Eurobench.com

voda 28 juni 2017 16:50

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China shuns Indian iron ore in favor of Australia's

Mining com reported that Chinese steel mills are turning their backs on India and embracing Australia as a source of higher-grade ore for steelmaking. According to a report from Macquarie Research, Indian exports of iron ore dropped by 53%, to 23 million tonnes in May, compared to 49 million tonnes in March. The reason? Lower iron ore prices are making it cheaper for Chinese steel mills to buy higher-grade (more than 57% Fe) iron ore, which makes them more productive.

Iron ore prices have slipped below USD 60 a tonne on concerns about oversupply and weak demand from steelmakers in China, the world's top buyer.

The situation in India is reversed from March, when it was reported the amount of iron ore handled by India's ports more than doubled in the period between April 2016 and January 2017.

Macquarie said that the increase in tonnage was partially explained by a resumption in production from India's top iron exporting state of Goa in the summer of 2015, led by Vedanta Resources after an almost three-year hiatus. Most of that ore has been of the lower-grade variety, with competition for lower grades heating up.

Business Standard reported that "as most steel mills are focusing on higher grades to increase productivity. Chinese steel consumption has been higher than expected and prevailing steel prices provide for respectable profit margins to these mills.”

The publication notes that shipments from Goa "have become unviable" with volumes from the east coast getting diverted to domestic markets instead. The Macquarie report expects Indian iron production to grow 8%, but with declining exports, it expects a domestic surplus of 18 mt in full-year 2018, 4 mt more than the 2017 surplus.

Source : Mining.com

voda 28 juni 2017 16:53

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India government might fix output floor for iron ore mines

Business Standard reported that India central government is working on a proposal for encouraging companies to mine more iron ore, by benchmarking the mining capacity and linking it with royalty payment. At present, if a company has a mine with 10 million tonnes capacity but is extracting only 4 million tonne, it pays royalty on the latter amount. With the new proposal, the government would fix an output floor. Internationally, this is 80 to 85% of the total capacity.

According to a senior official, the proposal would be ready after consultations between the steel and mines ministries. The official did not elaborate whether the benchmarking would be done in line with global standards or the government would work out its own model.

The government feels mining companies aren’t producing enough ore, which has led to higher prices of the raw material for the steel industry. Some steel companies had also alleged that mining firms were keeping their activity slow in order to artificially raise the prices. The latter’s retort was that domestic demand for ore was weak.

According to a report by Macquarie Research, iron ore production saw 23% growth in 2016-17 over a year before, at 190 million tonne.

It forecasts production to grow to 206 million tonne, up eight per cent, this year. With declining export, it expects a domestic surplus of 18 million tonne in FY18, adding to the surplus of 14 million tonne in FY17.

Macquarie said that the market for low-grade ore is getting tougher, as most steel mills are focusing on higher grades, to increase productivity. Chinese steel consumption has been higher than expected and prevailing steel prices provide for respectable profit margins to these mills.

It said that since the mining ban was lifted in India in 2015, extractor companies here have gradually raised the output of low-grade ore.

Source : Business Standard

voda 28 juni 2017 16:56

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Citic likely to close Sino Iron project

The Australian reported that Chinese conglomerate Citic will shut its AUD 12 billion Sino Iron project by the end of the year, putting about 2600 jobs at risk, unless former MP Clive Palmer agrees to key project permits. Affidavit material filed as part of the ongoing Supreme Court fight between Citic and Mr Palmer over royalties from the project shows that a senior Citic executive has recommended the suspension of the project in the next six months, citing growing inability of the project to store tailings.

Mr Malcolm Northey, the director of project planning and sustainability at Sino Iron, swore in his affidavit that operations would become “severely constrained within 2017” if Mr Palmer’s private company Mineralogy continued to refuse Citic access to additional areas for storage and tailings.

Mr Northey wrote that “Without approvals and tenure, the project would cease operations and there would be no prospect of the project ever achieving profitability or economic sustainability. In the event that the (mine continuation plans) are not approved and/or concerns regarding the economics of the project ... cannot be overcome, it would be my recommendation to suspend the project.”

The previously confidential comments, read into court by Mineralogy’s lawyer Charles Scerri late last Friday, are the strongest yet by Citic that it could shutter the huge project.

A shutdown would have major ramifications not just for the workforce, but also project suppliers, the state and Mr Palmer himself.

