Eurobench.com

voda 17 december 2014 16:46

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Tale of Ilva steel plant in Italy - A close view

The last question about the destiny of Ilva is not if the State will become shareholder of the troubled Steel Company but when and how many times. According to the last information the first time should be right now, even before the end of the year and the second within 1 year.

The first nationalization should be done by nominating a new Commissar, following the rules of an old Law that was approved during the 90’s to rescue bankrupted companies of national interest.

The second, everything going well during the Commissar administration, by acquiring the 49% through a Strategic Fund” controlled for 77% by “Cassa depositi e prestiti” (whose 80% is controlled by the Ministry of the Economy) and 20% by BankItalia (the Italian Central Bank). The 51% should be taken by a consortium controlled by ArcelorMittal and Marcegaglia.

However, the second step is subject to different successful implementation which are neither easy nor obvious.

1. The Government should find as a Commissar, a really expert and capable person as well as a bunch of 40 – 50 top managers, enabling the company to accomplish to its different obligations.

2. The new Commissar and management will have to coop with the planned revamping of the BF No 5, due for March 2015 and would need around EUR 300 million.

3. The Government should then find a solution for the environment problems. The Italian Environmental Law is much more stringent and restrictive of the European one and would oblige Ilva to an unbearable level of investments and maintenance. This is why the same Government is considering to modify the Law to become equivalent to the European one. However a Parliament vote is necessary which, assuming is guaranteed, is not in any case quick. On top the revision of the Environmental law could be strongly criticized by the local population of Taranto that have seen an increase of cancer cases of about 30% during the last years.

4. Then a solution to the EUR 350 million debts to different suppliers should be found, together with demands for EUR 35 billion, still pending at different Tribunals for environmental damages.

Assuming that all above will be accomplished and performed in the right time, then the State should establish a Company “ad hoc” to become 49% partner of the AM-Marcegaglia consortium that should take the 51%. This company should serve also as a guarantor in front of the Environmental regulators, facilitating the seizure clearing of the different assets.

For Marcegaglia, Ilva will become the gold eggs chicken, under the form of captive HRC source. For Marcegaglia this will be a real major step as they’ll not be anymore obliged to go around the world, begging and negotiating for the 5 million tonnes yearly need. For ArcelorMittal, Ilva will represent 1/5 of its total European production and a final step to control the entire European steel system. That’s why it seems that ArcelorMittal has promised an investment of EUR 2.5 to EUR 3 billion for implementing the environmental restructuring operations.

This the plan of the Government; however it rest to see if all above will be implemented and if, once done, ArcelorMittal and Marcegaglia will reconfirm timing and conditions of their participation. Everything going well the last stage would see ArcelorMittal and Marcegaglia taking over also the 49% controlled by the state.

A decision of the entire process or at least of the first step is expected as soon as December 22nd, during a Council of the Ministries.

Good luck to everybody but mainly to the people of Taranto and to Puglie region.

Source - Strategic Research Institute

voda 17 december 2014 16:47

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EU's open market falls victim to unfair steel trade from non EU countries - EUROFER

EUROFER said that EU trade policy needs to become more reactive and effective

Mr Axel Eggert director general of EUROFER said “The EU steel industry depends on open markets and fair trade. However, since the global crisis, the proliferation of unfair trade practices by non EU steel producing countries is undermining the level playing field for EU steel producers increasingly weakening their margins. For Europe to keep its global leadership in this strategic sector with hundreds of thousand highly skilled employees, trade policy needs to be reactive and effective, forcefully tackling third market access and raw material export restrictions, and enforcing the EU’s trade remedy instruments without inhibition against unfair trade practices.”

He said “Securing an international level playing field has become increasingly challenging: Free Trade Agreement (FTA) negotiations with major emerging, resource-rich economies are not concluded while protectionist measures are cumulating in all steel regions of the world outside the EU.”

He said “The only moderate rebound in EU steel demand so far this year - estimated to have grown by about 4% over the first three quarters of 2014 - has been largely absorbed by imports. Owing to finished steel imports rising by 22% over this period, domestic deliveries by EU mills increased only by around 1.5%: EU mills are losing market share to steel suppliers from abroad. At the same time margins of steelmakers in third countries are protected by domestic policies.”

