Kobe Steel to lift wire rod prices for home, export sales
Thursday, 10 February 2011
Kobe Steel has decided to lift its prices of high-carbon wire rods for export by $200/tonne for April-June shipments to offset higher raw material costs. It says its earlier increases of $250-300/t tabled last April-September have not kept pace with rising input costs and better international prices.
At home, Kobe has also decided to lift rod prices by ¥15,000/t ($183/t) for March contracts/April rolls – again to transfer higher raw materials prices within it present fiscal year that ends 31 March.
“But we haven’t decided on any additional rise for a further cost increase (expected) from April,” a Kobe spokesman tells Steel Business Briefing. During last April-September the company had attempted to add ¥40,000/t to its prices of ordinary and high-carbon wire rods, but SBB understands this rise was not accepted by customers.
Wire rods imported from China were much cheaper and this hindered the price rise attempts of the Japanese mills, a trader explains. Wire rods imported from China in 2010 reached 190,332 tonnes, a huge 41.3% jump year-on-year, according to data prepared by the Japan Iron & Steel Federation.
Kobe says that demand for wire rods has recovered and that production at its Kakogawa and Kobe works in western Japan is almost at full capacity. Japan produced total 654,706 t of ordinary steel rods last calendar year, up 5.5% year-on-year. High carbon rods output reached 652,816 t, up by 18.1% year-on-year, SBB learns from Ministry of Economy, Trade & Industry data.
Chinese interest rate hike has little effect on steel market
Thursday, 10 February 2011
Beijing decided to end the Chinese New Year holiday (2-8 February) by hiking interest rates by 0.25% on Tuesday, the second hike in rates since December.
The move takes China’s one-year lending rate to 6.06% and its one-year deposit rate to 3%, just two percentage points below China’s consumer price index, a move that analysts note indicates Beijing is still encouraging consumption. The increase takes effect from 9 February.
The rise is having no noticeable effect on the steel market with the widely traded October rebar contract on the Shanghai Futures Exchange (SHFE) hitting a new record high of RMB 5,136/tonne ($779/t) before closing at RMB 5,124/t unchanged from the last day of trading before the holiday.
Hot rolled coil prices also were unfazed by the rate hike as traders raised their prices on the first day of business after the holiday citing higher mill ex-works prices and a lack of deliveries in February (See related article).
Analysts commenting on Beijing’s interest rate increase say that they see the increase more as a signal that economic tightening is to continue this year as opposed to a concrete effort to clamp down on inflation right after the Chinese New Year holiday, Steel Business Briefing notes.
Chinese media is also reporting that as much as RMB 1.1bn may have been issued in new loans in January and that this could lead to a hike in the deposit reserve ratio later this month.
Brazilian pig iron producer reaches JV with UK's Mir Steel
Thursday, 10 February 2011
Brazil's top pig iron producer Cosipar, through its subsidiary Usipar, has formed a joint venture with UK hotrolled coil producer Mir Steel UK - controlled by the main shareholder of Russia's Mechel, Igor Zyuzin - for the construction of a US$5bn steelmaking complex in Barcarena city, Pará state.
Steel Business Briefing learns from Cosipar’s top executive Leonardo Abranches that the JV comprises a 2.5m tonnes/year slab mill - to be commissioned by 2015 - a coke plant and a 15m t/y port terminal in Barcarena city. The foreign investors will control 75% of the JV, while the Brazilian company will hold the remaining 25%.
As anticipated by SBB, Usipar will ship some 200,000 t of pig iron to Mir Steel, while the North American coal producer Bluestone, also owned by Zyuzin, will supply coking coal to the Brazilian facilities.
According to local media reports, the parties will create a holding company for the JV to be named RAM – Russian and Monteiro (a reference to the Cosipar group's family ownership).
SBB notes that Cosipar presented details of the project to the Pará state government yesterday. The group was unavailable for additional comment by press time, however.
North European coil market ‘quieter after January hype’
Thursday, 10 February 2011
Northwest European coil producers have returned to the market with firm offer prices in the higher range hinted at in the past week or so. At the same time, the “hype” and “panic” surrounding coil availability has subsided and the market has “quietened down” – a positive development, some sources tell Steel Business Briefing.
“The big hype we had in January is being followed by a period of thinking and discussion,” a German distributor says. “Our stock business was hectic in January but is now normalising: we are selling lower quantities,” he adds. “The market will not go through the roof,” he believes. Numerous customers have purchased sufficient material to cover their needs until the end of the second quarter, meaning they have no need to buy at current offer levels, a Benelux trader says.
“Nobody is buying for stock at these levels, but traders are purchasing tonnages for which they have already secured sales,” another Benelux trader comments.
Traders are also buying from third countries solely for back-to-back business. “Traders are not taking positions, because they do not trust the market. They are afraid of losing money,” a German distributor says. Imported cold rolled coil is said to have been booked in the past ten days at €700/tonne effective delivered, although a German source could not specify its origin.
Some sources say CRC is in tight supply domestically, while others attest to its availability.
Current domestic hot rolled coil offers for April production are €640-680/t ($876-931/t) base ex-works, while CRC is offered at €730-750/t. However, distributors are sceptical whether buyers will accept. A German distributor expects mills to “correct” offers before the end of February, although a producer source expects the latest increases to be implemented.
Export prices of CIS billet are looking set to make a U-turn or at least stabilise at or above the $620/tonne fob Black Sea level, in the next ten days or so, market sources tell Steel Business Briefing.
Squeezed by high domestic prices for scrap and other raw materials, and with slowly but surely improving domestic demand, the CIS producers are unlikely to offer their billet below the cost level. Based on the information on scrap prices at the mills, Ukrainian producers' costs "must be close to $600/t ex-works and $620/t in port," a producing source says.
"The slide in billet prices was given a major impetus by traders, who were panic-selling in an attempt to clear their positions," a trader explains. As prices went up very fast since the beginning of the year, some traders were able to sell at low levels and still make a small profit at $590-600/t fob Black Sea. "There were no mill offers whilst this "sale" was going on – and are unlikely to be any, as tonnages are still quite limited, and costs are high," he explains.
As soon as traders' stocks are empty, which is imminent, they will go back to buying from the mills, and "no one will sell cheap", another source agrees. As Turkish producers' scrap stocks are reported to be low, and no current US scrap offers in the market at the moment, it looks like costs will continue to rule the market, preventing it from collapsing, he adds.
Nucor seeks smaller plate hike in wake of competitor's move
Thursday, 10 February 2011
Following a $100/short ton hike by one of its biggest competitors, Nucor told customers yesterday it also would raise plate prices - but by $80/s.t.
SSAB Americas earlier this week announced its transaction price increase for all non-contract plate and hotrolled products greater than 72 inches wide, effective with new and existing orders to ship the week of February 27. Nucor said in a letter to customers yesterday its increase is effective with discrete and coiled plate orders acknowledged to ship the week ending February 27, as well.