The former MP currently collects about AUD 4 million a year in royalties from operations at Sino Iron, and stands to win tens of millions if not hundreds of millions a year in additional royalties should he succeed in the case currently under way. A closure of the mine would kill off Mr Palmer’s biggest source of future cash flow, following his decision to sell off much of his property empire and the financial collapse of his Queensland Nickel refinery near Townsville early last year with the loss of about 800 jobs.

Mr Palmer said earlier this month he believed Citic would “never” close Sino Iron given the amount invested in the project to date and China’s reliance on the project for low-price iron ore.

The lawyer representing Mr Palmer, Thomas Bradley QC, told the court Mineralogy’s decision to withhold the approvals stemmed from the fact it was not being paid the royalties under dispute. He said that without a substantial interest in the project such as a royalty, Mr Palmer and Mineralogy “might not have any rational commercial incentive to expedite, accommodate of support any approvals” that Citic might seek.

Mr Palmer’s decision to withhold approvals that would allow Citic to expand the tailings dam and other storage is despite the fact Mineralogy and Citic are bound under a state agreement to be “ready, willing and able” to support the project in operating continuously.

Citic has previously hinted at the cost pressures brewing at Sino Iron and the compounding uncertainty from the legal battles with Mr Palmer. In April, the company warned its employees it would no longer go ahead with an expansion of its mining fleet and the installation of additional processing fees until the uncertainty was resolved.

The hearing into the royalty dispute is due to close later this week.

Source : The Australian

voda 28 juni 2017 17:00

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Impact of deep ocean mining will last forever - Scientists

The search for raw materials to feed the all-powerful Sarlacc of capitalism is pushing industries to increasingly remote and alien environments. One of the most exciting frontiers to emerge of late is the deep ocean rife with valuable metals like copper and zinc, as well as the rare Earth elements that drive our smartphones and computers. But as humanity’s interest in plundering the deep of its riches heats up, scientists are warning that this new gold rush will have serious consequences.

In a letter published in Nature Geoscience today, marine scientists from roughly a dozen universities including two who have received research support from deep ocean mining company Nautilus Minerals argue that if the deep ocean is opened up to mining, a loss of biodiversity is “inevitable” and “likely to last forever on human scales, given the very slow natural rates of recovery in affected ecosystems.” The authors call for caution in green-lighting any efforts to mine these delicate ecosystems, emphasizing that the public has to have full knowledge of the implications and risks.

Ms Cindy Van Dover, a professor at the Division of Marine Science and Conservation at Duke University and lead author of the new letter, told Gizmodo that “Our intent is to contribute to the discourse about how best to manage deep-sea mining. We came to an understanding that loss of biodiversity at a mine site in the deep sea is unavoidable, and we want this to be part of the public discourse.”

It’s often said we know less about the bottom of the ocean than we do about the surface of Mars. What we do know as that unlike the cold, dead Red Planet next door, the deep sea, which extends from roughly 200 meters down the continental slope to 11,000 meters at the bottom of the Mariana Trench, is teeming with bizarre forms of life that challenge our understanding of biology and evolution. Every time we send a scientific expedition down to study an uncharted patch of seafloor, we discover more biological wonders, from deep water corals to chemosynthetic communities that make energy from the chemicals around hydrothermal vents.

We’ve also discovered that the seafloor is full of useful materials. Volcanic hydrothermal vents hotbeds of biodiversity contain high-value metals like copper, zinc, and gold. Manganese nodules, potato-sized concretions of rock and metal that form under crushing pressures on the pitch-black abyssal plains, are chock full of nickel, copper, and cobalt, in addition to the rare-earth oxides that form the core of nearly all modern technology. These resources have gone untouched for decades, largely due to the technical challenge of retrieving something that sits beneath millions of cubic feet of seawater.

But in recent years, a growing demand for raw materials, a drying up of traditional sources, and technological improvements are causing a sea change, with governments and companies rushing to devise new deep ocean mining technologies and lock down exploration licenses in international waters. Although nobody is yet mining deep ocean resources commercially, Nautilus Minerals, working off the coast of Papua New Guinea, has begun a project to tap gold and copper at a seafloor ridge, Ensia reports. Others are hot on its heels.

As mining companies push forward, scientists who study the deep ocean are pushing back, arguing this nascent industry could have untold impacts on ecosystems we barely understand and species we haven’t discovered. As Van Dover and her colleagues argue in their letter, the framework used to minimize ecological impacts in terrestrial mining including remediating exploited sites, and offsetting ecological damage by improving neighboring habitats may be irrelevant to the deep ocean, where the mixing of seawater ensures that sediment plumes and pollutants are spread far and wide, and where slow-growing species have trouble recovering.

