| Vale 'playing hardball' to boost contract iron ore prices | ||
| Brazilian miner Vale has indicated that it is seeking a significant increase in contract prices for iron ore this year, and affirmed its “more flexible” policy on prices in a conference call monitored by Steel Business Briefing last week. The company’s executive director for ferrous minerals, José Carlos Martins, said it wants its contract prices to move closer to spot values, to narrow the gap between benchmark and spot prices. The mining company dismissed the possibility of eliminating the current benchmark system, but believes that with a more flexible pricing system it can better meet Chinese companies’ demand regarding prices and payments. Vale’s change of stance is an admission that the days of the fixed annual benchmark fob price are gone, according to analysts at Macquarie. This moves the Brazilian miner closer to BHP Billiton which is trying to shift more of its business on to spot pricing. “The liquidity in the Chinese spot market has changed the iron ore game for Vale: it now considers this the market reference price and any contracts must pander to that point,” the analysts add. “Vale will play hardball in the 2010 negotiations, and will accept nothing too far from the prevailing spot.”
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| CIS billet exports quiet, as exchange rates shift balance | ||||||||||||||||||||||||
US dollar denominated prices of commercial billet offered for export from the CIS are becoming less attractive, as the weakening Euro cuts offers from European and Turkish producers to lower levels, sources in the industry tell Steel Business Briefing. "Offers from producers in Europe (both South and North) and Turkey are coming in, their lead times shorter, and their prices are around €325-330/t ($443-450/t) fob North and South Europe and $450-460/t fob Turkey," sources explain. This presents serious competition for CIS billet, but Russian and Ukrainian producers are apparently unfazed, sources add. Indeed, with March tonnages sold long ago and scrap tight, some producers now look set to reduce output, sources say. Not desperate to sell, some mills are asking increadibly high prices for the "CIS grade billet", such as 100mm square, at $480-485/t fob Black/Baltic Sea, one major trader explains. Meanwhile producers such as OEMK with access to the Caspian Sea and Iranian ports are also not rushing to cut their prices. Instead, they prefer to wait and see, he says. Ukrainian mills too seem to be relaxed about the current apparent correction, as low scrap supplies makes billet availability tighter,” he adds. Today's sentiment seems to be peculiar, but the result is still favours the producers. “They seem to be able to, or pretend to just disappear when demand is not there, seemingly without any damage to their business,” a trader says. He adds that bids of $440/t fob Black/Baltic Sea are being rejected by the CIS producers.
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| China's Baosteel raises coil prices by $44/t for March | ||
| Baosteel announced its March prices on 12 February, increasing most of them by a range of RMB 200-700/tonne ($29-103/t). Baosteel’s hot rolled coil and cold rolled coil are increased by RMB 300/t ($44/t), Steel Business Briefing learns. As a result, SS400 5.5mm HRC of 1,500mm wide is priced at RMB 4,342/t ($639/t) ex-works, while its SPHC 1.0mm cold rolled sheet price is RMB 5,826/t ($857/t). Both prices exclude 17% VAT. Baosteel’s price increases are welcome news for the current weak steel market, according to local sources. They tell SBB that most of the other Chinese mills should follow Baosteel’s lead, and increase their March ex-works prices. This along with rising iron ore prices should see prices rise in the spot market in March, the market sources say. In advance of the Chinese New Year holiday on 13 February, HRC and CRC spot market prices remained very stable with very little business recorded. In Shanghai, Q235 5.5mm HRC is offered at around RMB 3,750/t ($549/t) with VAT, and 1.0mm CRC is offered at around RMB 5,050-5,350/t ($739-783/t) with VAT.
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| Stagnant Italian rebar market puts scrap under pressure | ||
| The Italian rebar market in February is depressed with prices in a range of €360-380/tonne ($494-522/t), local industry and market sources say. It would appear that the producers failed to achieve their February asking prices of around €400/t. Rebar prices are low due to the very weak demand in national and overseas markets. The local construction market is still particularly gloomy, and this is not helping any recovery. As a result, a few mills are said to be operating at even below 50% capacity, compared with an average of around 50% earlier. The high price for scrap has also weighed heavily on margins. Scrap prices are between €200-220/t, traders and others tell Steel Business Briefing. Last week’s scrap prices' fall of around €10/t was not enough for producers. They say today's price is still too expensive. Rebar sales volumes are very low and with scrap prices so high, margins are thin, a source said.
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| Brazil considering setting iron ore export duty | ||
| Brazil's government has been considering imposing an export duty on iron ore and removing taxes on finished steel products, Steel Business Briefing learns from the country's energy and mining ministry. The world's second-largest iron ore exporter may start taxing exports in an effort to stimulate investments in the Brazilian steel industry. A decision hasn't been made yet, the ministry notes. Meanwhile, Brazil’s president Luís Inácio Lula da Silva, has already pushed Vale to focus its investments on steelmaking instead of sending ore overseas for processing and then importing the finished products, SBB notes.
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| Report: US mills up $30 on sheet, but Nucor denies it | ||
| US sheet market players are pondering a published report that two US mills raised prices $30 a short ton late last week. Steel Business Briefing could not confirm the increases as US Steel said it only discusses prices with its customers, and Nucor denied that it made an across-the-board move. “No, it is not true,” said Nucor COO John Ferriola when asked if his company raised sheet prices by $30. “Whenever we raise pricing on any product across the board, we send out a letter. We have not sent out a letter increasing sheet pricing across the board.” Ferriola allowed, however, that there may be some specific sheet products or grades where the spot transaction price has increased “due to tightness in the market for that specific product or grade.” Buyers expect to learn more about possible sheet price increases today. Just last week SBB reported that they were expecting the moves, while questioning whether or not demand would support them.
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| Posco's HRC exports to decline for April-June shipment | ||
| The tightened output of hot rolled coil from Posco is expected to reduce its export volume in the April-June quarter. As several stoppages at the company’s HRC works were ongoing and will continue during the first half this year, Posco is intending to focus on supplying the domestic market to meet requests from local consumers. As a result, the mill’s export volume of April-June deliveries is likely to be decline by 20-30% compared with the current January-March quarter, Steel Business Briefing learns from industry sources. Early last week, Posco finished maintenance stoppages at its No.3 hot strip mill in Gwangyang west of Busan after halting for seven days. In mid-January the No.2 mill at the same works was also stopped for seven days. Posco’s loss of HRC output from these two units during the January-February period could be around 200,000 t, an industry source notes. More maintenance is scheduled later as Posco has planned to halt its hot strip mills at its Gwangyang and Pohang works during January-July for 2-7 days at a time, as SBB reported. However, the stoppages may be readjusted or delayed depending on market conditions later this year. Last year, Posco’s HRC exports surged to around 3m t compared with 1.8-1.9m t in 2008, given shrunken HRC demand at home followed by the global financial crisis. But this year’s exports are unlikely to reach similar levels as last year, another source notes.
