Indian Railways invites private companies to connect mines with plants

Feb23, 2011, 12.38PM IST,ET Bureau

NEW DELHI: The railways ministry has invited investment proposals from private companies in the country's power and steel sectors to build tracks connecting coal and iron ore mines with their plants, after failing to attract private capital in its earlier attempts.

The move forms part of the ministry's plan to attract private investment in rail connectivity between mineral-rich areas and industrial belts to support increasing demand for these key raw materials.

"A number of new coal blocks and iron ore mines have been identified for exploitation, but many of them do not have either rail or road connectivity," a railways official said, adding that the scheme is beneficial for both the railways and private firms.

Called R2CI, the new policy will incentivise developers by offering to return their investment over a period of 10-25 years through a surcharge on freight.

This is a substantial improvement over its earlier R3i policy for private sector participation in rail projects, which left out coal and iron ore mines out of its ambit.

The decision comes just three days before the railway budget and is seen as the ministry's efforts to improve its image as a department willing to tap private capital to develop railways infrastructure.

The railways will also undertake the operations and maintenance of such lines after the ownership is transferred to it. Companies can apply for the scheme either through setting up special purpose vehicles or through a capital cost model where the cost of construction shall be borne by an individual company, partnership firm or a joint-venture between firms.

To eliminate non-serious players, the railways will stipulate a lock-in period for investors.

"Between the date of execution and the commercial operation date, transfer of shares to any other entity except as provided in the agreement will not be permitted," the policy document states.

The railways ministry had initiated a similar scheme earlier to connect automobile factories with ports. But the initiative failed with the industry objecting to several restrictive conditions put in place by the railways.

"Railways need to be more receptive to the ideas of the industry & end-users so as to encourage the industry to invest in PPP model," said Vineet Agarwal, executive director of Transport Corporation of India in a note.

Railways minister Mamata Banerjee is keen to list some achievements as part of the railway budget to be placed in the Parliament on Friday. Railways' finances took a hit in the current fiscal due to an over 92% hike in salaries, two hikes in diesel prices and irregular freight business.

Tags:railway connectivity to mines and plants, investment proposals,

Limited availability of coal could trip mega power plan

Wed,Feb23, 2011

The Economic Times reported that, an acute shortage of domestic coal is threatening to destabilize new power generation projects in which developers have already invested an estimated Rs75,000 crore.

"New capacity of about 15,000 Mw is likely to be stranded for want of coal," a senior official with the power ministry told ET. This capacity is enough to light up three states bigger than Delhi.

Coal India Limited had promised to supply 92 million tonnes (mt) of fuel to these projects, most of which were expected to be operational over the next one year. But the state-run firm now says it can deliver only 13mt. The available coal, which needs to be blended with imported coal before it is ready for use by generating companies, could produce barely 3,000 Mw of power.

"Coal India has indicated that availability for power utilities is likely to be 319mt only. Of this, fuel supply agreements have already been signed for 306mt generating units commissioned up to March 31, 2009," the official said.

"There is coal available at pit head locations, which is not being mined out due to inefficiency of Coal India and its subsidiaries," he added.

Power project developers on Tuesday called on the Central Electricity Authority (CEA) to raise their concerns over the fuel supply issue but the authority said it could not do much.

"We are helpless as Coal India has indicated that there is no coal for new projects," a CEA official said.

The coal ministry official said CIL production would not improve unless the environment ministry clears the hurdles for mining projects. He said more than 150 mining projects of Coal India are awaiting clearance from the environment ministry. These projects have a coal production potential of 210mt.

Experts say importing coal will also not solve the problem for new projects as there is a limit to which Indian boilers can use imported coal.

Imported coal has higher heat value as compared with domestic coal and it is believed that it also corrodes boiler parts and emits more smoke when used in Indian boilers over longer period.

Supply of coal by CIL to power utilities over the past few years has been falling short of requirement for the electricity generation targets. The utilities had reported a loss of 10.9 billion units in 2008-09, 14.5 billion units in 2009-10 and 5.3 billion units between April 2010 and December 2011.

By Economic Times

Iron Ore Prices Down Again Due To Unstable Steel Prices

Sophia Fain 11:48AM, February 23, 2011

Platts reported that "Seaborne iron ore cargo prices slid again Wednesday as buyers remained resistant to purchasing in the spot market.

