|From the CEO's Desk|
Many companies seeking
diversification have docked at the ports of Gujarat as attracted by the
investment opportunities lying along the 1,600-km coastline. The latest to
jump onto the bandwagon is Bhavnagar-based Steelcast Ltd. The company
plans to enter in shipbuilding near Bhavnagar and has already acquired
land from the government. Briefing about the development, Chetan Tamboli,
the managing director of Steelcast, said that they had earmarked Rs 100
crore for the Greenfield project. “We have acquired about 1,30,000 sq m of
land in the creeks of Bhavnagar,” he said. Under a new company that is yet
to be formed, Steelcast aims to raise funds needed for the project by a
mix of equity, debt and private placements.
Shankara Pipes India Ltd, a steel tube manufacturing and distribution company in Bangalore, has drawn up plans to foray into Tier II cities and open retail stores in Mysore, Hubli, Belgaum and Bellary. As Mysore is witnessing a booming realty market, it is planning 2-3 stores during 2008-09. The Rs 600 crore ISO 9001 company has 19 branches across the country and most of them are in Karnataka. It sells 12,000 MT of steel tubes every month and serves about 10,000 customers. It has an inhouse laboratory and tube drawing and cutting facility as well. With a fleet of 20 trucks and 400 strong workforce, it has built a 3-lakh sq ft warehousing facility. Apart from foraying into the retail market under the brand, 'Shankara Steel World', it has also drawn plans to enter the services sector. Claiming that these two plans were maiden efforts by any steel tube company, Shankara Pipes Managing Director Sukumar Srinivas told Business Standard the company intends to open around 50 retail stores by 2008-09 and double that number by 2010-11 for an investment of around Rs 100 crore. “Over a period of five years, we intend to come out with three groups of stores — regular (1000-1500 sq ft), express (5,000 sq ft) and super stores (10,000 sq ft). After Bangalore and 10 other major cities, we will focus on the Tier II cities,” he said. Srinivas sees a tremendous potential in the steel tube retail segment. The steel industry is witnessing a boom. User industries like construction, auto and infrastructure projects are fuelling the boom. For instance, the industry is growing in the South and West India at 15 per cent compared to the all India average of 10 per cent. This accounts for 1.20 million tonnes out of the estimated all India 2.50 million tonnes of the steel tube sector, he says. “The future looks very positive as infrastructure seems to be a key area of the Government spending. Textile industry is in the beginning of run away growth. Auto and construction industry continue to look very positive, as also machine building and light engineering. This explains the market potential,” says Srinivas.
Tata Steel, the world's sixth largest steelmaker, is back in the fray for the Western Cluster Iron Ore deposit project in Liberia, which was widely expected to go to South Africa's Delta Mining Consolidated. Arun D Baijal, group director, global minerals, Tata Steel, said while Delta Mining Consolidated was ranked first among the bidders shortlisted, a committee evaluating the bids had decided that the due diligence would be conducted for all companies shortlisted, and these included Tata Steel and China's Sinosteel. “We are still in the fray for the project,” Baijal said. The project is under the supervision of an inter-ministerial mineral technical committee that is chaired by the representative of the ministry of land, mines and energy and includes representatives of the ministries of justice, planning and economic affairs, labour, justice, national investment commission and the central bank. The provisional decision to award the project was announced by the Liberian president in January on the basis of recommendations of the committee. Besides mining areas, the project includes a pelletisation plant, road, rail, power, water and upgraded port facilities. Delta Mining is being linked to Global Steel Holding Limited, which is owned by the brother of Lakshmi Mittal, the principal shareholder of Mittal Steel. The Western Cluster Iron Ore has several deposits over an area of nearly 210 sq km and the investment package is estimated in the region of $1.6 billion (about Rs 6,400 crore). These deposits include the Mano River Iron Ore, the Western Position of Bomi Hills Iron Ore and the Mountain Iron Ore. Tata Steel is also exploring the possibility of deposits in the Millennium Iron Ore Range, one of the largest known undeveloped magnetite iron deposits owned by the Canadian publicly traded mining company, New Millennium Capital Corp (NML).
