|From the CEO's Desk|
The country's mining industry is projected to cross over $30 billion (about Rs 1,27,662 crore) accounting for about 2.5 per cent of the GDP in the next four years, a latest report said. "Considering India's mineral resources, we believe there is strong potential for further development and scaling up of the country's mining industry. "We believe the mining industry could grow to $30 billion-plus by FY12 and reach 2.5 per cent of the GDP if India develops a conducive regulatory framework and attracts significant investment in exploration, mine development and infrastructure," a report by financial services firm Edelweiss stated. The report on metals and mining pointed out that India has immense natural resources and is ranked among the top-10 nations for deposits in iron ore at 25.2 billion tonnes (bt), coal 257.4 bt and bauxite 3.3 bt. These constitute 3 per cent, 10 per cent, and 4 per cent of the world's resources. The country also holds leading positions in mica (No. 1), barytes (No. 2), chromite (No. 4), kaolin (No. 4), and manganese (No. 7), the report said. Also the proposed National Mineral Policy and the allotment of captive coal blocks (in effect opening up the nationalised coal sector) are the key triggers for future development of mining in India. The ongoing bull run in minerals has created enormous wealth for investors. Market cap of the leading global mining companies has increased at a Compound Annual Growth Rate of 39 per cent per annum from calender year 2001 to 2007, while the corresponding figure for top Indian miners is a whopping 139 per cent per annum. "As the Indian mining industry scales further, we see both new and existing mining players offering significant wealth creation opportunities to investors," it said. Major companies in the mining space in the country are Sesa Goa, Adhunik Metaliks, Tata Steel (which is mainly a end-user), McNally Bharat (MHE) and JSW Steel. In September 2005, the Hoda Committee under the chairmanship of Anwarul Hoda was constituted to review the National Mineral Policy, 1993, with an aim to improve the investment climate for mining in the country. Some highlights of the Hoda Committee report are - prioritising critical infrastructure needs of the mining sector, review existing procedures for granting reconnaissance permits, prospecting license, mining lease, identifying ways of augmenting state revenues among others, it added.
Ispat Industries, the steel company controlled by brothers Pramod and Vinod Mittal, will buy a 40 per cent stake each in three overseas mines of Global Steel Holdings, another company owned by the brothers of billionaire Lakshmi Mittal, to help boost iron ore and coal availability to their Indian plants, sources said. Global Steel owns 70 per cent stakes in iron ore mine in Brazil and two coal mines in Columbia and Mozambique. The company is setting up three special purpose vehicles for isolating financial and regulatory risks. Ispat will purchase the stakes in these SPVs, which are held by Global Steel. The iron ore mine has an estimated reserve of 500 million tonne while the coal mines hold reserves of 120 million tonne. The stake buy will help the Indian company meet its requirements of the raw materials in India, especially when rising prices cut its margins. Earlier, when Global entered into multiple lease agreements with the respective governments for mining, the group's plan was to sell the raw materials in the international market. Now, Ispat feels that their expansion plans would be delayed if it could not reach raw materials for the projects, said sources. Ispat Industries officials declined comment on the development. "Despite soaring freight cost, which accounts 60 per cent of the landed cost of iron ore and coal, Ispat decided to bring the raw materials from its overseas mines to India. This shows the urgency in accessing raw material for their expansion plans," said an industry analyst. Ispat, which produces 3.6 million tonne steel a year, is planning to raise its capacity to 10 million tonne by 2014. The company had already announced its plans to take its capacity to five million tonne in the next two years. The overseas mines are expected to take two to three years to begin production. Until then Ispat will continue buying iron ore from National Mineral Development Corporation (NMDC) for their plants in India. Ispat, which scouts for coal mines in India, has bought five million tonne iron ore last year from NMDC. Currently in the spot market, the iron ore prices are ruling at $200 a tonne, while coal prices are about $400 a tonne. According to industry estimates, the long term contract prices of iron ore are expected to jump 70 per cent this year. As per the thump rule, for the production of one tonne steel requires 1.7 tonne iron ore and 1.4 tonne coal.
