Saturday, 29 Jan 2011
Severfield Rowen Plc and Zamil Steel Industries, a unit of Zamil Industrial Investment Company, of Saudi Arabia, announced the signing of a formal alliance.
The alliance will provide enhanced structural steelwork design, fabrication and erection capability to clients in Saudi Arabia, the wider Middle East and North Africa. The focus of the collaboration will be projects with high engineering content, eg stadiums, high rise buildings, airports, power plants and transport infrastructure.
Severfield Rowen will operate with Zamil in Dammam, where several key Severfield Rowen managers will be located.
Both Severfield Rowen and Zamil are leaders in the field of fabricated structural steelwork and have a history of successfully completing many flagship projects. This alliance will provide further enhanced benefits to clients in the growing markets of the Middle East and North Africa.
Commenting on the alliance, Mr Adnan A Al Mansour, President of Zamil Steel Industries, said “We are very pleased with our new alliance with Severfield-Rowen Plc and believe this will put both companies in a much better position to capture the highly engineered projects which are planned for the region. Through our discussions with Severfield Rowen, we have already built strong relations between our respective management teams and we look forward to good future prospects as a consequence of this alliance.”
Mr Tom Haughey CEO of Severfield Rowen Plc added “Severfield-Rowen Plc has been looking to further expand its activity into the regions of the Middle East and North Africa and we believe our collaboration with Zamil is the perfect vehicle. This will give us excellent opportunities to combine our skills and work together successfully on the many prestigious projects planned in these areas. We very much look forward to a long and rewarding relationship. This alliance is an excellent platform for both companies to realize their growth ambitions.”
Saturday, January 29, 2011
Tokyo Steel to increase steel prices by up to JPY 3000 a tonne
Saturday, 29 Jan 2011
Japan's largest electric steelmaker Tokyo Steel Mfg Co announced that the company has decided to increase the list prices of the whole steel products by JPY 2,000 to JPY 3,000 per tonne in its February 2011 supply contracts of domestic sales, with a January 26th 2011 deadline for order intakes. The decision indicates a price increase across the board for two consecutive months.
A price increase of JPY 2,000 per tonne applies to sheet products, heavy plates and square pipes. Another price increase of JPY 3,000 per tonne applies to long products.
As a result, the new list prices of main products in base sizes are1. JPY 69,000 per tonne FOT for HR coils2. JPY 87,000 per tonne FOT for hot dip galvanized coils3. JPY 73,000 per tonne FOT for checkered plates4. JPY 76,000 per tonne FOT for heavy plates5. JPY 78,000 per tonne FOT for H beams6. JPY 75,000 per tonne FOT for channels7. JPY 87,000 per tonne FOT for U piles8. JPY 61,000 per tonne CIF for deformed bars.
At the same time, Tokyo Steel announced a start up of heavy plate sales out of its captive warehouse in the Osaka area to meet the requirements of various customers. Heavy plates on sale are ones of 9mm to 40mm thick and 2,100mm/2,438mm wide on the SS400 standards.
Mr Naoto Ohori MD & GM of marketing at of Tokyo Steel said that "The price increases to take effect are intended to meet a surge in ferrous scrap prices. Prices of steel products are trending upward, but it will take time to correct cave in prices. The company is poised to watch prices of raw materials, supply demand conditions for steel products and foreign exchange markets after the lunar New Year holidays (February 2nd 2011 to February 8th 2011) in China."
He added that "The company estimates finished steel production from its five works at a total of around 150,000 tonnes for January 2011. On the agenda are periodic equipment repairs at the Okayama and Utsunomiya works for six days each from January 24th 2011 and at the Kyushu works for 13 days."(Sourced:TEX Report Limited)
UK steel industry outlook poor for 2011 - Severfield Rowen
Saturday, 29 Jan 2011
Steel group Severfield Rowen said that the outlook for the UK steel industry was poor for 2011. In a trading update ahead of its full year results for 2010, it announced a new venture in its international business.
Severfield Rowen, which provides steel to the construction industry, said that "A number of commercial office projects in London and some projects in the power sector are being deferred until 2012. Overall UK demand for 2011 will be lower than expected as a result of slower than anticipated economic recovery, reducing public expenditure and significant increases in steel prices at a difficult point in the business cycle. This is leading the Company to lower its expectations for 2011, but with the prospect for some recovery starting early in 2012."
It said its 2010 results, to be announced in March, would be in line with expectations and that it has a current order book of GBP 217 million in the UK.
Severfield Rowen also announced an alliance with Saudi Arabian business Zamil Steel Industries, which it said would help both companies win big engineering projects in Saudi Arabia, the wider Middle East and North Africa, such as stadiums, high rise buildings, airports, power plants and transport infrastructure.
Mr Tom Haughey CEO of Severfield Rowen said that "Severfield Rowen has been looking to further expand its activity into the regions of the Middle East and North Africa and we believe our collaboration with Zamil is the perfect vehicle. This will give us excellent opportunities to combine our skills and work together successfully on the many prestigious projects planned in these areas."
Meanwhile, the business' Indian JV JSW Severfield Structures, which opened in November and employs 250 people, continues to grow its order book, which currently stands at GBP 15 million.(sourced:yorkpress.co.uk)
Euro Coal-Prices up $1-4 a tonne on Colombia strike, oil
* Cerrejon in talks to avoid strike this weekend
* Oil up sharply by $1.84/bbl on fast U.S. growth
* Reuters poll shows 5.5 mln T lost in Queensland floods
* March DES ARA trades at $119.50/T, up $1.00
LONDON, Jan 28 (Reuters) - Prompt coal prices rose $1.00-4.00 a tonne on Friday on stronger oil prices and market anxiety that a strike may start soon at Colombia's largest coal exporter Cerrejon.
Although coal prices have fallen over $12.00 a tonne from the peaks in early January, the market is still vulnerable to any fresh supply disruptions.
Buyers who face delayed or cancelled cargoes will be able to replace them but are likely to push the market higher in the process.
The market has adjusted to the loss of thermal coal from Australia due to Queensland's floods, because China and India have withdrawn from the spot market.
According to a Reuters poll on Thursday, around 5.5 million tonnes of thermal coal was lost in Queensland and 11.3 million tonnes of coking coal.
"Colombia and the possible strike is the talk of the market today but prices haven't moved up much, yet," one major European trader said.
Oil prices moved up sharply by $1.84 a barrel on better than expected U.S. economic data and this helped pull coal values higher, traders said [O/R].
Late on Thursday workers at Colombia's biggest exporter Cerrejon, voted overwhelmingly for a strike after failing to reach agreement on pay.
Under Colombian law, workers cannot strike in the first two days after the vote or on the last day of a mandatory 10-day period. After that they must vote again on whether to strike.
Cerrejon is still trying to reach a deal with the unions before the strike begins.
Colombian exporters including Cerrejon have ample stockpiles at the ports and would be able to ship from these for weeks without delays or cancellations, industry sources said.
The strike would have to be protracted to have any real impact, they said.
But the strike vote has given a fillip to bullish sentiment.
European utilities would be the hardest-hit by any disruption to Cerrejon's exports but they are still holding back from booking new cargoes, waiting for further falls in coal and freight and for the Rhine to reopen fully to barge traffic after an accident.
TRADES
A March delivery DES ARA cargo traded at $119.50 a tonne, up $1.00.
PRICES
A March loading South African cargo was bid at $118.60 with an offer of $119.00, up $4.00 on the bid.
A March delivery DES ARA cargo was bid at $120.00, up $5.00 on the bid, following the earlier trade at $119.50.
An April delivery DES ARA cargo was bid at $116.50 and offered at $119.00, also up $4.00 on the bid.(Reporting by Jackie Cowhig, courtsey sourced: af.reuters)
Acomar to invest USD 50 million in new steel mill
Saturday, 29 Jan 2011
BNamericas reported that Paraguayan company Acomar, which makes and sells steel products, will invest USD 50 million in the construction of a new steel mill.
Mr Juan Alberto Acosta GM of Acomar told BNamericas that "It's a project that is already in the works, but there are still some issues that need to be resolved."
Until these issues are finalized, Mr Acosta said that he prefers not to speak in more detail about the project. He added that "I expect everything to be ready in a month and then more information will be released."
The new steel mill is designed to meet the high demand for rolled products on the market. The company's industrial installations total nearly 10,000 square meters, including a metallurgical service center and six machines working all day to supply the market with plates, structural tubes and structural profiles.
Acomar produces and sells products such as plates, tubes and metallic structures used in warehouses, silos, bridges, as well as parts for the motorcycle industry.(sourced:bnamericas.com)
BNamericas reported that Paraguayan company Acomar, which makes and sells steel products, will invest USD 50 million in the construction of a new steel mill.
Mr Juan Alberto Acosta GM of Acomar told BNamericas that "It's a project that is already in the works, but there are still some issues that need to be resolved."
Until these issues are finalized, Mr Acosta said that he prefers not to speak in more detail about the project. He added that "I expect everything to be ready in a month and then more information will be released."
The new steel mill is designed to meet the high demand for rolled products on the market. The company's industrial installations total nearly 10,000 square meters, including a metallurgical service center and six machines working all day to supply the market with plates, structural tubes and structural profiles.
Acomar produces and sells products such as plates, tubes and metallic structures used in warehouses, silos, bridges, as well as parts for the motorcycle industry.(sourced:bnamericas.com)
Steel minister reviews the progress of Jagdishpur SAIL unit
Saturday, 29 Jan 2011
Mr Beni Prasad Verma steel minister held a meeting with senior officials from ministry of steel & Steel Authority of India Limited at Lucknow and reviewed the progress of the ongoing revival work of Jagdishpur SAIL Unit which is erstwhile Malvika Steel at Jagdishpur.
Mr UP Singh joint secretary ministry of steel, Mr CS Verma chairman of SAIL, Mr SN Singh MD of RSP and representatives from Kobe Steel were among those present during the meeting.
While expressing satisfaction over the status and progress, Mr Verma commended the SAIL team for nearing the completion of warehouse and galvanized corrugation unit.
Mr CS Verma chairman of SAIL outlined the proposed strategy for the JSU and stated that the revival work is going on as per schedule and the unit will be successfully operational soon.
It is noteworthy that SAIL acquired the assets of erstwhile Malvika Steel at Jagdishpur in the year 2009 which were registered in SAIL’s name in June 2010. For reviving this setup and to supply value added finished products to meet the demand of the region, initially four main units were proposed under Phase 1. Two units namely, a warehouse with a capacity of 12,000 tonnes per annum and a GC unit of capacity 13,000 tonnes per annum are in final stages and shall be ready for commissioning very soon.
Work for two more units under the current phase viz. a TMT Bar Mill of capacity 150,000 tons per annum and a crash barrier manufacturing unit of capacity 10,000 tons per annum is progressing as per schedule and shall be completed by November 2011.