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| E United Vietnam BF project could restart in Q2 | ||
| Construction of E United Group’s blast furnace project in Vietnam is likely to restart in the second quarter of this year, instead of the first quarter, pending the finalisation of equipment purchases, an official from E United’s subsidiary, Yieh Phui Enterprise, tells Steel Business Briefing. SBB learned in December last year that construction of the plant at Dung Quat industrial park in Vietnam’s Quang Ngai province could begin in the first quarter. But the official says this is now unlikely to happen as the equipment purchase agreements have yet to be signed. Hence the second quarter will be a more probable timing, he says. Construction is expected to take three years to complete. The first phase of the project is currently envisaged to include a 3.5m tonnes/year blast furnace, 2.5m t/y of hot strip capacity, and 600,000 t/y of billet capacity, with approximately 400,000 t/y to be sold as slabs. Construction of the project was halted in 2008, not long after it started, due to the global economic slowdown and softening steel demand.
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| Korean Assemco's strip service centre starts in Pakistan | ||
| What is claimed to be Karachi’s first steel service center, Assemco Pakistan Pvt, has started operating. Steel Business Briefing is informed by a company executive that the facility is handling cold rolled and galvanized coils imported from Korea. It has 20,000 tonnes/month of slitting and shearing capacity. Assemco Pakistan is a joint venture of Assemco Korea, Cottage Industries UK, and Aftab Technologies Pakistan. The service center is meeting demand from the automotive, home appliances and electronics sectors. The executive says the service center might use domestically produced coils as well in the future. Demand for flat rolled steel is quite high in Pakistan because the country’s biggest producer, Pakistan Steel, is not working at full capacity, as reported. But new facilities like Aisha Steel Mills, a cold rolled strip producer, will start operations this year.
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| Weak demand limits price hikes for rebar and HRC in Thailand | ||
| Steel buyers in Thailand are resisting price hikes for rebar and hot rolled coil. “The steel market is still dull due to weak demand,” a Thai trader tells Steel Business Briefing. “The stockists have filled their requirements and are taking a wait-and-see attitude until they return after the Chinese New Year,” he explains. Rebar producers raised their domestic prices by THB 500/tonne ($15/t) on 1 February which lifted prices to around THB 19,000/t ($575/t). Local trading sources tell SBB that current turnover is thin which makes it difficult for producers to achieve their new target price of THB 20,000/t. “The mills have been trying to raise their prices virtually every week. But they cannot sell at higher prices,” another trader says. The prices hikes are the result of increased billet prices. "They have no choice but to increase their rebar prices if they want to continue their rolling operations,” the trader adds. Domestic billet prices are soft at around THB 17,000/t for electric arc furnace billet, and THB 16,500/t for induction furnace billet. These prices are unchanged since early February. The billet producers are finding it difficult to secure enough scrap – overseas scrap is high-priced and local scrap (the equivalent of around $335/t) is scarce – and are having to restrict billet sales to their local customers. Meanwhile, sluggish demand is also preventing domestic HRC prices from rising in Thailand. Mills are aiming to push up the domestic price for 2mm and up commercial quality coil to THB 21,000/t, but the domestic market is stagnant at around THB 20,500/t.
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| Shagang keeps rebar/rod prices unchanged | ||
| Eastern China’s Shagang has again kept its rebar and wire rod prices unchanged for deliveries up to 20 February. Steel Business Briefing notes the prices have been the same since end-January, and may leave little room for drops of spot prices in the markets after Chinese New Year. Shagang kept ex-works prices for 16-25mm HRB335 rebar and 6.5mm Q235 wire rod at RMB 3,860/t ($565/t) and RMB 4,050/t ($593/t) respectively, both including 17% VAT. Though the Chinese New Year holiday officially started on 13 February, most traders left the market in advance and very few transactions were done through the 8 February week. The markets won’t be re-opened until 20 February or even later. Offers by 5 February were quoted at about RMB 3,760-3,770/tonne ($550-552/t) for Shagang-sourced 16-25mm rebar in the Hangzhou market. Meanwhile, Shanghai prices for similar materials sourced from tier-two mills have remained at about RMB 3,650-3,660/t ($534-536/t). Despite closure of physical steel markets, prices on the Shanghai Futures Exchange rebounded, stimulated by news of the RMB 200-700/t hike in Baosteel’s March prices (see related story). Settlement prices for rebar for April delivery increased to about RMB 4,122/t ($603/t) on 12 February, up by RMB 57/t ($8/t) from the previous day or RMB 140/t ($20/t) from 8 February. Chinese export prices for rebar are hovering around $540/t fob. A southern Chinese mill source says its overseas bookings for delivery in March are full and he expects better export markets next month.
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| Liugang to start up new wire rod mill in March | ||
| Liuzhou Iron & Steel (Liugang), in south-western China’s Guangxi autonomous region, expects to start operating its second wire rod mill in March, with a design capacity of about 500-600,000 tonnes/year, Steel Business Briefing learns from the company. The mill was scheduled to be brought on stream last October, but was postponed because of a delay in equipment delivery, one company source suggests. The mill is capable of producing wire rod in diameters of 5.5-25mm in grades of carbon, spring and cold-heading steel. The company may also consider diversifying into production of rod for tyre cord making. Meanwhile, Liugang is constructing a new bar mill, which has a designed capacity of 600,000 t/y, but may be ramped up to operate at a maximum of 900,000 t/y. Construction of the mill, for products in 12-40mm diameters, was started last September, and it may commence production in March or April this year. With these two rolling mills, Liugang’s longs capacity will see an increase of over 4m t/y, also including some light sections. The company also produces hot rolled coil and plates, with a combined capacity of around 6-7m t/y. While the company had a crude output of 8.18m t in 2009, Liugang plans to increase crude production to 10m t this year.
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| Yieh Hsing boosts wire rod output on strong demand | ||
| Taiwan’s Yieh Hsing Enterprise Co has boosted wire rod production at its Kaohsiung works in southern Taiwan on strong domestic and export demand. The company is now producing at above capacity, a company official tells Steel Business Briefing. The steelmaker is currently producing around 11,000 tonnes/month of carbon wire rods and 6,000 t/m of stainless wire rods. Yieh Hsing was producing at 10,000 t and 5,000-6,000 t respectively last December, which it considers to be full capacity, as SBB reported. “We are expecting demand to be very good at least until June,” says the official. Demand is strong from the fasteners industry in Taiwan and its export markets, such as the US, China and Southeast Asia, he adds. Meanwhile Yieh Hsing is still on track to commission its 300,000 t/y wire rod and rebar plant in Pingnan in southern Pintung county in the April-June quarter. The plant was restarted in September last year after closing mid-2001 when the company ran into financial difficulties, as SBB reported. But there has been little progress with the company's plans to build a meltshop in Pingnan to produce billets as feed for its wire rod mills. Yieh Hsing has had a Danieli meltshop on order since June last year but the project is at a standstill because of prolonged talks with local environmental authorities.
