Source:http://www.headlinesindia.com/business-news/iron-and-steel/tataowned-corus-to-cut-steel-production-2899.html

“Demand has fallen by more than 50 percent to 300,000 tonnes this September from 700,000 tonnes last September,” said Sridhar. “Prices too have fallen by 60 to 65 percent. This is one of the worst slumps we have seen. The closure of steel mills in China, which in the recent past had accounted for more than 85 percent of Goan ore exports, has hit the industry the most,” he said.

“China was a booming market until the Beijing Olympics. During the run-up to the Games, the Chinese government ordered several steel mills closed to cut down on pollution. These mills have not opened since due to a possible credit crunch,” he said. He further added that some of the ports in China had heavy inventories piled up to the tune of 70 to 80 million tonnes of ore. Sridhar also claimed that the global economic recession had forced the infrastructure industry to cut corners wherever they could and one of the first casualties of the trimming exercise was low grade ore.

“Energy costs for processing low grade ore are higher when compared to high grade ore and so steel plants worldwide have switched to high grade ore to cut down energy costs. High grade ore is, unfortunately, non-existent in Goa,” Sridhar said. He also said that the emergence of the Yandi mines in Western Australia meant that the mining industry in Goa would either have to buck up or go into the red. “The extraction of ore from Yandi mines alone rivals the extraction from the whole of Goa.”

In 2007, Goa exported nearly 33 million tonnes of iron ore to markets including China, Japan, South Korea and Romania. Sridhar warned that the slump in the mining industry would engineer a trickle-down effect, affecting everyone all the way to truck and barge owners. “Decrease in demand will obviously mean hardships for everybody.” He also hinted at possible resource sharing exercises by mining companies in Goa to cut production costs to fight the slump. “You could possibly see some joint ventures between mining firms in the near future,” he said.(IANS)

Source:http://www.headlinesindia.com/business-news/iron-and-steel/goas-iron-ore-exporters-in-worst-slump-3439.html

Three blast furnaces, at Port Talbot and Scunthorpe in Britain, and one in the Netherlands, will shut temporarily.

Corus, which is owned by India’s Tata Steel, blamed the global economic downturn for the cuts.

Chief executive, Philippe Varin, said Corus had to adapt “to the changing environment with maximum speed”.

Shut down

The cut is greater than expected. Last month, Corus said it would cut production between October and December by a million tonnes of crude steel - about 20% of its output.

In a statement the firm said it had now decided to extend these production cuts beyond December.

Corus said no jobs would be lost as a result of the production cutback. The firm, which employs more than 24,000 workers in the UK, announced 400 job losses in its distribution business, on 6 November.

Michael Leahy, general secretary of the steelworkers’ union Community, said the shut down “underlines how the economic crisis is hurting manufacturing in Britain”.

“We are hopeful that Corus will look to retain capacity to meet long-term demand rather than make a knee-jerk reaction to short-term trends,” he said.

One blast furnace at Scunthorpe, Port Talbot, and IJmuiden in the Netherlands, will be temporarily shut down, the firm said.

Corus said it expected to produce about 30% less crude steel than planned during the two quarters to the end of March 2009.

Source:http://news.bbc.co.uk/2/hi/business/7716448.stm

The project on a free tax zone would entail an investment of 350 billion rupees in three phases, Sajjan Jindal managing director of JSW Steel told reporters.

“We would produce three million tonnes of steel by 2012 from the unit when it goes onstream, followed by six million tonne by 2015.” he said.

“We will reach our target of producing 10 million tonnes of steel by 2020.”

The inauguration of the project at Salboni, which is about four hours’ drive from Kolkata in an economically backward district, was marked by a huge presence of cadres of the ruling communists in West Bengal.

Last month, Tata Motors (TAMO.BO: Quote, Profile, Research, Stock Buzz) moved its ultra-cheap Nano small car project from the state in the face of farmers’ protest over land seizure.