“How much longer has the EU steel industry to face worsening unfair competition worldwide?”, Eggert asks. ”The EU could use more the weight of its own vast domestic market in tackling third country market protectionism. Leverage towards third countries is critical for the EU, notably in domains where WTO disciplines and enforcement are weak such as subsidies and raw material restrictions.”

He said “Member states should support the Commission’s proposal on the modernization of the EU trade remedy instruments to swiftly update the basic Anti-Dumping and Anti-Subsidy Regulations, inter alia allowing the imposition of duties which better reflect the real injury caused to European industry (EU’s “lesser duty” rule).”

He added “In particular, the EU should not give Market Economy Status (MES) to China as China’s economy as a whole does not function on free market terms; the country does not meet the EU technical criteria.”

Source – Strategic Research Institute

voda 17 december 2014 16:48

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Morgan Stanley cut iron ore forecast too

Morgan Stanley lowered its iron ore price forecasts for the next two years as an Australia led supply surge counters the closure of high cost mines, sending the steel making ingredient to a five year low.

Analysts Mr Tom Price and Mr Joel Crane said that “Iron ore will average USAD 79 per tonne in 2015, down 9% from a previous estimate. The bank reduced its outlook for 2016 by 14% to USD 75 per tonne.”

The Morgan Stanley analysts said that “Led by Australia in 2014, the relatively low cost supply surge continues to dramatically alter the character of the industry’s supply side. Many of the mining operations that emerged over the past decade are unviable at current prices. The most exposed of these include low-grade iron ore operations in Hebei province, northeast China and small operations in Australia and Brazil.”

Morgan Stanley said many of the mines that have gone into operation over the past decade were currently unviable due to an unwavering supply surge led by Australia. According to Morgan Stanley, more than 150 million tonnes per year of capacity has been idled, reduced or closed as of this month, representing about 10 percent of estimated seaborne and China production capability in 2014

This follows a sharp revision in Australian government’s forecast for the commodity’s price next year to USD 60 a tonne. The revision in this week’s Mid Year Economic and Fiscal Outlook MYEFO comes just seven months after the May budget revealed a forecast of USD 95 a tonne

Source – Strategic Research Institute

voda 17 december 2014 16:49

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Iron ore falls for eighth straight day

couriermail.com.au reported that iron ore prices have fallen for an eighth straight trading day, barely holding above the five-year low reached at the end of November amid a broader slump in commodity prices.

At the end of the latest offshore session, benchmark iron ore for immediate delivery to the port of Tianjin in China was trading at USD 68.10 a tonne, down 0.7 per cent from its previous close of USD 68.60 a tonne and within touching distance of the recent five year low of USD 68 a tonne.

The red session was the eighth in succession for the commodity, which has lost about half of its value this year due to surging supply and flagging demand growth.

Source – couriermail.com.au

voda 17 december 2014 16:50

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China Nov iron ore output down 7.5pct on year

Data from the statistics bureau showed that China's iron ore output plunged 7.5% in November from a year ago to 128.18 million tonnes

Total output over January to November reached 1.386 billion tonnes, up 4.8 percent compared to the same period of 2013.

Imports rose 13.4% over the 11 months to 846 million tonnes.

China does not adjust its data to account for the iron content of its raw ores. According to estimates from global miner BHP Billiton , Chinese output this year is likely to stand at 240 million tonnes to 250 million tonnes when adjusted to 62% grades, down from 340 million tonnes last year.

Source – Reuters

voda 17 december 2014 16:51

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Export restrictions in SA jeopardize steel recycling & should be scrapped - BIR

The proposals for multilateral action to counter the harmful impact of export restrictions on steelmaking heard at a recent OECD workshop in South Africa have been welcomed by the Bureau of International Recycling.

The proposals were outlined at an OECD workshop in Cape Town last week, which the detrimental effects of export restrictions and the efficiency gains to be made from their simultaneous removal both upstream and downstream of steelmakers.

