|From the CEO's Desk
The global downturn continues and it has now started surrounding iron &
steel industry too. Many steel companies have announced production cuts
while some are on the verge of closure. Till date there is no major
manpower reduction but I am not too sure about the future. The problem
seems to be more acute in US and EU and also for those countries which
were doing huge exports to these regions.
As far as the prices are concerned, they also continue to dip. HR coil
prices have gone below US$500 and iron ore (63.5 % Fe) prices have gone
below US$50. There is a similar dip in the longs segment too. On one
hand it is good for the downstream industries but one should be more
worried about the huge inventories lying at various stockyards in Asia.
In this context I feel that steel mills have no option but to cut on
production. Further, most of the mills have either scrapped or delayed
their greenfield as well as brownfield projects. An exception to this is
SAIL, which has announced that it will go ahead with its expansion plans
inspite of the present downturn in global economy.
Having said all this, I still believe that the epicenter of the problem
is far away from
manufacturing industry and is obviously more related to financial
sector. Today, the main problem for the manufacturing sector is the
finance crunch and non availability of funds for their expansion plans.
I believe the governments of various countries have been pumping funds
in the system so that this problem can be diluted. Indian government has
also imposed 5 % import duty on steel to prevent cheap imports from
other countries. This move is expected to help the price stabilization
process and also to prevent its further downfall.
As such, I am quite optimistic and feel that at least for the steel
sector in Asia, the problem seems to be temporary and the industry can
be back on track in the next few months. Out of the whole hazy picture,
one thing is emerging very clear. The global iron & steel industry will
have to depend more and more on China and India. A lot depends on how
these two countries perform in the future!!!
Editor & CEO
Evo Tech P. Ltd.
Asian Metallurgy 09
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Adani's first Power Plant to be Operational in 2009
The Adani Group's first
power plant of 330 MW capacity is set to be commissioned in the first
quarter of 2009 at Mundra.
“The first turbine of 330 MW will be commissioned in the first quarter
of 2009 in Mundra power plant. The entire plant 4,260 MW power plant
will be complete in the end of 2010,” Adani Group chairman Gautam Adani
Adani Power, subsidiary of Adani Group, has already inked two
power-purchase agreements (PPA) of 1,000 MW each with the state-owned
power utility Gujarat Urja Vikas Nigam (GUVNL), while another PPA of
1,450 MW has been signed with the Haryana state power utility.
Waning Demand Shutdown150 Small Sponge Iron Units
Slowdown in the economy and slump in demand
for steel have forced to over 150 small sponge iron units to shut down
operations. Besides, several small and mid-sized steel plants and
rolling mills in the eastern region are on the verge of closing down
manufacturing units temporarily.
At present, there are close to 300 organised and unorganised sponge iron
units spread across Orissa, West Bengal and Chhattisgarh. These units
are dependant on National Mineral Development Corporation (NMDC) and
private miners for iron ore.
“Both sponge iron makers and small steel-making firms are struggling to
make their ends meet as they are operating on small margins. Demand for
steel has already plunged steeply. Moreover, NMDC's recent move to raise
iron ore prices has worsened the situation,” said Chhattisgarh Sponge
Iron Manufacturers' Association.
“If the situation worsens further, many small units may either cut
production or close down completely,” he added. The association has
recommended that NMDC should roll back price hike and that railway
freight should be brought down further. Besides, it has also recommended
imposition of up to 20% import duty on steel to prevent dumping from
China, Thailand and Ukraine.
Duty on Steel Prod Exports Scrapped
Indian government has decided to withdraw a 15
percent export duty on certain items such as pig iron, iron and steel
ingots, bars and rods, angles shapes, sections in view of the sharp fall
in international prices.
However the move to scrap duty on the items may not give a big relief to
export markets as the exports of those products is insignificant. The
government, in a statement, said this was done after the steep fall in
global and iron ore prices in order to make exports remunerative and
saves jobs in the sector.
The government had imposed export duty on specified iron and steel
products in May 2008 which were modified in June 2008.
Global Steel Production Records 3.2 % y-o-y Decline
World crude steel production for 66 countries
was 108.4 million tons in September, showed the figures released by
World Steel Association. This is 3.2 percent lower than same month last
Total world crude production was 1,035.8 mmt in the first nine months of
2008, a 4.6 percent increase over the same period in 2007. In September
2008, the world crude steel production moving annual total (MAT) growth
rate further slowed to 4.7 percent from 5.6 percent last month. China's
crude steel production for September 2008 was 39.6 mmt, a decrease of
-9.1% on September 2007. In the first nine months of 2008, China
produced 391.0 mmt of crude steel, an increase of 6.2% compared to the
same period in 2007.
Overall, Asia produced 60.4 mmt of crude steel in September 2008
compared to 63.7 mmt in September 2007, a -5.1% decrease in crude steel
production. South Korea showed a 12.7% increase in September producing
4.6 mmt of crude steel.
In September 2008, the EU produced 17.4 mmt of crude steel, an increase
of 0.9% and in the first nine months the EU produced 160.1 mmt, a 1.2%
increase over the same period in 2007. Germany produced 4.0 mmt of crude
steel in September, a decrease of -0.6 compared to the same month last
year. Italy showed an increase of 2.4% producing 2.7 mmt in September.
Russia produced 6.1 mmt, 7% higher than September 2007 and in South
America, Brazil produced 3.0 mmt in September, an increase of 5%
compared to the same month in 2007.
Total crude steel production in North America was 10.9 mmt in September
2008, the same amount as September 2007. The North America MAT growth
rate again rose, to 6.4% from 6.1% last month. This is its tenth
consecutive monthly increase.
Govt Deny Steelcos' Plea to Step in
The government has denied interfering in
the argument between steel producers and National Mineral Development
Corporation (NMDC) over the iron ore price hike.
Private steel companies like Ispat Industries, Essar Steel and JSW
Steel, which buy varying quantities of iron ore from NMDC through long
term contracts to make various types of steel, are opposing to the
recent decision of NMDC to hike iron ore prices, as globally, prices of
iron ore have fallen.
“Pricing of iron ore of NMDC is purely a commercial decision of the PSU
and we may not intervene in it,” the steel ministry said in response to
the joint representation of the steel companies.