Tata Steel is considering the option of shifting its Rs 2,500-crore titanium dioxide projects to Andhra Pradesh or Orissa as it has failed to initiate the process of land acquisition in Tamil Nadu even as a year has gone by since the announcement of the project, according to S Asokan, head of the project. "We will talk to the Tamil Nadu government first before taking a decision," he said. The mining project, which was announced in June 2007, needs an estimated 10,000 acres of land. However, the state government has failed to help the company in the land acquisition process, said Asokan. Tata Steel officials are planning to meet shortly to decide on the future as the cost of excavating ore may negate the benefits of a captive mine. Asokan declined to give details on the cost increase in the project. Initially, sections of the local population, particularly those with strong political leanings, accused Tata Steel of attempting to acquire agricultural land for mining. The steel maker is now facing trouble in acquiring land since small pieces of land aggregating to its needs are scattered among several hundred owners. "We need a proper title and are finding it difficult to approach each individual owner," said the Tata Steel executive. He also said that since the project hit its first road block at the local level with demand for unreasonable prices for land, today more land owners are willing to sell but they do not aggregate to the size (9,829 acres) Tata Steel wants. "If we buy 100 acres, some other land owners might increase their prices. We cannot afford to take that risk. Since the last one year, the project cost, too, has already gone up due to delays," he said. He, however, could not specify the exact escalation in the project cost that was announced at an investment of Rs 2,500 crore a year back. The project, within Tata Steel, is considered vital for its foray into non-ferrous metals. The project was conceived in part for making up the opportunity lost by Tata Steel by not branching into other metals like copper and aluminium when the opportunity came along. Titanium dioxide extracted from red sand found in this region, has a wide range of applications, from aerospace, roofing, paints to food colouring.
Naveen Jindal-promoted Jindal Steel and Power (JSPL) plans to build a Rs 5,000-crore thermal power plant in Orissa, a company official said. The company plans to build a 1,080-mw, coal-fired captive power plant to fuel its 6-million tonne (mt), proposed Orissa steel plant, Sushil Maroo, wholetime director, JSPL, said. About 70-80 per cent equity worth over Rs 4,000 crore will be raised through debt and the company has already approached a consortium of banks, said an executive of JSPL. The project is slated to take off simultaneously with the first phase of the Rs 13,500-crore steel plant by February 2011. "Now, we have 330 mw of capacity up and running for our steel plants. In the near future, we will set up 550 mw for the upcoming steel plant in Chhattisgarh and 1080 mw in Orissa for captive usage," Maroo said. The power plant will comprise eight 135-mw units. The first unit is slated for commissioning by 2009. Orders for the 135-mw units have been placed with Shanghai Electric Company of China. The project capacity may be raised to as much as 1,410 mw, with six 135-mw and two 300-mw units. Efforts are on to firm up suppliers for the two 300-mw units, said another executive of the company. Land acquisition is on and the ministry of environment has cleared the power project. A few weeks ago, JSPL had written to the ministry of coal to allocate long-term coal linkages for 4 mt of steel. The ministry has already given coal linkages for 2 mt of steel capacity by allocating coal blocks in Utkal, said government sources. As announced earlier, the Rs 5,400-crore JSPL is also setting up a 6-mtpa steel plant and captive power plant in Patratu in the Hazaribagh district of Jharkhand. Jindal Power, a subsidiary of JSPL, is also setting up a 1,000-mw OP Jindal Super Thermal Power Plant near Tamnar in Raigarh district, Chhattisgarh. It has commissioned 500 mw of the project and the rest is expected to take off soon. JSPL also has plans to set up two power plants with a total production capacity of over 2,500-mw in Jharkhand.
Sujana Metal Products (SMPL), a part of the Hyderabad-based diversified Rs 3,000-crore Sujana group, has acquired three steel companies at a cost of Rs 180 crore. The company intends to invest an additional Rs 100 crore in modernisation and expansion of these units located in Visakhapatnam, Hyderabad and Chennai. With the latest acquisitions, SMPL's takeover tally has increased to five in the past one year. It had earlier acquired Kamini Steels and Handum Industries at a cost of Rs 90 crore. SMPL manufactures a range of construction steel products, including thermo-mechanically treated (TMT) steel bars. "The acquisitions are in tune with the company's strategy to enhance its capacity to 1 million tonnes per annum (mtpa) by 2010 through acquisitions and expansion plans," Sujana Group Chairman Y S Chowdary told mediapersons recently. With the takeover of the three steel plants, he said, an additional capacity of 300,000 mtpa had been added, taking the total capacity of the company to 728,000 mtpa. This apart, Sujana Metal is planning to acquire a sponge iron company near Suryapet in Nalagonda district of Andhra Pradesh. According to Chowdary, SMPL has embarked upon a Rs 800-crore expansion programme, which includes establishing a greenfield sponge iron unit and a billet manufacturing unit in Hyderabad and Chennai at a cost of Rs 300 crore. The expansion project is being funded through term loans of Rs 470 crore, promoters' contribution of Rs 200 crore and internal accruals of Rs 130 crore. The promoters have already contributed their money through purchase of company's warrants recently. Stating that the company intended to go in for complete backward integration, Chowdary said SMPL was also in the process of acquiring an exploration licence for iron ore mining. "We are hopeful of getting the licence in six months," he said. In the financial year ending June 2008, SMPL expects to post a turnover of Rs 1,400 crore and a net profit of Rs 50 crore. During the nine-month period ending March 2008, the company posted a turnover of Rs 1,150 crore. Its target is to achieve a turnover of Rs 3,100 crore and a net profit of Rs 300 crore by 2010.
