Imported Scrap Steel to Rescue Indian Steel Manufacturers from Recession

RNCOS in its new research report, “Indian Steel Industry Outlook to 2012”, states that as survival chances are brighter with low input cost, the Indian steel manufactures will focus on importing more scrap steel.

Traditionally, India has been one of the major importers of carbon steel finished products. In 2007-08, carbon steel finished products contributed around two third of the overall imported steel products followed by scrap steel. The total volume of imported scrap steel increased significantly by 18% during 2007-08 compared to a year ago.

However, the steel consumption in the Indian market is severely hampered by the ongoing global recession that washed out many investment plans in various industries. In fact, many steel manufacturers are facing the risk of bankruptcy due to declining consumption and rising stocks at warehouses. Thus, the only way to avoid bankruptcy for most of the steel manufacturers is to clear the existing inventories as soon as possible. But clearing of stockpiles has significantly affected the profitability of steel manufacturers as they are forced to sell products at lower prices.

Moreover, in the post recession era, it is possible that most of the steel manufacturers would prefer to use more scrap steel as raw material for their end products at a low cost. Hence, the availability of scrap and low custom duties will bolster the import scenario for the scrap steel industry in India.

“Indian Steel Industry Outlook to 2012” gives exhaustive and objective information on the Indian steel industry, with focus on the industry structure, composition and working. It also provides extensive statistical data and rational analysis on the steel industry. The report highlights the advantages/disadvantages India has to become an attractive geographical region to carry out steel business.

In addition, the report focuses on the growth prospects of steel consuming industries in terms of fresh investments to get a clear picture of the steel industry potential. It also provides forecast on major industry parameters and helps clients to identify critical opportunities available in the industry.

Source:www.rncos.com

Jobs blow for Rotherham steel firm

ROTHERHAM’S giant Corus plant has suffered a further jobs blow after it was revealed plans to transfer work from the West Midlands were being scrapped.

In January bosses at Corus Engineering Steels – part of the Indian-based Tata group – announced more than 700 jobs were to go at the Aldwarke plant as part of a restructuring plan which would see more than 3,500 jobs axed worldwide.

They also announced around 100 jobs would be created when the company’s bright bar division was transferred from Wednesbury in the West Midlands to Rotherham.
But now the company says the plans have been ditched due to deteriorating market conditions.
Corus spokesman Rob Simpson said: “The company has decided not to relocate its bright bar operations from Wednesbury, West Midlands, to Rotherham.

Source:http://steelstripworld.blogspot.com/

India’s Steel Ministry Proposes Additional Tax on Cheap Imports

June 16 (Bloomberg) — India’s steel ministry proposed imposing a temporary additional tax on cheap imports, accepting local steelmakers’ demand to curb dumping.

“We would certainly like to see that our steel industry flourishes and not face any unfair competition,” Steel Minister Virbhadra Singh told reporters in New Delhi today. “We have made some proposals” to the finance ministry.

Imports of steel rose 21 percent to 528,000 metric tons last month from a year earlier, Steel Secretary Pramod Rastogi said last week, citing ministry figures. Some countries are offering prices lower than those in India, which is leading to the spurt in imports, he said, without identifying the nations.

Producers from Ukraine and Russia are willing to sell in India at below-market prices, Seshagiri Rao, chief financial officer at India’s third-largest producer, JSW Steel Ltd., said in an interview on June 11. China’s move to offer a rebate on steel exports will also hinder the Indian steelmakers, he said.

The government had last month rejected a plea by JSW Steel, Steel Authority of India and rivals that a 25 percent duty be imposed in addition to the existing 5 percent import tax.

“We are watching the data,” Rastogi said on June 11.

By Pratik Pareja & Debabrati Roy.

Source: http://www.bloomberg.com/apps/news?pid=20601091&sid=aH_.VeL.krs4

India’s Tata Steel downgraded amid burden of foreign acquisitions

MUMBAI, India (AP) — Moody’s downgraded the company rating of India’s Tata Steel Ltd on Monday because of weak performance at its U.K. Corus unit — sign of how troublesome Tata’s ambitious overseas acquisitions have become since the global financial crisis hit.

Tata Steel was rated at Ba3 from Ba2, the second downgrade since March. Both ratings are below investment grade. Moody’s also downgraded Tata Steel U.K. to B2 from B1 — both speculative grade ratings — the second downgrade since January.

“Reduced cash flow generation and increased leverage to support Tata Steel U.K. are putting pressure on Tata Steel India’s credit profile,” Ivan Palacios, an analyst for the ratings agency said in a statement.

“However, the company’s ability to provide further equity to the European operation is backed by the strong support from the domestic banking sector,” he added.

The Tata Group has made some of India’s most aggressive overseas acquisitions. In 2007, Tata Steel acquired Corus, Europe’s second-largest steel producer, and the next year, Tata Motors bought the Jaguar and Land Rover brands from Ford Motor Co.

After the acquisition of Corus, Tata Steel became the world’s sixth largest steel maker with an annual production capacity of around 29.9 million tons of crude steel.

But when the global financial crisis hit, those overseas assets quickly turned into liabilities, at least for the short term, for their Indian parent companies.

The acquisitions have been difficult to finance, and both Corus and Jaguar Land Rover have required significant capital infusions from the Tata Group.

In May, Tata Steel renegotiated 3.7 billion pounds ($5.4 billion) in acquisition-related debt. As part of that deal, Tata Steel agreed to inject 425 million pounds ($635.4 million) into its U.K. subsidiary.

That same month, Tata Motors managed, after much difficulty, to complete refinancing of a $3 billion bridge loan it took to pay for the Jaguar Land Rover deal.

Tata Motors executives said in May that the company had spent 78.1 billion rupees ($1.7 billion) to fund the acquisition and was now working to reduce its debt.

Tata Motors is India’s largest commercial vehicle maker and the creator of the ultra-cheap Nano passenger car, set to hit India’s roads in July.

ERIKA KINETZ, AP Business Writer
8:29 AM PDT, June 8, 2009

Source: http://www.latimes.com/business/nationworld/wire/sns-ap-as-india-tata-steel,0,5367541.story

JSW Steel to import coking coal at average USD 100 tonne – Mr Jindal – 04 Jun, 2009

Reuters reported that JSW Steel Limited will import 5 million tonne of coking coal in FY 2010 at an average price of USD 100 a tonne.

Mr Sajjan Jindal MD of JSW Steel Limited said on the sidelines of a conference that “We will import 5 million tonne of coking coal the average is about USD 100.”

Mr Jindal said last year the company imported 3 million tonne of coking coal. It also expects iron ore purchases from NMDC to be 33 percent cheaper this fiscal.

(Sourced from Reuters)