NMDC had announced up to 40 percent provisional hike in iron ore prices
for its long- term contracts in the domestic market with retrospective
effect from April 1, this year. This move came even as prices of iron
ore fines fell sharply to about $65 to $72 per ton, from high of $ 200
earlier this year, due to slow demand from large consuming markets such
as China. “This is unacceptable. Globally, iron ore prices are coming
down and NMDC has gone ahead and raised prices. This will have a major
adverse impact on us financially." said a senior official of a steel
company. Steel companies said the price hike by NMDC had come at a time
when the industry was under immense pressure due to the fall in demand
of the community and cheaper imports from China , Ukraine and Thailand.
Tata Group Puts Acquisition Plan on Hold
Tata Group, buyer of steel firm Corus in 2007 and car brands Jaguar and
Land Rover in 2008, has put acquisition plans on hold unless
strategically critical, sources said. Ratan Tata, the chairman of Tata
Group, has directed all pending loan and funding agreements be finalised
expeditiously, even if it meant accepting higher interest rates. Some of
the group companies with substantial foreign operations or those which
have made substantial acquisitions are facing major problems in raising
capital and establishing lines of credit for their operations. Senior
management of Tata Group companies have been advised to be sensitive and
conscious of the global financial crisis and have been requested to be
proactive and manage cash flows and conserve expenditure as prudently as
possible. The Tata Group had revenues of about $62.5 billion in 2007/08,
and is present in sectors including software, steel, energy, automobiles
and consumer products. The group's 27 publicly listed enterprises have a
combined market capitalisation of some $60 billion, the group's website
said. Last month vehicle maker Tata Motors said it was rethinking its
plans to raise $600 million overseas due to falling markets and was also
reviewing its expansion plans due to softening demand. The vehicle
maker's plans to raise 41.5 billion rupees ($870 million) via two rights
issues in October were hit by a stock market slump, with company
founders raising their stake to 42 percent from 33 percent.
JSW Steel Defers Commissioning Vijaynagar Plant
After cutting down its production in view of
the slackening demand, country's leading steel maker JSW Steel has now
decided to defer the commissioning of its Vijaynagar plant after its
capacity expansion. The company is waiting for the market to firm up
before commencing production from the Vijaynagar facility after its
capaicity expansion. The company will take a decision next month as to
when should it start production from the unit. The new facility will be
ready for production by November 25 and trial runs are successfuly on.
Initially, the company had planned to start production from the
Karnataka steel unit by October. Sajjan Jindal-led JSW Steel is
expanding its finished steel capacity at Vijaynagar plant in Karnataka
to 6.8 million tons from its present capacity of 3.8 million tons. It
has already commissioned a sinter plant and two blocks of coke oven
batteries as part of the company's Rs 5,300 crore expansion project at
Vijaynagar. JSW Steel plans to reach 32 million tons of steel capacity
by 2020 for which it would invest Rs 85,000 crore. On commencement of
the expansion project in Q3 of the FY 2008-09, JSW Steel would become
country's largest steel player in private sector with a total crude
steel production capacity of 7.8 million tons (including 1 Mtpa at
Salem). At present, SAIL is India's largest steel producer in the public
sector with annual production hovering close to 15 million tons, while
in private sector Tata Steel tops the list with installed production
capacity of 6.8 million tons. Facing steep fall in demand for steel, JSW
had last week announced a 20 per cent cut in production and slashed
prices by up to Rs 5,500 a tonne.
NMDC Gets 102 pc Hike in Export Prices of Iron Ore
State-run mining giant NMDC Ltd has
successfully negotiated a 102 per cent hike in export prices of iron ore
from Japanese and South Korean steel mills, notwithstanding the global
financial downturn. NMDC will export iron ore lumps and fines at 96.5
per cent and 79.88 per cent higher prices, respectively, to foreign
steel makers for a long-term supply of the raw material, sources said.
Over and above the accepted hike for the current fiscal, the steel mills
have also agreed to pay a bonus of 6 per cent on lumps from the
Bailadila mines of NMDC. That takes the hike to 102 per cent. After the
hike, the country's largest iron ore producer NMDC will now get USD 129
a ton as export price instead of USD 65 earlier. Of its total 30 million
tons of production, the Navratna PSU exports about 3.5 million tons of
iron ore to Japanese and South Korea steel companies including Posco. As
of now, the company has exported 1.5 million tons of the raw material,
while the rest would be done till March. NMDC's price negotiation was
due in April this year, but it got delayed due to some reasons. The
foreign steel companies will now pay price arrears. Enthused at the
price negotiation, NMDC Chairman and Managing Director Rana Som said the
Japanese and Korean steel companies made it clear that the concept of
long-term contract is "independent of short-term fluctuations in
prices". NMDC's price negotiation with Japanese and Korean steel
producers had been in limbo for a couple of months due to the Commerce
Ministry's reservations on the PSU's plan seeking up to 96.5 per cent
hike in iron ore prices. The Ministry was of the view that NMDC should
go in for a moderate price revision taking into account India's
long-term bilateral trade relationshi.
Paswan Seeks Import Duty on Steel
Steel Minister Ram Vilas Paswan has sought the
Finance Ministry's urgent consideration on levying 10 per cent import
duty on all categories of steel to ward off the threat of cheaper
imports. Fearing that falling steel prices in the global market would
result in cheaper imports, Paswan has shot off a letter to Finance
Minister P Chidambaram, urging him to "expeditiously consider" the
proposal of levying 10 per cent import tariff. The minister pointed out
that the domestic steel industry is passing through a tough time due to
slackening demand for the commodity amid the global financial recession.
Paswan said the steel scenario has "drastically changed" in
international markets over the last few weeks and the industry here is
facing the brunt of the transformed situation. During the last couple of
months, the demand for steel in the domestic market has dipped by over
30 per cent, forcing the producers to lower prices by up to Rs 8,500 a
tonne and also cut production to avoid piling up inventories. In order
to safeguard the interests of the industry, the Steel Ministry late last
month sent a detailed proposal to the Department of Revenue,
recommending 10 per cent import duty on all categories of steel
products, including alloy, non-alloy, semi-finished and finished
products. It also favoured reintroducing 14 per cent countervailing duty
on TMT (thermo mechanically treated) bars and structurals to make
imports competitive, and backed steel companies' demand for withdrawing
15 per cent duty on exports of long products, primarily used in
construction. In pursuance of the Steel Ministry's recommendations, the
government scrapped export duty on steel last month, but is yet to take
a decision on imposing import tariff to check shipments from countries
like China, Ukraine and Thailand. An official source said the Finance
Ministry has asked for more details and inputs from the Steel Ministry
in order to take a final call on 10 per cent import duty. "The Finance
Ministry does not have any reservation in imposing import duty at the
previous level of 5 per cent, but to levy it at 10 per cent, it wants to
know the rationale behind it," the official said. Steel makers are
demanding 15 per cent import duty, and in return have assured not
raising prices for six months.