The government is considering measures to control iron ore exports, Steel Secretary RS Pandey said. "The issue is being considered, as there has been such a demand from steel producers, Pandey said when asked if ore export restrictions were being considered. He, however, ruled out an outright ban on iron ore exports, as being demanded by steel producers like Tata Steel."There is no proposal to consider banning iron ore," Pandey said on the sidelines of the "blowing-in" ceremony of a blast furnace at Tata Steel's Jamshedpur plant. With the commissioning of the blast furnace, Tata Steel Jamshedpur plant's annual capacity has gone up by 1.8 mt to 7 mt tonne. Asked whether government is considering removing the recently-imposed duty on steel exports, Pandey evaded a direct reply and said: "These (export duty on some steel products) are short-term measures." To up local supplies and ease inflationary pressure, on May 12, the government had notified 15% export duty on products like pig iron, ferrous waste of iron and steel, iron ingots, semi-finished iron or non-alloy steel products. Speaking at the same event on the price trend, Pandey said while domestic prices of steel have started softening in recent times following steps to control prices, global rates are still on the rise. "While steel prices in our country are showing a declining trend, globally, they are going up," Pandey said. Earlier this month, bowing to pressure from the government, steel companies had agreed to cut prices by up to 4,000 rupees per 1 tn. They had also agreed to hold the price line for a couple of months. India may notify rollback of export duty on some steel products next week, a senior government official said today."The rollback is likely to include flat as well as high-value steel products," the official said. The government is also "seriously considering" imposing 15 per cent ad valorem duty on export of iron ore as a measure to mop-up revenues in lieu of fiscal concessions announced to curb inflation, the official said. In Jamshedpur at a Tata Steel event, Steel Secretary RS Pandey said. “The imposition of export duty on steel products was only a "temporary measure". An export cess of 10 per cent on flat rolled products of iron or non-alloy steel, bars and rods, hot-rolled coils of iron and non-alloy steel was also imposed. Flat-rolled products of iron or non-alloy steel, plated or coated with zinc will attract an export duty of 5%, the notification had said.
For the first time India has turned into a net importer of steel and the situation will worsen in the years to come. Steel Secretary R S Pandey said that exports in 2007-08 were at 5 million tonnes, while imports stood at 7 million tonnes. "Exports have declined 6 per cent whereas imports have increased 46 per cent," he said. Pandey pointed out that till 2006-07, India was a net exporter of steel. "In two-three years, the situation will worsen," he said while addressing the blow-in ceremony of Tata Steel's 'H' blast furnace, the largest in India, which would take its capacity to 7 million tonnes from a current level of 5 million tonnes. According to Tata Steel Managing Director B Muthuraman, in the next five years imports would be to the tune of 25 million tonnes and would again double in the following five years. The problem as pointed out by both Pandey and Muthuraman was that consumption was growing at 12-13 per cent but the growth in production was less than 6 per cent. "Consumption will increase by 8-10 million tonnes a year for the next several years." The solution was faster land acquisition, rehabilitation, mineral allocation and a curb on mindless exports of iron ore said Muthuraman. Tata Steel was facing delay in all its greenfield projects, as almost all other companies that had lined up greenfield projects. "In Orissa, we hope to start construction soon. There are good signs in Chhattisgarh and we hope to have a second plant in Jharkhand as well," said Muthuraman. Tata Steel is looking to add 23 million tonnes greenfield capacity. India has set a target of 124 million tonnes by 2011-12. Pandey also admitted that one of the reasons behind the turbulence in pricing over the last three months could be attributed to the demand-supply mismatch. Ironically even as exports were on the decline, the government has imposed an export duty on steel. When asked, Pandey said, "It is a one-time measure and hopefully it will be short-term." In a bid to control inflation, the government has imposed a 5-15 per cent duty on steel products. Pandey also said that hike in export duty of iron ore, which is now at 2 per cent, was also under the government's consideration.