TRF, an associate company of Tata Steel, has flagged off India's first mobile stone crusher and screening plant. Designed, engineered and manufactured by TRF. “The mobile crusher and screening plant is the first among six such sets that the company has to supply to its customer” said the Directorate General of Border Roads, India. The plant can handle 20 tons of stones per hour and is mobile, which implies that once the purpose of the stone crusher is over the builder can move it to another site. Sudhir Deoras, managing director, TRF said that the company encouraged their employees to be innovative and make suggestions without being encumbered by the fear of failure. R C Nandrajog, executive director, TRF said “ The mobile crushing and screening plant is just a beginning and we hope that in the days to come TRF would be able to delight a larger number of customers with this machine”.
The Jagatsinghpur district administration has compiled detailed
socio-economic survey report for the Posco steel project. The report will
be presented to the state government and the company for the valuation of
rehabilitation package for displaced families of the affected villages.
Official sources said that the survey covered 1930 house holds and 2315
betel vines including 1085 in Gobindpur village, 11 in Bhuyianpal, 300 in
Polang, 15 in Noliashai and 904 in Nuagaon village.
Aditya Mittal, chief financial officer, ArcelorMittal, and son of its chairman Laxmi N Mittal informed that the volatility in business of the ArcelorMittal Steel has come down to 5 per cent post-merger, from plus or minus 30 per cent both the players used to experience due to cyclical effects earlier. Mittal Junior was addressing a session organised by the Confederation of Indian Industry (CII) on the theme 'Creating Global Champions'. He added that greater consolidation in the steel industry was basically aimed at stabilising the margins and not to increase the same. “We want to change the steel industry. That is why ArcelorMittal was created. Because you have to be profitable forever,” he told the audience while explaining how the Mittal's strategy of acquiring loss- making or bankrupt steel companies world over shaped up on the back of already existing overcapacity in the industry. He said that the corporate social responsibility initiatives helped win over the communities wherever they set foot, while keeping the employees passionate about their work in the company by taking good care of them. Mittal said that Indian companies had the twin advantages of low-cost model and being successful even in the absence of good infrastructure. These attributes can help the Indian companies grow globally especially in Africa and erstwhile Soviet Republics. “The company hoped to perform ground breaking for the two proposed steel projects in India very soon,” he said.
Steel Minister Ram Vilas Paswan will be meeting major producers of the alloy to assess their capacity expansion plans and discuss the impediments to investments envisaged around Rs 3,00,000 crore by 2011-12. The government is concerned about the rising shortages and hence the minister has given a call. “The minister will meet leading steel producers tomorrow to discuss the reasons behind the increasing demand-supply gap in the sector and take stock of their mega expansion plans. He is also likely to discuss the bottlenecks impeding fructification of major investments in the country as we are envisaging an investment of Rs 2,80,000 crore by 2011-12,” a top steel ministry official said. The meeting assumes importance as the ministry has also asked the secretaries of mineral-rich states of Orissa, Jharkhand, Chhattisgarh, Karnataka, Madhya Pradesh and West Bengal to be present to apprise themselves of the issues raised by the steel manufacturers and share their views on achieving the envisaged investments. This meeting is besides the Inter-Ministerial Group (IMG) set up by the government and being headed by Steel Secretary Raghav Sharan Pandey to extensively delve into investment-related issues. “The minister is particularly concerned that the demand-supply gap has caused 67 per cent rise in steel imports,” the official said. Steel consumption in India is growing at nearly 12 per cent and in view of the anticipated growth in infrastructure and manufacturing sectors, the demand is further likely to grow by 14-16 per cent during the next few years. During April-December 2007, domestic steel demand grew at 12.2 per cent over the same period of previous year. “However, production has grown at 6.6 per cent in April-December of current financial year. This demand-supply gap has caused a 67 per cent rise in imports,” the steel ministry official said. The official pointed out that for the first time, India became net importer of steel in 2006-07, which has caused some concern, and the government is making all-out efforts to facilitate supply growth by way of faster commissioning of envisaged steel projects — both brown-field and greenfield. The companies invited to participate in the meeting include Rashtriya Ispat Nigam Ltd, Steel Authority of India Ltd, JSW, Essar, Tata Steel, Ispat, Posco, ArcelorMittal, Bhushan Steel and Power Ltd among others. The steel producers are facing problems in executing capacity-expansion plans, which relate to securing captive raw-material linkage and land acquisition.
