FEBRUARY   2009

 Steelworld Home

From the CEO's Desk

Dear Readers,

As we all know, there are many sub-sectors within iron & steel industry and interestingly, their response to recession is quite different.
Steel mills catering to the requirement of automotive industry are worst hit. Automobile production in last quarter is drastically reduced. This is because of the uncertainty prevailing in the industry has forced individual as well as corporate buyers to postpone their buying plans. Though the banks have reduced the interest rates, it will probably take few more months to change the mood and mindset. There is a slight increase in auto production in Jan 09 as compared to Dec 08 but is too small to be happy about. Further, lot of steel was going to forging units for auto component manufacturing. Forging industry was doing exceedingly well in last few years. Many companies had increased their capacity and were catering to developed world along with the domestic auto companies. India was all set to become forgings hub of the world but all these projections got shattered due to present unforeseen slump in the world economy. Today the overseas business is drastically reduced and even the domestic auto companies are operating at a very low capacity utilization. Forging companies and also steel mills are in a soup. I am told most of special steel producers are operating at less than 50 % capacity and are making huge losses every day. If this situation prevails for next few months, their accounts books will become really scary.
The situation with flat producers is slightly different. Their applications are quite diversified and thus, though they have reduced their production earlier, there is a gradual pick up. In fact, I am told JSW had made record production in CR and coated division in Jan 09. These mills may have kept their expansion plans on hold but I am sure once the situation is some what favorable, they will go ahead with their plans.
I must say that small and medium units based on sponge iron are doing comparatively better. Firstly, the raw material cost has substantially reduced and secondly, they are catering mainly to housing construction requirement which is less affected by worldwide recession. Also, they cater locally to nearby areas so that the logistic is also under control. The states like Chhattisgarh, Jharkhand and Orissa have many such units and I believe that in such testing period, they will perform better than others.

 D.A.Chandekar
Editor & CEO

Headlines

NEWS - VIEWS

SAIL expansion cost slip on downturn

JSW slashes investment in phase I of WB plant

CIL may hike coal prices next fiscal

JSW delays blast furnace commissioning

Orissa clears power, steel sector projects worth Rs 37,989 crore

Steel production up marginally in 10 months

JSW's steel sales growth may shrink to 10% this year

RINL cuts production by 30 % on demand slowdown

Tata Steel's January sales up 26%

Essar to set up 6-MTPA steel unit in Karnataka

Orissa defers decision on TATA Steel proposal

SAIL plans steel processing unit in Himachal

CIL rejects Rio Tinto's offer for developing coal mines

SAIL inks JV pact with CIL, RINL, NMDC, NTPC

Welspun bags orders worth Rs 500 crore

Steel demand to hinge on auto, shipbuilding industries

SAIL's steel production down 2% in January

JSW Steel reports 41% jump in steel output in Jan'09

JSL sets up logistics arm to curb costs

NMDC eyes over 25% production growth in Q4


GULF DIARY

Emirates Steel says rebar demand drop by 30% in UAE

South Steel Co project inks with BSF

Emirates Steel Industries to start new billet plant

Egypt Holding to buy 0.2% of Egyptian Iron and Steel

Egyptian steel importers may reduce prices

Turkish square billet prices comedown

Iran to reach self sufficiency in coal production



 
SOUTH EAST ASIAN DIARY

Vietnam inks rare minerals supply deal with Japan

Malaysian steelmakers urge for lower electricity and gas prices

Japanese December steel output lowest in 60 yrs

NPS increases stake in POSCO to 6.3%

Indonesian steel imports double in 2008

Nippon Steel cut prices of chrome sheets

POSCO cuts stainless steel prices by 14 %

Indonesia may curb cheaper steel imports





CHINA CALLING


China Coal production up 10.9% in 2008

Chinese steel industry to recover by 2009 end or early 2010

SinoSteel and E United Group ink strategic tie pact

Hangzhou Steel unveils production targets for 2009

Shougang boosts pipeline steel product output

Chinese steel market survey reflects positive trend

Hebei Steel moving forward on consolidation

 



EUROPE-AMERICA NEWS

US stainless steel consumption down 12%

Steel inventories in US and Canada continue downward trend in December

EU ends tariff threat on Chinese galvanized steel

Iron ore on recovery path

Magnitogorsk resumes operations after repairs

Russian steelmakers rise as Baltic Dry Index climbs on demand

Nucor reconsiders $3 bln plant on economy

ThyssenKrupp to save EU340 million after job cuts


 



 

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SAIL expansion cost slip on downturn   

Steel Authority of India Limited (SAIL), India's largest steel producer, expects the current slowdown in the global economy may reduce cost of its Rs 80,000-crore worth expansion plan to double its capacity. SAIL had originally planned to double its capacity by 2010, with an investment of Rs 54,000 crore. However, the cost of the plan rose to Rs 80,000 crore early last year when overbooked Europe- based equipment suppliers increased the prices. However, with the changed dynamics, SAIL expects to meet its target at costs close to the original estimate.
"The global economic slowdown has had a positive impact on SAIL. Equipment suppliers are now willing to offer larger discounts and are also promising timely delivery. According to initial calculations, this could reduce our expansion cost substantially," said an official of Ministry of Steel. Now, the state-owned company has started renegotiating equipment purchase deals that have not yet been finalised and is even exploring the possibility of getting discounts on existing supply deals. The company is trying to get best deal from suppliers who are also facing demand compression and looking desperately for buyers. Under the expansion plan, SAIL will increase its capacity from 15 million tons (mt) to over 26 mt by 2010. Roughly half of the orders for equipment have been placed and work on the remaining lot is being finalised.
Equipment is a big cost element in SAIL's expansion projects as it involves expanding production lines, putting up new ones and erecting new state-of-the-art blast furnaces. SAIL sources almost 80 percent equipment from the domestic market while the remaining comes from a select band of overseas suppliers.

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JSW slashes investment in phase I of WB plant

Faced with a liquidity crunch, the country's second largest steel producer JSW has revised its Rs 350 billion steel project in West Bengal and it has slashed investment in the first phase of project by 60 percent to Rs 40 billion.
As per the company's original plan, it was to set up a 10 million ton per annum in the state in three phases by 2020. JSW had planned to invest Rs 100 billion in the first phase which was to be completed by 2012. However, the waning demand for steel products and lack of liquidity have forced JSW to push the proposed steel plant the next phase. JSW Steel said that it is going slow on projects where financial closure has not been achieved. Unless rates come down they will not like to borrow any money. Therefore, they have not gone further with any syndication of loans for the West Bengal project. It said that they hoped the Phase 1 of the West Bengal project will achieve financial closure by March. They expect the interest rates to come down to below 10 percent by then from around 12 percent now.
MVS Seshagiri Rao, Director of finance, JSW, said that the firm will set up a beneficiation unit to purify iron ore, a pellet plant and develop coal mines with an investment of Rs 40 billion in its first phase. "We are implementing the Bengal project in phases. Phase-1, we are working on the raw material side. By end of this quarter, we hope to achieve financial closure for it." Rao added.
In November, JSW Steel laid the foundation of the 10 million ton steel plant, which is expected to be operational by 2020. The company, which acquired 4,500 acres of land for the plant, owns 89 percent of the equity in the Bengal unit while the remainder is held by the state government.