UAE shares advanced, led by cement companies
on speculation increasing demand for properties will boost their
profits.Ras Al Khaimah Company for White Cement & Construction Materials
rose to its highest in more than two years. Umm Al Quwain Cement
Industries Company and Gulf Cement Company also gained. Union Properties
advanced for a third day.The Abu Dhabi Securities Exchange General Index
added 0.8% to 5,037.85, while the Dubai Financial Market General Index
rose by 0.2%, gaining for a third day.
Real estate firm Emaar MGF Land, Indian JV of
Dubai's Emaar Properties, said that it plans to spend USD 3 billion in
developing properties in south India over the next few years. Besides a
residential property in Hyderabad with an outlay of USD 1.4 billion, Emaar
MGF will invest in commercial and retail properties and hotels spread over
31 million square feet in 10 south Indian locations. Emaar MGF in February
2008 called off a USD 1.6 billion initial public offering because of tepid
investor interest. Masdar to invest up to USD 2 billions in photovoltaic
solar energy Abu Dhabi based Masdar has announced that Masdar PV will
embark on a multi billion dollar investment in thin film photovoltaic
solar technology, as part of its drive to become a world leader in
alternative energy. The total investment of approximately USD 2 billion
represents one of the largest investments ever made in solar and will fund
a 3 phased manufacturing and expansion strategy to produce the latest
generation of thin film photovoltaic modules.
The European Commission has cleared steel group ArcelorMittal and Turkish peer Borusan's proposed 50:50 JV which will see a USD 500 million investment in the construction of a new hot strip mill at Gemlik in Turkey.The mill which will be located next to ArcelorMittal and Borusan's jointly operated Borcelik plant on the Marmara Sea coast, is planned to operate in first half of 2010 with a capacity of 4.8 million tonnes. The transaction was reviewed under the EU's 'simplified' merger review procedure for cases which the commission believes do not pose competition concern.
Mr Hisham Talaat Moustafa chairman of
General Section of Real Estate Investment has lauded Egypt government's
recent decisions taken to cool rapidly spiraling prices. Mr Moustafa said
that "I believe the government introduced effective procedures to contain
the relentless leaps in prices of construction material including the
cement export ban and steel price caps." He pointed out that after the
government banned cement exports, prices slid back to around EGP 500 per
tonne as compared to the previous EGP 700 to EGP 800 per tonne. He added
that "The same is true for steel, placing price limits on wholesalers and
retailer has helped push prices down.”
Larsen & Toubro Limited is planning to
bid for building a new airport in Muscat. Mr KV Rangaswamy president of
L&T's construction division said that "The government of Oman is in the
process of inviting bids and we will be submitting bids. The contract
could be worth up to INR 30 billion. We will look for foreign airport
modernization contracts and Greenfield airports as and when they come up.”
Kuwait is planning to launch tenders for power
expansion worth more than USD 2.5 billion to meet rapid growth in power
demand through 2015. Mr Khaled Al Wasmi assistant under secretary at the
ministry of electricity & water said that record oil export revenues are
fuelling economic growth throughout the Gulf. He added that "The main
reason for the new plants is housing plans. Kuwait has short listed 6
firms for a tender to build combined cycle gas turbine units for a
northern power plant with a capacity of 2,000 MW.”
Arabtec Construction has won an AED 3
billion contract to build the first 1,500 homes at Nakheel's Al Furjan
development in Dubai. The win by Arabtec follows an AED 1 billion contract
awarded to Khansaheb Civil Engineering in May 2008 to undertake all
infrastructure work at the development. Arabtec will start construction of
the first homes on the project in August 2008, with completion expected in
the third quarter of 2010. The project will include 4,000 villas and
terraced houses across four communities. It is located on a 5.4 million
square meter site behind Discovery Gardens and close to Jebel Ali Village,
which Nakheel is redeveloping as part of the Dubai government's strategic
plan to address the need for affordable housing in the emirate.