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| China mills agree 'provisional' 40% ore price rise: reports | ||
| Reports emerged as China closed down for the Chinese New Year holidays late last week that iron ore miners and several large Chinese mills have agreed to an “in principle” 40% increase on last year’s benchmark price. Though it has not been confirmed by the China Iron & Steel Association, the miners or any of the large mills, China-based sources are adamant that a provisional agreement has been struck. If true, the agreement is surprising as BHP Billiton and Vale have both stated they expect benchmark prices for 2010 contracts to “fully reflect” spot prices. This would imply a price rise of some 80-90% on last year’s benchmark, Steel Business Briefing notes. Other analysts predict a repeat of last year, with Rio setting a price with Japanese, Korean and Taiwanese mills which would become the de facto benchmark in China. BHPB chief executive Marius Kloppers said last week that the miner had entered into “tie-break” deals with Chinese mills in the absence of a formal price settlement. He appeared to hint that similar terms may have to be agreed this year. An analyst in Melbourne expected miners would ask for more than 40% to “claw back” some of the iron ore revenue losses incurred due to lower benchmark prices last year. Despite record iron ore production of 204m tonnes, Rio’s iron ore earnings dropped 31% in fiscal 2009.
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| Nippon Steel strengthens bond with FeMn producer | ||
| Nippon Steel will acquire a larger stake in Nippon Denko, Japan’s leading ferro-alloy producer, in a bid to strengthen the partnership between the two companies and ensure a stable supply of the ferro-alloy. Nippon Steel intends to own 15% of Nippon Denko from 9.5% currently, with the new equity being purchased from the stock market at an opportune time, a Nippon Denko spokesman says. Nippon Denko produces ferro-manganese at its Tokushima plant on Shikoku island, which has 220,000 tonnes/year production capacity. The company is currently producing about 160,000 t/y of FeMn and also receives about 40,000 t/y of silico-manganese from Jinzhou Nichiden Ferro Alloy, based in China's Liaoning province, of which Nippon Denko owns a 10% stake. Nippon Denko currently supplies ferro-alloys to Nippon Steel and other steel producers. “We already have a good relationship with Nippon Steel so it’s unlikely that the amount we supply them will increase in the short term,” the Nippon Denko spokesman tells Steel Business Briefing. “But lifting their stake in the company means they trust our products and technology so this should help us increase our sales to the wider market,” he added. Further, the stronger partnership with Nippon Steel could help Nippon Denko secure a stable supply of manganese ore, ahead of Chinese ferro-alloy producers which have been aggressively buying the raw material, the spokesman said.
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| China's Hebei sees drop in steel sector '09 profits | ||
| Northern China’s Hebei, the country’s largest steelmaking province, saw a decline in its steel sector’s profits in 2009 despite a surge in production, according to the Hebei Metallurgical Industry Association. Hebei’s steel industry generated profits of RMB 24bn ($4bn) last year, down by 8% year-on-year. Its revenues dipped by 0.05% y-o-y to about RMB 758bn ($111bn). But Hebei’s crude steel output increased by 18% y-o-y to about 135m t in 2009, making it China’s largest producer for the ninth straight year. Steel Business Briefing notes the province’s crude output accounts for 24% of China’s total production. The association says last year’s profits decline amid rising output occurred because oversupply in China’s domestic market has kept steel prices at low levels. Exports from the province also dropped, mainly because of slowing demand in the global market. Last year, Hebei exported 3.69m t of steel, a 61% plunge y-o-y. Revenues from exports plummeted by 69% y-o-y to about $2.7bn. The association predicts an improved outlook for this year’s steel market compared with 2009, as domestic demand will continue to grow and global demand is also expected to recover slowly. But the situation may remain tough for steel mills with the potential threats of steel oversupply and increasing global trade conflicts.
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| Benxi Iron & Steel predicts 2009 net loss | ||
| Shenzhen-listed Benxi Iron & Steel (Bengang) predicts that its business results for 2009 will show a significant net profit loss of RMB 1.32-1.4bn ($194-206m), compared with the profit of RMB 165m ($24m) it made in 2008. In a note to the Shenzhen Stock Exchange the company blamed the loss on the problem of overcapacity in the Chinese steel industry and the decrease in steel prices. Although Bengang generated profits in the fourth quarter of last year, these were still not sufficient to offset the losses it recorded over the first three quarters, Steel Business Briefing understands. In 2009, Bengang produced 9.06m tonnes of crude steel, up 22% from 2008. Meanwhile, last year, the company exported 950,000 t of finished steel, accounting for about 10% of its crude steel production. SBB also notes that Bengang and Anshan Iron & Steel have yet to complete their post-merger integration, and some insiders indicate that the merger between the two mills has already been suspended. The sources add that no timetable is available for when progress towards the merger will restart.
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| China’s Shandong closed 1.87m t/y of old capacity last year | ||
| In the run-up to the Chinese New Year, China’s major steel-making provinces have been issuing the results of their efforts to decommission outdated steel capacity last year. Eastern China’s Shandong province is the latest to update its progress. The province closed 250,000 tonnes/year of iron and 1.87m t/y of obsolete steel capacity in 2009, Steel Business Briefing learns from a provincial government report. Shandong also set a new target to close 2.4m t/y of obsolete iron capacity this year. It did not release a steel capacity closure target. China's provinces have promised the central government to close all blast furnaces with volumes below 300 cubic metres and converters/electric arc furnaces below 20 t. Last year, Shandong produced 52.7m t of pig iron, up 14% year-on-year, and 48.6m t of crude steel, up 9% y-o-y, according to data from the China Iron & Steel Association. The provincial government expects to reduce the province’s crude steel output to about 50m t/y by 2011, while relocating more steelworks to coastal regions, as it outlined in its 2009 steel plan. SBB notes some capacity closure may be part of mills’ efforts to upgrade their plants and therefore may not have an effect on Shandong’s overall steel capacity. SBB learns from the province’s environmental protection department that the provincial government is also focusing on the installation of flue gas desulphurization devices at steelworks' sinter plants as well as closing outdated sinter plants in order to reduce sulphur dioxide emissions.