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CIL may hike coal prices next fiscal  

State-owned Coal India (CIL), the country's largest coal producer, may increase coal prices from the next financial year due to a 24 percent increase in its wage bill. Most of the thermal plants, who purchase coal from CIL, will be hit by the move.
"CIL may be forced to increase coal prices as it will end up this fiscal with a liability of close to Rs 5,000 crore after adjusting new wages for its workers retrospectively from June 30, 2006." said CIL Chairman Partha S. Bhattacharyya. Santosh Bagrodia, Minister of State for coal, also said that a decision on these lines might be taken for the next financial year. Increase in coal prices would hike the cost of power generation, which would be ultimately hampered on the end consumer. Currently, the variable cost of generation at a pithead thermal power station is Rs 0.75 per unit. "In case there is a price rise of domestic coal, it will be passed by the regulatory authority only in the following financial year, which will be 2010-11," according to Puneet Goel of KPMG Advisory Services.
According to a CIL estimate, the company will have a liability of Rs 8,500 crore for a five-year period starting 2006 on account of wage arrears. The Rs 5,000-crore liability for the current financial year includes gratuity cost burden of Rs 1,200 crore. CIL had revised coal prices by 10 percent in December 2007 due to implementation of the previous round of the national coal wage agreement retrospectively.

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JSW delays blast furnace commissioning 

Commissioning of JSW Steel Ltd's massive blast furnace is unlikely to take place before March.
“We are delaying commissioning in view of the present crisis in the steel industry. The current market is not conducive to absorb any extra production." said JSW director Dr S.K. Gupta Claimed to be the country's largest, the blast furnace (4,300 cubic metres) has the capacity to produce 2.8 million tons (mt) of hot metal annually. It is the third blast furnace at the JSW plant.
Asked if there was already a production cut, Gupta said one of the two operating blast furnaces - producing at a rate of about 3,000 tons of hot metal a day - was closed but it was being put back into operation. Total capacity of the two blast furnaces is 4 mt of hot metal annually.
Gupta said there was little activity now over the group's proposed West Bengal plant in Salboni. "In view of the present situation, we're going slowly over our new investment plans," he added.

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Orissa clears power, steel sector projects worth Rs 37,989 crore


Orissa government has cleared the projects worth Rs 37,989 crore in the power and steel sectors.
This includes five projects in the power sector-with a combined investment of Rs 28,704 crore and an aggregate generation capacity of 6,120 MW- and one steel project at an additional investment of about Rs 9,285 crore. "Ind-Barath Energy Utkal Ltd would set up a 700-MW (2x350) thermal power plant at Sahajbahal near Banaharpali in Jharsuguda district at an investment of Rs 3,150 crore. Visaka Thermal Power Pvt Ltd would set up a 1,100 MW coal-based power plant at Bhandaripokhari or Banto block in Bhadrakh district at an investment of Rs 4,800 crore." said Orissa industry secretary Saurav Garg and energy department secretary Pradeep K. Jena. The High Level Clearance Authority approved the 1,680-MW thermal power project proposed by L&T Ltd. at an investment of Rs 10,200 crore near Dhamra in Bhadrakh district.
Jindal Steel & Power Ltd will set up a 1,320-MW thermal power plant at Athamallik tehsil in Angul district with an investment of Rs 5,940 crore.

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Steel production up marginally in 10 months

The country's steel production rose to 46.8 million tons in the first 10 months of the financial year 2008-09 that ends in March, up 1.1 percent from a year earlier. Among the large producers that control about a third of the domestic market, output at state-run Steel Authority of India was down, while Tata Steel remained steady. There has been a growth in long products used mainly in housing, but flat products were down owing to slower off-take from the engineering sector. India, which makes about 53 million tons of the metal a year, is the world's fifth largest steel producer .

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JSW's steel sales growth may shrink to 10% this year

Sluggish sales in third quarter are likely to pull down steel giant JSW Steel's sales growth to 10 percent this fiscal as against the expected 30 percent. "October-December was a very difficult quarter. People did not know about what was happening in the economy. For the full year, our growth could be at 10 percent as against the earlier expected 30 percent," JSW Steel Vice-Chairman and Managing Director Sajjan Jindal said. The steel major has seen a pick up in sales volumes in January that would help it clock an around 50 percent growth in the fourth quarter of the 2008-09 fiscal. The steel-major doesn't have any plans to raise debt as of now and it was trying to reduce its dependence on debt over a period of time. Noting that the steel prices have stabilized in global markets, Jindal said he did not expect any remarkable improvement in prices in the forseeable future. Banks have increasingly turned risk averse in the wake of the global financial crisis and corporates, which are not performing well, may face issues in raising funds.

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RINL cuts production by 30 % on demand slowdown

State-run steel maker Rashtriya Ispat Nigam Ltd (RINL) has cut its production by nearly 30 percent due to slackening demand of the commodity from consuming sectors like automobile and manufacturing. Its current level of production is restricted to 70 percent in view of the global financial crisis that has led to a dip in demand from automobile and manufacturing sectors. RINL has an annual production capacity of about 3 million tons. Owing to the dip in demand over the months, the steel major is left with a huge 6 lakh ton of inventory worth about Rs 1,800 crore. The company managed to clear about 33 percent (2 lakh tons) of its stockpiles in January by way of “aggressive selling and foregoing the premium” that it used to charge on its products earlier. During April-January period of the current fiscal, the company's saleable steel production stood at 2.35 million tons, which it claims is 93 percent above the planned target and 106 percent of the rated capacity. The company's turnover for the ten-month period stood at Rs 7,994 crore, up two percent compared to Rs 7,827 crore of the corresponding period in the last financial year.