According to BIR the workshop heard strong arguments that export restrictions introduced to protect a national metals industry’s primary and secondary raw material supply could actually jeopardise the viability of, respectively, the mining and the scrap recycling sector.

The organisation said that access to cheap domestic scrap created by export restrictions could lead to uncompetitive plants remaining in operation and could serve as a deterrent to investment for the future. Furthermore, such restrictions were said to place governments in the position of arbitrating between industry sectors across the same value chain.

Making the use of export restrictions more transparent was the first step proposed towards their removal, because only then could alternative policies to achieve the same objective be determined.

Indeed, according to BIR, the best way forward was the simultaneous multilateral removal of export restrictions. The workshop heard that time was ripe for such action, in order to seize the opportunity created by the oversupply of steelmaking raw materials in the next few years.

In comparison to other industries, BIR said that the steel industry is most affected by trade restrictive measures and the risk of trade friction in the global steel industry has increased of late.

The industry is said to be particularly susceptible to protectionist measures owing to its well known history of subsidies and excess capacity. It was explained in Cape Town that the most common reasons given for introducing export restrictions were to strengthen the competitive position of national processing industries and to enhance government revenues. However, it was argued that better alternative policies exist that do not deter investment.

Mr Ross Bartley, environmental & technical director of BIR said that “While the trend towards more export restrictions is currently the case, this OECD workshop has now made the case for multilateral action to reduce such restrictions in order to benefit the steel industry worldwide.”

Mr Bartly said that “The slower alternative is for countries to remove export restrictions though bilateral trade agreements. The difficulty is that almost all steelmakers and their governments would need to be convinced of the benefits to take multilateral action and to take that multilateral action in order to get those increased benefits to more steelmakers more quickly.”

Source – Waste Management World

voda 17 december 2014 16:51

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Updates on weekly raw steel production in USA

In the week ending December 13, 2014, domestic raw steel production was 1,880,000 net tonnes while the capability utilization rate was 78.2%. Production was 1,788,000 net tonnes in the week ending December 13th 2013, while the capability utilization then was 74.6%.

The current week production represents a 5.1% increase from the same period in the previous year. Production for the week ending December 13th 2014 is up 0.2% from the previous week ending December 13th 2014 when production was 1,877,000 net tonnes and the rate of capability utilization was 78.0%.

Adjusted year to date production through December 13th 2014 was 91,880,000 net tonnes, at a capability utilization rate of 77.1%. That is up 0.7% from the 93,233,000 net tonnes during the same period last year, when the capability utilization rate was 76.8%.

Broken down by districts, here's production for the week ending December 13, 2014 in thousands of net tons: North East: 232; Great Lakes: 680; Midwest: 229; Southern: 650 and Western: 89 for a total of 1,880.

The Raw Steel production tonnage provided in this report is estimated. The figures are compiled from weekly production tonnage provided from 50 percent of the domestic producers combined with monthly production data for the remainder.

Therefore, this report should be used primarily to assess production trends. The AISI production report AIS 7, published monthly and available by subscription, provides a more detailed summary of steel production based on data supplied by companies representing over three quarters of U.S. production capacity.

Source – Strategic Research Institute

voda 17 december 2014 16:52

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Iranian iron ore concentrate plant starts up

Argus reported that Iranian steelmaker Saba Noor Steel has started up a 600,000 tonne per year, 68pc Fe iron ore concentrate plant in Asadabad, following IRR 360 billion investment programme.

And a 550,000 tonne per year pelletising plant is 65pc complete and scheduled to start up in July. An 850,000 tonne per year sponge iron manufacturing plant should be inaugurated at the site during the next phase of the project.

Saba Noor Steel will secure the required feedstock for the plant from Baba Ali, in Hamedan, andthe Gulalai mine, in Ghorveh Kurdistan.

Source – Argus Media

voda 17 december 2014 16:56

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Fletcher moving steel plant to Levin hub

Stuff reported that Fletcher Reinforcing will shift its lower North Island steel bar processing facility from Petone to a new USD 1 million plus facility in Levin, on the site of the old Loaded Hog Bar and Brewery.

