Recent economic indices have reported that China's steel industry showed signs of recovery recently. From January to September China's total steel output was 501.8 million tonnes, up by 12.4%YoY. The monthly output broke the 60 million tonne level in June, reached61.983 million tonnes in August and 61.16 million tonnes in September, respectively. The total steel apparent consumption in January to August recorded at 438.312 million tonnes, up by 18.77% among which apparent consumption in August read at 61.493 million tonnes.
In Q1 this year, China's medium- and large-scale steel mills together made total losses of CNY 3.432 billion. However, the situation changed to positive in Q2, with total profits of CNY 3.313 billion. In quarter 3 the profit further increased thanks to steel price increases in June and July. However, the foundation for steel industry recovery may not firm enough. Steel prices started to decline in early August, notably known as the second round of market adjustment. On September 25th, the composite steel price index posted at 102.65, down 11.75% from the August 7th 116.32. From the macro economy level, China's economy is on a stable recovery track, indicating that steel demand sees no evident shrinkage and the market situation of steel products is mainly caused by a huge supply.
At the beginning of 2009, the country set a target of crude steel output at 460 million tonnes, but mills expanded their productions ambitiously supported by increasing prices. Through August, total crude steel output reached 370 million tonnes with daily output at 1.52 million tonnes, up 11.24% YoY. This production equals an annual output of 555 million tonnes. China's steel capacity was 660 million tonnes last year while the demand was only 500 million tonnes, resulting in about 25% of the total output relying on the international market. Clearly, the problem of overcapacity will be even more severe in 2010 as there are about 58 million tonnes of new capacity under construction.
Therefore, to take the actions quickly in controlling steel production is of significance to the stability and long term development of China steel industry. The related government departments have rolled out several regulations this year. As an industry features the strong characters of market and global resources distribution, the restriction of production in steel industry should combine the market mechanism and administrative measures together. However, this could never be an easy task and demands efforts in many years to come.
Source: Steel Guru
Saturday, October 31, 2009
Rio Tinto Sees No Early Deal In Iron Ore Talks
Anglo-Australian miner Rio Tinto PLC (RTP) expects provisional iron ore pricing agreements with China's steelmakers to provide the starting point for negotiations on next year's settlement, a senior executive said on Friday.
"I don't expect there will be an early settlement," Sam Walsh, chief executive for Rio Tinto's iron ore division, said at an investor presentation.
Walsh said the outlook for iron ore is positive, with demand strong and steel consumption within China robust.
"We can't meet the demand we are seeing from the market," Walsh said.
That may point to expectations of higher prices for iron ore among miners, a key ingredient in steelmaking. But Walsh acknowledged a "difference of opinions" heading into negotiations.
Chinese mills earlier this year reached provisional price agreements with iron ore producers on the same terms as those offered to other Japanese, Korean and other Asian mills, but insisted those agreements were subject to any final deal reached by China Iron & Steel Association, the country's lead negotiator this year.
CISA was demanding larger price cuts to the annual benchmark price than the 33% offered by Rio Tinto and other miners.
The talks have created tension between miners and steelmakers and boosted speculation that negotiations have become politicized. China detained Rio's chief iron ore negotiator Stern Hu and other employees earlier this year, accusing them of stealing commercial secrets.
Source: Dow Jones
"I don't expect there will be an early settlement," Sam Walsh, chief executive for Rio Tinto's iron ore division, said at an investor presentation.
Walsh said the outlook for iron ore is positive, with demand strong and steel consumption within China robust.
"We can't meet the demand we are seeing from the market," Walsh said.
That may point to expectations of higher prices for iron ore among miners, a key ingredient in steelmaking. But Walsh acknowledged a "difference of opinions" heading into negotiations.
Chinese mills earlier this year reached provisional price agreements with iron ore producers on the same terms as those offered to other Japanese, Korean and other Asian mills, but insisted those agreements were subject to any final deal reached by China Iron & Steel Association, the country's lead negotiator this year.
CISA was demanding larger price cuts to the annual benchmark price than the 33% offered by Rio Tinto and other miners.
The talks have created tension between miners and steelmakers and boosted speculation that negotiations have become politicized. China detained Rio's chief iron ore negotiator Stern Hu and other employees earlier this year, accusing them of stealing commercial secrets.
Source: Dow Jones
Friday, October 30, 2009
Iron Ore Inventories At China Ports Falls Slightly
Imported iron ore inventories at major Chinese ports decreased by nearly 1 percent on the week to Friday, industry consultancy Mysteel said.
Crude steel output in China, the world's top producing country, is likely to match its records in August and September, helping to suck up stockpiles of the steel ingredient despite inflows also hovering around their highest levels.
Iron ore prices in Asia were stable on the week with moderate Chinese demand.
Indian ore with 63-63.5 percent iron was quoted at $94-$96 per tonne basis C&F on Friday, around last week's level.
Of the total 68.15 million tonne iron ore stockpile, 23 million tonnes were shipped from Australia, 19.5 million tonnes from Brazil and 13.04 million tonnes from India, Mysteel said, citing figures obtained from the ports.
Crude steel output in China, the world's top producing country, is likely to match its records in August and September, helping to suck up stockpiles of the steel ingredient despite inflows also hovering around their highest levels.
Iron ore prices in Asia were stable on the week with moderate Chinese demand.
Indian ore with 63-63.5 percent iron was quoted at $94-$96 per tonne basis C&F on Friday, around last week's level.
Of the total 68.15 million tonne iron ore stockpile, 23 million tonnes were shipped from Australia, 19.5 million tonnes from Brazil and 13.04 million tonnes from India, Mysteel said, citing figures obtained from the ports.
BHP Sees Pullback In China Iron Ore Demand
BHP Billiton chief executive Marius Kloppers says there are signs of a pullback in demand for iron ore as China finishes rebuilding its inventories of raw materials.
Addressing the company's annual general meeting in London, Mr Kloppers says China was the major - and sometimes only - source of demand for commodities in the second half of the year.
"We as a company do believe that there's been a substantial inventory build in China," he said.
"So that's our view - that restocking in China is essentially complete, but we're seeing some signs of pullback as a consequence."
Mr Kloppers also says steel output is climbing in the US and Europe, providing the first signs of restocking in the major economies.
Source: ABC Australia
Addressing the company's annual general meeting in London, Mr Kloppers says China was the major - and sometimes only - source of demand for commodities in the second half of the year.
"We as a company do believe that there's been a substantial inventory build in China," he said.
"So that's our view - that restocking in China is essentially complete, but we're seeing some signs of pullback as a consequence."
Mr Kloppers also says steel output is climbing in the US and Europe, providing the first signs of restocking in the major economies.
Source: ABC Australia
Coal Of Africa To Buy NuCoal
South Africa-focused coal-miner Coal of Africa Limited (CoAL) plans to raise £59.6-million to fund a proposed R650-million acquisition of NuCoal Mining, to accelerate capital expenditure (capex) at its Vele and Makhado projects, and to pursue other smaller acquisitions, it announced on Thursday.
The ASX-, Aim- and JSE-listed coal-miner would place up to 59.8-million new ordinary shares, representing about 14.52% of its existing issued ordinary shares, with institutional investors.
JP Morgan Cazenove would act as the global coordinator and sole book runner, while Evolution Securities would act as joint lead manager and Mirabaud Securities as colead manager for the placing.
The acquisition of NuCoal could add, in total, five existing and future mining operations to CoAL’s portfolio, while there was also potential to realise synergies through blending NuCoal product with product from CoAL’s Mooiplaats project, as well as through transporting NuCoal’s product by using CoAL’s rail and port capacity, the coal-miner highlighted.
NuCoal’s thermal coal assets were situated close to the Mooiplaats mine, with the NuCoal Woestalleen Colliery, which produced 2,5-million tons a year of saleable coal for the domestic and export markets, already having offtake contracts in place.
The thermal coal producer also had two beneficiation plants in South Africa, one that was fully operational and the other, which would start producing again by the fourth quarter of this year.
A further two plants were expected to start producing by next year and another one by 2013.
“The proposed placing and acquisition further underpin CoAL’s track record in building a high-quality midtier thermal and coking coal business. The company already benefits from a sizeable resource base, carefully considered logistics and a high-quality and supportive investor base including its proposed offtake partners,” CoAL MD Simon Farrell said in a statement.
If the acquisition is not successful, the coal-miner would use the proceeds to accelerate the expansion of logistics facilities at the Matola terminal and the Maputo port, for alternative acquisitions and for general working capital.
However, if successful, CoAL would use the remainder of the cash raised to increase its logistics capacity, including the first instalment of the capital required to acquire wagons from Transnet Freight Rail, as well as to accelerate capex at its coking coal projects, in Limpopo province.
The coal-miner announced earlier this week that it was likely to receive mining rights for the Vele coking-coal project, in which it owned an 80% stake, before the end of the year.
Production would start within four months of receiving the required legislative approval, with the first phase expected to deliver output of one-million tons a year. This would increase to five-million tons a year of coal in a second phase.
Meanwhile, CoAL also reported on Thursday that it would expand its Makhado coking-coal project area after having entered into an exchange of prospecting rights agreement with joint-venture (JV) companies held by Rio Tinto and the Kwezi Group.
The JV companies Chapudi Coal and Kwezi Mining & Exploration, would give CoAL ownership over certain prospecting rights and interests over certain farms contiguous to the Makhado project, in exchange for other prospecting rights and farms.
CoAL’s subsidiary, Regulus Investment, would pay Chapudi Coal a premium of R12.5-million as part of the farm-swap agreement.
“The rationalisation of Rio Tinto and CoAL’s prospecting rights in Limpopo removes a significant commercial hurdle to the establishment of the Makhado hard coking-coal project. The farm swap, when completed, would result in the creation of a substantial opencast hard coking-coal mining asset,” Farrell noted.
Following the start of production, the project would ramp up over a two-year period to produce five-million tons of saleable hard coking coal.
CoAL would submit an application for new-order mining rights for the project early in 2010.
CoAL further highlighted its intention to migrate from the Aim market of the LSE to the main market, which it hoped would be concluded by the first half of 2010.
“Recognising the growing size of the company and its mining assets, its predominantly London focused institutional investor base and share trading liquidity, a move to the main market of the LSE represents the logical next step in CoAL’s exciting development trajectory,” Farrell commented.
Source: Creamer's Mining Weekly
The ASX-, Aim- and JSE-listed coal-miner would place up to 59.8-million new ordinary shares, representing about 14.52% of its existing issued ordinary shares, with institutional investors.
JP Morgan Cazenove would act as the global coordinator and sole book runner, while Evolution Securities would act as joint lead manager and Mirabaud Securities as colead manager for the placing.
The acquisition of NuCoal could add, in total, five existing and future mining operations to CoAL’s portfolio, while there was also potential to realise synergies through blending NuCoal product with product from CoAL’s Mooiplaats project, as well as through transporting NuCoal’s product by using CoAL’s rail and port capacity, the coal-miner highlighted.
NuCoal’s thermal coal assets were situated close to the Mooiplaats mine, with the NuCoal Woestalleen Colliery, which produced 2,5-million tons a year of saleable coal for the domestic and export markets, already having offtake contracts in place.
The thermal coal producer also had two beneficiation plants in South Africa, one that was fully operational and the other, which would start producing again by the fourth quarter of this year.
A further two plants were expected to start producing by next year and another one by 2013.
“The proposed placing and acquisition further underpin CoAL’s track record in building a high-quality midtier thermal and coking coal business. The company already benefits from a sizeable resource base, carefully considered logistics and a high-quality and supportive investor base including its proposed offtake partners,” CoAL MD Simon Farrell said in a statement.
If the acquisition is not successful, the coal-miner would use the proceeds to accelerate the expansion of logistics facilities at the Matola terminal and the Maputo port, for alternative acquisitions and for general working capital.
However, if successful, CoAL would use the remainder of the cash raised to increase its logistics capacity, including the first instalment of the capital required to acquire wagons from Transnet Freight Rail, as well as to accelerate capex at its coking coal projects, in Limpopo province.
The coal-miner announced earlier this week that it was likely to receive mining rights for the Vele coking-coal project, in which it owned an 80% stake, before the end of the year.
Production would start within four months of receiving the required legislative approval, with the first phase expected to deliver output of one-million tons a year. This would increase to five-million tons a year of coal in a second phase.
Meanwhile, CoAL also reported on Thursday that it would expand its Makhado coking-coal project area after having entered into an exchange of prospecting rights agreement with joint-venture (JV) companies held by Rio Tinto and the Kwezi Group.
The JV companies Chapudi Coal and Kwezi Mining & Exploration, would give CoAL ownership over certain prospecting rights and interests over certain farms contiguous to the Makhado project, in exchange for other prospecting rights and farms.
CoAL’s subsidiary, Regulus Investment, would pay Chapudi Coal a premium of R12.5-million as part of the farm-swap agreement.
“The rationalisation of Rio Tinto and CoAL’s prospecting rights in Limpopo removes a significant commercial hurdle to the establishment of the Makhado hard coking-coal project. The farm swap, when completed, would result in the creation of a substantial opencast hard coking-coal mining asset,” Farrell noted.
Following the start of production, the project would ramp up over a two-year period to produce five-million tons of saleable hard coking coal.
CoAL would submit an application for new-order mining rights for the project early in 2010.
CoAL further highlighted its intention to migrate from the Aim market of the LSE to the main market, which it hoped would be concluded by the first half of 2010.
“Recognising the growing size of the company and its mining assets, its predominantly London focused institutional investor base and share trading liquidity, a move to the main market of the LSE represents the logical next step in CoAL’s exciting development trajectory,” Farrell commented.
Source: Creamer's Mining Weekly
Thursday, October 29, 2009
China Minmetals Plans Mauritania Iron Ore JV
A senior executive from China Minmetals Corp said on October 28, the company is seeking to purchase an iron ore project in Mauritania of West Africa.
