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voda 29 november 2014 16:11

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Asian steel makers profitability to rise in 2015 - Moody's

Argus quoted Ratings agency Moody's Investors Service as saying that profitability of large Asian steelmakers may rise slightly next year, as capacity additions slow and blast furnace utilisation rates increase.

Mr Jiming Zou analyst of Moody's said that "We believe steelmakers' profitability has bottomed out and will increase slightly in 2015. Demand for steel will likely increase a modest 3pc, outpacing net production capacity additions. Declining raw material costs will also support steelmakers' profitability."

Iron ore prices have been forecast at USD 50 per tonne to USD 70 per tonne next year by various analysts, which would provide significant cost relief for steelmakers globally.

Moody's pointed out that while China is the major steel producer and consumer in Asia, Chinese steelmakers are the least profitable in Asia. Prominent Chinese steelmakers, such as Baosteel, will likely modestly grow profits and gain market share at the expense of smaller companies as the Chinese government gets aggressive on removing redundant production capacity.

The ministry said that China's ministry of industry and information technology earlier this month released a third list of 21 iron and steelmaking companies that will have to eliminate their outdated production capacity by the end of this year. Provincial governments should dismantle the outdated equipment mentioned in the list and ensure they are never brought back to use.

Moody's said that Japanese steelmakers Nippon Steel & Sumitomo Metal Corporation and JFE Holdings are better positioned than other producers in Asia to increase their profitability because of a growing domestic economy. South Korea's POSCO and Hyundai Steel's profits will increase with capacity expansion. POSCO will also higher earnings from its non steel businesses.

It said that capacity additions and high utilisation rates at existing plants is also likely to boost profitability for large Indian producers such as JSW Steel, Sail and Tata Steel.

Source – Argus Media

voda 29 november 2014 16:17

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China to hit peak steel in 2017

Macro Business cited Mr Li Xingchuang, president of the government linked China Metallurgical Industry Planning Association, as saying that steel consumption would peak at 740 million tonnes in 2017. This is well below the 1 billion tonne forecasts of Rio Tinto, BHP Billiton and Fortescue Metals Group, who all broadly believe Chinese steel consumption will not peak until beyond 2030.

Mr Li said that “I really don’t understand how the big mining companies made that forecast.”

He said that “To be honest, I reckon this forecast is optimistic. 1.7% growth next year to 834 million tonnes and 850 million tonnes as the peak, but only if exports keep growing. My own view is that the peak will come next year as exports are choked off by protectionism.”

Source – Macro Business

voda 29 november 2014 16:19

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Iron ore price levels sink further without any respite in site

The iron ore prices have sunk further below US70 a tonne with investors seeing no signs of a cooling of production growth plans despite Chinese demand failing to reignite.

According to the Steel Index, benchmark 62% grade iron ore for immediate delivery to China's Tianjin port slipped 0.9 percent to USD 68.00 a tonne on Wednesday

However, the most traded May iron ore contract on the Dalian Commodity Exchange rose as much as 2.6% to CNY 475, before easing to CNY 472 later in the day

The losses have been driven by a rapid expansion push from leading miners BHP Billiton, Rio Tinto, Vale and Fortescue Metals Group. The mining giants have been maintaining that as low cost miners will force high cost miners especially in China, they will continue to ramp up the production. But off late cracks have started to appear.

As per reports, Vale is not considering slowing its expansions because of slumping prices and is pressing ahead with the USD 19.7 billion Serra Sul S11D mine and logistics project, the industry’s biggest. Mr Murilo Ferreira CEO of Vale recently said that “There was a lot of volatility in prices this year and the market is undershooting at the moment and this will bring about a correction. This correction will come through the closure of many inefficient miners of high cost and poor quality iron ore.”

On the other hand, Rio Tinto has decided to defer plans to build a USD 1 billion new Silvergrass iron ore mine in Australia, but said that it still expects to reach its expansion target of 330 million tonnes by 2015 and 350 million tonnes by 2017.