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| Turkish flat steel market waits for new prices | ||
| Demand for flat rolled steel is still weak in Turkey, but a price increase is nevertheless expected. Steel Business Briefing is told by Turkish traders that Ukraine has not announced new prices yet, but they expect a $20-30/tonne increase. Ukraine was asking $550-570/tonne cfr for HRC February delivery. This is expected to go as high as $570-590/t cfr Turkey. Some of the ports are frozen in the CIS, which is adding to freight costs, sources say. Russian mills are asking $620-650/t cfr for HRC. This price is too high for the Turkish market, since the local producer Erdemir’s HRC base price is $570/tonne. Besides, there is a 9% import duty on HRC. Turkish traders say that, despite the expectation of price rise, local sales are slow because industrial activity is low in the country.
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| Polish steel distributor Odmet to open service centre | ||
| Polish steel distributor Odmet is constructing a service centre at the site of its head office in Siedlce, east of Warsaw, a company representative tells Steel Business Briefing. The service centre, which represents the distributor’s first venture into finished product processing, will be equipped with a slitting line. The new line will process hot rolled coils up to 2 metres wide, up to 10mm in thickness and 0.6-12 metres in length, with a coil weight of 35 tonnes. The slitter will have a throughput capacity of 8,000 tonnes/month. The new service centre is expected to begin operating in the third quarter of this year. Apart from its warehouse in Siedlce, Odmet also possesses a reinforcing steel fabrication shop in Warsaw. The company sells rebar and plain bar, wire rod, closed sections, square bars, HRC, plate and various stainless and acid-resistant steel products, as well as aluminium sheet, profiles and tubes. Odmet sold 58,000 tonnes of steel in 2008. The distributor is part of Grupa Polska Stal, which consists of eleven steel processing companies that together sold 284,000 t of steel in 2008.
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| ThyssenKrupp returns to profit in October-December | ||
| Germany’s ThyssenKrupp Group returned to a pre-tax profit in its first fiscal quarter 2009/2010 (October-December), following three quarters of losses, it says in a release sent to Steel Business Briefing. Excluding special factors like divestments, pre-tax profit was €237m ($323m), slightly down from €249m in the corresponding prior-year quarter. Sales decreased by 19% year-on year to €9.4bn. In its carbon steel segment, sales were down by 20% year-on-year to €2.3bn due to low selling prices, while orders in terms of value rose 34% to €2.5bn. Pre-tax profit was €104m. Total crude steel production including supplies from HKM was down 7% year-on-year at just under 3m tonnes, TK says. In stainless steel, sales climbed 3% to €1.2bn, and order intake in volume was up 29% year-on-year. In terms of value, order intake remained virtually unchanged at €0.9bn, due mainly to lower alloy surcharges. Deliveries were up 25% in October-December to 510,000 t. ThyssenKrupp has surprised positively with its Q1 performance, according to analysts at Germany’s BHF Bank. The group sticks to its expectation of operating profit in the lower three-million digit euro range for the full year, affected by losses that will be incurred in later quarters by the start-up of its mills in Brazil and Alabama, USA. “However, it would be quite safe to assume that the guidance is by far too conservative and we think it will be raised in the course of the year,” BHF says.
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| N. European sections prices inch higher in February | ||
| Northern European sections prices are up marginally this month as producers’ attempts to increase prices slowly bear fruit, market participants in Germany, France and Benelux tell Steel Business Briefing. Transaction prices for category one sections have edged up from €450-460/tonne effective delivered last month to €460-470/t ($627-640/t) in February for March production, sources say. “€480/t is a good target price for this month,” a source close to a leading producer suggests. March rolling is now almost fully booked and mills say they will seek higher prices for April production to cover their costs. “There will be steady increases in the coming weeks,” another major mill comments. Increases may have to be achieved slowly, producers agree. The main problem is that end-user demand is still floundering. Mill's improved order entry has been largely driven by distributors refilling stocks which were depleted towards the end of last year. Once stockists receive orders in March and April, restocking could be complete, one producer forecasts. Distributors also say inventories are already approaching “reasonable” levels. As a result, buyers remain sceptical of attempts to implement large price increases, and while underlying demand is weak they will just order small quantities as and when required. “I think the market will be slower now,” one regional trader says. Furthermore, scrap shows signs of stabilising, with prices unchanged month-on-month in parts of Europe. This follows a couple of months of rising scrap prices, which have underpinned much of the recent upward trend in longs’ prices.
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| Eurometal paints a gloomy short term forecast | ||
| Steel business in Europe has “consolidated at a low level,” according to the latest short term outlook from Eurometal, the European distributors’ association. There is some evidence that the construction market has stabilised, it adds. In the final month of 2009, the volume of long product stocks in terms of sales days rose significantly, to almost 84, from 63 days in November. Overall, the volume of long product sales handled by the region’s distributors fell 26% in the course of last year, Steel Business Briefing learns. The report also talks about an imminent technical recovery, by which it means restocking and not real consumption. The main uncertainties, it adds are the availability of trade financing and “very tight” credit insurance. On coil products, Eurometal says that the market prospects for cold rolled products and coated flats are perhaps more promising than for other steel products.
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| Celsa’s Nervacero may apply job cuts | ||
| Celsa’s rebar producing subsidiary Nervacero is likely to implement a “severe” plan, which would lead to job cuts and salary cuts, Steel Business Briefing learns. Demand levels have not been sufficient for the company to maintain its temporary layoff plan initiated towards the end of 2009. Though this is still expected to run till September 2010, it is now looking at more drastic measures. “We are currently considering various measures which would enable the company to remain competitive and cope with the adverse conditions experienced by the market today,” a Celsa representative tells SBB. The company has not as yet issued any production forecasts for the immediate future, or concrete numbers on how many employees could be affected. The rebar plant currently has 570 employees and has lowered its production levels by over 50% since the temporary lay off schemes were put into place.
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| Turkey's January pipe exports down 33% | ||
| Turkish pipe exports remained sluggish in the first month of year because of the holidays in December and the low demand from the export destinations, Steel Business Briefing learns from local market players. According to data released by the Istanbul Mineral & Metals Exporters’ Association (IMMIB), Turkey exported 103,892 tonnes of steel pipes, which is 16% less than the same month of the previous year and 33% less than the December exports. In January, Algeria was still the largest importer of Turkish pipes with 21,834 tonnes, followed by the UK (20,000t) and Iraq (16,240t). In the whole year of 2009, Turkish pipe exports totalled 1.56m tonnes, as reported previously.
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| Greek service centres feel strain of public spending cuts | ||
| As discussions continue at European level about measures to help Greece through its financial crisis, locals are wary of what repercussions this may have on the steel industry, Steel Business Briefing learns. The construction sector could be the worst hit if public expenditure is curtailed. “The EU is forcing our government to cut public expenditure and of course that will affect the steel market. For the steel and construction sector their best customer is the Greek government. If the government decides to stop all investments then many companies will face big problems surviving,” says a service centre. The Greek government itself has cut down its own purchasing of steel-containing goods. “One major customer in our steel service centre is the main supplier of steel furniture for the Greek government. We normally sell around 500 tonnes/month of sheets and strip. However we’ve had no enquiries in the last 40 days as the government has frozen all expenses,” the service centre says. However although overall demand for steel is currently low, tubes are faring better and expected to be healthier this year than any other steel products. Greek sources tell SBB that sales of tubes last year fell by less than 25%, whereas with other steel products the fall was closer to 40%.