"Wow. That means they see a weakness in the market that SSAB does not - or they have a leg up on scrap, as they own one of the largest traders of that market," one eastern market source toldSteel Business Briefing after learning of Nucor's move. "SSAB produces some other really niche items; they mix their production, unlike Nucor that caters to the vanilla plate market and some energy."
The hikes, if fully absorbed by the market, would bring spot prices for A36 plate material to about $980-1,000/s.t, sources said.
A southern trader said Nucor's move "does not make sense," as most buyers have allegiances to one mill or another and are unlikely to be lured away by the smaller increase.
"The way I see it, people are aligned with 'their mill' right now. The price is the price," he said. "If you are big enough, you have more than one mill, but if you go outside of your 'deal,' you go to the back of the line."
Rio digs deep to maintain Marandoo iron ore capacity
Thursday, 10 February 2011
Rio Tinto is set to spend US$933m on extending the life of its 15m tonnes/year capacity Marandoo iron ore mine in Western Australia by a further 16 years.
To do this, the miner will have to drill for ore beneath the water table in the Pilbara, putting into place a vast and costly water management program. Water taken out of the pits will be transported to the Tom Price township and also re-injected into the Southern Fortescue borefield to the north of the mine, Rio said.
Steel Business Briefing understands that much of Rio’s future iron ore expansion program will involve drilling beneath the water table, which it is already doing at its Hope Downs joint venture with Hancock Prospecting. The iron ore quality will not deteriorate but dewatering the ore means processing procedures will be more time consuming. One iron ore analyst in Perth said it was a case of “moving more material to end up with the same amount of ore – it’s not cheap.”
A Rio spokesman explained that the Marandoo deposits sitting above the water table were due to deplete by 2013, and that new production will maintain the mine’s 15m t/y capacity. He said it would take approximately 18 months to dewater the pits before mining can begin.
The analyst said dewatering the ore would “add an incremental cost, but not a huge amount in the scheme of things.” “It does produce a wet ore which is clumpy – it’s much easier to dry and separate dry iron ore,” he said.
Iron ore exports from Port Hedland to China drop 22% m-o-m
Thursday, 10 February 2011
January exports of iron ore from Port Hedland in Western Australia fell by 11.7% on the previous month, with exports to China plunging by almost 3m tonnes on December.
Iron ore exports from the port, which is used primarily by miners BHP Billiton, Fortescue Metals Group and Atlas Iron, totalled 15.3m t in January, down from 17.32m t in December. Exports to China fell almost 22% to 9.97m t, from 12.76m t in December.
Steel Business Briefing cautions that Port Hedland Port Authority data can be incorrect and retrospectively adjusted – therefore the month-on-month export drop to China may not have been as dramatic as it seems. Operations at the port were disrupted for a short period in January as a precaution ahead of cyclones, but the stoppage was not long enough to explain such a large m-o-m export drop.
The main user of the port, BHPB, lifted its iron ore output in Western Australia by around 6% quarter-on-quarter in October-December and has been producing at capacity. Fortescue’s port facility has been used by other producers, such as Atlas, if there is available capacity. Atlas noted this month that capacity is being ramped up at the new Utah Point wharf at Port Hedland.
Shipments to Korea fell slightly to 1.6m t in January from 1.7m t the previous month, according to the PHPA data released on 8 February. Exports to Japan jumped to 2.8m t from 1.6m t in December, while Taiwan received 356,702 t of ore from the Pilbara, compared with 549,191 t the previous month.
Brazil's CSN increases stake in Australia's Riversdale
Thursday, 10 February 2011
Following the acquisitions of common and preferred shares in its compatriot Usiminas, Brazilian flats and longs producer CSN has increased its stake in Australian coking coal producer Riversdale Mining Ltd, Steel Business Briefing learns from the company.
According to the mill, it received approval from Australian regulators to acquire 4.78m shares, paying a total price of A$76.3m (US$77.3m). Thus, CSN now indirectly holds 17.6% of Riversdale capital stock, up from the previous 16.1%.
As SBB previously reported, CSN - in two separate transactions - recently acquired a 5.03% stake in the common shares and a 4.99% stake in the preferred shares of Usiminas. The company said in an investor release it currently does not plan to purchase more than 10% of each class of stock in Usiminas. However, it is studying its strategies related to the company, which may include additional stock acquisitions above the amount mentioned. CSN stated that this could mean a change in Usiminas ownership and/or administrative structure.
At this time, CSN hasn't revealed further details about its investment in Riversdale, including its strategic plans.
SBB previously reported the board of Riversdale had recommended shareholders accept a US$3.9bn takeover offer by Australian mining company Rio Tinto.
Chinese domestic HRC prices rise further after holidays
Thursday, 10 February 2011
Despite Beijing’s decision to raise interest rates for the second time since December in a bid to rein in inflationary pressure, Chinese domestic hot rolled coil prices have soared further after the Chinese New Year holiday (2-8 February).
Although most traders will not return to the market until next week when the Chinese New Year season ends on 17 February, a few traders resuming business have increased their offer prices for HRC in response to mills’ higher list prices.
This was also prompted by a lack of deliveries this month and was also a response to speculation over rising inflationary pressure and raw material costs.
Steel Business Briefing notes that two major HRC producers, Shagang and Liuzhou Iron & Steel, have recently raised their February HRC list prices by RMB 350/tonne ($53/t) and RMB 80/t respectively, taking their Q235 5.5mm HRC list price to RMB 5,000/t ($759/t) and RMB 5,520/t with 17% VAT respectively. Meanwhile, due to maintenance work at Shagang the east China mill will only deliver 28% of its contracted volume to trading agents this month.
Although market transactions remain sparse because of few buyers in the market, traders are optimistic about prices in February, a source from Guangdong’s Lecong steel market tells SBB.
Currently, Q235 5.5 mm HRC is offered at RMB 4,850/t with 17% VAT in Shanghai and RMB 4,850-4,870/t with VAT in Lecong, up both by RMB 50/t after the holidays.
Thailand to issue preliminary AD duties on HRC within days
Thursday, 10 February 2011
Thailand’s ministry of commerce has completed its preliminary determination of dumping of hot rolled coil, pickled coil and hot rolled plate from China and Malaysia. “The anti-dumping committee has determined the preliminary dumping rates in their meeting on Friday (4 February) but the rates are confidential,” a spokesperson with the ministry tells Steel Business Briefing.
The ministry will be making an official announcement on the preliminary anti-dumping duties and results of its investigations, which covered all producing mills in these two countries, within one or two weeks, SBB is told. The provisional duties will be in place until the final determination is completed.
As SBB reported, Thai steel producers Sahaviriya Steel Industries, G Steel, G J Steel and Sahaviriya Plate Mill filed the anti-dumping petition in June last year alleging that Chinese hot rolled flat product imports were dumped with an apparent 30.91% margin of the cif price, and for Malaysian imports 31.06%.