FMG has denied media reports citing Standard Bank’s commodities analyst Melinda Moore that as saying that Fortescue Metals Group is considering closing its Cloudbreak operation in Western Australia.

It is estimated that these 4 miners have contributed to more than 60 million tonnes additional volumes in last 12 months and combined with new capacities from minor players the global surplus stands close to 200 million tonnes today resulting in free fall in iron ore prices

Source - Strategic Research Institute

voda 29 november 2014 16:21

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ArcelorMittal to invest EUR 15 million at Bourg en Bresse plant

ArcelorMittal, the world's leading steel and mining company, will invest EUR 15 million to expand the production capacity of its plant at Bourg en Bresse and support the development of its customer Technip, a world leader in project management, engineering and construction for the energy industry.

The initial partnership agreement signed in 2013 has been extended in duration and volume. The plant will also strengthen its team with the recruitment of around 20 people.

In 2015, the Bourg en Bresse plant will be equipped with a new heat treatment furnace and a new rolling mill.

In September 2013, ArcelorMittal was chosen by Technip to supply high performance, high strength steels used in the manufacture of flexible pipes for the development of deepwater and ultra deepwater oil and gas fields, particularly at depths in excess of 1500 meters. The five year partnership agreement between ArcelorMittal and Technip, the largest European contract for ArcelorMittal’s wire business, has been extended by two years.

The partnership agreement signed in 2013 sustained the operations of the Bourg en Bresse plant, and this agreement extension will reinforce it.

ArcelorMittal Bourg en Bresse has become Technip’s supplier of choice for high-end technological and innovative solutions. The site supplies Technip flexible pipe manufacturing plants located in France, Brazil and Malaysia.

The commercial contract comes with a research and innovation contract that strengthens technological progress at the Bourg-en-Bresse plant. The Bourg en Bresse plant is developing new wire solutions tailored to Technip’s requirements.

Source – Strategic Research Institute

voda 29 november 2014 16:21

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Chinese steel mills staying away from iron ore buying on credit strains

Mr Chen Yan, analyst with SteelHome said after a visit to some mills located in East China said that iron ore for May delivery on the Dalian Commodity Exchange reached the low CNY 470 per tonne or USD 61.3 per tonne in US equivalent on November 24, a price found low enough by some Chinese steel mills in hedging, who are currently away from the futures market due to credit tension at the end of the year.

One executive with international trading branch of the mill said that the price is very attractive, but banks are tough on credit loans at the end of the year. Our credit line next year will be affected if we fail to pay in time and so we are now still away from it.

Spot price for 62% grade Newman fines is now at USD 69.5 on November 25 and shows some signals of stabilizing after consecutive drops. Although market sentiment is still negative on price outlook, some players believe the pricing is bottoming out.

Mr Wang ZhongYuan, analyst with SteelHome, who also believes North Chinese steel mills' restocking intensity is falling said that “The market is highly likely to stabilize for a while and then turn to wings between USD 66.5 to USD 82.75.”

Commonwealth Bank of Australia said that “We no longer expect a meaningful iron ore restock later in the year as steel mills in China are content to purchase iron ore at their convenience, either from the port or from domestic producers, due to its wide availability."

Source - www.steelhome.cn/en
China steel information centre and industry database

voda 29 november 2014 16:24

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China's interest rate cuts to bring relief to steel industry

China's central bank's latest interest rate cuts has brought some relief to the sluggish steel market but may not be enough to get a substantial boost.

Industry insiders said that the central bank lowered the one-year benchmark lending rate by 40 basis points to 5.6% and the one year deposit rate by 25 basis points to 2.75%.

According to data from the China Iron and Steel Association, China's 86 large and medium sized steelmakers posted a total debt of more than CNY 3 trillion as of the end of June, of which bank loans reached CNY 1.3 trillion.

A staff member of a bank said that theoretically speaking, as a result of the 0.4% cuts in lending rate, steel companies will save at least CNY 5.2 billion for one year loans.