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Tata Steel's January sales up 26%

The country's leading steel producer, Tata Steel, reported 26 percent rise in January sales to 5.1 lakh tons on account of revival in demand. Amid the global economic downturn, the steel major's sales volume had dipped by about 14 percent to 1.07 million tons in the third quarter ending December. Beginning the fourth quarter on a buoyant note, Tata Steel saw its January sales improve by 1.1 lakh tons to 5.1 lakh tons. The company's hot metal production in the reporting month also increased by 32 percent to 5.7 lakh tons against 4.3 lakh tons in the same month of 2008. Its crude steel output also increased by 25 percent to 5.2 lakh tons from 4.1 lakh tons. The company said its steel melting shops and 'H' blast furnace at Jamshedpur unit recorded their best-ever production of 5.24 lakh tons (crude steel) and 2.57 lakh tons (hot metal) respectively. Besides reporting an increase in sales volume and output in January, the firm said it started civil construction work at its proposed 6-million-ton integrated steel project at Kalinganagar, Orissa. The world's sixth largest steel producer Tata Steel plans to invest about Rs 22,000 crore in its Orissa project. Tata Steel has already undertaken brownfield expansion to enhance production capacity to 10.5 million tons by 2010. At present, the company's Jamshedpur plant has a capacity to produce about 6.8 million tons of steel annually. In addition to increasing the capacity of its existing unit, the steel major is in process of setting up greenfield projects in Jharkhand, Orissa and Chhattisgarh. While in Jharkhand it proposes to invest about Rs 42,000 crore for a 12-MTPA integrated steel plant, in Chhattisgarh it intends to pump in Rs 18,000 crore for setting up a 5-MTPA steel plant. For all the proposed greenfield projects, the company claims it is in the process of acquiring land and raw material resources.

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Essar to set up 6-MTPA steel unit in Karnataka

Ruias-promoted Essar Steel is planning to set up a 6-MTPA steel unit in Karnataka at an investment of Rs 17,760 crore as it looks to increase its annual capacity to 25 million tons by 2015. The Karnataka government has already cleared investment proposals. The plant is to be set up at Bagalkot in the state. Initially, the plant would have a 3 MTPA capacity which would be doubled to 6 MTPA in the second phase. The proposal is to set up a pellet plant, a coke oven plant and a battery in the first phase for which the company has asked the state government to lease an iron ore mine for uninterrupted supply of the raw material. At present Essar Steel's production stands at 4.6 MTPA at Hazira in Gujarat and plans to increase the capacity to 9 MTPA. Its Indian operations also include an 8 MTPA beneficiation plant at Bailadilla in Chhattisgarh and an 8 MTPA pellet complex in Visakhapatnam in Andhra Pradesh. The company is also working on putting up a 6 MTPA integrated steel plant at Paradeep in Orissa. The project would be developed in two phases. In addition to its Indian operations, Essar Steel has a presence in Canada, US and Indonesia. Essar Steel Algoma has 4 MTPA capacity. PT Essar Indonesia, the second largest producer of cold-rolled steel in the private sector in the country, has a rolling capacity of 400,000 tons per annum. Minnesota Steel, which Essar acquired in 2007, plans to set up a 2.5 MTPA integrated steel plant with an estimated cost of USD 1.65 billion. Already the fifth largest steel producer in the world, India in its National Steel Policy has envisaged production of the alloy to reach to 110 MTPA by 2019-20. However, based on the assessment of ongoing projects, the Ministry of Steel has projected that the country's steel capacity is likely to be 124.06 MTPA by 2011-12.
As per the status of MoUs of private producers with various state governments, India's steel capacity would be nearly 293 MTPA by 2020.

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Orissa defers decision on TATA Steel proposal

Orissa government has deferred a decision on according permission to a proposal of Tata Steel for setting up a 1.5 million ton per annum steel unit. The decision was taken at the state level single window clearance authority meeting.
Ashok Meena, MD of the Industrial Promotion and Investment Corporation Limited, said that "TATA's proposal is deferred for decision in view of difficulties in acquiring land." The meeting also discussed TATA's Kalinganagar project which has not yet come up though the MoU for the 6 million ton per annum steel plant was signed way back in 2005.
A senior industry department official said that "Delay in implementation of the Kalinganagar project was also a factor for not giving the go ahead to the steel major's new proposal." Though the state owned Industrial Development Corporation said that land was available near TATA's sponge iron factory, it said that it would be difficult to acquire for the proposed new unit.
TATA which has a sponge iron unit at Bileipadar under Joda tehsil in Keonjhar district had evinced interest to set up a 1.5 million ton per annum steel plant adjacent to its old factory. The steel major which asked for 100 acre for setting up a second steel mill, also demarcated a huge open space near its sponge iron plant.

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SAIL plans steel processing unit in Himachal

The state-owned Steel Authority of India (SAIL) is planning a new steel processing unit in Kangra district of Himachal Pradesh.
According to a report, the 1, 20,000-tons per annum (tpa) plant would produce TMT steel rods, drawn wire and corrugated sheets with an investment of Rs 1.06 billion. SAIL had recently announced plans for building a similar 1,00,000 tpa unit in Uttar Pradesh for processing billets into TMT rebars. It has also started setting up a bar rolling unit in Gwalior in August and another in Pulwama in September.
The company has also started work on a 2,6,000 tpa processing plant for bar and pipes in Betiah and a 2,50,000 tpa unit in Mahnar for galvanised tubes and bars in Bihar.

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CIL rejects Rio Tinto's offer for developing coal mines

Coal India Ltd. (CIL) has rejected global major Rio Tinto's bid for developing its abandoned and underground mines of coal, saying the company “falls short of expertise” to take up the venture.
"Rio Tinto has not developed any abandoned mines. Their experience in underground mining and DPR also falls short of what our 'Notice Inviting Tender´ (NIT) stipulates,” Coal India (CIL) chairman Partha S Bhattacharyya said. Besides seeking a turn-key contract for the underground mines, Rio Tinto India had shown interest in partnering with CIL for developing its 18 abandoned mines which have an estimated coal reserve of 1,647 million tons. While Rio Tinto MD Nik Senapati said, " We participated in the E0l (expression of interest) and are waiting for a decision to be made by CIL." Navratna PSU CIL plans to produce about 100 million tons of coal from its underground operations by 2016-17. The seven underground mines on offer by for revival possess about 20 million tons of coal.
Though the mines are to be awarded on a turn-key basis, Bhattacharyya said CIL will invest about Rs4, 000 crore in it. The country's largest coal producer has already prepared NIT for the underground mines and is seeking comments from the nine short-listed companies out of the total 17. It is likely to float a tender for awarding the project next month.
Besides Rio Tinto India, the companies vying for the underground mines include Reliance Infrastructure, Indo Australian Mining and Bucyrus of Germany.
For the abandoned mines, being eyed by 12 corporate majors, including ArcelorMittal, Reliance, Sterlite, Essar and JSW Steel, the technical bids are under evaluation with Central Mining and Planning Development Institute.