China Minmetals Corp. is the largest metal trading company in China.
Ma Jun, director of General Office of Minmetals told reporters in a luncheon meeting, the Group has completed a preliminary study to the project.
Ma Jun didn't elaborate the project and didn't disclose the scale, either.
Ma Jun pointed out that even if the project resulted in losses, Minmetals Group must seize the opportunity for such a purchase.
Minmetals Group and Societe Nationale Industrielle et Miniere(SNIM) set an iron ore JV enterprise, which is set to produce 2.5mln tons of iron ore. SNIM is the world's seventh-largest iron ore supplier.
Since this year, SNIM became China's ninth-largest iron ore supplier and China imported 4.9mln tons of iron ore from SNIM in January to September, up 3 times compared with same period last year.
Source: MetalBiz
China Minmetals Corp. is the largest metal trading company in China.
Ma Jun, director of General Office of Minmetals told reporters in a luncheon meeting, the Group has completed a preliminary study to the project.
Ma Jun didn't elaborate the project and didn't disclose the scale, either.
Ma Jun pointed out that even if the project resulted in losses, Minmetals Group must seize the opportunity for such a purchase.
Minmetals Group and Societe Nationale Industrielle et Miniere(SNIM) set an iron ore JV enterprise, which is set to produce 2.5mln tons of iron ore. SNIM is the world's seventh-largest iron ore supplier.
Since this year, SNIM became China's ninth-largest iron ore supplier and China imported 4.9mln tons of iron ore from SNIM in January to September, up 3 times compared with same period last year.
Source: MetalBiz
Philippines Looks To Join China Resource Boom
The Philippines is aiming to be one of the next nations to cash in on China's insatiable appetite for resources, with the Asian neighbours working to build closer mining ties, officials from both sides say.
The Southeast Asian country has vast amounts of gold, nickel, copper, and other valuable minerals, but for years its mining industry has underperformed due to bad governance, foreign ownership restrictions, and domestic opposition.
Now, with the Philippines trying to nearly triple annual investment in the sector to $2 billion, China is being seen as a crucial buyer and source of funds to develop some of Manila's largest mining prospects.
"It's all very fortunate for us because we have the advantage of geography... they can practically buy everything we produce here," the Philippine Mines and Geosciences Bureau chief, Horacio Ramos, told AFP.
The economic counselor of the Chinese embassy in Manila, Wu Zhengping, also told a mining conference here last month that Beijing was looking at a "long-term strategic cooperation" with Manila in the mining sector.
"It's a win-win arrangement," Wu said.
However, he said the Philippines must address some key Chinese concerns, particularly continued restrictions on foreign ownership and inadequate infrastructure.
"The first thing you have to do is improve your investment environment," Wu said, calling for a relaxation on rules limiting foreign ownership of assets.
Nevertheless, China has shown it is willing to deal in the current environment.
Zijin Mining Group, China's largest gold miner, and another Chinese firm this month signed a memorandum of understanding with the Philippine government that could lead to $1 billion in mining investments over five years.
Chinese Foreign Minister Yang Jiechi on Wednesday also began a two-day trip to Manila, and resources was expected to be on the agenda during talks with President Gloria Macapagal-Arroyo on Thursday.
"Mining will be among the issues to be discussed," Ramos said.
The government estimates the Philippines has 83 billion tons of mineral ore deposits.
The country's estimated gold ore reserves of four billion tons is the world's third largest, its 7.9 billion tons of copper the fourth largest and the 815 million tons of nickel ore the fifth biggest in the world, it says.
However the Philippines has largely missed out on the economic windfalls the likes of Australia and countries in Africa have seen in recent years as they sold resources to power China's surging economy.
"The Chinese are going global, but I just don't see any substantial investments here in the Philippines," the executive vice president of industry association Chamber of Mines of the Philippines, Nelia Halcon, told AFP.
"The market is there. We just need to develop our resources...They (China) have a potentially crucial role to play in developing the industry."
The Philippines mining industry went into near-hibernation after the collapse of metals prices in the 1970s, then a high-profile tailings spill in the 1990s galvanized environmentalists into a strong anti-mining force.
The mining industry began to recover after parliament passed a law in the mid-1990s that lifted foreign ownership restrictions on major discoveries.
This drove fresh investments that reached annual levels of about $700 million, before dipping slightly to 650 million dollars last year due to the global financial crisis.
The government expects investments worth two billion dollars this year as metals demand improves.
Source: AFP
The Southeast Asian country has vast amounts of gold, nickel, copper, and other valuable minerals, but for years its mining industry has underperformed due to bad governance, foreign ownership restrictions, and domestic opposition.
Now, with the Philippines trying to nearly triple annual investment in the sector to $2 billion, China is being seen as a crucial buyer and source of funds to develop some of Manila's largest mining prospects.
"It's all very fortunate for us because we have the advantage of geography... they can practically buy everything we produce here," the Philippine Mines and Geosciences Bureau chief, Horacio Ramos, told AFP.
The economic counselor of the Chinese embassy in Manila, Wu Zhengping, also told a mining conference here last month that Beijing was looking at a "long-term strategic cooperation" with Manila in the mining sector.
"It's a win-win arrangement," Wu said.
However, he said the Philippines must address some key Chinese concerns, particularly continued restrictions on foreign ownership and inadequate infrastructure.
"The first thing you have to do is improve your investment environment," Wu said, calling for a relaxation on rules limiting foreign ownership of assets.
Nevertheless, China has shown it is willing to deal in the current environment.
Zijin Mining Group, China's largest gold miner, and another Chinese firm this month signed a memorandum of understanding with the Philippine government that could lead to $1 billion in mining investments over five years.
Chinese Foreign Minister Yang Jiechi on Wednesday also began a two-day trip to Manila, and resources was expected to be on the agenda during talks with President Gloria Macapagal-Arroyo on Thursday.
"Mining will be among the issues to be discussed," Ramos said.
The government estimates the Philippines has 83 billion tons of mineral ore deposits.
The country's estimated gold ore reserves of four billion tons is the world's third largest, its 7.9 billion tons of copper the fourth largest and the 815 million tons of nickel ore the fifth biggest in the world, it says.
However the Philippines has largely missed out on the economic windfalls the likes of Australia and countries in Africa have seen in recent years as they sold resources to power China's surging economy.
"The Chinese are going global, but I just don't see any substantial investments here in the Philippines," the executive vice president of industry association Chamber of Mines of the Philippines, Nelia Halcon, told AFP.
"The market is there. We just need to develop our resources...They (China) have a potentially crucial role to play in developing the industry."
The Philippines mining industry went into near-hibernation after the collapse of metals prices in the 1970s, then a high-profile tailings spill in the 1990s galvanized environmentalists into a strong anti-mining force.
The mining industry began to recover after parliament passed a law in the mid-1990s that lifted foreign ownership restrictions on major discoveries.
This drove fresh investments that reached annual levels of about $700 million, before dipping slightly to 650 million dollars last year due to the global financial crisis.
The government expects investments worth two billion dollars this year as metals demand improves.
Source: AFP
China Minmetals Urges Iron Ore Diversfication
China Minmetals, the country's largest State-owned metals trader, has urged industry leaders to diversify iron ore supply and improve negotiation tactics to reverse China's unfavourable position in global iron ore deals.
"Chinese steel mills seeking lower prices (of iron ore) should think more about reducing dependence on the three global miners," Zhang Ye, vice-general manager of China National Minerals Co Ltd (MINCO), a wholly owned subsidiary of China Minmetals, told China Daily yesterday.
His remarks come at a time when China's steel industry is facing a de facto breakdown in iron ore negotiations for the year, while the outlook for next year's talks seems gloomy at best.
The three global miners, Brazil's Vale SA, Australia's Rio Tinto and BHP Billiton, contributed to about 50 percent of Minmetals' iron ore trading volume. But the company is looking to diversify its iron ore suppliers, he said.
Minmetals will expand its list of buyers from the current five, which include Ukraine, Chile and Russia, to eight next year. The targeted iron ore suppliers will be from North and South America, Zhang said.
He also revealed that Minmetals is close to finalizing some overseas investment and acquisition deals, but declined to reveal specifics.
MINCO's iron ore imports will touch 12 million tons this year, 2 million tons higher than anticipated, due to higher steel output, he said.
China produced 266.58 million tons of crude steel in the first half, up 1.23 percent over the same period last year, according to official data.
"It is difficult to reduce the proportion of iron ore imports from the three giant miners, given the quality of their iron ore and geographic position, but what we can do is to cut the dependence. For example, when the three miners cut supplies, we can at least have alternative resources," he said.
The relationship between Chinese steel mills and iron ore miners should be mutually beneficial since China is the largest iron ore consumer and the three giant miners account for 70 percent of the iron ore trading market, Zhang said.
"Chinese steelmakers should realize that the three global miners are very eager to sell in China and are competing with each other. So, Chinese steel mills should take advantage of this to ask for a better discount," he added.
Zhang suggested all Chinese steel mills should join hands to exert their influence during iron ore price negotiations.
China's steel industry lobby and top iron ore price negotiator, China Iron and Steel Association (CISA), is made up of 216 members, with 72 key members being State-owned steel mills. CISA is often questioned on whether it really represents China's 1,200 steel companies.
Zhang suggested that all the smaller steel mills that meet the government's industry requirements should be part of CISA.
This year's iron ore price negotiations have been deadlocked since June after China insisted on a 45-percent price discount, but Chinese steel mills opted to buy on the spot market or privately accepted long-term prices that had been set with other Asian steel mills.
The Chinese media, including some State-run organizations, have criticized CISA's inability to get a better discount from the global miners.
During the next round of negotiations, CISA should consult with experienced negotiators and market researchers to get a better price for iron ore imported from the giant miners, People's Daily Online quoted industry insiders as saying.
Source: China Daily
"Chinese steel mills seeking lower prices (of iron ore) should think more about reducing dependence on the three global miners," Zhang Ye, vice-general manager of China National Minerals Co Ltd (MINCO), a wholly owned subsidiary of China Minmetals, told China Daily yesterday.
His remarks come at a time when China's steel industry is facing a de facto breakdown in iron ore negotiations for the year, while the outlook for next year's talks seems gloomy at best.
The three global miners, Brazil's Vale SA, Australia's Rio Tinto and BHP Billiton, contributed to about 50 percent of Minmetals' iron ore trading volume. But the company is looking to diversify its iron ore suppliers, he said.
Minmetals will expand its list of buyers from the current five, which include Ukraine, Chile and Russia, to eight next year. The targeted iron ore suppliers will be from North and South America, Zhang said.
He also revealed that Minmetals is close to finalizing some overseas investment and acquisition deals, but declined to reveal specifics.
MINCO's iron ore imports will touch 12 million tons this year, 2 million tons higher than anticipated, due to higher steel output, he said.
China produced 266.58 million tons of crude steel in the first half, up 1.23 percent over the same period last year, according to official data.
"It is difficult to reduce the proportion of iron ore imports from the three giant miners, given the quality of their iron ore and geographic position, but what we can do is to cut the dependence. For example, when the three miners cut supplies, we can at least have alternative resources," he said.
The relationship between Chinese steel mills and iron ore miners should be mutually beneficial since China is the largest iron ore consumer and the three giant miners account for 70 percent of the iron ore trading market, Zhang said.
"Chinese steelmakers should realize that the three global miners are very eager to sell in China and are competing with each other. So, Chinese steel mills should take advantage of this to ask for a better discount," he added.
Zhang suggested all Chinese steel mills should join hands to exert their influence during iron ore price negotiations.
China's steel industry lobby and top iron ore price negotiator, China Iron and Steel Association (CISA), is made up of 216 members, with 72 key members being State-owned steel mills. CISA is often questioned on whether it really represents China's 1,200 steel companies.
Zhang suggested that all the smaller steel mills that meet the government's industry requirements should be part of CISA.
This year's iron ore price negotiations have been deadlocked since June after China insisted on a 45-percent price discount, but Chinese steel mills opted to buy on the spot market or privately accepted long-term prices that had been set with other Asian steel mills.
The Chinese media, including some State-run organizations, have criticized CISA's inability to get a better discount from the global miners.
During the next round of negotiations, CISA should consult with experienced negotiators and market researchers to get a better price for iron ore imported from the giant miners, People's Daily Online quoted industry insiders as saying.
Source: China Daily
Minnesota Copper Mine Gets Go-ahead
Minnesota's first copper mine took a step forward Wednesday as state officials released a 1,500-page environmental impact study for the Iron Range proposal. The $600 million project, to be built by PolyMet Mining Inc., would include an open-pit mine near Babbitt and a processing plant near Hoyt Lakes, connected by an existing 6-mile railroad spur.
Company officials said the mine would create 400 permanent jobs for more than 20 years, and would produce nickel, cobalt, platinum and other valuable metals.
However, environmentalists said similar mines in other states have created sulphuric acid runoff, and similar problems could poison Minnesota water.
The study, done by the Minnesota Department of Natural Resources and the U.S. Army Corps of Engineers, does not approve the project or recommend that it be built. Rather, it provides a detailed record of facts that must be deemed accurate and complete before the mine and processing plant can receive air and water quality permits.
Environmental leaders are worried about the project, and point to similar mines in South Dakota, northern Wisconsin and elsewhere that have contaminated nearby water despite earlier promises not to do so.
"This is a new kind of mining that has never been done in Minnesota before," said Mary Marrow, staff attorney at the Minnesota Center for Environmental Advocacy. PolyMet would mine rock that contains sulfur, she said, which is transformed into sulfuric acid when the waste rock is exposed to oxygen and water.
"We're very concerned because PolyMet wants to do sulfide mining in Minnesota's water-rich environment, right next to the Boundary Waters Canoe Area Wilderness and Lake Superior," she said.
The draft environmental study estimates that the mine would remove an average 91,200 tons per day of rock, and generate nearly 400 million tons of waste rock over its life.