A market player said that the concurrent rate cuts will help ease steel companies' interest burdens, but only a recovery in demand could boost a substantial improvement in the steel industry which has been saddled with huge debts.

As of August 31, 18 out of 33 Chinese listed steel companies posted a debt to asset ratio higher than 70% and six of them reported their ratio above 80%. Capital shortage remains one of the biggest test for China’s steel mills amid chronic overcapacity and a fall in demand despite an improvement in profits.

CISA's member mills posted a combined profit of CNY 19.282 billion in the first three quarters and, an increment of 71.26% from the year ago level. The number of loss incurring mills accounted for 25% down 6.82 percentage points from a year ago. The combined losses reached CNY 8.086 billion down 29.58% YoY. The rate of return on sale was 0.71% a gain of 0.3 percentage points from the previous year.

The bank staff member said that "Though the cuts in lending rate can hardly change the situation of cash crunch facing steel mills, but it may somewhat help pull up steel demand.”

Source - www.steelhome.cn/en
China steel information centre and industry database

voda 29 november 2014 16:25

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Vale in discussion to establish third iron ore platform in China

Senior executive with Vale have met officials from Jiangsu provincial government, East China to discuss the feasibility of a bulk cargo line from Lianyungang Port, Jiangsu to Brazil and a new spot trading platform in Lianyungang City.

Those subjects are listed in two countries’ cooperation memo signed in this July when president Xi Jinping visited Brazil. Lianyungang Port, the biggest iron ore port terminal among 17 ports along Yangzi River in China accounts for 5% of iron ore at 44 Chinese ports.

China has already had two spot iron ore trading platforms, one is Beijing Iron Ore Trading Center Corporation and the other is Rizhao International Iron Ore Exchange.

COREX and previous CBMX traded 31st 3203 million tonnes of iron ore from its launching data May 8th 2012 to October 31st 2014; whilst RIOE traded 13.22 million tonnes from July 9th 2013 till November 24. Neither of them is big enough to break pricing power taken by Australian and Brazilian suppliers in China’s iron ore imports.

Vale sold about 150 million tonnes of iron ore to China in 2013 and hopes to double it as of 2018.

Update: Vale initiated USD 1.4 billion port terminal in Malaysia earlier this month as the miner seeks to cut costs of shipping to Asia from Brazil with prices at five-year lows. Given the Valemax ban, Malaysia is fairly important to Vale's strategy.

But to Wu Ming Hua, logistics expert with Maritime China, Malaysia is a stopgap and said that the journey from Brazil to Malaysia is pretty long, not to mention the ship needs to sail to North China. The voyage are definitely getting longer.

Mr Wu said that apart from Lianyungang, ports including Dalian, Qingdao, Zhoushan are all interested in and capable of being options for Vale. Those ports are competing with each other and given the situation, Jiangsu province and Lianyungang are moving faster.

Source - www.steelhome.cn/en
China steel information centre and industry database

voda 29 november 2014 16:26

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ArcelorMittal loses court battle over documents

In a judgment with wider significance for industrial companies, the Supreme Court of Appeal ordered steel producer ArcelorMittal SA to hand over environmental information to a lobby group.

The judgment is a victory for environmental organisations seeking to monitor the practices of private companies. The judgment also scathingly rebuked ArcelorMittal SA for how it initially dealt with the requests for information.

On behalf of a unanimous bench of five, the appeal court’s Mr Mohamed Navsa acting deputy president said that local and international companies must be left in no doubt that, when it came to the environment, there was no room for secrecy. Constitutional values will be enforced.

Calling SA’s biggest steel producer a major, if not the major, polluter in its operational areas, Judge Navsa said that ArcelorMittal SA’s industrial activities were a matter of public interest and were crucially important.

While there was a danger in forcing companies to throw open their books in cases of trivial or frivolous requests, this case did not fall into that category. It concerns us all.

The court battle concerned two requests under the Promotion of Access to Information Act by nongovernmental organisation the Vaal Environmental Justice Alliance.

