|From the CEO's Desk
Global iron & steel industry continues to be in recession. As per World
Steel Association, steel output reduced by huge 19 % in November as
compared to last year's November figures. What does this mean?
We know that all major steel companies have reduced their production.
This is in response to the slowdown of demand worldwide. If we assume
that infrastructure is single largest consumer sector of steel, we can
easily imagine the kind of demand slack this sector is witnessing.
Europe and US were already stagnated as far as additional steel demand
is concerned but the regions which were seen as the infrastructure
development hubs like gulf, China, SE Asia, India are also going through
a bad phase. I know many infrastructure projects are on indefinite hold
in India, gulf region and also elsewhere in Asia. Huge inventories of
semies and even finished construction steel are lying all over the
region for want of buyers. Many rolling mills and mini steel plants are
closed and some of them may not restart at all. When the price curve
deepens so suddenly and with such a magnitude, the economics of small
and medium mills shatters. If one buys scrap at USD750 and find that its
value has become USD250 overnight, how can he continue production or
even survive? Not to talk about the plight of trading community which
faced even bigger problems as they are sandwiched between buyers and
sellers. I fear a lot of shutters will be down for ever in iron & steel
What is the way ahead? I am sure that everybody would agree that the
industry can not stop functioning and it has to move forward. The
reduction in steel output on global level may continue for some more
months but slowly it may increase. The governments of many countries
have pumped huge liquidity in the economy and this should help to
restart some of the infrastructure projects which are on hold. This
should induct some steel demand in the system. Indian government has
also levied import duty in order to protect the domestic market from
cheap imports. Also, excise duty has been reduced by 4 % which should
push the economy to some extent. All this should give some comfort to
Lastly, one has to keep in mind that the falls are always sudden whereas
the climbs are gradual. It will take months (or probably years) to wipe
out this recession from the economy and more importantly, from our
Editor & CEO
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SAIL Continues Expansion Plan despite Global Recession
Steel Authority of India
Limited (SAIL) has indicated the current economic crisis would not
create any barrier for its ongoing Rs 54,000-crore expansion plan. The
company plans to expand saleable steel production from 13 million ton to
24.5 million ton in 4 years. “We would not put the brakes on our current
expansion plan," said S K Roongta, Chairman, SAIL.
He said, "The expansion, which is slated to involve an investment of Rs
54,000 crore, will have a debt equity ratio of 1:1. However, SAIL is yet
to tie up funds for its bank borrowings." Roongta however said that the
company s directional plan for year 2020 would be affected by the
economic recession. As per earlier plans, SAIL had targeted a capacity
expansion of up to 60 million ton by 2020.
Tata Steel Postpones Capex Plans
“Tata Steel is planning to postpone its capex
plans and greenfield units at Jharkhand and Chhattisgarh due to the
liquidity crisis and slow demand”, said B Muthuraman, MD, Tata Steel.
“But the company will go ahead with its Rs 27,000-crore plan to expand
capacity at Jamshedpur and build a new plant at Orissa," added
Muthuraman. Tata Steel will hike Jamshedpur capacity by 3 million tons
(mt) to 10 mt by 2010, at an estimated cost of Rs 12,000 crore. B.
Muthuraman said it planned to build a 3-mt plant at Kalinganagar in
Orissa for Rs 15,000 crore. The Orissa unit would be the first phase of
a 6-mt plant.
Muthuraman said, "We don't see the need for any production cut here."
Tata Steel had recently said its hot strip mill at Jamshedpur would be
closed for 17 days as part of an annual maintenance exercise that would
restrict production of hot rolled coils.
The fall in demand has led to a softening, with steel prices falling
sharply to about $500 per ton, compared to about $1,100 earlier in the
year. "Prices must always relate to prices of raw materials and since
raw materials have already started falling, I expect steel prices to
stabilise now," Muthuraman added.
India may Buy Coal Mines Overseas : Bagrodia
India may buy coal mines in the U.S.,
Australia and Mozambique to meet increasing demand for the fuel from
domestic users, said Santosh Bagrodia, State Coal Minister of India.
India plans to allot more coal mines to private companies for captive
mining and is seeking to reopen 18 mines to help boost local production,
said the minister.
India, Asia's third-biggest economy, needs coal to meet demand from
power plants, steelmakers and cement companies. The government expects
imports of the fuel will increase to 60 million tons annually by 2012.
India may produce 415 million metric tons of coal in the year to March
and import as much as 31 million tons, added Bagrodia. Coal production
may rise by 8 percent next year, he said. India may produce 415 million
metric tons of coal in the year to March and import as much as 31
million tons, Bagrodia said. Coal production may rise by 8 percent next
year, he said.
Mukand in Pact with Japan's Kobe Steel
Specialty steelmaker Mukund Ltd has entered
into an exclusive licence agreement with Japan's Kobe Steel to execute
EPC (engineering, procurement and construction) contracts of Kobe's
coal-based iron making technology projects in India.
Kobe has developed an innovative technology to produce high quality iron
nuggets. The nuggets are ideal feed for steel making in electric arc
furnace because of its high quality high purity and high density,
resulting in cost reduction and higher productivity in steel making as
compared to sponge iron. The nuggets are stable, inflammable and easy
for handling at the size of 5mm to 25 mm.
Kobe will offer its expertise in process technology, engineering,
supervision, operation and commissioning and training, while Mukand will
contribute in terms of design and project execution. Depending on the
location of the plant, laboratory tests of various raw materials would
be done by Kobe to finalize technological parameters before designing
Falling Commodity Prices Ease Cost of Expansion for Steel
The falling prices of commodities will
bring some relief for steel companies in India. Slowdown in commodity
markets will bring significant saving for ongoing steel capacity
expansion projects in the country. Decline in structural steel and
cement prices is further expected to slash expansion cost. And now steel
companies are expecting lower prices on new orders for equipment.
Currently Steel Authority of Indian Limited (SAIL) is raising capacity
from 13 million tons of saleable steel to 24.5 million tons by 2011-12
at a cost of Rs 54,000 crore. But, now the company expects the bill to
be considerably lower. S K Roongta, chairman of SAIL said, “We will
reassess the investment once we place the orders which will be in the
next few months." The second phase of expansion of JSL Limited in
Orissa, which would take the capacity from 0.7 million tons to 1.5
million tons would now cost Rs 6,000 crore the original cost that was
approved a year and a half ago. Arvind Parakh, Director for Strategy and
business development of JSW, said, " After the project was approved,
prices increased by 30 percent to 40 percent and suppliers were asking
for revised rates. Now, we are negotiating even for equipment, which
have been ordered."
