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yellow   Valemax Iron Ore Vessels to Dock at China Ports
    Beijing's ban on Vale's giant ore carriers has been practically lifted after China Cosco Holdings' landmark deal with the Brazilian miner over a 25-year freight contract that involves 14 of the massive ships known as Valemax vessels. An executive at a state-owned port company familiar with the development of iron ore terminals in China said, “The current regulation actually already legitimises these vessels to berth at Chinese ports. If you look at how the ban was initiated in the first place, it will be unlikely for the government to make an official announcement with much fanfare that says the ban is loosened.” In early 2012, the Ministry of Transport issued a circular revoking the ability of local maritime authorities to approve dry bulk cargo ships and oil tankers exceeding the designed berth capacity to dock at mainland ports on a case by case basis. That effectively banned Valemax vessels, which have a capacity of about 400,000 deadweight tonne. The executive said, “Eventually, the ban will be lifted in a quiet manner. You may see a Valemax ship granted approval by a local maritime authority to dock and that will be it. Officials realised the ban has hurt China's economic interests, pushing up the costs for iron ore imports.” That'll knock USD 1 to USD 2 per tonne off Vale's iron ore deliver.
yellow   NLMK DanSteel Supplies Plates to Improve Offshore Wind Turbines 
    NLMK DanSteel A/S, part of NLMK Europe Plate and Denmark's only manufacturer of steel plates, has supplied 200 tonnes of plates with special dimensions made from high-strength steel for the construction of experimental foundations for offshore wind turbines as part of The PISA Project, the European research and development programme. The aim of the project is to improve the construction of foundations for offshore wind turbines in order to reduce cost, and consequently, to raise the investment appeal of wind power. Other participants from the Danish side are DONG Energy and Bladt Industries A/S, the manufacturer of foundations for turbines. The research project is carried out by the UK Carbon Trust as part of the Offshore Wind Accelerator programme (OWA), aimed at promoting offshore wind generation and reducing the cost of wind energy.
Assembly and testing of the foundations for offshore wind turbines manufactured with the use of thick plates supplied by DanSteel will take place in September 2014. Experiments will be held in Dunkirk (France) and Cowden (Great Britain). It is planned that by the end of 2014 the results of the experiment will be used in order to develop an industrial prototype for the new type offshore wind turbine foundations.
NLMK DanSteel joined the European programme aimed at improving the construction of offshore wind turbines in May 2014. It is the only supplier of thick plates of special dimensions made from high-strength steel for the programme. Research carried out as part of the programme has shown that the current geotechnical design for the foundations of offshore wind turbines is very conservative. Oxford University, Imperial College London and University College Dublin have developed a new, more progressive method. In order to implement it, a series of experiments must be performed using large-dimension steel piles under lateral load. Currently, 28% of electric power in Denmark is generated by wind turbines. The Danish Government is planning to bring the share of renewable generation in the country's energy balance to 50% by 2020; and to 100% by 2050.
yellow   Coking Coal Set to Rebound
    The Australian reported that the outlook for coking coal prices seems to be picking up, with predictions for a price between USD 130 and USD 150 per tonne near term. Prices could reach up to USD 170 in the longer term. As quoted in the publication, “The commodities desk at Citi has been one of the first to call a bottom in coking coal prices, tipping a rebound in coming months, but with its long-term price expectation trimmed by USD 10 a tonne to USD 170 a tonne. Its short-term bullishness USD 143 a tonne in 2015 and USD 152 a tonne in 2016 is based on a pick-up in Chinese steel ­demand, announcements of the closure of 14 million tonnes of annual production since April, and a slowdown in new supply growth.”
yellow   Brazil's Crude Steel Output Little Changed in 2014
    Steel industry Association IABr said, Brazilian crude steel production fell 1% YoY to 22.6 MT in the first eight months of 2014. Domestic steel sales in January to August reached 14.1 MT down 8.0%. IABr said, steel exports in the period totaled 5.59 MT worth USD 4.20 billion up 2.1% in volume and up 10% in value. Brazil imported 2.76 MT of steel in January to August, up 15.2%. Domestic apparent steel consumption fell 4.9% to 16.8 MT. Brazil is Latin America's biggest steel producer and home to steelmakers such as Gerdau, Usiminas and CSN, as well as a number of foreign owned companies. Steelmakers in the country have been hit in recent years by high iron ore prices and local production costs, global overcapacity and unstable demand as a result of economic volatility.