The Platts 62%-Fe fines assessment was down 75 cents to $186.75/dry mt, and the Platts 63.5/63%-Fe assessment was down also down 75 cents at $191.75/dmt. Transactions were limited in the spot market, as buyers held back from purchasing, and trade slowed down...

'There are still some buyers in the bearish market, who are waiting for the right time and the right price to buy a spot cargo,' said a Shanghai trader.

'The price for iron ore is going down because everyone is panicked when the prices of steel futures fall suddenly from the peak, I believe the price of iron ore will stabilize by next week when the price of steel products and steel futures remain constant,' said the Beijing trader.

There were some bullish factors, as traders also talked of a possible supply slowdown from Australia following the recent cyclone, and although Port Headland had opened, there were reports that there were loading delays and queues at the port.

Added to this traders were wary, as in India on February 28 there will be a ruling on whether iron ore export duties will increase. However, not everyone was in agreement that prices would stabilize soon, with some pointing out that the price of iron ore still remained bearish in the short run.

'I was willing to pay $190 for a 63.5/63 Indian fines cargo yesterday, but not a single cent today, as the steel mills are shunning the spot market, many of them are reeling from the credit crunch in China today,' said the Beijing trader.

In the low-grade market there was talk that 58/58%-Fe cargo with 4% alumina and 5% silica had been sold at $163/dmt CFR North China, although sources also reported pressure on low-grade spot prices...

Spot prices of Q235 square billet stayed unchanged at Yuan 4,330/mt ($657) ex-stock while hot-rolled coil was down Yuan 50/mt at Yuan 4,870/mt ex-stock. On the Shanghai Futures exchange, the most active October rebar futures contract was down Yuan 60/mt at Yuan 4,940/mt.

'The price of many commodities futures suffered a huge dip today due to the instability in Libya, the steel futures are not spared either,' said a Shanghai trader."

Steel prices remain flat in thin trade

By Press Trust of India
New Delhi Feb 23, 2011, 15:57

Quiet conditions prevailed in the local steel and iron market today as prices continued to move in a limited range on restricted buying and settled around previous levels.

Traders said restricted buying activity against adequate stocks kept steel prices steady.

Following are today's quotations in Rs per tonne:

CTD saria (Kamdhenu) 8-mm 41,700, 10-mm 43,400, 12-mm 42,100, 16-25 mm 39,950

Saria Jai Bharat (ISO 9002) 8-mm 39,150, 10 mm 38,350, 12-mm 37,550, 16-25 mm 37,550

Amba saria (ISO-9002) 8-mm 38,000, 10-mm 37,300, 12-mm 36,700, 16-25-mm 36,500

Amba shakti: (TMT) 8-mm 37,000, 10 mm 36,000, 12 mm 35,400, 16 to 25 mm 35,200

M S Angle: (50x5) (50x6) 33,000, (40x5) (40x6) 33,500

Angle capital (ISI) (40X5) (40x6) 36,900, (35X5) (65X6) 33,900

Garder (joist) (150x75) 33,500 (175x85) 32,500 (200x100) 33,300 (125x70) 33,600

T-IRON (40X5)(40X6)(50X6) 33,500

(sourced:business standard)

Afripalm and India's SAIL sign steel mill pact

Wed Feb 23, 2011 4:24pm GM

* Feasibility study for 3-5 mln tonnes plant in SAfrica

* Mill expected to cost $2.95 billion

* Afripalm says SAIL to have big management role


JOHANNESBURG, Feb 23 (Reuters) - South Africa's Afripalm Resources signed a memorandum of understanding with Steel Authority of India (SAIL.BO: Quote) to build a steel mill in South Africa, Afripalm Chairman Lazarus Zim said on Wednesday.

The companies would conduct a feasibility study for a 21 billion rand ($2.95 billion) plant, expected to produce 3-5 million tonnes of steel a year, Zim said.

"There is a domestic market for steel and an export market. We believe South Africa has significant iron ore deposits and there is room for another steel mill," Zim told Reuters in an interview.

He said the feasibility study, expected to take six months, would start in the next few weeks.