JSW Steel expects to save 20- 25 percent on civil and steel fabrication
works at its Bengal project. Seshagiri Rao director finance of JSW Steel
said that “The initial investment expected for the Bengal project was Rs
4,000 crore. Now, the company expects a saving of 20- 25 percent on
civil and fabrication works.”
Neeraj Singal MD of Bhushan Steel said that the 2.5 million to 5 million
ton expansion, which was to cost in the range of Rs 7,000-8,000 crore
will cost less on the falling market. The company is now planning to
speak afresh to equipment manufacturers for reduction in costs.
Kalyani Forge to Shut Operations Partially
Kalyani Forge Limited closed its Hot Forging
Division, Metal Form Division and Precision Autocomp Division, for the
period from November 26, 2008 to November 28, 2008 on account of reduced
demand from the market. The company had informed the Exchange .
Steel Demand to Pick Up in 2009 - Tata Sons
Tata group Holding company Tata Sons said the
demand for steel is expected to pick up and price to stabilise only in
2009. The company doest not expect the steel price to fall further at a
time when the steel makers resorting to production cuts and the raw
materials prices are ruling high.
“The outlook is depressing for the next three to six months. I see steel
demand picking up only in 2009. Prices are already low, I do not think
they can go down further because raw materials prices are still high,”
said Tata Sons director J.J. Irani. He said manufacturers worldwide had
resorted to production cuts and that had helped tame falling demand and
stop price decline. Demand for steel and its prices fell recently due to
the global economic downturn. "India cannot be decoupled (from) the
international market," Irani added.
Hike in Railway Freight to Increase Steel Input Cost
The Railways has hiked freight charges on coal
and coke by up to eight per cent on each ton of load movement, a move
expected to increase input cost pressure on steel companies which
consume the fuel to produce the metal. The new freight rates came into
effect recently. "Sanction of the Central Government is hereby accorded
to revise the classification of main commodity head 'coal and coke' from
Class-140 to Class-150 for train-load movement," an official circular
said. Railway officials confirmed that the freight would go up in the
range of 6.5-8 per cent per ton. The move comes a day after government
announced a four per cent across-the-board reduction in excise duty to
give a boost to the infrastructure sector and stimulate demand in the
economy. Domestic steel companies, including SAIL, JSW Steel, Ispat
Industries, said that such a move would increase the input cost pressure
on the industry already reeling under the heat of slackening demand.
Industry experts said coal and coke customers including power, steel,
cement companies will have to shell out about Rs 3 lakh more for one
rake, equivalent to about 3,800 tons, of load.
Siemens to Invest Rs 200 Crore in India Operations
Despite a low profit margin in the fourth
quarter results, engineering conglomerate Siemens has set to invest Rs
200 crore for India operation in the next fiscal.
In the current fiscal, the company has gained a net profit of Rs 593
crore on sales turnover of Rs 8,296 crore as against a net profit of Rs
596 crore on sales turnover Rs 7,727 crore in the previous year. While
the sales turnover rose by 7 percent, the net profit fell marginally.
Dr. Armin Bruck, managing director, Siemens, revealed plans of Rs 200
crore capital investment in Indian operations in the next fiscal across
its various business verticals. This huge amount will be managed by
internal accruals of the company. According to a source, the company
will focus heavily on the infrastructure sector.
According to the management, the reduction in the net level is mainly
due to additional cost impacts in certain large projects. "The impact of
profitability was due to the provisions booked to cover the costs
overrun on certain large projects. As a matter of good accounting
principles, we had to take respective accruals in our books, which of
course heavily impacted the bottom line," added Dr. Armin Bruck.
However, the base business of the company grew well. On a comparable
basis, sales rose by 21 percent while orders increased by 27 percent and
profit from operations rose by 68 percent during the current fiscal.
Siemens received new orders valued at Rs 8,718 crore for the 12 months
ended September 30. On being asked as to whether the company facing any
problem in realisation of dues from external parties, a diplomatic Dr
Bruck, said, "despite the meltdown in the market, we are still getting
increasing number of orders. But delays/discounts in payments are common
Conros Group to Continue Expansion of Tube Capacities
Mumbai- based Conros Group will triple its
pipe making capacity by installing new equipment with combined capacity
of 200,000 ton per year.
“In August 2009, it plans to commission a new ERW pipe mill No 3 to
produce pipes in diameters 21.3mm to 114.3 mm. The equipment is being
supplied by German SMS Meer.” Conros Group said.
The release added that “Next, in mid September, it plans to launch mill
No 4, to produce 140,000 ton per year of ERW pipes under the API
standard, in diameters up to 219.1 millimeter of up to X52 strength
class steel. The mill is ordered from Abbey Etna.” Apart from the two
ERW pipe mills, Conros Group is presently operating a 120,000 ton per
year steelmaking shop and bar rolling mill of the same capacity. The
company's product range is comprised of 21.3 millimeter to 168.3
millimeter ERW pipes with wall thickness 2.03 millimeter to 10.31
millimeter including galvanized ones and also angles, flat bars and
KKN Takes Over Orissa Ferro Alloys Plant
KKN Group of companies has bought a 30,000-ton
capacity steel plant in Orissa from the Board for Industrial and
Financial Reconstruction (BIFR). “We will venture into the manufacturing
sector after acquiring the steel plant, Ferro Alloys Metallic Pvt Ltd in
Bhadrak, Orissa for Rs 40 crore", said K.K. Nath the group director.
It will start producing about 45,000 tons by September 2009, after
additional investments of Rs 100 crore. The Kolkata-based company will
scale up capacity to about 7,00,000 tons in three years, at an
investment of Rs 1,000 crore, 85 percent of which will be financed by
banks and other financial institutions, according to Nath.
Besides TMT bars, the unit would make SGCI casting and malleable iron
casting, wanted by engineering units, railways, state electricity
boards, wagon builders, automobile units and related sectors..