Nippon Steel Corp., JFE Holdings Inc. and Posco, Asia's three largest steelmakers, will join Brazil's Cia. Vale do Rio Doce to expand production at jointly owned coal mines in Australia. The companies will invest A$400 million ($379 million) in the Car borough Downs and Glennies Creek mines to increase output, JFE said at a press briefing in Tokyo. Vale, based in Rio de Janeiro, is the world's biggest iron-ore producer and owns stakes in the Australian coal mines.
State steel maker PT
Krakatau Steel plans to build an integrated steel plant in South
Kalimantan at a total cost of US$600 million to meet demand for ingot
steel. “In the first phase of the project we will build a billet plant in
South Kalimantan,” PT Krakatau Steel President Director Fazwar Bujang
The government will
reduce its import duty on hot roll coil (HRC) to zero percent in a bid to
encourage the growth of the country's downstream steel industry, a
minister said. “Import duty on HRC will be eliminated,” Industry Minister
Fahmi Idris said after a ceremony marking the start of construction of a
factory of PT BlueScope Steel Indonesia in Cilegon, Banten,. He said the
government would lower the import duty on HRC from currently five percent
to zero percent to increase the competitiveness of the country's steel
industry. “The higher costs in the upstream steel industry will lower the
competitiveness of downstream steel products while at the same time we
want to penetrate the global market,” he said.
Korea expects to become the
fifth-largest shipping power in the world by 2010 as specialized funds and
tax benefits help local companies expand their fleets, the government
said. The Ministry of Land, Transport and Maritime Affairs said as of 2007
Korea ranked sixth with 36.80 million deadweight tons (DWT) of registered
ships. Greece topped the list with 175.70 million DTWs of registered
ships, followed by Japan, Germany, China and Norway. DWT is the main
measure of a ship's carrying capacity.
Kinsteel Bhd has
obtained a licence from the Government to build a RM400mil mini-blast
furnace plant, the second such plant in Malaysia. An industry source said
the licence obtained would enable Kinsteel to eventually produce about
600,000 to 800,000 tonnes of hot metal or “pure liquid iron” annually. The
new plant is slated to be commissioned within two years. Ann Joo Resources
Bhd is currently constructing a RM600mil mini-blast furnace plant in Prai,
targeted to start production by year-end with an annual capacity of about
Thai hot rolled coil
producer G Steel will install reheating and tunnel furnaces to boost HRC
capacity from its existing 1.8m tonnes/year to 3.4m t/y, company sources
tell. The expanded capacity will come on stream at the end of 2009. Tenova
Loi Italimpianti has been awarded the contract to supply and install the
two furnaces as part of the revamping of G Steel's hot strip mill at
Rayong on Thailand's eastern seaboard. The Italian supplier will combine a
new roller hearth furnace and new walking beam furnace with G Steel's
existing line that has a medium (80~100mm) thick slab caster. G Steel will
also be installing a re-rolling line, down-coiler and two more finishing
facilities (skin pass and P&O) as part of its expansion.
Bluescope's Steel's metallic coating line in Rayong, Thailand,
has been producing above capacity to meet rising demand in Thailand,
company officials told MB. The plant is producing at less than a third
above 400,000 tpy capacity, said coated manufacturing manager Greg Harris,
although he would not say if the plant was due for an expansion.
Construction of the project to expand Siam Yamato Steel's
capacity for wide-flange beams and structurals by 400,000 tonnes/year is
proceeding according to plan, Bangkok-based company sources tell.
Construction commenced in the last quarter of 2007. The new operation,
also scrap-based, is situated on a different site 5km from the company's
existing complex in Rayong, eastern Thailand, It is scheduled to start
operating commercially in middle of 2009.
Vietnam Steel Corp (VSC) expects to commission a 500,000 tpy
billet mill in the northern province of Cao Lao by end-2010, an official
told MB. There are plans to add a rolling mill in 2012 to produce bar and
“maybe some wire rod”, he said. Construction has started on the small
blast furnacebased billet mill at VSC's Quy Xa iron ore mine site. The
original plan was the commission a 500,000 tpy billet and bar mill in
2009. “This is not a delay; we have a change of plans,” he said, declining
to explain further.