PolyMet vice president of public affairs LaTisha Gietzen said that ore contains only very low amounts of sulfur, and that waste rock would be placed on liners where runoff would be collected, treated and reused. "We have a very low potential for acid rock drainage," said Gietzen. "What we're proposing to do is environmentally safe."
Gietzen said that problems at copper mines in other states are either old examples, when few pollution regulations existed, or different cases in which there was a significantly higher percentage of sulfur in the rock.
PolyMet is a Canadian firm with headquarters in Hoyt Lakes, Minn., and this is its first project, Gietzen said. PolyMet purchased the former LTV Steel taconite plant after it closed in 2001, and plans to transform it into the processing center for copper and other metals.
The environmental impact study cost more than $20 million, financed by the company, and took the DNR and the Army Corps more than three years to complete. Other effects detailed in the report include potential increases in mercury in fish, additional greenhouse gas emissions, potential loss of habitat for Canadian lynx and wolves, decreased flow in the nearby Partridge River, and destruction of 854 acres of wetlands and more than 1,700 acres of other vegetation.
Half a dozen other firms that have leases in the area and interest in copper-nickel mining are watching the environmental review process closely.
The public can find the draft environmental study on the DNR's website, and can provide comments in writing or at two public meetings soon to be scheduled on the Iron Range and in the Twin Cities. The agencies will consider those comments before publishing a final version of the study next year.
Gietzen said PolyMet expects to receive permits and begin building the mine in the second half of 2010, and to be processing ore a year after that.
Aside from the environmental questions, the project also faces a land dispute. The mining site is located on national forest land, where PolyMet has leased mineral rights. The company and Forest Service disagree on whether the lease includes the right to open-pit mine. Both are exploring the feasibility of a land exchange to resolve the issue.
Source: Star Tribune
Company officials said the mine would create 400 permanent jobs for more than 20 years, and would produce nickel, cobalt, platinum and other valuable metals.
However, environmentalists said similar mines in other states have created sulphuric acid runoff, and similar problems could poison Minnesota water.
The study, done by the Minnesota Department of Natural Resources and the U.S. Army Corps of Engineers, does not approve the project or recommend that it be built. Rather, it provides a detailed record of facts that must be deemed accurate and complete before the mine and processing plant can receive air and water quality permits.
Environmental leaders are worried about the project, and point to similar mines in South Dakota, northern Wisconsin and elsewhere that have contaminated nearby water despite earlier promises not to do so.
"This is a new kind of mining that has never been done in Minnesota before," said Mary Marrow, staff attorney at the Minnesota Center for Environmental Advocacy. PolyMet would mine rock that contains sulfur, she said, which is transformed into sulfuric acid when the waste rock is exposed to oxygen and water.
"We're very concerned because PolyMet wants to do sulfide mining in Minnesota's water-rich environment, right next to the Boundary Waters Canoe Area Wilderness and Lake Superior," she said.
The draft environmental study estimates that the mine would remove an average 91,200 tons per day of rock, and generate nearly 400 million tons of waste rock over its life.
PolyMet vice president of public affairs LaTisha Gietzen said that ore contains only very low amounts of sulfur, and that waste rock would be placed on liners where runoff would be collected, treated and reused. "We have a very low potential for acid rock drainage," said Gietzen. "What we're proposing to do is environmentally safe."
Gietzen said that problems at copper mines in other states are either old examples, when few pollution regulations existed, or different cases in which there was a significantly higher percentage of sulfur in the rock.
PolyMet is a Canadian firm with headquarters in Hoyt Lakes, Minn., and this is its first project, Gietzen said. PolyMet purchased the former LTV Steel taconite plant after it closed in 2001, and plans to transform it into the processing center for copper and other metals.
The environmental impact study cost more than $20 million, financed by the company, and took the DNR and the Army Corps more than three years to complete. Other effects detailed in the report include potential increases in mercury in fish, additional greenhouse gas emissions, potential loss of habitat for Canadian lynx and wolves, decreased flow in the nearby Partridge River, and destruction of 854 acres of wetlands and more than 1,700 acres of other vegetation.
Half a dozen other firms that have leases in the area and interest in copper-nickel mining are watching the environmental review process closely.
The public can find the draft environmental study on the DNR's website, and can provide comments in writing or at two public meetings soon to be scheduled on the Iron Range and in the Twin Cities. The agencies will consider those comments before publishing a final version of the study next year.
Gietzen said PolyMet expects to receive permits and begin building the mine in the second half of 2010, and to be processing ore a year after that.
Aside from the environmental questions, the project also faces a land dispute. The mining site is located on national forest land, where PolyMet has leased mineral rights. The company and Forest Service disagree on whether the lease includes the right to open-pit mine. Both are exploring the feasibility of a land exchange to resolve the issue.
Source: Star Tribune
Kazakhstan Crude Production Down 15 Per Cent
According to data released by the Republic of Kazakhstan Agency of Statistics, in January to September 2009 the country'S crude steel production fell 15.2% YoY to 2.99 million tonnes and flat rolled steel production down by 3.3% YoY 2.27 million tonnes.
During the first nine months of 2009, output of ferroalloys declined by 20.8% YoY to 1.03 million tonnes. Meanwhile, Kazakhstan exported 579,600 tonnes of ferroalloys down by 34% YoY at a value of USD628.8 million down by 67.4% YoY and 1.7 million tonnes of flat rolled steel, including tinplate, down by 11% YoY for a value of USD 831.2 million down by 49.7% YoY.
Source: Steel Guru
During the first nine months of 2009, output of ferroalloys declined by 20.8% YoY to 1.03 million tonnes. Meanwhile, Kazakhstan exported 579,600 tonnes of ferroalloys down by 34% YoY at a value of USD628.8 million down by 67.4% YoY and 1.7 million tonnes of flat rolled steel, including tinplate, down by 11% YoY for a value of USD 831.2 million down by 49.7% YoY.
Source: Steel Guru
Wednesday, October 28, 2009
Anglo-American Plans Irish Zinc Stake Sale
Mining giant Anglo American plans to sell its stake in Lisheen Mine in Tipperary as part of a bigger plan to sell all its global zinc operations to raise €4bn, London-based 'Metal Bulletin' magazine has reported.
Anglo American is expanding its divestment programme by putting the zinc business on the block as part of a wider restructuring. Anglo American is being pressured by investors after an abortive merger bid from rival Xstrata.
"The zinc business may be the first to go because zinc prices have recovered strongly and they're high quality assets. That's the expectation in the market," Reuters reported, quoting an industry source as saying.
The price of zinc has nearly doubled this year, touching a 17-month high on Monday, and is on course for a 17.7pc rise this month as it benefits from producer cutbacks and Chinese buying.
Zinc is one of Ireland's few valuable minerals and production is centred on three zinc-lead mines -- Lisheen, Galmoy in Kilkenny, and Tara in Meath which is the largest lead-zinc field in Europe. The owners of the Galmoy mine will close in 2011, while Tara mines has been threatened with closure several times.
Anglo's zinc operations consist of Lisheen, Skorpion in Namibia and the 74pc-owned Black Mountain mine and Gamsberg project in South Africa.
Source: Irish Independent
Anglo American is expanding its divestment programme by putting the zinc business on the block as part of a wider restructuring. Anglo American is being pressured by investors after an abortive merger bid from rival Xstrata.
"The zinc business may be the first to go because zinc prices have recovered strongly and they're high quality assets. That's the expectation in the market," Reuters reported, quoting an industry source as saying.
The price of zinc has nearly doubled this year, touching a 17-month high on Monday, and is on course for a 17.7pc rise this month as it benefits from producer cutbacks and Chinese buying.
Zinc is one of Ireland's few valuable minerals and production is centred on three zinc-lead mines -- Lisheen, Galmoy in Kilkenny, and Tara in Meath which is the largest lead-zinc field in Europe. The owners of the Galmoy mine will close in 2011, while Tara mines has been threatened with closure several times.
Anglo's zinc operations consist of Lisheen, Skorpion in Namibia and the 74pc-owned Black Mountain mine and Gamsberg project in South Africa.
Source: Irish Independent
Centennial Coal Benefits From Strong Asian Demand
Centennial Coal says Asian demand for higher-value coal used in steel-making has continued to strengthen, with growing shipments across the region.
In a positive sign for other coal producers, the NSW miner yesterday said buyers had returned in traditional long-term markets in the region during the September quarter.
Sales were up 22 per cent in the quarter, to 3.8 million tonnes, compared with 3.1 million tonnes in the same period last year.
Shipments of semi-soft coal from the Hunter Valley, for instance, had risen from 620,000 tonnes in April to 2 million tonnes in September.
The production result is the latest evidence of better times for producers of coal, the country's biggest export.
In a sign of the strong demand rippling through world markets, a Patersons analyst, Andrew Harrington, noted that some shipments of coking coal had traded as high as US$170 a tonne, compared with a contract price of about US$125 a tonne.
Demand for the thermal coal used in power stations has been more subdued, trading closer to its contract price of US$70 a tonne.
''The metallurgical coals are trading at a big premium,'' Mr Harrington said.
One reason for the excess demand is China, which was not historically a big coking coal buyer until this year. European steel mills are also buying more after slashing their orders in late 2008.
The latest figures from the Port Waratah Coal Service showed China accounted for 9 per cent of coal shipments in September - far above its long-term average.
Mr Harrington said the continuing strength of demand from China was surprising, as he had expected it to drop away as world coal prices recovered and its own domestic production increased.
Source: Sydney Morning Herald
In a positive sign for other coal producers, the NSW miner yesterday said buyers had returned in traditional long-term markets in the region during the September quarter.
Sales were up 22 per cent in the quarter, to 3.8 million tonnes, compared with 3.1 million tonnes in the same period last year.
Shipments of semi-soft coal from the Hunter Valley, for instance, had risen from 620,000 tonnes in April to 2 million tonnes in September.
The production result is the latest evidence of better times for producers of coal, the country's biggest export.
In a sign of the strong demand rippling through world markets, a Patersons analyst, Andrew Harrington, noted that some shipments of coking coal had traded as high as US$170 a tonne, compared with a contract price of about US$125 a tonne.
Demand for the thermal coal used in power stations has been more subdued, trading closer to its contract price of US$70 a tonne.
''The metallurgical coals are trading at a big premium,'' Mr Harrington said.
One reason for the excess demand is China, which was not historically a big coking coal buyer until this year. European steel mills are also buying more after slashing their orders in late 2008.
The latest figures from the Port Waratah Coal Service showed China accounted for 9 per cent of coal shipments in September - far above its long-term average.
Mr Harrington said the continuing strength of demand from China was surprising, as he had expected it to drop away as world coal prices recovered and its own domestic production increased.
Source: Sydney Morning Herald
Tuesday, October 27, 2009
Mesa Makes First Manganese Ore Shipment
West Australia-based Mesa Minerals this week successfully sailed from being a miner to an ore-exporting company with long-term contracts on the horizon.
Its export this week to China of its inaugural shipment of manganese ore and its name-change this month from HiTech Energy mark a new start for Mesa.
The 24,000-tonne shipment was sourced from Mesa's Ant Hill project, 400km east of Port Hedland. The project is a joint venture with Auvex Resources.
Mesa managing director Alan Scott says the first shipment represented a very important step forward to attain a regular and long-term income stream.
``The achievement of this goal is seen as a complement to and a funding source for the company's parallel efforts to establish a second regular and long-term income stream from the secondary processing of the lower grade ore fractions mined at Ant Hill,'' he says.
``The lessons learned from the many problems encountered and overcome in achieving this first shipment will stand the company in good stead for the future.''
Mr Scott says the company will also soon learn about the performance of the ore when it becomes smelter feed in China.
He says this will allow Mesa to more precisely determine and supply the optimum grades of ore products to meet demands.
Mr Scott also thanked the people and businesses that helped Mesa reach its first shipment.
``Without their support we simply could not have achieved a successful outcome.''
The first shipment is the first from a trial production. Mesa now anticipates larger scale mining from Ant Hill and its second project, Sunday Hill, which were previously mined in the post-war period.
A second shipment to China is expected early in the New Year.
Mesa and Auvex are refining mine plans, planning road improvements and seeking quotes on infrastructure with contractors.
Source: Perth Now
Its export this week to China of its inaugural shipment of manganese ore and its name-change this month from HiTech Energy mark a new start for Mesa.
The 24,000-tonne shipment was sourced from Mesa's Ant Hill project, 400km east of Port Hedland. The project is a joint venture with Auvex Resources.
Mesa managing director Alan Scott says the first shipment represented a very important step forward to attain a regular and long-term income stream.
``The achievement of this goal is seen as a complement to and a funding source for the company's parallel efforts to establish a second regular and long-term income stream from the secondary processing of the lower grade ore fractions mined at Ant Hill,'' he says.
``The lessons learned from the many problems encountered and overcome in achieving this first shipment will stand the company in good stead for the future.''
Mr Scott says the company will also soon learn about the performance of the ore when it becomes smelter feed in China.
He says this will allow Mesa to more precisely determine and supply the optimum grades of ore products to meet demands.
Mr Scott also thanked the people and businesses that helped Mesa reach its first shipment.
``Without their support we simply could not have achieved a successful outcome.''
The first shipment is the first from a trial production. Mesa now anticipates larger scale mining from Ant Hill and its second project, Sunday Hill, which were previously mined in the post-war period.
A second shipment to China is expected early in the New Year.
Mesa and Auvex are refining mine plans, planning road improvements and seeking quotes on infrastructure with contractors.
Source: Perth Now
India's JSPL In Race For Mongolian Coal Project
Naveen Jindal-controlled Jindal Steel & Power Ltd (JSPL) is in the race for Mongolia’s Tavan Tolgoi coal project, one of the 10 biggest deposits in the world.
Vikrant Gujral, vice-chairman and CEO, JSPL, said: “We had made a presentation before the Group of Ministers. We have been informed that we are one of the shortlisted bidders for a 49 per cent stake in Tavan Tolgoi. This is a big deposit and we are the only Indian company to be shortlisted.”
