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| Korea-Japan HRC talks settled at $550/t | ||
| The negotiations over January-March shipments of Japanese hot rolled coil to Korean re-rollers have concluded, with both sides agreeing to an average price of $550/tonne fob. Though the concluded levels differ slightly according to tonnage and specification, prices are to gradually climb to reach $560-570/t in March. The talks began in early December and dragged on chiefly because of large price gaps between the two sides. The Japanese mills were asking for around $580-600/t fob while the re-rollers were insisting on $520/t fob, as Steel Business Briefing reported. But the forecast of higher iron ore prices from April was the major reason for the concession from the Korean side, a re-roller source says. Following last week’s settlement, the HRC talks for April-June shipments are likely to start from late this month or early next. The Japanese mills are expected to lift their price demands to $650/t fob or beyond, according to Japan’s Tex Report. Korean re-rollers are convinced that iron ore prices will climb from the start of the new fiscal from 1 April, and that the hike will affect the negotiations for the next quarter. “But I’m unsure whether Japanese mills will succeed (in the price demand) in the coming quarter,” another source says, adding that if the low HRC demand in Japan continues it may be not help export prices. Meanwhile, commodity grade HRC export offer prices from China’s Shagang have dropped by around $20/t to $530/t fob for April deliveries compared with a month ago. The drop is due to weak Chinese domestic HRC prices ahead of the Chinese New Year holiday, SBB learns. | ||
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| Asian long product import markets slow as holidays approach | ||
| Trading in long products is thin in Southeast Asia as buyers are unwilling to chase after the high prices suppliers are demanding. Conversely, suppliers are either unwilling to give firm offers or are maintaining their high asking prices. “Nothing much is happening,” a trader in Singapore says. “It is confusing because there are not many firm offers or firm bids. So there are no real prices,” he adds. Turkish suppliers are indicating offers for rebars at around $570/tonne cfr. Importers are indicating their buying interest at $510-520/t cfr which traders say is not realistic. While one trader reports a booking of 3,000 tonnes of Korean-origin rebar last week at $560/t cfr Singapore, others say that there have been no recent deals. Similarly, the import market in Southeast Asia for billet is very quiet. Offer prices for Russian-origin billet are generally prevailing at $520-535/t cfr (some traders report a few offers at around $510/t cfr). Billet from Turkey is being offered at $470-480/t fob and from Taiwan at a minimum of $500/t fob. Regional bookings were reported to have been last concluded at around $500/t cfr in January and billet importers are still indicating their interest at $495-500/t cfr. “There has been no (recent buying) movement. Everyone’s afraid that the market for longs may soften,” one tells Steel Business Briefing. "The scrap market is undergoing a price correction whereas iron ore prices are firming again so it’s hard to read the market." | ||
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| EU mills aim for significant price rises for wire rod | ||
| European producers of non-mesh quality wire rod aim to increase prices in the face of rising costs and to recoup margin losses in the ‘crisis year’ of 2009. Prices for rod, including drawing, cold heading, spring and tyre cord qualities, will have to rise by €70-90/tonne ($96-123/t) for the second quarter, sources close to ArcelorMittal believe. This is in comparison to Q4 last year, Steel Business Briefing understands. Corus has already announced an increase of “at least” £60/t (€69/t) for rod with immediate effect for new orders. We see the first signals that Corus is indeed implementing these increases in the market, a source at another European producer tells SBB. Increases of €70/t are on the low side, this source continues. The euro is weakening, and raw material costs are driven by dollar-based values, so pressure in the eurozone to raise prices will intensify. Mills were lacking some €40/t in margins at the end of 2009, the source estimates, and as costs could rise by another €60/t, an increase of €100/t would be necessary. Real end-use demand for quality rod is still low, but demand for mills’ production is picking up because of stock building throughout the supply chain. We were producing at 30-40% of normal tonnages in the first half of 2009, but final end-user demand was “only” down by 20-30% - thus stocks are now heavily reduced, he comments. The timing and extent of price rises will also depend on the length of customer contracts, another producer notes. | ||
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| US coil prices slip down from recent peaks - The Steel Index | ||
| The latest reference prices from The Steel Index show that all coil prices in US have eased back but those in Europe are consolidating after last week’s gains. The US HR coil reference price FOB Midwest mill slipped by $3/short ton to $594/short ton ($655/tonne). CRC also dropped by $3/s.t., while the hot-dip galvanised coil reference price is around 1% lower than a week ago. Last week’s prices were twelve-month highs for each product. The average delivery lead-times for CRC are shorter than last week at 7.4 weeks. In northern Europe, the HDG ex-works reference price increased and is now at €525/tonne ($728/t), while CRC also rose. Average HRC and CRC delivery lead-times are both slightly shorter at 7.6 and 7.8 weeks respectively. The CRC reference price in southern Europe is €8/t higher than last week at €493/tonne ($684/t). The HRC and HDG reference prices both increased by around 2% since the previous week. Average lead-times for all coils are shorter than last week, with HRC and HDG deliveries both between 5 and 6 weeks. The domestic Turkish CRC reference price, ex-works, is just higher than last week at $720/tonne, while the HRC and HDG prices are also firmer. HRC and HDG average delivery times are both unchanged from last week. The Steel Index is owned by Steel Business Briefing . Companies wishing to submit data or receive the full set of reference prices every week can apply on the website www.thesteelindex.com . | ||
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| Turkish bar exports slumped in January | ||||||||||||||||||||||||||||||||||||||||||
January rebar export figures indicate that 2010 is likely to be more difficult for Turkish exporters than 2009, market sources tell Steel Business Briefing. Turkish rebar exports fell by 70% to 314,000 t in January 2010 compared to 964,000t in the same month last year, according to the figures of iron and steel exporters association. In December Turkish bar exports were 516,000 t. Turkey's bar exports have not reached such a low level for the last two years. The decrease in steel consumption in their principal export markets gave a hard time to Turkish producers. Although some producers tried to switch their exports to billet, the overall tonnages of long steel exports are far from supporting the Turkish steel industry. Turkish rebar exports last month went principally to Iraq, Egypt, Singapore, the USA and Brazil. The average export price was around $486/tonne fob. The United Arab Emirates imported only 10,000t, a slump from 100,000t in January 2009. The Turkish rebar export market is expected to revive in the second quarter of the year, but still high scrap prices are causing the producers to struggle to cover their costs. The slowdown in demand is making this still harder, SBB was told. | ||||||||||||||||||||||||||||||||||||||||||
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| Brazil's regulators approve Votorantim's new rebar JV | ||
| Brazilian competition authorities have approved Votorantim's 50-50% joint venture with Sitrel to build a new rebar mill in the country's middlewestern state of Mato Grosso do Sul, Steel Business Briefing learns from the government. According to its initial plan, the Sitrel JV, to be built in Três Lagoas city, would operate as a 250,000-300,000 tonnes/year minimill. However, since Votorantim joined the project, the plant is now understood to be planned as a rebar mill using outside billets instead of operating a melt shop. Billets to be rerolled there would be supplied by Votorantim's newest mill in Resende, Rio de Janeiro state. | ||
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| BHP Billiton names Campbell as new iron ore head | ||
