Steel cos may hold capacity expansion

Indian steel producers may not be able to expand production capacity to meet burgeoning demand if their operating margins remain at current levels, Tata Steel’s managing director B Muthuraman said on Wednesday.

“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.

Govt may ban export of flat steel products, iron ore

The steel industry could be in for another shock with the government now considering banning exports of flat steel products with a view to check rising inflation.
“If the prices of flat steel products are not being kept in check, either the export duty could be increased or a ban on exports could be considered to increase domestic availability,” Committee of Secretaries (CoS) observed in its last meeting.
It also noted that the government may consider increasing export duty on long steel products and subsequently explore the possibility of banning iron ore exports to increase domestic availability.
Government had on 13 June exempted flat rolled products of iron and steel, including galvanized products, pipes and tubes that attracted export duty ranging from 5% to 15% ad-valorem, from the purview of the export duty.
The rate of export duty on long products such as bars and rods, angles, shapes, sections and wires was also increased from 10% to 15% and a 15% ad-valorem duty was imposed on iron ore.
The CoS decided that the Ministry of Steel in consultation with Department of Revenue would soon consider suitable measures for increasing the domestic availability of steel and moderating its prices.
The ministry would also consider proposals for implementation in early August when the three-month self- moratorium imposed by major steel producers to hold their priceline expires.
The ministry would quickly undertake an analysis on the options available for moderating the prices of iron ore and submit it for consideration of the company of secretaries during the next meeting, they added.

Corus Process to modernize RINL bloom caster

Corus Process Engineering has been awarded a multi million pound contract from Rashtriya Ispat Nigam Limited’s Visakhapatnam Steel Plant to modify and enhance the company’s number 2, four strand bloom caster at its plant.

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.


Iron Ore in India: The Present and the Future of It

‘Iron Ore in India: The Present and the Future of It’, authored by prominent author Dr AS Firoz provides you the valuable information on Indian iron ore market and is scenario. The report covers the reviews of the developments in Indian iron ore industry.

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.


POSCO may buy iron ore to feed steel plant in India

POSCO may buy iron ore to feed steel plant in India – Report
Bloomberg reported that POSCO may be forced to buy iron ore to feed its USD 12 billion steel plant in India should the government fail to award it a license to mine ore.

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.


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U.S. Steel Stays Strong

With the 2008 iron ore price negotiations between BHP Billiton and Chinese steel mills still up in the air as of Monday U.S. steel producers see dollar signs in their future.

All of the feet dragging on iron ore prices is very bullish for U.S. steel producers, says Michelle Applebaum of Michelle Applebaum Research. Last week, Australian mining giant Rio Tinto clinched a deal with Baosteel for an 85.0% price hike, which shows that demand from China is strong enough to sustain a massive price increase. (See “ Rio Changes The Rules Of The Game”) and (See ” Rio Sets Steel Prices Alight.”) With U.S. steel prices already 20.0% less than offshore prices, demand in the U.S. will only continue to grow.

The weak dollar, high shipping rates, and strong overseas demand has been keeping steel imports from reaching American shores. The decline in imports limits supply, forcing U.S. steel companies to use full production capacity and allowing them to raise prices. As a result spot steel prices, which are prices for immediate delivery, have surged.

Monday marks the informal industry deadline for talks between BHP and Chinese steel mills, led by Baosteel, China’s largest steelmaker. But unidentified sources say the negotiations could drag on indefinitely, according to Reuters.

“It is unlikely that U.S. prices will stay below global levels,” Applebaum said. “There will be continued pressure to raise prices through the end of the year.”