Tavan Tolgoi has six billion tonnes of coal, of which two billion is coking. The balance 51 per cent stake would be held by a government-owned company. Though Gujral did not specify the value of the deal, pointing out that this would have to be studied, industry sources said it could run into billions of dollars as it is an operational mine. He said most Indian companies have been eyeing smaller mining companies, while adding BHP and Brazil’s Vale were also in the fray.
Gujral said the coking coal could be transported to cater to JSPL’s steel plants in India. However, he pointed out that Mongolia is a land-locked country and the mineral would have to be routed through either China or Russia.
JSPL operates a three-million-tonne plant at Chhattisgarh and has lined up two six-million-tonne plants for Orissa and Jharkhand, for which Memoranda of Understanding have been signed. Moreover, there are plans to add another three million tonnes at Chhattisgarh.
Indian steel companies have been scouting for raw material assets overseas in the past few years. Coking coal accounts for around 50 per cent of the raw material costs and proven reserves of prime coking coal in India are at 4.6 billion tonnes, but production is around seven million tonnes only. Also, the quality of Indian coking coal is poor and has to be blended with imported coal
Source: Business Standard
Vikrant Gujral, vice-chairman and CEO, JSPL, said: “We had made a presentation before the Group of Ministers. We have been informed that we are one of the shortlisted bidders for a 49 per cent stake in Tavan Tolgoi. This is a big deposit and we are the only Indian company to be shortlisted.”
Tavan Tolgoi has six billion tonnes of coal, of which two billion is coking. The balance 51 per cent stake would be held by a government-owned company. Though Gujral did not specify the value of the deal, pointing out that this would have to be studied, industry sources said it could run into billions of dollars as it is an operational mine. He said most Indian companies have been eyeing smaller mining companies, while adding BHP and Brazil’s Vale were also in the fray.
Gujral said the coking coal could be transported to cater to JSPL’s steel plants in India. However, he pointed out that Mongolia is a land-locked country and the mineral would have to be routed through either China or Russia.
JSPL operates a three-million-tonne plant at Chhattisgarh and has lined up two six-million-tonne plants for Orissa and Jharkhand, for which Memoranda of Understanding have been signed. Moreover, there are plans to add another three million tonnes at Chhattisgarh.
Indian steel companies have been scouting for raw material assets overseas in the past few years. Coking coal accounts for around 50 per cent of the raw material costs and proven reserves of prime coking coal in India are at 4.6 billion tonnes, but production is around seven million tonnes only. Also, the quality of Indian coking coal is poor and has to be blended with imported coal
Source: Business Standard
Monday, October 26, 2009
Abu Dhabi Steel Prices Fall Seven To 17 Per Cent
There has been an overall drop in prices of steel products in Abu Dhabi, even as a surge in Chinese steel demand has pushed global output close to what it was before the economic crisis.
Prices have dropped between seven and 17 per cent compared to October 13.
According to figures released by the Statistics Centre - Abu Dhabi (Scad), prices of flat steel went down by 11 per cent, falling by almost Dh300 per tonne. The price of flat steel from Turkey dropped to Dh2,300 per tonne from Dh2,600 on October 13.
Meanwhile, rebar prices dropped between seven and 12 per cent during the past 10 days. The cost of six to eight mm rebar from Turkey dropped by seven per cent and fell by Dh175. It is now priced at Dh2,125 per tonne compared to Dh2,300 during the second week of October.
Similarly 10-32mm rebar from Turkey and the UAE dropped by 12 per cent to Dh287, falling to Dh1,962 per tonne compared to Dh2250 on October 13. Qatari rebar, however, increased by eight per cent, going up to Dh2,450 per tonne from Dh2,250 on October 13. Speaking to Emirates Business, Karel Costenoble of Mesteel, an online portal providing information on steel products, said prices of flat products have already bottomed out and a correction is imminent.
"Prices of hot rolled coil was priced at about $510 to $520 per tonne CFR Dubai, whereas it will be moving up by $20 to $25 per tonne," said Costenoble.
According to him, prices of beams have slightly reduced. The price of a tonne of UB/UC from South Korea, South Africa and India has come down from $660 (Dh2,423) a few weeks back to $610 to $620 CFR Dubai.
He said prices of rebar from Turkey is holding with Turkish bars hovering near $475 per tonne CFR Dubai.
"The slide in prices of Chinese products will come to an end soon. We might see an increase in prices of Chinese steel products by about $20 to $25 per tonne. However, there are no signs of a drop in production," he said.
According to reports, the price fall in China is a result of capacity expansion.
Reports quoting China Iron and Steel Association (Cisa) said steel prices kept falling in September due to fast capacity expansion, which further exacerbated market supply glut.
A report in Mysteel.net said the steel association expected the market will level off though it still relies on the degree of capacity expansion.
According to the latest figures released by the National Statistics Bureau, crude steel output in September stood at 50.71 million tonnes up by 28.7 per cent year on year, and the second high this year.
Daily output in the month hit an all-time high at 1.69 million tonnes. Steel stocks in major cities also kept rallying and total stocks up 2.74 per cent by the end of September, approaching this year's record. As to futures market, Cisa said there will be slim space for further steel price declines in view of the slumping profit at steel mills.
Profit at large and medium-size steel mills dived 77.65 per cent on year in the first nine months.
Similarly, according to statistics by the World Steel Association, an increase in the Chinese steel production and demand has pushed global output close to what it was before the economic crisis.
World crude steel production for the 66 countries reporting to the association was 107 million metric tonnes (mmt) in September. This is just 0.6 per cent lower than September 2008. The world total crude steel production month-on-month has continued to show a steady increase since April.
China's crude steel production for September was 50.7 mmt, 28.7 per cent higher than September 2008.
Elsewhere in Asia, Japan produced 8.3 mmt of crude steel in September, down 18 per cent compared to the same month last year. South Korea had a decline of 2.4 per cent from September 2008, producing 4.4 mmt of crude steel in September 2009.
Turkey produced 2.1 mmt of crude steel in September, 1.8 per cent down from September last year.
In the EU, Germany's crude steel production was 3.2 mmt in September 2009, a decrease of 21.7 per cent from September 2008. France produced 1.3 mmt in September 2009, down by 15.3 per cent from September 2008. The US produced 5.4 mmt of crude steel in September, a decrease of 31.4 per cent compared to the same month last year.
In the Middle East, Iran produced 0.9 mmt of crude steel in August 2009, four per cent more than in September 2008. Total crude steel production in the 66 reporting countries for the first nine months of 2009 was 866 mmt down by 16.4 per cent over the same period of 2008.
Source: Emirates Business
Prices have dropped between seven and 17 per cent compared to October 13.
According to figures released by the Statistics Centre - Abu Dhabi (Scad), prices of flat steel went down by 11 per cent, falling by almost Dh300 per tonne. The price of flat steel from Turkey dropped to Dh2,300 per tonne from Dh2,600 on October 13.
Meanwhile, rebar prices dropped between seven and 12 per cent during the past 10 days. The cost of six to eight mm rebar from Turkey dropped by seven per cent and fell by Dh175. It is now priced at Dh2,125 per tonne compared to Dh2,300 during the second week of October.
Similarly 10-32mm rebar from Turkey and the UAE dropped by 12 per cent to Dh287, falling to Dh1,962 per tonne compared to Dh2250 on October 13. Qatari rebar, however, increased by eight per cent, going up to Dh2,450 per tonne from Dh2,250 on October 13. Speaking to Emirates Business, Karel Costenoble of Mesteel, an online portal providing information on steel products, said prices of flat products have already bottomed out and a correction is imminent.
"Prices of hot rolled coil was priced at about $510 to $520 per tonne CFR Dubai, whereas it will be moving up by $20 to $25 per tonne," said Costenoble.
According to him, prices of beams have slightly reduced. The price of a tonne of UB/UC from South Korea, South Africa and India has come down from $660 (Dh2,423) a few weeks back to $610 to $620 CFR Dubai.
He said prices of rebar from Turkey is holding with Turkish bars hovering near $475 per tonne CFR Dubai.
"The slide in prices of Chinese products will come to an end soon. We might see an increase in prices of Chinese steel products by about $20 to $25 per tonne. However, there are no signs of a drop in production," he said.
According to reports, the price fall in China is a result of capacity expansion.
Reports quoting China Iron and Steel Association (Cisa) said steel prices kept falling in September due to fast capacity expansion, which further exacerbated market supply glut.
A report in Mysteel.net said the steel association expected the market will level off though it still relies on the degree of capacity expansion.
According to the latest figures released by the National Statistics Bureau, crude steel output in September stood at 50.71 million tonnes up by 28.7 per cent year on year, and the second high this year.
Daily output in the month hit an all-time high at 1.69 million tonnes. Steel stocks in major cities also kept rallying and total stocks up 2.74 per cent by the end of September, approaching this year's record. As to futures market, Cisa said there will be slim space for further steel price declines in view of the slumping profit at steel mills.
Profit at large and medium-size steel mills dived 77.65 per cent on year in the first nine months.
Similarly, according to statistics by the World Steel Association, an increase in the Chinese steel production and demand has pushed global output close to what it was before the economic crisis.
World crude steel production for the 66 countries reporting to the association was 107 million metric tonnes (mmt) in September. This is just 0.6 per cent lower than September 2008. The world total crude steel production month-on-month has continued to show a steady increase since April.
China's crude steel production for September was 50.7 mmt, 28.7 per cent higher than September 2008.
Elsewhere in Asia, Japan produced 8.3 mmt of crude steel in September, down 18 per cent compared to the same month last year. South Korea had a decline of 2.4 per cent from September 2008, producing 4.4 mmt of crude steel in September 2009.
Turkey produced 2.1 mmt of crude steel in September, 1.8 per cent down from September last year.
In the EU, Germany's crude steel production was 3.2 mmt in September 2009, a decrease of 21.7 per cent from September 2008. France produced 1.3 mmt in September 2009, down by 15.3 per cent from September 2008. The US produced 5.4 mmt of crude steel in September, a decrease of 31.4 per cent compared to the same month last year.
In the Middle East, Iran produced 0.9 mmt of crude steel in August 2009, four per cent more than in September 2008. Total crude steel production in the 66 reporting countries for the first nine months of 2009 was 866 mmt down by 16.4 per cent over the same period of 2008.
Source: Emirates Business
Sumitomo Seeks Perks For Philippines Nickel Plant
Sumitomo Metal Mining Co. Ltd. is seeking registration with the Philippine Economic Zone Authority (PEZA) and the proclamation of its $1.3-billion nickel processing plant project in Surigao del Norte as a special economic zone.
Takanori Fujimura, president of Sumitomo-owned Coral Bay Nickel Corp. (CBNC) in Palawan, has already informed government officials that the new project has to be registered with PEZA instead of the Board of Investments because it is an export-oriented enterprise.
Part of their registration is a petition for Malacañang to proclaim its project as a special economic zone just like the CBNC nickel refinery plant in Palawan.
As an export-oriented enterprise, the project would be entitled to tax and fiscal incentives including income tax holiday and zero-duty importation of capital equipment.
Project registration for incentive purposes was the next step following the recent signing of the memorandum of understanding between Sumitomo and Nickel Asia Corp. to proceed with the construction of a nickel-processing plant in the municipality of Claver, which is adjacent to Taganito Mining Corp.’s nickel mine.
Taganito, a subsidiary of Nickel Asia, will supply all of the required nickel ore to the plant for an estimated 30-year project life, while Nickel Asia will take a 20-percent to 25-percent equity interest in the project under a joint-venture company called THPAL Corp.
The output of the high pressure acid leaching plant, a mixed nickelcobalt sulfide, will be purchased by Sumitomo for final processing at its refinery in Japan.
The nickel processing plant in Claver will be the country’s second downstream nickel-processing plant by the Sumitomo-Nickel Asia, the first being CBNC in Palawan. CBNC was put up by a Japanese consortium led by Sumitomo and Rio Tuba Nickel Mining Corp., another subsidiary of Nickel Asia.
The Surigao processing plant is expected to triple the size of the initial CBNC plant, which became operational in 2005 with an initial capacity of 10,000 tons year of nickel metal equivalent. CBNC's output has been doubled since then.
The project is expected to start early next year and commercial operation to commence after three years. An estimated 4,000 personnel would be hired during the construction stage and 1,000 full-time employees when fully operational.
Source: Manila Bulletin
Takanori Fujimura, president of Sumitomo-owned Coral Bay Nickel Corp. (CBNC) in Palawan, has already informed government officials that the new project has to be registered with PEZA instead of the Board of Investments because it is an export-oriented enterprise.
Part of their registration is a petition for Malacañang to proclaim its project as a special economic zone just like the CBNC nickel refinery plant in Palawan.
As an export-oriented enterprise, the project would be entitled to tax and fiscal incentives including income tax holiday and zero-duty importation of capital equipment.
Project registration for incentive purposes was the next step following the recent signing of the memorandum of understanding between Sumitomo and Nickel Asia Corp. to proceed with the construction of a nickel-processing plant in the municipality of Claver, which is adjacent to Taganito Mining Corp.’s nickel mine.
Taganito, a subsidiary of Nickel Asia, will supply all of the required nickel ore to the plant for an estimated 30-year project life, while Nickel Asia will take a 20-percent to 25-percent equity interest in the project under a joint-venture company called THPAL Corp.
The output of the high pressure acid leaching plant, a mixed nickelcobalt sulfide, will be purchased by Sumitomo for final processing at its refinery in Japan.
The nickel processing plant in Claver will be the country’s second downstream nickel-processing plant by the Sumitomo-Nickel Asia, the first being CBNC in Palawan. CBNC was put up by a Japanese consortium led by Sumitomo and Rio Tuba Nickel Mining Corp., another subsidiary of Nickel Asia.