| BHP Billiton has appointed Chris Campbell as its new iron ore president, replacing incumbent Ian Ashby, who will focus on the prospective Pilbara joint venture with Rio Tinto. The Melbourne-based miner said yesterday that Campbell will take over from Ashby over the next few months as the joint venture progresses. Ashby’s new title is chief executive of Western Australian Iron Ore, while Campbell will be responsible for BHPB’s global iron ore operations in Brazil, Africa, and also the marketing of ore from the Pilbara JV. Campbell is a 20-year veteran of BHPB and presided over the integration of WMC Resources into BHPB in 2005. He has also headed the joint venture with Rio since June last year. Campbell’s appointment is the latest of a number of reshuffles in iron ore at senior level among the larger miners. Last week, Rio said its former managing director of iron ore sales and marketing Ian Bauert would become managing director for China. BHPB will announce its half-year results this Wednesday, Steel Business Briefing notes. | ||
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| Korean ship plate demand to sink this year | ||
| The depressed state of Korea’s shipbuilding industry will result in a reduction in purchases of ship plate this year among the major Korean shipbuilders. Each is considering cutting its plate buying by about 300-400,000 tonnes this year, Steel Business Briefing learns from industry sources. The cool outlook is because of a lack of new ship orders and the decline in order backlogs at the yards. Some are intending to delay building on those orders already in hand in order to keep their facilities operating. Some builders have cancelled a part of their January-March quarter contracted tonnage with domestic plate makers Posco and Dongkuk Steel Mill equivalent to around 100,000 t, as SBB reported. “The high-season for ship plates of 2008-2009 has passed,” lamented a source from a ship plate maker. “The demand is expected to decline for the time being due to the cancellation of new shipbuilding orders and shrinking order backlog.” Meanwhile, the plate negotiations for April-September shipments between the Japanese integrated mills and Korean shipbuilders such as Daewoo Shipbuilding & Marine Engineering (DSME) have been underway since late January. Market sources assume that several factors are helping the Korean shipbuilders in their negotiations, such as reduced ship plate demand from their yards and increased production from this year because of Hyundai Steel’s entry to market. However, an industry source tells SBB that reaching an agreement this time will be difficult because the Japanese mills also face issues such as the likely increase steelmaking raw materials prices from April. | ||
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| China's Angang sees strong production growth in 2009 | ||
| Anshan Iron & Steel’s (Angang) crude steel production in 2009 reached a record high of 20.13m tonnes, up 25% year-on-year. However, its preliminarily profits totaled RMB 3.1bn ($456m), almost the same as 2008’s RMB 3bn. Steel Business Briefing notes that Angang’s 5m tonnes/year Bayuquan steel complex, which was commissioned by the end of 2008, reached its full operation in May 2009, and contributed 5.05m t of crude steel production to the company last year. According to sources close to Angang, the company is positive about the steel market this year, and has set its 2010 crude steel production target at 22.1m t, up 10% from 2009. Although Angang saw a great increase in its crude steel production last year, its profit didn’t grow much due to the weak steel market in the first half of the year. Meanwhile, Angang just launched the construction of its new cold strip mill in Fujian province’s Futian city on 6 February. This new cold strip mill with a capacity of 1m t/y, will mainly produce cold rolled sheet for use in white goods production, and is expected to be commissioned in late 2010 or early 2011. | ||
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| Taiwan’s Hai Kwang expects good rebar demand this year | ||
| One of Taiwan’s largest rebar producers, Hai Kwang Enterprise Corp, is expecting stronger domestic rebar demand this year due to government infrastructure and construction projects, a company spokeswoman tells Steel Business Briefing. “So far, domestic demand is definitely better than last year,” she says. In 2009, the Taiwanese market accounted for around 65% of Hai Kwang’s total rebar sales. This year the proportion from domestic sales is likely to rise due to the improved demand, she notes. Hai Kwang has 800,000 tonnes/year of rebar capacity at its Kaohsiung works in southern Taiwan. Rebar prices in Taiwan have generally been on an uptrend since the fourth quarter, says the official. Hai Kwang had yet to table its rebar list price for this week at press time. The company’s transacted rebar price was around TWD 17,700/t ($551/t) last week. Another major rebar producer, Feng Hsin Iron & Steel, is keeping its rebar list prices this week at TWD 18,200/t, unchanged from last week. Its price had reached TWD 18,800/t in mid-January. Taiwanese rebar prices had eased in late January due to weakening scrap prices. Some market participants believe the decline in Taiwanese rebar prices will be short-lived and could rebound after the Chinese New Year holidays in mid-February as scrap prices are expected to bottom out this month. | ||
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| India’s state-owned NINL expanding capacity | ||
| India’s government-owned pig iron and steel producer Neelachal Ispat Nigam Ltd (NINL) has launched an expansion to 3m tonnes/year from the current 1.1m t/y. “Construction work is already underway,” a source close to the company tells Steel Business Briefing. “Expanded billet and wire rod capacity should come on line by mid-2010.” On completion, NINL will be able to make 700,000 t/y of wire rods, with the remaining 2.3m t/y comprising pig iron and billets. The long products would be mainly sold into the domestic construction and infrastructure markets. NINL’s plant, located in Jajpur district in the eastern state of Orissa, currently produces 800,000 t/y of coke, 600,000 t/y of pig iron, 270,000 t/y of billets and 300,000 t/y of wire rods. The pig iron is mostly sold in the domestic market. State-owned trading company MMTC owns 49.8% of NINL while the National Mineral Development Corp owns 12%. The Industrial Promotion & Investment Corp of Orissa Ltd and Orissa Mining Corporation hold 22% and 4.6% respectively. Financial institutions hold the rest. Earlier, talks had begun to merge NINL with state-owned longs producer Rashtriya Ispat Nigam Ltd, as SBB reported. But discussions have apparently founded because this would lead to the Orissa government’s equity stake in NINL being diluted – something the government refuses to accept. | ||
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| Maruichi to add new pipe mill in China | ||
| Maruichi Steel Tube is establishing a second welded pipe plant in China that will start operations from the end of 2010, the Japanese company has announced. The new plant, managed by Maruichi Metal Products Tianjin (MMPT), is being built in Tianjin in northern China and is owned 100% by Maruichi Metal Products Foshan (MMPF), Maruichi’s first pipe mill in China. The Tianjin facility will have a single-shift capacity of ERW tubes of 12,000 tonnes/year, a Maruichi spokesman tells Steel Business Briefing. MMPF was established in 2005 and is held 35% by Maruichi, Japan’s largest independent ERW pipe producer, 10% by Toyota Tsucho, Toyota Motor’s trading arm, and 5% by trader Metal One. Taiwanese coil centre Large Crown Ltd holds 35% and Chung Mao Trading 15%. MMPF mainly produces automotive seat frames and door frames for Japanese auto makers in China such as Toyota and Honda Motors, and furniture pipes for local customers. Maruichi will not reveal current production volume but says the venture’s ERW pipe capacity is 100,000 t/y. Osaka-based Maruichi is aggressively expanding production overseas and has plants in the US, Indonesia, China and Vietnam. Last November it acquired 95% of Indian stainless tube producer, Kuma Stainless Tubes. In southern Vietnam, Maruichi subsidiary Sun Steel Co, is installing 16-inch mill to increase the total capacity to 120,000 t/y. A second plant near Hanoi will start operation from August 2010 with 36,000 t/y capacity, as SBB reported. | ||
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| Chinese OCTG maker sees sales drop 26% | ||