Salem Steel Plant, a
company of the S.A.I.L. group (Steel Authority of India) has awarded a
contract for the supply of a single-strand continuous casting machine to
SMS Demag, a company of the SMS group, Germany. The company plans to
produce slabs of stainless steel grades. The X-Cast slab caster is rated
for the production of 140 to 200 mm thick and 600 to 1,300 mm wide slabs
at a maximum attainable casting speed of 1.5 m/min. The unit is designed
to produce 300,000 t of slabs per year.
In response to media
inquiries, Steel Partners II today issued the a statement to the media
regarding changes to the Board of Directors of the KT&G Corporation (Korea
Stock Exchange saying that the Steel Partners welcomed the addition of
four highly qualified independent directors to the Board of Directors of
KT&G Corporation. They especially applauded KT&G's backing of Mr. Jin Moo
Lee, CEO & President of S.C. Johnson Korea and Mr. Jin Ho Chang, Associate
Professor, Yonsei University's School of Business.
Strike Resources Ltd said that it was in discussions for the possible sale
of its iron ore interests in Peru, and in talks with steelmakers for
Michael Zaoui, one
of the top rainmakers in the European merger-and-acquisitions game, is
retiring from Morgan Stanley, people familiar with the situation tell the
Wall Street Journal's Deal Journal.
RAK Steel, spearheaded by Ras Al Khaimah Investment Authority, will be commencing commercial production for a range of rebars for the construction industry at the end of last month, following completion of trial production.The new energy efficient and environment friendly, 500,000 tonnes per year deformed steel reinforcement bar manufacturing mill has been set up with an investment of USD 50 million and will be the second largest producer of rebar in the UAE. Dr Khater Massaad, chairman RAK Steel and CEO of Rakia said that RAK Steel will produce rebar from 8 mm to 40 mm diameter in variable lengths of 6 meters to 18 meters to both British and American standards.
Due to the strong demand for rebar and flat
bars in Turkey's domestic market, prices have soared from the middle of
February 2008. Affected by the soaring prices, most of Turkish steel mills
have been rapidly purchasing materials.
The Dubai Water & Electricity Authority
will have to wait until the second half of 2008 to return to the debt
market after delaying a 2007 bond sale.DEWA will need to invest USD 19.1
billion during the next 4 years, raising most of that through loans and
bonds. In 2007, it shelved a plan to sell bonds after the US mortgage
crisis made investors more reluctant to lend. Mr Saeed Mohamed Ahmed Al
Tayer CEO of DEWA said that for Islamic bonds they are waiting for the
market to recover and would only go into the market after June 2008.
The real estate boom in the UAE is
set to hit a major roadblock that could seriously affect the completion of
projects across the Emirates. The problem lies with companies that supply
ready mix concrete.Representatives of these suppliers told that they are
struggling with a huge backlog of orders due to a massive shortage in the
supply of cement and that they have issued their clients notices that they
are not in a position to supply more than 45% of the ready mix orders.
Some RMC companies have even ceased production.
Turkish labor minister, Mr Faruk Celik said
that all the shipyards in Istanbul's Tuzla district will be closed down if
they do not implement regulations to prevent further worker deaths.Mr
Celik said that the success of shipyards should be with respect to human
lives, otherwise, regardless of the success it means that one earns money
from deaths. 25 deaths had resulted from work related accidents recently,
but did not specify a time frame. “A campaign that will harm the shipyard
sector will not be correct” he said. There were 37 shipyards in Turkey
until 2002 and now there are 76, with this number expected to increase
gradually due to the numerous new orders.