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SAIL inks JV pact with CIL, RINL, NMDC, NTPC

Steel Authority of India (SAIL) has signed a joint venture agreement with Coal India (CIL), Rashtriya Ispat Nigam (RINL), NMDC and NTPC for setting up of a special purpose vehicle i.e. International Coal Ventures (ICVL) for acquisition of coal mines and block overseas for securing coal supplies.
The company will have its registered office in the National Capital Territory of Delhi and will be incorporated with an authorized capital of Rs 10 million, which shall be increased from time to time depending upon needs of the joint venture company.

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Welspun bags orders worth Rs 500 crore

Welspun Gujarat Stahl Rohren Ltd (WGSRL), the world's second largest pipe producer, has bagged orders for LSAW pipes worth Rs 500 crore from the Gas Authority of India Ltd (GAIL).
Now WGSRL's existing order book position will reach over Rs 10,000 crore in comjuction with other significant orders obtained by the company in the last few months. The order book position is almost double the company's revenue of Rs 4,000 crore in fiscal 2008-09. “Welspun takes pride to deliver this prestigious order in the Indian soil. These orders not only reaffirm our position as a global supplier, but also reiterates its reach in the premium segment of the Indian pipe market,” said B. K. Goenka, vice chairman and managing director of Welspun.

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Steel demand to hinge on auto, shipbuilding industries

The automobile sector is expected to lose 7 percent in volume in 2009. Michael Pfitzner, Executive Vice-President, ArcelorMittal, said, "Only in 2010 and onwards will we see a resumption of the sector." He anticipated that the present crisis would result in a general production of cars and steel used in car manufacturing. Pfitzner added that a crisis in shipbuilding plates would also redesign global steel consumption. "Capesize freight rates have dropped dramatically in 2008 and the order books of shipyards are shrinking by the day,” he said.
"There will be a major change for the supply and demand situation for shipbuilding plate and this product will probably face overcapacity in the coming years," he added. The impact of the crisis in the automotive industry and the coming plate market difficulties will be a readjustment of steel prices and volumes.

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SAIL's steel production down 2% in January

The country's largest steel producer, Steel Authority of India Ltd (SAIL) reported a marginal 2 percent decline in its January production at 1.12 million tons. In the corresponding month of the last fiscal, the steel major's production stood at 1.14 million tons. Nevertheless, the capacity utilisation of SAIL plants was 110 percent in January and its inventory position is for 30 days. There were no production cuts December and the output of December-January was completely sold off, not adding to the inventory levels.

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JSW Steel reports 41% jump in steel output in Jan'09

JSW Steel, the country's second largest private steel producer, reported its crude steel output surge by 41 percent to 3.21 lakh tons in January 2009 over the previous month as the steelmaker recommenced operations from closed furnaces in view of improving demand. However, the production in last month was down by 3 percent compared to its output of 3.30 lakh tons in January 2008. Recommencement of two (blast) furnaces last month, which were temporarily shut down during November and December 2008, led to higher output. First few days, it (production) took time to pick up and that is why there is a difference (when compared to the last year's level). JSW steel undertook capacity revival of its mills in January as its demand scenario improving in coming months. In December 2008, the company's crude steel output stood at 2.28 lakh tons. The output of specific steel products such as flat products, and long steel items stood at 2.60 lakh tons and 38,000 tons, respectively, in last month against 2.13 lakh tons and 29,000 tons in December 2008. However, the firm failed to meet last year's production level of 2.65 lakh tons of flat steel items.

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JSL sets up logistics arm to curb costs

The country's largest stainless steel producer JSL has set up a logistics arm and will be investing up to Rs 100 crore in the firm in the next two years to curb cost on its cargo movement. Initially, the company would invest Rs 25 crore. JSL Ltd spends up to Rs 800 crore per annum on movement of inbound and outbound cargo, including raw materials and finished alloy products. Through its new logistics firm, the company intends to save the 20-30 percent margins that hired transporters make on ferrying cargo. Initially, JSL Logistics will cater to the phase-I of the company's eight lakh ton stainless steel project, which is being set up in Orissa with an investment of about Rs 6,000 crore. Among the suppliers of heavy commercial vehicles, JSL Logistics is favoring Tata Motors, as the auto major is offering a better deal.

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NMDC eyes over 25% production growth in Q4

The country's largest iron ore producer, the public-sector National Mineral Development Corporation (NMDC), expects its fourth quarter production to surge by over 25 percent to 8.5 million tons on the back of an improved demand for the mineral from domestic steel sector. As demand from the steel sector has started reviving, the company hopes to achieve over 25 percent growth in iron ore output in the fourth quarter. In the third quarter ended December 31, 2008, NMDC had produced about 6.6 million tons of iron ore. The proposed increase in production would negate the effect of the 25 percent cut in iron ore prices announced by NMDC for its long-term domestic customers from December 1. Though realisations from the sales in the fourth quarter will be low, its effect would be offset with increased output. Owing to slackening demand for steel from sectors like housing and automobile, steel companies like Essar, JSW, RINL and Ispat had reduced their iron ore offtake from NMDC by over 35 percent from October onwards. Navratna PSU produces about 30 million tons of iron ore per annum, of which it exports 3.5 million tons to Japanese and South Korean steel mills, while the rest is consumed by domestic steel producers.

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Emirates Steel says rebar demand drop by 30% in UAE   

The steel demand in the UAE may fall by over 30 percent in 2009 in the wake slowdown in the construction sector, said Sridhar Krishnamoorthy, CEO, Emirates Steel Industries. He forecasts the demand in 2009 in the UAE for rebars would be about 4.5-5 million tons, around 17-31 percent down from 6-6.5 million tons in 2007. However, he also said," In the first three week of the January there is a considerable bounce back in demand, with a lot of production cuts taking affects and the inventories have gone down, so we feel healthy demand." Krishnamoorthy expects the price to recover by about 5-10 percent. He said, "I suspect the price will start moving up as we see a bounce back in demand, more than we expected. In most regions the price has gone up marginally, 5 to 10 percent and the same is likely to happen in the UAE."
High stockpiles and dwindling demand has resulted in rebar prices falling to around USD 500 per ton, a third of what they were at their peak in mid 2008.