| Shandong Molong Petroleum Machinery Company (Molong), a Hong Kong-listed Chinese oil country tubular goods (OCTG) maker, reported on 5 February that its sales revenue fell by 26% year-on-year in 2009. The decline was due to a drop in both price and demand for OCTG, Steel Business Briefing learns from a company release. Molong’s net profit amounted to approximately RMB 274m ($40m), down 14% y-o-y. Among Molong’s 2009 sales revenue of RMB 2bn ($299m), 64% came from China, while 36% was from exports. Due to trade barriers in the US, Molong says it is intensifying the development of new export markets in South America and North Africa while maintaining its market share in Southeast Asia, the Middle East and elsewhere. With operations in northern China’s Shandong province, Molong says its sales volume to China’s four major oil companies rose significantly in 2009. The acceleration in China’s exploration of coal bed gas also generated new demand for its products. Molong says its casing production reached 100,000 tonnes in 2009, with its new 250,000 tonnes/year casing mill reaching its designed capacity last year. The company will put its 180mm OCTG mill in test runs in the first quarter of this year. Construction on the mill began in 2008. It has a capacity of 300,000 t/y of high grade casing and will reach its designed capacity in three years. SBB notes Molong’s OCTG capacity will reach about 650,000 t/y when the new mill is commissioned. | ||
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| Chinese stainless mills say demand is strong for Jan-March | ||
| Stainless mills in China are optimistic about demand for the January-March quarter and are running production at full capacity as a result, say industry sources. Baosteel Stainless produced at around 110,000 tonnes in January, which is around full capacity for the steelmaker, and envisages continuing doing so for the rest of the quarter, says a company official. In fact, he notes that production is unlikely to be lower in February, despite it being a shorter working month in China due to the Chinese New Year holidays, as demand is strong. While January output numbers are not available yet, an official from Shanxi Taigang Stainless Steel says that his company will likely be producing at full capacity for the rest of the quarter. "This quarter's outlook is positive," he notes. Likewise for stainless cold-roller, Qingdao Pohang Stainless Steel (QPSS), which produced at full capacity of 15,000 t in January. Output will probably slip slightly in February due to the holidays but will likely return to full capacity in March as demand is generally good, a company official says. “Most mills are reporting strong orders for the first quarter and are optimistic,” says a Beijing-based stainless analyst. Demand is coming from the electrical appliance, construction and automotives sectors, sources say. Some industry watchers had questioned whether stainless demand is as strong as mills purport it to be as there are fears that full capacity production in China during the quarter could result in rising market inventory, hence dampening prices, as Steel Business Briefing reported. | ||
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| Jindal ‘shocked’ at RCI rejection | ||
| Indian steel and energy firm Jindal Steel & Power (JSPL) has reacted angrily to last week’s decision by Australian metallurgical coal and coke producer Rocklands Richfield (RCI) to end takeover talks. In a letter to RCI ceo John Girdlestone, JSPL director finance Rajesh Bhatia said: "We are quite shocked at your response since... the terms and conditions of our offer are substantially the same as those in Meijin's proposal.” Bhatia was referring to its rival for RCI, Chinese coke producer Meijin Energy, whose latest bid of A$0.56 (US$0.49) per share JSPL had matched in early January, as Steel Business Briefing reported. JSPL owns 13.6% of RCI. Last week, RCI’s board dismissed the Indian firm’s proposal as “commercially unacceptable.” Though RCI had had discussions with JSPL over the terms and conditions offered, when these were eventually tabled they did not satisfy RCI. The demands included that JSPL be allowed to drill in RCI’s tenements during its due diligence for up to 120 days, that JSPL be granted exclusivity in talks with RCI during the drilling period, and that a JSPL nominee be appointed to RCI’s board. RCI owns three tenements in Queensland’s Bowen Basin as well as China Coke & Chemicals, which operates a 480,000 tonnes/year coke plant in Huabei in eastern China’s Anhui province. With the JSPL talks terminated, RCI can now engage Meijin. “We will give them a few days to study (the terms statement) and see what they come back with,” Girdlestone tells SBB. | ||
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| Ableauctions.com acquires Chinese coking firm | ||
| Canada's Ableauctions.com Inc has acquired SinoCoking, a Chinese coal and coke producer, Steel Business Briefing learns. SinoCoking, based in China's Henan province, will be renamed SinoCoking Coal and Coke Chemical Industries, Inc. Its president, Jiahua Lv, will take over as CEO. According to a statement by the buyer, SinoCoking has been a significant supplier of thermal and metallurgical coal and coke to industrial customers such as power plants, steel mills and other industrial buyers in China since 1996. It uses coal from its own mines and that of third-parties to supply customers. It currently holds mining rights for about 2.5m short tons of coal from mines located in central China. It began producing metallurgical coke in 2002. Said Mr. Lv, “On behalf of SinoCoking, we are proud to complete this business combination with a US publicly traded company. Being a US public company will put us in a position to attract the capital that our company needs to expand our operations, and create value for our shareholders.” British Columbia-based Ableauctions.com is a provider of high-tech online services and technology to auction houses and retailers. Its shares are trade on the American Stock Exchange. | ||
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| Chinese steel demand for machinery to rise: CMIF | ||
| The China Machinery Industry Federation (CMIF) predicts that the mechanical industry will consume more than 100m tonnes of steel this year. Thus, the industry’s estimated total output value will increase about 10-15% year-on-year, Steel Business Briefing learns from local media. Zhao Xinmin, a senior CMEIF official, says steel consumption by China’s machinery industry was estimated to reach 100m t in 2009, according to the production volume of the country’s major mechanical products. As the industry is expected to grow this year, she predicts steel consumption will also see a steady increase. SBB notes China’s machinery industry mainly includes the manufacturing of industrial equipment, agricultural machinery and transport machinery (both finished units and parts). Zhao says the machinery industry will generate new demand for both Chinese- and foreign-produced high value-added steel products. Many products, including high-strength, corrosion resistant and heat-resistant alloy steel are currently imported. According a report released by CMEIF in late January, China’s machinery industry saw increases in its output and sales of 16% in 2009. The fastest growth was seen in China’s agricultural machinery and auto industries, including both finished units and parts, last year. | ||
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| Beijing to allow mills to acquire "unlawful" capacities | ||
| China will permit major steel companies to take over unapproved capacities under its forthcoming guidelines on steel industry consolidation, Miao Xu, vice minister of Ministry of Industry and Information Technology (MIIT) told local media on 5 February. At the recent members’ conference of the China Iron & Steel Association (CISA), Miao said that China produced about 568m tonnes of crude steel in 2009, but only about half of that was produced by legally-approved steel companies that secured all the necessary approvals from all levels of government. The other half consisted of what Miao termed “unlawful” output. But these “unlawful” production capacities are not all targeted for closure. Instead, some are qualified or even have advanced facilities in terms of equipment size, environmental protection and energy efficiency. “In order to increase the amount of steel produced by major Chinese mills, these unlawful companies (with qualified facilities) will be allowed to be merged into major companies, though they are not entitled to acquire others,” Miao says. The merged companies can complete the legal procedures after the merger. A precedent for this situation exists in Shandong Iron & Steel Group’s consolidation with Rizhao Iron & Steel last September. In that case, Rizhao did not possess all the required approvals for its projects. As Steel Business Briefing has reported, China disclosed at the same conference its intentions to create 3-5 steel companies each with steel capacities of about 50m tonnes/year, via mergers and acquisitions. | ||