yellow   Nucor to Acquire Gallatin Steel from ArcelorMittal and Gerdau
    ArcelorMittal and Gerdau jointly announced that they have entered into a definitive transaction agreement to sell their respective 50% interests in Gallatin Steel Company to Nucor Corporation for a total cash consideration of USD 770 million, subject to customary closing adjustments. Strategically located on the Ohio River in Ghent, Kentucky, the flat-rolled products mill, with an annual capacity of approximately 1,800,000 tons, broadens Nucor's footprint in the important Midwest region. Adding Gallatin to Nucor's four existing flat-rolled mills will increase Nucor's total flat-rolled product annual capacity by 16% to approximately 13 million tons.
John Ferriola Chairman, CEO and President of Nucor said, "Our agreement to purchase Gallatin Steel is a significant step forward in the execution of Nucor's strategy for profitable growth. Importantly, Gallatin will enhance Nucor's current position serving flat-rolled customers in the growing pipe and tube segment. We believe this transaction will create excellent value for our shareholders, as the purchase price represents a multiple of approximately 6.4 times estimated 2015 EBITDA before synergies and approximately 5.3 times estimated 2015 EBITDA before synergies net of anticipated tax benefits. We are both excited and proud to have the men and women of the Gallatin team join our Nucor family." Aditya Mittal, CFO of ArcelorMittal said, "The sale of Gallatin unlocks substantial value for ArcelorMittal's shareholders and is consistent with ArcelorMittal's stated strategy of selective divestment of non-core assets. I would like to thank all our employees in Gallatin for their hard work and commitment during the years that we have co-owned this mill.” Gerdau's Chief Executive Officer, André B Gerdau Johannpeter said, "The decision to sell Gallatin was made in order for Gerdau to focus on its core assets in North America. On behalf of Gerdau's management, I would like to express gratitude to the whole team at Gallatin for their efforts in making Gallatin a great company.” Nucor anticipates that this transaction will close promptly after the satisfaction of all closing conditions and the receipt of required regulatory approvals.
yellow   Second 400-ton Converter Successfully Revamped by SMS Siemag at Thyssenkrupp Steel Europe 
    The 400-ton converter at ThyssenKrupp Steel Europe AG, Germany, in the Duisburg-Bruckhausen works went into production immediately after the successful revamp by SMS Siemag (www.sms-siemag.com) Germany, in July 2014. “We would like to thank all parties involved for their performance and commitment. The project is a very good example of the fact that precise agreements, an open attitude towards one another, good communication and close cooperation between the subsuppliers, our specialist departments and the Oxygen Steelworks I have paid off,” said Tim Moscheik, Project Manager of the converters revamp, ThyssenKrupp Steel Europe in Duisburg-Bruckhausen.
The new converter vessel is one of the largest of its kind worldwide. The design developed by SMS Siemag has enabled the construction of a much larger converter vessel: With an unchanged quantity of up to 400 tons of material charged, the internal volume of the converter has been increased by 24 percent. Thanks to the lamella suspension system developed by SMS Siemag, the existing mounting space can now be used more efficiently. The lamella suspension comprises a maintenance-free converter suspension for arranging the converter vessel in the trunnion ring without restraint. The additional volumetric capacity enables a more environment-friendly process control and a more efficient energy recovery. This expansion will be done for reasons inherent to the production process and it is not associated with increasing volumes (keyword: Overcapacities).
