Chinese shipping firms urge govt to foil Vale iron ore fleet expansion

Tuesday,09 Aug 2011

Bloomberg reported that China's largest shipping companies are lobbying the government to foil Vale SA's plan to build a USD 2.3 billion fleet of the world's biggest iron ore carriers that will haul the steelmaking material to the nation.

Mr Zhang Shouguo executive vice chairman of China Shipowners Association said that Vale should engage the shipping companies to run the fleet. Rio de Janeiro based Vale is building 19 of the 400,000 tonnes vessels and will control another 16 under long term contracts, aiming to stabilize freight costs and iron ore prices. He added that "Let the shipping industry do the transport thing. Vale is seeking to control the freight market as it has done with iron ore prices."

The Baltic Dry Index, a measure of commodity transportation costs, slid for a 14th day in London because of a glut of iron ore carriers competing to transport the steelmaking ingredient. Iron ore prices have more than tripled in the past three years and reached a record USD 191.90 a tonne in February.

Mr Murilo Ferreira CEO of Vale Brasil said that the first in the fleet will undoubtedly go to China whenever Vale needs to send iron ore to its biggest customer. The vessel was diverted from its original destination in China to Italy on its maiden voyage because of draft restrictions at the port and a request from a European iron ore customer.

Vale is spending USD 8.1 billion on the fleet including USD 5.8 billion for a 25 year transportation contract with STX Pan Ocean Co, South Korea's biggest bulk shipping company, for seven more. Vale also needs to pay fuel costs for the ships it owns.

(By Bloomberg)

Iron Ore-ShFE rebar ends flat; spot ore up on freight hike

Thu Mar 31, 2011 7:41am GMT

By Nick Trevethan

SINGAPORE, March 31 (Reuters) - Shanghai steel rebar futures rose 0.4 percent on Thursday, on course for a loss of around 1.5 percent on the quarter, while iron ore indexes gained on the prospect of costlier freight charges for Indian ores.

The most active rebar contract on the Shanghai Futures Exchange, October, rose 19 yuan to 4,813 yuan a tonne by 0140 GMT, reversing the previous session's losses.

The contract remains near an eight-session high, having hit a four-month low of 4,627 on March 22, but is down 1.5 percent this quarter.

Late Wednesday, Baoshan Iron & Steel , China's top listed steelmaker, posted an 8.3 percent rise in quarterly profit, and said it expected growth in global steel demand to slow this year. [ID:nB9E7EP00X]

"The important thing to note is that it's growing, not slowing. Maybe it's not growing as quickly as before but the rates we saw in 2009 and 2010 were unsustainable, built on all that stimulus money," said a trading source in Sydney.

"It looks like demand growth will moderate. We still have a bit of an inventory hump to get over, which in the short term may cap steel prices, in particular in China and even cause a lull in iron ore demand in the next three to six months, but it's temporary."

Key iron ore indexes, based on spot transactions in China, rose sharply on Wednesday.

India's iron ore exports fell for the eighth straight month in February because of a continuing ban on shipments by its key Karnataka state and exports are likely to face further pressure as the country hikes freight rates again.

Exports from the world's No. 3 iron ore supplier dropped 18.6 percent from a year ago to 10.137 million tonnes in February, data from the Federation of Indian Mineral Industries showed on Wednesday.

In addition, Indian Railways said it will impose a "busy season" charge of 7 percent on iron ore freight rates from April 1 to June 30 and from Oct. 1 to March 31.

Platts 62 percent iron ore index IODBZ00-PLT jumped $5.50 cents to $175 a tonne, including freight, and the Steel Index's 62 percent benchmark .IO62-CNI=SI gained $2 to $170.50.

Metal Bulletin's 62 percent gauge .IO62-CNO=MB rose $1.74 to $169.71. (Editing by Himani Sarkar)
Tags : steel plant, steelmaking, Chinese iron ore market, raw material, busy season charge, levy on coal and coke

Iron Ore-Prices rise for first time in a month as buyers return

Fri Mar 18, 2011 3:34am GMT

* Falling ore stockpiles spur Chinese buying
* Forward swaps extend gains
By Manolo Serapio Jr

SINGAPORE, March 18 (Reuters) - Spot iron ore prices rose for the first time in a month and offers remained firm on Friday as Chinese steel mills returned to the market to replenish
dwindling stockpiles.

Prices for the steelmaking raw material had fallen 15 percent since hitting record highs near $200 a tonne in mid-February as rising raw material cost and slow steel demand turned off top buyer China.

But some Chinese mills are looking at increasing steel exports to the region as production at quake-hit Japan could slow and domestic demand may spike when reconstruction starts.
Japan was Asia's biggest steel exporter last year.


"We had always thought that the dearth of Chinese buying in recent weeks would not last - steel production rates continue to record new highs and iron ore stocks can only sustain production
for perhaps a month or two," Commonwealth Bank of Australia said in a note.