The communists in the eastern state is showcasing the project to fight negative publicity it got when Tata Motors shifted its plant to another state.

Unlike the Tata plant, the JSW project faced no protest over land acquisition after the steel maker offered farmers jobs and shares in its unit JSW Bengal Steel.

“We are against forcible land acquisition from farmers. We started work with support of the villagers,” Jindal said.

The company has acquired 4,500 acres of land for the plant.

JSW Steel owns 89 percent of the equity in the unit in Bengal. The remaining is held by the state government.

Source:http://www.reuters.com/article/rbssConsumerGoodsAndRetailNews/idUSBOM41816620081102

Rizhao and Shandong Iron and Steel, located in eastern China’s Shandong province, signed a letter of intent on consolidation on Wednesday, the paper said. It gave no further details.

Fast-growing Rizhao produces 8 million tonnes of crude steel annually and has attracted analysts’ attention for its high profit margins.

Consolidation has progressed slowly but steadily in China’s fragmented steel sector, with encouragement from the government.

The state-owned parents of Laiwu Steel Corp and Jinan Iron and Steel Co have merged to form Shandong Iron and Steel Group, although they have yet to give a time frame for a formal combination of their equity.

Source: http://www.reuters.com/article/rbssIndustryMaterialsUtilitiesNews/idUSSHA2680120081106

“The steel ministry submitted a new fiscal package for approval to the finance minister (FM) on Friday. Though the FM has given an assurance of full support to the steel ministry, the decision on duty rejig may be announced once Prime Minister Manmohan Singh returns from Beijing,” an official source said.
Source:http://economictimes.indiatimes.com/Economy/Govt_may_impose_import_duty_on_steel/articleshow/3638875.cms

While the finmin is likely to change custom duty structure on steel, it is unlikely to reduce excise duty on the metal as suggested by the steel industry earlier. The industry had earlier asked steel ministry to reduce excise duty on steel products from present 14% to 8% level. Long steel products used for construction activities may also escape the 10% import duty. However, the CVD (14%) waiver on few long products may be withdrawn to create a level playing field.

The new fiscal package is likely to come as a breather for steelmakers including Tata Steel, JSW, Essar and Ispat who have been finding it difficult to sell their products in the domestic market due to the suppressed demand and cheap imports coming from countries like Ukraine, Thailand and China. The landed cost of steel from these countries has reached rock bottom level of between $500 -$600 per tonne, much lower than prevailing domestic steel price.

The steel industry had demanded import duty up to 15% on steel products besides fixing a floor price of $800 per tonne on imports to prevent dumping from China, Ukraine and Thailand.

Prices per ton of steel will fall as much as 4,000 rupees ($80) by December, Chief Financial Officer Koushik Chatterjee said today in Mumbai, where the company is based. Demand from makers of trucks and buses have fallen, while supplies to cars and other light vehicle have remained flat, he said.

Deepening concerns about the global economic slump is keeping consumers away from purchases of houses, cars and home appliances, lowering demand for steel worldwide. ArcelorMittal, the world’s biggest steelmaker, and Tata Steel’s U.K. unit Corus have said they plan to cut production.

“Indian steelmakers will see a fall in realization by at least 20 percent this quarter as demand is hit,” said Bharath S., an analyst, at Sundaram BNP Paribas Mutual Fund, which sold Tata Steel shares last quarter. “Also, expenses are unlikely to come down as both raw material and borrowing costs remain high.”

Tata Steel shares fell 14 percent to 178 rupees at close of trading in Mumbai today. The stock has fallen 81 percent this year, compared with a 57 percent decline in the benchmark Sensitive Index. Rival Posco has dropped 56 percent in the period, Nippon Steel Corp. 60 percent and JFE Holdings Inc. 64 percent.

“Steel shares are being hammered because people don’t expect demand to revive in the next few quarters,” said Sanjay Makhija, vice president at Fortune Financial Services India Ltd. in Mumbai.