The company is consulting workers affected by the move which could see them relocate to Levin, where the new site will be ready to distribute steel structures to construction sites around the region by the end of March.

Mr Hamish McBeath GM of Steel Distribution said that “The plan was to develop an industrial hub in Levin for its business, and Horowhenua's location would allow the company to extend its distribution reach from Wellington's city centre to central North Island areas as needed.”

Horowhenua Mayor Brendan Duffy said that having one of New Zealand's leading blue chip companies shift part of its operation to Levin was a major endorsement for the district. It is also a good example of Horowhenua's Economic Development Board realising an opportunity and helping facilitate. It probably wouldn't have happened otherwise.

Mr McBeath also sang the praises of the development board and district council, including developing connections with local industrial companies to help Fletcher Reinforcing grow its business.

Mr Cameron Lewis, Development board chairman said that Horowhenua was seen not only as a strategic business location with a ready network of existing industrial businesses, but also offered lower operating costs and lifestyle opportunities for staff. I look forward to more firms relocating to take advantage of our ideal location to service the whole lower North Island, as well as take advantage of the current and upcoming significant roading upgrades nearby.

Lower Hutt Mayor Ray Wallace said that Fletcher Reinforcing's move went against a trend in the city, where existing and new businesses were growing. For example, building consent figures to June 2012 were at USD 106.9 million, with building consent figures to June 2014 increasing to USD 142.7 million.

Mr Wallace said that the Seaview and Gracefield area of Lower Hutt accounted for a quarter of all Wellington industrial building space. Its vacancy rate has fallen about one-third from 8.4% in 2013 to 5.6%.

Source – Stuff

voda 17 december 2014 16:58

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Australian treasurer forecasts widening budget gap

Bloomberg reported that the Australian government forecast a wider budget gap this year as plunging iron ore prices erode tax revenue and spending cuts are blocked by opposition lawmakers.

Mr Joe Hockey, Australian Treasurer said that the underlying cash deficit would deteriorate to AUD 40.4 billion in the fiscal year ending June 30 next year from a May estimate of AUD 29.8 billion. The government forecast unemployment would climb to 6.5% by the middle of next year, higher than its May projection of 6.25%.

Mr Hockey said that “We are now witnessing the largest fall in the terms of trade since records began in 1959. This has been faster and deeper than anyone expected.”

Australian Prime Minister Mr Tony Abbott’s Liberal National Party coalition, which was elected 15 months ago promising to end the debt and deficit disaster of the former government, has faced Australian Senate opposition to savings measures while falling prices of key exports have cut tax revenue.

Documents showed that the fall in iron ore prices is forecast to reduce company tax payments by AUD 2.3 billion from this year to next year and AUD 14.4 billion over the forward estimates.

Mr Tom Kennedy economiest of JPMorgan Chase & Co Sydney said that “The government’s in a very difficult position the current situation is unsustainable and spending has to come down. Fiscal policy is going to be pretty restrictive over the next four or five years as the government looks to balance the books, so monetary policy is going to have to do most of the work, which means rates will remain at very low levels or potentially the Reserve Bank of Australia could cut.”

Source – Bloomberg

voda 17 december 2014 22:08

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China Demand Drop Pushes Iron Ore Shipping Rates to 5-Year Low

By Naomi Christie Dec 17, 2014 5:56 PM GMT+0100

Iron ore and shipping costs plunged to the lowest in five years amid signs China’s slowing economic growth and a glut of the commodity are sapping seaborne trade.

China imported 67.4 million tons of iron ore in November, down 15 percent from October, according to customs data. This was the first November decline in China’s iron ore imports since 1998. The only other time November imports fell since records began was in 1996.

China’s economic growth will slow to 7 percent next year from 7.4 percent in 2014, according to economist forecasts in a Bloomberg survey. The rate to ship the commodity on a Capesize vessel to Qingdao, China from Tubarao, Brazil fell 4.4 percent to $12.47 a ton today, the lowest since Jan. 9, 2009, data from the Baltic Exchange in London show. The Latin American country’s shipments fell 18 percent in November to 26 million tons, the lowest for the time of year since 2010, government data show.