The HRC market in Thailand has been rising on rumours that the preliminary AD duties on the imports have been set at 30% for China and 40% for Malaysia. Stockists are now quoting base grade HRC at THB 25,000/tonne ($813/t) compared to THB 24,000/t before the Lunar New Year.
Flat steel stocks up slightly over holidays in Shanghai
Thursday, 10 February 2011
The slowdown in transactions during the Chinese New Year holidays (2-8 February) has led market inventories of hot rolled and cold rolled coil in Shanghai to grow slightly since the beginning of this month.
This marks the first time since early December that HRC and CRC market stocks have increased. However, industry sources tell Steel Business Briefing that the upward trend in inventories will be just temporary, given the shutdowns for maintenance work planned by mills and the improved export market in February.
HRC stocks in Shanghai have increased slightly from 1.73m tonnes at the end of January to over 1.74m t now, while the CRC inventory has risen by less than 10,000 t to over 500,000 t.
One market source says the HRC and CRC market stocks should resume their downward decline soon as demand picks up after the holidays. Several major HRC producers have largely cut February delivery volumes to their trading agents due both to maintenance and improved export demand.
SBB notes that the February delivery of HRC from Shagang will account only 28% of the mill's contracted volume, only 25% of Beitai Iron & Steel's, 30% of Benxi Iron & Steel's total, 35% of Anshan Iron & Steel's and 65% of Shougang's.
The country’s biggest steel producer Pakistan Steel increased its prices for hot rolled coil, CRC, HDG, slab and chequered material with effect from 9 February. Steel Business Briefing learns from the company that the prices of some unsorted products have also been changed. This is the second change this month; Pakistan Steel raised its prices on 4 February, as reported.
Pakistan Steel has now added PKR 500-2,000/t ($6-23/t) to its flat steel products (see tables).
The country’s steel market players say demand is better for flat products compared to the previous weeks. The price increase was expected because the global prices keep increasing and the company’s prices are below the international levels.
Shanghai-listed Ningxia Hengli Steel Wire Rope Co., a major steel rope and pre-stressed strand maker in north-western China’s Ningxia autonomous region, reported a financial loss in 2010. The processor blamed the deficit on an oversupplied domestic market and increasing raw material cost pressure.
According to Hengli’s annual report, the company incurred a loss of RMB 54m ($8m), compared with 2009’s RMB 5m net profit.
The company says the wire rod processing industry is continuing capacity expansions over the last few years, which has resulted in excessive completion in the market and sluggish price for steel rope. In addition, increases in raw material prices including wire rod further squeezed out Hengli’s profit margins, the company claims.
A company source tells Steel Business Briefing that rising raw material prices add additional pressure on the company’s cash flow, which limited the company’s actual output to much lower than its capacity. In 2010, Hengli’s output was just around 160-170,000 tonnes, while its capacity is around 300,000 tonnes/year, according to another company source.
As SBB has reported, the company has proposed conducting a private placement to replenish its working capital, but the project is still underway.
The company says overcapacity of the industry remains a big challenge to its performance this year, but increasing development in China’s western regions is predicted to boost demand for products such as pre-stressed strand, which is used in infrastructure construction, and help the company return profitability in 2011. Hengli aims to produce 224,000 t of finished products this year.
Indian billet producers have raised prices further to keep pace with firming raw materials and steel product prices. “We have to keep moving with the market trends as steel prices have surged in the past few weeks. Also, secondary producers have increased billet prices and we have to maintain a marginal difference,” an official from the state-owned Steel Authority of India Ltd (Sail) tells Steel Business Briefing.
Another factor affecting billet prices is the high input costs, he adds. Sail increased billet prices by Rs 2,000/tonne ($44/t) on 1 February.
Though Sail does not reveal current billet prices, another state-owned steel producer – Rashtriya Ispat Nigam – is selling 125x125mm billets for Rs 35,200/t ($774/t) including 10.3% excise duty but excluding VAT at Visakhapatnam in southern India's Andhra Pradesh state. This represents a Rs 1,300/t rise from 1 February.
Meanwhile, secondary producers have increased billet prices too by around Rs 500-1,000/t blaming high raw material costs. But they say that prices might decline slightly or stabilize at the present levels due to weakening demand.
“Many re-rollers have already stocked up anticipating further price hikes and are waiting for a price correction before making further purchases,” a secondary billet producer in Chennai tells SBB. Nationwide, secondary mills are selling 100x100mm billets at Rs 29,500/t-31,500/t, ex-works, excluding excise duty and tax.
“For the past two months, there has been a battle going on among steel producers to increase prices. However, this has to stop as buyers have started halting purchases at the current rates,” a secondary producer based in Mumbai warns SBB.
China's rebar futures price up despite interest rate rise
Thursday, 10 February 2011
A 0.25% increase in China’s benchmark interest rates from 9 February did not depress prices on the Shanghai Futures Exchange (SHFE), the first trading day back from the Chinese New Year Holiday. Instead, the most active October rebar contract price reached new high at RMB 5,150/tonne ($781/t) in morning trading, and closed at RMB 5,124/t.
The increase in the rebar contract reflects market watchers' anticipation of the interest rate rise and an industry consensus of an optimistic steel market outlook for the spring when demand will generally recover from the winter off-season.
Steel Business Briefing notes that the futures prices picked up despite few transactions being concluded in the physical market on Wednesday, since most traders will resume business over the weekend or next week. For the same reason, no clear indications of new offers were available, though one or two traders in Shanghai have been heard to hike their prices for 16-25mm HRB335 rebar by some RMB 100/t ($15/t) to RMB 4,800/t ($728/t), with 17% VAT. Lowest prices before the Chinese New Year holiday were just around RMB 4,640/t.
Traders were forced to lift their prices in line with additional increases tabled by major producers before the holiday. Eastern China’s leading mill, Shagang, raised its prices by RMB 150/t for HRB335 rebar in late January and added another RMB 50/t for early February delivery, which took the latest ex-works price to RMB 5,000/t ($758/t), with VAT.
Pakistan rebar market is unaffected by new billet prices
Thursday, 10 February 2011
Pakistan rebar market sources tell Steel Business Briefing that the new billet prices announced by Pakistan Steel have had no effect on the real market prices, because company does not supply any billet to the market. Current rebar prices are reported at around PKR 69,000-70,000/tonne ($811-823/t).
A company spokesperson tells SBB that, because the market prefers to use rerollable scrap from shipbreaking, billet market competition is strong, and not many produce good quality billet at the moment. The reason for announcing new prices is told to be keeping the prices in line, and no need to increase their prices too much, once they decide to produce billet.
Rebar demand is reported to be slow in the market, and also energy shortages affect the production as well as demand negatively, SBB was told.
Pakistan Steel increased its billet prices by $6-12/t to $632-690/t last weekend, as SBB reported.
China's die & mould industry to see steel demand rise
Thursday, 10 February 2011
The Chinese die and mould manufacturing industry is expected to see higher steel demand in 2011, Steel Business Briefing learns. This is in line with an estimated 18% year-on-year increase in the industry’s production value, according to the China International Mould & Plastic Hardware Industry Suppliers Association (CIPHISA).