Saudi Arabia based Al Tuwairqi Group announced
that it has commissioned a new bar mill. By commissioning this plant of
1.35 million tonnes per year, the total capacity of ISPC Makkah will be
1.85 million tonnes per year in addition to its parent company ISPC Dammam,
which has already been upgraded to produces 1.5 million tonnes per
year.The plant, originally designed to produce 600,000 tonnes per year of
alloy steels was upgraded to produce 1.35 million tonnes per year by the
EPC team of Al Tuwairqi Group. Reverse engineering, erection &
commissioning of the equipments was done in house by Al Ittefaq Steel
Products Co. Reputed equipment suppliers of the world like Danieli, MWE of
Germany, Sund Brista of Sweden, NCO of Italy, Sicmemotori of Italy, Abus
of Germany & MNS of Turkey participated in the equipment supplies and to
upgrade the plant capacity.
Alfozan Group subsidiary Madar Holding
announced the launch of a so called super steel, claiming to be five times
more resistant to corrosion and is twice as strong as the standard
reinforcement steel. The new steel will be first made available in the UAE
and will then be introduced throughout the Middle East.
BHP Billiton is supposed
to invest the first $1.1 billion in its Rapid Growth Project 5 (RGP5)
expansion plan that will expand its iron ore production in the Pilbara
region of Western Australia to more than 200 million tpy during 2011.
Nippon Steel has reduced
its forecast for Japanese ordinary steel consumption during October-March
half by 2.03 million tonnes from the estimates it tabled last October,
largely because of concerns about construction steel demand. Consumption
during the present half would now reach 30.88m t, Nippon Steel said.
Industries Minister has recently announced the government decision to
cancel the import tax on hot rolled coil from 5 percent to zero percent to
help the processing center to grow and improve the competition globally.
approved in principle a plan by South Korean group POSCO to build a
US$11.5 billion steel plant with a local partner, said Chairman of Khanh
Hoa provincial People's Committee, Vo Lam Phi.
Holdings Bhd will be investing US$500 million to build an iron-making
facility, which is expected to increase the company's revenue by 60% by
Because of the reconstruction demand in the wake of the biggest
blizzard damage in mainland China in half a century, the prices for such
raw material as coal have skyrocketed, leading to the price hikes in
cement and steel products. The reconstruction demand will also bring in
mass opportunities for the industries of petrochemical, rubber and
plastics, food processing, and electric wire and cable.
Taiwan's leading steel producers, including CSC (China Steel
Corporation) and E United Group, have recently been approved by the
Vietnamese government to invest a total of US$2.8 billion to expand
The Vietnamese steel industry expects that Vietnam's steel
demand will grow at least 15% this year. A forecast made by the Vietnam
Steel Association (VSA) whose members accounts for 80-85% of Vietnamese
production of construction long products, 80% of galvanized and colour
coated steel and 75% of local pipe production.
The ASEAN Iron and Steel
Industry Federation will be meeting shortly to discuss ways to redress the
difficulties the steel industry may face when the ASEAN-China
comprehensive economic co-operation agreement takes effect on July 1.
Export offers for steel plate have witnessed another jump and it
has set record high price again. Current price level is believed to have
reflected the domestic market price increase.Quotations for commercial HR
plate have risen to USD 930 per tonne FOB and the highest is USD 955 per
tonne FOB for April shipment. The increase is almost across the board and
some traders are surprised at such a swift rise.
Mr Yu Tianchen, president of Benxi said that the long awaited
merger of Anshan Iron & Steel Group Co and Benxi Steel Group is expected
to begin this year. He said that the merger proposal is now subject to
regulatory approval that is expected to be granted within the year. In
fact, the two steel makers were merged in 2005, but still kept operating
independently, due to some historical and structural reasons.
The National Development & Reform Commission (NDRC) and China
Iron & Steel Association (CSIA) have jointly hosted a symposium to do
spade work for steel demand forecast. As a fundamental industry of the
national economy, steel sector has met demand from various other
industries over the years. Its rapid development, presented by largest
steel production for 12 straight years in the world also boosts
anticipation of all regions that project to invest in steel expansion.