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| China’s passenger car sales hit record high in January | ||
| China’s passenger car sales totaled 1.22m units in January, up 5.1% month-on-month and 84.2% year-on-year, according to China's National Passenger Cars Association (NPCA). The January car sales reached a new record high since the car market started to rebound last February. The January sales figure indicates that China’s robust car market shows no sign of slowing down, despite some industry analysts’ belief the effect of the central government's auto industry stimulus policies will gradually fade this year Most car manufacturers are quite confident about their sales for this year. Major joint venture manufacturers, such as Shanghai General Motor, Guangqi Hongda and Dongfeng Hongda, have set their 2010 sales growth rate at 10-20%, while most Chinese auto makers have set their growth rates as high as 50%, Steel Business Briefing notes. According to the China Association of Automobile Manufacturers (CAAM), the country’s car sales, including the passenger and commercial cars, could reach over 15m units, up by 10% from 2009. Steel industry sources say the robust car market is welcome news for China’s cold rolled coil producers, especially for those major auto sheet producers such as Baosteel, Wuhan Iron & Steel and Anshan Iron & Steel. Sources say the strong demand for cold rolled auto sheet means the whole CRC market should see a knock-on effect in the increase in demand this year. | ||
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| China's Hegang predicts 60-80% decrease in '09 profit | ||
| Hebei Iron & Steel Co. (Hegang), the listed company of Hebei Iron & Steel Group, predicted a 60-80% year-on-year decrease in 2009’s net profits over the weekend. Profits last year were equivalent to about RMB 470-940m ($69-138m), compared with RMB 2.35bn ($344m) in 2008. The company explains the falls of profits is because the decreases in steel prices have surpassed those of raw materials. As Steel Business Briefing has reported, Hegang, previously named Tangshan Iron & Steel Co. (Tanggang), has resumed share-trading on Shenzhen Stock Exchange on 25 January, after merging with two other listed arms of its parent group. The other two companies, Handan Iron & Steel Co (Hangang) and Chengde Xinxing Vanadium & Titanium (Xinxing), were delisted after the consolidation. According to 2008’s crude output, Hegang ranked as the second largest listed steel company in China, behind Baosteel. Hegang’s 2008 output was about 19.39m tonnes after combining the 2008 output of Tanggang, Hangang and Xinxing, while Baosteel produced 23.12m t. Figures for 2009 were not available yet. Hegang’s parent company has replaced Baosteel Group to become the largest producer in 2009 by producing 40.24m t crude steel. Baosteel Group yielded 38.87m t. | ||
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| China's Jigang earned $31m via carbon credit sales in '09 | ||
| Jinan Iron & Steel (Jigang), located in eastern China’s Shandong province, is reported to have earned €23m ($31m) by selling certified carbon dioxide emissions reduction credits last year, Steel Business Briefing learns from local media. Jigang is China’s first steel mill registered to receive certified emissions reductions (CERs) under the Kyoto protocol’s Clean Development Mechanism (CDM) scheme, SBB notes. Jigang earns the credits with its combined cycle power plant (CCPP) which was commissioned in 2007. The company has been regularly examined by the United Nations’ CER team since March of that year. The CCPP can generate power using waste gas from blast furnaces and coke ovens, saving on thermal coal. Jigang invested RMB 2.6bn ($363) to construct the CCPP, which can reduce carbon dioxide emissions by 1.5m tonnes/year. SBB notes that more Chinese mills such as Baotou Iron & Steel, Handan Iron & Steel and Anyang Iron & Steel all have their power recycling equipment registered under the CDM scheme. | ||
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| Turkish flat steel imports dropped by one third in 2009 | |||||||||||||||||||||||||||||||||||||||||
Turkey imported 4,886,734 tonnes of flat rolled steel in 2009, 32.4% less than 2008’s 7,229,390 tonnes. Steel Business Briefing is informed by the Turkish Statistical Institute (TUIK) that December import volumes, on the other hand, increased not only month-on month, but also year-on-year. Russia was the biggest hot rolled flat steel supplier of Turkey in 2009, with 733,772t. Ukraine followed with 733,755t. Turkey imported a total of 3,418,925t of HR flats in 2009, 36% less than 2008’s 5,308,796t. Turkish cold rolled coil imports were 580,540t, 26% less than 2008’s 781,923t. Russia was again the biggest CRC supplier with 198,689t. Turkey imported 606918 tonnes of coated flats in 2009, which is 25% less then 2008’s 806,317 tonnes. Belgium was the biggest supplier with 76,259t. Narrow strip import volume was 280,351 tonnes in 2009, 16% less than 2008’s 332,355 tonnes. Turkish market players believe the decline in import volumes is because of the effects of the global financial crisis and high import duties. Turkish traders believe 2010 volumes may also be low because some new Turkish producers like Toscelik, Isdemir, MMK Atakas and Colakoglu will start or have started production of flats this year. | |||||||||||||||||||||||||||||||||||||||||
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| Italian auto sales rise stimulated by government incentives | ||
| In January sales of commercial vehicles in Italy rose by 21.8% to 14,737 units, Italian automotive manufacturers’ association Anfia confirmed in a press release. Despite the data, Anfia emphasised that the figures are not indicative of a recovery. “This result was reached only with the government stimulus: sales were boosted by orders registered before the ending of the incentives”, Anfia stressed. Anfia also said that sales appeared much higher in January 2010 due to the very weak comparable month one year earlier. January 2009 sales dropped by 40% compared with those in January 2008. “Stimulus packages do not provide healthy support in the longer term. But they at least help to boost consumption. The situation is alarming. If consumers do not start to buy again, there will be grave consequences for both the automotive sector and the steel industry”, a steel trader commented to Steel Business Briefing. According to UNRAE, Italy's Automobile Association, the situation could be worse by the end of the year. “If the government does not confirm incentives to boost commercial vehicle sales or if it does not include them in the fiscal aid programme known as “Tremonti – ter”, there will be dire consequences for the industry with sales dropping 6%,” Unrae Director, Gianni Filipponi said. | ||
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| UK scrap prices unchanged this month | |||||||||||||||||||||||||
| Scrap prices in the UK remain unchanged this month, local merchants, buyers and traders tell Steel Business Briefing. Corus has rolled over January’s purchasing prices, sources concur. As a result obsolete material is still pegged around £170-190/tonne delivered, while shredded material costs £180-190/t (€206-217/t) delivered depending on region, merchants and traders say. One mainland European mill, which buys rails for re-rolling, has also rolled over its prices. “We deal with [one big UK-based merchant] and they have been very bullish and unwilling to negotiate in recent months. But this month they allowed us to keep January’s prices,” one source with links to the mill says. “We thought it might have been an opportunity to drop prices,” one UK-based scrap buyer says, but strength in other markets, such as the US, helped merchants keep prices stable. “Buyers will struggle to pay higher scrap costs unless finished product prices increase,” he suggests. “Demand, which we thought was going to wane a little bit, does not seem to have done so. We might see the steady market roll over into March now," one merchant adds. There has been talk of Turkish scrap buyers re-entering the market, and this may bolster prices heading into next month, according to one merchant. “If the Turkish mills come back into the market it might liven things up a bit. In the UK it should cause a bit of pressure [on HMS1+2 and shredded] and prices may go up,” he says.