“The die and mould sector will continue to support the upgrades in high-grade steel, as further development of the industry is subject to [improvements in] the special steel industry,” Luo Baihui, a senior official with CIPHISA told a press conference.
He predicted high-grade die steel demand will increase in the future and lead to a rise in the imports of special steel that China is unable to produce. Luo did not give an exact quantity of the steel the die and mould industry will require this year, however.
According to data from the China Die and Mould Industry Association, annual steel demand from the industry exceeded 1m tonnes in 2010, when the production value of the industry reached RMB 100bn ($15.2bn). But the final data has not been published, SBB notes.
The China Special Steel Enterprise Association said its 32 members' finished die steel output rose by 46% y-o-y during January-November 2010. The association would not reveal the tonnage, however.
Luo also predicted the production value of the die and mould industry could reach RMB 250bn by the end of China’s twelfth five year plan (2011-2015), as the industry is expected to benefit from the country’s industrial development.
Changcheng's forging project to enter hot testing in May
Thursday, 10 February 2011
Changcheng Special Steel (Changcheng), a subsidiary of Panzhihua Iron & Steel Group (Pangang), says a major part of its post-earthquake reconstruction project - a 90,000 tonnes/year die and tool steel forging operation - is scheduled to enter hot testing in May.
With an investment of RMB 1.32bn ($200m), construction of the new forging plant was started in June 2010 in Jiangyou city in southwestern China’s Sichuan province. Changcheng was affected by a massive earthquake on 12 May 2008 that killed 80,000 people,Steel Business Briefing notes.
Changcheng says the plant’s forging press is supplied by Czech manufacturer ZDAS. The new plant will replace the company’s outdated forging facilities which were partly damaged in the earthquake. The old facilities will be eventually phased out.
The new plant’s output will be high value-added large die and tool forgings, according to the company. Changcheng also plans a second phase for the plant to boost its final capacity to 120,000 t/y but a construction schedule has not been released.
Changcheng’s post-earthquake reconstruction project is estimated to cost RMB 6.68bn, with 700,000 t/y of crude steel capacity and 790,000 t/y of finished steel capacity, according to a Pangang release from May 2010.
SBB notes the new capacity is similar to the company’s capacity before the earthquake. But Changcheng will upgrade its iron-making, special steel, steel-rolling and forging lines during the reconstruction, in order to optimize its production structure.
The highest bid in the auction for Japanese H2 grade scrap for export next month, held by the Kanto Tetsugen dealers on 10 February, dipped by ¥130/tonne ($1.6/t) from the January price – a decline that was smaller than some pundits had predicted.
The highest bid was ¥38,550/t ($470/t) fas, equivalent to ¥39,550/t ($482/t) fob, and was awarded 6,000 tonnes. The three subsequent bids – awarded 5,000 t each – were ¥37,820/t fas, ¥37,750/t fas and ¥37,710/t fas.
“The winning prices are too high for current export price levels and the winners may already have contracts with high prices,” a Tokyo-based scrap trader tells Steel Business Briefing. “But frankly, I have no idea who would pay these high prices.” He notes that the most recent export contract for Japanese H2 material was concluded at ¥38,000/t ($463/t) fob, equivalent to ¥37,000/t fas.
Another Tokyo scrap trader says that enquiries from overseas mills have been quiet, suggesting buyers are merely monitoring price movements because international scrap prices have dropped.
“We have heard that mini mills in the Kanto (Tokyo-Yokohama) area are receiving scrap smoothly and they too will simply monitor price trends,” he says. Factors exist that might produce a rise in scrap prices – such as increasing scrap usage among blast furnace makers and the low levels of scrap generation across Japan generally – and thus the mini mills are not rushing to decrease prices yet even though deliveries are smooth.
Tokyo Steel Manufacturing has kept its scrap buying prices unchanged since 21 January. The company’s H2 buying price at its Utsunomiya works in the northern Kanto is ¥38,000/t.
Scrap imports via Zhangjiagang port up 70% y-o-y in Jan
Thursday, 10 February 2011
A tight supply and higher domestic steel scrap prices helped push scrap imports through eastern China’s Zhangjiagang port up by 70% year-on-year in January, Steel Business Briefing learns from the Zhangjiagang Bureau of Commodity Inspection & Quarantine (BCIQ). International scrap prices are also dropping, sources say, and this may encourage further imports this month.
According to Zhangjiagang BCIQ statistics, some 148,000 tonnes of carbon steel scrap was channelled through Zhangjiagang port last month, compared with 87,000 t in January 2010. The majority of the scrap is being delivered to Shagang’s Zhangjiagang facility, a BCIQ official tells SBB.
“The surge in imports was due to a short supply in the domestic market and strengthening domestic scrap prices,” the official explains. He adds that while international scrap prices are still higher than Chinese domestic levels, global prices are weakening due to lack of demand from China and Turkey, and this may cause Chinese scrap imports to rise over the next two months.
As SBB reported, offers for US-origin 80:20 HMS 1&2 to China were about $60/tonne higher than China's domestic prices for the same grade in mid-January. However, import prices fell by $10-20/t at the end of last month while Chinese domestic prices remained strong.
Meanwhile, market prices for Chinese scrap increased by about RMB 400/tonne ($61/t) in January and are expected to see further increases this month, which may narrow the gap between domestic and international price levels. “If domestic prices keep rising, we’ll consider turning to imports to supplement our scrap purchasing,” an eastern Chinese mill source says.
Chinese scrap prices stable during holidays, may rise soon
Thursday, 10 February 2011
There were few transactions in China’s domestic scrap market during the Chinese New Year holiday (2-8 February) and prices held steady. However, prices may resume their pre-New Year rise in the next few days, Steel Business Briefing learns from market sources.
Traders will return to the market as steel prices are expected increase and mills will need to re-stock, thus pushing up scrap prices, SBB is told.
In eastern China’s Jiangsu province, market prices for heavy melting scrap (>6mm) are holding at around RMB 3,700/tonne ($561/t) with 17% VAT. Major scrap consumers including Shagang kept their scrap buying prices unchanged during the holiday. But sources expect scrap prices to rise in the next few days as mills return to normal operations.
Meanwhile, in northern China’s Hebei province, market prices for the same grade are still around RMB 3,700-3,750/t ($561-569/t) with VAT, almost the same as they were before the break.
“Since most traders are off during the holiday, the scrap market saw a lull in transactions and deliveries,” an eastern mill source says.
Sources from northern mills are reporting the same situation in their region, adding that prices may remain at current levels until the middle of this month when scrap traders resume business.
Market insiders have predicted prices for heavy melting scrap (>6mm) could climb to around RMB 3,900/t ($592/t) by mid-February since most mills will need to replenish their stock.