Jayaswal Neco Industries Approves Merger of Companies
The board of directors of Jayaswal Neco
Industries Ltd (JNIL) approved the merger of Inertia Iron and Steel Pvt
Ltd (IISIPL) with JNIL from March 31, 2008 as the appointed date for
IISIPL holds 0.8 million tons per annum (mtpa) sinter plant, 0.4 mtpa
steel melt shop and 0.4 mtpa of long product rolling mill for alloy
steel. The board has also sanctioned merger of 350 tons per day sponge
iron ore plant and 15 MW power plant of Abhijeet Infrastructure Ltd
(AIL) and 500 TDP sponge iron plant and 12 MW power plant of Corporate
Ispat Alloys Ltd (CIAL) from 01, 2008 as the appointed date for the
All these facilities of IISPL, AIL and CIAL are located at and adjacent
to the Steel Plant Division of the company at Siltara near Raipur. The
Board has approved the aforesaid schemes of arrangements subject to
statutory clearances and requisite approvals. On implementation of the
aforesaid Schemes of Arrangement, JNIL would have capacities of one
million ton of iron making and around 0.4 million ton finished alloy
steel making with. 42.5 MW waste heat and thermal power plants. The
Company would become a fully integrated steel player with significant
improvement in its Net Worth and capacity to implement further cost
reduction on and value addition projects. Post merger, the company would
have around Rs 1500 crore of gross fixed assets base and more than Rs
600 crore of net worth. The projected turnover for the year 2009-10
would be around Rs 2500 crore.
Kohinoor Steel Quit Jharkhand
Kohinoor Steel Ltd is looking for another
destination for the company's expansion plan. The company is running its
own integrated steel plant in Jharkhand, now may invest in new capacity
in Madhya Pradesh.
Bijoy Bothra, managing director of Kohinoor, said, “The company had
signed a memorandum of understanding (MOU) in 2005 for an integrated
steel plant in Jharkhand. It had already invested around Rs 250 crore in
Jharkhand on four sponge direct reduced iron (DRI) units of 800 ton per
day capacity, a 17MW power plant, a 400TPD induction furnace for concast
billets, and 150 ton per hour coal washery.” “ The company had purchased
45 acres from villagers in the first phase. However, we needed more land
for expansion but the Jharkhand government was not supporting its effort
in any way.” added Bothra said.
Now Kohinoor would implement its expansion plans in Madhya Pradesh,
where the state government signed an MOU of Rs 2100 crore with the
Kohinoor group and gave the company with two manganese ore mines. The
allotment of iron ore mines was under final consideration by the Madhya
Pradesh government. The support of the Madhya Pradesh government and
favorable conditions in MP would mean Kohinoor would set up its proposed
4 million ton cement plant in MP, more so as the cement project had been
allotted a large lime stone mine of excellent quality by the state
already. “We have applied for iron ore at 13 sites and are awaiting
allocation,” said Bothra. It was earlier allotted an iron ore block in
Tatiburu, in West Singhbhum.
Shyam Group Power, Steel Projects Set for Launch in 2009
Kolkata-based Shyam Group of Industries will
start the first phase of its Rs 9,900 crore integrated steel and power
project by the end of 2009.
According to the company, in the first phase the company would be
setting up 0.25 million tons of steel and 250MW of power with an
investment of Rs 2,000 crore. The group has already acquired 400 acres
for the first phase. The total capacity of the project would be 1.1
million tons of finished steel and 1,000 MW captive power. The state
government would acquire another 180 acres for the company. The total
land requirement for the project is 1,500 acres. According to Bhushan
Agarwal, vice chairman and managing director, around 35 per cent of the
funding would rise from equity and the balance would be debt. However,
the project is yet to get allocation of coal blocks. Shyam Group expects
allocation of coal block from Jagannathpur, which would feed the
projects at early phases of production. The project has already got
clearance from the Ministry of Environment & Forestry. The memorandum of
agreement (MoA) with West Bengal Industrial Development Corporation
(WBIDC) and West Bengal Mineral Development & Trading Corporation
(WBMDTC) for the project was signed earlier this year.
The department of commerce and industries has assured allocation of
Kunnur coal block for the mega projects when the block is allotted to
WBMDTC by the ministry of coal. Coal from the block would support
Essar, Kobe Steel Join Hands for Tech Support
Essar Steel and Japan's Kobe Steel signed an
agreement that will allow Essar Steel gain access to technology for
marking high-grade steel products and, while providing raw materials to
the Japanese company. This is the first time that $21.3- billion Kobe
has signed an agreement with an Indian steel company.
" This agreement will strengthen Essar Steel's product portfolio and
enable it to produce steel for high-end applications in auto segment,"
Said Essar Steel CEO Dilip Oommen." In addition, it opens the
possibilities of working on joint projects in future."
This is the second time that a major Indian steel company has tied up
with a Japanese company for technical collaboration. Earlier in 2008,
Tata Steel had joined hands with Nippon Steel and Arcelor to assist the
Indian company to develop high-grade steel for the automotive market.
The agreement with Arcelor was before the company was taken over Mittal
Steel. Till the current recession hit the economy, the Indian automotive
sector was one of the fastest expanding segments, growing at almost
12-15 percent every year and forcing steel companies to again access to
high-grade technologies expertise.
BSP Posts Growth in 8 months
Bhilai Steel Plant, a part of Steel Authority
of India (SAIL), has registered a considerable growth in all areas
during the 8 months of the fiscal 2008-09. The cumulative crude steel
production during the period of April to November 2008 stood at 3.43
million tons up by 5 percent YoY. It would be interesting to note that
the cumulative saleable steel production in this period moved up to 2.92
million ton by 2.2 percent YoY. The company also posted a growth of 3.9
percent YoY in the loading of saleable steel to 2.89 million tons. In
sinter segment, the production moved up by 6.5 percent YoY to 4.97
million tons while for hot metal, the growth was 5.9 percent YoY to 3.83
million tons during April to November 2008.
Meanwhile the cumulative production of rails and semis also sustained
the similar kind of growth rate and stood at 630,500 tons up by
6.1percent YoY and 524,700 ton up by 6.2 percent YoY respectively.
During this period, the plant produced 814,600 ton of plates.The
merchant products and wire rods were also no exceptions. The cumulative
production of merchant products witnessed a rise of 7.8 percent YoY and
reached 510,600 tons while for wire rods the rise was 4.1 percent YoY
pulling to production to 434,000 tons. There has been a 25 percent
growth in rounds & bars production at merchant mill with a cumulative
production of rounds and bars at 319,000 tons.
Apart from this, the cumulative production of high tensile plates,
electrode quality wire rods, TMT wire rods, TMT bars and rods, the cast
slabs and blooms along with loading of UTS 90 rails and loading of long
rails, have been the best ever for any April to November period.
Surya Roshni to Set up Tube Mill at Bhuj
Surya Global Steel Tubes (SGST), a subsidiary
of Surya Roshni Group Company, will pour Rs 400 crore to set up a
greenfield steel pipe manufacturing plant in Bhuj, Gujarat.
