And while the steel industry is booming in the region due to the extraordinary number of major construction projects, there is a significant imbalance between supply and demand.

Consumption of steel in the Middle East is growing at a phenomenal rate.

By 2010 the region is expected to consume 60 million tonnes a year, while expected to only produce 35 million tonnes per year.

This massive imbalance between supply and demand therefore means that the business opportunities for those involved in the region’s steel sector is immense.

source: http://www.ameinfo.com/167645.html

But most analysts have suggested selling at current levels on expectations steel companies would refrain from raising prices and curtail exports to boost supplies in the local market.

“The government does not directly control steel prices but it looks like it has managed to convince steel makers not to raise prices this month,” an analyst in Motilal Oswal Commodities Broker Pvt Ltd, said.

Prices may edge up a little this week but in the medium term the market looks bearish and anyone holding long position may exit at current levels, Prakash Prabhu, Ventura Commodities Pvt Ltd, said. On July 31, India’s steel minister Ram Vilas Paswan said he had asked steelmakers not to increase steel prices in the ‘national interest’.

India is battling 13-year high inflation and steel prices are a major contributor.

Steel firms were expected to raise prices when a three-month moratorium on price increases ended last week, but chose to hold price, the steel secretary said last week.

There can be minor rise in prices but in the medium term the market should ease, the Bonanza Commodity analyst said.

Mild steel ingot futures <0#NST:> on NCDEX is the most traded product in the ferrous metal category in India.

Official data showed India’s steel consumption rose 10.7 percent in 20O7/08, while output growth was slower at 5.1 percent and the gap was met through 7.18 million tonnes of imports
Source:http://in.reuters.com

Firms in the world’s fifth-largest steel producing nation have been battling soaring costs of key inputs like iron ore and coal, but have been holding prices since May to help rein in double-digit inflation, which crossed 12 percent in late July.

“The government had initiated a number of fiscal measures to check prices and steel companies had agreed to hold prices and restrain exports. They have now agreed to hold prices further,” Rastogi said.

Officials of Tata Steel Ltd (TISC.BO: Quote, Profile, Research, Stock Buzz), state-run Steel Authority of India Ltd (SAIL.BO: Quote, Profile, Research, Stock Buzz), JSW Steel Ltd (JSTL.BO: Quote, Profile, Research, Stock Buzz) and Ispat Industries Ltd (ISPT.BO: Quote, Profile, Research, Stock Buzz) said on Thursday they would hold prices in August, even as the self-imposed moratorium ended.

But some company officials said they would review the situation next month. (Reporting by Devidutta Tripathy and Mayank Bhardwaj, Editing by Mark Williams)

Source: http://www.reuters.com/article/rbssIndustryMaterialsUtilitiesNews/idUSDEL4262020080808

“Our margins are not good,” he said, even as steel secretary R S Pandey noted that profit margins for some producers were as high as 20% in June.

Refusing to name any company, Pandey said, “The range of profit margins is as wide as 15-45% for different companies.” But Muthuraman maintained that steel prices in India were Rs 15,000-20,000 lower than international prices despite rising input costs. “I have seen consumer prices rising disproportionately to steel prices,” he said, adding that the benefits of low steel prices here hadn’t reached end users.

Steel minister Ram Vilas Paswan said that profits of domestic steel producers have risen despite hike in raw material costs. He said steel price hike has been higher than rise in cost of production.

“If I tell mediapersons that steel prices have risen because of higher input costs, they will ask me why this hike is higher than that in input costs,” Paswan said. He urged steel producers to monitor the prices themselves.
Source: http://www.dnaindia.com/report.asp?newsid=1178008

As a turnkey contract, Corus Process Engineering’s responsibilities include the complete design, equipment supply, installation and commissioning of the modified bloom caster.

Corus Process Engineering will lead the project, with its consortium partner TATA Projects, handling some of the design, indigenous equipment sourcing and installation work.