Government and private steel sector representatives of Japan and Indonesia will meet in Jakarta Thursday for their inaugural ‘Steel Dialogue’ meeting, though the agenda for the initial summit suggests no contentious issues are outstanding.
The Indonesian side consisting of about 50 government and steelmaker representatives is being led by industry ministry director Putu Suryawirawan while his opposite at the summit is Masaki Koito, the head of the iron and steel division at Japan’s Ministry of Economy, Trade and Industry (Meti).
Koito is leading a 20-strong Japanese delegation that will include the Southeast Asian export managers of the five major integrated mills. Though Indonesian officials were unavailable to outline their hopes for the dialogue, a Meti official said the Japanese planned to raise the issue of Jakarta’s policy on steel imports.
The Indonesian Iron & Steel Industry Association is implementing local industry standards for steel products – including hot rolled coil, hot-dip galvanized and galvalume – that are seen as an import barrier.
“These rules don’t affect Japanese exports much,” a Meti official tellsSteel Business Briefing. “Indonesia seems to be targeting China but nevertheless, Japan basically opposes these actions and we aim to get information about the measure’s current status.”
The Japanese mills are also keen to hear more about plans formalised by Posco and PT Krakatau Steel last September to build a 6m tonnes/year integrated flat steel project at Cilegon-Banten, west Java, as SBB reported.
Japan holds regular bilateral steel ‘dialogues’ with China, Korea, Taiwan, the EU and Thailand, SBB notes.
A week after Nippon Steel and Sumitomo Metal Industries (SMI) announced plans to merge, the place of the third member of their three-way alliance – Kobe Steel – remains unclear.
Addressing a seminar Wednesday arranged by the Osaka-based business lobby, the Kansai Economic Federation, SMI chairman Hiroshi Shimozuma implied that Kobe Steel might have a role were it to albeit massively restructure its business and hive off its non-steel activities including its aluminium and construction machinery arms.
“If Kobe split off its steel sector we can consider integrating but with Kobe as it is now, that would be impossible,” said Shimozuma, whom is also the economic federation’s chairman. “The relationship with Kobe will be as it is.” A Nippon Steel spokesman was equally insistent that “there is no consideration of Kobe joining.”
Kobe and Nippon Steel signed a collaboration pact in December 2001, and eleven months later Kobe joined the Nippon Steel-SMI alliance of cross-shareholdings and other cooperation pledges.
But the former two – despite each owning 3.5% of Kobe – have treated the smaller mill as a very distant cousin, Steel Business Briefing notes. Japanese sources say that Kobe Steel CEO Hiroshi Sato was furious to learn only two hours before last Thursday’s press conference that Nippon Steel and SMI were announcing merger plans. A Kobe spokesman would only say to SBB that Sato was told “on the day.”
Nippon Steel says its relationships with other alliance partners – such as Posco and ArcelorMittal – “basically won’t be changed.”
Turkish rebar exports declined in January compared to December, but tonnages were better than in the first month of 2010. In January export tonnages totalled 500,000 tonnes, compared with 645,000 tonnes in December and 314,000t in January last year.
Veysel Yayan, general secretary of the Turkish iron and steel producers association, tells Steel Business Briefing that Turkish rebar export markets are now going through a period of instability, and this is likely to affect Turkish exports in the short term. However, an interruption of production in those countries might benefit Turkish suppliers.
He also adds that demand from Far Eastern markets is strong, as well as South America and North America, whereas the European market is still uncertain.
Yayan comments that, following the construction season starting in more parts of the region, rebar consumption is expected to grow, therefore Turkish exports may increase, SBB was told.
Italian longs producer, Lucchini, plans to increase its production of crude steel to 1.8-1.9 million tonnes in 2011 at its Piombino plant,Steel Business Briefing learns from a source close to the company.
“The steel market has improved but also the company can now afford to pay its suppliers, particularly for raw materials, and so produce more. This is due to the recent agreement between Mordashov and the creditor banks”, the source says to SBB.
“These figures are the target, but of course they could change after the third quarter”, the source adds.
Two days ago, Lucchini’s board confirmed and signed the agreement between Mordashov and the banks. Meanwhile, the banks are waiting to formalise the agreement before the deal is finally approved by the creditor committee (comitato credito).
“All the banks have agreed to the deal, so this is just a formal process. The banks will become the real owners of Lucchini. So the real question is whether they will try to push ahead with the sell-off of Ascometal or even the entire group, or whether they will wait for the market to improve to make more money”, the sources concludes.
As previously reported by SBB, under the terms of the new agreement, the banks will reschedule the debt to make it long term and will provide a “bridging” facility of €50m, which will be used to support the company’s operations. This facility will be guaranteed by the expected proceeds from the sale of Ascometal’s hydroelectric power plants.
Turkish tubes and pipes exports slowed in January as some buyer countries were out of the market because of the new year holidays,Steel Business Briefing learns from market sources.
According to data released by the Istanbul Mineral & Metals Exporters’ Association (IMMIB), Turkey exported 140,536 tonnes of tubular products in January, which is 37% higher than the same month of last year but 19% less than the 173,476 tonnes exported in December 2010.
In January, Iraq was the biggest buyer from Turkey with 19,260 tonnes because of the ongoing reconstructions in the country. UK and Jordan followed with 17,814 tonnes and 17,557 tonnes respectively, SBB notes from IMMIB’s data.
Italian domestic scrap prices are on hold, due to the uncertain international situation, market participants tell Steel Business Briefing.
“Domestic dealers are on hold with their quotations because are looking at the international market, which at the moment is unclear. Turkish buyers are not buying because they want to drive down prices... Due to the riots in Egypt, the Turkish mills are not selling rebar in one of their biggest market, and of course if they having problems selling finished products, they are reducing their purchases of new raw materials”, a trader says to SBB.
“There is a battle between Turkish and US dealers, at the moment there are 16 cargos of scrap waiting outside the port of Istanbul. These cargos where suppose to go to Ezz, but due to the riots, they did not enter the port. Some Turkish mills were interested but they are still negotiating about the prices with the buyers," another trader tells SBB.
The Italian mills are looking not only at movements on the Turkish market but also at what the German and Northern European dealers are doing. “German scrap dealers have reduced their prices, but not to the level the mills requested, so now they are selling less and are trying to hold firmly to the last quotations”, an international trader notes.
The current Italian prices are firm at €300-310/tonne ($409-423/t) for E3 scrap (heavy melting), €330-350/t for E40 (shredded) and €360-380/t for E8, all delivered to the mill, SBB understands.
Production of crude steel in Germany rose by 4.4% to 3.7m tonnes in January 2011 versus January 2010, demonstrating a year-on-year increase for the 16th month in succession, Steel Business Briefing learns from German steel association Wirtschaftsvereinigung Stahl. Although the extent of the y-o-y increases is lessening.
January 2011’s production was also up by 15% month-on-month against December 2010’s 3.2mt.