“We will invest Rs 400 crore for the Gujarat plant. We have already
bought the land and orders have been placed for the machinery. The plant
will have an initial capacity of 200,000 ton and is expected to be
commissioned by December 2009.” Surya Roshni Chairman and Managing
Director Jaiprakash Agarwal. He said setting up the new plant is part of
the company's strategy to cater to demand steel pipe in the oil and gas
Agarwal said that "We are targeting a sale of Rs 2,000 crore in the
first year of operations of the plant. It will export 80 percent of the
production, while the rest will be for the domestic markets." The
company will fund the investment through internal accruals and debt.
SGST currently has a steel pipe and tubes manufacturing unit at
Bahadurgarh in Haryana with an annual capacity of 300,000 ton and
accounts for sales of about Rs 1,000 crore.
Indian Steel Demand Growth Rate Slips to 1.1% in April to
Indian steel consumption growth has declined
to 1.1 percent during April to November 2008 against 2.4 percent during
April to October 2008 and 4.9 percent during April to September 2008.
The demand for sales has dropped due to global meltdown.
Ministry of Steel has received a large number of representations from
steel industry and industry associations regarding fall in steel demand,
sharp decline in international steel prices. Steel industry and industry
associations are requesting the India government to take appropriate
measures to avoid cheap imports of steel into the country. In order to
safeguard the domestic steel industry government has imposed 5 percent
import duty on steel with effect from November 18, 2008. Further, India
government has withdrawn the duty on export of all steel in terms with
effect from October 31, resorted DEPB benefit on steel export with
effect from November 14th, put the import of hot rolled coil in the
restricted list of imports with effect from November 21st and also
reduced excise duty on steel items from 14 percent to 10 percent with
effect from December 7th.
India among Top 15 Vehicle Manufactures: UNIDO
The United Nations Industrial Development
organisation (UNIDO) has ranked India among the world's top 15 motor
vehicle producers. Japan, USA and Mexico have been ranked top three
countries in the International Yearbook of Industrial Statistics 2008
list of UNIDO. India with its burgeoning auto industry has scored over
countries like Brazil and China to bag the 12th rank. According to the
yearbook, India occupies the fourth position in the leading developing
countries category of motor vehicles manufactures. The list is topped by
Mexico, South Korea and Iran. The other countries making the list are
Brazil, Indonesia, Singapore and China.
India also figures among the world's top 15 producers of chemicals and
chemical products, electric machinery and apparatus, basic metals ( iron
and steel, non- ferrous metals), coke, refined petroleum products (
glass and glass product, cement , ceramic products), machinery and
equipment, leather products and footwear and textiles, the report
revealed. As per the UNIDO report, India also ranks fifth among world's
top 15 textile producer countries. The main purpose behind UNIDO's
yearbook is to provide statistical indicators to facilities
JSW Steel Output may Dip by 17% : Sajjan Jindal
Indian steel major JSW said its production in
December may decline by up to 17 percent as compared to the
corresponding month last year.
The company had slashed its output by 20 percent last November. “Our
output in December will be 15-17 percent lower than the output of the
same month last year," said JSW Steel Vice-Chairman and Managing
Director Sajjan Jindal. Even as the demand for steel has dropped by over
30 percent during the last few months due to global economic crisis,
Jindal said JSW Steel would run its plant at full capacity from next
month as its expects the demand to pick up. “We see steel demand picking
up. Barring auto sector, the demand is coming from infrastructure and
other allied sectors. We plan to revive production at all our units from
January," he said.
Jindal Steel, which has put on hold the commencement of its enhanced
production line of 3 million tons at Vijaynagar Plant in Karnataka, is
optimistic to start operations from March next year. Vijaynagar plant
produces about 3.8 million tons of the commodity per annum.
Post-expansion, the company is set to become India's largest private
sector steel company with a total capacity of 7.8 million tons
(including 1 million tons at Salem).
SAIL to Set up Steel Processing Unit in UP
Steel Authority of India
(SAIL) will set up a steel processing unit in Lakhirampur Kheri district
of Uttar Pradesh with an estimated investment of Rs 100 crore.
The unit will produce 100,000 tons of TMT bars annually, as per
requirement pf the local industries and customers in the state. The unit
will use billets produced by SAIL's integrated plants to manufacture a
wide variety of products, mainly TMT bars. The proposed project is
likely to be completed within 18 months..
GCC Steel Demand to Remain High despite Crisis
Steel demand in the GCC is expected to remain
high despite the global financial crisis as they are pushing ahead with
a massive construction drive. The GCC countries could still invest $9
billion into steel expansion projects and the UAE is expected to be the
top investor, Global Investment House (GIH) said.
The projects would require about 27 million tons per year and this could
have a downward impact on prices following a sharp rise over the past 18
months because of the economic and construction boom. “Despite the
financial crisis in the international market, we hope that the demand
for steel will remain strong in the region. An estimated $850 billion
will be invested by the GCC countries in the next three to five years in
infrastructure, petrochemical industry, tourism and other projects,"
said a market study. "These projects would create an enormous demand of
about 17 million tons per year over the next three to five years. The
GCC countries are diversifying their revenue sources to reduce their
reliance on oil income and setting up of steel and aluminum industries
is part of the plan." added the study. But the study forecasts that a
prolonged world economic slowdown and reduction in oil prices can head
to cancellations and postponements of projects that will affect on the
industry as a whole. The GCC countries will continue to remain major
consumers of long products, which constitute 60 percent of the estimated
demand as they look to develop their infrastructure and petrochemical
industry to sustain economic growth.
GIH estimated the GCC's combined investment in new steel projects at
between $7bn and $9bn in the next three years. It said such projects
would enhance the iron and primary steel output capacity by 27 million
tons to 45.1 million tons per year to meet the growing appetite for
steel. Its figures showed that the UAE and Saudi Arabia are bringing in
the largest increase in primary steel-making capacity while Bahrain and
Oman are focusing on iron pellet production for exports. Qatar and
Kuwait currently have no major expansion plans. Companies in UAE will
execute six projects worth $2.7bn to increase the primary steelmaking
capacity by 3.8 million tons per year and the secondary steel-making
capacity by about two million tons.
Emirates Steel Plans to Boost Output
State-owned Emirates Steel Industries is going
ahead with its expansion plan despite the global recession and aims to
boost production to 1.85 million tons next year.
“We believe there will be sufficient demand to absorb that production,"
Sridhar Krishnamoorthy, deputy chief executive at Emirates Steel
Industries. He said that the company resumed production after suspending
it in September for three weeks and were expecting the output to reach
just below 1 million tons this year, up from 2007's 770,000 tons. He
also said the company's target to boost capacity 3 million tons by 2011
was still intact.