Zim also said the Indian firm, also known as SAIL, would have a leading management role in the running of the plant, which is expected to take three to four years to build.

"We will sit down and decide who does what but (SAIL) will play a big role in management," Zim said.

Zim resigned last year from the board of Kumba Iron Ore (KIOJ.J: Quote), the world's 10th-largest iron ore supplier, to start a new steel firm.

The South African steel market is dominated by ArcelorMittal South Africa (ACLJ.J: Quote), a unit of the world's largest steel producer.

The government has accused ArcelorMittal of charging excessive prices to the detriment of the local steel industry and for failing to pass to consumers the benefits of an iron ore discount it used to receive from Kumba.

State-run SAIL said this week it plans to spend $12 billion to build four overseas plants in Indonesia, Oman, Mongolia and South Africa. [ID:nSGE71K04N]

($1=7.118 Rand)

(Reporting by Agnieszka Flak and Olivia Kumwenda; Editing by Jon Herskovitz and David Hulmes,sourced:Thomson Reuters)

World's 'biggest' ships on order

Take a virtual look around "the largest vessel of any type known to be in operation" that is being built by Daewoo.


By Alex Johnston 3:00PM GMT 22 Feb 2011
Danish container ship company Maersk, the world’s biggest container line, said it had signed a contract to buy 10 Triple-E vessels, the biggest ships ever built, with an option for 20 more.

The vessels will be "the largest vessel of any type known to be in operation" at 400 metres long, 59 metres wide and 73 metres high.

They will be able to carry 18,000 containers, 2,500 more than the next largest operational ship.

Due to their size the Triple-Es will solely be used for the Asia to Europe trade route, as only a handful of ports in the world are large enough to accommodate them.

The company said that Triple-E designation stood for the three purposes behind the creation of the ships — economy of scale, energy efficiency and environmental improvements.

It claims the ships will emit half as much carbon dioxide as the average ship travelling the Asia to Europe trade route.

Have virtual tour of World's 'biggest' ship

India's Tata Steel says no decision yet on Riversdale

Wed Feb 23, 2011 2:16pm GMT

MUMBAI Feb 23 (Reuters) - India's Tata Steel (TISC.BO: Quote), the world's No. 7 steelmaker, said on Wednesday it has not yet made a decision regarding its stake in Africa-focused coal miner Riversdale (RIV.AX: Quote).

Tata Steel holds a 24 percent stake in Riversdale, which has received a $3.9 billion bid from Rio Tinto (RIO.AX: Quote).

The company has till March 4 to decide on whether it will hold on to the stake or sell to Rio, but earlier this month its Managing Director Hemant Nerurkar told Reuters Tata Steel was primarily interested in securing coal supplies from Riversdale, and talking to Rio about various options.

(Reporting by Prashant Mehra; Editing by Aradhana Aravindan,sourced:Thomson Reuters)

Usiminas sees $209 mln annual energy savings-CEO

Wed Feb 23, 2011 2:26pm GMT

SAO PAULO Feb 23 (Reuters) - Brazilian steelmaker Usiminas (USIM3.SA: Quote)(USIM5.SA: Quote) could save as much as 350 million reais ($209 million) a year through energy self-sufficiency efforts, including consolidation efforts, Chief Executive Wilson Brumer said on Wednesday. ($1=1.675 reais)
(Reporting by Guillermo Parra-Bernal and Alberto Alerigi Jr., editing by Gerald E. McCormick,sourced:Thomson Reuters)

Usiminas sees room for cut in Brazil discounts

Wed Feb 23, 2011 2:51pm GMT

SAO PAULO Feb 23 (Reuters) -

Usiminas (USIM3.SA: Quote)(USIM5.SA: Quote), Brazil's largest maker of flat steel, sees room for a decline in price discounts for some products in the domestic market of as much as 10 percent, Sales and Business Vice President Sergio Leite said on Wednesday.

(Reporting by Guillermo Parra-Bernal and Alberto Alerigi Jr., editing by Gerald E. McCormick,sourced:Thomson Reuters)

South African and European coal price rose due to unrest in Libya

Wednesday, 23 Feb 2011

Reuters reported that prompt physical coal prices for South African and delivered Europe cargoes rose by up to USD 1 in line with oil prices which hit a 2 and a half year high due to unrest in Libya.