For Phase, discussions with KOBE Steel of Japan are being held for which a joint task force team has been formed which is likely to submit its report in March 2011. Options for setting up a 1000 MW gas based power plant and a steel plant based on the technology of gas based DRI and EAF for making value added products are being examined.
SAIL is also carrying out many activities under Corporate Social Responsibility in and around Jagdishpur. The School inside the campus has been renovated with basic amenities and playground. 210 children have been registered with the school and are studying. Medical health check up camps organized in nearby villages/ schools regularly and necessary medicines disbursed. Medical health centre with one doctor and two pharmacists is functional; one ambulance is also in operation. Many patients are being examined daily in the health centre and free medicines are provided to them.
Steel minister stated that for further industrial development of the State of Uttar Pradesh, SAIL will also be examining the feasibility of setting up a Steel Processing Unit at Barabanki and Gonda.
Mr Beni Prasad Verma steel minister held a meeting with senior officials from ministry of steel & Steel Authority of India Limited at Lucknow and reviewed the progress of the ongoing revival work of Jagdishpur SAIL Unit which is erstwhile Malvika Steel at Jagdishpur.
Mr UP Singh joint secretary ministry of steel, Mr CS Verma chairman of SAIL, Mr SN Singh MD of RSP and representatives from Kobe Steel were among those present during the meeting.
While expressing satisfaction over the status and progress, Mr Verma commended the SAIL team for nearing the completion of warehouse and galvanized corrugation unit.
Mr CS Verma chairman of SAIL outlined the proposed strategy for the JSU and stated that the revival work is going on as per schedule and the unit will be successfully operational soon.
It is noteworthy that SAIL acquired the assets of erstwhile Malvika Steel at Jagdishpur in the year 2009 which were registered in SAIL’s name in June 2010. For reviving this setup and to supply value added finished products to meet the demand of the region, initially four main units were proposed under Phase 1. Two units namely, a warehouse with a capacity of 12,000 tonnes per annum and a GC unit of capacity 13,000 tonnes per annum are in final stages and shall be ready for commissioning very soon.
Work for two more units under the current phase viz. a TMT Bar Mill of capacity 150,000 tons per annum and a crash barrier manufacturing unit of capacity 10,000 tons per annum is progressing as per schedule and shall be completed by November 2011.
For Phase, discussions with KOBE Steel of Japan are being held for which a joint task force team has been formed which is likely to submit its report in March 2011. Options for setting up a 1000 MW gas based power plant and a steel plant based on the technology of gas based DRI and EAF for making value added products are being examined.
SAIL is also carrying out many activities under Corporate Social Responsibility in and around Jagdishpur. The School inside the campus has been renovated with basic amenities and playground. 210 children have been registered with the school and are studying. Medical health check up camps organized in nearby villages/ schools regularly and necessary medicines disbursed. Medical health centre with one doctor and two pharmacists is functional; one ambulance is also in operation. Many patients are being examined daily in the health centre and free medicines are provided to them.
Steel minister stated that for further industrial development of the State of Uttar Pradesh, SAIL will also be examining the feasibility of setting up a Steel Processing Unit at Barabanki and Gonda.
ArcelorMittal withdraws from the financing program of Valin Steel
Saturday, 29 Jan 2011
It is reported that Hunan Valin Steel Co Ltd finally released its non public offering plan after twists and turns. The issue price is set at 5.57 per share equal to the net asset value per share of 2009. And the number of the objects of the directional add-issuance is reduced from two to one, Hunan Valin Iron and Steel Group Co Ltd.
Early in 2008, Valin Steel had launched the directional add-issuance program, but had not gotten written approval from China Securities Regulatory Commission until last September end. The plan has been adjusted for several times and it was put off again and again owing to its stock price long moving below its slated directional add issuance price under the backdrop of government controls on steel sector and market recession.
More unfortunately, at the moment of the coming of the deadline of three months effective for the issuance, ArcelorMittal which agreed to acquire the incremental shares by cash withdrew from its earlier decision. Now, one company is left to take the bleeding deals, Valin Group.
The number of shares was once cut from 600 million set in 2008 to 550 million adjusted in June 2010 and now has again been trimmed to 278 million.
The closing price of January 26 posted at CNY 3.86 a discount of about 30.7% compared with CNY 5.57 the directional add issuance price. (sourced:21cnhr.gov.cn)
It is reported that Hunan Valin Steel Co Ltd finally released its non public offering plan after twists and turns. The issue price is set at 5.57 per share equal to the net asset value per share of 2009. And the number of the objects of the directional add-issuance is reduced from two to one, Hunan Valin Iron and Steel Group Co Ltd.
Early in 2008, Valin Steel had launched the directional add-issuance program, but had not gotten written approval from China Securities Regulatory Commission until last September end. The plan has been adjusted for several times and it was put off again and again owing to its stock price long moving below its slated directional add issuance price under the backdrop of government controls on steel sector and market recession.
More unfortunately, at the moment of the coming of the deadline of three months effective for the issuance, ArcelorMittal which agreed to acquire the incremental shares by cash withdrew from its earlier decision. Now, one company is left to take the bleeding deals, Valin Group.
The number of shares was once cut from 600 million set in 2008 to 550 million adjusted in June 2010 and now has again been trimmed to 278 million.
The closing price of January 26 posted at CNY 3.86 a discount of about 30.7% compared with CNY 5.57 the directional add issuance price. (sourced:21cnhr.gov.cn)
Chinese steel price index continues to increase
Saturday, 29 Jan 2011
The Chinese Long Product Price Index CLPPI went up by 1 point on January 28th 2011 whereas the Chinese Flat Products Index CFPPI went up by 8 points. The overall price index CHISPI went up by 5 points.
The Chinese Long Product Price Index CLPPI went up by 1 point on January 28th 2011 whereas the Chinese Flat Products Index CFPPI went up by 8 points. The overall price index CHISPI went up by 5 points.
The Chinese Long Product Price Index CLPPI went up by 1 point on January 28th 2011 whereas the Chinese Flat Products Index CFPPI went up by 8 points. The overall price index CHISPI went up by 5 points.
| Class | 27-Jan | 28-Jan | Change | % |
| CLPPI | 7518 | 7519 | 1 | 0.0% |
| CFPPI | 7624 | 7632 | 8 | 0.1% |
| CHISPI | 7578 | 7583 | 5 | 0.1% |
CLPPI - Chinese Long Product Price Index
CFPPI - Chinese Flat Product Price Index
CHISPI - Chinese Steel Price Index
Long Products
| Category | 27-Jan | 28-Jan | Change | % |
| PI - WRC | 6285 | 6285 | 0 | 0.0% |
| PI - Rebar | 9011 | 9013 | 2 | 0.0% |
PI- Product Index
Flat Products
| Category | 27-Jan | 28-Jan | Change | % |
| PI - Plates | 6994 | 6998 | 4 | 0.1% |
| PI - HR | 7795 | 7807 | 12 | 0.2% |
| PI - CRC | 7802 | 7802 | 0 | 0.0% |
| PI - HDG | 7243 | 7243 | 0 | 0.0% |
PI- Product Index
To know more about these indices please visit daily this blog or subscribe to FREE services of http://leeuniversal.blogspot.com by join Google group or send a mail for request. (sourced:steelhome.cn)
Macroeconomic indicators - Overheating fears grow in China
Saturday, 29 Jan 2011
Xinhua reported that some local governments plan on doubling their GDP within five years as China ushers in its 12th Five Year Program (2011-2015) and raising concerns that the Chinese economy could overheat.
As per report, at the starting point of the 12th Five Year Program, local governments have released their GDP targets for the next five years at the annual meeting of the local legislature. Many set double digit growth targets for the coming five years and some even proposed doubling their 2010 GDP by the end of 2015.
A rough calculation shows that to double the GDP in five years an annual growth of 14.87% would be needed. That is even faster than China 10.3% GDP growth in 2010 and 9.2% in 2009.
Southwestern China Chongqing Municipality planned to reach an annual GDP growth rate of 12.5% and double local GDP per capita to USD 8,000 by 2015. Jiangmen city of southern Guangdong province has set its sights even higher. It eyes an average annual GDP growth of 15% much higher than the 8% target for the whole province.
Only a few regions lowered their GDP targets. For example, Shenzhen lowered its growth target to 10 percent from 13.5 percent in the 11th Five Year Program.
The enthusiasm about economic growth figures of local governments has triggered authorities and economists to worry about the economy overheating, and put further pressure on inflation management and economic restructuring.
Mr Zhang Ping, director of the National Development and Reform Commission while addressing the national working conference on energy on January 7 that China's top economic planning body, said most provinces set their 2011-2015 GDP targets too high and failed to take into consideration the constraints of environmental protection, energy and resources.
Mr Yao Jingyuan chief economist of the National Bureau of Statistics said if the economy grows too fast, it would undermine both price stability and economic restructuring. He said that "We should make every endeavor to step on the brake peddle for our economy to maintain a moderate growth rate and avoid overheating of the economy. I personally think a growth rate of 8% to 9% will be great."
The high GDP targets set by local governments also show that the growth patterns adopted by local governments remain unchanged.
(Sourced from Xinhua)
Xinhua reported that some local governments plan on doubling their GDP within five years as China ushers in its 12th Five Year Program (2011-2015) and raising concerns that the Chinese economy could overheat.
As per report, at the starting point of the 12th Five Year Program, local governments have released their GDP targets for the next five years at the annual meeting of the local legislature. Many set double digit growth targets for the coming five years and some even proposed doubling their 2010 GDP by the end of 2015.
A rough calculation shows that to double the GDP in five years an annual growth of 14.87% would be needed. That is even faster than China 10.3% GDP growth in 2010 and 9.2% in 2009.
Southwestern China Chongqing Municipality planned to reach an annual GDP growth rate of 12.5% and double local GDP per capita to USD 8,000 by 2015. Jiangmen city of southern Guangdong province has set its sights even higher. It eyes an average annual GDP growth of 15% much higher than the 8% target for the whole province.
Only a few regions lowered their GDP targets. For example, Shenzhen lowered its growth target to 10 percent from 13.5 percent in the 11th Five Year Program.
The enthusiasm about economic growth figures of local governments has triggered authorities and economists to worry about the economy overheating, and put further pressure on inflation management and economic restructuring.
Mr Zhang Ping, director of the National Development and Reform Commission while addressing the national working conference on energy on January 7 that China's top economic planning body, said most provinces set their 2011-2015 GDP targets too high and failed to take into consideration the constraints of environmental protection, energy and resources.
Mr Yao Jingyuan chief economist of the National Bureau of Statistics said if the economy grows too fast, it would undermine both price stability and economic restructuring. He said that "We should make every endeavor to step on the brake peddle for our economy to maintain a moderate growth rate and avoid overheating of the economy. I personally think a growth rate of 8% to 9% will be great."