SMS Demag announced that Indonesia's PTKS has placed an order for the modernization of its hot strip mill at Cilegon in West Java. SMS Demag said that through the modernization PTKS will be able to increase the production of its hot strip mill by approx. 20 % and at the same time improve the product quality and extend the product range. The modernization comprises the revamp of the edger including commissioning of an Automatic Width Control system to improve strip width tolerances and to minimize crop losses. Furthermore, new work roll cooling systems in the finishing mill, as well as anti peeling and interstand cooling systems will be installed. The use of CVC plus® systems and work roll bending in mill stands F1 to F3, along with a new Profile, Contour and Flatness Control will further improve the product quality. Upon completion of this order all finishing mill stands will possess CVC plus® technology. The new laminar cooling system will enable PTKS to improve its cooling strategies.
Kinsteel Bhd has obtained a
licence from the Government to build a RM400mil mini-blast furnace plant,
the second such plant in Malaysia. An industry source said the licence
obtained this week would enable Kinsteel to eventually produce about
600,000 to 800,000 tonnes of hot metal or “pure liquid iron” annually. The
new plant is slated to be commissioned within two years. Ann Joo Resources
Bhd is currently constructing a RM600mil mini-blast furnace plant in Prai,
targeted to start production by year-end with an annual capacity of about
500,000 tonnes. The source said Kinsteel had well placed its long-term
growth strategy upon securing the licence to build the furnace plant.
It is reported that Chinese plate export market seems to be a
bit slowed down recently since transactions have softened. Export offers
do not see further increase and exporters started to become cautious on
market situation.Export offers for commercial plate by tier two producers
are at around USD 1130 per tonne FOB to USD 1150 per tonne FOB, but
transactions are reported to be a little difficult.
It is reported that there
has been price inversion between hot galvanized coil and cold rolled coils
in China since August 2007 as price for HDG is lower than that of CRC. The
oversupply and dependence on exports are believed to be the major reasons
behind the lower HDG price.In recent years, HDG capacity and production
have witnessed great increase. Annual HDG output has been growing at a
level higher than 40% since 2004. However, the growth rate started to drop
since the second half of 2007. Subsequently, lots of HDG flow to
international market and the proportion of exports to total output is also
on the increase. In 2006, total Chinese HDG exports reached 2.87million
tonnes accounting for 23% of domestic production. But the export tonnage
began to drop remarkably following the rebate cut in 2007.
It is reported that reconstruction of the quake hit areas
involving 15 million people to be settled down is becoming a focus
nowadays with the rescue and relief work gradually winds up. It is
estimated that the overall reconstruction will need about 50 million
tonnes steel products in next 5 to 10 years.Industry insider said that the
reconstruction will also witness a process of urbanization. If per capita
steel consumption is 0.33 tonnes per year the reconstruction work will
require at least 5 million tonnes each year adding up to 50 million tonnes
in ten years.
According to Mr Sun, owner
of a private steelmaker, small and medium scale steel makers in Qian'an
have generally cut production by 30% to meet the environmental
standard."As Qian'an is close to Qinhuangdao, one site of the 2008 Olympic
football game and adjacent to Beijing-Shenyang superhighway, many small
and medium scale steel mills in the town have had to reduce steel output
since early May.
It is reported that China Iron & Steel Association has advised its members to stop increasing prices of steel products destined for reconstruction and relief operation in quake hit areas. CISA has forwarded the top planning body's directive to all its members and urged them not to increase the price of hot rolled coil, color coated coil and structural tube above levels prior to the devastating earthquake. The mills have been told that any price rises already implemented would be rescinded. The move has come after the price limit order issued by National Development & Reform Commission. According to NDRC's CISA members are also required to supply materials directly to the quake stricken areas and prevent any price bidding in the circulating process.
It is reported that recently Chinese HDG and PPGI price have
been surging despite slow domestic steel market. Supply is reported to be
quite short and prices are continuously on the rise.As per report the
price increase is across the board and there has been an average increase
of CNY 200 per tonne for HDG and PPGI since late May.
It is reported that Tianjin Pipe Group has commissioned its 720 project, which is China's first oblique rolling expansion unit with the world's largest caliber and annual output of large caliber seamless steel tubes.As per report the 720 project began to be constructed on March 7th 2007. The completion of the project has important role on further expanding industry chain, to optimize the product structure, realize product series, high end, high quality and enhance the enterprise's core competitiveness.It mainly produces large caliber high pressure boiler pipe, mechanical tube, structure pipe, oil pipeline pipe, the specification is 325mm to 720 mm ×15.5mm to 55mm. It is expected to yield 45,000 tonnes products this year.