“December might be even more disappointing than November,” Alex Gray, chief executive officer of Clarkson Securities Ltd., a unit of the world’s biggest shipbroker, said by phone on Dec. 15, citing his firm’s initial discussions with port agents in Brazil. “The absence of Brazilian volume in the scale we’d anticipated has been the key cause of the Capesize drop.”

Brazil is the second largest exporter of iron ore in the world after Australia. Such cargoes have a greater impact on freight rates, as the country is three-times further from China than Australia, the biggest shipper of the commodity. It takes 35 days to ship ore from Brazil to China, according to Axsmarine.com.

Baltic Dry

Iron ore delivered to China fell 0.8 percent to $68.05 a ton today, the lowest since June 3, 2009, according to Metal Bulletin data. The market needs to absorb a surplus of about 110 million tons next year, almost double the 60 million tons in 2014, Goldman Sachs Group Inc. estimated in October.

The Baltic Dry Index, a measure of dry shipping costs, had its longest declining streak in 18 months today, falling 1.3 percent to 827 points on the Baltic Exchange.

China’s GDP growth in 2015 would be the lowest in 25 years, and was revised down from 7.3 percent growth forecast in March, according to Bloomberg surveys.

“Whatever happens in China has a profound impact on the economics of steel production and industrial activity globally,” Paul Gait, a London-based research analyst at Sanford C. Bernstein & Co., said by phone on Dec. 16.

To contact the reporter on this story: Naomi Christie in London at nchristie5@bloomberg.net

voda 17 december 2014 22:11

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Iron Ore Slumps to Five-Year Low as China Slowdown Curbs Demand

By Jasmine Ng and Phoebe Sedgman Dec 17, 2014 2:21 PM GMT+0100

Iron ore sank to the lowest level in more than five years as signs of a slowdown in China’s economy deepened concerns that demand for the steelmaking raw material will weaken from the largest buyer, increasing a global surplus.

Ore with 62 percent content delivered to Qingdao, China, lost 0.8 percent to $68.05 a dry metric ton today, according to data compiled by Metal Bulletin Ltd. That’s the lowest since June 2009, and extends this year’s slump to 49 percent.

The world’s biggest suppliers including Rio Tinto Group, BHP Billiton Ltd. (BHP) and Vale SA (VALE5) have expanded output, pushing the market into oversupply. Australia this week predicted the commodity will trade at about $60 a ton over the next two years. A Chinese factory gauge fell to a seven-month low in December, adding to signs of a slowdown that may cut demand for iron ore, used to make steel for buildings and appliances.

“The price drop is exacerbated by the weaker Chinese PMI data,” Kelly Teoh, an iron ore derivatives broker at Clarkson Securities Ltd. in Singapore, said before today’s price data was released. “Fundamentally, we’ve got a huge supply situation. Supply isn’t going to stop.”

The preliminary Purchasing Managers’ Index from HSBC Holdings Plc and Markit Economics fell to 49.5, missing the median estimate of 49.8 in a Bloomberg survey and lower than last month’s 50.0. Numbers below 50 indicate contraction.

This year’s “price fall reflects the competitive expansion in Australia, a shift that is sidelining high-cost producers,” Morgan Stanley said in an e-mailed report yesterday. The bank cut its 2015 price outlook by 9 percent to $79 a ton and the 2016 forecast by 14 percent to $75 a ton, ranking iron ore as the least-preferred metal after gold on a 12-month view.

No Letup

BHP has signaled that there won’t be a slowdown in the drive by producers to boost output. If the higher “volume doesn’t come from our business, it’s going to come from other businesses,” Jimmy Wilson, BHP’s president of iron ore, said in an interview broadcast by Australia’s Nine Network Nov. 30.