China's daily crude steel output rose 0.5 percent from January to a record high of 1.94 million tonnes in February.

Inventories of imported iron ore at major Chinese ports fell to 80.4 million tonnes last week after climbing above 81 million tonnes towards the end of February.

Iron ore indexes, based on spot transactions in China and which global miners use in determining quarterly contract prices, rose on Thursday, the first uptick since they touched record peaks in mid-February.

The Steel Index's 62 percent benchmark .IO62-CNI=SI rose 30 cents to $163.90 a tonne, including freight, and Platts' 62 percent index IODBZ00-PLT jumped $1.50 to $166.50.

Metal Bulletin's 62 percent gauge.IO62-CNO=MB edged up 60 cents to $163.49.

Those gains may be sustained on Friday as offers from sellers remained firm, with Indian 63.5 percent iron ore quoted at $170-$172 a tonne, according to Chinese consultancy Mysteel.

"Sentiment is improving and there are more inquiries," Mysteel said.

"Iron ore buyers have come back because a lot of Chinese steel mills are very, very low on iron ore inventory and they now need to buy to sustain themselves," said an iron ore trader
in Shanghai.

"But will they come buy and disappear again which would make the price slide further or will they stay for sometime which will help prices rebound? That is still an unanswered question."

Further gains in iron ore forward swap prices on Thursday suggested confidence is slowly returning to the market.

The Singapore Exchange-cleared April contract climbed 3 percent to $157.80 a tonne, May rose 2 percent to $154.80 and June gained 1.8 percent to $152.40.

(Reporting by Manolo Serapio Jr.; Editing by Manash Goswami,sourced:Reuters)

Teck inks new coal handling deal with Westshore

Mar5, 2011 By Mining Weekly

Canada's biggest diversified miner, Teck Resources, has signed a new four-year agreement with Westshore Terminals to ship metallurgical coal from the company's British Columbia and Alberta mines through the export facility, sources reported.

The agreement, of which the commercial terms are confidential, covers the period from Apr 1, 2012, to Mar 31, 2016.

The new agreement contemplates Teck shipping 16 million tonnes coal in the initial contract year, and larger amounts in subsequent years when Teck's production is scheduled to increase, all at fixed rates through Westshore, the company said.

In Sep 2010, Teck lowered its coal sales forecast for the year, partly because of temporary capacity constraints at the Westshore Terminals export facility in the second half of the year.

Westshore is the top coal-export facility in Canada.

TATA Steel expects to complete TCP sale by March - Mr Muthuraman

Saturday, 19 Feb 2011

It is reported that TATA Steel Limited expects to complete the sale of its Teesside plant in the United Kingdom by the end of March 2011.

Mr B Muthuraman VC of TATA Steel said that "The process is on and we should be able to complete it by March 31st 2011."

It may be noted that TATA Steel recently agreed to sell the Teesside Cast Products plant to Thailand's largest steel group Sahaviriya Steel Industries PLC in a deal valued at USD 500 million.

The plant was partially shut in February 2010 after four steel slab buyers pulled out of a joint 10 year contract.

(Sourced:Dowjones)

Nucor raises steel prices as demand gains and raw materials climb

Sunday, 13 Feb 2011

It is reported that Nucor Corporation has raised prices for some of its products amid demand gains and increasing raw material costs.

Charlotte North Carolina based Nucor boosted prices for plate steel for March delivery by a minimum of USD 80 a tonne.

Nucor said that plate steel sold by contract was increased by USD 65 a tonne. AK Steel Holding Corporation, the fourth biggest US based steelmaker by 2010 sales, said it is raising prices for new orders of flat rolled carbon steel products by USD 50 a tonne.

Mr Patrick McFadden a Nucor spokesman said that Nucor sees rising raw materials and incremental demand. He added that "Some level of demand occurred to allow for the increases to be implemented."

US steelmakers have raised prices and brought more production back on line as they recovered from the plunge in demand following the 2008-09 recession.

(sourced:bloomberg)

Steam coal prices set to hit record highs

Thursday, 10 Feb 2011
Mr Tony D’Altorio of Investment U Research has opined that “Oil has stolen the headlines recently thanks to Brent crude trading above USD 100 a barrel. But it’s still well below its record high. Not so much with thermal coal yet energy investors too often favor oil and natural gas over this resource.”

Thermal coal prices quietly trended higher after the 2009-10 annual contracts were set at a mere USD 71 a tonne. But recently, the market has taken a powerful shot of adrenaline. Prices have jumped sharply amid supply disruptions in key coal exporting countries, such as Australia. Spot prices shot up to USD 140 in early January, though they have fallen back since to about USD 125.
This month, Asia’s utilities and coal mining companies will be holding their secretive, annual talks. Those extremely important meetings set the annual fixed prices for thermal coal April-March.