Ms Van Dover said that “As we thought about applying the [mitigation] hierarchy to deep-sea ecosystems, we realized that restorative actions are unproven and require much more knowledge and experimentation before their efficacy in restoring biodiversity at any deep-sea mine site is demonstrated. As for offset possibilities, while we appreciate that proposed out-of-kind offsetting can seem attractive,” for example, restoring coral reefs in exchange for deep ocean mining, “[this] cannot be justified on a scientific basis, if the environmental goal is no net loss of biodiversity.”

Ms Van Dover and her colleagues argue that the best way forward is for mining companies to avoid critical habitats as much as possible. Doing so will require careful environmental assessments before mining begins, some of which area already under way. The International Seabed Authority, which is responsible for doling out exploration permits in international waters, is developing management plans that establish ‘Areas of Particular Environmental Interest’, where mining and its impacts are not permitted.
Image: NOAA Office of Ocean Exploration and Research, 2016 Deepwater Exploration of the Marianas.

Diva Amon, a deep sea biologist at the University of Hawaii at Manoa, said she “wholeheartedly agrees with the sentiment of the authors in the letter.” She told that “It is naive to think anything otherwise. Biodiversity loss in unavoidable once deep-sea mining begins and deep-sea mining will have large-scale and long-lasting effects on our oceans.”

Frank Sansone, chair of the oceanography department at the University of Hawaii at Manoa, added that “a major effort needs to be made to minimize the dispersion of sediment plumes,” and “minimize the release of sediment porewater,” which some are concerned might concentrate harmful metals.

Source : Giz Modo

Bijlage:

voda 28 juni 2017 17:05

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Sonshi mines to add nine more ambient air quality monitoring stations

Times Of India reported that while continuing to keep the consent to operate of 12 mining companies at Sonshi in abeyance, the Goa State Pollution Control Board during a meeting decided to add nine more ambient air quality monitoring stations across the state to monitor air pollution in the mining belt.

At present, the board has AAQM stations at 18 locations under the National Ambient Monitoring Program of the Central Pollution Control Board of which 14 are outsourced to laboratories approved by the ministry of environment, forest and climate change and four are operated by the board. Of these 18 AAQM stations, eight are located along the iron ore transportation routes.

A senior GSPCB officer said that in view of the exceeding level of particulate matter at Sonshi, the board has approved seven monitoring stations along the transportation routes of mining areas to be adopted under NAMP.

A senior GSPCB officer said that the seven monitoring stations in north Goa would come up at Sonshi village, Navelim sub-station, Maina village, Sirsaim village, Pale-Velguem-Vagus village, Calvim and Bicholim. In South Goa, the stations would come up at Capxem and Sanvordem. The locations would be finalized after a joint site visit by board officials.

The pollution control board's decision against non-renewal of consent to operate was taken after the 12 companies said they have not received suggestions from the Indian School of Mining on how to monitor and control air pollution in the mining belt. The board has asked the mining companies to submit a proper plan in this regard.

Source : Times Of India

Bijlage:

voda 28 juni 2017 17:07

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Restricting steel imports would further damage US manufacturing - Mr Dan Pearson

Xinhua reported that it would further damage US manufacturing if the Trump administration imposes new restrictions on steel imports. Mr Dan Pearson a senior fellow at the Cato Institute and former chairman of the US International Trade Commission said that "Roughly 200 antidumping or countervailing duty measures already are in place on steel products, making steel one of the country's most protected sectors.”

As a result, US prices for many steel products are significantly higher than world prices, Mr Pearson wrote in an analysis recently published on the website of the pro-trade Cato Institute that "greatly disadvantaging American manufacturers that require steel as an input.”

He added that "Any additional import restrictions would do far more harm to steel-using manufacturers than any benefit that could accrue to steel mills,noting that manufacturers that use steel as an input employ 6.5 million workers, 46 times more of employment in steel mills.”

According to Pearson, Steel mills account for only 0.2% of US gross domestic product, while the economic value added by firms that use steel as an input was 1.04 trillion US dollars, equaling 5.8% of US GDP.

Mr Pearson's warning comes before the Trump administration is about to release its report on the national security implications of steel imports by the end of this month.

The Trump administration in April launched the so-called Section 232 investigations into imported steel products, a rarely-used trade tool to limit imports on the grounds of protecting national security.