Kalinganagar Steel Plants Face Global Economic Crisis
The global economic crisis has precipitated
into a crisis at Kalinganagar with most steel plants in the region
shutting down furnaces and managements resorting to disengagement of
workers. Jindal Stainless, which had shut down all its four blast
furnaces since September 17, was resorting to several cost-cutting
measures to stay float. A spokesperson of Jindal Stainless said that the
price of the finished product had gone down due to the slowdown, adding
that the management at this juncture had the only option to lay off
workers as an austerity measure for the company's survival.
Public-sector Nilachal Ispat Nigam Limited (NINL) was also facing the
heat due to the economic meltdown. A company source said that the
production at the plant had been curtailed and maintained to the extent
needed to operate the furnace. Although the plant had not disengaged any
worker, the management would have to take appropriate action to beat the
crisis. Rohit Ferrotech Ltd, a ferro chrome unit which has a production
capacity of 300 mt per day, had also shut down two of its four furnaces
in the last 20 days.
Tata BlueScope to Double Capacity at Jamshedpur Unit
Tata BlueScope Steel, the equal joint venture
between Tata Steel and BlueScope Steel, will double capacity as its
upcoming facility in Jamshedpur, which will be inaugurated in August
Harish Pathak, managing director, Tata BlueScope Steel, said that the
timing for capacity expansion will be set in the next two to three
months, depending on market conditions. The joint venture company has
invested around Rs 900 crore in setting up the plant.
The Jamshedpur facility will go onstream in August with a capacity of
250,000 tons of premium zinc and aluminium coated steel called Zincalume
and pre-painted zinc and aluminium coated steel called Colorbond.
Investment for doubling the capacity could be a little less since land
and required infrastructure are already available. The investment will
be made in equal proportion by both the partners.
According to industry sources, domestic demand for coated steel is
around 2.7 lakh tons, with a potential of going up to 1 million tons.
Tata BlueScope has been importing some of the Zincalume requirements
from the southeast Asia-based BlueScope facilities.
ArcelorMittal to Go Slow on Its Projects
Amid fears that it may cut the volume of
investments in India in the wake of global meltdown, world's largest
steel maker ArcelorMittal said it would proceed in a phased manner to
implement the projects. “The international meltdown will have no impact
on the long term plans of the company. However, in order to adjust in
terms of economic situation, the projects in India have to be phased,”
ArcelorMittal's India CEO Vijay Bhatnagar said after meeting Chief
Minister Naveen Patnaik. Stating that his meeting with the chief
minister was a courtesy call, Bhatnagar said ArcelorMittal would make
some adjustments in short term plan while its long term plan for the
country remain unchanged. During the discussion, the company asked the
state government to expedite its proposal on raw material linkages
(mining) and also forest diversion proposal. Of the total 7,500 acre of
land required by the company for its proposed 12 mtpa greenfield steel
mill project at an investment of Rs 40,000 crore, nearly 1400 acre of
land come under forest land category. Meanwhile, the company plans to
cut crude-steel output by 35 percent temporarily at the Tubarao mill in
Brazil as global demand declines. Maintenance at a blast furnace in
Espirito Santo state in southeast Brazil will be earlier than scheduled,
Luxembourg- based ArcelorMittal said in a statement. Two other furnaces
will run at a slower rate because of less demand for steel slabs, the
company said. The Tubarao works will run its hot-strip rolling mill,
which produces for the Brazilian market, at 75 percent of capacity in
November and December because of a drop in customer demand, the company
said. Maintenance at the Espirito Santo furnace had been set for 2011.
RSP on Eco-Friendly Steel Making
Rourkela Steel Plant (RSP) is all set to go
for massive expansion to raise production capacity from 2 million tons
to 4.5 million tons of hot metal in an eco-friendly manner by adopting
state-of-the-art technologies and environmental protection measures. The
Union Ministry of Environment and Forest has already issued environment
cflearance to RSP for its expansion, plant sources said. A technical
committee of the State Pollution Control Board (SPCB) visited the plant
on November seven, 2008 and examined the environmental management plans
proposed by RSP for the expansion project. SPCB will issue clearance
based on the recommendations of the technical committee. RSP is the
first integrated steel plant in the country which has installed two
''automatic ambient air quality monitoring stations'', one inside the
plant and another at the steel township. These stations continuously
monitor the concentration of pollutants like dust, sulphur di-oxide,
oxides of nitrogen and carbon monoxide present in ambient air. The
enhancement of solid waste utilisation to 73 per cent and use in place
of basic raw materials reduced consumption of natural resources like
coal, lime stone and iron ore. The plant, as per its major achievements,
has taken various steps in maximizing the recovery of waste gases and
their use as fuels in steel plant operations. RSP has complied to most
of the commitments given under corporate responsibility for environment
protection (CREP), a charter voluntarily committed by various industries
Lanco Infratech Sole Bidder for Rajpura Thermal Plant
Hyderabad -based Lanco Infratech Ltd is sole
bidder for the Punjab government's 1200- MW thermal plant at Rajpura.
Though seven companies had purchased the request-for-proposal (RFP)
document only Lanco has submitted the bid.
Earlier, 13 companies including like Reliance Power, Tata Power, L&T and
Essar had submitted their request-for-qualification (RFQ) bids in May
this year. Of these, 10 players were declared qualified. The power
project will be coal-based and is likely to attract an investment of Rs
6,000 crore, according to the state electricity department. The Punjab
cabinet on 7th November gave its approval in-principle for setting up
the 1,200-Mw thermal power plant at Rajpura, on which the work is likely
to be inaugurated on December 8.
The project would be set up on about 1,078.16 acres on a
build-own-and-operate (BOO) basis. For development of the Rajpura power
project and also to enhance investors' confidence, reduce risk
perception and good response through competitive bidding, the Punjab
State Electricity Board (PSEB) has set up a special purpose vehicle
(SPV), namely Nabha Power Ltd, as its wholly-owned company to facilitate
tie-ups of inputs, linkages and clearances for these projects. Nabha
Power Ltd Director K B Kansal said, "While Reliance Power and Lanco
Infratech came to the electricity department with RFP bids, only Lanco
submitted the bid. We are going to take the decision on government and
regulatory levels and the future course of action will be decided on the
basis of the decision..