Prices will return to an average $85 to $90 next year as high-cost mines shut, Vale Chief Executive Officer Murilo Ferreira said last month. Australia’s Roy Hill Holdings Pty, developing a mine in the Australia’s ore-rich Pilbara, aims to be “one of the last people standing” as higher-cost suppliers close, Chief Executive Officer Barry Fitzgerald said on Nov. 20.

Global Supply

“Whilst low-cost mines in Australia and Brazil are expected to continue to expand global supply, on the demand side, China’s growth outlook for 2015 has been downgraded,” Australian Treasurer Joe Hockey said on Dec. 15 in the mid-year economic and fiscal outlook document. “Weakness in the property sector and the ongoing transition from resource-intensive growth is expected to constrain Chinese steel demand.”

China, which buys 67 percent of global seaborne supply, is on track to record its weakest annual growth since 1990. The central bank cut interest rates for the first time in two years last month, and economists expect more monetary easing next year.

Iron ore will average $67 a ton next year, 24 percent less than previously forecast, and $65 in 2016, down 23 percent, JPMorgan Chase & Co. said in an e-mailed report received Dec. 9. Low-cost producers are unlikely to curb supplies, the bank said.

To contact the reporters on this story: Jasmine Ng in Singapore at jng299@bloomberg.net; Phoebe Sedgman in Melbourne at psedgman2@bloomberg.net

marcel13 18 december 2014 12:49

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ArcelorMittal levert staal gaspijpleiding
DONDERDAG 18 DECEMBER 2014, 12:07 uur | 11 keer gelezen
LUXEMBURG (AFN) - ArcelorMittal levert 310.000 ton gewalst staal voor de bouw van een pijpleiding die vanuit Azerbeidjan dwars door Turkije wordt aangelegd om de rest van Europa van gas te voorzien. Dat maakte het staalconcern donderdag bekend, zonder financiële details te vermelden.

Het zogeheten 'Trans Anatolian Natural Gas Pipeline Project' (TANAP) zag het levenslicht in 2011. Naar verwachting vloeit in 2018 voor het eerst gas door het buizenstelsel van 2000 kilometer.
www.belegger.nl/nieuws/2659246/arcelo...

max21 18 december 2014 16:05

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www.thestreet.com/story/12989444/1/st...
NEW YORK (TheStreet) -- Despite the economic woes plaguing the Europe economy, TheStreet TV's Jack Mohr is finding investment opportunities amid the selloff.

In his survey of the top five European picks, Mohr put Bank of Ireland (IRE) as number five and Transocean (RIG) as number four.

For Mohr's third pick: steel titan ArcelorMittal (MT) , which is down nearly 39% in 2014. The company is the world's largest steel producer, with almost 10% of the global market share.

MT Chart
ArcelorMittal MT data by YCharts

While the company faces cyclical risk, fluctuating raw material costs and rising competition, it has the advantage of scale, vertical integration and "excellent management" to mitigate those risks, Mohr said.

CEO Lakshmi Mittal founded the company in 1976, making him one of the most capable leaders in the industry, Mohr said. He also controls 40% the company, so there's plenty of incentive for him to align his interests with shareholders.

The company has already found a way to reduce its annual costs by $1.5 billion and plans to reduce those costs by another $1.5 billion by the end of 2015. This will also boost the company's margins, Mohr reasoned.

For these reasons, Mohr said, ArcelorMittal is a "beleaguered European stock that's poised for a major bounce back in 2015."

Must Read: U.S. Steel’s Turnaround Could Get Scrapped in a Down Market

-- Written by Bret Kenwell

Follow @BretKenwell

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.

voda 18 december 2014 16:35

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TATA Steel resumes key iron mines amid shortage in Odisha

Reuters reported that TATA Steel Ltd has resumed production from two of its four iron ore mines

Mr Deepak Kumar Mohanty, Odisha's mines director, said that TATA Steel reopened the iron ore mines in Odisha state after a court directed the local government to let the company operate them until a hearing on January 28th. A company source, who did not want to be named, also confirmed the reopening.

Mr Mohanty said that the company was asked to stop production from the two mines last month pending the renewal of their leases. One other mine in Odisha is shut since May and the state was considering a request to let that open as well.