Mr Pearson said that "The Section 232 process may be intended to inflict pain on foreign nations by curtailing their exports. We can't be sure whether U.S. import restrictions will hurt other countries, but we can be certain that restrictions will hurt America adding limiting steel imports "creates a genuine threat to economic growth and prosperity."

Mr Pearson also warned that other countries likely would retaliate, targeting U.S. military equipment, farm and food products, if the Trump administration imposes additional import restrictions on steel.

Source : Xinhua

Bijlage:

voda 28 juni 2017 17:11

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China’s falling steel exports may be a temporary phenomenon

According to Reuters, China’s January to May export total was 34.2 million tonnes, down 26% from last year’s equivalent period and the lowest level since 2014. The year drop in export tonnage amounted to 12.1 million tonnes roughly equivalent to Canada’s production over a full 12 month period.

Meanwhile, profits on products like steel rebar have surged to USD 162 dollars per tonne this month, as inventory levels have fallen and demand has remained robust (particularly from the construction sector). Investment in real estate is running at an annual growth rate over 6%, Reuters reports. Although there are fears of overheating in some regions, real estate has been stronger for longer than analysts outside the market expected.

So, what exactly is going on in China with respect to steel production and demand? Can we take it that Beijing’s actions to tackle excess steel production have finally resolved China’s deflationary impact on global steel markets?

First, Reuters notes that China has been quite successful in permanently closing previously shuttered steel plants, as well as in in tackling older and more environmentally damaging mills. Those actions combined has resulted in the removal of some 100 million tonnes of capacity.

In addition, Beijing’s focus on environmental issues has hastened the closure of induction furnaces, which use scrap rather than iron ore as their input and are often labelled as producers of sub-standard products (and, hence, unapproved). Unapproved equates to illegal by Beijing as such, their production and their closures does not figure in the normal statistics. A significant proportion of China’s rebar production came from these mills, which explains the record profits being earned by surviving state-owned manufacturers of the same products as they capitalize on the removal of these scrappy competitors.

Unfortunately, nobody expects China’s construction market to continue at the current pace and a slowdown is in the forecast for the second half of the year. Replenishment of low inventory levels will maintain steel mill production runs for a while, but as Reuters notes, China’s mills have a notoriously poor record in adjusting output to demand. So, we should expect that as demand eases, inventorying levels will rise, prices will fall, and access production may well begin to leak through exports onto the international market.

While America’s anti dumping legislation will largely protect that market from Chinese material, the rest of the world may find itself under pressure next year from greater availability of Chinese steel at falling prices, further fueling an already rising tide of protectionist sentiment in both developed and emerging markets.

Source : Metal Miner

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voda 28 juni 2017 17:12

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Celedan steel frame rolloing mills in South Wales is operational

The Wales Online reported that a new GBP 1 million steel facility which will create 28 jobs in south Wales is now fully operational. Caledan, based in Hengoed, Caerphilly county South Wales in UK, is a cold steel rolling mill supplying steel frame sections to the construction industry, has signed major contracts with UK firms to distribute their product, resulting in an immediate recruitment drive. The business is being backed with GBP 134,000 with funding from the Welsh Government.

The firm's managing director, Mr Chris Morton, said demand was coming from all over the UK, which meant it would be looking to recruit further staff. Mr Morton said “This year has got off to a great start. We believe our product will fill a gap in the local market and allow companies in Wales to access steel frame sections quickly and easily from our base in Hengoed, Caerphilly. But at the same time, the quality and expertise we provide means that companies with reach nationwide are approaching us too.”

The mill produces two kinds of steel frame sections, stud and track and primaframe. Stud and track is used by the construction industry to provide support within primary structures and the Caledan mill is capable of producing up to 20,000 metres, or 12.5 miles, of stud and track in a single eight-hour shift. At its full capacity, the mill will be able to produce 200 miles per week.

Source : Wales OnLine

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voda 28 juni 2017 17:13

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Britain's biggest ever warship built with Scunthorpe steel

Scunthorpe Telegraph reported that Scunthorpe steelworkers can take great pride in the test launch of Britain’s biggest-ever warship HMS Queen Elizabeth on June 26. The voyage of the ship from the dock at Rosyth to the North Sea comes nine years after the Scunthorpe works won the contract from the Ministry of Defence to produce the steel to build the hull.

Corus, the then Scunthorpe site owners, beat off world-wide co competition to win the reported GBP 65 million contract. The bulk of the 80,000 tonnes of steel plate was produced and rolled in the town.

The Scunthorpe steel was also used to build the hull of Queen Elizabeth’s twin air craft carrier HMS Prince of Wales.