Earnings

Second-quarter profit, excluding unit Corus, rose to 17.9 billion rupees ($358 million), or 21.75 rupees a share, in the quarter ended Sept. 30 from 11.9 billion rupees, or 15.58 rupees, a year earlier, Tata Steel said today in a statement. Profit beat the 16.5 billion rupee median of five analyst estimates compiled by Bloomberg. Sales climbed 41 percent to 67.4 billion rupees.

Revenue from sources other than steelmaking jumped to 1.06 billion rupees from 610 million rupees a year earlier, the company said, without giving details. Tata Steel’s raw material costs surged 73 percent to 13.8 billion rupees, while interest charges rose 34 percent in the quarter.

The company reported a foreign-exchange loss of 3.45 billion rupees, compared with a gain of 610 million rupees, after a slide in the Indian currency against the dollar in the quarter forced the company to revalue its overseas debt.

Moody’s Investors Service lowered Tata’s credit-rating outlook on Oct. 22, citing challenges its U.K. unit faces because of the global economic slowdown.

The Indian rupee, which fell as much as 50 against the dollar to a record, is the worst performer in Asia this year after South Korea’s won.

Tata Steel is looking at forming iron-ore and coal ventures in Mozambique and scouting for limestone ventures in Oman, to secure raw material supplies, Chairman Ratan Tata said in August.

While Tata Steel imports a third of the coal needed for its mills in India and mines its own iron ore, Corus buys both the raw materials. Both iron ore and coking coal prices surged to a record this year on increased demand from China, the biggest producer of the metal.

Source:http://www.bloomberg.com/apps/news?pid=20601091&sid=a8ivswjjbXaM&refer=india

Mittal’s election as chairman till October 2009 was announced Monday after a meeting here of the board of directors of the association, which also changed its name from the earlier International Iron and Steel Institute.

The Indian steel magnate was also elected as member of the worldsteel executive committee, while Naveen Jindal-led Jindal Steel and Power Ltd joined the association as an associate member in the category of steel companies producing less than two million short tonnes per annum, a statement from the association said.

The new vice-chairmen elected to the worldsteel were Ku-Taek Lee, chairman and CEO of POSCO; Paolo Rocca, chairman and CEO of Techint Group; and John Surma, chairman and CEO of US Steel.

On behalf of the board of directors, director general of the World Steel Association Ian Christmas welcomed Mittal as the new chairman.

“The board of directors expressed their gratitude to Ku-Taek Lee as he completes his year as chairman and gave a warm welcome to Lakshmi Mittal. We are delighted to welcome our new members on board,” Christmas said.

“Since we were formed in 1967 the world for steel has substantially changed and so has this organisation. We are now a truly global body representing 18 of the world’s 20 largest steel companies, including six of the top 10 producers in China,” he added.

Besides Mittal, the 2008/9 executive committee includes: Hajime Bada, JFE Steel Corporation; Daniel DiMicco, Nucor Corporation; Jorge Gerdau Johannpeter, Gerdau SA; Karl-Ulrich Köhler, ThyssenKrupp AG; Ku-Taek Lee, POSCO; Alexey Mordashov, Severstal JSC; Shoji Muneoka, Nippon Steel Corporation; M. Aydin Müderrisoglu, Erdemir; Paolo Rocca, Techint Group; John Surma, US Steel Corporation; Sakari Tamminen, Rautaruukki Oyj, Philippe Varin, Corus Group; Lejiang Xu, Baosteel Group; Xiaogang Zhang, Anshan Iron & Steel Corporation; Ian Christmas, World Steel Association.

Four new companies - Badische Stahlwerke GmbH, Deacero, S.A. de C.V, Laiwu Steel Group Ltd and Metalloinvest Management Company - were inducted as regular members, companies producing more than two million short tonnes per annum.
SOURCE:http://www.zeenews.com/articles.asp?aid=474544&sid=BUS

While contract prices have declined given the recent fall in international prices, they are still higher on a year-on-year basis.