TATA Steel produces about 10 million tonnes from the mines in Odisha state.

Source - Reuters

voda 18 december 2014 16:41

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SAIL chairman bullish about Indian steel industry prospects in mid term

The Financial Express reported that Steel Authority of India Limited’s chairman Mr CS Verma shared SAIL’s business plans recently

Excerpts

Q - How is the current business environment for the steel sector? Which sectors are driving growth—infrastructure, construction or automobiles?

A - The market is expected to take an upturn in India, in the near future. All the key steel consuming sectors ie construction, infrastructure or automobiles are likely to see healthy growth, thus, raising steel consumption. The initiatives taken by the new government, especially in the field of infrastructure, augur well for the steel industry. The Make in India campaign, FDI in defence, railways, etc., diesel price decontrol are such moves which will give a push to industry. However, globally the current business environment for the steel industry is challenging. The growth in production in China, the largest steel producer in the world, has seen a slowdown.

Q - What is the medium-term outlook on steel demand in India?

A - We are bullish about the prospects of Indian steel industry over the medium term. We expect the manufacturing sector will see a high growth phase, which would, in turn, stimulate higher steel consumption. Moreover, the plan for infrastructure development, smart cities, freight corridors, ports, etc should lead to sustained demand for steel in the next five years. Even a modest recovery in overall GDP growth of 6% to 7% will increase the finished steel consumption of India close to a level between 175 and 200 million tonnes in the next ten years, which would be an addition of more than 100 million tonnes from the current consumption level of around 74 million tonnes.

Q - What are your expectations from the next Union budget?

A - We look forward to a supportive and enabling framework for manufacturing and mining sectors through interventions in the Union Budget or before that.

Q - How is the global market faring?

A - Chinese steel exports reached a record high of 9.72 million tonnes in Nov’14, surging by 94% over Nov’13. Cumulative exports of steel from China during the first 11 months at 83.6 million tonnes recorded a 47% growth over the same period last year. The impact of this increase in Chinese exports is visible in major steel consuming economies, with steel production remaining almost flat on an aggregate basis this year.

Q - What is your CAPEX target for this fiscal? Do you expect to meet the target?

A - SAIL is currently undertaking modernisation and expansion activities in all its major plants/units in order to enhance its hot metal production capacity to 23.5 million tonne, from the existing level of 14 million tonne with an investment of over INR 72,000 crore. In the last five years, a capital expenditure of over R10,000 crore per annum has been made and the projected CAPEX target for this fiscal is INR 9,000 crore. Till now, Sail has operationalised projects/facilities worth INR 31,800 crore. After the lighting up of the largest blast furnace of 4,160 cubic meters at ISP, Burnpur, the integrated operations of 2.5 million tonnes new steel plant at this location have commenced. This would be the second such large volume blast furnace in Sail, after the first one operationalised in the Rourkela Steel Plant in August, 2013. The integrated process route of 2.5 million tonnes hot metal at the Rourkela Steel Plant has been operationalised and production is being ramped up from these facilities. Thus, the going has been good this year with the targets of integrated commissioning, as envisaged, completed.

Q - Are you satisfied with the company’s financial performance?

A - SAIL registered an EBIFTA of INR 1,498 crore for the July-Sept’14 quarter, which is 58% higher than the corresponding period last year. During 2013-14, we achieved a PAT of INR 2,616 crore, which was 21% higher compared to 2012-13. It is satisfactory, considering the challenging environment. The capacity addition of Sail is fructifying at a time when the country is witnessing improved economic sentiments and a renewed thrust on infrastructure building, which will lead to an increased demand for steel. With production at Sail being ramped up, we hope to be able to improve sales and financial performance in the coming quarters.

Source – financialexpress.com

voda 18 december 2014 16:44

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Imported HR steel prices finding new direction in Italy

Market rumours are indicating that a major Italian buyer has booked about 35,000 tonnes of HRC from a Russian steel mill at a price of EUR 350 per tonne CFR FO Ravenna.

This is possibly equivalent to USD 415, may be USD 420 per tonne FOB Russia, considering a freight of USD 15- 20 per tonne, which is a price almost at par with those booked for recent Indian orders.