The industry expects record prices for these new contracts well above the 2008-09 peak of USD 125 a tonne. The estimates for the annual coal contracts range from a low of USD 130 a tonne to a high of USD 145 per tonne. But either way, it will be far above the USD 98 per tonne set last year.
The thermal coal market moved to spot trading in the early 2000s. But most of the large mining companies still keep annual contracts with utilities in Japan, South Korea and Taiwan and elsewhere. Annual contracts set the price directly or indirectly for about a third of the 730 million metric ton seaborne thermal coal market. And they also set the tone for the spot market.
Australia’s coal rich state of Queensland keeps getting pounded with heavy rains and tropical cyclones. Meanwhile Indonesia, Columbia and South Africa have suffered under similarly bad weather.

Emmanuel Fages coal analyst at Societe Generale, summed up the global outlook said that “There seem to be rains in every place where coal is produced these days.”
Plus, a severe shortage of railway cars is hurting output in Russia, another large thermal coal exporter.
The disruption to global coal supplies has coincided with a rebound in demand for the thermal variety. On the demand side, the traditional big three Asian markets of Japan, South Korea and Taiwan have increased buying on the back of stronger economic growth. Meanwhile, India and China have recently emerged as major thermal coal buyers. Together, they imported 190 million tonnes.(Sourced from www.investmentu.com)

Baosteel Huangshi Branch sales reach all time high in 2010

Friday, 04 Feb 2011

Last year lead by the goal of the new production line achieving four results and with flexible operation and accurate market positioning, Baosteel Co Ltd Huangshi Branch had its production and sales exceeding the annual plan and reaching all time high. Meanwhile, sales rate, contract completion rate and capital return rate all reached 100% with sales revenue and profits covering 106% and 124% of the yearly plan respectively.

Huangshi Branch originally had two production lines: galvanizing and color coating. The placodes required in production relied on imports for a long time. To change the passive situation and for new development opportunities, in the past two years, the branch increased investment in equipment and built two new production lines pickling and cold rolling. Last year, the two production lines achieved four results consecutively. On this basis, Huangshi Branch actively adjusts operating strategy, optimizes variety and market development and makes new breakthroughs in production, sales and research and development.

As for new production lines' upgrading and capacity building, by relying on site improvement and stabilizing quality, Huangshi Branch has a number of collaborative research results, for example, improving product quality by way of raw material quality, technology and equipment capability. Through equipment modification and process optimization, scratched products in cold rolling mill decreased by 80%. By optimizing the rolling process and exploring the optimal operation and running model, cold rolling mill production rose month by month from July to November last year. Huangshi Branch allocates resources rationally, trackes the market closely and makes changes in marketing strategy.

In last October, as the sales of hard coils reached standstill while galvanized products had good market situation, Huangshi Branch increased the sales of galvanized sheet and allocated the processing of hard coils to outsiders which expanded the production of galvanized sheets and achieved maximum benefit. In addition, the Branch also has new marketing perspective for new production lines. The cold rolling mill complex, originally designed only for inside use is now put to sales and now has accumulated a number of steady customers.

In research and development of new products, Huangshi Branch insists on seeking breakthrough by differentiating. According to user special needs, the company developed wide galvanized plates, extra-thick galvanized coated plates and modified silicon polyester color coated plates, accelerated the transformation of large scale production and achieved bulk supply. Based on the original products of the new unit complex, it further develops new technology, explores equipment potential and makes trial in ultra-thin specification which broke the limit of unit design.

Currently, the company has formed four major categories of products: pickled, cold rolled, galvanized and color coated products. The market is further expanded, with the sales of key project and stable customer oriented products reaching more than 50%. At the same time, the internal logistics has become balanced, enterprise system operating cost is reduced and the ability to withstand market risks and the comprehensive competitiveness are enhanced.

Oman to hire consultants to develop first rail network

Thursday, 03 Feb 2011

Bloomberg reported that Oman will appoint project and design consultants in June 2011 to help create the Arabian Gulf country's first railway network.
Mr Salim Al Affani head of planning at the Supreme Committee for Town Planning said that the network's construction will take four years. Freight and passenger services are scheduled to start in 2017.

Mr Al Affani said that Oman, one of six countries that make up the Gulf Cooperation Council, is trying to improve transport links with other Middle Eastern nations. Ten companies have been shortlisted for each contract that will be awarded in June 2011. He declined to name the shortlisted companies or give a value for the project, citing government policy.
In the first phase, 1,000 kilometers of track will link Muscat with the town Sohar as well as a rail network the neighboring UAE is developing. The second phase will include an additional 600 kilometers of track connecting the capital with Salalah in Oman’s south.

Mr Al Affani said that "We have visibility on phase one and from there it depends on the government's willingness. Studies have shown that the potential is low for the second phase because of the high cost, but the government is still intending to proceed with what’s planned for now."
Mr Salim Al Affani also the head of Abu Dhabi's Union Railway Co said in November 2010 that the UAE railway line will link with a train system covering the six cooperation council countries in seven years.(sourced:bloomberg.net)

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)