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South Steel Co project inks with BSF        

Banque Saudi Fransi signed a SR912.25 million deal to finance the South Steel Co project, one of the largest steel projects in the Gulf region.
The first phase of South Steel Co. project, which has a paid-up capital of SAR 450 million, will get total investment of SAR 1.3 billion. The BSF has poured SAR 912.5 million for the project, which will start production in 2011. This project is being promoted by SPKH, which own 60 percent of the project, while rest of the project-40 percent- is shared by three partners including the UAE based Dubai Investments Industries, which has acquired a 10 percent stake. The project would be built up on 6,000 sqmt out of a total area of one million sqmt in Jazan Economic City. Promoted by SPKH, the new steel plant will be set up with technological assistance from Germany-based SMS Group, to produce top-quality steel billets and reinforcement bars in accordance with international standards. Jean Marion, MD of BSF, said," The BSF is a strong bank and it continues to lend funds for good projects even in this period of global economic downturn.” Al-Harbi said that the project will be set up in three distinct phases. The first phase, on which the construction will start soon, will produce 1.5 million tons of steel of different kinds. the deal was inked by Mr Jean Marion MD of BSF, while Sulaiman Saleem Al-Harbi chairman of Saudi Pan Kingdom Holding Co signed, on behalf of South Steel Co. The event was attended by several senior bankers and SPKH executives including Abdulrahman Al-Jawa, BSF's deputy MD and Mohammed Al-Jedia MD of South Steel Company.

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Emirates Steel Industries to start new billet plant        

Emirates Steel Industries will start operation of a new steel billet plant in Musaffah. The company is planning to launch the country's first integrated steelmaking operation in the spring and control a third of the local market.
The plant will serve as a middle link in the integrated chain by turning reduced iron pellets into 1.4 million ton of rectangular billets, the raw material for adjacent rolling mills, which cast rebar and wire rod. Ahmed al Dhaheri, Assistant VP for projects at ESI, said, “when a third plant starts up in April 2009 to make the pellets, it will be able to transform iron oxide directly into usable products in a USD 820 million operation, an investment that will boost its profit margin and shield it from the volatile prices for steel inputs.”
He added “We were basically dependent on the international market for securing all our raw materials, so the management decided we should become an integrated plant. By being integrated, it gives the company an advantage to compete with other players in the market.” Al Dhaheri however said that he was confident that prices had already hit bottom, and the firm was proceeding with plans to get two new mills up to full production, raising the company's output capacity to 2 million tons per year. He noted that “The volume has increased, and the prices in the last two weeks have turned the corner.”
The ESI facility currently uses imports of billet to produce more than 700,000 tons of rebar a year. It controls about 20 percent of the steel market in the UAE, but as the two new mills ramp up production, ESI will potentially hold 35% of the market. It is also constructing an adjacent USD 1.5 billion plant that will be a copy of the first integrated complex, but produce 1 million tons of structural beams when it opens in 2010. A third integrated operation, planned for Taweelah, will produce flat steel products, which will serve as raw material for the development of a downstream industry, fashioning anything from boilers to car parts to piping.
A fourth plant will transform up to 10 million tons of iron ore into usable pellets, allowing the company to source materials directly from mines. Final investment decisions have not yet been announced for the third and fourth projects.

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Egypt Holding to buy 0.2% of Egyptian Iron and Steel        

Egypt Holding Company for Metallurgical Industries is seeking to buy 1 million, or 0.2 percent of Egyptian Iron & Steel shares at price of EGP 13 million.
The Capital Market Authority is currently reviewing the offer. The holding firm already owns 97.60 percent of Egyptian Iron & Steel while the remaining 2.40 percent are free float.

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Egyptian steel importers may reduce prices   

Egyptian steel importers will reduce price between EGP 3100 and EGP 3250 per ton, after the average price has reached EGP 3800. The move would put domestic producers in trouble amid of recessionary period.
The move came in response to Ezz Group announcing a price reduction to EGP 3400 ex factory and EGP 3520 for the consumer so as to beat Beshay Steel that sells for EGP 3700 and El Garhi Steel that sells for EGP 3600. According to a report, Beshay and Garhi would compensate through the imported shipments arriving in the coming days. The Ezz Group domestic market share amounts to 200,000 tons per month, with 90,000 tons accounted by Beshay and 20,000 tons by Garhi.
The report said it is expected more declines in prices when the quantities from Turkey arrive in February 2009, especially since most of these quantities were bought for EGP 2800. A number of local producers accused the Egypt's ministry of Industry of not supporting that national industry by allowing the dumping of Turkish steel. Rafiq el Daw, VP of Egypt National Steel said that “The Turkish steel is sold in Turkey for USD 600, while it is exported to Egypt for USD 500, which means that there is suspicion of dumping the Egyptian market, and which requires the intervention of the ministry of commerce to legalize import and protect the national industry.

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Turkish square billet prices comedown   

Due to high prices of square billet in domestic market, Turkish still mills pruchased the square billets from CIS. However, the current CIS and Turkey's square billet prices have started to comedown in wake of dropping scrap price. Turkish electric furnace mill have cutting down the purchasing volume of scrap and focusing on CIS and Europe's square billet recently. Besides, the scrap demand dips due to weak demand of global finished products.

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Iran to reach self sufficiency in coal production          

Ali Akbar Mehrabian, minister of industries & mines of Iran will inaugurate a development project at the Hamkar coal mine, Kerman Province, which will increase its annual output by 17,000 tons, bringing the country to self sufficiency in coal production, said a report.
Mehrabian said that the project has cost 250 billion, generating some 1,000 direct and 2,500 indirect job opportunities. The report added that 70% of the related machinery and equipment are domestically made.

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Vietnam inks rare minerals supply deal with Japan

Vietnamese government will provide a stable supply of rare earth minerals, which is required for manufacturing high tech products, to Japan.
According to a report, the trading companies Toyota Tsusho Corporation and Sojitz Corporation, and the Vietnamese government run resource development company will form a joint venture (JV) to start developing a major earth mineral site in Vietnam in the next fiscal year. More than 90 percent of raw minerals are imported from China. The JV will start commercial mining operation as early as 2011, supplying about 5,000 tons of the minerals, or about a quarter of Japan's annual consumption, for about 20 years.
Toyota Tsusho and Sojitz plan to acquire 49 percent of the deposit rights, but the economy, trade and industry ministry official said that," The majority of the unearthed minerals are highly likely to be exported to Japan." Rare earth minerals, such as the elements lanthanum, cerium and neodymium, are indispensable in the manufacture of permanent magnets for products such as hybrid vehicle motors and computer hard disks. Demand for the minerals is expected to continue growing. Japan plans to provide resources development project by having Japan Oil, gas and Metal National Corporation conduct geological surveys of the planned area and have official development assistance used to build roads and bridges. Now gaining the rights for rare earth minerals deposit in Vietnam, Japan is will get stable supply of the minerals. In 2008, Vietnam government drew up a framework to support efforts by domestic companies to secure supplies of natural resources to the country. However, even if all of Viet Nam's rare earth mineral production was imported, it would only cover about a quarter of Japan's annual consumption. Further efforts to diversify mineral supplies are needed.