Traders said that the whole energy complex strengthened in reaction to the Libyan situation. European power forward prices also rose sharply, spurred by gains in oil, gas, carbon and coal.

One European trader said that "Nobody's buying coal in Europe or Asia but the market is still going up, following oil."

Clashes in oil producer Libya pushed benchmark Brent crude to over USD 105 a barrel on fears of oil supply disruption.

Earlier this month, coal analysts had warned that spreading Middle East unrest could have a significant impact on coal prices by causing oil price spikes.

Aside from pockets of demand in countries which need more coal-fired power, such as Finland or Turkey, European spot demand has been minimal for the past few weeks.

(Sourced:reuters)

Sumitomo Metal confirms new coking coal pricing proposal from BHPB

Wednesday, 23 Feb 2011

Japan's third biggest steelmaker Sumitomo Metal Industries Ltd said that it had received a proposal from BHP Billiton on a new pricing scheme for supplying coking coal after April.

A company spokesman declined to give details of the proposal by saying “We can't comment on details of our discussions.”

The Nikkei business daily reported last week that BHP, the world's biggest diversified miner, has notified major Japanese steelmakers that from April it wanted monthly pricing of coking coal to replace quarterly pricing.

A shift in pricing would likely further squeeze steelmakers, which have already been reeling from a steep fall in profit margins since they adopted quarterly pricing for major inputs of iron ore and coal in April last year.

(Sourced from Bloomberg)

Australian Port Hedland iron ore terminal reopens after cyclone

Wednesday, 23 Feb 2011

Australia's Port Hedland, one of the world's largest export terminals for iron ore, reopened on Wednesday following a two day suspension due to a cyclone.

Mr John Finch port's harbourmaster said "There was no damage and the cyclone just passed."

A cyclone bearing down on Western Australia on Tuesday has brought iron ore shipments from the world's top exporter to a near standstill as ports shut ahead of the storm.

Two of the world's largest iron ore terminals at Port of Dampier and Port Hedland have suspended operations as Cyclone Carlos builds and sweeps toward the country's northwest. Nearly all of Australia's around 400 million tonnes of iron ore exports are shipped from the two ports.

Gales with wind gusts to 110 kilometres per hour were slamming into coastal areas west of Port Hedland and were heading westward towards Dampier, according to the Australian Bureau of Meteorology.

Cyclones are a normal fixture of an Australian summer but the national weather bureau has indicated that above average cyclone activity is to be expected this season due to a La Nina weather event.

(Sourced from Reuters)

Russia scrap exports double in January

Wednesday, 23 Feb 2011

According to preliminary data, in January this year Russia exports of scrap and ferrous metal waste doubled compared to the same period last year amounting to 264,200 tonnes.

Russia imported 200 tonnes of scrap in January this year, while in January 2010 there were no imports of scrap into the country. In 2010, Russia scrap exports increased by 1.5 times to 5.5 million tonnes while its imports went up by 2.4 times to 10,600 tonnes both compared to 2009.

Russian scrap exports are directed mainly to Turkey, Spain, Greece, the Netherlands and South Korea.

(Sourced:www.steelorbis.com)

Macroeconomic indicators - China stresses for economic stability in 2011

Wednesday, 23 Feb 2011
Xinhua reported that China top leading body Monday pledged to prevent wild swings in the economy while warning that the economic situation in 2011 would be complicated.
The Political Bureau of the Communist Party of China Central Committee decided at a meeting presided over by President Mr Hu Jintao who is also General Secretary of the CPC Central Committee said the country should maintain stable and consistent macro-economic policies while improving accuracy, flexibility and efficiency of the policies.
Officials at the meeting were urged to remain sober be aware of difficulties, and work hard to fulfill the tasks this year so as to create a good beginning for the 12th Five Year Plan (2011-2015).
The top echelon of leadership reassured that China would continue an active fiscal policy and prudent monetary policy while trying to balance steady economic growth with economic restructuring and control of inflationary expectations.
The Political Bureau of the CPC Central Committee urged at the meeting said "It is necessary to maintain stable commodity prices, expand domestic consumption, increase investment in agriculture, speed up industrial restructuring, promote education and development of science and technology and improve people livelihoods and cultural services."
It also reiterated the importance of making great efforts to expand reforms in key sectors, advance the cause of opening-up, while intensifying endeavor to build a clean government and fight corruption.
Members of the Political Bureau of the CPC Central Committee also discussed the drafts of the government work report and the 12th Five-Year Plan (2011-2015). The two documents will be submitted to the top legislature for discussion and approval at its forthcoming annual session in March.
Statement from the meeting said the period from 2011 to 2015 will be critical for China which wants to build a well-off society. In the next five years in a bid to meet Chinese people expectations for a better life, China will stick to scientific development by focusing on accelerated transformation of its way of economic growth while deepening the reform and opening-up, guaranteeing and improving people livelihoods.
The statement said "It is necessary to solidify and boost China success in outperforming other countries in dealing with the international financial turmoil and advance the economy to grow at a faster and steady pace for a long time while guaranteeing social harmony and stability."
(Sourced from Xinhua)