The Surigao processing plant is expected to triple the size of the initial CBNC plant, which became operational in 2005 with an initial capacity of 10,000 tons year of nickel metal equivalent. CBNC's output has been doubled since then.
The project is expected to start early next year and commercial operation to commence after three years. An estimated 4,000 personnel would be hired during the construction stage and 1,000 full-time employees when fully operational.
Source: Manila Bulletin
Indian Steel Minstry Seeks Iron Ore Export Levy
India's steel ministry wants a new policy on iron ore that will turn India from an exporting country into one shipping value-added items.
As a first step, the ministry wants to raise the tax on ore export.
In an interview to The Telegraph, steel minister Virbhadra Singh said, “We are a major producer of iron ore, much of which we export at low prices. We should rather work towards a policy of encouraging value-added exports which fetch us better revenues.
“I have proposed that we increase the tax on iron ore export from the current low of 5 per cent,” he said.
The minister, however, refused to set a target tax.
Brazil, the other major producer of high-grade iron ore, had recently said that it was considering imposing a tax on export.
Last year, Indian officials had demanded a hefty lump sum tax on iron ore fines and a 15 per cent ad valorem duty on iron lump export.
Ministry officials argue that India should follow a policy similar to that of China, which does not allow the export of high quality coking coal.
According to the officials, the government should gradually phase out the export of high-grade ore, which should be reserved for domestic steel makers.
Singh, a former chief minister of Himachal Pradesh and known for his views on protecting the environment, said, “We need to conserve resources and mines scientifically and minimise environmental damage.”
Steel makers support the ministry’s argument as they need more ore to expand their capacity to 85 million tonnes by 2011.
Iron ore miners, on the other hand, have come out with figures to prove that the reserves in India are sufficient to meet the demands of the steel industry as well as the overseas market.
Experts, both within and outside the government, however, feel that India needs to revise its export policy for raw materials.
Advisers in the Planning Commission had earlier suggested that instead of selling iron ore at cheap prices, the scarce raw material should be bartered for equally scarce coking coal.
On his efforts to push the new policy, Singh said, “I have encouraged NMDC, which is a miner, to set up its own steel plant and add value to its output. SAIL is trying to turn its fines into sinter and use it in its own steel plants instead of selling it.”
India’s per head steel consumption is about 35kg, which is expected to increase to 300 kg by 2020. Policy-makers say any long-term strategy should take future consumption into account.
The Prime Minister’s Office is believed to be planning a compromise formula on iron ore that can cap export at a specified level, instead of a total ban.
India produces 155 million tonnes of iron ore annually, of which 89mt is exported, mostly to China.
Source: Calcutta Telegraph
As a first step, the ministry wants to raise the tax on ore export.
In an interview to The Telegraph, steel minister Virbhadra Singh said, “We are a major producer of iron ore, much of which we export at low prices. We should rather work towards a policy of encouraging value-added exports which fetch us better revenues.
“I have proposed that we increase the tax on iron ore export from the current low of 5 per cent,” he said.
The minister, however, refused to set a target tax.
Brazil, the other major producer of high-grade iron ore, had recently said that it was considering imposing a tax on export.
Last year, Indian officials had demanded a hefty lump sum tax on iron ore fines and a 15 per cent ad valorem duty on iron lump export.
Ministry officials argue that India should follow a policy similar to that of China, which does not allow the export of high quality coking coal.
According to the officials, the government should gradually phase out the export of high-grade ore, which should be reserved for domestic steel makers.
Singh, a former chief minister of Himachal Pradesh and known for his views on protecting the environment, said, “We need to conserve resources and mines scientifically and minimise environmental damage.”
Steel makers support the ministry’s argument as they need more ore to expand their capacity to 85 million tonnes by 2011.
Iron ore miners, on the other hand, have come out with figures to prove that the reserves in India are sufficient to meet the demands of the steel industry as well as the overseas market.
Experts, both within and outside the government, however, feel that India needs to revise its export policy for raw materials.
Advisers in the Planning Commission had earlier suggested that instead of selling iron ore at cheap prices, the scarce raw material should be bartered for equally scarce coking coal.
On his efforts to push the new policy, Singh said, “I have encouraged NMDC, which is a miner, to set up its own steel plant and add value to its output. SAIL is trying to turn its fines into sinter and use it in its own steel plants instead of selling it.”
India’s per head steel consumption is about 35kg, which is expected to increase to 300 kg by 2020. Policy-makers say any long-term strategy should take future consumption into account.
The Prime Minister’s Office is believed to be planning a compromise formula on iron ore that can cap export at a specified level, instead of a total ban.
India produces 155 million tonnes of iron ore annually, of which 89mt is exported, mostly to China.
Source: Calcutta Telegraph
NMDC Defers Sponge Iron Investment Plans
India’s largest iron ore producer NMDC Ltd is deferring a Rs1,200 crore investment in the struggling Sponge Iron India Ltd because of a steep drop in global sponge iron prices.
NMDC, which will merge Sponge Iron India into itself by the year-end, had planned to expand the company’s production capacity fourfold and diversify its operations to include manufacturing of steel products for the construction sector.
“We are a little careful about the whole thing” because the prices of sponge iron are quite low now, said Rana Som, chairman and managing director of both NMDC and Sponge Iron India.
“Things are a little difficult and we have to redo our financial calculations,” Som added.
The Union government in May 2008 cleared the merger of NMDC with Sponge Iron India to turn around the sponge iron firm with financial support and an assured supply of iron ore.
Sponge Iron India has been facing an acute shortage of iron ore in the past few years as Indian producers shipped more overseas to take advantage of rising prices. As a result, it has not been able to use at least 75% of its production capacity of 60,000 tonnes a year at its plant in Andhra Pradesh’s Khammam district.
NMDC had firmed plans to enhance its capacity to 260,000 tonnes a year but has deferred the plan as the price of sponge iron in global markets has declined by about half to Rs13,500 per tonne, said Som. “If we invest Rs1,200 crore... we have to have an attractive (selling) price which can bear the interest and depreciation cost. Otherwise, the whole venture will be unproductive,” Som said.
Source: Livemint
NMDC, which will merge Sponge Iron India into itself by the year-end, had planned to expand the company’s production capacity fourfold and diversify its operations to include manufacturing of steel products for the construction sector.
“We are a little careful about the whole thing” because the prices of sponge iron are quite low now, said Rana Som, chairman and managing director of both NMDC and Sponge Iron India.
“Things are a little difficult and we have to redo our financial calculations,” Som added.
The Union government in May 2008 cleared the merger of NMDC with Sponge Iron India to turn around the sponge iron firm with financial support and an assured supply of iron ore.
Sponge Iron India has been facing an acute shortage of iron ore in the past few years as Indian producers shipped more overseas to take advantage of rising prices. As a result, it has not been able to use at least 75% of its production capacity of 60,000 tonnes a year at its plant in Andhra Pradesh’s Khammam district.
NMDC had firmed plans to enhance its capacity to 260,000 tonnes a year but has deferred the plan as the price of sponge iron in global markets has declined by about half to Rs13,500 per tonne, said Som. “If we invest Rs1,200 crore... we have to have an attractive (selling) price which can bear the interest and depreciation cost. Otherwise, the whole venture will be unproductive,” Som said.
Source: Livemint
Sunday, October 25, 2009
World Steel Production Back To Pre-Crisis Levels
According to the World Steel Association, a surge in Chinese steel demand has pushed global output close to what it was before the global economic crisis.
It said that production in the 66 members of the association, which includes the main metal producers in the world, has been growing since April and was 0.6% lower in September than in September 2008 at 107 million tonnes.
Output in China grew 28.7% in September on a 12 month comparison to 50.7 million tonnes, while Japan's output was down by 18%, Germany's was 21.7% lower and the US level was 31.4% below last year's.
Global steel production for the first nine months of this year was 866 million tonnes, 16.4% YoY lower.
Source: World Steel
It said that production in the 66 members of the association, which includes the main metal producers in the world, has been growing since April and was 0.6% lower in September than in September 2008 at 107 million tonnes.
Output in China grew 28.7% in September on a 12 month comparison to 50.7 million tonnes, while Japan's output was down by 18%, Germany's was 21.7% lower and the US level was 31.4% below last year's.
Global steel production for the first nine months of this year was 866 million tonnes, 16.4% YoY lower.
Source: World Steel
Saturday, October 24, 2009
Nine Chinese Steel Mills Raise Prices On Market Kick-Up
Beijing News has quoted traders saying that nine steel mills scaled up steel prices together on October 21st without the involvement of those leading companies such as Baosteel, WISCO and Anshan Steel. It is not a turning point for the steel market but the situation in demand and supply is still serious.
China biggest private steel mill Shagang Group issued on October 21st the price policy for the last ten days of October pushing up prices of wire rod by CNY 80 per tonne and of rebar by CNY 60 per tonne which is the first price lift following continuous falling since mid August.
Following hot in the heels are other eight steel mills including Jincheng Fusheng Steel Ltd and Shuicheng Iron & Steel Group which also have raised prices of around CNY 10 per tonne by and large for wire rod. Rizhao Steel in addition has lifted HR prices mildly.
These middle and small steel mills' moves are triggered by the spot and future markets rally which are directly affected by the world demands picking up. This round of price lifting moves lacks the presence of Baosteel, WISCO and other large mills. Just on the same day, Shougang and Benxi Steel launched its steel products ex-works prices for November delivery of which there are still some are scaled down including HR and galvanized steel with cut of CNY 300 per tonne to CNY 350 per tonne.
There is not sufficient drive for the market to go up now. Recently domestic steel market didn't see continued rally but fluctuation. Construction steel eyed a mild drop and rebar lost CNY 8 per tonne on average in major cities with Beijing observed the deepest of CNY 80 per tonne.
Source: Steel Guru
China biggest private steel mill Shagang Group issued on October 21st the price policy for the last ten days of October pushing up prices of wire rod by CNY 80 per tonne and of rebar by CNY 60 per tonne which is the first price lift following continuous falling since mid August.
Following hot in the heels are other eight steel mills including Jincheng Fusheng Steel Ltd and Shuicheng Iron & Steel Group which also have raised prices of around CNY 10 per tonne by and large for wire rod. Rizhao Steel in addition has lifted HR prices mildly.
These middle and small steel mills' moves are triggered by the spot and future markets rally which are directly affected by the world demands picking up. This round of price lifting moves lacks the presence of Baosteel, WISCO and other large mills. Just on the same day, Shougang and Benxi Steel launched its steel products ex-works prices for November delivery of which there are still some are scaled down including HR and galvanized steel with cut of CNY 300 per tonne to CNY 350 per tonne.
There is not sufficient drive for the market to go up now. Recently domestic steel market didn't see continued rally but fluctuation. Construction steel eyed a mild drop and rebar lost CNY 8 per tonne on average in major cities with Beijing observed the deepest of CNY 80 per tonne.
Source: Steel Guru
High Ash Content To Force JSW Mozambique Cancellation
JSW Steel plans to abandon its coal mining project in Mozambique because of higher than expected ash content in the coking coal.
“We are looking at alternative sites, as the Mozambique project is commercially unviable,” Vice-Chairman and Managing Director Sajjan Jindal said.
The project has been put on hold after detailed studies. These showed burnt coal (ash) content is high, at 60 per cent. The company is now scouting for coal assets in Australia and some other countries, said Jindal.
The company has reported a 28 per cent rise in net profit at Rs 323 crore for the quarter ended September 30, 2009, compared with the same quarter last year. The increase was on account of a 54 per cent growth in crude steel production to 1.5 million tonnes. Also, the quarter saw a Rs 21-crore loss on foreign exchange transactions. This was a far smaller loss than the Rs 268-crore loss in the same quarter last year.
Net sales in the second quarter of this financial year for the Sajjan Jindal-controlled JSW Steel went up a marginal 1.9 per cent to Rs 4,730 crore, supported by gains from sales of carbon credits and growth in volume, from the comparative quarter last year.
Profit from operations fell 22.1 per cent, with a fall in steel prices. A one-time annual benefit of Rs 60.2 crore from carbon credit sale helped the company to improve the profit.
Source: Business Standard
“We are looking at alternative sites, as the Mozambique project is commercially unviable,” Vice-Chairman and Managing Director Sajjan Jindal said.
The project has been put on hold after detailed studies. These showed burnt coal (ash) content is high, at 60 per cent. The company is now scouting for coal assets in Australia and some other countries, said Jindal.
The company has reported a 28 per cent rise in net profit at Rs 323 crore for the quarter ended September 30, 2009, compared with the same quarter last year. The increase was on account of a 54 per cent growth in crude steel production to 1.5 million tonnes. Also, the quarter saw a Rs 21-crore loss on foreign exchange transactions. This was a far smaller loss than the Rs 268-crore loss in the same quarter last year.
Net sales in the second quarter of this financial year for the Sajjan Jindal-controlled JSW Steel went up a marginal 1.9 per cent to Rs 4,730 crore, supported by gains from sales of carbon credits and growth in volume, from the comparative quarter last year.
Profit from operations fell 22.1 per cent, with a fall in steel prices. A one-time annual benefit of Rs 60.2 crore from carbon credit sale helped the company to improve the profit.
Source: Business Standard
Friday, October 23, 2009
Ivanhoe Targets 20 Million Tonnes Of Mongolia Coal
-- Ivanhoe Mines Ltd., developing a $4 billion copper and gold mine in Mongolia with Rio Tinto Group, is targeting long-term coal production of 20 million tons a year from the country.
The company, through its SouthGobi Energy Resources Ltd. unit, wants to supply 1 percent of China’s coal supply within 10 years, Chairman Robert Friedland said today in an interview in Beijing. China is the world’s biggest coal consumer.
Mongolia may become the “Saudi Arabia of coal,” Friedland said earlier at the China Eurasia Investment Forum.
SouthGobi’s Ovoot Tolgoi mine, located 45 kilometers (28 miles) north of the border with China, has 114.1 million metric tons of coal reserves, according to an October presentation on the company’s Web site. It’s targeting sales of almost 15 million tons by 2015.