The high GDP targets set by local governments also show that the growth patterns adopted by local governments remain unchanged.
(Sourced from Xinhua)
China to renew bid to curb steel industry sprawl
Saturday, 29 Jan 2011
According to the Ministry of Industry and Information Technology said China will renew its push to reduce the production capacity of its sprawling steel industry as its largest mills continued last year to make only limited progress in the industry consolidation.The country produced 626.7 million tonnes of crude steel last year an all time high that refocused attention on limited effectiveness of policy tightening and government's attempts over the years to curb the industry size.
Mr Zhu Hongren Ministry of Industry and Information Technology spokesman said the 10 largest steel mills raised their combined contribution to the country's total steel output to 48% last year from 45% in 2009, and a total of 179 million tonnes of obsolete steel and iron capacity was shut down.He said that "We should keep tight control of expansion in the highly energy consuming and polluting industry."The ministry data shows that the top 10 steel mills' crude steel output increased slightly in volume terms last year. At 45% of 2009 output, the top 10 mills would have produced 259.6 million tons of crude steel. At 48% of 2010 output, their production would have been 300.8 million tonnes.
In addressing the reach of the government's policy, Mr Zhu sought to make a distinction between permitted and illicit output-capacity additions. He said that "In referring to overcapacity, we are not talking about mere 'expansion of capacity,' but blind expansion."He added that China's steel output capacity has reached 700 million tons. He also said the cement industry, beset by similar issues, also saw output rise last year by 15.5% to 1.8 billion tonnes.(Sourced from online.wsj.com)
According to the Ministry of Industry and Information Technology said China will renew its push to reduce the production capacity of its sprawling steel industry as its largest mills continued last year to make only limited progress in the industry consolidation.The country produced 626.7 million tonnes of crude steel last year an all time high that refocused attention on limited effectiveness of policy tightening and government's attempts over the years to curb the industry size.
Mr Zhu Hongren Ministry of Industry and Information Technology spokesman said the 10 largest steel mills raised their combined contribution to the country's total steel output to 48% last year from 45% in 2009, and a total of 179 million tonnes of obsolete steel and iron capacity was shut down.He said that "We should keep tight control of expansion in the highly energy consuming and polluting industry."The ministry data shows that the top 10 steel mills' crude steel output increased slightly in volume terms last year. At 45% of 2009 output, the top 10 mills would have produced 259.6 million tons of crude steel. At 48% of 2010 output, their production would have been 300.8 million tonnes.
In addressing the reach of the government's policy, Mr Zhu sought to make a distinction between permitted and illicit output-capacity additions. He said that "In referring to overcapacity, we are not talking about mere 'expansion of capacity,' but blind expansion."He added that China's steel output capacity has reached 700 million tons. He also said the cement industry, beset by similar issues, also saw output rise last year by 15.5% to 1.8 billion tonnes.(Sourced from online.wsj.com)
Alpha close to $7 bln Massey deal-sourcesSat Jan 29, 2011
* Alpha to pay about $7 bln for Massey - sources
* Deal would combine two major coal companies
* Deal would be latest in wave of sector consolidation (Adds details, background)
By Michael Erman and Paritosh Bansal
NEW YORK, Jan 28, 2011 - Alpha Natural Resources is close to a $7 billion deal to buy Massey Energy Co , which was rocked by a deadly coal mining accident last year, sources familiar with the matter said on Friday.
One of the sources said Massey shareholders will receive slightly more than one Alpha share for each Massey share in addition to $10 per share in cash, for a value of around $68 a share. That represents a nearly 19 percent premium over Massey's closing share price of $57.23 on Friday.
The sources said the deal would be worth about $7 billion to combine two of the biggest companies in the Appalachian coal business in the industry's latest consolidation move.
Surging Asian demand for coal to fuel steel mills and power plants has made the sector one of the hottest for dealmaking over the past year.
Recent deal activity in the sector includes Walter Energy's more than $3 billion deal to buy Canadian rival Western Coal Crop , and Rio Tinto's $3.9 billion bid for Africa-focused coal miner Riversdale Mining Ltd .
Massey has said it was weighing strategic options, sparking market speculation that one of its peers may buy it.
ArcelorMittal , the world's largest steelmaker, and St. Louis-based Arch Coal Inc had been seen as potential bidders for Massey in addition to Alpha.
The likelihood that Massey would be acquired increased with the departure of Chief Executive Don Blankenship at the end of last year. Blankenship had been seen as opposed to selling the company and analysts in December said his departure removed the largest impediment to a deal with Alpha.
Blankenship had led Massey for 20 years and had been criticised by environmentalists for championing surface mining, and by unions for the company's use of non-union labor.
The Wall Street Journal first reported that Abingdon, Virginia-based Alpha and Massey were close to a deal. It said talks were continuing and a deal could be signed on Friday night.
Massey, based in Richmond, Virginia, has been under scrutiny by federal mine safety regulators since an explosion on April 5 last year in one of its West Virginia mines that killed 29 workers, the deadliest U.S. coal mining disaster in 40 years.
Massey disputed claims by federal investigators that excessive coal dust fueled the deadly explosion and has said a natural gas leak caused the accident.
In the months following the disaster, Massey shares lost more than half their value, hitting a low of $25.87 in July. They have since bounced back to above pre-explosion levels, helped by reports that the company would likely be acquired. (Reporting by Michael Erman and Paritosh Bansal; additional reporting and writing by Bill Berkrot and Grant McCool, sourced reuters)
Kobe Steel to set up its own port in Vietnam-Nikkei
Saturday, Jan 29, 2011
TOKYO Jan 29, 2011 - Kobe Steel , Japan's fourth-biggest steelmaker, will invest up to $365 million to set up a port facility in Vietnam to be used exclusively by the company, the business daily Nikkei reported on Saturday.
Kobe Steel will invest about 20-30 billion yen ($244-$365 million) until 2013 to build cranes and other infrastructure at the port in the country, the paper said.
The steelmaker decided to set up its own port as it thought it would be more cost efficient than using an existing port and sharing with others as it had originally planned, the Nikkei said.
The Japanese steelmaker has said it plans to build a $1 billion iron-making plant in Vietnam, capable of producing 2.4 million tonnes per year of iron nugget from low-grade iron.
The plant will be built in the northern province of Nghe An this year and begin production in early 2013.
The material from the plant will be sold in Vietnam, as well as to be exported to Japan and other Asian countries, the newspaper said. ($1=82.10 Yen) (Reporting by Chikafumi Hodo; reuters)
Friday, January 28, 2011
Strike looms at Teck Resources coal mine in western Canada
Strike looms at Teck coal mine in western Canada
* United Steelworkers union sets Jan 30 deadline
* Union says dispute centers on retirement benefits
* Mine produces steel-making coal
(Updates with union statement)
VANCOUVER, Jan 27, 2011 (Reuters) - Unionized workers at Teck Resources Ltd's Elkview coal mine in western Canada will walk off the Sunday evening if a contract deal is not reached, the company and union said on Thursday.
More than 700 workers at the facility, the second largest of Teck's six operating coal mines, have worked without a contract since the end of October.
The company said it will not disclose sticking points in the dispute, but the United Steelworkers union has said unresolved issues include company contributions to the workers retirement plan and retiree benefits.
"Our members are preparing to bring about an orderly shutdown and strike action will commence on Sunday," said Dan Will, a staff representative of Steelworkers Local 9346.
Teck said it remains committed to resolving the contract through the negotiations, which are underway in the ski resort town of Fernie, British Columbia.
The Jan. 30, strike notice by the United Steelworkers union comes just over a week after Teck said that adverse weather and rail traffic disruptions would hit its coal sales in the first quarter.
Teck, one of the world's top exporters of metallurgical coal, used to make steel, said it expects sales of between 5 million to 5.5 million in the quarter. That compared with sales of 5.25 million in the same quarter 2010.
Nippon Steel Corp and South Korean steelmaker Posco each own a 2.5 percent stake in the open pit mine near Sparwood, British Columbia. It has an annual production capacity of 6.5 million tonnes per year.(sourced:af.reuters)
* United Steelworkers union sets Jan 30 deadline
* Union says dispute centers on retirement benefits
* Mine produces steel-making coal
(Updates with union statement)
VANCOUVER, Jan 27, 2011 (Reuters) - Unionized workers at Teck Resources Ltd's Elkview coal mine in western Canada will walk off the Sunday evening if a contract deal is not reached, the company and union said on Thursday.
More than 700 workers at the facility, the second largest of Teck's six operating coal mines, have worked without a contract since the end of October.
The company said it will not disclose sticking points in the dispute, but the United Steelworkers union has said unresolved issues include company contributions to the workers retirement plan and retiree benefits.
"Our members are preparing to bring about an orderly shutdown and strike action will commence on Sunday," said Dan Will, a staff representative of Steelworkers Local 9346.
Teck said it remains committed to resolving the contract through the negotiations, which are underway in the ski resort town of Fernie, British Columbia.
The Jan. 30, strike notice by the United Steelworkers union comes just over a week after Teck said that adverse weather and rail traffic disruptions would hit its coal sales in the first quarter.
Teck, one of the world's top exporters of metallurgical coal, used to make steel, said it expects sales of between 5 million to 5.5 million in the quarter. That compared with sales of 5.25 million in the same quarter 2010.
Nippon Steel Corp and South Korean steelmaker Posco each own a 2.5 percent stake in the open pit mine near Sparwood, British Columbia. It has an annual production capacity of 6.5 million tonnes per year.(sourced:af.reuters)
Brazil's CSN may bid for Usiminas, Banif says
Friday, 28 Jan 2011
CSN, Brazil's largest diversified steel group, could bid formally for Usiminas, its bigger rival in the flat steel segment, according to a report by Banif analyst Juliano Navarro. CSN said on Thursday that it boosted its stake in Usiminas voting stock to 5.03 percent from 4.99 percent and could step up purchases to the equivalent of 10 percent of Usiminas' capital.
However, the company said that "it is studying strategic alternatives, including the acquisition of additional shares, more than the aforementioned amount." Navarro said CSN could bid for part of the shares owned by Usiminas' controlling shareholders, pay in cash for them or even do a share swap. (source:af.reuters)
CSN, Brazil's largest diversified steel group, could bid formally for Usiminas, its bigger rival in the flat steel segment, according to a report by Banif analyst Juliano Navarro. CSN said on Thursday that it boosted its stake in Usiminas voting stock to 5.03 percent from 4.99 percent and could step up purchases to the equivalent of 10 percent of Usiminas' capital.