Meanwhile, domestic steel companies are likely to continue acquisitions abroad, focusing on the mining sector, in an effort to improve integration of raw materials, add analysts.

For instance, players like JSW Steel plans to increase its capacity by 2020 with two greenfield projects of 10m tonnes each in West Bengal and Jharkhand, and it is also attempting to increase its captive supply of key raw materials via its overseas mines.

JSW Steel has 25 per cent captive iron ore, but is fully dependent on external sources for coal. It expects to attain self sufficiency to the extent of 40-50 per cent in iron ore and coking coal over the next two to three years, via a combination of expansions of captive mines and JVs both in India and countries such as Chile and Mozambique
Source:p://economictimes.indiatimes.com/Indicators/Steel_consumption_to_grow_but_at_moderate_pace/articleshow/3566247.cms

The growth targets may also have to be revised from double digit to single digit, though the long-term expansion plans of companies could remain intact, they added.

“The production growth in the steel sector is likely to decline to 8-9 per cent this year from the expected 12-13 per cent due to global economic slowdown,” JSW Group Chief Financial Officer Sheshagiri Rao told PTI.

Indian steel companies would have to cut prices to survive, else domestic market will be flooded with cheaper imports, he said.

Globally, steel prices have softened by about USD 350 per tonne in the last couple of months, alluring large-scale consumers to go for cheaper imports from countries like China and Ukraine.

“The global turmoil has affected demands and put pricing pressure in the US. These would have a ripple effect on Indian market too,” an Essar Group spokesperson said.

British steel giant Corus, part of Indian conglomerate Tata group, has already said it is taking steps to optimise production as per the changing demand scenario.

Even as the dynamics of global economic market continues to change, the domestic steel firms don’t see its impact on their long-term expansion plans.

“We have secured finances for our projects lined up till 2010. In this scenario, however, raising capital from abroad will not be easy,” Rao said.

India’s largest steel producer SAIL too said the crisis would not affect its expansion plans as it has enough financial resources.
Source:http://economictimes.indiatimes.com/Steel/Steel_prices_prod_may_come_down_on_global_crisis/articleshow/3586137.cms

The China Iron and Steel Association (CISA) says Vale’s price demands are unreasonable. Several Chinese steel mills, including Baosteel and Wuhan Iron & Steel signed contracts early this week with domestic iron ore miners to use their products as a substitute for Brazilian iron ore.

Last week CISA wrote a letter to Vale, asking the world’s largest iron ore miner not raise the price of its iron ore by an additional 12 to 13%. In February Vale and several European steel companies agreed on a 65% price hike. Asian customers pay 11% to 11.5% less than European clients, according to Vale.

The Brazilian miner is trying to match the iron prices charged by Rio Tinto Group and BHP Billiton. Rio and BHP secured a price increase of as much as 97% this year, compared with Vale’s 71% increase.

Chen Xianwen, head of market research at CISA, told Bloomberg that Chinese steelmakers have rejected the price hike because of a slowdown in demand from the auto industry and construction. “It was agreed in the meeting that using domestic iron ore fines is absolutely feasible,” Chen said.

Iron ore prices have already significantly increased this year. The CISA says costs for China large and medium-size iron and steel manufacturers rose by nearly 58% in the first half of this year.

Chen told Bloomberg that Vale is now only shipping iron ore fines with a 62% iron ore content to China, suspending the shipment of higher grades that have 64 and 65% content.
SOURCE: http://www.mineweb.net/mineweb/view/mineweb/en/page39?oid=63363&sn=Detail

Shan Shanghua, secretary general of the China Iron and Steel Association, said domestic ore will replace Brazilian products in a meeting on Tuesday that was attended by major Chinese iron and steel groups, according to China Security News.

The association considers the move reasonable due to weak demand for steel products at home and abroad, as well as price and quality advantages for domestic ore products.