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| Klöckner and Interfer expect to profit from credit crunch | ||
| Germany’s largest steel stockholding groups, Klöckner & Co and Knauf Interfer, could profit from the current credit crunch, aiding their ambitions for external growth. For many small and medium-sized distributors the difficulty of obtaining bank loans could lead to a number of bankruptcies, the chief executives of Klöckner and Interfer both suggest in recent interviews. While companies of all sizes feel some restrictions from banks, publicly listed groups like Klöckner have access to the capital markets to finance takeovers, which is a clear advantage over its rivals, claims its ceo Gisbert Rühl. Interfer, although privately owned, also sees opportunities from looming bankruptcies of other players. “It’s quite possible that opportunities for acquisition are coming up in 2010,” said ceo Martin Müller-Frerich in the monthy Stahlmarkt publication. Klöckner is looking for growth in the USA, where it intends to become one of the top three players through its subsidiary Namasco, Steel Business Briefing understands. Interfer is mainly interested in takeovers within the flat steel segment, with its high potential for innovation, according to Müller-Frerich. The company recently opened a bureau in Vienna to look after customers in Eastern Europe, but the ceo says it has no plans to open service centres in the region.
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| Polish steel distributor’s privatisation moves closer | ||
| The four potential investors in Polish state-owned scrap merchant and steel distributor Centrozlom Wroclaw have until 23 February to submit offers for an 85% stake in the company, Steel Business Briefing learns from Poland's national treasury. The companies still in the running are steelmaker CMC Zawiercie - which supplies Centrozlom with steel products - steel processor and distributor Stalprodukt, metals distributor and industrial waste management firm KGHM Ecoren, and German steel scrap firm TSR Recycling. The interested companies have already examined Centrozlom and will now negotiate over the cost of the potential acquisition and the programme of development for the distributor. As well as trading in ferrous scrap, Centrozlom sells wire rod, hot and cold rolled coil, bars, profiles, pipes and steel structures. It sources its steel from CMC Zawiercie, Celsa Huta Ostrowiec, ArcelorMittal Poland and Huta Pokoj. According to the Polish Association of Steel Stockholders (PUDS), of which Centrozlom is a member, the company sold 107,000 tonnes of steel products in 2008.
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| NLMK long products take higher share of domestic market | ||
| NLMK long products division is increasing its share of the Russian long products' market, NLMK says in a statement sent to Steel Business Briefing. NLMK's sales of rebar in Russia fell only marginally last year, whilst for wire rod and other longs they increased 33% and 24% respectively. In contrast, the country's overall domestic demand fell by 33% for rebar, 35% for wire rod and 21% for other long drawn products. As a result, the company's share of the country's rebar market increased from 15% to 22% y-on-y, whilst for wire rod, it more than doubled from 8% to 16.5%. In addition, its share for low-carbon long drawn products rose to 21% from 13% in 2008. Moreover, NLMK's share of the value added long products' market overall rose by 10%, the company spokesman also tells SBB. This was through higher sales of rebar and low-carbon long drawn products, he adds. NLMK 2009 actual sales of rebar amounted to 1m t, a fall of 5.7% y-on-y. Sales of wire rod were 68,000t. Meanwhile, sales of other long drawn products increased by 29% to 188,000t, whilst sales of commercial billet fell 55.5% to 241,000t. The division produced 1.7m tonnes of crude steel last year, 11% less year-on-year, the company says.
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| OMK invests more in plate mill project in Vyksa | ||
| Russia's United Metallurgical Company (OMK) is stepping up investment in its wide plate (mill-5000) project to $550m this year, its spokesperson Vladimir Stepanov, tells Steel Business Briefing. Initial equipment testing is set to begin in December 2010, with full commissioning due to start in March 2011, Stepanov says. Initial commercial production is due to take place in 2012, OMK expects. Currently OMK is working on construction of the rolling mill, storage facilities and a workshop. Equipment delivery is ongoing, supplied by SMS Demag, as previously reported. Pipe and rail wheel producer OMK is building the mill to reduce its dependence on plate imports for its large diameter pipe production. Since June 2007, it has invested $546m in the mill, which is located at OMK’s Vyksa plant near Nizhny Novgorod. At 1.5m tonnes/year capacity, the mill will produce wide plate up to 4590mm for tube and pipe production, as well as for use in shipbuilding, nuclear energy and military equipment. Overall investment into the Nizhny Novgorod site will amount to $686m this year, with the additional $132m set aside for reconstruction and modernisation of other facilities at Vyksa, OMK says.
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| From Ukraine with love | ||
| Victor Yanukovych's presidential victory can be good news for Ukraine's steel industry. "He is from Enakievo, a steel town near Donetsk, his father worked at steel works, and the majority of his team are ex-steel mill directors, so he is firmly connected to the country's steel industry," a seasoned industry insider tells Steel Business Briefing. With ferrous metallurgy now contributing up to 30% of the country's GDP, compared to 10% in the Soviet times, the sooner the new president focusses on the task of renewing the sector's production capabilities the better, he says. "Switching to energy saving technologies as well as granting tax relief to companies that have adopted these is the key. It will help develop [Ukraine's] electro-engineering, heavy engineering and machinery building industries, create new jobs and revive the economy," he adds. The new Ukrainian president's link to the steel industry, however, goes even deeper. He revealed recently how he met his wife of 40 years at the Enakievo steelworks. While working there as a gas welder, he rushed to her aid after a brick had fallen on her foot. “I looked at her and my heart skipped a beat," Yanukovych reminisced. The billet and long products producer Enakievo now belongs to Metinvest.
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| SSAB to reduce US expansion of plate Q&T line | ||
| SSAB is scaling back the expansion of its Mobile, Alabama, quench and temper line due to fluctuations in the North American market. In 2008, SSAB announced plans to add a second quenching line to the Mobile facility’s existing 100,000 tonnes/year line by 2012, bringing the plate facility’s total capacity to 400,000 t/y. The new line, originally designed for a capacity of 300,000t/y, will be cut back to 200,000 t/y, making the mill's total Q&T capacity 300,000 t/y instead of 400,000 t/y, Steel Business Briefing learns from SSAB representatives. “There has been a slight adjustment in the investment, but not by half – more like a one-third reduction from the original plan,” said an SSAB spokesman. “We have reviewed the market situation and found that this is the right level for us right now.”