Siemens to modernize plate mill of Handan Steel

Wednesday, 23 Feb 2011
Siemens VAI Metals Technologies has received an order from Handan Iron & Steel Co Ltd Ltd a Chinese steel producer to fit its three meter plate mill in Handan with a new basic and process automation system. After modernization, the mill will produce high quality heavy plate for shipbuilding and pipeline construction.
It is scheduled to be commissioned at the beginning of 2012.

The 3 meter plate mill has been running at Handan Iron & Steel since the 1990s.
Within the scope of the modernization project, Siemens will design and supply core components for a new basic and process automation system to replace the existing heterogeneous automation equipment. The scope of supply also includes the integration of new process models. These include, for example, a multipoint roll gap setup, a temperature and mass flow model and a profile and flatness control. Plan view pattern control will ensure that the plates are orthogonal.

Models for taper and thermo mechanical rolling fulfill the requirements for multi-piece rolling, so that modern types of steel can be produced. A mill pacing function will ensure a high throughput and optimum utilization of the rolling stand. The automation to be implemented at Handan Iron & Steel is based on the Siroll PM Solution concept specially developed for plate rolling mills. Siemens will also be responsible for supervising the installation and commissioning.
A major reason behind winning this order was the good experience Handan had gained from previous projects with Siemens, which include the construction of the two coupled tandem pickling lines and a hot rolling mill.
Handan Iron & Steel Co is a subsidiary of Hebei Iron & Steel Group Co Ltd. It is one of China's leading steelmakers, and produces around 40 million tons per annum. In Handan, in the province of Hebei, the company runs a production complex with a capacity of some twelve million tons of crude steel per annum. Handan has two production lines for producing heavy plate. The three meter plate rolling mill was originally constructed by a German machine manufacturer in the Hattinger steel plant of Ruhrstahl AG, where it ran until 1987, before it was dismantled and transferred to Handan.

Ansteel join hands with Stemcor for buying British USS Machining Center

Wednesday, 23 Feb 2011
It is reported that on February 17th 2011, Mr Zhang Xiaogang GM of Ansteel Group, signed an agreement with Mr Julian Verden of Stemcor in Brussels for establishing Ansteel British Holding Company and purchasing British USS Machining Center.
London based Ansteel British Holding Company, expected to start operation in March, will purchase 2/3 shareholdings of British USS Machining Center.
According to the agreement, Ansteel Group British Holding Company will lead the macro management and operation in the region on behalf of Ansteel and Stemcor.
Mr Zhang Xiaogang indicated that, purchasing the machining center is beneficial for Ansteel to provide value added services and develop overseas marketing systems, so as to further improve Ansteel brand value.
In late 2007, the Chinese steelmaker formed a joint venture, Ansteel Spain SL, with Stemcor to market steel products in Spain.
(Sourced from Xinhua)