This is the second meeting since Vale requested a price increase after annual contracts were signed. The request violated international rules on iron ore price negotiations, the report said.

The Brazilian miner has sought to raise prices for ore sold to Asian steel mills to bring it in line with agreements with European customers. Market watchers said Vale’s move may have been taken to position itself for a new round of price talks for iron ore that will start in November.

Vale traditionally granted discounts to Asian customers to make up for higher shipping costs compared to products from Australia, the report said.

Representatives of Bao Steel, Wuhan Steel, Jinan Steel, Shougang Mining Company, Benxi Steel Mining Company, Shunfeng Steel Mining Company of Liaoyang and Miyun Metallurgy Mining Company from Beijing attended the association’s meeting.
Source:http://en.ce.cn/Industries/Energy&Mining/200809/26/t20080926_16929867.shtml

China would encourage domestic iron ore miners to increase production and would decrease overall ore demand at steel mills, including through a reduction in steel product exports, said Luo Bingsheng, the association’s vice chairman.

“Vale’s price demand was extremely ill-advised as the long-term price for Brazilian iron ore and the spot price for Indian ore have reached the same level,” Luo said, adding that domestic iron ore inventories had increased substantially.

Luo said China would not ease controls on steel exports but would be likely to tighten them further, adding that sharp increases in steel product exports in July and August were atypical.

China’s steel association has sent a formal letter of complaint to Vale over its demand for higher payments for iron ore.

The moves came after Vale asked its Asian customers to pay about 12 to 13 percent more for iron ore under 2008 term contracts to bring their FOB prices in line with those paid by European steel mills.

Chinese steel mills met at the association’s headquarters last week, but failed to hash out a clear strategy for opposing Vale’s hike.
SOURCE:http://www.reuters.com/article/rbssIndustryMaterialsUtilitiesNews/idUSSHA9303020080918

This was decided at a meeting of the Committee of Secretaries chaired by the Cabinet Secretary, Mr K.M. Chandrasekhar, to sort out the difficulties encountered by national mineral companies in the face of the levy of export tax of 15 per cent announced by the Government in order to make the domestic availability of the raw material for steel companies affordable at a time when steel prices do not show any let-up in their rise.

Highly placed sources in the Government told Business Line here that since the Australian iron ore companies have obtained a 96.5 per cent hike in their iron ore price from the importing countries, Indian companies too should negotiate with the Japanese and South Korean companies using this as a floor price to cushion the impact of export levy and spurt in freight cost for the iron ore producers.

They said as these companies renegotiate with their importing companies in Japan and South Korea this year around, they should get a minimum of 96.5 per cent hike as compared to the realised sale price last year.

Steel minister Ram Vilas Paswan said that the steel ministry was is favour of complete ban of iron ore exports but other concerned ministries were not inclined to it.

The government decided to impose 15% export duty on iron ore in June after iron ore prices increased by 50% because of low availability in the domestic market.

The government should at least consider raising export duty of iron ore having 62% ferrous content.” Paswan said.

The committee of secretaries also decided to roll back export duty on steel, barring primary and semi-finished products as a measure to control steel prices and control inflation.

Paswan said that prices of steel has already come down by 15-20% and it is expected to remain stable at that level as the prices of steel has also started coming down internationally. He was in the city to attendthe 44 th anniversary of Metal & Scrap Trading Corporation.

“We have had a review meeting on August 7 and found that prices of steel in India were low compared with international prices. But steel prices internationally has also started coming down so there are no reasons for the prices to go up,” Paswan said.

He said if the steel companies are earning a profit margin of 15%, there are no reasons for the steel companies to increase prices, Paswan said
source: http://www.financialexpress.com/news/Steel-ministry-wants-20-export-duty-on-iron-ore/359317/

Leading steel makers have asked for the tax to be lifted to 35 percent from 15 percent as they try to reduce input costs at a time when the government has leaned on them for months not to raise prices as it fights double-digit inflation.