However, the company said that "it is studying strategic alternatives, including the acquisition of additional shares, more than the aforementioned amount." Navarro said CSN could bid for part of the shares owned by Usiminas' controlling shareholders, pay in cash for them or even do a share swap. (source:af.reuters)
S.Africa may ask for low-price iron ore deal: paper
Friday, 28 Jan 2011
JOHANNESBURG (Reuters) -South Africa may ask Kumba Iron Ore to enter into a preferential iron ore supply deal with politically-connected Imperial Crown Trading, Business Day reported on Friday, citing a senior government official.
Kumba lost a battle for mine rights over a stake in its Sishen mine that was previously held by ArcelorMittal's South African unit. The deal entitled the steelmaker to source ore from Kumba at a discount.
After ArcelorMittal failed to renew its rights, both Kumba and little-known ICT applied. The government granted ICT prospecting rights over the mine stake and rejected Kumba's application. The iron ore producer vowed to fight the government decision in court.
ICT has subsequently applied for a mining right.
"If this application is granted, the overwhelmingly likely result will be that (Kumba) and ICT would have to negotiate in good faith in order to procure an arrangement along the lines contained in the supply agreement," Sandile Nogxina, director general in the minerals department, was quoted as saying in court papers.
A preferential deal with ICT would pave the way for ArcelorMittal, which said last year it would buy ICT, to source discounted iron ore once more.
But it would raise further questions about the management of mining rights in South Africa.
Various disputes in 2010 tarnished the image of South Africa as a destination for international mining investment, despite it being the world's biggest platinum producer and number three gold producer.(sourced:af.reuters)
JOHANNESBURG (Reuters) -South Africa may ask Kumba Iron Ore to enter into a preferential iron ore supply deal with politically-connected Imperial Crown Trading, Business Day reported on Friday, citing a senior government official.
Kumba lost a battle for mine rights over a stake in its Sishen mine that was previously held by ArcelorMittal's South African unit. The deal entitled the steelmaker to source ore from Kumba at a discount.
After ArcelorMittal failed to renew its rights, both Kumba and little-known ICT applied. The government granted ICT prospecting rights over the mine stake and rejected Kumba's application. The iron ore producer vowed to fight the government decision in court.
ICT has subsequently applied for a mining right.
"If this application is granted, the overwhelmingly likely result will be that (Kumba) and ICT would have to negotiate in good faith in order to procure an arrangement along the lines contained in the supply agreement," Sandile Nogxina, director general in the minerals department, was quoted as saying in court papers.
A preferential deal with ICT would pave the way for ArcelorMittal, which said last year it would buy ICT, to source discounted iron ore once more.
But it would raise further questions about the management of mining rights in South Africa.
Various disputes in 2010 tarnished the image of South Africa as a destination for international mining investment, despite it being the world's biggest platinum producer and number three gold producer.(sourced:af.reuters)
JSW Steel stock hits 52-week low
Friday, 28 Jan 2011
Shares of JSW Steel fell more than 5 percent to a 52-week low as institutions were unwinding positions after the company reported weak Q3 financial results for the December quarter.
JSW Steel stock slipped another 5 percent on Thursday soon after it announced a 32 percent drop in its net profit.
According to analysts, higher coking coal and iron ore costs continue to threaten profitability. At 10.41 a.m., shares of the company were down 4.48 percent at 922.30 rupees.
Shares of JSW Steel fell more than 5 percent to a 52-week low as institutions were unwinding positions after the company reported weak Q3 financial results for the December quarter.
JSW Steel stock slipped another 5 percent on Thursday soon after it announced a 32 percent drop in its net profit.
According to analysts, higher coking coal and iron ore costs continue to threaten profitability. At 10.41 a.m., shares of the company were down 4.48 percent at 922.30 rupees.
Tata Steel Europe raises UK structurals prices $151/mt again for March
Friday, 28Jan, 2011
London: Tata Steel Europe said Friday it will raise the sale prices on structural sections in the UK by GBP95/mt ($151/mt), citing higher coking coal and raw material costs affecting the business.
Effective on all deliveries from March 6, the increase follows a GBP50/mt price increase the company announced late last year for the period starting January 2.
"The recent extreme flooding in Queensland has led to spot prices in coal and other raw materials markets, which were already suffering from chronic structural supply side constraints, to rise beyond anticipated levels," Mick Maloney, Tata Steel commercial manager for sections, said in a statement. "The steel supply chain has no choice but to take robust action to recover these rapid increases in raw materials costs."
Tata Steel said in December that lower inventories led it to make its prior price increase as it took action before an expected upswing in demand in the usually more active construction season starting at the end the first quarter. (sourced:Platts)
CRC offers to India rise to $830 cfr
Mumbai 28 January 2011
Cold rolled coil offers into India have jumped to $820-830 per tonne cfr Mumbai, supported by demand from the growing car sector and rising hot rolled coil prices upstream. This is up from bookings of $775-780 cfr last week. For more information visit www.metalbulletin.com)
Cold rolled coil offers into India have jumped to $820-830 per tonne cfr Mumbai, supported by demand from the growing car sector and rising hot rolled coil prices upstream. This is up from bookings of $775-780 cfr last week. For more information visit www.metalbulletin.com)
CHINA STEEL WRAP: rebar record gains
Shanghai 28 January 2011
+ SHFE May rebar down 0.3% w-o-w at 4,936 yuan ($751)
+ SSEC April HRC up 0.9% w-o-w at 4,883 yuan ($743)
+ Spot iron ore unchanged at $188-191 cfr Shanghai rebar ended the week lower despite hitting record highs on Monday and Tuesday, as profit taking and property curbs erased earlier gains. The dominant May rebar contract closed at 4,936 yuan per tonne on Friday, up a slight 6 yuan from Thursday but down 0.3%. For information visit www.metalbulletin.com
+ SHFE May rebar down 0.3% w-o-w at 4,936 yuan ($751)
+ SSEC April HRC up 0.9% w-o-w at 4,883 yuan ($743)
+ Spot iron ore unchanged at $188-191 cfr Shanghai rebar ended the week lower despite hitting record highs on Monday and Tuesday, as profit taking and property curbs erased earlier gains. The dominant May rebar contract closed at 4,936 yuan per tonne on Friday, up a slight 6 yuan from Thursday but down 0.3%. For information visit www.metalbulletin.com
Dry miner looks to cash in on spot prices Mathew Murphy
January 28, 2011GLOUCESTER Coal has capitalised on its status as one of the only coal companies largely unaffected by recent heavy rainfall, posting a record quarter for coking coal sales.
The NSW-based company sold 222,000 tonnes of coking coal, used in steel-making, a 49 per cent increase on the December 2009 quarter. Thermal coal sales receded 8 per cent, from 295,000 tonnes to 272,000 tonnes as Gloucester cancelled fixed Australian dollar forward sales contracts in order to take advantage of rising prices.
Gloucester said it was hoping to cash in on soaring spot prices for coking coal, a consequence of the number of coalmines under water.
''The company continued to seek to maximise production and sale of coking coal while maximising total output by topping up with exports of thermal coal,'' it said in a statement.
''The effects of flooding in Queensland's Bowen Basin is manifesting itself in rapidly rising coking coal prices. The company is yet to agree [on] its coking coal pricing for the January-March 2011 quarter, however a substantial increase in price is expected.
''In addition, the company has an uncontracted volume of coking coal available for sale during the quarter and as such should be well-positioned to benefit from the surge in spot prices.''
The chief executive of Gloucester, Barry Tudor, said production would ramp up quickly following the approvals received at its Duralie and Stratford operations.
''[The projects] are important steps towards increasing the Gloucester Basin product coal output up to 3.5 million tonnes per annum by 2014,'' he said. Gloucester shares fell 5¢ to $12.90. (sourced:smh.com.au)
Local cold rolled coil producers raise prices
January 28, 2011, By TEE LIN SAY
PETALING JAYA: Local cold rollers have raised the prices of cold rolled coils (CRC) in view of the general increase in the cost of raw materials and the recent floods in Australia.
Sources said the latest sales were at US$840 to US$850 per tonne this week, up from deals done at US$780 to US$800 in the first week of January.
Cold roll coils are pre-dominantly used in the automobile sector, pipe making and furniture.
Chief Executive Officer of Kinsteel Bhd Datuk Henry Pheng said the increase in CRC prices was in tandem with international prices.
“The recent floods in Queensland, Australia has caused the loss of coal production and hence a shortage in coal supply,” said Pheng.
Australia provides for nearly half the world's coal for steel-making. Queensland produces about 80% of Australia's coking coal, contributing 10% to the nation's exports and 2% to gross domestic product.
OSK Research steel analyst Ng Sem Guan said the asking price for CRC was too high, and it was expected to ease.
“At this price, demand is lacklustre because most people are not confident of its sustainability and also because the Chinese New Year period is typically quiet. The second quarter is normally the peak period for the steel industry,” said Ng.
Almost two months of torrential rains and the worst floods in Queensland since 1974 had affected 30,000 properties, shut coal mines, cut rail lines and damaged crops.
Coking coal is used primarily in steelmaking. It is more vulnerable to supply disruptions than thermal coal because supply has been extremely tight throughout 2010. Most exporters were already producing at capacity before the Australian floods.
Some analyst are predicting that coking coal prices, which currently trade at over US$300 a tonne to reach US$500 due to the intensification of rain in Australia.
Ng said some of these mines which were disrupted, should resume operations in the next one to two months.
The hype in CRC prices was caused more by speculative traders.
The floods in Australia have also caused Japanese steel mills, which secured more than 50% of their coking coal from Australia last year, to seek other alternatives in North America, Africa and Indonesia.(souced:thestar.com.my)
Nippon Steel, JFE Cut Profit Forecasts on Coal Cost
Friday - Jan 28, 2011
By Masumi Suga and Yasumasa Song, Reuters
Net income at Nippon Steel will be about 95 billion yen ($1.15 billion) for the financial year ending March 31, missing its Oct. 27 estimate of 130 billion yen, the Tokyo-based company said today in a statement. JFE reduced its full-year profit forecast by 36 percent to 70 billion yen.
Coking coal prices may rise as much as 78 percent next quarter on disruptions from flooding in Australia, the Bank of America Merrill Lynch said. Japanese steelmakers, which rely on Australian imports for about 60 percent of their coking coal, are seeking alternative supplies from North America and Russia. Iron ore prices have more than doubled in the past two years.
“In addition to rising raw material prices, tightening coking coal supplies due to heavy rains in Australia pushes up costs,” Yoshio Ishikawa, executive vice president, told reporters today in Tokyo.
Third-quarter profit rose to 33.4 billion yen from 25.9 billion yen a year earlier, Nippon Steel said in the statement. JFE Holdings reported a 32 percent decline in quarterly profit to 18.5 billion yen, according to Bloomberg calculation based on the nine-month result released today by the Tokyo-based company.