In full year 2010, when crude steel production rose by 34% y-o-y to 43.8mt, the increase was most pronounced for oxygen converter steel, which went up by 44% to 30.6mt. Production of electric arc furnace steel grew by 17% to 13.2mt.
Correspondingly, production of flat hot rolled products rose by 32% to 24.9mt in 2010 compared to 2009, and of long hot rolled products by 17% to 11.9mt. Total hot rolled products output was 36.8mt, up 27%.
Sustainability of increases depends on utilisation: BE Group
Thursday, 10 February 2011
The sustainability of price increases being pushed through by producers depends on demand and output levels, according to Sweden-based distributor BE Group.
Mills have increased prices on the back of “substantially” higher raw material costs and BE Group raised prices earlier this month as a result. “We launched new prices (at the) beginning of February with a span of increases depending on product,” Roger Johansson, president of the company, says without elaborating.
In Finland the company has upped capacity in response to higher demand at the beginning of 2011 after sales and prices in the region fell in Q4.
In Sweden Q4 tonnage increased 17% on the preceding three months, while sales prices remained largely unchanged. The group as a whole did experience a seasonal weakening of demand towards the end of Q4, which was exacerbated by uncertainty over prices going forward.
The central and eastern European markets continued to improve, with prices up 2% on Q3, but credit risks among customers limited growth.
“The decline in December, in combination with an overall downward price trend and unfavourable sales mix, affected the margins negatively and resulted in a weak ending of the year,” the company says in its results sent to Steel Business Briefing. The company lost SEK8 million in the last three months of 2010, which saw its operating result rise to SEK98m ($15m) compared with a loss of SEK266m in 2009.
Sweden-based BE Group is acquiring metal processor RTS, which supplies the heavy engineering industry, company president Roger Johansson tells Steel Business Briefing.
RTS produces frames for the yellow goods sector and has cutting, pressing, blasting and welding capacity. BE Group failed to comment on RTS’ theoretical capacity prior to press deadline. It has annual sales of around SEK90 million (€10m) and employs 35 people at operations in Eskilstuna, Sweden, and Rapla, Estonia. It also has a smaller-scale trading arm in Romania.
“This acquisition marks an additional step in BE Group’s strategy to advance its business along the value chain. RTS further complements our production capacity, opening up a new category of assignments in the heavy engineering segment,” Johansson tells SBB.
The acquisition should be completed this month, Johansson confirms to SBB.
Polish distributor warns of rising costs for construction
Thursday, 10 February 2011
Rising steel prices are reported to be threatening the profitability of Poland’s construction sector, which accounts for over 30% of the country’s annual steel consumption. Statistics show that a large proportion of bankruptcies in Poland are experienced by construction firms, chief executive of Polish steel distributor Stalprofil, Jerzy Bernhard, told Polish industry journal WNP.
He said there will certainly be enough steel to cover the needs of the construction sector in Poland during 2011, as steel mills are still not utilising around 20% of their capacity. However, rising steel prices could squeeze the already low profitability of this important end-use sector.
Bernhard explained the increase in steel prices by the high cost of scrap metal and the floods in Australia. “Small mills that produce on the basis of scrap are increasing their prices,” he observed. “Larger producers are making use of this situation, also expecting higher prices for their products,” he added. “Added to this is the rising price of coke that is used in the steel industry, caused in part by the floods in Australia,” he said.
Poland’s construction sector, which together with steel fabrication activity accounts for 46% of the country’s steel consumption, is likely to grow by only 1% in 2010, as previously reported by Steel Business Briefing.
Addressing EU overcapacity ‘will hit commodity grades first’
Thursday, 10 February 2011
The necessary reduction of steelmaking overcapacity in the European Union will primarily hit producers of commodity grades, believes Wolfgang Eder, president of EU steelmakers’ federation Eurofer and chief executive of Austrian steelmaker Voestalpine.
He includes among “commodity grades” long products such as rebar and also standard strip mill products, even in processed form such as galvanised coil. “There is a lot of pressure from eastern neighbours, namely Russia, Ukraine and Turkey, and producers within the EU will not be competitive in the long run,” he tells Steel Business Briefing.
There is less danger for higher value products, which may require certain know-how with which producers further east may take longer to catch up, he adds.
Of the roughly 220m tonnes/year of steelmaking capacity in the EU, some 15% is surplus, according to Eurofer’s estimates, and it is 10-15% of the lower grade products that will disappear, Eder claims.
As reported by SBB, steel consumption in the EU in times of a normal economy is seen at 170m-180m t/y. The 20m-30m t/y of overcapacity “will not disappear at once, but we can come close in a time span of ten years,” Eder suggests.
Although he remains sceptical whether reductions will come about quickly enough. “We have known for 15 years that we have overcapacity and little has happened,” he comments.
Tajik and Chinese firms team up to build longs micro-mill
Thursday, 10 February 2011
Faroz, a company based in Tajikistan’s capital Dushanbe, has entered into a partnership with Chinese company Anshan Jingang Automation to build a long products micro-mill in Tursunzoda, western Tajikistan. Construction of the plant is expected to begin in early spring this year, Steel Business Briefing learns from Faroz.
Named Tajik-Chinese Steelworks, the plant will produce rebar, rounds, angles and channels, with a capacity of 120,000-200,000 tonnes/year of finished products. The steelworks will comprise a meltshop, equipped with two 25-tonne electric arc furnaces, and a rolling shop. All the equipment will be supplied by the Chinese partner, Faroz says.
The company does not specify when it expects to commission the plant, but says it will commence construction work at the beginning of March. It plans to sell the plant’s output locally.
“Tajikistan currently imports all the products we plan to produce, but imported volumes are not sufficient to cover the existing demand. The estimated deficit totals 200,000 t/y,” a Faroz representative tells SBB.
US import duties on hotrolled sheet and plate from Brazil's Usiminas will not change for the 2009 calendar year after the withdrawal of the request for a review, Steel Business Briefing has learned.
The US Department of Commerce (DOC) decided to rescind an annual administrative review of the countervailing duties on these products after US producer Nucor withdrew its review request, according to an announcement in the US Federal Register.
Therefore, the CVD found in the prior administrative review will be maintained for 2009. However, the final duty has not yet been set by the DOC for the 2008 calendar year. In October, a preliminary margin of 0.02% de minimis was set. In the 2007 review, the final CVD was found to be 9.67%, SBB notes.
ArcelorMittal's North American flats segment saw shipments increase in the final quarter of 2010, Steel Business Briefing notes.
The NA unit shipped nearly 3.9m tonnes in Q4 2010, up from roughly 3.3m t in the same quarter of 2009. Q3 2010 NA shipments were almost 3.7m t, the company says in a release.
ArcelorMittal's overall flat carbon Americas shipments totaled 5.4m t in Q4 2010, versus 4.8m t in Q4 2009. The Americas unit, which also includes South America, had overall shipments of nearly 5m t in Q3 2010.
At least two US wire rod producers will keep their pricing flat in March, Steel Business Briefing learns from the mills.