HMS Queen Elizabeth, one of two new aircraft carriers for the Royal Navy, begins to leave the Rosyth dockyard near Edinburgh to begin her sea worthiness trials.

The two carriers will be the back-bone of Allied air power for the next 50 years and will help to sell British industry abroad.

Source : Scunthorpe Telegraph

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voda 28 juni 2017 17:14

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Rio Tinto and BlueScope worried over Section 232

Mining Journal reported that Rio Tinto and steel maker BlueScope Steel have called for restraint from Donald Trump as his government considers slapping tariffs on aluminium and steel imports to the US. BlueScope is keen to find a way around any punishing tariff. It imports substrate for further processing in the US at its Steelscape joint venture with Nippon Steel and Sumitomo Metal Corp.

Mr John Cross CEO of Steelscape said that “The steel substrate that Steelscape must import from Australia and other countries does not threaten the security of at least this part of the US’ steel industry; it helps the industry survive and prosper.”

He said that “We ask the department to consider the special situation of companies such as ours, companies that depend on imported steel to survive as American steel producers. And we ask you to take the special relationship between Australia and the United States into account.”

Steelscape produced 199,000 tonnes of coated steel products in the second half of 2016.

Rio Tinto aluminium boss Mr Alf Barrios, who heads up the company’s Canadian aluminium operations, took a different tack, according to the Australian Financial Review. He said that “In regards to the national security focus of this hearing, the US and Canada have treated each other as indispensable partners in national defence for nearly a century.”

Mr Barrios said the US’ import solution could be to make a deal with the world’s biggest aluminium producer. He said that “I must say the recent statements from the Chinese government do recognise the oversupply and offer some hope I believe that the best outcome is a negotiated solution led by the US with the Chinese. This will leave a more sustainable, long-term solution which will give clarity and predictability for future industrial investments in North America."

Canada sent just under 2.5 million tonnes of primary aluminium over the US border in 2016, more than all other aluminium exporting countries combined.

Source : Mining Journal

Bijlage:

voda 28 juni 2017 17:21

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Rebar steel plant at Golestan in Iran closed laying off 130

NCR Iran reported that the Steel Industries Plant in Minoo-Dasht in Golestan province of northern Iran was shut down since June 22 due to problems with the procurement of raw materials and more than 130 workers of this Plant lost their jobs and become unemployed. The factory was active in production of all kinds of metal wires and rebar.

The workers of the plant, who have at least 10 years of work experience, say that 130 workers of this production unit are unemployed. They filed a complaint with the Department of Labor to receive an allowance and health insurance.

Employer of this manufacturing plant owns several other industrial and manufacturing plants in Minoodasht city and Golestan province.

Source : NCR Iran

voda 28 juni 2017 17:25

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Booming coal industry returning to Southwest Virginia - DOE

According to the Department of Energy, coal production in the United States has risen almost 20 percent in the past 5 months. This increase comes after a major decline for years cost thousands their jobs. Just last year, Southwest Virginia's coal industry lost nearly one million tons of production from the previous year due to energy market shifts.

So far this year, Virginia producers are already seeing a 24 percent increase. In past years, the coal industry has been steadily declining due to market conditions and carbon emission restrictions. Coal dependent communities have been hit hard.

Mr David Eaton, Russel County Board of Supervisors Vice Chairman, said that "The coal industry is huge. It has a huge economic impact. We lost a lot of people that had to move away from here, kids in our public education sector in which we lost a lot of funding in regards to that so, you know, it has a huge impact."

However, but a possible boom is underway-- partially due to the cost of natural gas shooting up early this year, as well as President Trump's efforts to bring coal back.

Mr Harry Childressm President of the Virginia Coal and Energy Alliance, said that "We're seeing some improvement here, we're seeing some jobs going back, especially on the metallurgical side of the coal."

Meanwhile, metallurgical coal comes out of Southwest Virginia mines and is used to make steel. It's in high demand for construction and building purposes.

Source : WCYB

voda 28 juni 2017 19:35

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U.S. Steel: No More Whack-a-Mole?

One analyst continues to recommend owning U.S. Steel and other steel makers ahead of a Section 232 announcement.

ByBen Levisohn Updated June 28, 2017 10:02 a.m. ET

Steel makers like Nucor (NUE), Steel Dynamics (STLD), U.S. Steel (X), and AK Steel (AKS) have gotten beaten up this year, and all hope appears to reside with Section 232 of the Trade Expansion Act of 1962, which allows the U.S. Commerce Department to investigate dumping of imports. Such an investigation of steel imports is underway now, and it's outcome could determine whether the steel sector can rally, or will remain stuck in a rut.