Thus it makes a good demand forecast to give guidance to its growth is of
great significance to sustainable and healthy development of the steel
industry.On the symposium, industries division of NDRC analyzed the
current economic situation and stressed the importance of making steel
demand forecast better. The CISA introduced steel industry status while
the major industry associations made detailed account of their
development, demand for and consumption of steels as well as the
trends.The symposium attendees said that with rapid growth of the national
economy, steel consuming sectors such as construction, machinery, light
industry and automobile, kept fast headway these years. Processing with
specific condition of each sector, the associations offered significant
data about steel demand and the calculation methods of each of the
Acerinox SA and Nisshin
Steel, after a feasibility study and considering several alternatives,
have decided to construct a manufacturing plant for Stainless Steel in
Malaysia. The plant will be built with high efficiency criteria similar to
the plant of North American Stainless in Ghent owned by Acerinox. It will
be located in Johor Bahru in Malaysia in 350 acres are with direct access
to the sea. For this project, Malaysia will constitute a new company,
which Acerinox will have a majority shareholding. The new plant will be
built in phases and in its final stage will be a comprehensive
manufacturing plant stainless steel with 1 million tonnes per year of
steelmaking capacity to 600,000 tonnes per year of cold rolling capacity.
Estimated total investment amounts to 1,500 million USD. The construction
begins with immediate effect once the legal formalities are completed. The
launch is scheduled for 2011.
WISCO and Shandong Xinwen Mining Company have signed a share transfer agreement on March 5th 2008 under which WISCO would invest CNY 260 million to purchase 5% stock of Shandong new dragon Energy Company. Xinwen Mining group is the only supply enterprise for WISCO coking coal, the two sides have cooperated for more than 30 years. Xinwen Mining company provides more than 1 million tonnes coal to WISCO every year. The production capacity of the key project invested by Shandong New Dragon Energy Company is estimated to reach 6 million tonnes every year. Mr Shun Wendong of WISCO expressed that this move can satisfy WISCO 100% supply to produce rich coal, if the coal prices rise or the coal resources is shortage, WISCO will not be afraid.
China's Tangshan Iron and Steel Group plans to raise its 2008 output by 10%.Mr Wang Yifang, president of the group, while speaking on the sidelines of an annual parliamentary gathering said that China's third largest steel maker expects to produce 25 million tonnes in 2008.
China retained its ranking as the top destination for foreign
direct investment last year attracting USD 90.4 billion, while India
followed with the United States in FDI influx. Consultants OCO Global said
in an annual report that overall, global cross border FDI grew by 5.1% in
2007 to USD 946.8 billion. The group said China also topped the list for
number of FDI projects with 1,171. The amount of money it attracted,
however, fell from USD 116 billion a year earlier.
Mr Zhou Zhongshu, president of Minmetals Corp said that China's
state owned Minmetals Corp plans to consolidate its logistics business
into an independent subsidiary and boost the unit's annual capacity.
Panzhihua Steel has confirmed a plan to invest CNY 6 billion to
complete technical reforms on vanadium and titanium steel projects in
2008.The mill completed fixed assets investment of CNY 4.07 billion in
2007, involving 100 meter rail surplus heat quenching production line at
New Steel Vanadium's rail plant, a new RH vacuum treatment unit at steel
making plant, a new 150,000 tonnes per year OCTG production line at
Panchenggang, relocation and upgradation of heat extending pipe machines
and 159 continuous rolling pipe machines, a new cleaning line for pipe
billet and tailings treatment system at titanium concentrate plant.
The price level of Hot dipped galvanized coil export has
improved remarkably last week after steel makers raised ex-works prices.
Transactions have been heard at the updated levels and export tonnages are
expected to increase in the next months.
Guangxi Province has
optimized export product mix, promoted trade balance and shifted trade
method to curb exports of energy-intensive, resources-intensive and high
polluting products under the guide of the country's macro policies.
Exports in 2007 indicate that the policies have taken effect.