Turkish Nov 2008 Steel Exports Drops by 17.3% YoY
Turkish steel export in November dropped 17
percent on the year to 1.12 million metric tons as the global economic
crisis continued to take its toll on steel demand, figures unveiled by
the Istanbul Iron and Steel Exporter's Association. On a monthly basis,
Turkish steel exports fell 7.1 percent from 1.21 million tons in
October. Meanwhile, the value of Turkish steel exports in November fell
16.4 percent on the year to $821.7 million. A month-on-month figure
The total export of debars, a subset of total steel exports, fell 5.4
percent on the year but rose 11.7 percent on the month in November to
607,258 tons as Turkey began to deliver debar to two new destinations:
Canada and Algeria. Debar is a type of steel used in construction.
The United Arab Emirates continued to be the largest export destination
for Turkish debars but only reached 142,401 tons compared with 550,000
tons in October as inventories in Dubai remained high and construction
demand fell. Iraq was the second-largest destination for Turkish debars.
Turkey exported 74,700 tons to Iraq in November. Sedar Kocturk,
President of the Istanbul Iron and Steel Exporters' Association, wasn't
able to provide any figures about weekly Turkish steel exports in
December due the week-long holiday in Turkey, but he said the
association expects Turkey to export to Algeria, Libya and the U.S..
Tunisian Steel Demand to Reach 1mn tons by 2010
Tunisian Steel Manufacturing Company
produced 73,000 tons of reinforcing steel during the first ten months of
2008. During the same period, the company has exported 231,000 tons of
reinforcing steel to meet the domestic market requirement, which is
estimated by 675,000 tons in 2007.
“The demand for steel products in Tunisia is expected to see a
significant development, as it will reach 1 million tons in 2010," said
Ammar EL Shayeb, CEO, Tunisian Steel Manufacturing Company. During the
first ten months of 2008, the company produced 665.000 tons of billets.
Tunisian Steel Manufacturing Company is the only one from among five
companies involved in rolling in Tunisia which produces billets. The
other companies cover their requirements of billets through imports. The
total capacity of the rolling companies in Tunisia amounts to 850.000
tons per year of which 250.000 tons are the production capacity The
second electric furnace which it started to execute in December 2007
will come on stream in December of 2008 with a production capacity of up
to 100,000 tons per year. In its future plan it will open its capital
for a strategic partner in order to boost the billets production
capacity from 200 thousand tons per year up to 500 thousand to one
million tons per year relying on both local and imported experience.
Qatar Steel Sees 2009 Gulf Rebar Demand Down by 30%
Middle East steel companies expect
demand in the Gulf region, a major consumer, may drop as much as 30
percent in 2009 to the global economic crisis, but a need for housing
could cushion the fall.
Many analysts and industry officials from the region feel that there
would be a gloomy picture for consumption prospectus in 2009, with some
predicting further output cutbacks and expansion plans being put on
hold. “It will be very challenging year," said Ali Hassan al-Muraikhi,
an official at Qatar Steel, a unit of Industries Qatar. He said that
demand is declining and the fall will be in the range of 30 percent on
2009 due to global financial crisis and falling oil prices. “Most of the
mills in the region have to consider cutting production," he added. Ezz
Steel, Egypt's largest steel producer, recently reduced production. An
official of Ezz Steel said that the company was adjusting production to
match weaker demand. “Our export business has been affected, so we are
producing less than normal", he added, but did not reveal an exact
percentage for how much the company has cut production. “The steel
industry is no doubt going through tough time", he said, adding he
expected rebar, billet and scrap prices to remain depressed unit the
first quarter of 2009. However, several steel producers believe the need
for housing is still there, and once liquidity improves, demand will
return. Sridhar Krishnamoorthy, deputy chief executive at the
state-owned Emirates Steel Industries said Gulf countries will continue
to be a major consumer of steel, despite slowdown, as the need for
affordable housing remained.
Despite his expectation of consumption falling around 10% in the UAE,
Krishnamoorthy said the company will boost production next year. With
new mills coming onstream, the company expects to increase output to
1.85mn tonnes in 2009, from around 1mn this year.
Erdemir 9 months Net Profit up by 154% YoY
Turkey's largest steelmaker Erdemir said its
9-month net profit rose 154precent year-on-year to $ 1.2 billion.
Earnings before interest, taxes, depreciation and amortisation (EBITDA)
rose 135precent, while EBITDA margin increased by 38.7precent.
The third quarter, EBITDA margin was up to 45.8precent from 39.6 percent
at the end of the second quarter. The company's operating profit
increased by 195precent to $ 2.93 billion while the operating profit
margin went up to 33.6precent, a rise of 18precent compared to the nine
months of 2007. Significant raw material cost increases in 2008 resulted
in a 7precent increase the cost of goods sold, but Erdemir still saw a
39precent increase in consolidated sales revenue to $ 8.7 billion. "In
spite of the dramatic increase in the raw material costs, we were able
to increase our net profit for the first nine months of 2008. In the
third quarter of 2008, the company's net profit rose 256precent to $ 480
million on sales of $ 1.7 billion, up 61precent on the year. The
company's EBITDA rose 226precent to $ 767 million.
Al Jazeera Steel Capacity to Almost Double in 09
Oman steelmaker Al Jazeera Steel Product Co.
is set to double its capacity to 600,000 tons per year. “The total
capacity will be over half a million tons starting from April," said CEO
The company's product range will expand to long products such as rebars,
on top of its current capacity of mainly flat products such as tubes. He
expected demand to remain robust, despite the slowdown. “Demand is
expected to be higher than supply locally for pipes,’’ he said.
China Steel Corp Cuts Output in 2009
China Steel Corp,
Taiwan's top steel maker, will cut domestic prices of steel products in
the first quarter as it cuts production next year due to slowing demand.
Analysts and industry officials say growth in steel demand in China is
expected to slow in 2009 as the global financial crisis weigh on the
real economy, including key industries such as automobile and
construction. China's steel demand is expected to begin bouncing back in
the second quarter of 2009 on a surge in domestic infrastructure
spending. By the end of next year, China, the world's biggest consumer
of steel, could see demand rise 5 to 6 percent, said John Johnson, CRU's
chief executive for China.Johnson said global prices were unlikely to
decline further because of production cuts by mills across the world.
"We have almost hit the bottom because producers have cut production and
that will bring the market back into balance," he said.
He said global prices of hot-rolled steel have inched up after declining
sharply. "The prices may have recovered only $20 per ton, but the key
thing is that they are not falling anymore..
POSCO may Cut Steel Output If Market Worsens
POSCO, the world's
No.4 steelmaker, may cut output next year if market conditions
deteriorate further and a weaker won currency depresses earnings in the
coming months, the company said.