Worthington Industries and MISA reach joint venture agreement

Wednesday, 23 February 2011
Columbus, Ohio-based diversified metals manufacturer Worthington Industries, Inc. and metal processor Marubeni-Itochu Steel America Inc. (MISA) have reached a principle agreement to combine light gauge steel framing manufacturer ClarkWestern Building Systems and the US' largest manufacturer of metal framing and finishing products, Dietrich Metal Framing, into a newly-formed joint venture.
In the new venture, MISA will hold a 75 percent interest, while Worthington Industries will acquire a 25 percent interest, however, Worthington will also acquire the assets of the non-automotive service center business of MISA Metals, Inc. (MMI) consisting of three steel processing facilities located in Ohio and Tennessee. The deal is expected to be signed by the end of the month.
"We are making two businesses stronger by combining them in a joint venture," John McConnell, Chairman and CEO of Worthington Industries said. "The economic downturn has been particularly difficult for the construction industry and by creating the joint venture, we best position them to be profitable now, and for success when the market begins to recover."
Under the new joint venture however, seven of Dietrich's 13 facilities will be closed, as well as one ClarkWestern Building Systems facility.

Tags: galvanized , coated , flats , USA , Europe , North America , investments , M&A , manufacturing , European Union , Mediterranean

Angang announces prices for March

Wednesday, 23 Feb 2011

Angang has released its EXW price policy for March 2011 as under
1. HRCHRC price up CNY 350 per tonneSPHC 3.1

*1000mm to 1199mm low carbon standing at CNY 4560 per tonneQ235 5.5

*1500mm carbon HRC at CNY 4450 per tonne
2. CRCCRC price up by CNY 260 per tonneSPCC 1.0

*1250mm coil standing at CNY 5150 per tonne
3. Galvanized steelGalvanized steel price up by CNY 300 per tonneST01Z 1.0mm standing at CNY 5600 per tonne
4. Color coated steelColor coated steel price up by CNY 300 per tonneTDX51D+Z 0.5mm listed at CNY 6700 per tonne
5. Medium plateMedium plate price up by CNY 350 per tonneQ235A 20mm carbon plate standing at CNY 4750 per tonneCCSA 20mm shipbuilding plate at CNY 4990 per tonne
6. Silicon steel50AW470 and higher-grade 50AW800 0.5mm *1000*C standing at CNY 75650 per tonne up by CNY 200 per tonne
7. Wire rodWire rod up by CNY 300 per tonne
The new prices will be effective as of Mar, 2011.
(Sourced:mysteel.net)

Ternium’s Q4 net income down $98 million

Wednesday, 23 February 2011

Steelmaker Ternium announced Tuesday net income of $102.8 million in Q4 2010, a decrease of $98 million compared to Q3 2010 mainly due to a $133.9 million decrease in operating income. For the whole of 2010, Ternium's net income was $779.5 million, compared to $767.1 million in 2009.
Sales of both flat-rolled and long steel products soared in Q4 2010, increasing 43 and 56 percent, respectively, compared to Q4 2009.
For 2011, Ternium predicts accelerated growth in the NAFTA regions, with higher industrial activity in Mexico driving local demand for steel products.

(sourced:steelorbis)

Tags: rebar , hrc , crc , galvanized , coated , longs , flats , USA , Mexico , Venezuela , North America , South America , fin. Reports , steelmaking

Change of guard at China Iron and Steel Association

Wednesday, 23 Feb 2011

It is reported that Mr Zhu Jimin chairman of Shougang Group will replace Mr Deng Qilin GM of Wuhan Iron and Steel Group as the new chairman of China Iron and Steel Association for 2011 to 2013 and chairman of Baosteel Mr Xu Lejiang will be the chairman of CISA for 2013-2015.
CISA has appointed the vice chairman Zhang Changfu, 65, as secretary general replacing 64 year old Mr Shan Shanghua, who was appointed CISA secretary general in 2007.
Meanwhile, Mr Luo Bingsheng, the vice chairman of the association, will also retire and be replaced by Mr Wang Xiaoqi, a former official at China's State owned Assets Supervision and Administration Commission.
The former cores of CISA Mr Bingshen and Mr Shanghua have recently announced their retirements. It is reported that both of them said due to their ages, they felt no long fit for their job.
Analyst points out that the retirements of Mr. Luo and Mr. Deng indicate the era of old iron ore negotiation has ended and the new leader will bring new staff to the table.
CISA has total member of 232 corporations, covering most of the national Steel industry. CISA plays an very important role in negotiating iron ore prices in the previous annual iron ore talks and provides advices for government regarding domestic steel industry policies.

(Sourced from Xinhua)