Third-quarter coal sales from Ovoot Tolgoi were forecast to rise 17 percent to 450,000 tons, according to the presentation.
Ivanhoe Mines, based in Vancouver, owns 80 percent of SouthGobi.
Source: Bloomberg
The company, through its SouthGobi Energy Resources Ltd. unit, wants to supply 1 percent of China’s coal supply within 10 years, Chairman Robert Friedland said today in an interview in Beijing. China is the world’s biggest coal consumer.
Mongolia may become the “Saudi Arabia of coal,” Friedland said earlier at the China Eurasia Investment Forum.
SouthGobi’s Ovoot Tolgoi mine, located 45 kilometers (28 miles) north of the border with China, has 114.1 million metric tons of coal reserves, according to an October presentation on the company’s Web site. It’s targeting sales of almost 15 million tons by 2015.
Third-quarter coal sales from Ovoot Tolgoi were forecast to rise 17 percent to 450,000 tons, according to the presentation.
Ivanhoe Mines, based in Vancouver, owns 80 percent of SouthGobi.
Source: Bloomberg
Coal India Price Hike May Push Up Power Rates
The upward revision of coal prices by government-owned Coal India Limited (CIL), which took place last week, is likely to have a divergent impact on the fossil fuel’s primary consumers such as cement, power and steel sectors. While cement makers’ margins will be under pressure, power producers will make a move to pass on the increased burden to consumers.The three sectors account for about 72 per cent of the total coal demand in the country.
On October 16, CIL increased the price of coal from Eastern Coalfields (ECL) and Bharat Coking Coal (BCCL) by 15 per cent, while all other subsidiary companies were permitted a hike of 10 per cent. This price increase is expected to swell CIL’s net profit by approximately Rs 2,000 crore this financial year and by about Rs 4,100 crore in the following year.
However, for the consuming sectors, especially the cement industry, the increase in coal prices will squeeze profit margins at a time when prices are already low due to rapid capacity augmentation.
Despite the fact that coal accounted for around two-thirds of the power and fuel cost, and 20 per cent of the total cost for cement manufacturers, firms would be unable to pass on the hike in coal prices to end users due to the current business environment, a report by Crisil Research suggested.
“The recent coal price hike will increase the cost of cement by Rs 3-4 a bag. However, this has been absorbed by manufacturers in the short-term. In the long run, though, if conditions are right, we could pass on the cost,” Cement Manufacturers Association President and Shree Cement Managing Director HM Bangur said. For the power sector, though, the impact of the upward revision of coal prices would be neutral, as the rise in cost of fuel would be passed on by the generators.
On an average, tariffs of power plants using domestic coal as fuel are expected to increase by 3-4 per cent. In rupee terms, the tariffs are expected to increase on an average by Rs 0.06 a unit. The rise is expected to increase the tariffs for final power consumers as the price hike will be passed on, the Crisil report further stated.
With the respective regulatory authorities of each state overseeing power tariffs, generators would first have to ascertain the increase in input costs and then approach the regulator for approval.
However, with the coal mixture of each generator differing, the choice being between CIL coal and that of the imported variety, it would take sometime before power utilities decide on the actual magnitude of the increase in tariff. “But 100 per cent, we will have to pass on the cost,” an official from the RPG’s power utility CESC said.
As for the steel industry, the Crisil report indicated that the coal price hike by CIL was not expected to have a significant impact on the steel industry as non-coking coal, which was primarily used by the sector, did not account for a significant portion of the total cost of steel manufacturing, except for steel made through the sponge iron route. Moreover, the dependence of domestic steel producers on CIL is only 25-35 per cent of their total requirement due to the availability of captive mines and imports. But Visa Steel Chairman and President of the Indian Chamber of Commerce Vishambhar Saran said the ex-pit head prices of CIL were already comparable to international prices, barring the freight factor cost. “The cost of setting-up a plant is higher if one is to use domestically available coal as compared to imported coal. This is because the former is of inferior quality and consequently extra costs such as ash disposal must be counted into the total project cost,” he added.
Source: Business Standard
On October 16, CIL increased the price of coal from Eastern Coalfields (ECL) and Bharat Coking Coal (BCCL) by 15 per cent, while all other subsidiary companies were permitted a hike of 10 per cent. This price increase is expected to swell CIL’s net profit by approximately Rs 2,000 crore this financial year and by about Rs 4,100 crore in the following year.
However, for the consuming sectors, especially the cement industry, the increase in coal prices will squeeze profit margins at a time when prices are already low due to rapid capacity augmentation.
Despite the fact that coal accounted for around two-thirds of the power and fuel cost, and 20 per cent of the total cost for cement manufacturers, firms would be unable to pass on the hike in coal prices to end users due to the current business environment, a report by Crisil Research suggested.
“The recent coal price hike will increase the cost of cement by Rs 3-4 a bag. However, this has been absorbed by manufacturers in the short-term. In the long run, though, if conditions are right, we could pass on the cost,” Cement Manufacturers Association President and Shree Cement Managing Director HM Bangur said. For the power sector, though, the impact of the upward revision of coal prices would be neutral, as the rise in cost of fuel would be passed on by the generators.
On an average, tariffs of power plants using domestic coal as fuel are expected to increase by 3-4 per cent. In rupee terms, the tariffs are expected to increase on an average by Rs 0.06 a unit. The rise is expected to increase the tariffs for final power consumers as the price hike will be passed on, the Crisil report further stated.
With the respective regulatory authorities of each state overseeing power tariffs, generators would first have to ascertain the increase in input costs and then approach the regulator for approval.
However, with the coal mixture of each generator differing, the choice being between CIL coal and that of the imported variety, it would take sometime before power utilities decide on the actual magnitude of the increase in tariff. “But 100 per cent, we will have to pass on the cost,” an official from the RPG’s power utility CESC said.
As for the steel industry, the Crisil report indicated that the coal price hike by CIL was not expected to have a significant impact on the steel industry as non-coking coal, which was primarily used by the sector, did not account for a significant portion of the total cost of steel manufacturing, except for steel made through the sponge iron route. Moreover, the dependence of domestic steel producers on CIL is only 25-35 per cent of their total requirement due to the availability of captive mines and imports. But Visa Steel Chairman and President of the Indian Chamber of Commerce Vishambhar Saran said the ex-pit head prices of CIL were already comparable to international prices, barring the freight factor cost. “The cost of setting-up a plant is higher if one is to use domestically available coal as compared to imported coal. This is because the former is of inferior quality and consequently extra costs such as ash disposal must be counted into the total project cost,” he added.
Source: Business Standard
Zinc Rebounds To Over $1 A Pound
Zinc is back! After a couple of years in the wilderness, prices have rebounded back over US$1.00 a pound, and it happened faster than almost anyone imagined.
But maybe it is not as great as it looks. There are some forecasters suggesting that China has more than a million tonnes of unreported zinc stocks, and that the country now has a surplus of zinc concentrate.
Octagon Capital analyst Hendrick Visagie offers a different take — that these stockpiles do not even exist. In a note to clients, he pointed out that zinc consumption growth is related to steel consumption growth (usually slightly higher). This year, China's steel consumption is expected to grow 19%. Meanwhile, implied demand for zinc in the first eight months of the year was up 21% to 3.2 million tonnes.
"While restocking in China is included in the apparent consumption, we find it difficult to see mountains of zinc metal being stored in hidden warehouses in China," he wrote.
Mr. Visagie also dismissed concerns about rising zinc spot treatment charges, which are often a sign of an oversupplied concentrate market. He suggested that the Chinese are just modifying their spot terms to track the price escalator in the benchmark terms, and not necessarily because of any change in the availability of concentrates.
As a result, he suspects that China's demand for zinc is higher than most analysts give credit to, and there is no obvious surplus of concentrate.
"We believe that going forward, zinc prices will be stronger than most are forecasting, and in fact our average zinc price forecast for 2010 of US$1.25 per pound may be low," he wrote.
He pointed to Breakwater Resources Ltd., Farallon Mining Ltd. and Iberian Minerals Corp. as companies with strong leverage to zinc. HudBay Minerals Inc. also smelts its own concentrate and will benefit from a rise in the price, he noted.
Source: National Post
But maybe it is not as great as it looks. There are some forecasters suggesting that China has more than a million tonnes of unreported zinc stocks, and that the country now has a surplus of zinc concentrate.
Octagon Capital analyst Hendrick Visagie offers a different take — that these stockpiles do not even exist. In a note to clients, he pointed out that zinc consumption growth is related to steel consumption growth (usually slightly higher). This year, China's steel consumption is expected to grow 19%. Meanwhile, implied demand for zinc in the first eight months of the year was up 21% to 3.2 million tonnes.
"While restocking in China is included in the apparent consumption, we find it difficult to see mountains of zinc metal being stored in hidden warehouses in China," he wrote.
Mr. Visagie also dismissed concerns about rising zinc spot treatment charges, which are often a sign of an oversupplied concentrate market. He suggested that the Chinese are just modifying their spot terms to track the price escalator in the benchmark terms, and not necessarily because of any change in the availability of concentrates.
As a result, he suspects that China's demand for zinc is higher than most analysts give credit to, and there is no obvious surplus of concentrate.
"We believe that going forward, zinc prices will be stronger than most are forecasting, and in fact our average zinc price forecast for 2010 of US$1.25 per pound may be low," he wrote.
He pointed to Breakwater Resources Ltd., Farallon Mining Ltd. and Iberian Minerals Corp. as companies with strong leverage to zinc. HudBay Minerals Inc. also smelts its own concentrate and will benefit from a rise in the price, he noted.
Source: National Post
Thursday, October 22, 2009
Nippon Yusen, Anshan Sign Iron Ore Contracts
Nippon Yusen KK has inked two long term iron ore shipping contracts with Chinese steel giant Anshan Iron and Steel Group Corp.
The first contract is for 10 years, to 2019 and is for a total of 15 million tonnes of iron ore to be shipped from Western Australia to China. The second contract is a five year agreement beginning in January under which 2.5 million tonnes of iron ore will be shipped from Brazil to China.
Nippon Yusen will primarily use capesize bulk carriers which can hold around 170,000 tons of cargo to transport the ore. By entering into long term contracts, the shipping company aims to create a stable earnings structure and reduce exposure to market fluctuations.
Anshan, which produced 23.4 million tonnes of crude steel in 2008 is looking to secure iron ore shipping capacity in response to growing steel production. With shipments to Japanese steelmakers, who have been Nippon Yusen's main customers, leveling off, the company aims to turn shipments to Chinese steelmakers which produce nearly 40% of the world crude steel into a new earnings source.
Source: Steel Guru/Trading Markets
The first contract is for 10 years, to 2019 and is for a total of 15 million tonnes of iron ore to be shipped from Western Australia to China. The second contract is a five year agreement beginning in January under which 2.5 million tonnes of iron ore will be shipped from Brazil to China.
Nippon Yusen will primarily use capesize bulk carriers which can hold around 170,000 tons of cargo to transport the ore. By entering into long term contracts, the shipping company aims to create a stable earnings structure and reduce exposure to market fluctuations.
Anshan, which produced 23.4 million tonnes of crude steel in 2008 is looking to secure iron ore shipping capacity in response to growing steel production. With shipments to Japanese steelmakers, who have been Nippon Yusen's main customers, leveling off, the company aims to turn shipments to Chinese steelmakers which produce nearly 40% of the world crude steel into a new earnings source.
Source: Steel Guru/Trading Markets
SA Ferrochrome Producers Call For Chrome Ore Export Restrictions
SA’s ferrochrome producers are calling for government support against their Chinese counterparts in what has emerged as another trade skirmish between the two countries.
The battle to retain leadership of the global ferrochrome market and remain a key supplier to the Chinese stainless steel industry amplifies the struggle of clothing and textile makers against a cheap Chinese goods onslaught.
Ferrochrome producers have called for restrictions on chromite ore exports to China, which is 99%-dependent on the imports — largely from SA — for its ferrochrome production.
But the proposals are not likely to win support from platinum producers, who produce chromite ore as a by-product for export.
The ferrochrome lobby hopes that by increasing the cost and limiting the quantity of chromite ore exported, the price of Chinese ferrochrome would have to rise, making them more competitive.
The proposed quota and export duty on chromite ore would be a tit-for-tat response to China’s imposition of a stiff 40% export duty on metallurgical coke, which is the sole ingredient that South African ferrochrome producers import — largely from China.
The Chinese government is subsidising various raw material imports (including chromium) to foster beneficiation.
Ferrochrome manufacturers have met the government, and yesterday with MPs, to lobby for urgent protectionist measures.
They say that Chinese competition, together with escalating electricity tariffs and the stronger rand, have threatened their international competitiveness.
Most expect to suffer a “significant loss” this year as a result of the plunge in demand due to the global recession.
The seven producers in the lobby group — including Xstrata Alloys, Samancor Chrome and International Ferrometals — represent about 90% of SA’s ferrochrome production and about 44% of global production.
SA has about 65% of the world’s chrome reserves.
Xstrata Alloys MD Deon Dreyer told Parliament’s mineral resources committee the producers had been undermined by the recent surge in Chinese ferrochrome production.
In a document presented to the Department of Mineral Resources and MPs, the manufacturers asked for legislation to curtail unbeneficiated chromite ore exports from SA to international ferrochrome-producing countries. These exports should be restricted to integrated ferrochrome producers only and limited to 30% of the ore-equivalent ferrochrome production capacity.
This would mean that for chromite ore exports to increase there would have to be an increase in investment in beneficiation capacity. In addition, an export duty of 100 a ton of chromite ore should be payable, along the lines of a measure adopted in India.
“The introduction of Chinese ferrochrome production and the consequent surge in traded ore since 2004 has seen integrated (mining and smelting) production declining from 86% in 2004 to 75% in 2008. SA’s market share over the same period has declined from 51% to 44% against China’s growth in market share from 9% to 18%,” the document said.