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Malaysian steelmakers urge for lower electricity and gas prices  

Malaysian Iron and Steel Industry Federation has requested the government to cut electricity tariff and reduced the gas prices. The federation urged to revert to the level of the previous rates before July 1, 2008.
According to MISIF, the lower prices will help the steel industry to better manage costs. The Malaysian steel industry has been suffered a 60 to 70 percent demand and also a serve reduction in prices of materials and products from August 2008. The federation said that the reduction in energy cost will assist the manufacturing sector, especially steel for which energy and gas contributed about 16 percent of production cost, to bring costs. The government increased the gas prices to the Malaysian power sector and a corresponding to the adjustment to the electricity tariff, both effective from July 1, 2008. The gas price for industrial users consuming less than 2 million standard cubic feet per day was increased from MYR 9.40 per million British thermal units to MYR 32.56 per million British thermal units, while for consuming above 2 million standard cubic feet per day, it was raised from MYR 11.32 per million British thermal units to MYR 32.56 per million British thermal unit. The electricity tariff went up by 26percent.

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Japanese December steel output lowest in 60 yrs 

Japanese crude steel production in December dropped by 27.9 percent YoY to 7.48 million tons, registering the lowest fall since January 1949.
Japan Iron and Steel Federation said the country's steel production reduced for the third consecutive month in the view of declining demand for automobiles amid the worsening economy. The federation also added that the production at Japan's blast furnace in December 2008 plunged by 24 percent YoY to 5.91 million tons while output from electric arc furnaces dropped by 40 percent to 1.57 million tons. In 2008, Japan's crude steel production fell 1.2 percent YoY to 118.7 million tons, the first annual decline in three years. JISF said that steelmakers are reducing the production as steel demand from housing and electric products is coming down.

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NPS increases stake in POSCO to 6.3%    

South Korean's National Pension Service (NPS) bought 1.76 million shares in steelmaker POSCO to increase its stake in the world's No.4 steelmaker to 6.3 percent. NPS already a top shareholder of POSCO now owns 5.5 million shares of POSCO.
Lee Ku-taek, Chief Executive, POSCO, had offered to resign as the company brace for its worst monthly results in January due to faltering steel demand globally as a result of steepening global economic recession. Lee, who has been at the top job since 2003, said his decision was to make way for a new leader helping POSCO go through the worst crisis in its 40-year history. Other big shareholders of POSCO include Japan's Nippon Steel and South Korea's top mobile operator SK Telecom.
Prior to announcement, NPS, which had steadily increased its investment in POSCO since 2007, had a 4.3 percent stake.

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Indonesian steel imports double in 2008    

Indonesia's imports of iron and steel doubled in 2008 as rising prices in the first half prompted steelmakers and users to boost stocks.
According to data from the country's Central Statistics Bureau, imports of steel raw materials and products rose to USD 11.6 billion last year from USD 5.5 billion in 2007.
The data showed, billet, slab, pig iron and scrap totaling 9.8 million tons and worth USD 8.29 billion were imported last year as compared with 7.13 million tons valued at USD 4.17 billion in 2007.
Purchases from overseas of iron and steel products, such as coils, plates, nails and pipes, rose to 1.52 million tons valued at USD 3.35 billion, compared with 836,064 tons valued at USD 1.37 billion the previous year.

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Nippon Steel cut prices of chrome sheets  

Nippon Steel & Sumikin Stainless Steel Corp., Japan's largest maker of the alloy, cut the price of chrome-based sheets for a fourth month on lower costs for ferrochrome, an ingredient in steel. Sheets will sell for 301,000 yen ($3,298) a ton under February contracts, compared with 304,000 yen a month earlier, the Tokyo-based company said. The price of nickel-based sheet remains at 350,000 yen a ton. The deepening recession is reducing demand for steel from builders and makers of cars and appliances. Nippon Sumikin is 80 percent owned by Nippon Steel Corp. with the remainder held by Sumitomo Metal Industries Ltd.

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POSCO cuts stainless steel prices by 14 %  

South Korea's POSCO, the world's No.4 steelmaker, cut stainless steel price by up to 14 percent in its second price reduction in six months in the wake of weak demand and falling input costs.
"The move is to respond to imports of cheaper stainless products from Japan and Taiwan as well as to reflect falling ferrochrome prices," POSCO said. POSCO has cut prices and production of stainless steel products since the third quarter of last year as buyers delay purchases on expectations of lower prices.
But it had to expand production cuts in the fourth quarter, cutting output by 38 percent from the previous quarter, as a deepening global economic downturn hit the steel industry hard and weakened demand for rustproof stainless steel, used in products ranging from kitchenware to machinery and aircraft.

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Indonesia may curb cheaper steel imports   

"Indonesian government will intensify steel imports barriers following the dumping of cheap iron ore from outside the country." said Anshari Bukhari director general of metal, machinery & textile industry.
Protecting the local industry is a policy that must be made by the government, said Anshari. He cited that hot rolled coils are sold at USD 700 per tonne, while imported steel are sold under USD 600 per tonne. The price of imported products is considered irregular.
He explained that steel imports can only be done by registered producers. Meanwhile, the entry point for imported steel will not be limited by the government. He said, "This applies for upstream to downstream products, from hot rolled coils to nails." Anshari said that the government's policy requiring the procurement of government services to use local products will help the national industry. This policy includes steel products. He added,"The policy can support the weakening steel industry caused by declining orders. Some industries have begun cutting their production.

 

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China Coal production up 10.9% in 2008

China Coal Energy Co Ltd of China produced 100.37 million tons (mt) of raw material coal in 2008, up by 10.9 percent from the previous year.
The company's sales rose by 3 percent to 87.75 mt during the year. Out of the total sales, 72.07 mt were shipped to the domestic market while the rest 15.66 mt went for exports. The growth was also visible in its coal coke production which reached 3.67 mt, up by 8.8 percent from the previous year, stated a Tex Report data.

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Chinese steel industry to recover by 2009 end or early 2010    

The first half of 2009 would be the hardest period for the steel development as well as the most important time for steel industry to run into stable operation with state stimulating policies take effects." said Song Jijun, Vice-Chairman, Hebei Metallurgical Industry Association. He anticipated that the Chinese steel industry would recover on later this year or early next year, boosted by the actualization of national policies. Songs said that crisis has not touched to the bottom, and the worst period yet to come and serious results will appear in future. Under this situation, the international economy will come into correction period, so will China's industries. China is expected to continue the recurrent winter in economic development.
Owing the current situation of the industry, he said that steel process gradually recover while the overcapacity becomes more obvious in 2009. Songs said, “The current trend will change market structure and competitive systems. And steel makers have to change their strategic transformation and optimizing structure.