JFE shares dropped 3.3 percent to 2,643 yen, the biggest decline since Aug. 31 as of the 3 p.m. trading close on the Tokyo Stock Exchange. Nippon Steel fell 2.1 percent to 285 yen.
Weak Prices
Nippon Steel expects the average price of steel will remain little changed at about 81,000 a metric ton in the current quarter, after a 5.8 percent decline from the previous quarter ended Dec. 31, according to its statement. The average price JFE got for its steel fell 2.8 percent to 79,300 yen in the third quarter from the previous three months and is expected to be about 79,000 yen this quarter.
While market prices are rising, the company’s contracted product prices little reflect this gain, Nippon Steel Executive Vice President Shinichi Taniguchi said today. The company plans to raise prices in April, he said, without giving details.
China’s domestic prices for hot-rolled coil, a benchmark steel product, were unchanged at 4,868 yuan a ton today, according to Beijing Antaike Information Development Co. They have risen about 25 percent in the past six months.
Posco, South Korea’s largest steelmaker, this month reported a worse-than-expected drop in quarterly profit after raw material costs gained and demand from builders and home- appliances makers waned.
Australian free-on-board coking coal prices may increase to $400 a metric ton for three-month contracts starting April 1, from $225 a ton this quarter, Merrill Lynch analysts led by Sydney-based Alex Tonks said in a report dated Jan. 25. This compares with the bank’s Jan. 11 forecast of $330 a ton for the second quarter.
Still, the weather’s “impact on coking coal won’t likely continue,” once the season changes, and the short term cut in steel output caused by the flooding will help steelmakers boost prices, according to Shinya Yamada, an analyst at Credit Suisse Securities Japan Ltd.
Flooding has inundated about three-quarters of Queensland, shutting mines, damaging crops and prompting BHP Billiton Ltd. and Rio Tinto Group to declare force majeure, a legal clause that allows producers to miss deliveries. The region is the world’s largest exporter of seaborne coal.
Sumitomo Metal Industries Ltd. and Kobe Steel Ltd., Japan’s third- and fourth-largest steelmakers, are scheduled to report nine-month results and full-year outlook on Feb. 3. (sourced:Bloomberg)
By Masumi Suga and Yasumasa Song, Reuters
Nippon Steel Corp. and JFE Holdings Inc., Japan’s two largest mills, cut their full-year profit forecasts after prices fell and record rains and floods in Australia pushed up the cost of steelmaking coal.
Net income at Nippon Steel will be about 95 billion yen ($1.15 billion) for the financial year ending March 31, missing its Oct. 27 estimate of 130 billion yen, the Tokyo-based company said today in a statement. JFE reduced its full-year profit forecast by 36 percent to 70 billion yen.
Coking coal prices may rise as much as 78 percent next quarter on disruptions from flooding in Australia, the Bank of America Merrill Lynch said. Japanese steelmakers, which rely on Australian imports for about 60 percent of their coking coal, are seeking alternative supplies from North America and Russia. Iron ore prices have more than doubled in the past two years.
“In addition to rising raw material prices, tightening coking coal supplies due to heavy rains in Australia pushes up costs,” Yoshio Ishikawa, executive vice president, told reporters today in Tokyo.
Third-quarter profit rose to 33.4 billion yen from 25.9 billion yen a year earlier, Nippon Steel said in the statement. JFE Holdings reported a 32 percent decline in quarterly profit to 18.5 billion yen, according to Bloomberg calculation based on the nine-month result released today by the Tokyo-based company.
JFE shares dropped 3.3 percent to 2,643 yen, the biggest decline since Aug. 31 as of the 3 p.m. trading close on the Tokyo Stock Exchange. Nippon Steel fell 2.1 percent to 285 yen.
Weak Prices
Nippon Steel expects the average price of steel will remain little changed at about 81,000 a metric ton in the current quarter, after a 5.8 percent decline from the previous quarter ended Dec. 31, according to its statement. The average price JFE got for its steel fell 2.8 percent to 79,300 yen in the third quarter from the previous three months and is expected to be about 79,000 yen this quarter.
While market prices are rising, the company’s contracted product prices little reflect this gain, Nippon Steel Executive Vice President Shinichi Taniguchi said today. The company plans to raise prices in April, he said, without giving details.
China’s domestic prices for hot-rolled coil, a benchmark steel product, were unchanged at 4,868 yuan a ton today, according to Beijing Antaike Information Development Co. They have risen about 25 percent in the past six months.
Posco, South Korea’s largest steelmaker, this month reported a worse-than-expected drop in quarterly profit after raw material costs gained and demand from builders and home- appliances makers waned.
Australian free-on-board coking coal prices may increase to $400 a metric ton for three-month contracts starting April 1, from $225 a ton this quarter, Merrill Lynch analysts led by Sydney-based Alex Tonks said in a report dated Jan. 25. This compares with the bank’s Jan. 11 forecast of $330 a ton for the second quarter.
Still, the weather’s “impact on coking coal won’t likely continue,” once the season changes, and the short term cut in steel output caused by the flooding will help steelmakers boost prices, according to Shinya Yamada, an analyst at Credit Suisse Securities Japan Ltd.
Flooding has inundated about three-quarters of Queensland, shutting mines, damaging crops and prompting BHP Billiton Ltd. and Rio Tinto Group to declare force majeure, a legal clause that allows producers to miss deliveries. The region is the world’s largest exporter of seaborne coal.
Sumitomo Metal Industries Ltd. and Kobe Steel Ltd., Japan’s third- and fourth-largest steelmakers, are scheduled to report nine-month results and full-year outlook on Feb. 3. (sourced:Bloomberg)
NWR Says Quarterly Prices for Coke, Coking Coal Gain
Friday, Jan 28, 2011 By Lenka Ponikelska
New World Resources NV, a mining and coking company based in Amsterdam, said contract prices for first-quarter delivery of coke and coal increased.
The company agreed to deliver mostly semi-soft coking coal for an average price of 165 euros ($226) per metric ton, 7 percent up on the previous three months, it said today in a statement. Coke prices are up 1 percent, at 339 euros a ton.
Thermal coal prices are 13 percent higher than a year ago, at 71 euros a ton, the company said.
NWR said it fulfilled its overall coal production targets for 2010. A lower-than-expected proportion of coking coal in the sales mix affected 2010 revenue. The shortfall in coking coal production was partly offset by an increase in that of thermal coal, according to the statement.
The company expects to produce about 11 million tons of coal and 800 kilotons of coke in 2011, the company said, adding that external sales are likely to reach 10.3 million tons of coal and 720 kilotons of coke on 2011.
The company has the capacity to produce an extra 400 kilotons of coal this year, depending on market conditions, the company said.
NWR is due to publish fourth-quarter results on Feb. 24. (sourced : Bloomberg)
Indian iron ore futures may be cash-settled-source
Indian iron ore futures may be cash-settled-source
Cash-settled contract may be benchmarked to TSI
* Exporters, traders unlikely to rush in to hedge
* Chinese, overseas firms have shown interest-ICEX (Adds quotes, details, background)
By Siddesh Mayenkar
Cash-settled contract may be benchmarked to TSI
* Exporters, traders unlikely to rush in to hedge
* Chinese, overseas firms have shown interest-ICEX (Adds quotes, details, background)
By Siddesh Mayenkar
MUMBAI, Jan 28, 2011 (Reuters) - India's planned iron ore futures contracts are likely to be settled in cash initially and would be linked to internationally acceptable prices, an official said on Friday, but potential players say they would not rush in to hedge on the platform until there is ample liquidity.
Singapore is also looking at a cash-settled futures contract which the Singapore Mercantile Exchange is hoping to launch in the second quarter, in a race with India to establish the world's first futures market for the steelmaking ingredient.
"The contract would closely track acceptable benchmarks like the TSI (The Steel Index)," an official from the Indian Commodity Exchange (ICEX) told Reuters on condition of anonymity.
TSI .IO62-CNI=SI is one of three key providers of iron ore reference prices which global miners Vale , Rio Tinto and BHP Billiton use in setting quarterly contract rates.
SMX, controlled by India's Financial Technologies , was looking at benchmarking its futures contract against the iron ore index of another data provider, Metal Bulletin .IO62-CNO=MB.
India's commodity market regulator, Forward Markets Commission, on Tuesday approved plans by ICEX and the Multi Commodity Exchange (MCX) to launch four iron ore futures contracts. ICEX said it was looking at launching in a month's time.
India is the world's third-biggest iron ore exporter after Australia and Brazil, although its shipments have dropped for a sixth straight month in December because of an export ban in its southern Karnataka state. India normally exports around 100 million tonnes of iron ore annually of which around a quarter comes from Karnataka.
But India's iron ore exporters said liquidity would be a key consideration before they hedge on the futures platform.
"It's a fear that prices may not fluctuate on an intra-day basis, which may put speculators off and take away liquidity from the market and hamper corporate participation initially," said another source with ICEX.
ACCEPTABLE BENCHMARK
Futures contracts would be in addition to the existing forward swap contracts, launched in 2008, being offered by bourses from Singapore to the United States and Europe to prod steelmakers into hedging price risks after the industry moved to a more flexible quarterly pricing system last April after the collapse of a 40-year-old annual benchmark system.
"We wonder if we would hedge right away or wait to see how soon liquidity enters the market," said Rahul Baldota, executive director with iron ore exporter MSPL, which ships most of its annual output of 2.5 million tonnes to top buyer China.
"We hope liquidity would come in over a period of time after options come on board."
India is awaiting approval from the lower house of parliament to start options contracts, which are likely to lure corporate participants and boost liquidity.
"Few overseas firms have shown interest, and they plan to open a subsidiary here so that they can procure, hedge and export," said Sanjay Chandel, chief executive at ICEX.
The absence of foreign players in Indian commodity bourses is a predominant concern which could further limit liquidity, and restrain its influence as a price setter for the seaborne iron ore market worth around $100 billion in 2010.
India currently bars foreign funds from its commodity exchanges.
"India would take time, say another two years, to become a globally acceptable benchmark and could be much more easier after the entry of foreign players," said ICEX's Chandel.
Chandel said ICEX plans to start roadshows next month to promote the contracts. (souced: reuters)
ICVL decides not counter bid for Riversdale Mining
Friday, 28 Jan 2011
Reuters reported that Indian state owned consortium International Coal Videsh Limited has decided not to counter Rio Tinto's AUD 3.9 billion bid for Australian miner Riversdale Mining.
ICVL, which had earlier said it would consider a bid and had hired Citigroup to do due diligence on the firm, on Thursday said it decided against an offer.
Mr CS Verma charman of Steel Authority of India Limited and head of ICVL told reporters “We discussed in detail pricing scenario, future outlook, resources available and took a conscious decision not to bid.”
