mega-projects planned for the region, which include the $5 billion Saudi Landbridge railway. But the most ambitious plan to have been unveiled so far is for an Arabian railway network extending in a giant loop from the Syrian/Turkish border, through Iraq and along the Arabian Peninsula’s Gulf, Arabian Sea and Red Sea coasts. Murhaf Al Sabouni, general secretary of the Syria-based Arab Railway Union, revealed that Abu Dhabi, Dubai and Sharjah could be main line stops on the 1860km “third artery” of the proposed rail network between Basra and Muscat. |
|
|
Al - Tuwairqi Direct Reduction Iron Factory to start mid 2006 The first module of Al Ittefaq’s (Al Tuwairqi Group) new 500 - 750KT/year DRI plant is due start operation mid 2006, while the second module, of similar capacity, should start production early 2007, reports said. Midrex early this year signed a licensing agreement with Saudi Arabia’s Al-Tuwairqi Group, to enable the company to operate the first purchased MIDREX® DR Plant. The plant is one of two MIDREX DR Plants from Mobile, Alabama (USA) purchased by Al-Tuwairqi Group from Corus Group Plc in December 2004. The two plants each had a production capacity of 400,000 metric tons per year. |
|
|
Nippon Steel, Kobe Steel, Sumitomo Metal rise mutual stakes Nippon Steel Corp., Sumitomo Metal Industries Ltd. and Kobe Steel Ltd. said that they had increased their mutual shareholdings to strengthen their alliance, reports said. Nippon Steel has bought Y31 billion worth of Sumitomo Metal shares since last March, raising its stake in Sumitomo to 5.01% from 2.55%. Sumitomo bought an equal amount of Nippon Steel shares during the same period, raising its stake to 1.81% from 0.52%. Nippon Steel, Kobe Steel, and Sumitomo Metal, three of Japan’s top-four steelmakers, had already agreed earlier in the year to increase their mutual stakes to strengthen and carry out cooperation in mutual product supplies and technical development. Nippon Steel and Kobe Steel purchased Y3 billion worth of shares in each other, the three companies said in a joint statement. Nippon Steel’s stake in Kobe rose to 2.05% from 1.80%. Kobe now holds a 0.41% stake in Nippon Steel, up from 0.29%. Sumitomo and Kobe also bought Y3 billion of shares in each other. Sumitomo’s stake in Kobe rose to 2.05% from 1.80%. Kobe’s shareholding in Sumitomo increased to 1.71% from 1.52%. |
|
|
Russian steel makers to turn to domestic market Russia’s steelmakers, which in early 2005 seemed set to expand abroad both westwards and eastwards, will likely have to temper their appetites outside the country in 2006, reports said. As global steel consumption declines, prices are falling, while the cost of raw materials is increasing dramatically. Against this backdrop, Russian steelmakers are planning to increase domestic sales to the fast-growing local market, analysts and producers said. Steel consumption growth is coming from the construction and automobile industries, currently in the early stages of development in Russia, as well as from major oil and gas pipeline projects. Sergey Krivoshchekov, deputy general director of Magnitogorsk Iron & Steel Works, the largest steel producer in Russia, said he expects domestic consumption to increase at least 12%-13% a year in the next few years. And in 2006, analysts expect domestic steel consumption to increase 20%, to 36 million metric tons from 30 million tons in 2005. The five largest steel producers in Russia control 76% of national steel output, and together have been battling to keep prices high, analysts say. Producers managed to maintain steel prices on the domestic market in 2005 at 35%-40% above world prices, while their production costs are lower than those of their Western counterparts. But while Russian producers suffered less than others as a result of the collapsing world steel prices in the spring and summer of 2005, rising costs are starting to be felt. |
|
|
AK Steel, US Steel, Nucor lower following downgrades Three steel stocks fell Thursday after a couple research firms downgraded them, saying the recent run-up on Wall Street was overdone and highlighting the offshore competition, reports said. “The risk is that pressure from offshore producers may intensify as supply growth continues to eclipse demand and inventories grow in some markets,” Deutsche Bank analyst David Martin said. Martin downgraded both U.S. Steel Corp. and AK Steel Holdings to sell from hold, while Merrill Lynch cut Nucor Corp. to neutral from buy. The moves follow UBS’ downgrade last week of U.S. Steel to reduce from neutral, saying any takeover of the steel giant was unlikely. Steel names have been climbing recently after ThyssenKrupp AG bid $4.1 billion for Canadian steelmaker Dofasco Inc., topping a $3.8 billion hostile offer from Luxembourg’s Arcelor. “The recent run-up in steel stocks is based upon the recent merger talk, rather than industry fundamentals,” Merrill Lynch analyst Daniel A. Roling said in a research note that disclosed no conflicts with Nucor. Martin said pressure from offshore producers are real, and he doesn’t expect Asian steelmakers to be as disciplined about limiting supply as North American and European steelmakers have been. Martin disclosed no conflicts in his research. Roling said the current price difference between the U.S. and the rest of the world, as well as low inventory levels in the U.S., could push up imports heading into 2006. |