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SinoSteel and E United Group ink strategic tie pact      

SinoSteel, the largest steel producer service provider, and Taiwan-based E-United Group inked an agreement for strategic cooperation.
E-United Group, owns four lines-production, medical care, education and real estate, is entering in steel business. Both in the mainland and Taiwan, it has built YIEH United Steel, Yieh Phui Enterprise and Lianzhong etc.
Under the agreement, SinoSteel plans to set up a branch in Taibei to coordinate with E-United and help organise work there. SinoSteel will supply raw materials, fuel, accessories, equipment for subsidiaries of E-United and both companies may jointly build steel service centers and strengthen exchange of technology as well as hold shares in the affiliates each other.

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Hangzhou Steel unveils production targets for 2009       

Hangzhou Iron & Steel Group Company plans to achieve sale revenue of CNY 50 billion and profit of CNY 1 billion in 2009.
In this year, the company plans to produce 2.6 million tons of pig iron, 3.4 million of crude steel, 3.3 million tons of steel products and 0.41 million tons of coke at Banshan steelmaking plant and 3.5 million tons of pig iron, 3.5 million tons of crude steel, 2.2 million tons of steel products in Ningbo plant.
Hangzhou Iron & Steel Group Company achieved sales revenue of CNY 65.087 billion, pre-tax profit of CNY 2.338 billion and profit of CNY 0.763 billion in 2008, when steel market met with severe challenge caused by global financial crisis.

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Shougang boosts pipeline steel product output

In the mid of gloomy market, Shougang, a leading Chinese pipe producer, supplied about 500,000 tons of pipeline steel products to domestic pipe manufacturers which primarily produce ERW 610 pipe and large diameter SSAW pipe. Meanwhile, the company's sales of the pipe steel products reached 500,000 tons in 2008 from 30,000 tons in 2007. It's said that China National Petroleum Corporation is one of major buyers who require large quantities its pipeline steel products per year.

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Chinese steel market survey reflects positive trend

Over 80 percent of Chinese steelmakers and traders see the steel industry will back on track after Chinese Spring Festival. Since January, the steel prices are stabilising and trending up amid no heavy inventory pressure, but most of insiders feel there are many uncertainties to be concerned.
A survey conducted by a consultancy institution on rebar and HRC prospect says, 64 percent steelmakers believed in correction in rebar segment, while 49 percent of traders held rebar market will be adjusted, 48 percent, be pushed up and 3 percent, pulled down. On HRC, 55 percent of the steelmakers predicted it will stay in correction, 30 percent, move up and 15 percent go downward; while 58 percent of the traders believed in upside and 42 percent in correction. Steel prices showed up trend in January that started in mid of November. The composite steel price increased some 10 percent, however longs and flats price increased 7 percent and 13 percent respectively. In general, the supply is staying low and inventory at the traders is not much. Leading steelmakers had lifted ex-w price for some products before the holiday, which also lent supports to the up-trending market. With a capacity of about 650 million tons of crude steel, China produced some 500 million tons in 2008. The numbers show a big room for possible change of the output this year. A steel analyst said that cut in production was the prime reason behind decreasing supply and up-trending market at the moment. But this may in turn stimulate more startups and resumptions and threaten the market again if the demand recovery lags behind. According to PPI, port throughput and power generation figures, Chinese economy is improving, but no considerable signals have noted in real estate, auto and other major steel consuming industries. Though construction steel and railway steel may have a better future on the nation's expansion of infrastructure construction, flats appears lackluster due to bygone of the fast-growth of machinery and decrease in new ship orders etc. Chinese steel market see heavier pressure this year than last year on steel export is possible worsening of economies in US, Europe and the emerging ones. Steel export is poorly driven this period by narrowing price gap as the overseas price remains low while domestic price starts rising. Moreover, protectionism, change of exchange rate etc would all dim the prospect of steel export and force some enterprises to sell at home the products originally made for export.
Vanishing of export advantage indicates the home market is facing heavier pressure of import, risking more volatility.

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Hebei Steel moving forward on consolidation      

Hebei Steel Group, the result of a merger of two local steel mills, Tangshan Iron and Steel and Handan Iron and Steel, intends to go ahead with the consolidation from raw materials purchasing, production and sales respectively.
The group has set up a mining subsidiary in last September in a bid to merge the mineral assets of its three listed subsidies. The ore mine of Chengde Xinxin Vanadium and Titanium, now part of the group, has already been transferred to the group for free. Moreover, Hebei Iron and Steel Group is in early talks with Australian iron ore prospector Aurox Resources to finance the Aurox's 6-million-ton iron ore project in last Oct.
Senior official of the group said that "Hebei Steel Group is set to look for raw materials overseas as it ramps up production and beefs up competitiveness. Three listed companies would focus on their own specialty after the merger. Tangshan Steel has an edge in medium plate production, and produces substantial tonnage of construction Steel. Handan Steel focuses on steel plate, while Chengde Steel's advantage lies in vanadium and titanium products. And the group plans to consolidate the sales departments of its three subsidies into a unified one to take up the marketing and sales of the whole group. Nevertheless, three listed companies have their independent financial operation since the local government is reluctant to suffer the loss of great sum of tax revenue. However, analysts greeted the deal with skepticism and warned that consolidation in China's steel industry faced huge hurdles and would proceed slowly at best. They doubt the fate of the smaller mills of the group like Wuyang Steel, Xuhuan Steel, and how the Caofeidian project, a joint venture between Tangshan Steel and Shougang, would proceed.
The small mines controlled by the group are very scattered, thus, it would be a tough task to consolidate the fragmented mining assets in the future.

 

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US stainless steel consumption down 12% 

The US consumed about 12 percent less stainless steel in the first ten months of 2008, compared with same period of 2007 and imports also slipped about 1 percent.
According to a media report, US consumption of stainless sheet, plate, bar, rod and wire totaled nearly 1.66 m short tons (s.t) from January through October. Imports of those products reached 650,500 s.t, bringing ten-months import penetration to 39 percent - an increase of four percentage points from the previous year period. Import penetration was greatest for stainless wires, with imports of 37,000 s.t accounting for nearly 59 percent of total US consumption (63,200 s.t). Stainless bar imports penetration was also high (52 percent), with imports at 1,04,500 s.t and consumption at around 2,01,000 s.t. Import penetration was high too, just under 50 percent, for stainless rods, with imports of 26,200 s.t within total consumption of over 54,300 s.t.Import penetration was lowest (35 percent) for the most imported and most consumed product - stainless sheets and strips. Ten-month imports totaled just over 4,00,000 s.t while consumption reached nearly 1.13 m s.t.