Mr Brian Stalker international sales manager for Corus Process Engineering said that “The contract suits Corus Process Engineering’s skill sets entirely and includes supply of new moulds and top zones, mould oscillators and mould table, Tundish car frames, modified strand guide segments and enhanced secondary cooling spray systems. Corus Process Engineering is also responsible for replacing the process control and an automation system associated with the caster, as well as electrical works, including new electric motors and cabling.”

The number 2 bloom caster is one of six identical casters at RINL’s steel plant, which all share a common casting floor.

Source: www.steelguru.com

This report critically looks at the current situation in the industry, potential of the iron ore market growth in the medium term, growth plans of the individual major companies, demand and supply issues related to raw materials like coal and iron ore, competitive positioning of steel production in the country, socio economic and political factors which may have direct and indirect impact on the growth dreams of the Indian steel makers, etc among a large number of other relevant issues of strategic importance.

This report is the product of extensive and in depth analysis with incredible amount of time spent to put the numbers in perspective. There are neutral and frank expert views on matters which have drawn attention of the industry in the recent period.

The phenomenal rise in iron ore prices and their continued shortages worldwide have raised many important questions on the future of the iron and steel industry globally especially in the context of the changing dynamics in the environment surrounding especially in respect of raw materials to this industry. The steel makers are undergoing a phase of uncertainty, volatility and speculation amidst a supply side crisis looming large over raw materials, importantly iron ore and coking coal.

The Indian story is no different. A country having over 25 billion tonnes of officially declared iron ore resources and producing over 210 million tonnes of them annually and exporting nearly 95 million tonnes of them is important from all angles to the world of iron ore business.

Source: www.steelguru.com

Mr SK Mahapatra GM at POSCO India said that “There is a possibility of iron ore requirement coming ahead of our captive mining operations. In this situation, the state government has agreed to make the iron ore required available.”

It may be noted that land disputes and delays in allocating mining licenses have stopped POSCO from proceeding with potentially the biggest overseas investment in India. It is yet to begin building the 12 million tonnes steel plant in Orissa state. Work was scheduled to start in April 2007.

Initially, POSCO will build a 4 million tonnes steel plant and set up a 400 MW power plant.

Source: www.steelguru.com

German weekly magazine Auto, motor and sport reported over the weekend that European car makers would have to face drastic price increases of up to 60 per cent for steel in coming weeks and months.

According to an advance copy of an interview with a senior manager of ArcelorMittal to be published on Thursday, the steel company planned to increase prices in several steps over the coming weeks and months.

“Contracts with our clients usually run over 12 months, but we’re already now beginning to negotiate with them how we can share the (increased) costs (for steel),” said ArcelorMittal vice-president automotive Jean-Luc Maurange.

Mr Maurange pointed to higher raw material costs, a rise in transportation costs and the unabated demand for steel.

ArcelorMittal planned the increases over the next few months to avoid an even more “drastic” rise in prices in 2009.

Auto, motor and sport said ArcelorMittal delivers some 23 per cent of the steel needed by German carmakers, adding that its market share in Europe was around 50 per cent.

In the United States, Mr Maurange said the company was seeing the first signs that steel demand was cooling due to the crisis of US car makers.

“(For the full year 2008,) I expect revenue to rise slightly, mainly resulting from price increases, while steel sales will stagnate,” Mr Maurange told the weekly magazine.

He said the steel producer expected to grow in the Western European market, but was beginning to feel the weakness in the North American market.

The Asian market won’t be able to deliver on ArcelorMittal’s expectations as the steel maker wasn’t set up well enough in the region, Mr Maurange said.

http://www.theaustralian.news.com.au/story/0,25197,23943984-20142,00.html

Tata Steel, the first and largest Private Sector Steel Company in India has embarked on growth plan to increase its Jamshedpur Works Capacity to 7 million tonnes per annum in Phase I and to 10 MT in Phase II. ‘H’ Blast Furnace marks the completion of the most important milestone in that journey. It has been designed, supplied, erected and commissioned by a consortium consisting of PW Italia, L&T, PW India, and PW Luxembourg.