The South Korean firm is the sole steel maker among the global majors
refusing to reduce output, partly because it is benefiting from a weaker
won currency, which makes steel imported into South Korea less price
competitive. "If (steel) market conditions deteriorate further, we may
consider reducing output," POSCO spokeswoman Ko Min-jin quoted. POSCO is
seeking to minimise production cuts by shifting its product mix to
increase slabs, which are in short supply, and implementing scheduled
maintenance work at blast furnaces.
The tumbling won, which has slid around 29 percent from end-August, has
helped POSCO boost the won-denominated value of its overseas steel sales
and is likely to help the firm meet market expectations for the current
quarter, POSCO said.
In October, POSCO raised its 2008 operating profit target by 16 percent
to $4.87 billion to reflect strong nine-month results of 5.1 trillion
won. The depreciating won, however, is likely to have a negative impact
on the company's bottom line in the first half of next year as it
inflates imported raw material costs, which usually take around two
months to be reflected in its books.
Malaysian Firm Starts Building Vietnam's Biggest Steel Plant
Industries and Vietnamese shipbuilder Vinashin have begun building the
country's biggest steel plant with an investment of $ 9.8 billion.
The complex will be located on 1,650 hectares in central Ninh Thuan
province, about 300 km northeast of the business capital Ho Chi Minh
City. Once operational in 2011, the complex is set to produce 4.5
million tons of steel a year. At full capacity from 2025, it is
scheduled to produce 14.4 million tons. Lion Industries holds a 74
percent stake in the project while Vinashin holds the remainder. The
entire project, slated to be completed by 2025, has an annual capacity
of 14.42 million tons of crude steel. It would use the venture's product
for its shipyards around the country. This month Prime Minister Nguyen
Tan Dung rejected a proposal by South Korea's Posco Group to build a
5.4-billion-dollar steel mill near resort areas in south-central Nha
Trang province, citing environmental concerns.
Dongkuk Cuts Rebar Steel Prices by 11 %
South Korea's third-largest
steelmaker Dongkuk Steel Mill will cut prices of rebar by 11 percent to
bring prices of its construction steel in line with that made by a
Its local competitor Hyundai Steel would also slash prices of rebar by
11 percent , its second price cut in a month, due to waken demand from
construction sector and falling prices of raw materials such as scrap
metal. Dongkuk said it would slash rebar prices by the same amount to
$559.2 per ton effective from last week of November, also its second
price cut for the products in a month. But the company said it had no
plans to reduce prices on heavy plates for shipbuilding, the industry
least affected by the spreading economic crisis thanks to multi-year
order backlogs, although the sector is seeing new orders slowl to a
trickle. Demand growth for steel from the shipbuilding sector in Asia,
home to the world's largest shipbuilders, is likely to slow to 19
percent next year from 49 percent in 2008, still far better than auto
industry, where demand for steel may decline by 7 percent next year,
according to Goldman Sachs.
Vietnam Steelmaker Hike Steel Prices
After the global price of
steel billet went up, the Vietnam's domestic steel manufacturers hiked
the price by 500,000 dong to 700,000 dong per ton. But the volume of
stored steel remained high. Steelmakers such as Vietnam Steel Corp (VSC)
had raised the price of rolled steel to$683-689 a ton.
Pomina firm's steel price was increased by about $670 per ton of rolled
steel and by $692 a ton of steel bar. VSC said its steel sale in October
alone reached 20,000 tons which could be 45,000 tons last month. The
figures of Pomina are estimated at 25,000 tons and 36,000 tons a month,
respectively. The global steel billet price recently jumped from the
bottom of $270-280 per ton to over $300 per a ton, going up to even
$420-450 a ton. Dao Dinh Dong, marketing manager of VSC said that the
gap in steel prices between the southern and northern region remains
high. According to the Vietnam Steel Association, steel prices could
continue soaring because Vietnam's stored finished steel volume is over
200,000 tons while the stockpiled steel billet volume is 500,000 tons.
From January 2009, China may exempt the export tariff on steel, which
can result in the massive steel import into Vietnam market. To protect
domestic steelmakers, Vietnam Steel Association also proposed to the
authorities to raise the import tariff on finished steel from the
current 8 percent to 20percent, steel billet from 2 percent to 5 percent
or 10 percent.
Nisshin Steel Expands Nickel Series Stainless CR Output Cut
Nisshin Steel has announced
that it is expanding output reduction of nickel series stainless cold
rolled flat steel to more than 40 percent at Shunan plant in November
2008 from original plan while the operation reduced the output by 30
According to a report the company's stainless steel making operation
should decrease from current 10 percent cut.
Posco to Continue Fresh Investment on Steel Plants
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.
Vietnamese Construction Material Prices Down by 30%
Prices of construction
materials in Vietnam were declined by 10 to 30 percent sharply during
the last five months. Particularly, construction steel between June and
July 2008 was sold at about VND 21.5 million per ton.
In the middle of 2008, the price of cement Ha Tien 1 and Holcim stood at
VND 80,000 a bag and VND 73,000 a bag, which has now decreased to VND
65,000 and VND 69,000 a ton only.
Baosteel Cuts Steel Prices
Baoshan Iron & Steel Co Ltd
will reduce some steel prices in January, while holding other steady
after reducing them in an unscheduled mid-month cut in December.
According to a foreign news agency report Boasteel's price are
considered the benchmark in China. However the report stated that
analyst have said that the reduction in prices may not lead to lower
profits for the company in January as the cost of mail raw material have
also gone down.
“According to my rough estimate, Boasteel's profitability in January
could be better than in December, as the price decrease in materials
such as coking coal would be larger that the size of its price cuts,"
said analyst Yang Baofenge at Orient Securities stated the report. The
company's January price for cold-rolled steel remained unchanged from a
revised December price issued in last week of November. This is owing to
a continued slump in prices in spot market which encouraged an
extraordinary adjustment to its monthly price tags. The report added
that according to sources the benchmark price for cold-rolled steel
products would be 3,626 yuan ($530.60) per ton in January, down 970
yuan, or 21 percent, from the first December offer price.
The report added that the source had informed that the benchmark price
for hot-rolled steel products was set at 3,242 yuan per ton, down 700
yuan, or 18 percent, from the initial December price.
PZH New Steel & Vanadium Has No Plan to Cut Staff
A subsidiary under
Sichuan-based Panzhihua Steel Group a state-run mill will not cut
workers. Chen Xingui president secretary of the steel producer said, “We
have more than 20,000 employees at the moment. We have our social
responsibilities and won't cut staffs in whatever cases. And we will
fare through the market winter through development instead of staff
cuts. "He said when asked his opinion about the future trend amid the
stabilizing steel market since the mid of November it remains unclear
how the Beijing's stimulus package would help jolt the steel market.