Source – Bdlive

voda 29 november 2014 16:28

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Siemens offers industry specific motors for steel plants

Siemens has developed industry specific motors for steel plants on the basis of the Simotics 1LE1 motor platform.

The ventilated Simotics DP Steel Plant Motors expand the range of roller table motors, and are specially designed for applications in the steel industry where they meet the high demands in terms of vibrations and shocks according to Class 3M4.

Versions of these new motors are optimised for use with converters of the Sinamics S120 series and as integrated drive systems, contribute to reliable and efficient operation. In network operation, the IE3 efficiency class ensures particularly high energy savings.

The new Simotics DP Steel Plant Motors from Siemens offer optimised solutions for steel production processes. In particular, these include the transport processes, for example transport to the reheating furnace and cooling bed, on beam rolling mills or run out tables.

The motors feature a mechanical design that has been continuously tested in accordance with to DIN EN60721-3-3 and exhibit a correspondingly high resistance to vibration and shocks, compliant with Class 3M4. They are available in 4- and 6-pole designs with shaft heights from 112 to 280 mm and in the torque range from 20 to 578 Nm.

The Steel Plant range comprises not only mains powered motors, but also versions optimised for converter operation with special insulation systems.

When used together with the Sinamics S120 drive system, these motors form an integrated drive system that contributes to particularly dynamic and reliable production processes.

Source – Ferret

voda 29 november 2014 16:30

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Iron ore giant Vale sees rebound as glut squeezes mines

According to the top producer Vale SA, iron ore prices are poised to rebound from five year lows as Asian infrastructure demand improves and high cost mines close.

Mr Murilo Ferreira CEO of Vale said that “The steelmaking raw material, which has slumped 49% this year to USD 68.49 a dry metric tonne will return to an average range of USD 85 to USD 90 next year.”

Mr Ferreira said that “There was a lot of volatility in prices this year and the market is undershooting at the moment and this will bring about a correction. This correction will come through the closure of many inefficient miners of high cost and poor quality iron ore.”

The company isn’t considering slowing its expansions because of slumping prices and is pressing ahead with the USD 19.7 billion Serra Sul S11D mine and logistics project, the industry’s biggest.”

Source – Bloomberg

voda 29 november 2014 16:34

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Tangshan of Hebei Province to cut steel capacity by 20 MT by year end

Tangshan, located in North China’s Hebei province, the largest steel producing region in the country, has slashed steel capacity by 17.92 million tonnes as of October.

Official data showed that it is expected to cut steel capacity by 20 million tonnes by the end of this year.

According to an action plan for air pollution control released last September, Hebei pledged to phase out 60 million tonnes of steel capacity by 2017 and it set the target for Tangshan at 40 million tonnes by the same year.

Source - www.steelhome.cn/en
China steel information centre and industry database

voda 29 november 2014 16:35

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Ibovespa declines as iron ore slump on global supply sinks Vale

Bloomberg reported that the Ibovespa fell, erasing earlier gains, as a drop in iron ore prices to the lowest level since 2009 sank shares of mining company Vale SA.

Pulp producer Suzano Papel e Celulose SA led losses on the MSCI Brazil and Materials Index as the real strengthened, dimming the outlook for sales abroad. Cosan SA Industria e Comercio rallied after a report that the Brazilian government plans to restore a tax on gasoline and diesel.

The gauge earlier gained 1% on speculation that President Dilma Rousseff is preparing to name a new economic team capable of reviving growth. Iron ore extended a retreat below USD 70 per tonne as global supplies of the steel making raw material are poised to swell just as economic growth in China is slowing.

Mr Pedro Galdi, the head strategist at brokerage SLW Corretora said that “Things are not easy for Vale with iron ore falling day after day. In addition, the speculation around the new economic team is spurring volatility.”

Vale fell 0.7% to BRR 20.43 snapping a four day rally. Susano slumped 5% to BRR 10.18. The real strengthened 0.7% to 2.5116 per dollar. Cosan jumped 5 percent to 34 reais. Brazil may restore a tax on gasoline and diesel as part of measures aimed at reducing its budget deficit.