Mr PS Bhattacharya chairman of Coal India Limited told Reuters that “We did not think it was an appropriate case to bid higher than Rio's offer.”
But he added that the consortium is scouting for coal assets in other countries and said “You should see some action in the next couple of months.”
(Sourced from Reuters)
No more hydrocarbons driven economic growth for Russia - Mr Medvedev
Friday, 28 Jan 2011
RIA Novosti citing Dmitry Medvedev of President as saying that Russia economy cannot grow solely on the vast reserves of oil and natural gas it has.
Mr Medvedev said "I hope most of our nationals realize that opportunities for hydrocarbons driven growth have been exhausted for this country."
He added that all political parties, from the ruling United Russia to opposition ones, realize that the economy should be modernized.
(Sourced from RIA Novosti)
RIA Novosti citing Dmitry Medvedev of President as saying that Russia economy cannot grow solely on the vast reserves of oil and natural gas it has.
Mr Medvedev said "I hope most of our nationals realize that opportunities for hydrocarbons driven growth have been exhausted for this country."
He added that all political parties, from the ruling United Russia to opposition ones, realize that the economy should be modernized.
(Sourced from RIA Novosti)
Ukraine in talks with US firms to develop Black Sea shelf
Friday, 28 Jan 2011
RIA Novosti citing Mr Nikolai Azarov Prime Minister of Ukraine as saying that, Ukraine intends to buy a drilling platform from Singapore this year to extract hydrocarbons on the Black Sea shelf and reduce its dependence on natural gas imports.
The Kerch section of the Black Sea shelf alone has been estimated to contain 10.8 billion cubic meters of natural gas, which could increase Ukraine annual gas production by 4 billion cubic meters and oil production by 3 million metric tons.
Mr Azarov said Ukraine was also negotiating the purchase with other countries and planned to extract gas from alternative sources, such as shale and coal layers. He said that "We are in talks with an American company on transfer of the relevant technology, adding that the government's plans were above all aimed at reducing Ukraine's dependence on gas imports from Russia.”
Although the Black Sea shelf is rich in hydrocarbons, they lie around two kilometers under water and can only be reached by floating drilling platforms. Ukraine Chernomorneftegaz oil and gas Exploration Company currently only has stationary platforms that do not reach beyond 70 meters.
(Sourced from RIA Novosti)
RIA Novosti citing Mr Nikolai Azarov Prime Minister of Ukraine as saying that, Ukraine intends to buy a drilling platform from Singapore this year to extract hydrocarbons on the Black Sea shelf and reduce its dependence on natural gas imports.
The Kerch section of the Black Sea shelf alone has been estimated to contain 10.8 billion cubic meters of natural gas, which could increase Ukraine annual gas production by 4 billion cubic meters and oil production by 3 million metric tons.
Mr Azarov said Ukraine was also negotiating the purchase with other countries and planned to extract gas from alternative sources, such as shale and coal layers. He said that "We are in talks with an American company on transfer of the relevant technology, adding that the government's plans were above all aimed at reducing Ukraine's dependence on gas imports from Russia.”
Although the Black Sea shelf is rich in hydrocarbons, they lie around two kilometers under water and can only be reached by floating drilling platforms. Ukraine Chernomorneftegaz oil and gas Exploration Company currently only has stationary platforms that do not reach beyond 70 meters.
(Sourced from RIA Novosti)
Russian ministry proposes export duties on flat steel and iron ore
Friday, 28 Jan 2011
It is reported that Russian deputy minister of economic development Mr Andrey Klepach has proposed a 10% export duty for flat rolled steel and iron ore. The move is focused on increasing domestic supply and preventing price rises.
As per reports, the ministry has offered to introduce two export tax schemes proposing 10% export duties for flat rolled steel and 30% for iron ore or an alternative including a progressive tax on steel with lower rates and increasing the mining tax on iron ore from the current 4.8% to 8.8% instead of the export duty.
Mr Marat Gabitov with UniCredit Securities said that a new tax regime could cut steel producers investment plans. He said “We see the news as negative for Severstal and MMK, as the two companies are Russia’s biggest exporters of flat rolled steel, with 45% and 35% shares of exports, respectively. Our rough estimates suggest that, all other things equal, the introduce 10% export duty on steel would result in a 10% to 15% cut to EBITDA for both companies. Mechel could suffer from the export duty on iron ore, as it ships up to 4 million tonnes per year to China. Although, the negative effect may not be significant. In any case, we note that the steel lobby in Russia is quite strong and the introduction of additional duties could result in the scaling back local steelmakers’ investment plans, and there fore we believe the chances that such duties will ultimately be introduced may be quite low.”
Mr Mikhail Pak analyst at IC Aton said that strong pressure from auto producers who are susceptible to sharp price rises also lays behind the proposal. He said “Auto producers accused steel plants for their plans to increase prices for flat rolled steel for 40% which may lead to higher auto industry expenditures and inevitably affect retail car prices. AutoVaz flat rolled steel stocks are almost finished and production is on the edge of material shortage. Export taxes were not applicable to any steel raw material earlier except Non ferrous metals. I think government is trying to equalize both sectors to resolve the dispute and prevent retail price soaring.”
Mr Airat Khalikov metallurgy sector analyst at Veles Capital believes the introduction of a new tax regime is a government response to pricing issues on the domestic market. He said “The decision to introduce export tax regime on iron ore and flat rolled steel major steel plants output products, was driven by auto industry complains and inappropriate price strategy on the local market. So to say Steel giants became too greedy spurred by recent foreign market demand growth and less profits on the local market. With strict government control steel producers forced to focus on local supply offering low prices comparing to export prices.”
(Sourced from rt.com)
It is reported that Russian deputy minister of economic development Mr Andrey Klepach has proposed a 10% export duty for flat rolled steel and iron ore. The move is focused on increasing domestic supply and preventing price rises.
As per reports, the ministry has offered to introduce two export tax schemes proposing 10% export duties for flat rolled steel and 30% for iron ore or an alternative including a progressive tax on steel with lower rates and increasing the mining tax on iron ore from the current 4.8% to 8.8% instead of the export duty.
Mr Marat Gabitov with UniCredit Securities said that a new tax regime could cut steel producers investment plans. He said “We see the news as negative for Severstal and MMK, as the two companies are Russia’s biggest exporters of flat rolled steel, with 45% and 35% shares of exports, respectively. Our rough estimates suggest that, all other things equal, the introduce 10% export duty on steel would result in a 10% to 15% cut to EBITDA for both companies. Mechel could suffer from the export duty on iron ore, as it ships up to 4 million tonnes per year to China. Although, the negative effect may not be significant. In any case, we note that the steel lobby in Russia is quite strong and the introduction of additional duties could result in the scaling back local steelmakers’ investment plans, and there fore we believe the chances that such duties will ultimately be introduced may be quite low.”
Mr Mikhail Pak analyst at IC Aton said that strong pressure from auto producers who are susceptible to sharp price rises also lays behind the proposal. He said “Auto producers accused steel plants for their plans to increase prices for flat rolled steel for 40% which may lead to higher auto industry expenditures and inevitably affect retail car prices. AutoVaz flat rolled steel stocks are almost finished and production is on the edge of material shortage. Export taxes were not applicable to any steel raw material earlier except Non ferrous metals. I think government is trying to equalize both sectors to resolve the dispute and prevent retail price soaring.”
Mr Airat Khalikov metallurgy sector analyst at Veles Capital believes the introduction of a new tax regime is a government response to pricing issues on the domestic market. He said “The decision to introduce export tax regime on iron ore and flat rolled steel major steel plants output products, was driven by auto industry complains and inappropriate price strategy on the local market. So to say Steel giants became too greedy spurred by recent foreign market demand growth and less profits on the local market. With strict government control steel producers forced to focus on local supply offering low prices comparing to export prices.”
(Sourced from rt.com)
Chinese domestic steel prices will continue to rise in 2011
Jan 28, 2011
According to a statement issued by the China Iron and Steel Association (CISA) on Jan 25, steel prices in China will continue their upward trend in 2011, though some fluctuations will be seen and the increase will be at a slower rate than previous.
With China's Spring Festival beginning next week, there has been a certain slackening in transaction activity in the domestic steel market. The CISA indicated that, approaching the holiday, finished steel demand will drop and steel prices will be characterized by stability. After the Spring Festival, the CISA foresees that steel demand will recover and that finished steel prices will move in an upward direction.
As the Chinese government will adjust the country's domestic industrial structure and stabilize development in 2011, and also given the impact of uncertainty in the international market, the rate of Chinese economic development will slow down, domestic steel demand will drop, while raw material prices will follow a stable trend at high levels.
The CISA added that it was not optimistic on the prospects for Chinese finished steel exports, due to the Chinese government restrictions on products entailing high levels of energy consumption and pollution, and also because of international trade protectionism. (sourced:SteelOrbis)
China's 2011 power consumption to rise about 9 pct
Jan 28, 2011
China's power consumption is expected to grow about 9 percent in 2011 to 4.5 trillion kwh, a slower pace of growth from the year before, the National Energy Administration said on Jan 28.
Power consumption increased 14.6 percent from a year earlier to 4.19 trillion kilowatt hours in 2010.
The NEA also said 2011 natural gas consumption would rise about 20 percent to 130 billion cubic metres, while natural gas output would increase 16 percent to 110 bcm, suggesting the country would import some 20 bcm of natural gas during the year.
(sourced:Reuters)
China's power consumption is expected to grow about 9 percent in 2011 to 4.5 trillion kwh, a slower pace of growth from the year before, the National Energy Administration said on Jan 28.
Power consumption increased 14.6 percent from a year earlier to 4.19 trillion kilowatt hours in 2010.
The NEA also said 2011 natural gas consumption would rise about 20 percent to 130 billion cubic metres, while natural gas output would increase 16 percent to 110 bcm, suggesting the country would import some 20 bcm of natural gas during the year.
(sourced:Reuters)
China to launch thermal coal futures in 12th five yrs
Friday, Jan 28, 2011
China is planning to launch thermal coal futures during 12th Five-Year (2011-2015), and the Zhengzhou Commodity Exchange will shoulder the responsibility, said Mr.Zhao Jialian, Secretary General of China Coal Industry Association on Jan 27 when interviewed by China Business News.
Zhao introduced that the application report has been handed in to China Securities Regulatory Commission, but declined to name the details.
According to China Business News, the coal futures proposal was postponed in 2010 due to the complex delivery issues.
Now Zhao highlighted that the futures trading of coal will be definitely realized during the 12th Five Years(sourced:Steelhome)
Russia’s NLMK secures coking coal supplies
Friday, Jan 28, 2011
Russian steel producer NLMK has won the right to develop the Usinskiy-3 coking coal deposit in the north of the country, having offered Rbs900 million ($30.2 million) for the license at an auction on 21 January.