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| Swiss scrap processor Kaufmann renews shredder | ||
| Switzerland-based scrap merchant Karl Kaufmann AG has ordered a new shredder from Metso. The new unit will produce up to 90,000 tonnes/year of fragmentized scrap and will help increase Kaufmann's productivity, according to the equipment supplier. The shredder will replace one that has been in operation for 20 years and has an annual capacity of 60,000 t/y, Steel Business Briefing learns from Kaufmann’s managing director, Werner Nydegger. The company has an annual turnover of around 120,000 tonnes of scrap, he adds. Kaufmann is one of five scrap processing plants in Switzerland with a shredder. | ||
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| India’s growing steel consumption attracts Spanish exporters | ||
| India’s steel consumption is expected to grow by 12% in 2010 to 62.7m tonnes, an outlook that is appealing to Spanish mills hoping to increase their exports there. 2009 already saw India’s consumption levels rise to 55.9mt, according to Spanish steel exporters association Siderex quoting World Steel Association figures. “India is one of the few countries that saw its liquid steel output actually rise in 2009, seeing a 2.7% increase to 56.6mt, making it the fifth largest producer globally. And 2010 looks even better, with predictions that it will even surpass the US and Russia to become the world’s third largest producer,” Siderex explains to Steel Business Briefing with statistics obtained by Spanish customs. 2009 proved to be a strong year for Spanish steel exports, with shipments to India increasing by 190% to 177,000 t during the first ten months of last year, “This is expected to further increase in 2010, especially considering how high India’s consumption is in comparison to Spain’s. We have to keep exporting as domestic demand is just not enough to absorb our production rates,” says a Spanish producer. Siderex has planned a commercial visit to India this week with 9 of its members, which include Spanish steel producers, in order to further boost exports there. | ||
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| Prices must rise to restore ‘sensible’ margins: UK stockists | ||
| Steel prices need to rise as producers react to increasing input costs, according to Laurence McDougall, chairman of the North Eastern Association of Steel Stockholders (NEASS). If UK stockists are to survive and return to profitability they must not sell below replacement costs, he said to loud applause at the NEASS annual dinner attended by Steel Business Briefing on Friday (5 February). The current demand is what it is and stockholders need to realise this and restore “sensible margins” in their sales, he continued. Other stockists corroborated this view, suggesting demand remains very weak across many sectors, and will continue to do so, which means “discipline” is vital if cost increases are to be passed on. “Pernicious selling” will only serve to undermine prices and profitability in 2010, one trader said. The survival intact of so many stockholders throughout the protracted downturn is testimony to the resilience of the sector in the UK, McDougall added. The UK market for steel is about 10m tonnes/year, half imported and half produced domestically, he noted. Stockists handle 50% of the tonnage produced by domestic mills and nearly all the imported tonnage. NEASS raised £2,600 for the charity WaterAid at the dinner in Harrogate. | ||
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| ArcelorMittal Poland to continue investing in 2010 | ||
| ArcelorMittal Poland intends to continue investing in new technology in 2010, following the completion of a major five-year investment programme, the company’s chief executive Sanjay Samaddar told Polish industry journal WNP. The company plans to install a new pig iron desulphurisation unit at its largest plant in Dabrowa Gornicza, as well as an automatic quality control system for strip at its Krakow hot rolling mill, and a coke oven gas purification unit at its coke plant ZK Zdzieszowice. ArcelorMittal Poland completed the PLN 98m (€23.7m) modernisation of its cold rolling mill in Krakow in December, at which point Samaddar told Steel Business Briefing that an increase in the capacity of the hot strip mill on the same site would be considered when market conditions strengthened. “In 2009, as a result of market conditions we utilised an average of 55% of our production capacity,” Samaddar told WNP. “Nevertheless after a weak first half of the year, increased demand for steel allowed us to hike our production in the third quarter,” he continued. “We hope that the worst [of the economic crisis] is now behind us, but an economic revival is barely visible. Until then we are focusing on reducing our stocks… In our opinion, steel demand in 2010 will grow by some 10% in comparison to 2009,” he added. | ||
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| Mechel coking coal output falls in 2009 | ||
| Production of raw materials by Russia's mining and steel producer Mechel mostly fell in 2009, company figures show. It produced 10.2m tonnes of coking coal in 2009, compared with 15.1m t in 2008; however Q4 2009 output was 37% higher year-on-year. 2009 washed coking coal output was 7.4m t last year against 11m t in 2008. Again Q4 2009 output up 42% at 2.5m t, as compared to the last quarter of 2008. Iron ore concentrate was at 4.2m t in 2009, only slightly down fromm 4.7m t in 2008. In Q4, there was a 15% q-on-q drop in production to 1.04m t, figures obtained by Steel Business Briefing show. Annual coke production was 3.3m t in 2008 and unchanged in 2009. “In the second half of 2009 we boosted production in our mining segment, which suffered the hardest attack during the global recession,” Vladimir Polin, senior vice president of Mechel said. He added that 2010 will see production at Mechel's Russian and US mining facilities recover to pre-crisis levels. "The acquisition of the Bluestone coal assets will allow us to even exceed those figures,” Polin concluded. | ||
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| Ukraine's exports fell 16% last year | ||||||||||||||||||||||||||||||||||
Despite export tonnage falling 16% to 23.8m tonnes, Ukraine remained the world’s fourth largest steel exporter in 2009 behind Japan, the EU27 and Russia, according to data made available toSteel Business Briefing by the Iron & Steel Statistics Bureau. Full-year exports of steel mill products (semis, long & flat products and tubes) to the EU27 at 3.1mt fell 46%, and to non-EU Europe they dropped 37% to 2.6mt including a 32% fall to 2.3mt for Turkey. Exports to CIS nations at 3.5mt were down 21% including those to Russia down 25% to 1.8mt. Exports to Africa at 2.4mt fell 19% while those to the Middle East climbed 5% to 5.7mt. Exports to North America collapsed 87% to just 0.2mt while those to Asian markets climbed 85% to 5.4mt including 1.3mt to China, up from just a trace in 2008. | ||||||||||||||||||||||||||||||||||
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| ZapSib operates normally despite hot metal spillage | ||
| Evraz's West-Siberian steel works' (ZapSib) oxygen converter shop No.1 is working at normal capacity even though one of its converters has been idled following an incident, says Evraz in a statement sent to Steel Business Briefing. A hot metal spillage injured three workers yesterday (8 February) morning, the Russian company says. "All necessary safety measures are being implemented and an enquiry into the cause of the spillage is being held," it adds. The plant produces billets, slabs, rods, bars and sections and has an annual capacity of 8m tonnes crude steel. Meanwhile, the Sverdlovsk region attorney general has blamed company management for the 23 December 2009 explosion at the Estyuninskaya iron ore mine, which cost nine miners their lives. The mine is operated by VGOK, a subsidiary of Evraz. A case has now been initiated against VGOK for alleged breach of employment law and safety in the workplace law, the attorney general's office said. | ||
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| US court upholds 'zeroing' in Korean HDG case | ||
