Power and cement companies to be affected by coal shortage

Sunday, 06 Mar 2011

Power producers are in for tough times this year, with plant load factors of several producers falling by as much as 20% due to acute coal shortage. This might spill over into the new financial year too, since there just isn’t enough coal available to feed India’s steel and power production facilities.

Business Standard said that even as India’s new power producers were coming to terms with coal shortages in India, the floods and subsequent cyclone in Australia have come has a body-blow to cement, power and steel producers. Imported coal prices are up 44% YoY, impacting profitability even further.

According to analyst estimates, Indian coal availability is expected to rise at a compound annual growth rate of only 4.2% over the financial year 2010-14, which is insufficient to meet the power capacity growth of 10.4%. (sourced: moneycontrol)

SAIL pays INR 7737 crore to national exchequer

Sunday, 06 Mar 2011

Steel Authority of India Ltd has contributed INR 7,737 crore to the national exchequer during the first nine months of 2010-11. The figure includes excise and customs duties, corporate tax and royalties.

Along with INR 80.74 crore as dividend tax, the total payment made by SAIL with respect to interim dividend to the Government works out to INR 506.1 crore. (sourced from PTI)

WISCO bags order for 6000 tonnes of steel sheets for containers

Sunday, 06 Mar 2011

It is reported that Hubei Province based Chinese steel manufacturer Wuhan Iron and Steel Co has secured an order from an unnamed domestic container producer for 6,000 tonnes of container steel sheet of 2.0 mm and below thickness.

China is the largest container producer in the world. At present, the major domestic suppliers of the product in question are Baosteel Group, Anben Steel Group, WISCO and Taiyuan Iron and Steel Co. However, specifications of 2.0 mm and below, for which domestic demand is greatest, have up to now been mainly supplied by imports. (sourced:steelorbis)

Macroeconomic indicators - China to step up efforts to maintain price stability

Sunday, 06 Mar 2011

Thanks to governmental efforts to counter inflation, China growth rate of CPI saw a mild decline in January compared to November.

In 2011, China will continue to step up efforts to maintain price stability.

The nation will enhance subsidies to grain production and raise the minimum purchase price of grain. The production, supply and storage of daily necessities such as meat, eggs and vegetables will also be ensured. Since last December, vehicles carrying agricultural products have been exempt from transportation charges. That saved the industry about CNY 13 billion.

Governments at local levels are also trying to lower food price by reducing license and market entrance fees. The government is also striving to establish a long term system keeping subsidies for low-income groups relevant to the cost of living price surge. (sourced:CNTV)

Chinese steel industry still has chance to restructure - Angang

Sunday, 06 Mar 2011

Reuters reported that the next five years will give China steel sector its last chance to resolve structural problems through a nationwide merger program.

Mr Zhang Xiaogang president of the Anshan Iron and Steel Group issued a stark warning to the domestic steel sector, saying that efficiency was shrinking as a result of chronic overcapacity problems.

He said that "The Chinese steel sector is facing an extremely big challenge and steel enterprises mustn't take the old road and chase their own investments, additional capacity and their own market share at a time when there is already overproduction."

Mr Zhang said the performance of the company in the fourth quarter of 2010 was not too good. He said “We didn't make losses in the fourth quarter but profits were lower than in the first, second and third quarters.”

Mr Zhang told reporters at last year that NPC session that the issues surrounding the merger were expected to be solved by the time parliament met again in 2011. This year he said the remaining stumbling blocks were likely to be overcome very soon, but he wouldn't provide further detail.

Mr Zhang said Angang and other steel firms were currently looking for investment opportunities abroad but costs were currently too high. He said that "Everybody wants to have but you can't just look to the next two years; you have to look at the end of five years and see if the results are good or not, whether the costs are good and whether there is competitiveness."

Mr Zhang added Chinese steel mills were unlikely to accept the more flexible monthly or even daily price adjustments now being offered by leading global miners saying China still seeks longer term agreements with the likes of Rio Tinto, BHP Billiton and Vale.

Anshan Iron and Steel based in northeast China Liaoning province and the parent of Shenzhen listed Angang has been involved in a protracted merger with local rival Benxi Iron and Steel.