Usinskiy-3 reserves will allow NLMK to rely on its own coal resources in future, as at present the company does not produce any coal and has to buy on the open market.
Usinskiy-3 is a large coking coal deposit located in Komi, a region in the north of Russia. Usinskiy-3 contains more than 227million tonnes of high-quality coking coal.
NLMK plans to have the necessary infrastructure ready to start production at Usinskiy-3 by 2016, and expects to bring it to capacity of 4.5 million tonnes per year in 2018.
The project will require Rbs45.5 billion of investment, according to NLMK.
Currently, NLMK consumes about annual 5.5 million tonnes of coking coal and has to buy this in the market, the firm told Argus.
NLMK gets coal mostly in the domestic market, with smaller amounts coming from outside Russia. The company imports 600,000 tonnes of coking coal per year from the US. (sourced:Argus Media)
Russian steel producer NLMK has won the right to develop the Usinskiy-3 coking coal deposit in the north of the country, having offered Rbs900 million ($30.2 million) for the license at an auction on 21 January.
Usinskiy-3 reserves will allow NLMK to rely on its own coal resources in future, as at present the company does not produce any coal and has to buy on the open market.
Usinskiy-3 is a large coking coal deposit located in Komi, a region in the north of Russia. Usinskiy-3 contains more than 227million tonnes of high-quality coking coal.
NLMK plans to have the necessary infrastructure ready to start production at Usinskiy-3 by 2016, and expects to bring it to capacity of 4.5 million tonnes per year in 2018.
The project will require Rbs45.5 billion of investment, according to NLMK.
Currently, NLMK consumes about annual 5.5 million tonnes of coking coal and has to buy this in the market, the firm told Argus.
NLMK gets coal mostly in the domestic market, with smaller amounts coming from outside Russia. The company imports 600,000 tonnes of coking coal per year from the US. (sourced:Argus Media)
China thermal coal price stable despite sea ice and int’l price hike
Jan 28, 2011
China's benchmark thermal coal price remained stable during January 19 to January 25 despite of the turbulence of sea ice and international price hike.
According to statistics released by Ocean Shipping Coal, China's benchmark thermal coal price averaged 774 yuan/tonne, up only one yuan from previous week. China's coal price remains in a downward trend which began since Dec 8 of 2010.
By January 16, the free on board (FOB) price for power coal at New Castle Port in Australia has jumped 4.9% on week to US$1 36.3/tonne, and that of coking coal up 5.7% to US$280/tonne.
Bohai has been covered by ice, which is supposed to block coal imports of China and further push up domestic coal price.
However, the international coal price hike and the bad weather seemed to pose little impact in China's domestic coal price.
The stability in coal price in China despite of international price hike is mainly attributed to smooth throughput at major ports in north China, which has effectively guaranteed stable coal supply to south China.
Experts forecast that coal supply and demand in coastal market will maintain flourish until the Chinese Spring Festival in February, and power plants would have stable coal supply if the weather will not deteriorate into a substantial hinder to disrupt coal transportation from northern coal producing provinces to major coal consumers in the south.
But considering the approaching of Chinese Spring Festival on February 3, China may have to face mounting transportation in railways, which may affect coal transportation. Therefore, insiders predicted that China's coal price is very likely to maintain at high level and grow up further in February. (sourced:Xinhua)
Steel prices may continue to go up in China - MOFCOM
Friday, 28 Jan 2011
According to survey, domestic steel prices presented three-week continuous increase with rising market transactions. By last week, domestic steel prices were up by 1%WoW including 3mm HR sheet coils, 14 I-beam and 20 1.2 welded steel pipe up by 2%, 1.8% and 1.7% respectively.
Traders and construction enterprises increased their winter-stocking, as per statistics, the social inventory of construction steel eyed a WoW increase of 6.9% by January 21 up by 23.1% from last month.
As predicted, the steel prices would be further edging up by small amounts in the later periods mainly boosted by many mills pulled up their ex-works prices.
(Sourced from MySteel.net) visit www.Mysteel.net for real time access to China steel news!
According to survey, domestic steel prices presented three-week continuous increase with rising market transactions. By last week, domestic steel prices were up by 1%WoW including 3mm HR sheet coils, 14 I-beam and 20 1.2 welded steel pipe up by 2%, 1.8% and 1.7% respectively.
Traders and construction enterprises increased their winter-stocking, as per statistics, the social inventory of construction steel eyed a WoW increase of 6.9% by January 21 up by 23.1% from last month.
As predicted, the steel prices would be further edging up by small amounts in the later periods mainly boosted by many mills pulled up their ex-works prices.
(Sourced from MySteel.net) visit www.Mysteel.net for real time access to China steel news!
China steel product export to different countries
Friday, 28 Jan 2011
It is reported that China country wise steel product export in 2010 total 42,448,880 tonnes which South Korea topping the table
It is reported that China country wise steel product export in 2010 total 42,448,880 tonnes which South Korea topping the table
| Country | Dec'10 | 2010 | Share |
| Total | 2,839,653 | 42,448,880 | |
| South Korea | 621,574 | 8,435,661 | 19.98 |
| India | 154,784 | 3,375,084 | 7.99 |
| Viet Nam | 147,413 | 2,419,488 | 5.73 |
| Brazil | 84,280 | 1,717,227 | 4.07 |
| Italy | 93,125 | 1,310,412 | 3.10 |
| Thailand | 99,486 | 1,288,141 | 3.05 |
| Philippines | 72,996 | 1,158,088 | 2.74 |
| Singapore | 66,304 | 1,047,288 | 2.48 |
| US | 76,583 | 1,013,085 | 2.40 |
| Indonesia | 80,799 | 984,106 | 2.33 |
| UAE | 67,708 | 971,714 | 2.30 |
| Hong Kong | 43,294 | 951,744 | 2.25 |
| Taiwan Region | 55,063 | 912,674 | 2.16 |
| Malaysia | 59,444 | 886,914 | 2.10 |
| Saudi Arabia | 75,968 | 815,906 | 1.93 |
| Japan | 36,827 | 807,514 | 1.91 |
| Russian Federation | 42,329 | 794,388 | 1.88 |
| Australia | 73,347 | 766,280 | 1.81 |
| Belgium | 39,744 | 749,010 | 1.77 |
| Chile | 22,412 | 707,535 | 1.68 |
| Spain | 66,125 | 617,691 | 1.46 |
| Iran | 41,329 | 562,100 | 1.33 |
| Peru | 31,149 | 556,044 | 1.32 |
| Canada | 44,996 | 454,441 | 1.08 |
| Turkey | 15,198 | 428,567 | 1.01 |
| Pakistan | 23,107 | 417,976 | 0.99 |
| Nigeria | 22,396 | 390,212 | 0.92 |
| Burma | 32,579 | 390,062 | 0.92 |
| Kuwait | 38,223 | 328,883 | 0.78 |
| UK | 12,194 | 317,367 | 0.75 |
| Colombia | 19,663 | 297,404 | 0.70 |
| Algeria | 17,976 | 271,574 | 0.64 |
| Iraq | 33,382 | 240,280 | 0.57 |
| Angola | 14,464 | 237,425 | 0.56 |
| Kazakhstan | 17,827 | 224,544 | 0.53 |
| Egypt | 17,921 | 222,320 | 0.53 |
| Bengal | 15,039 | 221,041 | 0.52 |
| South Africa | 15,977 | 210,850 | 0.50 |
| Israel | 10,668 | 208,418 | 0.49 |
| Venezuela | 16,080 | 207,746 | 0.49 |
| Sudan | 9,584 | 192,392 | 0.46 |
| Ecuador | 9,759 | 181,272 | 0.43 |
| Portugal | 5,967 | 181,123 | 0.43 |
| Mexico | 18,914 | 177,023 | 0.42 |
| Oman | 2,597 | 168,955 | 0.40 |
| Holland | 8,656 | 159,747 | 0.38 |
| Libya | 10,221 | 152,572 | 0.36 |
| Syria | 3,790 | 118,971 | 0.28 |
| Germany | 12,714 | 118,082 | 0.28 |
| Uzbekistan | 9,294 | 109,282 | 0.26 |
| Panama | 14,086 | 98,975 | 0.23 |
| Poland | 5,335 | 97,337 | 0.23 |
| Cuba | 7,314 | 96,425 | 0.23 |
| Jordan | 8,064 | 93,729 | 0.22 |
| North Korea | 5,365 | 92,485 | 0.22 |
| Turkmenistan | 5,957 | 88,657 | 0.21 |
| Greece | 3,887 | 84,485 | 0.20 |
| Ethiopia | 7,208 | 82,799 | 0.20 |
| Others | 171,137 | 2,237,336 | 5.30 |
In tonne (Sourced from MySteel.net)
Visit www.Mysteel.net for real time access to China steel news!
Thursday, January 27, 2011
China ports see coal stock at 24Mt by end-2010
Jan 26, 2011
Coal stockpiles at China’s main loading ports amounted to 23.73 million tonnes at the end of Dec 2010, surging 65.3% year on year and rising 6.2% month on month, disclosed the National Development and Reform Commission (NDRC) on Jan 24, Yicai Daily reported.
Meanwhile, China’s railways transported a total of 1.4 billion tonnes power coal in 2010, jumping 23.1% on year, the NDRC said.
Earlier, the Ministry of Railways said that coal haulage via railways reached nearly 2 billion tonnes in 2010, up 14.2% year on year.
Statistics from the Ministry of Communication showed China’s major ports shipped a total of 556 million tonnes coal in 2010, rising 21.6% from that in 2009. Of this total, 538 million tonnes was for domestic trades, up 24.1% from a previous year, and 18.1 million tonnes for foreign trade, falling 25.2% year on year.
(sourced:en.sxcoal.com)
Coal stockpiles at China’s main loading ports amounted to 23.73 million tonnes at the end of Dec 2010, surging 65.3% year on year and rising 6.2% month on month, disclosed the National Development and Reform Commission (NDRC) on Jan 24, Yicai Daily reported.
Meanwhile, China’s railways transported a total of 1.4 billion tonnes power coal in 2010, jumping 23.1% on year, the NDRC said.
Earlier, the Ministry of Railways said that coal haulage via railways reached nearly 2 billion tonnes in 2010, up 14.2% year on year.
Statistics from the Ministry of Communication showed China’s major ports shipped a total of 556 million tonnes coal in 2010, rising 21.6% from that in 2009. Of this total, 538 million tonnes was for domestic trades, up 24.1% from a previous year, and 18.1 million tonnes for foreign trade, falling 25.2% year on year.
(sourced:en.sxcoal.com)
China Coal sees coal output at 154 Mt last yr
Jan 27, 2011
China National Coal Group Corp, the second largest producer of the fuel, posted a year-on-year increase of 28.65 million tonnes or 22.9 percent in coal output to 154 million tonnes in 2010, 1.1 times more than that of 2005, the company said in a statement.