“Converter I, which has been on stream again for almost one year, delivers good results and fulfils our high-level requirements. For Converter II, we have already awarded acceptance after a 14 days period. We are very satisfied,” added. Wolfgang Schulte, Senior Engineer of the Plant development department, ThyssenKrupp Steel Europe. SMS Siemag supplied the converter, the supporting ring, the vessel fastening with its patented lamella suspension system of the latest generation, the trunnion bearings and the bearing supports. The solution developed by SMS Siemag makes it possible to retain and continue to use the existing converter tilt drive. SMS Siemag has also been responsible for the dismantling of the existing converter plant, the installation of the plant components as well as the erection of a new converter platform. The revamp has been carried out by the ThyssenKrupp MillServices & Systems GmbH, Duisburg, Germany. The SMS Siemag team has even succeeded in falling below the downtime of 44 days by more than 36 hours. In September 2013, the first of the two revamped converters was successfully put into operation. Since 1969, the two converters in the Oxygen Steelworks I have formed the basis for steelmaking in Duisburg-Bruckhausen. The second converter has now been revamped after more than 44 years of continuous operation, i.e. approx. 211,000 heats, corresponding to the making of around 80 million tons of steel.
yellow   Arcelormittal Galati Targets 15% Output Increase for 2015
    As a result of major technical upgrades of its production flow, ArcelorMittal Galati, Romania's largest steel plant, which is part of ArcelorMittal group, is targeting a 15% output increase for 2015. Previously due to the crisis in 2008-2009, the company almost halved its output and had also shut down some of its production lines. Before the crisis hit, ArcelorMittal Galati used to produce more than 3 million tons of steel each year.
As per reports ArcelorMittal Galati representatives said that “The current technical conditions are creating the frame for targeting to increase the production in 2015, from 1.6 million tonnes to more than 2 million tonnes. This forecast is possible only thanks to the measures taken by the authorities in the past months to support restoring the competitiveness of the Romanian business environment, especially aimed to re-establish rational prices for natural gas and electricity. Those decisions should not be temporarily and must be sustained on the long term at the same level.”
The report further added that due to a significant increase in gas and electricity costs combined with lower demand on the international markets, ArcelorMittal Galati closed down most of its blast furnaces and even demolished some of them, saying that they were unsafe. The company also reduced its number of employees, mostly via voluntary leaves.
All these had led to speculations that the steel group controlled by Indian billionaire Lakshmi Mittal would shut down its operations in Galati. The company firmly denied all such rumors, saying that the plant in Galati still plays a key role in the group's strategy for the European market.
Mr Bruno Ribo, CEO of Business Division Galati said that, “These major investments, amounting to EUR 10 million, show ArcelorMittal's commitment for its unit in Galati. The effects of these investments were immediately visible in the company's results. In August, the Blast Furnace no. 5 delivered its biggest production in the last 34 years.”
yellow   Outokumpu Showcases its Expertise in Surface Finishes
    Outokumpu showcased its high quality offering in surface finishes in simultaneous events in Germany and China and demonstrated why stainless steel is used increasingly in demanding building and infrastructure projects. At both events, Outokumpu exhibited three of its latest products; 2R2 a highly reflective, smooth finish in high volume production; GritLine a bright surface with improved properties through rolling; and Laser a new surface finish with random pattern that depicts a homogeneous surface, ideal for large façade elements.
Mika Seitovirta CEO of Outokumpu said,“Stainless steel is the preferred material for modern building and construction due to its high mechanical strength, resistance to corrosion, aesthetics and cost efficiency. It performs well in extreme climate conditions and needs little maintenance.” In both Dillenburg and Shanghai, China, Outokumpu displayed its broad range of surface finishes, many of which adorn some of the world's most famous buildings, from the Chrysler building and One World Trade Center in New York, to the new headquarters of the Ping An Finance Center in Shenzhen, China. On September 15, Outokumpu announced the delivery of over 800 tonnes of special surface stainless steel for the creation of the facades of Baosteel's head offices in Shanghai (48,000 m2 of facade) and Guangzhou, China.