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| Mexico's construction industry down in 2009 | ||
| Mexico's construction industry reported poor results both in December and 2009 overall, Steel Business Briefing learns from the local statistics agency Inegi. Construction activity declined 5.6% in December in a year-to-year comparison. In 2009, the sector dropped 7.5% from 2008. According to the bureau, these declines are related to reduced residential and infrastructure projects in response to a negative market sentiment. As a consequence, steel demand from the Mexican construction industry has also been negatively affected, including tubes and sections, SBB notes.
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| New Marcellus Shale pipeline feasibility study underway | ||
| A subsidiary of the Abu Dhabi-based International Petroleum Investment Co is looking at the possibility of laying a minimum 200-mile pipeline from the Marcellus Shale natural gas formation in Pennsylvania to the Sarnia-Lambton area of Ontario, Canada. Nova Chemicals Corp of Calgary, Alberta, has signed a memorandum of understanding with Buckeye Partners LP of Houston to explore the possibility of piping mixed natural gas liquids from Pittsburgh-area shale plays to Nova’s refinery in Ontario, according to a company spokeswoman. The companies are currently conducting a feasibility study for the pipeline, she said, calling the project “very preliminary.” Though the pipeline’s exact length and steel line pipe requirements are uncertain, the shortest distance between Pittsburgh and Sarnia-Lambton is about 200 miles, but that would have to pass through the massive Lake Erie, Steel Business Briefing notes. Buckeye is one of the largest independent petroleum products carriers in the US, operating approximately 5,400 miles of refined products pipelines.
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| US rig count finally exceeds prior-year level | ||
| The US rig count officially broke 2009’s ceiling in the latest total by petroleum industry consulting firm Baker Hughes, gaining 11 new net rigs for a total of 1,346. The new total is seven net rigs above 2009’s count in the same time period, Steel Business Briefing notes. Though the US lost two net oil rigs, new gas rigs increased by 13. The largest gains by state were Louisiana with seven new rigs and North Dakota and Texas with five each. Canada posted a slight retreat, losing six net rigs for a total of 551. That’s still 130 rigs above 2009’s count in the same time period, however. “It is a little bit of a confusing situation, especially with prices as they are,” said a journalist and market observer with Natural Gas Intelligence, a natural gas news and pricing publication. “(Natural gas producers) are getting ready to flip the switch when prices are a little more favorable.” He noted that gas producers are still about $1.50-2.00 above the cost-of-production, despite natural gas hovering around a Henry Hub spot price of $5.50/mmBTU. Pipe market observers expect the rig count to continue to rise beyond the natural gas seasonal demand dip in the second quarter. “We’d be hard-pressed to say the rig count is going to start going down,” he said. “But will it continue to rise at the same rate? I don’t think. The slope of the line is going to level off a bit as the year goes on.”
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| Welspun acquires former Wheatland warehouse | ||
| Welspun Tubular LLC has acquired a former Wheatland Tube Co warehouse on 44 acres near its Little Rock, Arkansas, spiral weld large diameter pipe and coating facilitiy. Welspun, a subsidiary of Indian firm Welspun Gujarat Stahl Rohren Ltd, paid approximately $4.25m for the 350,000-square foot facility, which will be used to store stock material, Steel Business Briefing learns from a company press release. The company’s Little Rock facility has a total annual capacity of 350,000 short tons of spiral weld large diameter pipe for the oil and gas industries. “Orders are strong and we recently added a third work shift," said a Welspun executive. "The 44 acres acquired from Wheatland will definitely add a lot of value to our existing business and facilitate growth options for the future.”
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| US ITC decision on Chinese drill pipe postponed | ||
| Treacherous weather conditions in the Washington DC area have postponed the US International Trade Commission’s preliminary injury determination in the trade case against imports of drill pipe from China. The preliminary decision in the antidumping and countervailing duty case had been expected last Friday, but the ITC has postponed the decision until February 19, Steel Business Briefing understands. An affirmative preliminary injury determination from the ITC will allow the trade case to move forward, but a negative injury determination will terminate the case completely. US petitioners TMK Ipsco, VAM Drilling, Texas Steel Conversion, Rotary Drilling Tools, and the United Steelworkers union, have alleged that Chinese producers and exporters have dumped drill pipe into the US market at margins of up to 500%. They also allege the Chinese have received subsidies from the government that have resulted in unfair advantages over US producers. This case involves US imports of "steel drill pipe and steel drill collars, whether finished or unfinished, without regard to chemistry of the steel (i.e. carbon, stainless steel, or other alloy steel), and without regard to length or outer diameter,” SBB notes.
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| Winter storms blow US stainless scrap prices upward | ||
| Winter storms in the eastern half of the US are tightening prices on an already thin supply of high-quality industrial stainless and alloy scrap. “There’s a lot of material that’s just not making it in because of the weather,” said one major processor of stainless and alloy scrap. “People are being understanding about it, though. You just don’t have a choice in this kind of thing.” Commodity stainless scrap prices have already been negotiated for February, so a sudden uptick in the price of stainless scrap is a mixed blessing for processors, he said. If the price remains consistently high through March, however, processors stand to profit from progressively mild weather later in the month, Steel Business Briefing understands. “Everyone tends to do everything on a just-in-time, last second basis,” he said. “The balance of this month should be good, next month should be good, but beyond that, we just don’t know.”
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| East coast US scrap prices weaken as exports falter | ||
| February US ferrous scrap prices will vary by more than the usual amounts depending on the region and the quality, according to a research note from Affiliated Research Group analyst Charles Bradford. Bradford believes scrap prices on higher grades like prompt and prime will remain the strongest, along with scrap supplies further away from the country's east coast. That region's demand has been impacted by a weak export market, especially to the Middle East, while the Chicago price has remained firm, the report noted. “I think that’s pretty much the situation,” one scrap market source told Steel Business Briefing. He noted that the weakened export market has allowed the domestic market “to shake a few dollars off the buying price.” On the other side of the country, he said, “China is still in the market, Korea is still in the market. There’s a fair amount of scrap moving off the west coast.” As previously reported by SBB, the price of shredded scrap declined by about $5/long ton to $345/l.t, delivered mill, this month. The report also noted continuing weakness in nonresidential construction and predicted steel shipments would be 72-75m short tons in 2010, compared to about 60m s.t in 2009. Looking ahead to next month, the source added, “Everyone seems to be wanting to predict a fall because we had that tremendous run up. But I think the markets as far as we can see are still firm. I was anticipating a March drop off, but now I’m not.”