While addressing the august gathering at the Steellenium Hall, Mr. B Muthuraman, Managing Director, Tata Steel said, “It is a historical day not only for Tata Steel but also for the nation. I would like to thank Mr. R S Pandey, who came to Jamshedpur to be a part of this momentous day. The blow in of H Blast Furnace is a major milestone and another giant step in making India prosperous. It is India’s largest blast furnace and it is an effort by Tata Steel to add tremendously to the nation building process. Steel is the back bone of the country and we want to ensure that India does not miss the bus. I would like to thank the entire team for completing the project in record time”

The chief guest for the occasion, Mr. R S Pandey, Secretary for Steel, Government of India was exhilarated to be a part of the commissioning of H Blast Furnace. “It is the largest blast furnace that has been completed in 25 months. It will work efficiently and pave the path for the construction of more blast furnaces. I would like to extend my congratulations to the entire team for achieving this remarkable feat. I get the reassurance that Tata Steel will continue to play a pioneering role in the process of steel making”

The foundation stone for this 2.5 MTPA Blast Furnace was laid in June, 2006. The project broadly involved a total of 80,000 m3 of civil work, 28,000 tons of structural work, 20,000 tons of equipment erection, 22,000 tons of refractory work and 1.5 km of rail track and 1500 km of electrical cabling involved. All the shells and major pipe line were fabricated in-house by Growth Shop of Tata Steel and most of the equipments have been procured from reputed OEMs Overseas. The whole plant has been designed within an area of 63 acre due to space constraints and this is an engineering marvel. Also the project has been completed in 25 months from the groundbreaking which is the shortest possible time ever taken for construction of such a large furnace anywhere in the world.

‘H’ Blast Furnace will produce over 7200 tonnes of hot metal per day with a coke rate of 380 kg/thm and coal injection rate of 160 kg/thm. The furnace is equipped with all modern features. It has two flat cast houses with four tapholes. Cold blast will be made available by electrically driven blowers. Energy in terms of electrical power will be recovered from the BF gas through an expansion turbine. The waste heat from the stoves’ exhaust will be recovered to save on the fuel rate of the furnace. The Slag generated will be supplied for Cement Manufacturing in granulated form.

The commissioning of the largest Blast Furnace of 3800 m3 in Jamshedpur Steel Works is in the year when Tata Steel is celebrating its Centenary and this is a moment of great pride not only for Tata Steel, but also the nation as a whole. 10 MT expansion of Jamshedpur Steel works will be completed by December 2010.

The function was attended by Mr. S.K. Roy, Chief (H Blast Furnace) along with his team, Jaswant Singh, Committee Members of Tata Workers Union and other dignitaries.

About Tata Steel

Established in 1907 as Asia’s first integrated private sector steel company, Tata Steel in 2006 on a combined basis is the world’s sixth largest steel producer in terms of actual crude steel production with geographic footprints in India, South East Asia, UK and Europe. With the recent acquisition of Corus Limited, the combined enterprise has an aggregate crude steel production capacity of around 28.1 million tonnes with approximately 82,700 employees across the four continents.

Press Releases 2008

Source: http://www.tatasteel.com/newsroom/press442.asp

It went a step further by imposing a uniform 15% ad valorem export duty (duty based on value of a product) on iron ore under an additional resource mobilisation programme (ARM). The new duty structure would be implemented with immediate effect.

As per the notification, the government has withdrawn 5-15% export cess imposed on variety of steel products including hot and cold rolled coils, steel pipes and tubes and galvanised sheets. It has, however, increased export cess on long steel products such as bars and rods; angles, shapes and sections and wire from present 10% to 15% to improve their availability in the domestic market. Rising price of long products has directly impacted consumers with higher cost of construction.