Posco Set to Get Kandahar Iron Ore Reserve Licence
South Korean major Posco is the verge of
getting a prospective licence for Kandahar iron ore reserve in Orissa's
Sundergarh district. “We will soon send the recommendation to the centre
for the prospective licence over Kandahar iron ore reserves,” said
Orissa's steel and mines minister Pradip Amat.
Kandahar iron reserve is spread over 6,204.32 hectors and is considered
as ' jackpot' in the steel sector. " Two more signatures, one of Pradip
Amat and another from chief minister Naveen Patnaik, are required to
finally recommend the name of Posco for availing the prospective licence
over Kandahar," said an official.
Posco-India, which proposed to set up a 12 mtpa steel plant near Paradip
at an investment of Rs 51,000 crore, there were as many as 289
aspirants, including Essar Steel and central PSU Kudremukh Iron Ore Ltd
for Kandahar reserve.
SAIL to set up SPUs in Rajasthan and Himachal
Steel Authority of India (SAIL) board has
given in-principle approval for two steel processing units (SPUs) in
Nahan, Himachal Pradesh and Jhunjhunu, Rajasthan.
According to a company statement, these will be apart from nine others
(Bettiah, Mahnar and Gaya in Bihar, Hoshangabad, Ujjain and Gwalior in
Madhya Pradesh, Guwahati in Assam, Srinagar in Jammu & Kashmir and
Sitapur/Lakhimpur in Uttar Pradesh) being set up by SAIL in places where
it does not have manufacturing units and where steel consumption is low,
compared to the national average.
The products manufactured at the SPUs would mainly be for construction
purposes, both industrial and individual.
Ship Orders Dropped 90% in October
Global ship orders declined by 90 percent in
October month as credit crunch slowed down world trade and made it
tougher for shipping lines to borrow money, said Lloyd's Registers
Ship companies ordered a total of 37 container ships, tankers and other
vessels in October, compared with 378 a year earlier, Lloyd's Register
Chief Executive Officer Richard Sadler said.
Hyundai Heavy Industries Co, the world's largest shipyard, has also
reported declining orders for the three months through September as
shipping lines are slowing expansion plans because of a lack of
financing and plunging demand for shipments of oil, raw materials and
The global full-year order tally will likely fall more than the 15 per
cent previously predicted by Lloyd's Register, Sadler added.
Contracts last year surged 50 per cent to 261.3 million deadweight
tonnes, according to Clarkson Plc, the world's largest shipbroker. In
the first nine months of this year, orders dropped 27 per cent to 142.9
million deadweight tonnes.
New contracts in China dropped 62 percent to 24.35 million gross tonnes
in the first ten months, he added. New orders in Korea fell 50 per cent
to 33.68 million gross tonnes.
Ship orders surged last year as China's economic growth boosted demand
for imports of iron ore, used to make steel. The country's export growth
also fueled demand for container ships to carry furniture, toys and
other goods to the US and Europe.
The Baltic Dry Index, a measure of commodity-shipping costs, surged to a
record 11,793 on May 20, having more than tripled in three years.
Rates have since tumbled 93 per cent, to near six- year lows, as traders
are struggling to get credit for shipments. Chinese steelmakers are also
curbing production amid slowing demand for new buildings and cars.
Steel Projects Witness 50% cost Overrun
Tata Steel's three
greenfield projects have witnessed a cost increase of over 50 percent,
or nearly Rs 35,000 crore, according to a recent report of global
financial firm Credit Suisse.
The company's in Jharkhand, Orissa and Chhattisgarh have been delayed by
two to three years due to land acquisition problems, in line with other
mega steel projects announced by global giants such as ArcelorMittal and
Tata Steel, the world's sixth largest steel-maker, had proposed to add
23 million tons (mt) capacity through these three projects with a total
investment of around Rs 68,000 crore. About Tata Steel's project in
Jharkhand, the Credit Suisse report said, "The initial reported capex is
$800 per ton for the 12-mt plant. However, the capex at today's prices
for a greenfield plant is much higher. Therefore, we estimate that the
cost overrun in the project could be more than 50 percent."
The Jharkhand and Chhattisgarh projects, which were to be completed by
2012 and 2015, respectively, have been delayed by 36 months while the
Orissa project has been delayed by 24 months from the deadline in 2013,
according to the report.
"With the delays, the total expenditure would escalate to over Rs
1,00,000 crore as the construction cost shot up to $1,000 a ton from
$600 a ton when the company announced the projects. Surging steel
prices, equipment and construction costs and land value are the key
reasons for the escalation of expenditure. If the projects are delayed
further, it will be tough for steel firms to complete announced capacity
additions. Moreover, the companies have to sweat a lot to tie up for
huge investments in the wake of the credit squeeze," said a Mumbai-based
The steel projects of ArcelorMittal in Jharkhand and Orissa have been
delayed by two to three years due to land acquisition delays, which
pushed its capital cost by 50 percent. The company had estimated to
invest about $18 billion in these projects. In the current situation,
the company will have to spend an additional $9 billion for the
completion of the projects, said the report.
South Korean steel-maker Posco's $11.6-billion Orissa project is facing
regulatory hurdles along with the issues of land acquisition. Indian
companies including JSW Steel, Jindal Steel and Power will also have to
stretch their investments by about 50 percent to complete their proposed
projects. According to the report, about 18 of the 34 mega projects in
the field of power, petroleum, transport and real estate are stuck due
to land problems. In September 2005, the Tatas had signed a memorandum
of understanding (MoU) with the Jharkhand government for its plant at an
investment of Rs 42,000 crore. The Tatas submitted a detailed project
report two years back, the state government has only now finalised a
resettlement and rehabilitation (R&R) package for land acquisition.
The report said, about 60 percent of the families have been shifted from
the plant location at Kalinga Nagar in Orissa. The 6-mt plant, which was
envisaged in 2004 at an investment of Rs 15,400 crore, is expected to be
completed by 2011.
The opposition from tribals have delayed the project. On January 2,
2006, at least 14 tribals and a policeman were killed when police opened
fire to disperse a group of tribals who had gathered to protest against
the construction of a boundary wall of the proposed plant. In July 2008,
Tata Steel managing director B. Muthuraman reportedly said, "We will
start construction of the plant at Kalinga Nagar soon." He said the
company had already procured equipment and machineries worth Rs 6,000
crore from Germany, China and other countries.
The first phase of the 5-mt Chhattisgarh project was to be commissioned
by 2011 and the second phase by 2015. Bacause of the delays in land
acquisition, the cost may increase from Rs 10,000 crore to Rs16,000
crore, said the report.