China steel industry, by far the world biggest is estimated to have a total capacity of around 800 million tonnes. Crude steel production last year stood at 627 million tonnes. The sector has been struggling with lower margins in recent months with steel price increases failing to match the surge in the cost of key raw materials iron ore and coking coal. In its new five year plan for the sprawling sector, Beijing is pushing for a comprehensive consolidation drive saying that fewer mills will help create higher industry standards and reduce pollution and energy waste, as well as giving China a bigger say in global iron ore pricing.(sourced:Reuters)

Tags : Angang, China's crude steel production 627 million tonnes, raw material,

CIL output growth seen almost nil this fiscal: official

March 06, 2011, 15:20 IST By PTI

New Delhi :Coal India's (CIL) production growth is likely to nosedive to less than 1% in the current financial year compared to the projected growth of about 7%, as a number of its projects have been hit by environmental concerns, a top Coal India official has said.

State-owned CIL has set a production target of about 460 million tonne for this fiscal.

"Due to 'no-go' classification by the Environment Ministry, several CIL projects are lying stranded. The production growth, as compared to the last fiscal is likely to be almost nil this fiscal," a Coal India official told PTI.

In the year 2010-11, CIL's coal output, which accounts for over 80% of the domestic production, is expected to be almost the same as 2009-10 fiscal years' 431.26 million tonne.

CIL's 2009-10 coal output was 7% more than the previous fiscal.

In 2008-09 CIL's production stood at 403 million tonne.

Talking about the decline in production, CIL's former Chairman Partha S Bhattacharyya, who retired on Feb 28, said: "Coal production has taken a dip due to non clearance of projects and no go classification, which has affected many a projects of the company."

Coal Minister Sriprakash Jaiswal last month had said that the growth rate has already declined to less than 2% on account of environmental concerns.

"We are trying our best that we restore it to 7% again in the next fiscal," he had said.

Ministry of Forest and Environment (MoEF) has put 203 coal blocks with a potential output of 660 million tonne per annum in nine coalfields under the 'no go' mining zone.

Besides, as many as 154 projects of CIL are stalled due to delay in environmental and forest clearances at the Centre and state level.

The government has already constituted a 12-member ministerial panel, headed by Finance Minister Pranab Mukherjee to address the issues hurting coal production. The Group of Ministers which has already met once is likely to meet again this month.

The Coal Ministry, meanwhile, has said that 23 CIL projects, falling under areas categorised as 'critically polluted' under Comprehensive Environment Pollution Index (CEPI) by the MoEF, were likely to get the green signal.

CEPI captures the various health dimensions of the environment and acts as a warning tool to facilitate early intervention.(sourced:Business standard)

Wuhan Steel to buy more overseas resources - Mr Deng Qilin

Sunday, 06 Mar 2011

Mr Deng Qilin President of Wuhan Iron & Steel Group Corp as saying that the company will continue to acquire iron ore resources overseas in an effort to become self sufficient.

Mr Deng said the Chinese steelmaker which currently imports more than 85% of its iron ore aims to be able to supply all of its own needs in three to five years so that it doesn’t need to buy from foreign monopolies.

He said that “Vale SA, Rio Tinto Group and BHP Billiton Ltd, the world biggest iron ore suppliers abandoned an annual pricing system for Chinese steelmakers last year in favor of quarterly agreements as spot prices for the material rose. Wuhan Steel accelerated its buying of assets during the financial crisis to help reduce its reliance on overseas suppliers and now owns or has stakes in eight iron ore mines abroad.”

He added that “Overseas iron ore companies are a monopoly. They can raise prices as much as they want. There is no room for negotiation.”

Mr Deng said “Foreign suppliers are now planning to establish a base at a Chinese port from which they can sell ore at spot prices. This plan will hurt China’s steelmakers to an extent that is too much to afford.”

Wuhan Steel agreed last month to jointly develop mining projects in Canada with Century Iron Mines Corp after entering into an agreement in January with Adriana Resources Inc to cooperate on developing, constructing and operating the Lac Otelnuk iron ore project in Canada.

Tags: Vale SA, biggest iron ore producer and exporters,