| The US Court of International Trade (CIT) has upheld a decision by the US Department of Commerce (DOC) which used zeroing in an administrative review. The DOC's use of zeroing in the 12th administrative review of the antidumping duty on corrosion-resistant carbon steel flat products from Korea was challenged by Korea's Dongbu Steel and Union Steel Manufacturing, according to court documents reviewed by Steel Business Briefing. The Korean producers wanted the CIT to remand the decision back to the DOC for recalculation of the duties without using "zeroing" - counting negative dumping margins as zero, thereby raising margin averages. America's use of zeroing has been challenged at the WTO several times. The WTO's Dispute Settlement Body has repeatedly ruled that Commerce's use of zeroing - in both original investigations and administrative reviews - is inconsistent with US obligations under the WTO antidumping agreement. Under a certain section of the Uruguay Round, however, the US agreed to discontinue the use of zeroing in original investigations but not in administrative reviews. Despite the WTO rulings, the US Court of Appeals and the CIT have consistently upheld the DOC's use of zeroing, both in original AD investigations and in administrative reviews, SBB understands, and this case is no different. The CIT is denying the Korean producers' request for remand and is upholding the DOC's decision. | ||
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| Pipe distributors wary as US market seems to improve | ||
| Some US pipe industry observers are pointing to price hikes and shriveling inventories as a sign of market recovery – as long as mills do not over-react. Pipe distributors anticipate a mid-2010 recovery for high-value OCTG as the North American rig count and scrap prices continue to rise. Standard pipe, hollow structural sections and mechanical tubing - despite a dismal outlook through 2010 for non-residential construction and heavy industry - have also seen steady price increases. The rising prices make adding capacity tempting, said one major distributor. For the market’s sake, however, he hopes mills keep capacity relatively subdued until demand backs up the scrap-based price increases. “The philosophy with some of the mills is that the market’s a feeding trough,” he said. “You just grab what you can get. A lot of the steel mills reduced what they were making (at the beginning of the downturn). When things started to come back, they zoomed up a bit.” Distributors are abandoning their traditional role as market buffers, a dealer of specialty oil-country tubulars tells Steel Business Briefing. Just-in-time inventory buys are becoming the norm, he said. “Today’s hotrolled coil price is where some pipe was selling nine months ago,” he said. “We think whatever purchases are being done are for very controlled inventory buying. Distributors are saying, ‘If I don’t buy today, it’s going to cost me another $50/short ton in two weeks. I’ve got a little better demand, so I only need to buy a little bit of inventory.’” | ||
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| Stainless distributors stuck between end-users, surcharges | ||||||||||||||||||||||||||||||||||||
Rising raw material costs are boosting the surcharges attached to US stainless orders, but a true base price increase is still elusive, according to distributors. “I keep looking at my inventories, thinking, ‘Do I need anything?’ And the answer I keep coming back to is, 'No, we’re plenty good,’” said one major distributor. Announced stainless surcharges for March are up significantly, with raw materials like scrap and nickel still displaying a good deal of volatility, sources report. That’s good news for the mills, which will be able to pass along the bulk of their increasing costs through surcharges. Slack demand, however, is squeezing distributors between their associated mills and end-users, Steel Business Briefing learns. “There are still some jitters out there,” one market observer said. “As much as we want to hope that things are getting better, maybe they just aren’t. Pricing is under attack, and it’s becoming increasingly hard to make money.” | ||||||||||||||||||||||||||||||||||||
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| US finalizes new dumping margin on Taiwanese stainless | ||
| The US Department of Commerce (DOC) has finalized a 4.3% antidumping margin on imports of stainless sheet and narrow strip in coils from Taiwan's Chia Far. The final margin of 4.3% for Chia Far was the same margin found in the preliminary results of the administrative review, Steel Business Briefing notes. The new margin applies to the one-year period ended June 30, 2008, and will also be used as the cash deposit rate for these imports going forward. The administrative review of imports from Yieh United Steel Corp and Ta Chen Stainless Pipe was rescinded by the DOC, as it was determined that the companies did not ship any of the subject merchandise during the period of review. However, imports from Yieh will still be subject to the dumping margin found in the previous administrative review (36.44%) and imports from Ta Chen and all other Taiwanese producers/exporters will be subject to the previous "all others" rate of 12.61%. | ||
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| UBS stockist survey: US scrap will keep going up in Q1 | ||
| The majority of US service center respondents polled in a quarterly UBS Investment Research survey expect scrap prices to rise in the current quarter. Some 84% of the stockist respondents predicted prices would rise and 14% predicted they would be flat, according to the survey, a copy of which was viewed by Steel Business Briefing. That’s a jump from only 41% who expected higher prices and 32% who expected flat scrap prices in the previous quarterly survey. “For February, we expect a lull, with different grades up and down on solid domestic buying but some weaker export activity,” according to the survey, which was released last week. | ||
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| US recycler looks to stainless for bright 2010 | ||
| Metals recycling firm Industrial Services of America is looking for higher margins in 2010 as stainless scrap remains tight and pricey. ISA, which deals in ferrous, non-ferrous and stainless scrap, spent 2009 expanding its stainless business footprint by doubling its primary recycling facility in Louisville, Kentucky, and acquiring stainless recycler Venture Metals, according to a company release. In its preliminary earnings outlook, ISA estimates it will make a 2009 year-end profit of between $1.32-1.37 per share on total revenues of about $181m. ISA’s 9-months profit was about $3m on sales of $143m, which amounts to about $1.01 per share, Steel Business Briefing notes. The release goes on to state that the company’s focus in 2010 will be on “higher margin segments of the metals recycling business,” particularly stainless steel. | ||
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| Weather snarls US transportation, shipping | ||
| Brutal winter weather has snarled transportation in the middle Atlantic region of the US, though production among domestic steelmakers appears to be relatively unaffected, Steel Business Briefing notes. Representatives from US Steel, AK Steel and Severstal said workers pulled extended shifts to keep production steady, though snow and ice made shipping finished product and obtaining raw materials difficult. Severstal’s Sparrow Point, Maryland facility received about 30 inches of snow. Railroad operator Norfolk Southern has declared force majeure, which may delay some shipments, according to Severstal. “We were able to sustain production,” said a Severstal representative. “Our biggest issue was the fact that, at least in Maryland, the roads were nearly impassable.” AK and USS also are dealing with minor shipping obstacles due to truck and rail delays, representatives said. A Nucor official said that company had some short-term disruptions in shipping. Specialty steelmaker Allegheny Technologies Inc was affected by regional power outages near Pittsburgh, which got up to 24 inches of heavy snow that downed trees and power lines, though there were no serious output interuptions. “Operations were a little challenging over the weekend due to sporadic power outages, but we were pleased our employees were able to get to work safely,” said an ATI representative. “We had no major issue.” A spokesman for Gerdau Ameristeel said its mills were not impacted by the storms. | ||
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| US manufacturers welcome export goal, call for policy change | ||