Source – Bloomberg

voda 29 november 2014 16:35

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BC Iron shrinks board to cut costs

SMH reported that BC Iron has shed three board members, including its first managing director, to help reduce costs as iron ore prices plunge.

Mr Mike Young, who was boss at BC Iron from its market listing in 2006 through to 2013, Mr Malcolm McComas and Mr Peter Wilshaw have stepped down from the board, leaving five members.

BC Iron said that the resignations follow the board's recent discussions to reduce its size in the current iron ore environment. The fees for those left on the board will be cut from January 1.

Iron ore prices have almost halved so far in 2014 and BC Iron's recent quarterly update showed it was struggling to break even at current prices.

Source – SMH

voda 29 november 2014 16:36

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Iron ore price prospects not encouraging - Anglesey Mining

Anglesey Mining Plc H1 loss before tax narrowed to 878,908 pounds from 3.21 million pounds in the prior year, as the prior year included 2.44 million pounds in investment impairment.

There were no revenues in either period. The company noted that the first half was a difficult period for the resource industry and for Anglesey.

Looking ahead, the firm said that the prospects for the iron ore price in the short term are not encouraging with a continuing surplus of supply over demand. This is likely to keep prices pegged at low levels at least until the spring of 2015.

Source - RTT News

voda 29 november 2014 16:38

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New video campaign highlights the positive contribution of steel industry globally - worldsteel

The World Steel Association has announced the launch of a video campaign highlighting the global contribution of the steel industry. The video brings to life the environmental benefits of steel, the extensive use of the material in our daily lives, the modern transformation of the industry, and the diverse job opportunities available.

The steel industry employs more than eight million people worldwide and spends over USD 12 billion annually on improving its manufacturing processes, new product development and future breakthrough technologies. In 2012 the steel industry had a turnover of more than USD 800 billion, yielding over USD 100 billion in tax which equates to putting 10 million students through school each year or building 5000 new hospitals.

Mr Edwin Basson, DG of worldsteel said that “We are delighted to launch the video, together with our members, to highlight the great work we are involved in as an industry. Our aim is to inspire current and future generations about the diverse number of opportunities available in the sector, and inform as many people as possible on how the industry has transformed and modernised over recent years. The video also reinforces how steel is one of the most recyclable materials available today without losing its quality. It also provides an example of how new steel can make our world a better place.”

Mr Edwin Basson said that “As an industry we believe sustainable development must meet the needs of the present without compromising the ability of future generations to meet their own needs. We are therefore committed to achieving a vision in which steel is recognised as a key element of a sustainable world – and hope our new video is a good way of communicating that vision and message.”

Source – Strategic Research Institute

voda 30 november 2014 16:28

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EU investment plan should boost demand for steel - EUROFER

Mr Axel Eggert, director general of EUROFER announced that intelligent public investments will strengthen Europe's competiveness and stimulate growth. From this perspective, we welcome the Commission’s EUR 315 billion investment plan.

As a consequence of the economic and financial crisis, the level of investment in the EU has dropped significantly in the past seven years, by about 15% due to calculations from the European Commission. Economic recovery, job creation, long term growth and competitiveness have been hampered as a result.

The focus of the investment plan is in the field of infrastructure, notably broadband and energy networks, transport infrastructure, research and innovation, education and renewable energy and energy efficiency. These projects could support demand for steel and its value chains.

Mr Axel Eggert said that “The investment projects should prioritize on infrastructures such as railways, roads, waterways, harbors, buildings, flood protection, and on innovation for large scale industrial projects, including energy efficiency and low-carbon projects.”

He said that “The Commission should review as rapidly as possible the EU Emissions Trading Directive in order to avoid carbon and investment leakage in the European industry.For sectors exposed to fierce global competition, such as steel, the Directive must not result in direct and indirect costs at least at the level of best performers, as requested by the European Parliament and the European Council Conclusions of 23 October 2014 on the climate and energy framework 2030. The best way to save jobs is a favorable business environment.”