Mr Seitovirta said,“These landmark buildings are more than just beautiful architectural masterpieces. They also tell about the advantages of high quality stainless steel and underscore Outokumpu's position as one of the world's leading innovators in advanced materials.” The Chrysler building is a great example of low maintenance. It was built in 1930 and except of few panels which have been replaced, the stainless steel roof is original and has been manually cleaned only twice. For the One World Trade Center, Outokumpu designed a brand new surface with random patterns to fit in with the critical surface demands of the architect. The Marina Bay Helix bridge in Singapore features high strength and corrosion resistant duplex to ensure low maintenance and continuing beauty in hot and humid maritime conditions. Mr Seitovirta stressed the importance of technical expertise and support for customers that, “The requirements for cost-efficient, high performing, sustainable buildings are growing and those stainless steel suppliers that can offer technical expertise, innovation and end to end project support will lead the pack. Outokumpu is one of the suppliers; one which takes building and infrastructure to new heights.”
yellow   Paul Wurth Appoints New CEO
    Georges Rassel is to succeed Marc Solvi as Chief Executive Officer of Paul Wurth SA at the beginning of 2015. Solvi, 62, who served as CEO to the company since January 1, 1998, is to resign from his function from December 31, 2014, for personally motivated reasons. He will remain a member of the company's Board of directors. Georges Rassel, 49, has been active at Paul Wurth since 1988 and has served as a member of the management as Chief Operations Officer. He was appointed by the Board of directors to succeed Rassel. Michel Wurth, Chairman of Paul Wurth's Board of Directors, said, “Marc Solvi has during the last 17 years with his work as Chief Executive Officer, contributed decisively to the growth and successful economic development of our group. After SMS Group from Düsseldorf took a majority stake in 2012, he helped to significantly shape the integration into SMS and, consequently, laid the basis for a next step in the company's further development. We respect his personally motivated decision to resign as Chief Executive Officer by the end of the year. We welcome very much that he will continue to accompany the company's development with his years of experience as member of the Board of Directors.”
yellow   Siemens Modernizes Cooling Conveyor at Keystone
    United States producer Keystone Steel and Wire Co. placed an order with Siemens Metals Technologies to upgrade the cooling conveyors of a two-strand wire rod mill in its Bartonville, Illinois production facility. The project includes new blowers, auxiliary systems as well as electric and automation equipment. This will enable Keystone to produce steel grades with higher tensile strengths with improved and more uniform quality, thus extending their product range. The new equipment is expected to be commissioned in late 2014.
The project is updating a mill built previously and modernized by the former Morgan Construction Company in the late 1980s. Siemens has also provided high speed shears and water boxes to Keystone in a multi-phased upgrade. Siemens´ contract scope for the current upgrade includes five large blowers with Optimesh control system on each strand of the rolling mill, together with plenums, as well as close coupled switch disconnect, transformer, switch panel, drives and a new automation cabinet.
With this upgrade, Keystone will produce wire rod of greater tensile strength and uniformity to meet the demands of the cable market. The upgrade is part of an ongoing modernization project undertaken by Keystone to expand into markets for higher value-added products.
Founded in 1889 in Dillon, Illinois, USA, the Keystone Steel & Wire Company is a rod and wire products supplier that produces and processes quality steel that exceeds AISI and ASTM standards to meet stringent customer specifications. Located in Bartonville, Illinois today, it operates one of the largest wire mills in the world ,with more than 2,000,000 square feet of fully integrated manufacturing space, for annual steel capacity exceeding 700,000 tons.
yellow   AISI Steel Imports Decline 5% in August
    The American Iron and Steel Institute (AISI) announced that the US imported a total of 3,667,000 net tonnes of steel in August, including 2,768,000 net tonnes of finished steel (down 5.0% and 10.2%, respectively, vs. July final data). This announcement was based on the preliminary Census Bureau data. Year to date total and finished steel imports are 28,634,000 and 21,430,000 net tonnes respectively, up 36% and 29% respectively, vs. 2013. Annualized total and finished steel imports in 2014 would be 43.0 and 32.1 million tonnes up 34% and 30% respectively vs. 2013. Finished steel import market share was an estimated 27% in August and is estimated at 27% YTD.