China Coal traded a total of 140 million tonnes coal in 2010, representing a year-on-year increase of 28.8 percent or 31.33 million tonnes, which is the highest growth in the five years from 2005 to 2010, the company said.
China Coal realized 96.4 billion yuan of operating revenue, growing 37.4 percent or 26.3 billion yuan year on year.
In addition, the company’s profit increased 15.6 percent or 1.63 billion yuan on year to 12.1 billion yuan, hitting a new high.(sourced:en.sxcoal.com)
Fenwei's CR coal price index gains outstanding contribution award
Jan 21, 2011,
China's Coal Price Index and Application, completed by the experts team of Fenwei Energy Consulting, received award for outstanding contributions to the science and technology of the 11th Five-Year Plan period (2006-2010) by relevant government authorities on Dec 25, 2010, the company said at its website.
With investment of over 10 million yuan, Fenwei experts compiled six price and inventory indexes for thermal coal, coking coal and coke, based on data of China Coal Resource website, Zhongtai Coal Exchange, and Jiaolian Coke Exchange, as well as study of global index, particularly coal price index.
It cost six years for experts to complete the program, the company said.
Fenwei started to formally publish the CR coal and coke index in May 2010.
The index can be used to analyze and forecast current and future market trends, and act as a dynamic analysis and early-warning tool for coal market, mainly attributed to its timely reflection of price changes and powerful analysis and forecast function.
Presently, the CR coal and coke index has been applied in industry institutions of China (Taiyuan) Coal Exchange Center, London Commodity Brokers, etc., serving as a barometer and forecast tool for global coal price.(sourced:en.sxcoal.com)
China's Coal Price Index and Application, completed by the experts team of Fenwei Energy Consulting, received award for outstanding contributions to the science and technology of the 11th Five-Year Plan period (2006-2010) by relevant government authorities on Dec 25, 2010, the company said at its website.
With investment of over 10 million yuan, Fenwei experts compiled six price and inventory indexes for thermal coal, coking coal and coke, based on data of China Coal Resource website, Zhongtai Coal Exchange, and Jiaolian Coke Exchange, as well as study of global index, particularly coal price index.
It cost six years for experts to complete the program, the company said.
Fenwei started to formally publish the CR coal and coke index in May 2010.
The index can be used to analyze and forecast current and future market trends, and act as a dynamic analysis and early-warning tool for coal market, mainly attributed to its timely reflection of price changes and powerful analysis and forecast function.
Presently, the CR coal and coke index has been applied in industry institutions of China (Taiyuan) Coal Exchange Center, London Commodity Brokers, etc., serving as a barometer and forecast tool for global coal price.(sourced:en.sxcoal.com)
India close to resuming thermal coal buying - traders
Thursday, 27 January 2011
Indian traders and end-users are close to resuming thermal coal prompt buying after a hiatus of several months, some of India's largest traders said. Coal prices have dropped to around $115.00 a tonne FOB South Africa's Richards Bay from $130.00 in early January and this, combined with plumetting freight rates, has brought an acceptable delivered cost within sight, they said. Indian and Chinese spot buying has been a key price-affecting factor for the past few years because the growth of these markets absorbed what would have been a rising global surplus and left the market finely balanced.
Indian traders and end-users are close to resuming thermal coal prompt buying after a hiatus of several months, some of India's largest traders said. Coal prices have dropped to around $115.00 a tonne FOB South Africa's Richards Bay from $130.00 in early January and this, combined with plumetting freight rates, has brought an acceptable delivered cost within sight, they said. Indian and Chinese spot buying has been a key price-affecting factor for the past few years because the growth of these markets absorbed what would have been a rising global surplus and left the market finely balanced.
The timing of any rise or fall in demand from India or China can have significant price implications in the international coal spot market."End-users in India were never going to pay $130 plus freight for South African coal but they are close to buying again and they also know they can get Indonesian coal a bit cheaper," said a source at one of India's biggest trade importers.
This spot buying dried up in November and only the severe European weather which boosted coal demand and the disastrous Australian floods pushed prices sharply higher."There was some selling but on a very small scale when prices were high and that's finished now, there are enquiries instead, especially for Indonesian coal," said an Asia-based trader supplying the Indian market.
The price correction since mid-January has not yet been sufficient to draw out Indian buying - end-users have relied on stockpiles instead of fresh imports."Coal prices need to fall another few dollars, maybe $5 would be enough if freights keep going down but consumers are now ready to buy," another major Indian coal trader said."The appetite is there, particularly among the cement companies who prefer South African coal," said an India-based trader for a European firm.
Demand for imported thermal coal in India has not changed despite the lack of recent buying and comments from the Coal Minister suggesting high prices could curb imports, traders said. India's coal deficit will deepen in the next fiscal year to 104 million tonnes, an increase of nearly 24 percent. (Source: Reuters)
Coal miner Consol Energy's profit, stock drop
Thursday, Jan 27, 2011
* Q4 adj EPS 54 cents vs Street view 55 cents
* Q4 coal revenue up 10 pct
* Stock drops 3 pct before market (Updates with CEO comments, more data, stock drops)
NEW YORK, Jan 27 (Reuters) - Coal and natural gas producer Consol Energy Inc's fourth-quarter profit fell 27 percent, missing Wall Street estimates and sending its stock down 3 percent.
The company said its coal sales jumped 10 percent and for the first time its profit from selling steel-making metallurgical coal, especially to China, exceeded profit from thermal coal which is used in power generation.
It also said it was looking to expand export markets in Asia to sell more metallurgical coal.
"We believe India has great potential and is the next market we will target for high-vol (high volatility) met coal," Chairman, President, and Chief Executive Officer Brett Harvey said in a statement.
In modest electronic trading before the New York Stock Exchange opened, Consol stock dropped 3 percent to $50.00.
Earlier this month, Consol said it mined more coal in the fourth quarter than any other quarter in 2010 as flooding in Australia restricted supply and boosted prices.
"We will continue to seek international sales opportunities where our coal can command the highest prices," said Harvey. "Consol's marketing strategy for 2011 is to continue to develop new overseas markets into which we can sell our high-vol met coal." Volatility, or the burn temperature of coal, is crucial in steelmaking.
Fourth-quarter net income was $104 million, or 46 cents per share, down from $143 million, or 78 cents per share, the Pittsburgh-based company said.
Excluding items, the company earned 54 cents per share and on that basis, missed analyst expectations of 55 cents per share, according to Thomson Reuters I/B/E/S.
Consol said total revenue was $1.34 billion, which included a 10 percent increase in coal revenue of $1.1 billion, driven by sales of 17.0 million tons.
"The combination of new sales of high-vol met coal into China and sales of our low-vol met coal enabled our annual met coal profits to exceed those from our thermal business for the first time in our history," said Harvey.
He said unit margins expanded considerably from the third quarter, as prices continued to strengthen while costs decreased by more than $5 per ton. (Reporting by Steve James and Vaishnavi Bala in Bangalore; sourced: reuters)
* Q4 adj EPS 54 cents vs Street view 55 cents
* Q4 coal revenue up 10 pct
* Stock drops 3 pct before market (Updates with CEO comments, more data, stock drops)
NEW YORK, Jan 27 (Reuters) - Coal and natural gas producer Consol Energy Inc's fourth-quarter profit fell 27 percent, missing Wall Street estimates and sending its stock down 3 percent.
The company said its coal sales jumped 10 percent and for the first time its profit from selling steel-making metallurgical coal, especially to China, exceeded profit from thermal coal which is used in power generation.
It also said it was looking to expand export markets in Asia to sell more metallurgical coal.
"We believe India has great potential and is the next market we will target for high-vol (high volatility) met coal," Chairman, President, and Chief Executive Officer Brett Harvey said in a statement.
In modest electronic trading before the New York Stock Exchange opened, Consol stock dropped 3 percent to $50.00.
Earlier this month, Consol said it mined more coal in the fourth quarter than any other quarter in 2010 as flooding in Australia restricted supply and boosted prices.
"We will continue to seek international sales opportunities where our coal can command the highest prices," said Harvey. "Consol's marketing strategy for 2011 is to continue to develop new overseas markets into which we can sell our high-vol met coal." Volatility, or the burn temperature of coal, is crucial in steelmaking.
Fourth-quarter net income was $104 million, or 46 cents per share, down from $143 million, or 78 cents per share, the Pittsburgh-based company said.
Excluding items, the company earned 54 cents per share and on that basis, missed analyst expectations of 55 cents per share, according to Thomson Reuters I/B/E/S.
Consol said total revenue was $1.34 billion, which included a 10 percent increase in coal revenue of $1.1 billion, driven by sales of 17.0 million tons.
"The combination of new sales of high-vol met coal into China and sales of our low-vol met coal enabled our annual met coal profits to exceed those from our thermal business for the first time in our history," said Harvey.
He said unit margins expanded considerably from the third quarter, as prices continued to strengthen while costs decreased by more than $5 per ton. (Reporting by Steve James and Vaishnavi Bala in Bangalore; sourced: reuters)
China coking coal price to see leaps despite stable power coal price
Thursday, January 27, 2011
BEIJING,(Xinhua News Agency)
China domestic coal price ha s been capped stable while coking coal price kept surging following th e international coking coal price hike. Experts predict that China's c oking coal price is likely to see the second uptrend of this year in March or April.
The National Development and Reform Commission (NDRC), China's top economic planner, only capped the price for contracted coal for 2011, but the pricing of spot coal, coking coal, and coke are fully market-oriented.
Since the beginning of this year, China's coke producers like Shanxi Xishan Coal and Electricity Power Co., Ltd (000983.SZ) and Guizhou Panjiang Refined Coal Co., Ltd (600395.SH) have raised coke price at least by 100 yuan/tonne.
It is learned that the flood in Australia has severely blocked coking coal supply to global market. Spot coke price of Australi a has exceeded 300 US dollars/tonnes, and is expected to reach 400 US dollars/tonne, hitting a new high since 2008.
On the coming of spring, China's domestic steel productio n will return to full operation, plus the peak demand for steel, cokin g coal demand would accordingly witness rapid growth at that time.
China's domestic steel makers are looking for alternative supply of coking coke. They have shown that they would increase purch ase of coking coal in domestic market if coking coal imports could not be guaranteed. In this sense, China's coking coal price is likely to hike again within a range of 100-150 yuan/tonne.
Besides, China International Capital Corp. noted that tim e is needed for Australia, the major coal expertor in the world, to re sume normal coal production and transportation. As the Oceanic country will enter rainy season soon, which usually an off season of coal pro duction, the international coking coal price would go even higher, resulting in more hikes of China's domestic coking coal price. (sourced:xinhua.org)
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