As a result of the displaced market share to China, South African capacity idled at 28% last year, representing a 2,5bn loss of sales to China.
Source: Business Day
The battle to retain leadership of the global ferrochrome market and remain a key supplier to the Chinese stainless steel industry amplifies the struggle of clothing and textile makers against a cheap Chinese goods onslaught.
Ferrochrome producers have called for restrictions on chromite ore exports to China, which is 99%-dependent on the imports — largely from SA — for its ferrochrome production.
But the proposals are not likely to win support from platinum producers, who produce chromite ore as a by-product for export.
The ferrochrome lobby hopes that by increasing the cost and limiting the quantity of chromite ore exported, the price of Chinese ferrochrome would have to rise, making them more competitive.
The proposed quota and export duty on chromite ore would be a tit-for-tat response to China’s imposition of a stiff 40% export duty on metallurgical coke, which is the sole ingredient that South African ferrochrome producers import — largely from China.
The Chinese government is subsidising various raw material imports (including chromium) to foster beneficiation.
Ferrochrome manufacturers have met the government, and yesterday with MPs, to lobby for urgent protectionist measures.
They say that Chinese competition, together with escalating electricity tariffs and the stronger rand, have threatened their international competitiveness.
Most expect to suffer a “significant loss” this year as a result of the plunge in demand due to the global recession.
The seven producers in the lobby group — including Xstrata Alloys, Samancor Chrome and International Ferrometals — represent about 90% of SA’s ferrochrome production and about 44% of global production.
SA has about 65% of the world’s chrome reserves.
Xstrata Alloys MD Deon Dreyer told Parliament’s mineral resources committee the producers had been undermined by the recent surge in Chinese ferrochrome production.
In a document presented to the Department of Mineral Resources and MPs, the manufacturers asked for legislation to curtail unbeneficiated chromite ore exports from SA to international ferrochrome-producing countries. These exports should be restricted to integrated ferrochrome producers only and limited to 30% of the ore-equivalent ferrochrome production capacity.
This would mean that for chromite ore exports to increase there would have to be an increase in investment in beneficiation capacity. In addition, an export duty of 100 a ton of chromite ore should be payable, along the lines of a measure adopted in India.
“The introduction of Chinese ferrochrome production and the consequent surge in traded ore since 2004 has seen integrated (mining and smelting) production declining from 86% in 2004 to 75% in 2008. SA’s market share over the same period has declined from 51% to 44% against China’s growth in market share from 9% to 18%,” the document said.
As a result of the displaced market share to China, South African capacity idled at 28% last year, representing a 2,5bn loss of sales to China.
Source: Business Day
OMM Now One Of World's Biggest Manganese Companies
Record production has transformed WA-based resources group OM Holdings into one of the world's biggest manganese companies.
It today reported a record quarterly production of 205,372 tonnes and a record monthly production in July of 77,398 tonnes - a 25 per cent jump in tonnages and a 31 per cent leap in manganese unit production compared with the previous quarter - from its flagship Bootu Creek mine near Tennant Creek in the Northern Territory.
OM Holdings also reported plunging production costs as yields and production increased. The cost is at $3.20 a metric ton - the lowest in the mine's history - while overall third-quarter costs are $3.80, down 20 per cent on the second quarter and 44 per cent lower than the first quarter of this year.
A second processing plant, now close to completion, will push production to more than 1 million tonnes a year.
It has forecast the fourth-quarter production at 280,000 tonnes at 38 per cent manganese. Shipping and sales is expected to be 240,000 tonnes, up from 185,385 tonnes in the third quarter.
The company's wholly-owned Qinzhou smelter in China processed and sold 10,527 tonnes of high-carbon ferro manganese in the third quarter - up three-fold on the previous quarter - as Chinese demand for the metal increased.
This smelter is to be complemented by a new sinter ore plant that is expected to be commissioned at the end of this year.
OM Holding's chief executive, Peter Toth, says 2010 will be an exciting year as it benefits from the completion of plant upgrades and additions.
In a deal worth $294 million, the company has also bought a 49.9 per cent interest in South Africa's Tshipi Kalahari manganese project.
Subject to shareholders approval, OM Holdings will buy out five co-investors in the project in return for 139.9 million OM Holdings shares.
The company will also pay $49.2 million for a 20 per cent interest in Ntsimbintle Mining which owns the remaining 50.1 per cent of the Tshipi project.
``The proposed transaction will propel OMH into the league of leading manganese producers with a diversified, long-life, high-grade and low-cost ore resource supported by full participation across the entire manganese value chain, including the China-focused marketing and distribution network,'' says Mr Toth.
OM Holdings also has exploration potential at Bootu Creek over the tenement's 3326sq.km and has a 12 per cent share in Shaw River Resources - which is exploring for manganese in WA - and a 10 per cent stake in Territory Resources which operates the Frances Creek iron ore mine in the Northern Territory.
Source: Perth Now
It today reported a record quarterly production of 205,372 tonnes and a record monthly production in July of 77,398 tonnes - a 25 per cent jump in tonnages and a 31 per cent leap in manganese unit production compared with the previous quarter - from its flagship Bootu Creek mine near Tennant Creek in the Northern Territory.
OM Holdings also reported plunging production costs as yields and production increased. The cost is at $3.20 a metric ton - the lowest in the mine's history - while overall third-quarter costs are $3.80, down 20 per cent on the second quarter and 44 per cent lower than the first quarter of this year.
A second processing plant, now close to completion, will push production to more than 1 million tonnes a year.
It has forecast the fourth-quarter production at 280,000 tonnes at 38 per cent manganese. Shipping and sales is expected to be 240,000 tonnes, up from 185,385 tonnes in the third quarter.
The company's wholly-owned Qinzhou smelter in China processed and sold 10,527 tonnes of high-carbon ferro manganese in the third quarter - up three-fold on the previous quarter - as Chinese demand for the metal increased.
This smelter is to be complemented by a new sinter ore plant that is expected to be commissioned at the end of this year.
OM Holding's chief executive, Peter Toth, says 2010 will be an exciting year as it benefits from the completion of plant upgrades and additions.
In a deal worth $294 million, the company has also bought a 49.9 per cent interest in South Africa's Tshipi Kalahari manganese project.
Subject to shareholders approval, OM Holdings will buy out five co-investors in the project in return for 139.9 million OM Holdings shares.
The company will also pay $49.2 million for a 20 per cent interest in Ntsimbintle Mining which owns the remaining 50.1 per cent of the Tshipi project.
``The proposed transaction will propel OMH into the league of leading manganese producers with a diversified, long-life, high-grade and low-cost ore resource supported by full participation across the entire manganese value chain, including the China-focused marketing and distribution network,'' says Mr Toth.
OM Holdings also has exploration potential at Bootu Creek over the tenement's 3326sq.km and has a 12 per cent share in Shaw River Resources - which is exploring for manganese in WA - and a 10 per cent stake in Territory Resources which operates the Frances Creek iron ore mine in the Northern Territory.
Source: Perth Now
Coking Coal Market To Get Pricey
John Surma, CEO of U.S. Steel, predicts at the Met Coke World Summit in Pittsburgh that buyers will need more steel in 2010 than during the recession-not only boosting demand for steel but also for the coking coal, iron ore, scrap, limestone and ferroalloys needed to make raw steel.
Surma is quoted by the Pittsburgh Tribune-Review newspaper as saying the domestic steel industry's operating rate-now around 62% of capacity-will have to be boosted to meet anticipated higher 2010 demand for steel. And that will increase demand for coking coal substantially.
In fact, CRU Group consultant Ronnie Cecil forecasts at the meeting that production of coke, made by burning metallurgical coal and used as a fuel in steel mill blast furnaces, should increase to between 25 million and 28 million tons in 2010, from the projected 15 million tons this year.
In its third-quarter report this week, Peabody Energy say it expects to see demand and prices to improve soon for metallurgical coal, propelled by growing demand in China and India. Coking coal is selling around $143/ton these days in the U.S. Still, higher demand could bring an increase in coke prices to $200-$250/ton next year, Cecil forecasts.
The metallurgical coal market has tightened appreciably in recent months because of the emergence of China as a major consumer. Macquarie Research says China has moved from a marginal net importer last year to importing as much metallurgical coal as Europe this year. China now is the second largest importer in the world after Japan.
The latest Macquarie Research report says that, in the absence of 2009 Chinese demand, exports through August would have declined 31.8%. "We would have seen more mines shutdown and more prolonged shutdowns across Australia, the U.S. and Canada, "the report says. "Given China's emergence, however, and given recovering steel production rates through the world outside China, we are now seeing mines being brought back on line and exports surging again toward practical capacities."
Coking coal supplies from China have been limited by a 40% duty it has placed on exports of metallurgical coal. That has boosted the Chinese export price to more than $350 a ton, thus limiting its demand on the international market.
Soure: Purchasing.com
Surma is quoted by the Pittsburgh Tribune-Review newspaper as saying the domestic steel industry's operating rate-now around 62% of capacity-will have to be boosted to meet anticipated higher 2010 demand for steel. And that will increase demand for coking coal substantially.
In fact, CRU Group consultant Ronnie Cecil forecasts at the meeting that production of coke, made by burning metallurgical coal and used as a fuel in steel mill blast furnaces, should increase to between 25 million and 28 million tons in 2010, from the projected 15 million tons this year.
In its third-quarter report this week, Peabody Energy say it expects to see demand and prices to improve soon for metallurgical coal, propelled by growing demand in China and India. Coking coal is selling around $143/ton these days in the U.S. Still, higher demand could bring an increase in coke prices to $200-$250/ton next year, Cecil forecasts.
The metallurgical coal market has tightened appreciably in recent months because of the emergence of China as a major consumer. Macquarie Research says China has moved from a marginal net importer last year to importing as much metallurgical coal as Europe this year. China now is the second largest importer in the world after Japan.
The latest Macquarie Research report says that, in the absence of 2009 Chinese demand, exports through August would have declined 31.8%. "We would have seen more mines shutdown and more prolonged shutdowns across Australia, the U.S. and Canada, "the report says. "Given China's emergence, however, and given recovering steel production rates through the world outside China, we are now seeing mines being brought back on line and exports surging again toward practical capacities."
Coking coal supplies from China have been limited by a 40% duty it has placed on exports of metallurgical coal. That has boosted the Chinese export price to more than $350 a ton, thus limiting its demand on the international market.
Soure: Purchasing.com
Wednesday, October 21, 2009
Shanxi Coking Coal Prices Stable
It is reported that Shanxi coking coal market has been stable recently. With the autumn holiday gone, production is being resumed steadily, and the price of coking coal remains stale. Demand for coking coal has increased as the steel market has just shown a little improvement.
In Hebei province, more deals have been made in the coke market than before, though the coke price has remained unchanged in the past week. In Taiyuan, Shanxi province, the ex-factory price of clean coal price remains at CNY 1,120 per tonne to CNY 1,150 per tonne. In Xinzhou, the clean coal ex-factory price remains at CNY 1,200 per tonne to CNY 1,250 per tonne. In Linfen, where the resumption of coal production has been comparatively slow, the clean coal ex factory price has stayed at CNY 1,250 per tonne to CNY 1,300 per tonne. As coking coal resources are tight, price of coking coal still remains robust.
Generally speaking, coke plants still suffer from high production costs, for the coking coal price remains high. The coking coal market is expected to be flat in late October with price stable as a whole.
Source: Steel Guru
In Hebei province, more deals have been made in the coke market than before, though the coke price has remained unchanged in the past week. In Taiyuan, Shanxi province, the ex-factory price of clean coal price remains at CNY 1,120 per tonne to CNY 1,150 per tonne. In Xinzhou, the clean coal ex-factory price remains at CNY 1,200 per tonne to CNY 1,250 per tonne. In Linfen, where the resumption of coal production has been comparatively slow, the clean coal ex factory price has stayed at CNY 1,250 per tonne to CNY 1,300 per tonne. As coking coal resources are tight, price of coking coal still remains robust.
Generally speaking, coke plants still suffer from high production costs, for the coking coal price remains high. The coking coal market is expected to be flat in late October with price stable as a whole.
Source: Steel Guru
Essar Drops Out Of Race For Rocklands
Essar Steel has dropped out of the race to acquire Rocklands Richfield, leaving only Jindal Steel & Power in the fray.
The move by Ruia-owned Essar, which has interests in steel, shipping and telecom, comes less than two weeks after it joined the race for the Australian coal miner.
Rocklands today informed the Australian Securities Exchange that Essar did not wish to proceed with its AUS$0.50-a-share offer, which was made public on October 7.
Essar made the preliminary and non-binding offer even after Congress MP Navin Jindal’s JSPL signed a term sheet on September 22 with Rocklands.
JSPL had proposed to acquire a 100 per cent stake in the Australian company for AUS$0.42 a share.
In a letter to Rocklands, the Ruias did not offer any explanation on why they chose to exit abruptly.
An Essar spokesperson said: “As a group we keep looking at various opportunities but it is not our policy to comment on any specific deal.”
Once Essar’s withdrawal was made public, Rocklands’ share plunged 15.29 per cent to close at AUS$0.36.
Rocklands said Essar’s decision was based on external considerations and was not a reflection on the company.
Confidential and non-public information was not shared with the Essar management during the period its bid was valid.
Rocklands has written to Essar seeking clarifications on why it withdrew the proposal and whether it is possible for Essar to continue with the proposal. Essar will reply to the letter next week.
The Rocklands management was happy to see two Indian firms bidding for the company.
In the absence of Essar’s proposal, JSPL’s offer is now on. Rocklands said JSPL was already carrying out a due diligence exercise.
JSPL holds a 12.75 per cent stake in Rocklands. The firm shored up its holding in the Australian miner after Essar’s proposal became public.
Rocklands claims to have coal resources of 900 million tonnes. JSPL is setting up steel and power plants in the country and will require coal, especially the coking variety not abundantly available in India.
