Monnet Ispat to buy another coal mine in Indonesia

Wed, Mar23,2011

Monnet Ispat touched an intraday high of Rs 532.50 and an intraday low of Rs 529.95. At 09:29 hrs the share was quoting at Rs 531.50, up Rs 6.15, or 1.17% on the NSE.

The company is close to buying another coal mine in Indonesia having reserves of fewer than 100 million tones, reports Business Standard.

It was trading with volumes of 2,573 shares. In the previous trading session, the share closed up 0.31% or Rs 1.60 at Rs 525.35. (source:moneycontrol)

MOC: Chinese steel prices down 0.6 percent week on week

Friday, Mar04, 2011

According to the report published on March 2 by China's Ministry of Commerce (MOC), due to weak demand from downstream buyers finished steel prices dropped slightly on week-on-week basis in the past week. In the coming period, as supplies increase, finished steel product inventories will also continue to increase. Thus, the MOC foresees that finished steel product prices in China will drop slightly in the short-term future.

According to the data from the MOC, during the past week domestic finished steel prices in China dropped in the past week by an average of 0.6 percent week on week. Prices of 3 mm common carbon sheet, 10 mm common carbon medium plate and 6.5 mm high speed wire rod dropped by 1.5 percent, 1.2 percent and 1 percent respectively on week-on-week basis.

Meanwhile, data from the China Iron and Steel Association (CISA) have revealed that as of February 20 the finished steel inventories of the 77 medium-sized and large Chinese steelmakers which are members of the CISA had increased to 9.46 million mt, compared to 7.57 million mt at the end of January. In addition, the Indian government has increased the export duty on iron ore fines and lump ore to 20 percent, with the CISA calculating that this adjustment will increase the cost to Chinese steelmakers per each ton of steel by $25, and this could push Chinese finished steel prices upward and also reduce the profit margins of Chinese steelmakers

Russian Railways: Steel product shipments up 11.2 percent in January

Monday, 07 February 2011 11:56:42 (GMT+2)
According to the preliminary data issued by Russian Railways (RZhD), in January 2011 steel product shipments on Russia's railways increased by 11.2 percent to 6.3 million mt, shipments of iron ore and manganese ore went up by 11 percent to 8.6 million mt, while shipments of coke went up by 10.7 percent to 10.5 million mt, all compared to January 2010. In January 2011, total shipments on Russia's railways increased by 10.6 percent year on year to 97 million mt.
Tags: iron ore , raw mat , Russia , CIS , steelmaking , trading
(sourced:steelorbis)

Japanese Steel Takeover Driven by `Radical' Shift as Costs Rise

Feb 4, 2011 2:12 PM GMT+0530
By Masumi Suga and Rebecca Keenan

Nippon Steel Corp. and Sumitomo Metal Industries Ltd.’s plan to create the world’s second-largest steelmaker is aimed at gaining leverage over raw-material purchases and metal pricing as costs soar. Shares in both companies surged the most in more than two years today.

Based on Sumitomo’s market value and net debt, the deal would be worth more than 2 trillion yen ($24.5 billion), according to data compiled by Bloomberg. Yesterday’s announcement of the accord, which may be Japan’s biggest non- bank takeover, said it would be completed by October 2012.

Steelmakers in Japan, the world’s second-biggest producer of the alloy, are seeing profits squeezed while market-leader China encourages consolidation to create globally competitive companies. Rising costs for iron ore and coking coal used to make steel forced Nippon Steel to cut its full-year earnings forecast last week. Sumitomo Metal did the same today.

“The purpose of this merger is to fend off competition from rivals in China, South Korea and India,” said Takashi Murata, an analyst at Daiwa Securities Capital Markets Co. in Tokyo. A bigger company has more clout to negotiate raw-material costs and set steel prices for buyers including automakers, he said.

Share Reaction

Sumitomo Metal Industries rose 16 percent to 224 yen at the close of trading in Tokyo for the biggest advance since Oct. 30, 2008. Nippon Steel ended at 313 yen, up 9.1 percent, after rising as much as 14.3 percent, the most since Oct. 28, 2008.

Before today, Nippon Steel shares had fallen 16 percent in the past year, compared with a 3.2 percent decline for Luxembourg-based ArcelorMittal and a 17 percent drop for South Korea’s Posco, the world’s third-biggest producer. Sumitomo Metal had fallen 26 percent in the year before today.

The proposed merger between Sumitomo Metal Industries and Nippon Steel will create synergies for both companies as well as benefit “the wider steel industry by helping to increase pricing and margins,” Goldman Sachs Group Inc. analysts Rajeev Das and Nana Hasegawa said in a report today.

The merger is positive for Nippon Steel because of benefits arising from the combined size of the two companies, Standard & Poor’s said today in a statement.

