Car makers face higher steel prices: report

June 30, 2008
CAR makers in Europe face price rises of up to 60 per cent for steel while US demand was cooling, a top steel maker told a magazine.

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-moving towards 10MTPA capacity

India’s largest Blast Furnace, ‘H’ Blast Furnace at Tata Steel, was blown in today, 31st May, 2008 formally by Mr R S Pandey, Steel Secretary, Government of India at a grand function at Tata Steel Works in Jamshedpur. He was accompanied by Mr B Muthuraman, Managing Director Tata Steel, Mr H M Nerurkar, Chief Operating Officer, Tata Steel, Mr. R.P. Singh, Vice President (Engineering and Projects) , Mr Basevi, Managing Director, Paul Wurth (PW) Italia and Mr K G Hariharan, Senior Executive Vice President, L&T.

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

Steel export cess rolled back, 15% duty on iron ore levied

NEW DELHI: The steel industry has finally got what it has been waiting for a long time. The government on Friday notified withdrawal of recently imposed export cess on a host of steel items as was agreed earlier during a meeting of steel producers with the Prime Minister.

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

Paswan urges roll back of steel export duty

New Delhi, May 23: India’s steel minister, Ram Vilas Paswan, said on Friday he has urged the finance ministry to roll back an export tax recently imposed on steel products.

“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

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Blast furnaces have been used for two millennia to produce pig iron, a crucial step in the steel production process, from iron ore by combining fuel, charcoal, and air. Modern methods use coke instead of charcoal, which has proven to be a great deal more efficient and is credited with contributing to the British Industrial Revolution. Once the iron is refined, converters are used to create steel from the iron. During the late 19th and early 20th century there were many widely used methods such as the Bessemer process and the Siemens-Martin process. However, basic oxygen steelmaking, in which pure oxygen is fed to the furnace to limit impurities, has generally replaced these older systems. Electric arc furnaces are a common method of reprocessing scrap metal to create new steel. They can also be used for converting pig iron to steel, but they use a great deal of electricity (about 440 kWh per metric ton), and are thus generally only economical when there is a plentiful supply of cheap electricity

                                                                                            SOURCE: Wikipedia

Inputs costs, demand seen lifting India steel price

Rising costs of iron ore and other inputs as well as strong demand will likely push up Indian steel prices over the next six months, despite government attempts to contain them, industry officials and analysts said.

Tata Steel has already raised hot-rolled coil prices twice this year and cold-rolled coil prices once, and smaller firms such as JSW Steel, Bhushan Steel, Ispat Industries and Essar Steel have followed suit.

“If you take $700 (per tonne) as the base, prices are going to go up by 20-25 percent.”

After Steel Minister Ram Vilas Paswan expressed concern over prices earlier this month, steel makers agreed to cut prices on some products by up to $25 per tonne, but the cuts are unlikely to be sustained.

Iron ore prices are rising internationally. Brazilian mining giant Vale secured price rises of 65 percent and higher for the iron ore it sells to major Asian steel mills.

                                                                                    Source: www.reuters.com

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