Chen said the CNY 3.5 trillion railway investment, once launches, will
pose material effect on steel demand. The huge invests are reported to
bring some CNY 245 billion to CNY 350 billion demand for steel rail
according to some institutes' calculations, and that will benefit the
steelmaker a lot.
He said that "We have advantages in steel rail production, and are
sole-producer for some specs like the steel rail with speed of over 300
kilometers per hour. The mill will yield over 0.8 million tonnes of the
product this year, and is likely to ramp up its capacity in accordance
with the detailed arrangements of the Ministry of Railway.” PZH New
Steel & Vanadium boasts a large railway consuming steel production, with
its ratio taking up over 20 percent of the total.
Hebei Steel Group Teams up with Chinese Railways
Hebei Iron and Steel Group has signed an agreement with the
Bureau of Transportation under the Ministry of Railway, China to supply
1 million tons of steel for the infrastructure construction. The work is
included railway groundwork, bridge and tunnels etc.
The move comes after the stimulus package brought by the Chinese
government. As per the agreement, the company will offer stable supply
at preferential prices, and the prices will be adjusted on a monthly
basis; while the ministry will be arranging shipment of the supply, and
try to lower the transport cost for the steel group and its
subsidiaries. A dozen of railway lines have launched since October,
giving rise to steel demand. China will build new railway of some 40,000
km by 2020 with an investment of 5 trillion yuan.
Arrow Signs Agreement with Bin Chang Mining
Arrow Energy has signed an
agreement with China's Bin Chang Mining to develop a coal bed methane
project in Shaanxi Province. According to the agreement, if commercial
volumes of gas are produced from the pilot program, the parties will
enter into a formal joint venture to develop the area.
Arrow Energy recently announced a joint venture with the Geological
Survey of Xinjiang Autonomous Region, where first drilling is targeted
for the second quarter of 2009. Nick Davies, CEO, Arrow Energy said,"
All of those activities underline Arrow's extremely positive view of the
future of the CBM industry in China where gas demand continue to e
strong, long term gas prices attractive and where Arrow's particular
skill set and experience is in demand by local industry participants..
Baosteel to Go with USD 8.7 bn Steel Plant Project
In the mid of recession ,
Baosteel Group Corporation, China's largest steelmaker, is set to go
with its USD 8.7 billion steel plant project. The company informed to
the Shanghai Stock Exchange that Zhanjiang Guangdong province project,
which would increase capacity by a third, is necessary for development.
Baosteel is relying on the Zhanjiang project and other expansions to
propel it to become one of the world's top three producers. Steel
demand, which has slumped with the economic slow down may rebound next
year because of low inventories. The China Securities Journal cited MR
Qi Xiangdong, vice chairman of the China Iron & Steel Association as
saying that China's steel demand, the largest in the world may rebound
from the Q2 of next year because of the government's spending on
railways, airports and housing under its CNY 4 trillion stimulus plan.
Nanjing Steel Sees Bottoming of Steel Prices
Nanjing Iron and Steel
United Co., the Chinese steelmaker part-owned by billionaire Guo
Guangchang, said steel prices in the world's biggest user of the alloy
have bottomed and output may recover on the state's stimulus package.
"Lower raw-material prices will allow producers to raise production.
Next year, our construction- steel sales will benefit from the
government's plan to boost infrastructure investment." Chairman Yang
Siming. Nanjing's Mr Yang said “Steel prices have bottomed. He said that
the company's production this month would recover to October's level
after four months of declines.” Qi Xiangdong the association's vice
chairman said, “The steel market will lead other industries in
recovering under the government's stimulus plan. The industry group
represents most of China's large state-owned steel mills, including
Baosteel Group Corp the largest mill.”
According to the China Iron & Steel Association, China last month
announced a CNY 4 trillion stimulus package to revive growth in the
world's fourth-largest economy. All Chinese steelmakers were
unprofitable in October after demand from manufacturers plunged. Yang's
said echo remarks recently from Mr Lakshmi Mittal chief executive
officer of the world's largest steelmaker, who said steel demand may
rebound next year and the company wouldn't deepen output cuts.
60% of China Steelmakers Post Low Margin in Oct
Dwindling demand in both
the domestic and overseas markets has sunk nearly 60 percent of Chinese
steel companies into the red since October.
The 42 steelmakers have reported a combined shortfall of $1.14 billion
in October. This was the first time for some of these companies to
report a loss. "The Chinese steel industry has come in for a hard time."
said Qi Xiangdong, deputy secretary general of China Iron and Steel
Association. A turnaround is not expected until the second quarter of
2009, he said. Analysts said the latest round of bank interest rate cuts
and the depreciation of the renminbi against the US dollar has helped
restore some confidence in the future of the steel manufacturing
Shagang Starts Construction for Plate Heat Treating Project
Shagang Group, China's
largest private steelmaker, commenced construction of its plate heat
treating project in last week of November.
The project is being completed with an investment of CNY 2.2 billion.
The project is to launch 4 lines, with processing capacity of 0.7
million tons per year with carbon structure plate, low alloy structure
plate and ship building plate as finished products. The project is
considered as a key for the private mil to upgrade its product mix and
build a quality plate production base.
Sangang Produces 3.7 mn tons of Billets in 11 -months
Sanming Iron and Steel Co
Ltd has produced 222,175 tons of steel billet sending its production to
3.736 million tons up-to standard billets in the first 11 months of 2008
from the annual production of 4 million tons.
As per report, due to influence of the BF reconstruction and production
equipments annual maintenance, the plant aims at 4mt of annual output.
As a result, the company decides to start annual overhaul in two stages
to ensure the production schedule.
ArcelorMittal Shuts Down Two Steel Plants in US
ArcelorMittal, the world's
largest steel producer, has planned to shut down its two plants in the
US-Lackawana in New York and at Hennepin in Illinois.
The current global recession has hit the company's finance, along with a
substantial drop in demand of steel. A company spokesperson said the
Lackawana steel plant would be closed by April 30. The exact date of
closing down the Hennepin plant has not been announced yet. "This is in
line with the temporary global production cuts of approximately 35
percent announced as part of the company's third quarter earnings on
November 5," said a company spokesperson.
The Lackawanna operation has inherent disadvantages that lead to higher
costs, longer customer lead times and higher inventory levels than other
ArcelorMittal finishing facilities in the US, according to the company..