Germany's second-largest steelmaker, Salzgitter, is expecting that the underlying pretax profit will be in the high hundreds of millions of euros this year. Pre-tax profit in 2007 was 1.314 billion euros ($2 billion), just above the average forecast of 1.28 billion in a Reuters poll of analysts. "We are striving to attain a notable growth of the group, of which more than 50 percent will result from the first-time full-year inclusion of the companies of the Kloeckner Group in our new Technology Division", said the company. The company is well know for its extremely conservative forecasts at the beginning of the year, which it then revises higher over the course of the year, usually when publishing quarterly results. Meanwhile the company's four-quarter profit rose 92 percent as increased demand and prices boosted sales at Germany's second-largest steelmaker. Net income for the three months ended Dec. 31 climbed to 310.1 million euros ($474.4 million) from 162 million euros a year earlier. Fourth-quarter figures were calculated by subtracting nine-month earnings from full-year results published today. The company was estimated to report profit of 193 million euros, according to the median of four analysts surveyed. Fourth-quarter sales rose 20 percent to 2.69 billion euros. Quarterly sales were estimated to be 2.65 billion euros.
Taiwan's top steel maker, said that it would raise its domestic steel
prices by 19 percent in the second quarter, so as to pass on the higher
iron ore prices and freight costs to the customers. The move, topping
market expectations for a 15 to 16 percent increase, comes after bigger
rivals including China's Baoshan Iron and Steel hiked their product
prices. Baoshan recently raised its second-quarter price by 17-20 percent.
Shares in China Steel closed at a four-month high on Thursday before the
official announcement was released. "The prices of iron ore and coal have
been jumping at a scary pace. We could have raised the product prices more
this time, but we have to take our downstream clients' competitiveness
into account," said L.M. Chung, executive vice president, China Steel.
Nippon Steel Corp has warned of soaring costs that will cut profits for the year to March and the next six months would also be tough as the industry faces high freight rates and tight coal supplies. It will be first dip in six years in full-year profit for the world's second-biggest steelmaker, who joined three Japanese counterparts in trimming earnings estimates. However some investors said Japanese steel was relatively cheap and makers should raise prices -- suggesting the pain might be passed to customers such as automakers and ship builders. Nippon Steel said it expected recurring profit, before tax and exceptional items, of 560 billion yen ($5.4 billion) for the year to March 31, down 6.3 percent. The company had previously expected profit to rise 0.4 percent to 600 billion yen, which would have been a record for a fourth consecutive year. Costs for the Japanese steel industry are expected to go up by more than 2 trillion yen ($19.3 billion) in the coming year to March 2009, double the rise seen this year, executive vice president Kiichiroh Masuda said. He added that coal supplies were expected to be extremely tight in April and May. But some investors said that Japan's steel makers should not face any hurdles in boosting prices to reflect the higher costs. "Japanese steel is relatively cheap compared to the international standards and it'll make sense to raise prices accordingly," said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments. Rival JFE Holdings Inc, the world's third-biggest steelmaker, last month cut its full-year recurring pretax profit forecast by 7 percent to 500 billion yen, citing high costs and the impact of a stronger yen. Sumitomo Metal Industries Ltd and Kobe Steel Ltd also trimmed their profit or sales expectations. Freight costs hit a record in November, weighing on January-March earnings, while high steel scrap prices are also squeezing profits.
Posco, Asia's largest steelmill, will raise the price of its 300-series stainless steel by 7 per cent because of the rising costs of nickel used to make the alloy. Posco, which gets 20 per cent of sales from stainless products, will raise the price of its hot-rolled steel by 250,000 won (264 us dollar) a metric ton to 3.65 million won, said Ko Min Jin, a spokeswoman for Pohang, a South Korea-based company. Posco and rivals are pushing price gains to customers including automakers and builders to revive growth after rising raw materials costs reduced earnings in the December quarter. Nickel prices surged 25 per cent this year on expectation of rising demand and as workers at a Colombia mine strike. Nickel inventories in warehouses monitored by the London Metal Exchange have dropped 282 tons to 47,592 tons recently. The Korean steelmaker last month also raised prices of its 400-series stainless steel by as much as 11 per cent to cover the higher costs of chrome, another raw material.