A letter to customers from Gerdau Ameristeel said wire rod products from its Beaumont, Texas, and Jacksonville, Florida, mills will continue at their current pricing next month. Keystone Steel & Wire also sent customers a letter advising them its February pricing would remain the same through the month of March, SBB notes.
Mesh quality wire rod is currently going for about $900-$960/short ton, fob US midwest mill.
Last week, a key scrap benchmark price used by a number of mills to set raw materials surcharges declined by $15/long ton. Producers of other long products such as beams and rebar are expected to keep March prices flat as well, as previously reported by SBB.
NA helps ArcelorMittal longs division to Q4 y-o-y increase
Thursday, 10 February 2011
ArcelorMittal's North American longs segment saw shipments rise year-on-year in the final quarter of 2010, Steel Business Briefingnotes.
The NA unit shipped nearly 1.1m tonnes in Q4 2010, up from roughly 1m t in the same quarter of 2009. Q3 2010 NA shipments were a little more than 1.1m t, the company says in a release.
ArcelorMittal's overall long carbon America and Europe segment's shipments totaled almost 5.7mt in Q4 2010, versus 5.2m t in Q4 2009. The unit, which also includes South America, had overall shipments of about 5.8m t in Q3 2010.
Carpenter Technology Corp is adding a columbium element to its surcharge beginning with March shipments.
The surcharge will be based on the prior month's mean value, with a base price of $8/pound, Steel Business Briefing understands.
According to a company spokesman, columbium is used primarily in Carpenter's higher-end nickel and specialty alloys, as well as some advanced grades of stainless steel.
US miner Alpha expects record met coal shipments in 2011
Thursday, 10 February 2011
US miner Alpha Natural Resources expects to ship a record 13m-14.5m short tons of metallurgical coal this year.
The projection came as the Virginia-based company reported fourth quarter net income of $10.8m, down from $17.9m in Q4 2009, Steel Business Briefing observes from a company earnings release. Alpha's Q4 revenue totaled $993m, versus $893m in Q4 2009. For 2010, net income was $95.5m, up from $58m the year before.
Q4 met coal shipments were 3m s.t, compared to 2.5m s.t in the year-ago quarter. For full-year 2010, shipments were 11.9m s.t, up from 8.1m s.t in 2009.
Alpha says it is well-positioned to capture the growing seaborne met coal market, as over 90% of 2012 shipments are open to market pricing. Expected 2011 eastern met coal shipments are 68% committed and priced at an average per ton realization of $142.23. The company expects to benefit as Asian economies grow and Australian production is hampered by recent flooding.
"Producers in the United States should benefit as the US produces far more metallurgical coal than the domestic steel industry consumes, and the eastern US is one of the few production regions that has excess support capacity," it says. "US metallurgical coal exports exceeded 50m s.t in 2010 and are likely to increase again in 2011."
Alpha recently announced it will acquire Massey Energy, creating the second-largest US coal company with about 1.7bn s.t of met coal reserves and an expected 24m-26m s.t in shipments on a combined pro forma basis, SBB notes.
Sims sees US$49.9m H1 profit, seasonal dip in scrap intake
Thursday, 10 February 2011
Sims Metal Management said its North American metals unit "continued to encounter margin pressures" during the two quarters ended December 31, Steel Business Briefing notes from a company statement.
The company said its revenue for the period was A$3.9bn (US$3.95bn), with net profit of A$49.3m (US$49.9m) and scrap intake and shipments of 6.6m tonnes and 6.5m t, respectively.
The company will formally release its financial results for its most recent half-year period later this month. Scrap intake in the last quarter was down 7%, Sims said, due to winter weather conditions in the Northern Hemisphere.
Mexico's 2010 steel output increased year-on-year, as anticipated, since 2009 figures were negatively impacted by the global economic crisis.
The growth was mainly related to flats production, which saw a 22.4% increase y-o-y, moving from 5.93m tonnes in 2009 to 7.26m t in 2010 (see table), Steel Business Briefing learns from the Mexican iron and steel group, Canacero.
Meanwhile, domestic longs mills produced 6.53m t last year - just a slight hike over 2009, when output came to 6.46m t.
"The Mexican construction industry, one of the most steel-consuming sectors, reported depressed conditions through 2010, negatively affecting longs production," a distributor says.
According to Canacero, apparent steel consumption of flats reached 9.24m t last year, against 7.38m t in 2009, while longs consumption remained stable at 6.42m t. The group notes, however, that the consumption figures – mostly for flats – were strongly impacted by high imports levels (see related article).
The Mexican market saw a large increase in steel imports in 2010.Steel Business Briefing learns from the domestic iron and steel group, Canacero, the country imported around 2.9m t of flats last year, a 26.6% year-on-year increase (see table). In the same comparison, longs imports climbed 36.9% - from 818,351 t in 2009 to roughly 1.12m t in 2010.
Market players say Chinese exports, in particular, have negatively impacted the Mexican industry's competitiveness. A Canacero source says Mexican steelmakers are urging government measures to support domestic competitiveness and help curtail imports, including antidumping investigations of several products, as well as the introduction of labor, tax and energy reforms.
Meanwhile, Mexican steel exports also increased in 2010, due to a slight rebound seen in several trade partner countries such as the US. Last year's flats exports were up 9.9% over 2009, totaling 930,764 t, while longs exports increased 35.2% in the same comparison, to 1.22m t.
SBB notes that, according to Canacero's figures, Mexico exported more longs than it imported in 2010.
Brazilian rebar prices set to rise 8%, sources say
Thursday, 10 February 2011
Brazilian distributors expect domestic rebar prices to increase shortly by 8%, although major longs producer Gerdau has yet to make an official announcement, Steel Business Briefing is told. Meanwhile, merchant bar and structural sections prices remain stable.
According to sources, domestic mills might start to hike prices, as international values have already surpassed Brazilian levels. Last year, with the import boom in the domestic market, Brazilian steelmakers reduced prices by as much as 25% in an attempt to maintain market share.
Moreover, the February price movement is being driven by continued demand for rebar. "The construction industry remains strong in Brazil," one source said.
Accordingly, in light of the expected 8% hike, domestic rebar prices may reach around R$2,025-2,160/tonne (US$1,219-1,301/t) delivered in February - up from R$1,875-2,000/t (US$1,129-1,204/t) del the previous month. "And prices may rise further in a couple months as mills try to recoup last August prices of around R$2,450/t (US$1,475/t) del," a source said.
Also, SBB is told merchant bar prices remain stable at R$2,300-2,315/t (US$1,385-1,394) del this month, while structural sections prices have been flat at R$2,570-3,008/t (US$1,548-1,812) del, depending on the grade.
As had been expected, Argentinean longs producers have not made any attempts to implement price hikes this month, keeping in line with the current quiet domestic market. There also has been no indication as to whether prices will increase in March, when demand typically picks up.