Abu Dhabi Steel Prices Fall 8-20% in Sept
Steel prices in the Gulf Arab emirate of Abu
Dhabi dropped between 8 to 20 percent in September as decline in steel
demand in the region, official data revealed. In Abu Dhabi, the price of
steel coils from Turkey dropped 20 percent to 4,438 dirhams per ton in
September from August, data from the Department of Planning & Economy
According to the report, the price of angled steel from Korea slipped 11
percent to 4,725 dirhams per ton compared to August, while the cost of
reinforcing bar prices fell 8 percent to 4,950 dirhams per ton. Steel
producers across the world are cutting steel production as global
financial crisis hits demand for their products. Saudi Basic Industries
Corporation whose subsidiary Hadeed is the Kingdom's largest steelmaker
has cut rebar prices for the third time since September.
Building Materials Prices Drop in Abu Dhabi
There has been a remarkable decline in prices
of building materials in the emirate of Abu Dhabi last October. This is
noticeable in the prices of steel, which fell by 8 to 31 percent in the
period specified, revealed the building materials price index announced
by Statistics Division of the Department of Planning and Economy
Department in Abu Dhabi (DPE).
The average price of Turkish flat steel decline 10 percent to AED 4,325
per ton from AED 4,800 per ton in September. The indicator also show a
decrease in the average price of Turkish beam steel from its September
level of AED 2500 per ton to AED 4575 per ton in October. Over the same
period , UAE made steel bars plummeted 23 percent to AED 3825 per ton,
while Turkish high tensile steel registered the largest decline 31
percent from AED 4438 per ton in September to AED per to AED 3075 per
ton on average in October.
A statement issued by the Statistics Division quotes vendors and
suppliers as attributing the decline to both global and domestic
Factors, citing the accumulation of surplus quantities of steel as a
result of the global financial crisis and the recession that some major
economies are going through as the root causes of the retreat in demand.
The statement added that sliding oil prices lower shipping costs,
coupled with the drop in the price of iron ore have in turn led to
reduced cost increased supply of steel production in local markets,
especially when it is borne in mind that that steel supplies are
available from several other sources including China and Ukraine.
According to the statement, one of the domestic reasons for the price
fall was the fact that the local traders inundated the market with large
quantities of steel fearing there would be storage difficulties. The
quantities were purchased earlier in anticipation of further rises in
steel prices, compared to those of the second quarter of this year.
The Statistics Department said in the statement the decline ion steel
prices was that accompanied by similar trend in the prices of cement for
the average price has fallen 8% compared to their September level.
\However the index have shows a 8% rise in the price bitumen compared to
their average for the month of September with the average price per ton
of bitumen 70/60 reaching 2150 in October , while bitumen 70/60 (200 kg
/ barrel) rose by 7% from what its September level.
It should be noted that according to the index, the price prices of some
commodities (such as white cement, cement blocks, ceramic tile, glass
and different types and paints remained stable during the past two
Dubai Aluminium Sticks to 1 mt Production Target
The Dubai Aluminium Co (DUBAL) has set target
to produce one million tons for 2009, up four percent from this year,
but may review it due to the global financial crisis, Abdulla Kalban,
chief executive of the company said.
The current slowdown in the global economy would push demand down
significantly lower, but the company was committed to pushing forward
its projects, added he.
A global economic slowdown has drastically reduced the demand outlook
for industrial metals like aluminium. Analysts say aluminium prices at
$2,050 are below costs paid by the highest cost producers, many of which
are delaying expansion plans of idling capacity.
"Demand will go down because of the financial crisis, and that has
already started and is evident by looking at inventories globally, which
have risen," Kalban said.
He added that there were no plans presently to either scale down or
delay the start-up of its joint-venture 1.5 million tons-per-year
greenfield aluminium smelter complex with Mubadala Development Co.
"The project is on track and we expect to start phase 1 in the
first-quarter of 2010," Kalban said. Kalban said phase 2 of the
mega-project has already started, with a feasibility study currently
EMAL Smelter on Schedule for Hot Metal Production in 2010
Duncan Hedditch, CEO of Emirates
Aluminium, said that the UAE's industrial flagship, the world's largest
single site aluminium smelter complex, is on schedule to produce hot
metal by 2010.
“From the first ground-breaking in May 2007 and the first concrete
pilling in January 2008, we have made outstanding progress and the
latest achievement is the schedule to produce hot metal in 2010, and we
are currently undertaking the pre feasibility survey for phase two,”
The finished smelter will be the largest in the world, producing 1.4
million tons of aluminium once two is active. The EMAL smelter complex
adds tangible value to the industrialisation of the Abu Dhabi economy
and its diversification beyond oil and gas, encouraging downstream
opportunities and potential employment in the region.
Iranian Deformed Bar Prices on Upswing
Iranian deformed bar price starts to
hike up after a long period of consecutive depreciation due to gradual
enhancement of demand and price increase in the market.
Iran domestic distributors currently quote USD 740 to USD 770 per ton
for 12 to 25 mm deformed bar. However, the settle rate of last week was
USD 640 to USD 680 per ton and USD 685 to USD 735 per ton of two weeks
Besides, it is reported that the Iranian government may raise the import
tax of long and flat products in order to be obedient to many Iranian
steel mills' suggestions, and therefore, it will presumably cause the
Recession Hits Turkish Steel Production Zones
Financial turmoil has driven many
Turkish steel producers to halt or reduce their output. And
industrialists have warned that the situation will be even graver coming
According to a report, several factories are for sale or lease in the
Atatürk Industrial Zone in the Aegean port city, known as the heart of
İzmir's industry. The extravagant decline in scarp and iron prices has
led some factories in İzmir's Aliağa, one of Turkey's top three iron
steel production zone, to take measures, such as reducing shifts or
Turkish Steel Plants Halt Exports to Saudi Arabia
Turkish steel plants have informed Saudi
importers that they will halt construction steel exports to Saudi Arabia
in the coming period due to unstable prices, especially the recent hike
in scrap prices in global markets.
Turkish steel factories rely heavily on the use of scrap for steel
manufacturing and the global prcies of scrap have increased to $300 a
ton in the last days from $200 a ton, According to the reports. The
steel plants have halted deals for 40,000 tons of construction steel at
last week's price of $450 a ton and they are asking now for $575 for one
ton, the reports citing Ali Al Dayekh, a Saudi steel importer. The
Turkish steel industry has seen a decline in output during the last
months due to the shortage of scrap in international markets, Dayekh
said according to the paper. Turkish steel plants have an annual
production capacity of 12 million tons while their current annual output
is four million ton which is equal to Turkey's domestic steel
consumption, he added.