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| ArcelorMittal mines 20m t of NA iron ore in 2009 | ||
| ArcelorMittal produced 20.2m tonnes of iron ore in North America last year, according to figures included with the company’s fourth quarter 2009 earnings, seen by Steel Business Briefing. The NA total represents the bulk of ArcelorMittal’s overall captive iron ore production, which came to 37.7m t in 2009. As SBB previously reported last October, ArcelorMittal agreed to divest its minority interest in Wabush Mines of Canada. The transaction was completed this month. The mine produced 800,000 t of iron ore for ArcelorMittal in 2009, the company stated in its earnings documents. ArcelorMittal "will continue to maintain significant mining operations and resources in Canada, including ArcelorMittal Mines Canada, formerly Quebec Cartier Mining," according to the company. ArcelorMittal also produced 2.1m t of coal last year in North America, part of the 7.1m t total of captive coal produced by the global steelmaker in 2009.
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| US export decline continues, but mildly | ||
| The US exported 843,000 tonnes of steel last December, down slightly from 849,000 t in November, according to government trade data released Friday. Steel Business Briefing notes that this is the third consecutive monthly export decrease for the US, but the decline has been mild, down just 6% from the recent peak of 898,000 t in September of last year. December exports were mostly to America’s Nafta partners. Compared to November, exports to Canada fell about 8% to 398,000 t and exports to Mexico increased about 13% to 193,000 t.
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| US and Canada sign government procurement agreement | ||
| Despite objections from the Ontario Federation of Labour, Canada and the US have signed a government procurement agreement with the hopes of ending Canada's problem with the "Buy America" clause in the US Economic Recovery and Reinvestment Act of 2009. The agreement gives US firms permanent access to Canadian provincial and territorial procurement contracts consistent with the WTO's Government and Procurement Agreement (GPA). American companies will also be able to compete for Canadian construction contracts not covered under the GPA through September 2011, Steel Business Briefing understands. In turn, the US will provide reciprocal access for Canadian companies to 37 US states already covered by the GPA, but will only give access to "a limited number of Recovery Act programs," according to a statement from the US Trade Representative’s office. The two countries are also committed to exploring a long germ government procurement agreement within the next 12 months "to deepen on a reciprocal basis, procurement commitments beyond those in the WTO GPA and NAFTA," says the Foreign Affairs and International Trade Canada website. "This agreement resolves key outstanding US-Canada government procurement issues and creates tens of billions of dollars worth of new job-supporting export opportunities for American companies and workers," commented USTR Ron Kirk. As SBB reported, the Ontario labor group objected to some US-favoring terms of the agreement and was encouraging the Canadian government to reject it, calling it "unfair" and "lopsided." The group could not be reached for comment over the weekend.
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| Colombia's ferronickel exports up 52% in 2009 | ||
| Colombian ferronickel exports increased 51.9% during 2009 over the previous year, from 111,614 tonnes to 169,572 t, Steel Business Briefing learns from the country's statistics agency. In terms of value, these foreign sales came to US$725.9m fob last year, down 15.9% from 2008. This drop is related to reduced average sales prices. Meanwhile, exports to the Chinese market alone totaled US$337.1m fob in 2009. December ferronickel exports reached 16,009 t, a 28% decline from the same month in 2008, when this amount came to 22,244 t. In the same comparison, ferronickel export revenue fell from US$120.1m fob to US$87.2m fob, SBB notes.
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| Ezz Steel’s new rebar mill to start by the end of 2010 | ||
| The new rebar production facility of Ezz Steel in Suez is scheduled to be completed by the end of the year. The company will have an additional 1m tonnes/year of rebar rolling capacity with the completion of the plants supplied by Danieli. Ezz Steel has an established hot strip mill in Suez with 1.2 m t/y capacity. The company also signed a contract with Danieli and Tenova HYL to supply its new DRI plant, with 1.9m t/y capacity, to be completed by 2011, as Steel Business Briefing reported previously. With the completion of the DRI plant, Ezz will also build a billet caster at the Suez plant, which will enable it to switch production between flat and long products depending on the market circumstances. The 6-strand billet caster will produce 100-160mm billets and feed two 500,000 t/y capacity rolling mills for 10-40mm rebar.
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| London Mining starts work on Sierra Leone iron ore project | ||
| London Mining has received the final approvals for its Marampa iron ore project and is now commencing development work, Steel Business Briefing learns from the company. The Sierra Leone parliament has ratified Marampa’s fiscal incentives package, mining and logistics plan, and environmental permitting. The first stage of the project is designed to produce 1.5m tonnes/year from existing tailings at a cost of $80m. The company previously said production could begin within 12-18 months of starting construction. Development of the primary orebody should enable it to reach 5-8m t/y of production by the end of 2013, said Graeme Hossie, ceo of London Mining.
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| Assmang switches furnace to produce ferro-manganese | ||
| South African alloys producer Assmang will convert the No.5 furnace at its Machadodorp plant from ferro-chrome production to high carbon ferro-manganese production, Steel Business Briefing learns from the company. Assmang said the conversion was needed to “meet elevated demand for its high carbon ferro-manganese, and there is no excess capacity at the Cato Ridge works to meet that requirement at this stage”. The No.5 furnace is already undergoing a rebuild and will be able to produce HC FeMn by mid-2010 at a rate of 4,000 tonnes/month. Assmang said that difficult global economic conditions have seen demand for FeCr reduced over the past two years. However, it will still have sufficient capacity at Machadodorp to fulfil existing FeCr contractual obligations. “Assmang remains focused on the chrome business and is in the process of expanding chrome ore production capacity at the Dwarsrivier mine,” a company official said. The company is still also carrying out feasibility studies on expanding FeCr and FeMn capacity, but does not plan to convert any other furnaces.
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| African Minerals raises finance for iron ore mine project | ||
| Mineral and exploration company African Minerals (AML) has placed new shares with institutional investors to raise £80m ($125m) for its Sierra Leone iron ore project, the company said in a press release sent to Steel Business Briefing. African Minerals executive chairman Frank Timis said the funds will expedite the “construction of critical infrastructure” for the first phase of production at the Tonkolili mine. Tonkolili is expected to produce 45m tonnes/year of iron ore in its first phase and its target market areas are Asia, Europe and North America, African Minerals previously told SBB.
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| Abu Dhabi growth slows, infrastructure projects continue | ||
| Abu Dhabi’s steel consumption is expected to remain limited this year as it struggles to keep up with its economic growth target. The emirate set a 6-7% per year growth target up till 2030, but the financial crisis means this will have to be adjusted to a less ambitious rate. After growing by 6.3% and 7.4% in 2006 and 2007, respectively, the economy of the United Arab Emirates contracted by 0.2% in 2008, according to International Monetary Fund data. In 2009 UAE real GDP growth was limited to 2.4% and the expectation for 2010 is for growth of 3.4%. Local steel market sources say that, although the real estate sector has slowed down, the government will continue infrastructure projects. However, this will do little to help steel demand recover, SBB was told. This is because the steel requirement for infrastructure projects is only one tenth of that used in residential construction. This expected to cause overall steel consumption to stay limited for 2010. Producers in the region are now able to supply enough steel to meet most of the local demand, and imports are therefore expected to remain at low levels unless traders receive extremely competitive offers from exporters such as CIS or Turkey, Steel Business Briefing was told.