Whatever is the case, this is a clear step forward towards a new and further price decrease, based on Ruble devaluation and poor market condition in Italy and an exception to the non written rule, always applied by the Russian mills, of different commercial and price policies between EU and extra EU sales.

It is also heard that secondary HRP from a Russian mill have been recently sold to North Europe at a price of EUR 360-370per tonne CFR FO Antwerp.

On the other hand, on the wave of scrap price increase in Turkey, some Russian mills are also increasing pig iron price by USD 10-15 per tonne, offering USD 335 – 340 per tonne CFR FO Italy for shipment Feb / March.

Source - Strategic Research Institute

voda 18 december 2014 16:46

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EUROFER monthly steel market update for December

The latest economic surveys showed that following a weakening trend in Q3 most indicators stabilised lately. Geopolitical concerns appear to have ebbed away to some extent in recent months.

EUROFER foresees for 2015 continued but slow growth, although the outlook remains vulnerable to downside risks such as an escalation of the conflict in the Ukraine, slow growth in the emerging world and persisting weakness in France and Italy.

Some positive news emerged more recently, such as the EUR 315 billion Junckers plan to stimulate investment activity in the EU over the coming 3 years. A significant part appears to be earmarked for infrastructure investment. This could potentially boost civil engineering projects and as a consequence also constructional steel demand.

Meanwhile, the weaker Euro is good news for Eurozone exporters and their suppliers. On balance, prospects for the steel using sectors are moderately positive, which underpins the expectation of a modest rise in real steel consumption in 2015.

Following the usual year end destocking steel buyers will have to return to the market in early 2015, with actual weather conditions being the wild card for market conditions. Uncertainty about raw material price trends could also lead to steel buyers holding their breath and order only for immediate needs.

Another key uncertainty stems from imports. October surveillance 2 data that show that finished flat steel imports remained at an elevated level and for quarto plate even rose to fresh heights. Both in raw material markets and in steel trade China represents the key determining factor.

Mr Axel Eggert GD of EUROFER said that “More stability in the steel market would be beneficial to both producers and consumers. China reducing its steel output in line with weaker domestic demand would be a major step forward to improve global steel market fundamentals.”

Source – Strategic Research Institute

voda 18 december 2014 16:50

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Steelmakers are likely to make over CNY 28 billion this year

According to the latest report released by China Iron and Steel Association, since the price drop range of raw materials surpassed that of steel products, the economic benefits and operation status of steelmakers improved greatly, although China’s steel price recorded new low level several times this year.

The total value of profit of steel sector is expected to reach the highest level in recent three years to over CNY 28 billion this year, from which we can see that the substantial decline of purchasing costs played a critical role in reducing the manufacturing costs and profitability of steelmakers.

As of late November, the average price of HRB400 rebar in China dropped 17.8% (CNY 623 per tonne), HR sheet decreased 13% (CNY 458 per tonne), 62% Australian fines decreased 47.8% (CNY 64 per tonne), China domestic ore decreased 36.8% (CNY 390 per tonne), coke decreased 35.7% (CNY 500 per tonne). Since this year, the price drop range of raw materials, which accounted for 70% of steelmakers’ manufacturing costs, doubled or tripled that of steel products, creating opportunities for steelmakers in cutting costs.

Statistics showed that 67 out of China's 88 large and medium sized steel mills monitored by CISA made profits in October, while the remaining 21 steelmakers suffered losses, with scale of losses reaching 23.9%, slumping substantially compared to the highest level of 45.5% in April. Thus, industrial insiders held the idea that the overall operation level and anti risk capability of Chinese steelmakers are getting better and better.

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

voda 18 december 2014 16:56

0

Japan crude steel output seen flat in fiscal 2015

Reuters reported that Japan's crude steel output in fiscal 2015 is expected to be flat from the previous year, at above 110 million tonnes.

The Japan Iron and Steel Federation said that output will be supported as the impact from April's sales-tax hike eases and helps boost consumer demand for new homes.

Source – Reuters

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