Chinese coke producers have hiked prices for June due to soaring
coking coal prices, adding pressure to steel mills already struggling with
surging iron ore prices. Traders and local media said many producers in
Shanxi, China's top coal and coke producing province, raised coke prices
by CNY 300 per tonne. Price of first grade metallurgic coke reached around
CNY 2,700 per tonne in the province. Shanxi based trader said "From coke
production to transportation, every link is problematic. Many small and
medium sized coke producers are cutting production, as there is not enough
coking coal feed into their coke ovens and the increasingly tougher
environmental regulations are putting pressure on them.”
It is reported that Hebei Steel Group will be officially launched to create a new industry leader and would improve the sector's efficiency and productivity.China Securities Journal reported that Hebei's provincial government has agreed to merge Tangshan Steel Group and Handan Steel Group to create the new Hebei Steel Group which will become China's No 1 steel maker overtaking Shanghai based Baosteel Group.The newspaper, citing unidentified sources familiar with the situation said that the new Hebei Steel Group will have annual productivity of nearly 32 million tonnes of iron and steel, more than that of Baosteel Group.The newspaper without giving a timeframe said that "According to the long term strategic plan by the Hebei province government, the new group will have annual productivity of 50 million tonnes of iron and steel, making it a world class iron and steel enterprise. It added that without the merger, Hebei cannot compete against domestic rivals and expand out of China." The merger and the creation of Hebei Steel Group is a first step towards helping Henan province solidifies its position as China's top province by steel productivity. Mr Wang Yifang general manager of Tangshan Steel Group is the chief of the government led team in charge of the creation of Hebei Steel Group and Mr Liu Rujun chairman of smaller Handan Steel Group. It added that the top management of the new Hebei Steel Group will be announced soon.
Sinosteel, the Chinese state-owned steelmaker, has strengthened its hand in the battle for Midwest Corporation by lifting its stake in the junior Australian iron ore group to 28.4 per cent. The Chinese steelmaker increased its stake from 19.9 per cent after a number of shareholders accepted its A$6.38 cash offer. Sinosteel was left stunned last week after its recommended bid was trumped by an A$1.5 billion "all-share" deal with Murchison Metals, a Western Australia compatriot of Midwest. Midwest said at the time that it backed the Murchison offer, which would be engineered via a "reverse takeover", leaving Midwest as the quoted entity. However, analysts have suggested the Murchison deal could yet play to Sinosteel's advantage. The Chinese group already has clearance from Australia's Foreign Investment Review Board (FIRB) to buy 100 per cent of Midwest, and the Chinese group may feel that approval remains in place even if the group becomes much enlarged after joining with Murchison. FIRB has delayed a number of Chinese groups from buying into Australia's resources sector as it considers "national interest" implications. The concentrated nature of China's planned investment in Australian resource groups, especially iron ore miners and explorers, in recent months has led to particular concerns in Canberra. Midwest and Murchison are both attempting to develop iron ore mines on adjacent tenements in the Mid West province of Western Australia and could generate significant synergies by sharing infrastructure costs, including rail and port requirements. Sinosteel is also considering making a complaint to Australia's Takeovers Panel over a potential link between Murchison and Harbinger Capital, the US fund. Harbinger, which owns just under 20 per cent of Murchison, was asked whether it supported the reverse takeover in advance of it being announced because the US fund had the potential to block the deal once it was put to a shareholder vote. On the same day the reverse takeover was announced, Murchison increased its stake in Midwest to 9.9 per cent. Sinosteel has expressed concerns that Harbinger and Murchison could be classified as "associates" under Australia's Corporations Act and may seek a ruling from the panel. Midwest shares closed down nearly 1 per cent at A$6.73 yesterday, while Murchison was one cent firmer at A$4.11. Midwest and Murchison have held on-off talks for close to two years. The Mid West region is directly below the Pilbara, Australia's richest source of iron ore that is dominated by BHP Billiton and Rio Tinto, with Fortescue Metals beginning to ramp up production.
Nisshin Steel Co., Japan's third- biggest stainless steelmaker, lost its Japanese Industrial Standards certification for four types of stainless steel pipes after failing to apply water pressure tests as required. About half the stainless steel pipes made at the Tokyo-based company's Amagasaki mill in central-western Japan are affected by the loss of certification, the company said in a statement. Products from the mill make up less than 10 percent of the company's total sales. Nisshin, which made about 6.8 million of the pipes in the past five years, is the third Japanese steelmaker since last month to report incomplete pipe testing. Nippon Steel Corp. and JFE Holdings Inc., the nation's two biggest mills, in May said they failed to apply similar tests to pipes made by affiliates. Both said customers had not reported problems. Nisshin said it didn't know how the loss of certification would affect its earnings. The company rose 1.5 percent to close at 400 yen on the Tokyo Stock Exchange, matching the 1.5 percent gain in the Topix Iron & Steel sub-index.