| In response to President Barack Obama's challenge to his country to increase exports in the next five years, Commerce Secretary Gary Locke announced a new National Export Initiative (NEI) to help the country meet that challenge. The NEI will provide more funding for export promotion and more coordination between government agencies, Steel Business Briefing understands. Although the National Association of Manufacturers (NAM) - which points out that manufacturers account for two-thirds of US exports of goods and services - welcomed the President's goal of doubling exports, it says reaching that goal will require much more than just export promotion. "The goal is equivalent to a 15% increase in exports every year for the next five years – one that can only be reached by major policy changes," said NAM. NAM is urging the government to move forward with bilateral trade agreements with Colombia, Korea, and Panama - "a move that would lead to thousands of new manufacturing jobs." NAM also points out that US export competitiveness depends on a dollar that is fairly valued. It says the US also needs to reduce the corporate income tax rate to match the average of other industrial countries. "America needs a broad array of trade initiatives and pro-growth tax policies to significantly boost manufactured exports and jobs," commented NAM. The association says it looks forward to working with the Obama administration and Congress to reach the President's goal. | ||
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| Mexico's 2009 longs & flats output down | ||
| Mexico’s steel output and consumption dropped during 2009 from 2008 in light of the global economic crisis, which negatively affected domestic demand. Domestic flats output came to 5.91m tonnes last year, down 9.9% from 2008, when production totaled 6.56m t, Steel Business Briefing learns from the Mexican steel group Canacero. Apparent flats consumption dropped 19.9% in 2009 y-o-y, from 9.19m t to 7.36m t. Meanwhile, longs output reached 6.26m in 2009, against 6.93m t in 2008. Longs apparent consumption came to 6.17m t last year, a 9.4% decrease in the same comparison. Flats exports totaled 846,487 t in 2009, against 452,607 t in 2008. Foreign sales of longs, however, fell 31.1% in the same comparison, to 902,479 t, SBB notes. | ||
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| Evraz NA gets new CEO as Declusin retires | ||
| Evraz Inc NA hired Mike Rehwinkel to be its new CEO, following the retirement of current chief Jim Declusin, effective February 10. Rehwinkel comes to Evraz NA from wood products company Georgia-Pacific, where he was president, overseeing a manufacturing and sales group of as many as 13,500 at 60 mills. Declusin served as CEO for Evraz NA and its predecessor Oregon Steel Mills for six years. His 40-year career in steel also includes stints at Kaiser Steel Corp and California Steel Industries Inc, Steel Business Briefing notes. Rehwinkel says he will continue efforts to integrate the various businesses of Evraz NA, a producer of more than 5m short tons per year of plate, rebar, rod, bar, rail, tubular products and round billets. | ||
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| CSN's galv prices again above competitors' | ||
| After some shortages of hot-dipped galvanized coils in the Brazilian market between 2009 and 2010, prices again differ depending on the supplier. CSN's prices used to be higher than those of Usiminas and ArcelorMittal but after the 10% increase made by mills in September-October last year, the three companies were offering HDG coils at very similar prices. Nevertheless, Steel Business Briefing learns from market sources that, while the Usiminas HDG prices reach an average R$2,650/tonne (US$1,409/t) ex-works, excluding local taxes and including extras, CSN's official prices reach some R$2,810/t on the same basis, or 6% more. | ||
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| Brazil's Ananda Metais commissions new processing center | ||
| Brazilian processor Ananda Metais has commissioned a new unit in Cuiabá, in the midwestern state of Mato Grosso, aimed at meeting growing and potential demand from the construction sector, Steel Business Briefing learns from the company. Ananda's new unit currently can process 3,600 tonnes per year of galvanized and galvalume steel and also fabricates structural sections and galvanized roof tile. The company says that besides improved orders from the local construction industry, it is also ready to meet demand from the World Cup, which will be hosted by Brazil in 2014. The source says that market prices are slightly increasing, since Brazil’s CSN has lifted its galvalume prices by 10% this month, to around R$2,420/tonne (US$1,285/t) – excluding taxes, SBB notes. | ||
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| CSN's shipments decline in January and February | ||
| Brazil's CSN continues to operate at its nominal capacity, but shipments have been decreasing since December 2009, Steel Business Briefing learns from unionists. They say CSN's sales to both the export and domestic markets, as well as intracompany shipments, should reach just 340,000 tonnes in February, given the lower number of days. In January shipments totalled 405,258 t/month, the union states, down from an average of 430,000-450,000 t/m in Q4 of 2009. CSN did not confirm these numbers, though. | ||
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| Peruvian rebar prices up on the back of construction boom | ||
| Peruvian rebar prices increased at the beginning of this year on the back of improved demand, mainly from the construction sector. Steel Business Briefing learns from domestic distributors that prices for 10mm rebar are currently around 2,884 nuevos soles/tonne (US$988/t) delivered. Meanwhile, 12mm rebar prices are being negotiated at roughly 2,512 soles/t (US$861/t) delivered. As previously reported, 10mm rebar was being sold at around 2,490-2,520 soles/t in late-December. SBB notes that the Peruvian construction chamber forecasts double-digit growth in construction activity overall for 2010, helping to stimulate domestic longs demand. | ||
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| Southeastern Brazil's alloy, SBQ longs prices steady | ||
| Brazilian alloy rod prices remain steady in the country's southeastern state of São Paulo, Steel Business Briefing learns from major buyers in the region. According to the sources, they have been purchasing the product directly from the mills at around US$4,000/tonne delivered (US$2,132/t). Meanwhile, SBQ bar prices are also reporting stability and are currently being quoted by domestic steelmakers at roughly R$5,000/t delivered (US$2,666/t). Sources also say that imported products are constantly arriving in the Brazilian market with competitive prices, but they didn't disclose specific values. SBB notes that special steel producer Gerdau Aços Especiais has told customers that no price adjustments are scheduled for the coming weeks. "Price moves, however, can be done at any time," adds a source. | ||
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| Argentina's construction sector flat, but up from a year ago | ||
| Argentina’s construction industry reported a rebound during January when compared to January 2009, Steel Business Briefing learns. According to the local index published by the industry group Construya, Argentinean construction activity increased 11.85% in January in a year-to-year comparison. Compared to the previous month, however, the sector remained flat. According to domestic sources, the construction industry might show solid recovery signs through 2010, and it might contribute to increased domestic steel demand, SBB notes. Learn more about the Argentinean steel industry at SBB's Steel Focus Argentina on March 19 in Buenos Aires. | ||
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| Brazil's manganese ore exports back to normal level | ||
| Brazilian manganese ore exports seem to be getting back on track, showing a consistent recovery in January with figures close to 2008 levels, Steel Business Briefing learns from sources at the country’s customs agency. During the first month of this year, domestic producers shipped 199m tonnes of manganese ore, against just 11m t during January 2009. However, this January’s figure is down slightly from January 2008, when exports reached 202m t. SBB notes that January manganese ore export revenues came to US$24.4m, against US$3.18m and US$49.8m in the same month of 2009 and 2008, respectively. | ||
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| Egypt’s Hadisolb saw sales decline in 2009 | ||