While Argentina's government has forced the controversial rollback of a recent flats price increase by Ternium, longs prices - specifically rebar - remain at the same levels seen three months ago, around US$950-1,200/tonne delivered, depending on the grade.
"There's not a huge amount of transactions during January, and not a lot expected during February either," a local longs trader tellsSteel Business Briefing. "It's also not in local producer Acindar's interest to boost prices, seeing as it is still currently preparing AD measures against cheaper Turkish imports."
Iron ore prices to continue rising, EBX's Batista says
Thursday, 10 February 2011
Iron ore prices are expected to continue rising going forward, as expensive mining projects come online and global demand grows, EBX group president Eike Batista said during a conference call monitored by Steel Business Briefing.
"Iron ore won't be sold at US$60/tonne. We see iron ore prices being easily traded at US$100/t in the long term," the executive said. "Currently, more profitable projects are being developed, but to advance with the other half, considered essential, iron ore prices may have to grow. If not, these latter projects won't be commissioned."
According to Roger Downey, president of MMX - the miner controlled by holding company EBX - MMX has never been in a better position, generating cash flow that will be used to finance its own projects.
SBB notes that the mining company expects to be producing 25.3m t/year of iron ore by 2015 at its operations in Serra Azul, Minas Gerais state.
Brazil's overall steel output might increase 26.5% by 2014, while domestic consumption could climb 43.5% in the same period, according to a study conducted by the country's development bank, BNDES.
Steel Business Briefing learns from the study that Brazilian steel production could reach 43m tonnes in 2014, up from 34m t in 2010, mainly driven by the start up of new local projects. In the same comparison, domestic consumption is predicted to rise from 23m t to 33m t.
The study also observes that during the next five years the country could see additional demand of around 8m t from Petrobras' pre-salt project, which should consume 2m t of steel. Additionally, the World Cup in 2014 and Olympic Games in 2016 might consume 4.5m t and 1.3m t, respectively.
Moreover, BNDES expects the steel sector to spend US$27.7bn in the next three years on modernization, expansion and new projects. This is more than the sector invested in 2000-2009, when the amount reached US$20.3bn, SBB notes.
West Africa focused iron ore explorer Sundance Resources expects the costs of developing its Mbalam iron ore project in Cameroon to be higher than originally planned, Steel Business Briefing learns from the company.
The project was originally expected to cost $3.4bn, but costs are now hovering at over $4bn owing to excess railway and crushing facilities needing to be built.
Sundance signed an agreement with leading Chinese infrastructure builders, China Rail and China Harbour last year, for scope and costing of a 490km railway linking two mines in the Mbalam area to the port on the Cameroon coast. Now another 60km of railway line and a crushing and sorting facility also needs to be built to access the Nabeda mine, part of the Mbalam project, Sundance MD Giulio Casello said in a presentation this week.
Casello said 2011 will be “a year of transformation for Sundance” in that it expects to complete and announce results from Mbalam’s definitive feasibility study by the end of Q1 2011. It will also begin construction of the railway in Q4 this year, which is due to be completed in Q1 2014 along with full construction of the mine. The first ore to be shipped from Mbalam is scheduled for Q2 2014 and the mine will have output of 35m tonnes/year.
Zambian steelmaker to develop two new iron ore mines
Thursday, 10 February 2011
Zambia-based steel and development company Universal Mining & Chemical Industries Ltd. (UMCIL) is developing two iron ore mines. Technical director Julius Kaoma tells Steel Business Briefing: “The larger deposit is around 250m tonnes, at 57% Fe; the smaller mine is around 10m t at 65% Fe.”
UMCIL expects to begin production at the smaller mine in mid-2012 and the larger one in 2013. Kaoma adds: “The smaller mine will produce around 200,000 tonnes/year and the larger about 1m t/y.”
The company intends to use all the ore for its own steel plant, making it fully-integrated and will, in time be looking to expand the steelworks. It hopes to produce as much as 200,000 t/y.
Currently it is using around 4,000 t of scrap per month, but is looking to eventually move over entirely to the use of iron ore to produce sponge iron in its rotary kiln.
According to company information, UMCIL produces round bars, deformed bars, flats, angles, channels, strips, wires and sheets. The current imported iron and steel consumption in Zambia is at around 50,000- 70,000 t/y. Most of this is used in building and construction, manufacturing, engineering and mining.
Ezz Steel says its plants are operating without any damage
Thursday, 10 February 2011
Egypt’s biggest steel producer Ezz Steel said yesterday that its plants are operating “and have not suffered any physical damage” in the country’s recent political disturbances. One of its corporate offices was looted and damaged, along with other buildings in the same district of Cairo.
“The plants are not currently operating at full capacity due to the logistical impact of the government imposed curfew and disruption of communications,” it tells Steel Business Briefing.
“Ahmed Ezz, Ezz Steel’s chairman and major shareholder, has been directed by the Egyptian authorities to remain in Egypt. This measure, which is strictly personal… does not affect the operation of the company,” it said.
Ezz also rebuffed allegations of being involved in a market monopoly. “Any allegation of monopoly is strongly denied. Ezz Steel is not a monopoly but… operates in a free market and competes fairly with other Egyptian steel producers and foreign importers.”
The Egyptian Competition Authority found that there had been no abuse of a dominant position by Ezz Steel, nor any breach by the company of the competition law in January 2009, Ezz Steel pointed out.
Ezz Steel’s plants in Alexandria, Sadat City, 10th of Ramadan City and Suez have a total capacity of 5.8m tonnes/year of finished steel products and produced 3.3mt of long products and 1mt flat products in 2009. Long steel production reached 2,553,000 tonnes during the first nine months of 2010 and flats production was 751,000 tonnes. Ezz has not yet reported full-year 2010 production.
ArcelorMittal continues discussions on Iraq joint venture
Thursday, 10 February 2011
ArcelorMittal is continuing discussions on establishing a joint venture to build a 250,000 tonnes/year rebar plant in Sulaimaniyah in northern Iraq, the global steelmaker’s chief financial officer Aditya Mittal said this week.
ArcelorMittal has changed its guidance on the forecast completion date for the project from 2012 to "to be determined" because it has not yet concluded the joint venture agreements.
“The reason we changed from 2012 to ‘to be determined’ is because by now we had expected to conclude our joint venture arrangements with our partner, and we have not yet done so,” Mittal explained at the company’s annual results meeting in Luxembourg.
“We are continuing our discussions with our JV partner in Iraq, and as we conclude them we can provide a more definite date. It may come back to 2012,” he added at the meeting attended by Steel Business Briefing.
As reported by SBB, ArcelorMittal said in March 2010 that it had signed a memorandum of understanding to establish a joint venture with Turkish trading company Dayen to build a mini-mill in Sulaimaniyah with an initial capacity of 250,000 t/y of rebar, potentially increasing to 500,000 t/y at a later stage.
It said the rebar would be produced from locally sourced scrap and sold in the local market. It estimated the investment cost at $100m-130m, which would be shared by ArcelorMittal and Dayen.