“One issue is raising the export tax on iron ore. The government is considering it,” Ram Vilas Paswan told reporters after meeting officials of steel firms.

Pawan Burde, a steel analyst with Angel Broking in Mumbai, said it was likely the government would hike the export tax on iron ore, but possibly only to 25 percent.

“That’s very much possible because the government is against companies exporting high-quality iron ore,” Burde said.

India exported about 93 million tonnes of iron ore in the fiscal year ending March 2007, out of which about 75 percent went to China. Local miners say this could halve in the year to March 2009 as the existing tax makes rival suppliers attractive.

Earlier in the day, Paswan told an industry conference the sharp increases in prices of raw materials were a cause of concern and both steel and its raw materials needed to be at “reasonable levels” for sustained growth of the sector.

“A short-term approach on pricing of critical raw materials and steel has the potential to slow down growth,” he said.

Steel Secretary P.K. Rastogi said domestic prices could decline further in September, tracking international markets.

“They are not able to sell their products because people like to import rather than purchase from them, as their prices are high,” Rastogi told reporters

SOURCE: http://malaysia.news.yahoo.com/rtrs/20080901/tbs-india-steel-02c71ef.html

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

Baosteel, the listed unit of China’s largest steel mill, lowered cold-rolled steel product prices by 300 yuan from the third quarter, while keeping its hot-rolled steel product prices unchanged, trade sources said on Monday.

An official in the office of Baosteel’s board had no comment, while a senior Baosteel official told Reuters on Friday that the company may not publish uniform steel product prices for the fourth quarter. The company did not announce prices for the third quarter.
Source: http://www.reuters.com/article/rbssIndustryMaterialsUtilitiesNews/idUSSHA36534220080825
The decision to keep hot-rolled prices unchanged reflected high global steel prices relative to China’s and expectations of firm demand worldwide in the fourth quarter, analysts said.

“Baosteel’s pricing is within the market’s expectations. We have already seen weak demand for cold-rolled coil due to a slowdown in the auto and home appliance industries,” one trader said.

The price for cold-rolled steel, excluding value-added tax, is 6,496 yuan ($949.30) per tonne for September, while the price for hot-rolled steel is 5,742 yuan, traders said, citing offers from the company.

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

With the Supreme Court clearing the mining plans of Posco and Sterlite last Friday, following the green signal of a central empowered committee handling such cases, it is now Bhilai Steel’s turn at Friday hearings. This Friday being a holiday, Bhilai’s case is expected to be heard on August 22. Raghavachari Ramaraju, managing director of the Chhattisgarh-based plant, said he is hopeful about Rowghat. The plant’s current mines at Dalli Rajhara, 85km away, will be exhausted in four or five years.

“We expect that, with Posco’s and Sterlite’s case having been cleared by the Supreme Court…Ours will be coming up next and get the clearance,” said Ramaraju, who has been with Bhilai since joining it in 1972 as a graduate engineer. Rowghat, 180 km from Bhilai, has around 500 million tonne iron ore, which will last the plant 35-40 years at its expanded capacity.

“Dalli Rajhara is depleting fast and we are trying to stretch it to the maximum, but it won’t last us more than another four and a half years maximum,” he said. Bhilai Steel was set up in the middle of nowhere only because of the iron ore reserves, and its location makes imports or even supplies from other SAIL mines uneconomical. It gets Dalli Rajhara ore at Rs 600-650 per tonne, and imports will cost ten times more. “We can’t afford to buy from anywhere else, and at the same time there is no source which can give me the ore,” he said, pointing out that the NMDC Ltd mines nearby are fully booked. “That is precisely the point we are stressing, that an established unit will not have any linkages,” he said. He said, SAIL’s own raw materials division is already finding it difficult to feed the existing plants.

Bhilai is the only SAIL plant that has its own iron ore mines, apart from ISP, the recently acquired Indian Iron & Steel Plant.

source:http://us.rd.yahoo.com/dailynews