|
|
Dubai DMCC seeks to launch steel futures The Dubai Gold and Commodities Centre seeks to launch two steel contracts over the next 18 months, Colin Griffith, executive director of gold and precious metals, said. Speaking at the Euromoney Gold Investment Conference Griffith said the contracts wouldn’t take the form of a steel index as planned by the London Metal Exchange. The DMCC’s first steel contract will focus on the local market in the Middle East and will be “relatively easy” to establish, Griffith said. “Once the first contract is working, we’ll work on an internationally-based steel contract,” he said. Previous attempts to design a futures contract have been hampered by the multitude of steel grades among other aspects. “Four years ago when the LME first started thinking about a contract the steel industry itself was in a bad state,” Griffith said. “Now it’s a different scenario and it’s a much better time to launch steel contracts. We’ll overcome the specific problems for steel by working out a consensus through discussions with market participants.” The DGCC has hired advisors ahead of the launch, he said. The planned steel futures contract launch is part of the DGCC’s drive to establish a number of commodities contracts. |
|
|
MMK sees output up 1% this year Russia’s largest steel smelter Magnitogorsk Metal Plant, or MMK, forecasts its steel output to increase 1% on the year to 11.4 million tonnes this year, reports said. The company’s rolled stock output is projected close to flat, rising 0.5% on the year to 10.2 million tonnes this year, the company said. In January-November, the company’s steel output increased 1.1% on the year to 10.414 million tonnes. |
|
|
Buys further 41% stake in Mittal Steel Zenica Mittal Steel Company NV, the world’s largest and most global steel company, announced Monday that it has a acquired a further 41% stake in Mittal Steel Zenica from the Kuwaiti Investment Agency for US$98 million, reports said. This follows the 51% of the Company (then BH Steel) acquired from the government of the Federation of Bosnia-Herzegovina and the Kuwaiti Investment Agency in August 2004. As a result of the transaction, Mittal Steel now has a 92% shareholding in Mittal Steel Zenica. The remaining 8% is held by the Government of the Federation of Bosnia-Herzegovina. |
|
|
China aims to limit steel capacity to 400M MT By ’10 The Chinese government plans to limit the country’s annual steelmaking capacity to 400 million metric tons by 2010 as part of its efforts to rein in overly rapid expansion in the sector, reports said. It also aims to reduce the country’s iron production capacity using outdated technology by 100 million tons and steel production capacity using outdated technology by 55 million tons by 2010, the National Development and Reform Commission sources said. The statement didn’t provide figures for China’s current iron or steel production capacity using outdate technology. China’s steel industry has expanded rapidly in recent years, fueled by the country’s fast economic growth, prompting the government to take a series of measures to cool the sector since late 2003, including curbing bank lending. Despite the measures, China’s steel production capacity is still likely to be about 400 million tons this year, up more than 50 million tons from last year, according to Nicholas Lardy, a senior fellow at the Institute for International Economics in Washington. Much of the increase in capacity in recent years has been in the low-grade steel sector and China probably needs to import more higher-grade steel to feed robust domestic demand, analysts say. Steel prices in China have been falling amid overcapacity, pushing steel companies into the red. |
|
|
Magnitogorsk eyes Volkswagen steel supply deal Russia’s largest steel maker, Magnitogorsk Iron and Steel Works, will next month ship to Volkswagen AG a test consignment of 120 metric tons of zinc-coated steel roll with a view to signing a long-term supply contract, reports said. Magnitogorsk said if the tests carried out by Volkswagen on its steel were successful, it would sign a long-term contract to supply steel to Volkswagen every 30 days. |
|
| This
is a compilation of news from various dailies, magazines, trade publications
and Press Releases. To unsubscribe send mail to office@steelworld.com. Type Unsubscribe <your email address> in the subject line. |
|