Vadim Varshavsky, the steel investor and Russian legislator, paid more than 50 million pounds ($97 million) for Alphasteel, the administrator for the U.K. steel mill said. The mini-mill, based in Newport, south Wales, was bought by Libala Ltd., a company affiliated to MirInvest, a Moscow-based investment firm owned by its management and Varshavsky, London- based Begbies Traynor said in an e-mailed press release. Alphasteel went into administration on Dec. 20, according to a note on the company's Web site. “We are unable to give an exact price, but can confirm it was in excess of 50 million pounds,'' Katie Hunt, a spokeswoman for Begbies Traynor, said. The company is keen to restart production as soon as possible and has a three-year production target of 1 million tons. Varshavsky is also a co-owner of Estar Holding, Russia's biggest producer of stainless-steel bars and cutlery.
Hyundai Steel Co., South Korea's second-largest steelmaker, will raise the price of iron bars, used in construction, by 8.5 percent as raw material costs increased. The price will rise by 80,000 won per metric ton to 1.02 million won ($997) effective June 9, Chang Young Sik, a spokesman for the Incheon, South Korea-based company, said.
Mitsubishi Heavy Industries Ltd., Japan's largest maker of heavy machinery, said it will increase forklift prices by 6 percent to absorb higher steel costs. Local prices for forklifts that can haul 3.5 tons to almost 16 tons of goods will be increased starting July 1, Tokyo-based Mitsubishi Heavy said. The cost of materials such as steel has exceeded the level that can be absorbed, the company said. Mitsubishi Heavy's unit that builds small and mid-size engines, forklifts and car turbochargers had sales of 472.5 billion yen ($4.5 billion) for the year ended March 31, accounting for 15 percent of total revenue. The company also makes products ranging from ships and aircraft components to gas turbines and air conditioners.
plans to charge
customers more in the third after the government ordered domestic mills to
hold prices at the same level as before the May 12 earthquake. “We will
keep prices for all grades unchanged at the second-quarter level,'' Chen
Zudong, a sales official at Baoshan, said. The steelmaker had planned to
raise prices for the three months starting July 1 to keep pace with global
levels, Xu Lejiang, the chairman of Baoshan's parent company, said. The
China Iron and Steel Association this week ordered members to hold prices
at levels prevailing before the quake and ensure sufficient supplies of
products such as color-coated sheets.
The cost of shipping iron ore by sea may decline once a dispute over the price of the raw material is resolved between Chinese steelmakers and Rio Tinto Group, the second-largest producer, Standard Chartered Bank said. The China Iron & Steel Association last month urged the nation's steelmakers to spurn efforts by Rio Tinto to sell ore at market rates rather than prices set at annual negotiations. The disagreement increases demand for vessels to ship ore from Rio's rivals, Helen Henton, London-based head of commodity research, said. Rio Tinto wants higher prices for its Australian iron ore, to reflect the shorter distance to China compared with competing sources, such as Cia. Vale do Rio Doce's mines in Brazil. Steelmakers are buying more ore from Brazil, according to Jeremy Penn, chief executive officer of London-based Baltic Exchange Ltd., which sets ship rates. Longer voyages have cut carriers available for hire and pushed rates to a record. ``Freight rates should reduce from these levels when the dispute is resolved,'' Henton wrote. Port congestion and a shortage of ships means prices will still be ``supported at high levels,'' she added. China is the world's biggest consumer of the steelmaking ingredient. The Baltic Dry Index, a gauge of commodity shipping costs, climbed to a record 11,793 points on May 20, according to the Baltic Exchange. Yesterday it rose 0.4 percent to 11,503 points. A so-called capesize vessel, used to haul about 170,000 metric tons of iron ore, costs $227,689 a day to hire, according to the exchange. That's 2.85 times more than a panamax ship of about half the size that's used for other cargo, such as grains. Capesize rates have averaged $139,871 since the start of 2007, about 2.4 times more than a panamax, exchange data show.
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