ILLUSTRATION: AGENCE FRANCE-PRESSE/GETTY IMAGES
After speaking with Earl Comstock, director of the Commerce Department's Office of Policy & Strategic Planning, Jefferies analyst Seth Rosenfeld contend "meaningful Steel Section 232 measure are nearing." They explain:

Comstock presented the DOC's outlook for trade policy and Section 232 in the context of a broader review of the US's massive trade deficit, which the administration has identified as a problem. In addition, existing antidumping/countervailing duties were criticised as part of an endless "whack-a-mole" problem whereas 232 offers more holistic policy options. Comstock proactively noted that with only 3% of domestic steel consumption linked to defence, the DOC must consider the broader ability of steelmakers to boost utilisation rates via commercial products so as to ensure defence-related niche products are accessible. Interestingly, some comments closely resembled those of steel mills at the recent public hearing, emphasising the need to "fill the mill." The only specific steel product discussed in prepared remarks was electrical steel, of which AK Steel is currently the sole domestic supplier.
Rosenfeld, however, believes that measures won't come until July, and will be more nuanced to prevent prices from rising too quickly and hitting consumers of steel. He recommends buying Nucor, Steel Dynamics, AK Steel, U.S. Steel and ArcelorMittal (MT).

Shares of Nucor have advanced 1.5% to $57.34 at 9:55 a.m. today, while Steel Dynamics has risen 2% to $33.70, AK Steel has gained 2% to $6.63, U.S. Steel has climbed 2.1% to $22.02, and ArcelorMittal has jumped 2.2% to $22.35.

www.barrons.com/articles/u-s-steel-no...

voda 29 juni 2017 15:32

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Stressed assets major obstacle in growth of steel sector - Mr Sushim Banerjee

Mr Sushim Banerjee DG of Institute of Steel Growth and Development in his personal capacity wrote for Financial Express that one of the major irritants in the growth journey of Indian steel industry seeking an augmentation of steel capacity to cater to the emerging demand from the various end using sectors has been the poor record of repayment of loans taken from the banks and other financial institutions. Out of the total loans to the industry, the steel sector has a share of 10.24% (INR 3.1 lakh crores). It is reported that the stressed assets of steel sector out of the gross NPAs comprise around 29.38% of the total and stands at INR 1.5 lakh crores. In China the financial liabilities of the banks and financial institutions to the steel sector consisting of SOEs and SMEs is also enormous. In fact many of the provincial governments in China have already converted a part of the loans into equity of the enterprises which are mostly SOEs.

The financial liabilities of SMEs are a major worry as a large number of them are served notices for violation of environment norms and therefore need to close their operations. Under the current subdued market conditions and the continuing economic restructuring that is taking place in China, the demand for conventional standard grades of steel is on the wane and the suppliers of these grades of steel from induction furnaces and other SMEs that are environment polluting would be facing a huge problem of survival. After a series of financial restructuring schemes such as 5/25 schemes, strategic debt restructuring schemes, conversion of loans by the lender groups into equity, the issue of stressed assets and NPAs became the sole indicator of the banks’ ability to extend loans to steel sector in the country, not only for capacity expansion but even for meeting the working capital requirements and participation costs in the bidding process of acquiring fresh mines of coking coal and iron ore.

Apart from forming an oversight committee on bad loans, RBI has now come out with a list of 12 major defaulters in steel, infrastructure, auto component sectors to take appropriate steps. Already, the four major creditors in the steel sector, namely, two Bhusan groups, Electrosteels and Essar Steel, with a combined debts of INR 1.29 lakh crores, have been referred for insolvency proceedings under the Insolvency and Bankruptcy Code to National Committee for Law Tribunal by SBI, the lead lender for three cases and PNB for one (Bhusan Steel and Power).

As per the norm, if three fourths of the lenders are convinced of a revival plan, the deadline of 6 months can be extended by another 3 months, else an automatic process of liquidation would commence. Indian steel industry had passed through an agonising period in FY15 and FY16 when the government lent a helping hand to the ailing industry suffering maximum losses, including fall in profitability and drop in market share from cheap and dumped imports from China, Korea, Japan and Russia by imposing MIP, safeguard and AD duties.