| Egyptian Iron & Steel (Hadisolb) sold a total of 553,000 tonnes of long and flat products in 2009. More than 50% of this was flat products, and 28% was sections, Steel Business Briefing learns from a company executive. But the company did not disclose the exact figures. Hadisolb produces slab, HRC, CRC, angles, channels, sections, rebar and billet, and has a total crude steel production capacity of 1.2m tonnes/year. The company’s sales declined by 35% for flats and 30% for longs in 2009, compared to 2008. Crude steel production declined by 34%. 87.5% of the company’s sales were in the Egyptian domestic market, while 12.5% was exported, according to the information confirmed by Hadisolb. The company also has not announced its financial results yet but Egyptian market players expect a decline because of the falls in production and sales. | ||
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| Bar/section prices look set to increase again in Iran | ||
| Trading in domestically-produced long products in Iran is seeing very strong levels of activity, Steel Business Briefing learns from traders. About 120,000 tonnes of long products were traded in one day (7 February) on the Iran Mercantile Exchange, and prices saw a sharp increase. Only Esfahan Steel, the government-owned longs producer, appears to be active in the market: it seems that private producers are still waiting for better prices, SBB is told. Esfahan Steel’s A3 rebar of different sizes traded at IRR 6,360,000-6,560,000/tonne ($636-656/t) for 30 days delivery ex-works. In comparison, in the last week of January A3 rebar of 14-28mm diameter was traded for IRR 5,900,000/t ($590/t) ex-works for immediate delivery. Meanwhile, IPEs of 140-180mm traded for IRR 7,150,000/t ($715/t), about a $40/t increase within three weeks. These prices exclude the 3% VAT payable by Iranian domestic buyers. The market is stable and demand is clearly much higher than supply, a trader told SBB. | ||
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| Iranian mill starting H-beam production | ||
| Esfahan Steel Co is now beginning the production of wide-flange beams in size of 180mm, Steel Business Briefing learns from the Iranian Mines & Mining Industries Development & Renovation Organization (Imidro). Esfahan is the country’s largest long steel producer. It already started production at a No.3 blast furnace to increase production to 3.4m tonnes/year from 2.2m t/y. According to Imidro, the first H-beam product is trial, but the company is ready to produce 100,000 tonnes/year to supply domestic demand and also to export. Up to now Iran has imported H-beams from Poland, South Korea, Italy and Germany. | ||
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| Iran was world's second biggest DRI producer last year | |||||||||||||||||||||||||||
Iran was the world’s second largest producer of direct reduced iron after India in 2009, Steel Business Briefing is informed by the Iranian state mines and metals holding company Imidro. The first DRI producer was India with 21mt. Imidro reported that Iran produced 8.2mt of DRI in 2009. According to World Steel Association figures, this was up by almost 11% from the 7.4mt that Iran produced in 2008. Most of Iran’s DRI came from Mobarakeh Steel Co (the large strip producer) and Khozestan Steel Co (the semis producer in southern Iran). Iranian steelworks projects have been mainly based on natural gas DRI, but because of the government’s new economic plan to increase natural gas prices for both domestic and industrial consumers, it is probable that this policy will switch towards more coal-based ironmaking in future, a steel specialist tells SBB. | |||||||||||||||||||||||||||
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| LME billet prices soften as dollar firms | ||
| The price of billet on the London Metal Exchange has softened after hitting a high in the middle of last week, Steel Business Briefing learns from LME data. Prices peaked last Wednesday at $460-470/tonne (€336-343/t) for the three-month Mediterranean contract and the same level for cash. They then dropped to $415-425/t and $415-420/t respectively, by the end of trading last week. This price peak “was totally out of line with the rest of the week” and it only happened because there was a large closing order at the end of the day, a trader tells SBB. “The market ran out of steam around ten days ago as the US dollar firmed,” he adds; this has seen a decline in the LME price since last month. The price is likely to stay around $410/t for the balance of February – it may go back up to $450/t, but it wouldn’t go further as it would then be too high, he says. The LME traded 2,974 lots (193,310 t) of the Mediterranean contract in the month of January 2010. January’s average prices were $409.75-413.13/t for cash and $429.43-438.80 for three-months. | ||
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| Oil/gas drilling increasing, but still historically low | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The number of oil/gas drilling rigs operating globally last month was the lowest January figure for five years, and 7% below the count of January 2009. However the world rig count continues the month-by-month increase which started in the middle of 2009 after eight months of declining numbers following the onset of the credit crunch, figures from industry source Baker Hughes indicate. As the table (below) shows, activity in the all important US sector was very subdued last month compared to a year earlier. Elsewhere in North America, Canadian rig numbers were up both on a m-o-m and y-o-y basis. Activity in this country tends to peak in the first quarter of each year as firm ground conditions favour drilling operations and associated transportation. Crude oil prices continue to be shy of prolonged exposure above the psychologically important $80/barrel mark, but they are about 80% higher than at this time last year ($40/bbl). Natural gas prices have staged a more modest 20% improvement on 12 months ago, Steel Business Briefing notes.
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| Xstrata sees robust ferro-chrome outlook on stainless growth | ||
| The outlook for ferro-chrome remains robust in the medium to long term, with stainless steel production expected to recover and grow from current levels, according to mining group Xstrata. In its 2009 results report sent to Steel Business Briefing Xstrata said the recovery in stainless steel will occur on the back of major global economic stimulus plans, including significant investment in infrastructure. China is also expected to continue to drive the strong demand for FeCr. Xstrata Alloys suspended up to 80% of its FeCr production from late 2008 due to weak demand. “Chrome steadily returned to the market in 2009, albeit at lower prices than had been achieved in 2008,” it said. However, by the end of the year production returned to 85% at its Xstrata-Merafe Chrome venture. The company said the short term outlook for vanadium also remains positive as “steel mills are anticipated to replenish depleted inventories in early 2010.” Vanadium demand and prices are expected to increase in the medium to long term in line with economic recovery. For the year ended December 2009, Xstrata Alloys produced 786,000 tonnes of FeCr and 2.2m kilograms of FeV. Average prices for FeCr in 2009 were $0.85/lb and $25/kg for FeV, it said. | ||
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| Coking coal market looks strong in 2010, Xstrata says |
| Prices for internationally traded coking coal remained resilient during 2009 despite the downturn, and are expected to stay robust in 2010, coal producer Xstrata said in a report sent to Steel Business Briefing yesterday. As the global economic slowdown and steel production and consumption continue to recover to pre-financial crisis levels, the coking coal market should benefit. China will remain the driver of demand, while new demand is also expected from India and “an anticipated recovery in the rest of the world is expected to result in significant growth in global demand,” Xstrata said. However, coking coal markets are expected to remain tight in 2010 due to the scarcity of resources and potential infrastructure limitations, it said. Average export prices FOB for Xstrata’s Australian coking coal in 2009 were $145/tonne (€105/t), down from $232.50/t in 2008 and for semi-soft coking coal it was $122.50/t in 2009 down from $157.50 in 2008. Japan remains Xstrata’s major market for semi-soft coking coal, while hard coking coal is sold to a diverse range of markets, with significant new customers coming from China. |