It is understood that 15% export cess on pig iron has also been maintained at the same level to discourage its exports and make available the material for value addition by domestic companies.

However, the levy of 15% ad valorem duty on iron ore is significant as it has been uniformly across all categories of ore irrespective of iron content. This likely to swell government’s resources substantially as country exports roughly 100 million tonne of ore annually mainly to spot markets in China where prices have been spiralling.

Government sources said net impact of export cess withdrawal and imposition of price linked duty on ore would be a gain of Rs 2000 crore for the exchequer.

The duty changes were earlier approved by a Committee of Secretaries (CoS). The CoS was asked to arrive at solution to check the rising price of steel through a mix of fiscal and administrative measures. The proposal to levy export cess on iron ore, however, divided inter-ministerial consultation earlier with mining and commerce ministries opposing the levy while steel and finance supporting.

The cess on iron ore is a expected to act as a big disincentive for exporters of ore (mainly mining companies). “There’s no shortage of iron ore in the domestic market currently. The government’s move would only have an adverse impact on the exports of iron ore as freight and other transportation costs are already very high. The decision would also aggravate the trade deficit between India and China,” Federation of Indian Mineral Industries (FIMI) secretary general R K Sharma said.

At present export duty on a fixed rate of Rs 300 per tonne is imposed on ore with 62% of higher iron content and Rs 50 on lower grade ore.

Finance minister P Chidambaram had announced imposition of 15% export duty on hot rolled steel products, 10% on cold rolled steel products, pipes and tubes and 5% on galvanised sheets to disincentivise exports and contain the domestic demand-supply gap. The steel ministry, however, favoured its withdrawal. Steel prices have risen by about over 60% in last one year.

Essar Steel Holding CEO J Mehra, “We appreciate the government’s decision to roll back export duty on steel products as it was required to maintain long term commitments to export value added items to overseas buyers. The move will provide free market access to the industry without affecting the domestic market.”

While steel firms are maintaining a voluntary moratorium on prices, the new measures are aimed at bringing stability for a longer period.

14 Jun, 2008, 0015 hrs IST, ET Bureau

“Steel producers have demanded roll back of export duty and we have forwarded the request to the finance ministry,” Paswan said.

Earlier this month, the government persuaded steel makers to roll back price hikes. It had earlier imposed an export duty ranging from 5 to 15 percent, as part of efforts to boost supplies and tame inflation ruling at 3-½ year highs.

Reuters
Posted online: Friday , May 23, 2008 at 1153 hrs IST

                                                                                            SOURCE: Wikipedia

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Stelco’s most attractive operation is its Lake Erie mill at Nanticoke, Ontario, which completed a renovation and expansion late last year at a cost of 270 million Canadian dollars ($252 million). While Mr. Mott has been working to reduce costs, the company’s much older traditional base of operations at its headquarters in Hamilton, Ontario, is unprofitable.

Over all, Stelco reported a net loss of 39 million Canadian dollars in the first quarter of this year and a net loss of 145 million Canadian dollars in the preceding quarter.

As part of its restructuring, Stelco agreed to make up, over 10 years, a pension shortfall of 675 million Canadian dollars. The company is also carrying about 738 million Canadian dollars in debt.

The company has long had a strained relationship with the United Steelworkers union. That situation has only been made worse by recent job reductions in Hamilton.

Stelco declined to comment beyond its statement, which did not identify the potential buyers. But the trend toward steel industry consolidation suggests that any new owner will not be Canadian.

Severstal of Russia, which owns a former Ford steel mill in Dearborn, Mich., tried to acquire Stelco during its restructuring.

Brookfield Asset Management of Toronto is Stelco’s largest shareholder, with about 36 percent of its stock. It did not respond to requests for comment

          Source : http://www.nytimes.com/2007/06/02/business/worldbusiness/02steel.html?_r=1&partner=rssnyt&emc=rss&oref=slogin

We wish you a prosperous 2008.

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