Fortunately, the global finished steel prices also improved on the back of a surge in coking coal and iron ore prices in the following years. The profitability indices improved for steel sector in FY17 and are continuing. It should provide some relief for the other beleaguered steel producers. Essar steel has ramped up its steel production from 3.8 million tonne to 5.6 million tonne in FY17, a 47% growth over last year against a capacity of 10million tonne. It has been able to create a niche market for special grade plates in the defence sector and increasing supplies of high grade CR for the auto sector. Its pellet plant is enhancing the production and the supplies of natural gas to the plant are slowly getting restored.

It had proposed fresh equity provision of around INR 2,500 crores along with conversion of a part of bank loans to equity to reduce promoters’ stake. A lot depends on convincing the lenders of a sound and robust revival plan. Like in other countries, the latest development may rekindle the consolidation and merger process in Indian steel sector, including the infusion of foreign capital.

Earlier, we had witnessed the mega ticket investment plans of ArcelorMittal and POSCO not materializing due to land acquisition and raw material sourcing issues. The market potential for Indian steel industry is indeed bright with gradual increase in global prices and therefore the loan restructuring process by the banks would unleash abundant opportunities for the investors, both in the country and abroad.

Source : Financial Express

voda 29 juni 2017 15:34

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GST impact - Steel sector to be unaffected by GST - ICRA

Economic Times reported that the impact of GST, which is due to be implemented with effect from July 1st 2017 is largely expected to be neutral on the steel sector. While pre GST, rates on steel are at 18.1%, the GST rates have been kept at 18%. Hence the impact will be largely similar to the effective rate based on prevailing excise duty and VAT rate, both of which would be subsumed under the GST going forward. Thus, ICRA said it does not expect any material impact of the GST rate on end users of steel products.

This is part of a report by the ratings agency on impact of GST across various industries across the corporate sector. In its Impact Analysis, ICRA has said the implementation of GST would have three major implications for the corporate sector. It would expand availability on input tax credit. Lead to a higher degree of tax compliance with business moving away from unorganized sector to organized sector, greater transparency on tax administration and reduce bottlenecks and improve efficiencies in supply chain and logistics.

ICRA note added that "Closer to the implementation date, however, we would expect some disruptions and the distribution chain (wholesale and retail) gets rid of channel inventory to avoid any potential inconvenience post transition. The working capital cycle of the industry is also expected to expand marginally, post GST implementation.”

Source : Economic Times

voda 29 juni 2017 15:34

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Odisha unlikely to approve JSW project at POSCO land– Report

Business Standard reported that Odisha government is unlikely to accede to the request of JSW Ltd, which intends to set up a 10 million tonne steel mill in the land vacated by Posco to transfer the statutory approvals obtained for the South Korean steel firm’s project to its name due to legal barriers. The report quoted an industry department official as saying that “It is highly unlikely. The forest and environment clearances for the Posco plant were granted based on its project parameters, module and technology, which will undergo a complete change in case of JSW. With statutory clearances being project specific, fresh approvals will be required.”

While putting forth the INR 50,000-crore investment proposal for the project, JSW Steel has laid out a list of facilitating measure to be undertaken by the state government for its smooth implementation. Among other things in the wish list, is transfer of statutory clearances obtained for the Posco project to the name of JSW.

Given the recalcitrant stand of the local anti-industry lobby, whose protracted agitation had stalled the Posco project, it will be a herculean task to conduct a fresh public hearing to get the villagers’ nod for the environment clearance, sources said. In fact, the anti-Posco brigade is already gearing up to oppose JSW project, according to anti-Posco leader Abhay Sahu.

Apart from transfer of statutory clearances, the state government is also in a quandary to meet the need of raw material security for JSW. The steel major has urged the government to step up the iron production by Odisha Mining Corporation (OMC), with whom it intends to enter into a long term supply agreement for 30 years, to produce 100 million tonne per annum. With the annual iron ore output of the state-owned firm now standing at only 6 million tonnes, it will take years to bring it up to the desired level, sources said.

Besides that, JSW wants encumbrance-free land with boundary walls to be handed over to it. Following the withdrawal of Posco, some betel vine cultivators, who had dismantled their vines to give way for South Korean firm’s project, have re-erected their vines on the acquired land. It will once again be a tough exercise to vacate the encroachers.

Similarly, the construction of boundary wall around 2,700 acres patch acquired for Posco was halted in 2013 when the local villagers opposed the work demanding fulfillment of their charter of demands relating to compensation and job opportunity. They are still stubborn on their demands and may create hurdles in transfer of the land to JSW.