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Steel inventories in US and Canada continue downward trend in December    

Shipments of steel products from US and Canadian metals services centers dropped by about 30 percent for a second consecutive month in December, while inventories of the metal continued a steady decline in year over year comparisons, said the latest Metals Activity Report from US based Metals Service Center Institute.
December shipments of steel products from US metals service centers dropped 29.3 percent from year earlier volume to about 2.4 million tons. Full year 2008 US steel shipments of about 46.8 million tons were down 10.6 percent from 2007. Steel inventories at the end of December of 8.6 million tons were 16.1 percent below December 2007 stocks and at current shipping rates, equal to a 3.6 month supply.
In Canada, December steel shipments from metals service centers of 322,400 tons were down 29.2 percent from December 2007. Full year 2008 Canadian steel shipments of about 6.7 million tons were 10.9 percent below 2007 annual volume. Canadian steel inventories at the end of December of about 1.2 million tons were 34 percent below year end 2007 stocks and at current shipping rates, represent a 3.6 month supply.
The Metals Activity Report, based on data from metals service centers in the United States and Canada, is produced by the Metals Service Center Institute and a third party econometrics and strategy firm, McCoy, Scott & Co.

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EU ends tariff threat on Chinese galvanized steel    

The European Union ended a threat of tariffs on galvanized flat steel from China after EU producers withdrew a complaint alleging price undercutting by Chinese competitors. The European Commission closed an inquiry into whether Chinese exporters sold hot-dipped metallic-coated steel in the EU below cost, a practice known as dumping. EU makers of the product, used in the construction industry, include ArcelorMittal and ThyssenKrupp AG. The Eurofer steel industry lobby group withdrew its dumping complaint in December, a year after the inquiry began, because EU imports from China fell about 37 percent in 2008. “This withdrawal was prompted by the recent market turbulence,' the commission, the 27-nation EU's regulatory arm in Brussels,” sources said. The end of the galvanized-steel case removes one potential source of EU-China friction over steel trade. The EU is pursuing three other dumping inquiries involving stainless steel, wire rod and steel wires from China.

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Iron ore on recovery path  

 Vale do Rio Doce, Rio Tinto Group and BHP Billiton Ltd. are in talks with Asian steelmakers to set prices for annual supply contracts. Prices rose 33 percent since October to $84.50 a metric ton for immediate delivery in China's spot market after stockpiles in the largest consumer of the metal dropped last month. Reserves fell 22 percent from the record reached in September, while shipping costs more than doubled this year as orders picked up. Imports of iron ore into China rose 6.2 percent in December, customs data show. China's steelmakers, which cut production in the second half, are benefiting from the government's 4 trillion-yuan ($585 billion) stimulus plan to spark slowing economic growth. Shares of Vale, Rio and BHP, which ship 75 percent of the world's iron ore and depend on China for about 20 percent of their sales, rose more than 50 percent since their lows last year. More than 50 percent of the 889 million tons exported by sea last year was sold based on annual contract prices negotiated between mining companies and steelmakers. Talks between Shanghai-based Baosteel Group Corp., China's largest steelmaker, and Rio started in January and any changes take effect April 1, the beginning of Japan's fiscal year. The increase in the spot market may limit the decline in contract prices, said Michael Rawlinson, head of mining resources and energy at Liberum Capital Ltd. in London. Mining companies will probably agree to a 30 percent reduction from last year. Australian iron ore for immediate delivery is now just 15 percent less than the 2008 contract price. While China's steel industry recovers, the global recession is reducing demand around the world. The International Monetary Fund forecast US gross domestic product will shrink 1.6 percent in 2009, Japan's will contract 2.6 percent and the euro area will decline 2 percent. The European Confederation of Iron and Steel Industries said Feb. 5 that the European Union's first-half steel output will fall 10 percent as demand declines. Steel prices fell 52 percent to $542 a ton since peaking in July, according to a global index from Steel Business Briefing. Iron ore contract prices rose every year since 2003. Chinese exports dropped for the first time in 13 years in 2008 after the credit crisis caused the global economy to slow and demand for Chinese goods to diminish. In June 2008, Baosteel Group agreed to pay London-based Rio as much as $127 a ton, a 97 percent increase from a year earlier. The gain was the biggest in at least 26 years, according to Macquarie Group Ltd.

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Magnitogorsk resumes operations after repairs 

Magnitogorsk Iron & Steel, Russia's third-largest steelmaker, resumed operations of its third converter this month after repairs. The facility, which converts cast iron into steel, can pour as much as 3.5 million tons of steel a year, the company, based in Magnitogorsk, Ural Mountains, said.

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Russian steelmakers rise as Baltic Dry Index climbs on demand 

Severstal and Evraz Group SA, Russia's biggest steelmakers, surged in London trading after a measure of shipping costs indicated renewed demand for metals. The Baltic Dry Index, a measure of the cost to ship commodities, has advanced for 12 consecutive days. It soared 15 percent in London recently, the biggest daily gain since at least 1985.

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Nucor reconsiders $3 bln plant on economy 

Nucor Corp., the largest US steelmaker by market value, may alter or cancel a plan to build a $3 billion iron-making plant in Louisiana because of the recession and possible climate-change legislation. Chief executive officer Dan DiMicco said that a drop in metal use and uncertainty over what laws Congress may pass to limit greenhouse-gas emissions put the project 'in jeopardy'. The company's hesitation on the Louisiana plant follows its decision to delay the start of a $150 million galvanized- products plant in Alabama completed in the fourth quarter. The average price for hot-dip galvanized steel coil fell to $660 per short ton as of Feb. 1 from $729 on Jan. 4, according to the Steel Index, compiled by Steel Business Briefing in London. Nucor is waiting for permits for the proposed Louisiana facility. The first phase of the plant includes a blast furnace that can produce 3 million tons of pig iron a year. Nucor chief financial officer Terry Lisenby said that work to build the plant in Louisiana or an overseas location was continuing.

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ThyssenKrupp to save EU340 million after job cuts   

ThyssenKrupp Steel AG, the steel unit of Germany's largest maker of the metal, plans to cut annual costs by 340 million euros ($437 million) by slashing its workforce and making operations more efficient. The savings will only take full effect in the fiscal year ending in 2011, Erwin Schneider, a spokesman for the Duisburg, Germany-based division, said. The first effects should be felt this year as the unit employs fewer contractors in favor of ThyssenKrupp personnel.

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