Arcelor Mittal Offers to Set Up Joint Venture in Indonesia
The world's largest
steel maker ArcelorMittal has offered to set up a joint venture with
Indonesia's state-owned firm Krakatau Steel.
Luxembourg's Economic Minister Jeanot Krecke to meet with Indonesian
President Susilo Bambang Yudhoyono and Enterprises Minister Sofyan
Djalil to further discuss the plan. Indonesia is seeking more investment
in steel sector to boost production as it attempts to boost its steel
production from 2.5 million tons to at least 7 million tons a year to
meet growing demand. The Indonesian government has decided to privatize
the Krakatau Steel.
Indonesia's Steel Output Seen Downhill this Year Says Govt
production may fall up to 50 percent this year as manufactures have cut
production due to falling steep prices, a senior ministry official said.
Steel producers in Southeast Asia's biggest economy has imported more
semi-finished products earlier this year to build up stocks on fear that
steel prices would rise further. But financial crisis in the United
States has changed the scenario and dragged down prices.
Indonesia normally turns out about 4 million tons of steel products
every year, but producers may only produce between 2-2.5 million tons
this year, Anshari Bukhari, director general of metals, machinery,
textile and miscellaneous industries said.
“Producers have imported so much semi-finished products at higher
prices. Now they can't sell the end products because steel prices have
fallen,” Bukhari said. 'They have started to slow production in recent
months.' Added he.
Imports of semi-finished steel products including slab and billets - a
semi-finished form of long steel mainly used in construction - reached 6
million tonnes in the first six months of 2008, compared with annual
imports of around 2 million tonnes previously, the industry ministry has
said in Septembe.
Japan's Scrap Exports Up in September
According to the
related statistics, Japan exported 469,000 tons of scrap in September,
increased by 12.7 percent compared to the same period of last year.
During the first 9 months, Japan's scrap exports totaled 4.438 million
tons, and the export is expected to touch about 5.92 million tons in the
whole year 2008. From January to September, Korea was the biggest export
destination at 2.189 million tons, down by 16.4 percent year-on-year.
Shipments to China totaled 1.906 million tons, up by 12.5 percent from a
Malaysia Continues to Attract Investments in Iron & Steel
Industries, says Govt
Malaysia continued to
attract investments in the iron and steel industry, with 29 projects
having an investment value of RM11.5 billion being approved from January
to September this year, said the Minister of International Trade and
Industry Tan Sri Muhyiddin Yassin.
Of this total, domestic investments amounted to RM4.7 billion while
foreign investments contributed RM6.8 billion, he said.
He said the total trade in iron and steel had been increasing,
reflecting the significance of the industry to the economy. From January
to September this year, the total trade reached RM30.02 billion despite
the current global economic situation, he added.
Last year, the total trade in iron and steel rose by 20.4 percent to
RM35.35 billion from RM29.37 billion in 2006.
According to Muhyiddin, the exports of iron and steel from January to
September this year surged to RM8.09 billion against the RM7.86 billion
for the corresponding period of 2007.
The exports were mainly to Singapore, Indonesia and Vietnam this year,
he said. He said exports for electro-galvanised iron (EGI) for the first
nine months of the year amounted to RM18.64 million and were mainly to
Indonesia, Singapore and Vietnam while that for metals like tubes, pipes
as well as hollow profiles and fittings, has churned RM1.88 billion to
date. Imports from January to September registered an increase of 16.7
percent to RM21.93 billion from the RM18.8 billion in the corresponding
period of last year, he highlighted. Muhyiddin said, "Given the impact
of the iron and steel sector on the growth of other important areas
including infrastructure and construction, the government is undertaking
a gradual liberalisation of the steel products market.
Japan Steel Product Orders Fall
Orders for ordinary
steel products in Japan in August fell 5.4 pct from a year before to
6,262,000 tons, the first drop in 28 months, said the Japan Iron and
Steel Federation said.
The decline reflects weak demand for building materials due to slumping
housing construction as well as a fall in exports orders, which fell for
the first time in 15 months, the Japan Iron and Steel Federation said.
Although steel production has enjoyed brisk demand for a while, it seems
that the industry has started to feel the impact of the slowing global
economy, industry watchers said.
By product category, total orders for steel products used in
construction and civil engineering fell 7.9 pct, while automobile
materials orders slid 3.4 pct, the first drop in five months. Exports
declined 2.9 pct.
POSCO Launches Malaysian Steel Unit
Korean steel giant POSCO
inaugurated POSCO-Malaysia, the name of the company's first steel firm
acquired overseas last year, as part of its expansionary drive into
The company spent $16 million last year to purchase 60 percent of MEGS,
Malaysia's sole electrolytic galvanised steel maker, to increase its
supply value chain in the region. After giving its added unit a new
name, POSCO said it raised POSCO- Malaysia's production capacity by 50
percent to 180,000 tons a year.
The facility will produce steel sheets used to manufacture electronic
goods and home appliances. Major electronic makers such as Samsung and
Sony are demanding about 250,000 tons of galvanised steel per year, but
they reply heavily on imports.
Baosteel Steel Produces 0.74 mt Seamless Tubes
Baongang Steel Tube Plant
has supplied 721,600 tons of qualified seamless pipes, including 123,400
tons of boiler tube and 420,000 tons of oil well pipes. The company has
achieved the annual production target two moths earlier.
The period of January to October the mill has yielded 736,400 tons of HR
seamless pipes, with 721,600 tons qualifies of which boiler pipe, high
chrome steel pipe and corrosion resistant steel pipe record at some
123,400 tons, 23800 tons and 35900 tons up by 16 percent, 53 percent,
and 120 percent YoY respectively.
China Increases Export Rebates Again
The Chinese government
introduced a large numbers of infrastructure projects and increased some
products' export rebates for the third time this year.
The projects, which were approved in an executive meeting, presided over
by Premier Mr Wen Jiabao, with a combined investment of more than CNY
200 billion designed to help boost domestic demand.
The meeting also decided to increase export rebates, effective December
1st on 3,770 export products or about 27.9% of the total. They are
mainly in the labor-intensive, and mechanical and electrical product
sectors. Besides, export tariff on some steel products, mechanical and
food supplies will be scraped. The tariff for some chemical fertilizer
varieties will be cut down. Besides, the imposition ways will also be
adjusted. It did not release details of the size of the rebates or which
products would be affected.