Corus Sells Stake in GrantRail
Corus UK, a
subsidiary of Tata Steel, sold its 50 percent stake in GrantRail Group
Ltd to VolkerWessels, its joint venture. The company has informed the
BSE that Grant Rail Group rail infrastructure services and was not a
part of Corus' core business steel production activities. The details of
the transaction were not revealed.
“GrantRail is a successful business providing rail infrastructure
services, but the JV was not part of our core steel production
activities. The additional expertise available from VolkerWessels will
help Grant Rail to continue to develop and grow in the future," said Joe
Guerin, managing director, Corus Rail. Doncaster based Grant Rail Group
was formed in 1996 as a 50:50 JV between the international rail and
construction group VolkerWessels and Corus. It has grown substantially
since then. GrantRail operating revenues have risen from GBP18 million
in 1996 to GBP 123 million in 2007.
The transaction will result in VolkerWessels taking full ownership of
the Grant Rail Group.
Novolipetsk Steel Cuts Output
Novolipetsk Steel, Russia's
fourth-largest steel maker by volume, will cut its full-year guidance
after posting strong third-quarter growth as demand has weakened in the
final three months of the year. NLMK now expects 2008 sales of roughly
$11.6 billion and earnings before interest, taxation, depreciation and
amortisation (EBITDA) of about $4.8 billion. In October, the
Lipetsk-based steel maker lowered its full-year revenue target to $12.5
billion and said EBITDA would total $5.0 billion. Novolipetsk also said
it had slashed its capex programme as the global financial crisis
dampened future growth prospects. "Due to the substantial worsening of
the market caused by the global financial crisis and deteriorating
prospects for the steel industry in the medium term, NLMK has
substantially reduced capex for Q4 2008 and put its capex program under
review," the company said in its nine-month earnings statement. Demand,
however, was strong from January to September. Net profit in the nine
months reached $2.76 billion, up 66 percent year-on-year and slightly
ahead of the $2.73 billion consensus. Nine-month revenues totaled $9.64
billion, up 74 percent, and slightly below the $9.67 billion consensus.
EBITDA in the period was $4.05 billion, up 65 percent and also below the
$4.06 billion consensus.
Rio Tinto to Slash 14,000 Jobs Globally
Rio Tinto Group, the
world's third-largest mining company, will slash 14,000 jobs globally,
comprising 8,500 contractor jobs and 5,500 employee roles and reduce
capital spending by more than half and sell significant assets as demand
for metals sinks in the global recession.
Rio Tinto chief executive officer Tom Albanese said, "Given the
difficult and uncertain economic conditions and the unprecedented rate
of deterioration of our markets, our imperative is to maximise cash
generation and pay down debt." Rio Tinto will also consolidate offices
around the group. According to a company release, this entitles an
annual operating cost saving of $1.2 billion and upfront severance costs
of $400 million. The next year is also likely to witness more
outsourcing and offshoring of IT and procurement by the company. "We
will minimise our operating and capital costs to appropriately low
levels until we see credible and meaningful signs of a recovery in our
markets. However, we will retain our strategic growth options," Albanese
He said, "We will expand the scope of assets we are targeting for
divestment. By taking these tough decisions now, we will be
well-positioned when the recovery comes."
Russian Scrap Exports Decline During First 9th Months
5.492 million tons of scrap during the January to September, a decrease
of 10.7 percent year on year. According to a foreign news report, the
export volume for the whole year is likely to reach 7.32 million tons.
Turkey was the biggest export destination at 2.139 million tons, down by
year on year 18 percent. Shipments to Korea totaled 893,300 tons,
accounting for 16.3 percent of the total volume. Moreover, Russia
exported 838,000 tons to Spain, decrease by 2.8 percent compared to the
same period of last year..
Rio Tinto Canada Iron-Ore Unit to Halt Expansion
Rio Tinto Group's iron-ore
unit in Canada will idle some production capacity next year and put an
$800 million expansion on hold because of falling demand for the
steelmaking ingredient. Iron Ore Co. expects to produce at about 80
percent of capacity in 2009, sources said. Labrador Iron Ore has a 15
percent stake in the company, Rio owns 59 percent and Tokyo-based
Mitsubishi Corp. controls the remainder. The announcement was made after
London-based Rio said that it will eliminate 14,000 jobs and slash $5
billion in spending as the global recession curbs demand for metals. The
Iron Ore Co. plant near Labrador City, in the Canadian province of
Newfoundland and Labrador, can produce 17 million metric tons of iron
ore in concentrate annually. Labrador Iron Ore Chief Executive Officer
Bruce Bone was not immediately available to comment.
Steel to Remain Low till March : Experts
Prices for steel won't rise
before the end of the first quarter as demand continues to decline,
JPMorgan Cazenove Ltd. said. “Spot prices appear to have stabilized for
the time being, but with demand fundamentals still crumbling, a price
rebound does not appear imminent this side of Q1 2009,” London-based
analyst Kartik Swaminathan wrote in a research note. ArcelorMittal, the
world's biggest steelmaker, is among global producers that have cut
output on falling demand from automakers and builders amid a global
economic slowdown. Prices for hot-rolled coil steel, a benchmark product
used in cars and construction, have fallen 18 percent since mid-August
to $867 a metric ton, figures from Metal Bulletin show. JPMorgan
Cazenove lowered its earnings per share estimates for ArcelorMittal from
2008 to 2010 because of the company's output cut, Swaminathan said. The
forecast for 2008 was reduced 34 percent to $8.54 a share, for 2009 by
76 percent to $3.45, and for 2010 by 68 percent to $4.99 a share.
Figures for steel trader Kloeckner & Co. SE and ThyssenKrupp AG,
Germany's biggest steelmaker, were also lowered for fiscal 2009 and
2010. EPS estimates for Kloeckner were cut 55 percent to 2.49 euros for
2009 and 29 percent to 3.97 euros for 2010. Forecasts for ThyssenKrupp
were reduced 50 percent to 2.48 euros for the fiscal year ending
September 2009 and by 43 percent to 3.32 euros for the following year.
Nucor Corp Q4 Profit to Slim
Corp expects to post a slim profit for the fourth quarter as the weak
economy and soft demand for steel hurt its shipments. Full-year profit
could still be a record for the company, but slack demand from
customers, who are also shrinking their steel inventories, would
probably push its shipments during the quarter down by 40 percent from
the third quarter. Average steel mill utilization will be slightly above
50 percent. Nucor said it would see a boost in the first quarter from
lower costs for scrap and pig iron, and that end-user demand would be
down between 25 to 30 percent, not the 50 to 60 percent decline that had
been seen in its order book.
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