‘Radical Change’

A combination of the two producers, which haven’t outlined terms of the transaction, would form the world’s second-largest steelmaker, based on output of 47.8 million metric tons in 2010, Sumitomo Metal Industries President Hiroshi Tomono said at a press briefing yesterday. ArcelorMittal is the biggest producer.

“We see a radical change in the business environment surrounding the Japanese steel industry,” Muneoka told reporters at the briefing.

Nippon Steel, formerly the world’s second-largest steelmaker by production, lost that rank in 2009 after being overtaken by five Chinese mills, according to the American Institute for International Steel.

Meantime, rivals are expanding, with South Korea’s Posco on Jan. 31 winning approval for a $12 billion steel plant in India, the biggest single foreign investment in the country.

“It’s very important Japanese steelmakers be globally competitive,” said Japanese Economy Minister Kaoru Yosano today. The planned merger of Nippon Steel and Sumitomo Metal Industries is “welcomed” he said.

Steel Demand

Steel consumption may rise 5.3 percent this year to a record, according to World Steel Association forecasts. Iron ore prices rose last year after Rio Tinto Group, BHP Billiton Ltd. and Vale SA, the biggest suppliers, shifted away from annual pricing to quarterly agreements.

The price of iron ore will be 21 percent higher on average this year, Credit Suisse Group AG said in a Jan. 7 report. The spot price of ore delivered to China including freight will average $178 a ton, the report forecast. That compares with $147 in 2010, according to The Steel Index.

Floods in Australia’s Queensland state closed mines and further pushed up coking-coal prices. Free-on-board prices may surge to $400 a ton for the three-month contract starting April 1, from $225 this quarter, Bank of America Merrill Lynch said last month.

“It’s all about lowering costs and enhancing margins,” Gavin Wendt, a senior resources analyst at Mine Life Pty in Sydney, said by phone. “While demand for steel is quite strong, one of the problems for steelmakers around the world is rising costs. It may give them more leverage when it comes to dealing with the miners.”
(sourced: bloomberg.com)

India iron ore futures rise a tad; volumes moderate

Wed Feb 2, 2011 8:37 amEST
* Volumes moderate even as trading enters fourth day
* Brokers says getting enquiries from exporters for hedging

MUMBAI Feb 2 (Reuters) The world's first iron ore futures in India rose a tad on Wednesday, tracing gains in the overseas spot market, which hovered near its record high, traders and analysts said.
At 5:00 p.m. on the Indian Commodity Exchange (ICEX), iron ore of 62 percent fines for March delivery was trading 0.85 percent higher at 8,014 rupees per tonne, including freight cost for delivery to northern China.
While on the Multi Commodity Exchange (MCX), the country's largest by turnover, 62 percent fines for February delivery was trading 0.30 percent higher at 7,380 rupees per tonne, free on board.
ICEX, which is part-owned by state-run MMTC Ltd (MMTC.BO), the biggest Indian trader of iron ore, recorded volumes of 20,800 tonnes, down 15 percent from a day ago. MCX volumes were at 1,500 tonnes.
The Platts 62 percent iron ore index IODBZ00-PLT was unchanged at $187.25 a tonne, cost and freight delivered to China. The Steel Index's 62 percent benchmark .IO62-CNI=SI was steady at $185.60.

The trading entered into its fourth day, and have been witnessing moderate volumes since its launch, and analysts said volumes would remain thin until exporters get used to the contract.
"We have been getting enquiries from iron ore exporters. We see potential in these contracts going forward," said Aurobinda Prasad, head of research, Karvy Comtrade.
Before India's futures contracts, trading in iron ore derivatives were mostly done through forward swaps with exchanges from Singapore to the United States and Europe offering clearing services, hoping to draw steelmakers into hedging price risks.
India is the world's third-biggest iron ore exporter after Australia and Brazil, but shipments have been hit by 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. (Reporting by Siddesh Mayenkar; Editing by Rajesh Pandathil, sourced:Reuters)

Shanxi Minmetals Industrial & Trading obtains approval for Mexican project

Tuesday, 04 January 2011 13:19:35 (GMT+2)

The development and reform commission of China's Shanxi Province has announced that local trading firm Shanxi Minmetals Industrial and Trading Co., Ltd (Shanxi Minmetals Industrial and Trading) has received approval from China's National Development and Reform Commission (NDRC) for its new iron ore project in the southern state of Jalisco in Mexico.
The project, which will involve both open-pit and underground mining, has estimated total reserves of 58.8 million mt of iron ore, with an annual iron ore output of 1.45 million mt.
Shanxi Minmetals Industrial and Trading signed the agreement to purchase the Mexican project in September 2009, and has since obtained mining rights and enviromental approvals.
Shanxi Minmetals Industrial and Trading mainly exports coke and bauxite, and also processes imported materials including manganese ore, chromium ore and iron ore and exports the processed products. Shanxi Minmetals Industrial and Trading is the third largest coke exporter and fourth largest bauxite exporter in China.
Source:steelorbis.com