Key finished steel products with a significant import increase in August compared to July are reinforcing bars (up 191%) and wire rods (up 22%). Major products with significant YTD import increases vs. the same period last year include plates in coils (up 85%), wire rods (up 78%), cold rolled sheets (up 73%), cut lengths plates (up 58%), sheets and strip hot dipped galvanized (up 56%), sheets and strip all other metallic coatings (up 52%), heavy structural shapes (up 44%), hot rolled sheets (up 37%), mechanical tubing (up 36%), oil country goods (up 26%), Tin Plate (up 21%) and reinforcing bar (up 14%).
In August, the largest volumes of finished steel imports from offshore were from South Korea (450,000 NT, down 21% vs. July final), China (226,000 NT, down 16%), Turkey (210,000 NT, up 59%), Japan (165,000 NT, down 18%) and Taiwan (130,000 NT, up 23%). For eight months of 2014, the largest offshore suppliers were South Korea (3,626,000 NT, up 49%), China (2,014,000 NT, up 70%), Japan (1,356,000 NT, up 5%), Turkey (1,306,000 NT, up 47%) and Russia (903,000 NT, up 511%). Below are charts on estimated steel import market share in recent months and on finished steel imports from offshore by country.
yellow   Global Steel Output Grows in August
    As higher output across major Asian producers and the U.S. offset relatively flat production in the European Union, global crude steel production notched up its seventh straight monthly gain in August according to a recent World Steel Association (“WSA”) report. The growth was also backed by gains across the Middle East and Africa.
However, as witnessed in July, the pace of growth once again slowed on a monthly basis in the reported month, hit by a slowdown in China – the world's biggest steel maker.
The international trade body for the iron and steel industry said that crude steel production for 65 reporting nations moved up 1.4% year over year in August to 135 million tons (Mt). This follows a 1.7% gain last month. August reading showed production gains across major steel producing nations in Asia. Growth, however, slowed on a monthly basis in China on subdued steel demand due to a downturn in the country's housing market.
China's steel output rose 1% year over year to 68.9 Mt in August versus a 1.5% gain a month ago. A slowing economy is hurting steel producers in the country. China's industrial output rose 6.9% in August (decelerating from a 9% gain in July) – the slowest pace in almost six years, raising concerns the world's second-biggest economy is losing steam. Output rose 2.2% to 9.3 Mt in Japan – the second largest producer. India, the fourth-largest producer, raked in healthy gain with production rising 5.2% to roughly 7 Mt as the country's major producers beefed up output in the reported month. South Korea racked up the biggest gain of 8% to 5.3 Mt. Consolidated output in Asia was up 1.7% to 92.5 Mt.
In North America, crude steel output went up 2.9% to 7.7 Mt in the U.S. – the third-biggest steelmaker. Output in Canada rose 7.1% to around 1.1 Mt. Total production for the region was up 2% to roughly 10.5 Mt in August.
Overall output in the Europe Union was essentially flat in August at around 12 Mt. Germany; the biggest producer in the region produced 3.1 Mt, down 1%. Output fell 0.8% in Italy to 1 Mt and was also down 0.4% in Spain to 1.1 Mt. Production slipped 9.1% in France to around 1.1 Mt while the UK saw an 11.7% gain to 1.1 Mt.
Output in the Middle East moved up 2% to 2.3 Mt on gains across Iran, Qatar and Saudi Arabia. Africa clocked a healthy 23.5% rise to 1.5 Mt in August.
Among other notable producers, production from Turkey climbed 13.9% to 2.9 Mt. Russia registered a 5.8% gain to 6.2 Mt while Ukraine – which have been hobbled by fierce conflict with Russia – saw a 37% slide in output to 1.8 Mt, leading to a 6.5% fall in overall output in the C.I.S. region. Output from Brazil, the largest producer in South America, clipped 1.4% to 2.9 Mt.
yellow   Australian BREE Cuts Iron Ore Price Forecast by Usd 11 Per Tonne
    Australia's state commodity forecaster cut its iron ore price estimates for this year and 2015, pruning its outlook again as surging production in the world's largest supplier outpaces demand growth in China.