The projects are included a gas pipeline from the Ningxia Hui autonomous
region to Guanghou, Guangadong province, and Hong Kong; expansion
projects for two nuclear power plants in Guangdong and Zhejiang
provinces, another project is water conservancy projects in the
Xingjiang Uygur autonomous provinces, and Guizhou and Jiangxi provinces;
and new airports in Anhui province and the Inner Mongolia autonomous
According to the latest statistics from Chinese Customs, the country
exported 4.62 million tons of steel products in October. And the export
volume has shown a sliding trend for two consecutive months since the
record high in August. The oversupplied steel products put greater
pressure on domestic markets.
China's Steel Exports Fall in near Future Says CISA
China Iron & Steel Association predicts that China's steel
products export will fall further in the coming months. China's steel
export has fallen sharply in the first three quarters of this year
resulted from the sub prime and financial crisis in US.
Figures reveal that China shipped out 48.46 million tons of steel
products during January to September down by 2.14%, or 1.06 million tons
from the same period of last year; steel billet export posts at 1.13
million tons down by 81% YoY or 4.84 million tons. Steel products import
registers at 12.3 million tons in the same review period, down 5.3%, or
0.69 million tons with steel billet import standing at 0.14 million tons
decline by 27% YoY.
Luo Bingsheng deputy director of CISA at the fourth steel industry
information release conference recently in Beijing China's net crude
steel export converted by the steel products and steel billet import &
export in the period posts at 39.47 million tons slump of 5.18 million
tonne or 11.6% YoY.
He said that the direct impact of the US crisis is the sharp contracting
export orders. Steel mills report that their export orders almost been
halved in the fourth quarter, with that for the first quarter of next
year also been reduced sharply.
Chinese Crude Steel Production in Oct Declines by 17% YoY
China's crude steel
production dropped 17% on year to 35.9 million metric tons in October,
the National Bureau of Statistics revealed.
The total crude steel production in the January-October period reached
427.29 million tons, up 3.9% on year. Meanwhile, October pig iron
production fell 16.8% on year to 34.13 million tons, while the
January-October output totaled 399.48 million tons, up 2.5% on year.
Statistics provided by the bureau also indicate October iron ore output
rose 12.5% on year to 67.85 million tons, while the total production
from January to October rose 18.8% on year to 654.18 million tons.
China Scrapes Export Duty on Some Steel Products
Weak domestic market and
financial crisis in the international market have forced the Chinese
government to abolish some steel products export tax.
The product such as HRC, steel strip, large beams, alloyed steel, steel
wire and welded steel pipes and tubes would be free from export tariff
effective December 1, 2008.
Baosteel requested to the head of Ministry of Commerce that export
policy should be properly designed so as to encourage the export of high
value added products. As a matter of fact, before that, industry
insiders have been proposing to the related departments not to levy
export tariff on special steel, which is competitive on the
international market. But now, the price for flats in the domestic
market dives sharply, even lower than such low value-added construction
steel as rebar, inverting the situation as a result.
Insiders added that, from this Q4 to next year, the domestic steel
producers will put their efforts on flat product making, especially for
HRC products. If there is no enough demand, the prices would remain weak
and mills will run into a quite embarrassed situation or will be in a
Chinese Domestic CRC Price Down Further
Chinese local CRC price is
still slipping down and the downward trend is to spread into early next
year. There are still few activities on export market and there is no
expected to any improvement in November.
On Shanghai market, 1.0mm CR sheet by Anshan steel goes at CNY 4100 per
tonne down by CNY 50 per tonne from last 7th November; 1.2mm to 2.0mm
material at CNY 3950 per tonne a decrease of CNY 70 per tonne. While
that for 1.0 CR coil by Maanshan steel remain flat at CNY 3750 per
Export offer for DC01 1.0mm CRC goes at about USD 600 per tonne FOB
which compares with USD 620 per tonne to USD 650 per tonne FOB early
this month. Steel makers probably would lower quotation again taking
into account further substantial drop in domestic market price and
Chalco to Cut CAPEX and Shut Smelters Operating at Loss
Aluminum Corp of China Ltd,
the world's No.3 alumina maker, will cut capital spending by at least
20% in 2009 due to weak demand for the metal.
According to a report, chief financial officer Chen Jihua of the company
said that China is expected to shut another 1 million tons of aluminum
capacity in the fourth quarter if the market situation continues to
Chalco did not plan to shut more aluminum capacity this year after it
temporarily shut down 720,000 tons earlier this month , said Chen.
He added that another 2 million tons of capacity outside Chalco, the
country's top aluminum and alumina maker, had been shut.
Chen said aluminum smelters across the industry in China were now
operating at a loss, with prices of the metal falling to CNY 13,000 per
ton while production costs were between CNY 15,000 and 16,000 per ton.
He said that the company targeted spending CNY 20 billion in capital
investment in 2008, and it would scale down the spending by at least 20%
Wuhan Steel Sing Contract with Madagascar on Mineral Development
Wuhan Iron & Steel Group, a
major steel maker in China, has signed an agreement with Madagascar on
joint development of mineral resources.
A Hubei provincial economic delegation paid a visit to Mozambique and
Madagascar recently. Wuhan Iron & Steel Group is working on development
of overseas resources, and the cooperation can help to meet this demand,
as Madagascar is the world fourth largest island with rich mineral
Before this, Wuhan Iron & Steel has joined hands with Hong Kong Kam Hing
International Holdings to register a joint venture in Hong Kong to
conduct feasibilities studies on resource exploitation in Madagascar.
According to the agreement, the mineral products explored by the joint
venture will be totally supplied to Wuhan Iron & Steel.
AK Steel Cuts Output at Two Plants
AK Steel Holding Corp., the
fourth- largest U.S.-based steelmaker by market value, will cut
production at two plants to contend with ``sharply lower demand'' for
its products. The facilities in Mansfield, Ohio, and Ashland, Kentucky,
produce flat-rolled steel used in exhaust systems and other auto
components, West Chester, Ohio-based AK Steel said in a statement. “A
small number” of the nearly 1,500 employees at the two sites will
continue working, the company said. The capacity is being idled because
of “the recent unanticipated and major downturn in the economy, which
has resulted in sharply lower demand for some of the company's
products,” the company said. “Based upon currently foreseeable market
conditions, both facilities will remain idled until early to
mid-January.” AK Steel joins rival Nippon Steel Corp. and others
worldwide in slashing output as consumers delay purchases of homes and
cars, driving down steel demand and prices. ArcelorMittal, the world's
largest steelmaker, will slash production by more than 30 percent in
Europe and the US. The US hot-rolled steel sheet prices began falling in
the third quarter, paring gains that peaked with an average price of
$1,068 a ton in July. The average price in September was $983 a ton.