Source : Business Standard

voda 29 juni 2017 15:35

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JFE Steel and Nucor JV breaks ground for auto steel plant in Mexico

JFE Steel Corporation announced that its Mexican joint venture with Nucor Corporation, the largest steelmaker in the United States, held a groundbreaking ceremony on June 26 for an automobile steel sheet manufacturing plant in Silao, a city in the central Mexican state of Guanajuato.

Source : Strategic Research Institute

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voda 29 juni 2017 15:36

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JFE Steel to supply 230,000 tonnes of line pipe for Thailand’s 5th Transmission Pipeline

JFE Steel Corporation announced today that together with Marubeni-Itochu Steel Inc it has received an order for 230,000 metric tons of API 5L X65-grade* UOE pipes from PTT Public Company Limited, Thailand’s largest oil and gas supplier. The pipes will be used for the 5th Transmission Pipeline Project, a plan to build Thailand’s fifth trunk pipeline.

This is JFE Steel’s first contract in some 20 years to supply PTT with UOE pipes for a trunk pipeline, and it is the company’s largest-ever order for heavy sour-service line pipes.

The 5th Transmission Pipeline will be a 426-kilometer pipeline for transporting natural gas from the LNG terminal in the coastal province of Rayong to the inland province of Nonthaburi, just northwest of Bangkok. The pipeline requires high-grade UOE heavy sour-service pipes. JFE Steel will produce UOE pipes with outer diameters of 36 inches and 42 inches at its Fukuyama District facility, which is part of the company’s West Japan Works.

The project is part of PTT’s five-year plan to invest 110.1 billion baht (3.1 billion US dollars) in natural gas pipelines and related facilities.

The order was awarded in recognition of JFE Steel’s advanced technology for the manufacture of high-grade pipes for pipeline projects around the world as well as its integrated quality management. Going forward, JFE Steel will continue to develop high-performance, high-quality steel pipes and other steel products to support global resource and energy development.

Source : Strategic Research Institute

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voda 29 juni 2017 15:43

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Vale shareholders approve corporate reorganization

Reuters Shareholders of Brazil's Vale SA approved a share conversion plan on Tuesday in a move that should boost transparency, give equal votes to all shares and limit government meddling in the world's No 1 iron ore producer. In a securities filing, Vale said shareholders approved all seven items on the corporate reorganization agenda, which is a first step toward giving the company dispersed share ownership - where no shareholder controls decision making at the firm.

The change represents a milestone in a country long hobbled by corporate governance abuses and reorganizations that hampered minority investors in most cases. Reuters reported the plan on Jan. 19, citing people familiar with it.

The plan also puts a limit to the meddling of politicians in Vale an aspect that weighed on the company's stock during former President Dilma Rousseff's five years in office. Still, the government will keep a golden share, allowing it to fend off hostile takeover attempts and shape strategic decisions.

Investors expect Tuesday's vote to improve investors' perception of Vale, translating into a faster convergence of Vale's share prices to those of rivals, and a decline in the Brazilian miner's cost of capital.

In the filing, Vale said the proposed conversion of preferred shares into a single, common stock was approved with the equivalent of 68% of preferred shares that participated in the ballot, well above the 54% threshold set when the plan was first announced in February.

Under terms of the conversion, holders of Vale's Class A preferred shares will receive 0.9342 of common stock. Investors have 45 days to convert their shares, needing the equivalent of at least 54.09% of preferred shares in circulation to go ahead.

In addition, minority holders voted to allow controlling shareholders grouped under holding company Valepar SA to keep control of Vale for another three and a half years. Vale will eventually absorb Valepar, facilitating the stock conversion.

Source : Reuters

voda 29 juni 2017 15:45

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India government might fix output floor for iron ore mines

Business Standard reported that India central government is working on a proposal for encouraging companies to mine more iron ore, by benchmarking the mining capacity and linking it with royalty payment. At present, if a company has a mine with 10 million tonnes capacity but is extracting only 4 million tonne, it pays royalty on the latter amount. With the new proposal, the government would fix an output floor. Internationally, this is 80 to 85% of the total capacity.

According to a senior official, the proposal would be ready after consultations between the steel and mines ministries. The official did not elaborate whether the benchmarking would be done in line with global standards or the government would work out its own model.

The government feels mining companies aren’t producing enough ore, which has led to higher prices of the raw material for the steel industry. Some steel companies had also alleged that mining firms were keeping their activity slow in order to artificially raise the prices. The latter’s retort was that domestic demand for ore was weak.

Source : Business Standard

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