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| Iraqi market is back to buying, Turkish rebar offers drop | ||
| Iraq’s demand for imported steel was strong last week, the completion of budget discussions having had a boosting effect on rebar demand, Steel Business Briefing was told. Turkish offers to Iraq are heard in the range of $505-510/t ex-works, slightly lower than previous Turkish export offers of $515-525/t. Turkish producers are criticized as not being active enough in Iraqi steel market, which has a great potential of steel consumption for post-war re-construction work. Some traders from Dubai tell SBB that, Turkey should be investing more in Iraq to become the main supplier of rebar to the country, rather than trying to market their material to overseas or Dubai. SBB was told: “Turkey has great capacity, so they should make the most of it by investing in the steel trade hub of their neighbouring countries; otherwise they are likely to waste a great opportunity”. Turkish exporters object to such comments. They emphasise that Iraq is already one of the biggest markets for Turkey, and Iraqi market has a big potential for their exports. Iraq was the third biggest market for Turkish rebar exports with 776,000 tonnes in 2009. In January 2010 Iraq was the biggest rebar export market of Turkey with more than 37,000t, and the average price was $489/t ex-works.
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| Iranian miner raises output of lump and fine ore | ||
| Iran’s third largest iron ore producer, Markazi Iron Ore Mines, is increasing its production, according to information obtained by Steel Business Briefing from the state mines and metal holding company Imidro. Markazi produced 1.6m tonnes of iron ore concentrates grading 67% Fe in the first ten months of the Iranian year (up to 20 January). This was 15% more than in the same period last year. The company also produced 4.3m tonnes of lump ore, a 16% increase on the same period last year. Of this, 1.2m tonnes was exported. Markazi Iron Ore, located in central Iran, is the only large iron ore producer that remains completely owned by the government. Other Iranian iron ore producers such as Chador Malu and Gol e Gohar have had their shares are floated on the Tehran stock exchange.
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| ArcelorMittal to raise iron ore output by 10m t in 2010 | ||
| “We gradually increased our iron ore production each quarter of the last year, and in the fourth quarter... production was 15.6m tonnes up from 13.1m t in Q3,” ArcelorMittal chief executive Lakshmi Mittal said last week. “Overall self-sufficiency of iron ore was 60% for the [final] quarter,” he added. The steelmaker produced 52.7m t of iron ore (including strategic long-term contracts) in full year 2009, down from 64.7m t in 2008. Its own captive iron ore output was 37.7m t in 2009. “For 2010 we expect the iron ore production from our mines to increase by 10mt, due to both mine restarts and some mining expansion,” Mittal forecast at the company’s annual results meeting. It has developed its mine at Volcán, Mexico, in order to raise production by 1.6m t in 2010, and has “reinitiated” projects in Liberia and Canada. The greenfield project in Liberia should eventually yield 15m tonnes/year of iron ore. Mining is due to begin in 2011 with initial production of 1m t. ArcelorMittal Mines Canada aims to replace spirals for enrichment by 2013 to increase iron ore production by 0.8m t/y. As reported by Steel Business Briefing, ArcelorMittal and BHP Billiton are considering potentially combining their iron ore mining and infrastructure interests in Liberia and Guinea within a joint venture to make these operations more competitive. “In Senegal our focus in 2010 is to try to explore infrastructure solutions for the project,” said Peter Kukielski, the group’s top mining executive, referring to plans to develop an iron ore mine at Falémé.
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| Iron ore prices moving steadily upwards - The Steel Index | ||
| The latest daily iron ore reference prices released by The Steel Index last Friday show that the price for 62% Fe content iron ore moved slowly but steadily upwards during the week. Similarly, the price for 58% Fe content iron ore finished the week at a slightly higher level in a generally quiet week leading up to Chinese New Year holidays. The reference price for 62% Fe content iron ore fines finished the week at $128.20/dry metric tonne CFR Tianjin port, China. This was a $2.30/dry metric tonne, or 1.8%, rise from the previous week. The reference price for 58% Fe content fines rose $1.10/dmt, or 1%, above the previous Friday’s level. Daily freight rates from Australia and Brazil to China were falling slowly during the week. Daily freight rates for shipments from the east and west coasts of India were 1-2% lower than in the previous week. Rates from the west coast of India are now moving slightly higher than freights from the east coast. The Steel Index is majority-owned by Steel Business Briefing and specialises in compiling steel and iron ore reference prices based on actual transaction data. Further details of the methodology and specifications for the two grades of iron ore can be found on the website www.thesteelindex.com . Companies wishing to subscribe to the full set of reference prices or apply to submit iron ore or steel price data can do so on the website .
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| ArcelorMittal targets ‘debottlenecking’ in coking coal | ||
| “In coking coal our focus in 2010 is to debottleneck all of our operating facilities,” Peter Kukielski, member of ArceorMittal’s group management board with responsibility for global mining operations, said at the steelmaker’s annual results meeting last week. “So our focus really is in maximising production at our existing coal mining facilities with modest growth in Princeton,” he added in answer to a question from Steel Business Briefing. The company aims to increase capacity at Princeton Coal, USA, by 0.7m tonnes in 2010. ArcelorMittal’s production of metallurgical coal was relatively stable in 2009 and self-sufficiency was approximately 20%, the global steelmaker’s chief executive Lakshmi Mittal commented. The company produced 7.1mt of coal last year and secured another 0.4mt on strategic long-term contracts.
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| Economic expansion continued in December, says OECD |
| The latest composite leading indicators (CLIs) from the Organisation for Economic Cooperation & Development (OECD) pointed to signs of stronger expansion in December than the previous month. Industrial production – a leading reference for the CLIs - reached its trough in all countries. The OECD’s CLIs are considered to give a signal of future economic performance, and hence demand for steel, Steel Business Briefing notes. All G7 economies, as well as Brazil, Russia, India and China, are now close to or above their long term trends, the Paris-based organisation says. The CLI for the OECD group of 29 developed countries rose 0.9 points between November and December 2009, and was up 10.1 points on December 2008. Month-on-month increases in the non-OECD emerging economies were more modest, but all posted large year-on-year gains. The USA’s CLI climbed 0.9 points in December, 9 points higher than December 2008. The Euro-area’s CLI also gained 0.9 points in December, increasing 12.2 points over the year. Japan’s CLI was up 0.8 points month-on-month, and 8.1 points on the year-ago month. Of the major economies, only the CLIs for Brazil and India remained slightly below their long term potential level of economic activity, represented by a CLI of 100. However, both countries showed improvements on the previous month and year, signalling a recovery in both. |