Aricom in Iron Ore Plant Talks with Chinese
mines iron ore in the east part of Russia, is in talks with China
Metallurgical Group Corp, China's leading state construction company,
about building a $200-300 million plant to treat ore from a major new
deposit, said the company head.
The plant is scheduled to start operating in 201 and will be a key asset
of the company to become a major supplier of iron ore across the border
"We're asking them for a fixed price, turnkey contract, which means that
a lot of the credit risk in terms of the project finance moves onto
them," Aricom Chief Executive Jay Hambro.
Aricom has singed a memorandum of understanding with China Metallurgical
Group Corp to building the 10 million ton per year ore processing plant.
Aricom said the memorandum was the basis for discussions between the
companies on signing an engineering, procurement and construction
agreement to build the plant. "Any resulting construction contract would
be a significant step forward for the development of the Aricom project
portfolio," Hambro said. Aricom, which this year launched production at
its first mine, Kuranakh, had been seeking $1 billion in financing for a
variety of projects, but said on Nov.
Australia's Iron Ore Producer to Raise Capacity
Australia's smallest iron
ore producer, Atlas Mining, is racing to increase production despite a
declining market, defying a massive contraction underway among bigger
rivals that face lower sales to steel mills. Atlas is readying its
maiden one-off shipment of 67,000 tons of ore for a buyer in China, who
Flanagan hopes to recruit as a long term buyer despite the bleak market
outlook. The world's two biggest producers, Brazil's Vale and
Australia's Rio Tinto are cutting out a combined 50 million tons of ore
output between now and the end of the year because China no longer needs
it. Rio Chief Executive Tom Albanese predicted a short sharp slowdown in
China, with demand rebounding over 2009. However others aren't so sure
of a quick demand recovery. They warn against putting too much faith in
China's $600 billion economic stimulus package, announced on the
weekend, saying big infrastructure initiatives will take another year to
fully take effect and would have been partly priced in weeks ago. In the
absence of a steady buyer, Atlas has to sell its ore at the prevailing
spot price, which is only about half what producers like Vale, Rio and
BHP Billiton with long-term supply pacts get. Chinese spot iron ore
prices have tumbled from a record $197.50 a tonne in March to $63.50
last week, according to data from the Metal Bulletin trade journal.
Analysts expect contract prices to tumble too, ending six straight years
of price hikes for miners, the last one by up to 85 percent.
NSW Australia's Coal Exports increases by 9%
New South Wales (NSW),
Australia has registered an increase of 9 percent in export of coal in
the January-September period as compared to the the same period last
In January- September 2008 a total of 67,731,445 tons of coal were
exported from the port as compared to the 62,142,494 tons of coal
exported during the same period a year ago.
During this period exports of coking coal posted at 14,515,338 tons as
against the 13,039,476 tons of coking coal exported in the same period a
year ago. Exports of thermal coal during this period totaled 53,216,107
tons as against 49,103,018 tons exported during the same period a year
However during this year's January-September period the exports of coal
to China dropped by 74.5 percent. This year total 150,921 tons of coal
was exported to China out of which 87,998 tons were of coking coal and
62,923 tons of thermal coal. Last year 591,915 tons of thermal coal was
exported to China.
Corus Shuts 3 Blast Furnaces
Group-owned world sixth largest steel maker Corus plans to cut
production by 30 per cent until the end of March 2009 and temporarily
shut down three blast furnaces. "Corus expects to produce about 30 per
cent less crude steel than planned during the two quarters to the end of
March 2009," the company said in a statement. Last month Corus had said
it was cutting production by 20 per cent, or the equivalent of one
million tonne of crude steel, to run to the end of the year. The group,
which was formed from the merger of British Steel and Hoogovens, would
close a blast furnace each in Scunthorpe, IJmuiden and Port Talbot. In
Britain, Corus has four blast furnaces at Scunthorpe, although one was
already idle. Two at Port Talbot and one at Teeside would not be
affected at the moment. Corus Chief Executive Philippe Varin said, “The
current slowdown requires us to adapt our operations to the changing
environment with maximum speed.” We are adopting responsible measures in
the areas of production and costs to optimise our results. Meanwhile,
our strategy for long-term growth remains unchanged," he added. No jobs
would be lost in the newest round of cuts but Corus said 400 people are
to go in its distribution business.
EUROFER Urges EU to Take Action Against Cheap Steel Imports
Confederation of Iron and Steel Industries ( EUROPER) has requested
European Union must remain vigilant and take necessary steps to prevent
a sudden supply of cheap steel imports from countries that have failed
to curtail production in line with weaker demand.
“In today's highly fragile market situation, the risk of opportunistic
export surges to the EU from third countries which have failed to
address their massive excess capacities is an imminent threat. We are
therefore calling for the European Commission and the Member States to
remain vigilant and to take the necessary action in the event of market
disrupting import flows," Gordon Moffat director general of EUROFER
EU is reviewing three separate antidumping steel cases at the moment.
Imports of products related to those three cases have decreased but
imports of hot rolled coil, cold rolled coil, and organic coated steel
products increased in September to well above the monthly peak levels of
EUROFER spokesman said that Chinese steel imports have played a distinct
role in the September import rise.
German Crude Steel Production to Decline around 2% this Year
German crude steel
production is set to fall around 2 percent in 2008 as economic turmoil
shrinks demand but domestic steel producers were in better shape than
“Compared to other markets, the situation in the German market all in
all is still relatively robust,” German Steel Federation (VDE) President
Hans Juergen Kerkhoff said.
The VDE cut its 2008 crude steel production forecast for Germany by 1
million tons to 47.5 million tons. Demand growth in the country will
slow by 2 percent this year from 5.7 percent as the car companies cut
But Kerkhoff said that production activity will be remain high in coming
months in the plant engineering, metal goods , steel building and steel
pipes sectors. New orders in the third quarter were flat year on year
but gained 8 percent in the January to September 2008 period.
German's top steelmaker ThyseenKrupp AG said that demand for flat steel
products has fallen drastically faster that expected in recent weeks.
The company will stop buying steel slab from third parties and cut
downstream processing shifts. Also Salzgitter AG said that it would cut
output in the flat steel and construction sections in December and
January by 30 percent.
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