Group Inc.said that the US steel prices, which reached a three-year high
last month, must rise another 25 percent to attract the imports necessary
to make up for a domestic production shortfall. Hot-rolled coil must rise
to about $850 a ton, from about $679 at present, to draw shipments
currently directed to regions with higher prices, Goldman Sachs reported.
The U.S. relies on imports for about 23 percent of its steel needs. “The
U.S., capacity-short of steel and with very low inventories, needs more
imports,'' Goldman said. Higher prices should lead to ``upside earnings
surprises'' for steel companies. Industry executives including Dan DiMicco,
chief executive officer of Nucor Corp., predict that steel prices and
earnings this year may withstand slowing U.S. economic growth. Steel
inventories fell 25 percent in December to 12.2 million tons, and lower
supply is forcing consumers to accept higher prices. The U.S. imports
steel because domestic producers make only about 100 million tons a year
while the nation uses about 130 million tons. Prices for hot-rolled coil,
the benchmark product used in automobiles and household appliances, rose
to the highest in more than three years in February.
Nuclearelectrica SA, Romania's atomic energy administrator, said that they reached agreement with Italy's Enel SpA, Iberdrola SA of Spain and four other companies to build two nuclear power plants. Utility companies Electrabel SA of Belgium, CEZ AS of the Czech Republic and Germany's RWE AG, as well as steelmaker ArcelorMittal, will also take part in the 2.2 billion-euro ($3.3 billion) project, Nuclearelectrica said.
The price of hard-coking coal is set to rise to a record in 2008 after two years of declines, adding to pressure on steelmakers' raw-material costs, analysts said. The contract price may double or triple in annual negotiations this month between steelmakers and producers such as BHP Billiton Ltd., Anglo American Plc and Rio Tinto Ltd., according to four analysts surveyed. China banned exports of coking coal in January to meet local demand, while flooding and port congestion trimmed shipments from Australia, reducing global supplies by at least 8 million tons, according to Sage Consultoria Tecnica Ltda., a Rio-de-Janeiro- based consulting company. Asian and European steelmakers last month agreed to pay 65 percent more for contract iron ore, setting a global benchmark. ``Steelmaking levels are growing and the price agreements being negotiated this month should take hard-coking coal to its highest-ever level,'' said Andrew Jones, an analyst at Resource- Net, a Belgium-based research group. The price of coking coal fell in the past two years from a 2005 peak of $125 a ton on a free-on-board basis, Jones said. The price fell to $114 in 2006 and $98 in 2007, he said. Global seaborne trade of the coal was 202 million tons in 2007, according to a Resource-Net market survey. Australia produced 127 million tons of the trade. Roger Downey, director, equity research with Credit Suisse in Sao Paulo, said he expects the contract price to triple, while Brazilian analysts Bernardo Lobao of ARX Capital Management and Max Bueno of broker Spinelli SA each forecast prices to at least double. “Higher coking coal prices will further pressure flat-steel product prices in Brazil, which imports all its hard-coking coal,” Bueno added.
Handan Iron & Steel
Group plans to boost steel production more than threefold by 2015 through
acquisitions, making it as big as China's largest steelmill now. The
company wants to produce 30 million metric tons of crude steel by 2015,
Chairman Liu Rujun said. The Handan, Hebei province-based company produced
8.33 million tons last year. China wants its state-owned steelmakers to
merge to compete with overseas rivals and boost their bargaining ability
with raw materials suppliers. Steel demand may rise 9 percent this year in
China, the China Iron & Steel Association forecasted in January. Handan
Steel would like to obtain stakes in Shijiangzhuang Iron & Steel Co. and
Xingtai Iron & Steel Co., both of which are based in Hebei, Liu said.
Local governments own a 20 percent and 26 percent stake in those companies
respectively, and Handan would like to get those holdings, he said.
is a compilation of news from various dailies, magazines, trade publications
and Press Releases.
To unsubscribe send mail to email@example.com.
Type Unsubscribe <your email address> in the subject line.