Source – Strategic Research Institute

voda 30 november 2014 16:29

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Dalian iron ore futures rise for 3rd day but rally may not last

Reuters reported that Chinese iron ore futures rose for the third consecutive day as investors covered short positions and the market was set for its first weekly rise in four but analysts doubted the rally would go far since fundamentals had not changed.

The most traded May iron ore contract on the Dalian Commodity Exchange rose 2.3% to CNY 485 by 0331 GMT. Even so, the price has lost about 9% this month.

A persistent supply glut and slower demand from top consumer China are expected to weigh on prices of the raw material, even though the strong rebound in futures has helped suppliers sell cargoes at USD 70 per tonne, up from USD 68 per tonne to USD 69 per tonne.

ANZ Bank said that without any changes to fundamentals for the recovery, the rally could be largely short covering following recent heavy selling. Negative sentiment will continue to plague seaborne iron ore markets until we see sustained supply side discipline.

According to the Steel Index, Benchmark 62 percent grade iron ore for immediate delivery to China's Tianjin port .IO62-CNI=SI jumped 2.5% to USD 69.7 per tonne the biggest daily rise in over a month.

Source - Reuters

voda 30 november 2014 16:30

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Fortescue cuts spending forecast by half on global iron ore glut

Fortescue Metals Group Limited slashed its full year spending plans by half, joining its larger rivals in making cuts after a plunge in iron ore prices.

The world’s fourth biggest iron ore exporter plans to spend AUD 650 million in the year through June 2015, compared with its previous budget of AUD 1.3 billion. Fortescue’s outlook for shipments for the year is unchanged at 155 million to 160 million tonnes.

Mr Nev Power CEO of Fortescue Metals Group said that “In the current environment it is prudent to defer investing additional capital that increases supply.”

Fortescue joins miners including Rio Tinto Group and BHP Billiton Limited in cutting spending amid tumbling commodity prices. Iron ore prices this week fell below AUD 70 for the first time in five years as increasing production from the world’s largest miners deepens a global glut.

Rio, the second-biggest miner, deferred plans to approve a new AUD 1 billion Australian iron ore mine and lowered its 2014 expenditure estimate. BHP, the biggest miner, earlier this week announced capital outlays will drop to AUD 13 billion in fiscal 2016, down more than 40% from 2012.

Source – Bloomberg

voda 30 november 2014 16:32

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Rio Tinto vows big returns despite iron ore rout

Reuters reported that global miner Rio Tinto deferred plans to build AUD 1 billion mine in Australia, stepping up cost cuts amid a plunge in iron ore prices so it can deliver on a vow to boost returns to shareholders.

The move to delay an investment decision on its proposed Silvergrass iron ore mine until at least the Q3 of 2015 follows a 50% slide in iron ore prices this year as Rio and its main rivals have flooded the market with new supply.

Mr Sam Walsh CEO of Rio Tinto while the long term outlook remains sound, the near term is undoubtedly more challenging But was not affecting Rio's promise to raise shareholder returns substantially come February 2015, when the company reports its full year results.

Rio needs to keep shareholders happy in order to ward off a new approach from suitor Glencore Plc, which is widely expected to make another play for the global miner after it was rebuffed in August. Investors have demanded higher returns following a spending binge on overpriced acquisitions and mine expansions over the last seven years.

Mr Walsh said that "We have reduced our cost, we have reduced our debt, we have substantially reduced our capital, and that's put us in an incredibly good position to materially increase shareholder returns."

Source – Reuters

voda 30 november 2014 16:35

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Ukraine's steel export values in Oct

Ukraine exported the amount of USD 247 million of steel flat products in October.

Meanwhile, the country’s steel flat imports totaled a value of USD 69.55 million in the month.

During the first ten months, Ukraine exported amount of USD 3.04 billion of steel flat products, with imports totaling USD 655 million.

Source - www.yieh.com

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