The Bureau of Resources and Energy Economics said in a quarterly report that iron ore will average about USD 94 a tonne this year from USD 105 a ton forecast in June and prices may be USD 94 a tonne in 2015 from USD 97 estimated in June.
It said “Lower prices for Australia's most valuable commodity export will contribute to a drop in the value of the country's resource and energy shipments to AUD 192.4 billion in the year started July 1 from AUD 201.4 billion forecast in June.”
It added “Prices are expected to rebound from the current low levels but remain well below the high prices seen in previous years due to the supply overhang. Further increases in supply indicate increasing price competition will be needed to push more high cost supply out of the market.”
Shipments from Australia will jump 22 percent to a record 707 million tonnes this year and climb 8.6 percent to 768 million tons next year, the bureau said. Previously, it estimated exports at 680 million tons in 2014 and 764 million tonnes in 2015. China's total iron ore imports would rise 6.6 percent to 933 million tonnes next year.
yellow   Indian Steel Companies Now Import Iron Ore
    Steel companies are now importing iron ore as domestic mining has taken a hit with policy amendments and the Supreme Court's cap on the quantity of extraction, H. Noor Ahmed, President of the Federation of Indian Mineral Industries (FIMI) has said. JSW Steel for instance imports 6 lakh tonnes a month, he said at a press conference recently. In Karnataka, of the 160 mines that exist, only 23 are operational, and the State produces around 17 million tonnes a year while the demand is early double at 30 million tonnes, Mr. Ahmed said. The Mines and Minerals (Development and Regulation) Amendment Act 1957 has made the process of acquiring licenses and clearances tedious, he said. The level of exploration in India is "far below" that of other mineral rich countries, such as Australia, Canada, Brazil and South Africa. Although iron ore production in India has traditionally been “export fed”, in the first quarter of this fiscal year, India exported just 1.9 million tonnes - a 41 per cent drop since last year - thanks to export duties, he said. While the consumption of metals in the country is among the lowest in the world, it is likely to increase four or five fold in the next fifteen years, underscoring the need to “accelerate mining activity”.
yellow   Iron Ore Miners Battle for Survival as ‘Perfect Storm’ Hits
    High-cost Australian miners are battling for survival as plunging iron ore prices push many to breaking point, with analysts seeing no significant short-term recovery as Chinese demand for steel wanes in line with sliding property prices.
Australia, the world's largest exporter of iron ore, is heavily dependent on China's hunger for resources even as its economy transitions away from an unprecedented mining investment boom. A year ago, iron ore fetched about US$135 a tonne. This month it hit a five-year low of US$81.90, slumping 40 percent since January.
The weaker price has also hit Australian government coffers, reducing tax revenue just as it makes a push to bring the budget back into surplus. Australia produces 17 percent of the global iron ore, second only to China's output of 39 percent. "I think the iron ore market got a perfect storm at the moment," ANZ's global head of commodity research Mark Pervan told AFP.
Australian junior miners Termite Resources and Western Desert Resources -- which operate at a much higher cost than majors BHP Billiton (NYSE: BBL - news) , Rio Tinto (Xetra: 855018 - news) and Vale -- have already collapsed, and there are fears others could follow.
On the supply side, record levels of iron ore production in Australia from the world's largest miners BHP and Rio have pushed millions more tonnes into the global market.
But demand from China has weakened as the property market softens. New home prices have fallen for four straight months, according to Chinese data, weighing on steelmakers that depend on the sector as a "pillar industry", Pervan said.
While the Australian jump in supply - driven by strong prices three years ago - was forecast, the continued output from Chinese miners has exacerbated the price decline. The plunge in the iron ore price has been so severe that Goldman Sachs (NYSE: GS-PB - news) called it "the end of the Iron Age".
In a research note, analysts Christian Lelong and Amber Cai wrote that "in our view, 2014 is the inflection point where new production capacity finally catches up with demand growth, and profit margins begin their reversion to the historical mean". "In other words, the end of the Iron Age is here."
Lelong and Cai added that the "weak demand outlook in China and the structural nature of the surplus make a recovery unlikely".
This section is a compilation from various company press releases, business dailies &
trade publications.