Rocklands has two main assets — met coke plants in China and coal mines in Australia.
Source: Calcutta Telegraph
The move by Ruia-owned Essar, which has interests in steel, shipping and telecom, comes less than two weeks after it joined the race for the Australian coal miner.
Rocklands today informed the Australian Securities Exchange that Essar did not wish to proceed with its AUS$0.50-a-share offer, which was made public on October 7.
Essar made the preliminary and non-binding offer even after Congress MP Navin Jindal’s JSPL signed a term sheet on September 22 with Rocklands.
JSPL had proposed to acquire a 100 per cent stake in the Australian company for AUS$0.42 a share.
In a letter to Rocklands, the Ruias did not offer any explanation on why they chose to exit abruptly.
An Essar spokesperson said: “As a group we keep looking at various opportunities but it is not our policy to comment on any specific deal.”
Once Essar’s withdrawal was made public, Rocklands’ share plunged 15.29 per cent to close at AUS$0.36.
Rocklands said Essar’s decision was based on external considerations and was not a reflection on the company.
Confidential and non-public information was not shared with the Essar management during the period its bid was valid.
Rocklands has written to Essar seeking clarifications on why it withdrew the proposal and whether it is possible for Essar to continue with the proposal. Essar will reply to the letter next week.
The Rocklands management was happy to see two Indian firms bidding for the company.
In the absence of Essar’s proposal, JSPL’s offer is now on. Rocklands said JSPL was already carrying out a due diligence exercise.
JSPL holds a 12.75 per cent stake in Rocklands. The firm shored up its holding in the Australian miner after Essar’s proposal became public.
Rocklands claims to have coal resources of 900 million tonnes. JSPL is setting up steel and power plants in the country and will require coal, especially the coking variety not abundantly available in India.
Rocklands has two main assets — met coke plants in China and coal mines in Australia.
Source: Calcutta Telegraph
Pike River Looks To Customers For $20million Funding
Pike River Coal may turn to its Asia-Pacific customers with a share offering to raise $20 million needed for operational outgoings in the first half of 2010.
In a quarterly report to shareholders, the NZX-listed company said despite operational improvements over the last two months, pushed-out dates for the first coal deliveries and sale proceeds had increased working capital costs.
Pike River is waiting for primary funder Liberty Harbor to extend the $US27.5 million convertible bond from November to June 2010, as it requires the company to be capable of producing 800,000 tonnes in the six months from condition date – unlikely to be met.
But it was confident of funding the cost of delays and any bond redemption obligations, the report said.
However, about $20 million is needed to bolster existing funds and loan facilities for working capital, which may come from increased debt or equity, the company said.
Chief executive Gordon Ward said an Australian-based specialist coal industry commercial adviser had canvassed its Asia-Pacific customers and believed there was strong interest in securing a long term coal off-take agreement at competitive market prices, possibly including a share placement at a premium to Pike River’s share price.
Mr Ward would not say what the premium price might be. "The board is yet to decide which way it will go [through equity or debt options]," he said.
The company contracted coal sales for hard coking coal to March at $US128 a tonne. By October, international spot prices reached $US160 a tonne, with some speculation it will go higher, up to $US200 a tonne next year.
Considerable demand was coming from China, which was estimated to have imported 15.7 million tonnes of hard coking coal in the eight months to August – offsetting reduced demand in Europe and the US.
Last month, Mr Ward said the company was continuing talks with China and Korea, despite most of its production already committed for at least the next three years.
Its first shipment will be a 20,000 to 30,000 tonne cargo to India in the January to March quarter.
The company has a 14,000 tonne stockpile at its coal preparation plant and production levels are expected to ramp-up to more than 15,000 tonnes a month as roadways and other infrastructure is completed.
In the next few months, Pike River will install ventilation structures, extend coal slurry flumes and main underground fans.
The first hydro-mining is scheduled for the April to June 2010 quarter.
Source: National Business Review
In a quarterly report to shareholders, the NZX-listed company said despite operational improvements over the last two months, pushed-out dates for the first coal deliveries and sale proceeds had increased working capital costs.
Pike River is waiting for primary funder Liberty Harbor to extend the $US27.5 million convertible bond from November to June 2010, as it requires the company to be capable of producing 800,000 tonnes in the six months from condition date – unlikely to be met.
But it was confident of funding the cost of delays and any bond redemption obligations, the report said.
However, about $20 million is needed to bolster existing funds and loan facilities for working capital, which may come from increased debt or equity, the company said.
Chief executive Gordon Ward said an Australian-based specialist coal industry commercial adviser had canvassed its Asia-Pacific customers and believed there was strong interest in securing a long term coal off-take agreement at competitive market prices, possibly including a share placement at a premium to Pike River’s share price.
Mr Ward would not say what the premium price might be. "The board is yet to decide which way it will go [through equity or debt options]," he said.
The company contracted coal sales for hard coking coal to March at $US128 a tonne. By October, international spot prices reached $US160 a tonne, with some speculation it will go higher, up to $US200 a tonne next year.
Considerable demand was coming from China, which was estimated to have imported 15.7 million tonnes of hard coking coal in the eight months to August – offsetting reduced demand in Europe and the US.
Last month, Mr Ward said the company was continuing talks with China and Korea, despite most of its production already committed for at least the next three years.
Its first shipment will be a 20,000 to 30,000 tonne cargo to India in the January to March quarter.
The company has a 14,000 tonne stockpile at its coal preparation plant and production levels are expected to ramp-up to more than 15,000 tonnes a month as roadways and other infrastructure is completed.
In the next few months, Pike River will install ventilation structures, extend coal slurry flumes and main underground fans.
The first hydro-mining is scheduled for the April to June 2010 quarter.
Source: National Business Review
Tuesday, October 20, 2009
Merafe Ferrochrome Production Down 47 Per Cent
Merafe Resources said Tuesday that ferro chrome production for the Xstrata-Merafe Chrome Venture for the first nine months of 2009 was 47 percent lower than the same period in 2008 as a result of the temporary suspension of up to 80 percent of production capacity, as announced in early 2009.
In response to improved demand, furnace production has been restored to 85 percent of the Venture's total capacity, the company said.
During the third quarter, the rand continued to strengthen against the US dollar and is currently trading near its 14 month highs. The strong rand has meant margins remain under pressure, Merafe said.
On 5 October 2009, Merafe announced that the European benchmark ferro chrome price had been settled at $1.03 per pound for the fourth quarter of 2009, an increase of 16 percent from $0.89 per pound in the third quarter of 2009.
For the third quarter, attributable production was 63kt compared with 79kt in the same quarter last year. Attributable production for the nine months ended September amounted to 126kt, compared with 238kt for the same period last year.
Source: Business Report
In response to improved demand, furnace production has been restored to 85 percent of the Venture's total capacity, the company said.
During the third quarter, the rand continued to strengthen against the US dollar and is currently trading near its 14 month highs. The strong rand has meant margins remain under pressure, Merafe said.
On 5 October 2009, Merafe announced that the European benchmark ferro chrome price had been settled at $1.03 per pound for the fourth quarter of 2009, an increase of 16 percent from $0.89 per pound in the third quarter of 2009.
For the third quarter, attributable production was 63kt compared with 79kt in the same quarter last year. Attributable production for the nine months ended September amounted to 126kt, compared with 238kt for the same period last year.
Source: Business Report
ETI Reports Ferrochrome Oversupply
ETI Krom of Turkey is satisfied by the fourth quarter charge chrome contract price of 103 US cents per pound/Cr with European steelmakers even though the cost structure during July to December 2009 has been changed significantly.
Mr Robert Yuksel Yildirim president & CEO of ETI Krom said that "A 14 US cents per pound rise over third quarter levels will only cover some parts of those adjusted costs."
The price represents, perhaps more than usual, a reference point from which sizeable discounts will apply. Two months ago FeCr producers were confident that spot prices would continue to firm on the back of an improvement in contract prices. However, in reality this has not been the case at the moment.
Turkey is also among the countries which are suffering from a very weak USD and the appreciated TRL is also weighing a lot on our production costs. Despite ETI Krom believes that the mid and long term outlook is positive and better than 2009, he sees no reason today to run their furnaces at full capacity in Turkey."
Mr Yildirim said that "The European alloy steel and stainless steel output has still not yet fully recovered, so we see no reason today to build up FeCr stocks. We try to watch very closely the developments and demand at the market. We are reviewing our current strategy according to current market indications and eager to run our furnaces at half capacity."
Source: Steel Guru
Mr Robert Yuksel Yildirim president & CEO of ETI Krom said that "A 14 US cents per pound rise over third quarter levels will only cover some parts of those adjusted costs."
The price represents, perhaps more than usual, a reference point from which sizeable discounts will apply. Two months ago FeCr producers were confident that spot prices would continue to firm on the back of an improvement in contract prices. However, in reality this has not been the case at the moment.
Turkey is also among the countries which are suffering from a very weak USD and the appreciated TRL is also weighing a lot on our production costs. Despite ETI Krom believes that the mid and long term outlook is positive and better than 2009, he sees no reason today to run their furnaces at full capacity in Turkey."
Mr Yildirim said that "The European alloy steel and stainless steel output has still not yet fully recovered, so we see no reason today to build up FeCr stocks. We try to watch very closely the developments and demand at the market. We are reviewing our current strategy according to current market indications and eager to run our furnaces at half capacity."
Source: Steel Guru
Troubled Times For India's Ferro Alloys Industry
Ferro alloys, the intermediate products used in the making of steel as deoxidants and for rust proofing, have seen their fortunes take a steep dive since October 2008. Some recent improvements in prices are not proving enough to balm the wounds of manufacturers. That the prospects for ferro alloys are linked to steel are stating the obvious.
The Indian ferro alloys industry is much younger than the steel industry here. But in the past four decades, the former has developed capacity of 3.64 million tonnes, including 2.1 million tonnes of manganese alloys and 1.3 million tonnes of chromium alloys and that leaves it with a good amount of export surplus. In the process it has become particularly vulnerable to global trading condition.
Thanks to the long good run of the global steel industry till the third quarter of 2008, ferro alloys prospered in tandem. The first half was witness to global ferro chrome producers struggling to execute orders from the steel industry. At one point then, high carbon ferro chrome fetched record spot prices of $2 a pound, CIF basis.
The bottom subsequently, however, fell out of ferro alloys as steel makers, except in India and China, were obliged to cut capacity use ranging from 25 per cent to 50 percent. The disappearance of steel demand from construction, automobile and machinery building sectors as the major economies slipped into recession, particularly in the final quarter, which saw the world register a negative growth in the metal’s production during 2008.
Ispat Industries chairman Pramod Mittal who also leads a major ferro alloys group says trading condition became so difficult since November that ferro alloys units in South Africa responded to the crisis by switching off furnace capacity from 80 to 100 per cent. The severe power crisis in that country also contributed to the misery of ferro alloys manufacturers there. The uncertain power outlook is leading to indefinite postponement of eight major South African ferro chrome projects totalling capacity of 1.9 million tonnes.
May not be to the same extent as in South Africa, our ferro alloys industry which generally operates at capacity of 65 to 70 per cent had also to effect some sharp cuts in production since November when export orders from Japan, South Korea, Europe and the US virtually dried up. Indian ferro alloys exports were down from 902,542 tonnes in 2007-08 to 849,291 tonnes last year. Exports would have been much less but for good shipments in the first half.
Scan the balance sheets of the listed ferro alloys companies and you will know what a hit the industry took in 2008-09. Remember they are the ones with the advantage of mines linkages and own power units. So where the market collapse has left the ones without the twin benefits is not difficult to imagine.
The earlier happy days encouraged the leading ferro alloys groups to plan ambitious capex programmes. Responding to the now difficult times, Mittal has done some deep pruning of Balasore Alloys’ capex plans leaving only the building of captive power complex intact. Difficult times call for moderation of ambition and this is happening in the industry across the board.
As is the want of manufacturers everywhere, faced with big falls in demand and prices, our ferro alloys units are seeing the devil in the liberal import regime for the finished intermediates. After much pleading with the government, they could get a levy of 5 per cent imposed on ferro alloys imports.
But will that be enough to curb imports? Industry spokesperson T S Sundaresam wants a 10 per cent customs on all ferro alloys except ferro nickel which is not domestically available. This and even higher rates of import duty were prevalent in the past. The industry is asking for a 10 per cent customs so that it gets a “level playing field.” Moreover, the duty should necessarily be calibrated in tune with the changing trade reality.
Sundaresam argues that the demand for level playing field, which should not be mixed up with seeking protection, also calls for the government doing away with charging a 2 per cent import duty on chrome and manganese ores. The 3 per cent spread cannot compensate for the three to four times higher power bill that Indian manufacturers bear compared with their counterparts in South Africa, Kazakhstan and Russia.
The industry does not tire of complaining about the chrome and manganese ores pricing policy of state enterprises MOIL and OMC owning vast tracts of mineral bearing areas. Moreover, ferro alloys units outside Orissa are angry that OMC shies away from giving them any chrome ore on one pretext or another. Such complaints need to be looked into and corrected if proved true.
Source: Business Standard
The Indian ferro alloys industry is much younger than the steel industry here. But in the past four decades, the former has developed capacity of 3.64 million tonnes, including 2.1 million tonnes of manganese alloys and 1.3 million tonnes of chromium alloys and that leaves it with a good amount of export surplus. In the process it has become particularly vulnerable to global trading condition.
Thanks to the long good run of the global steel industry till the third quarter of 2008, ferro alloys prospered in tandem. The first half was witness to global ferro chrome producers struggling to execute orders from the steel industry. At one point then, high carbon ferro chrome fetched record spot prices of $2 a pound, CIF basis.
The bottom subsequently, however, fell out of ferro alloys as steel makers, except in India and China, were obliged to cut capacity use ranging from 25 per cent to 50 percent. The disappearance of steel demand from construction, automobile and machinery building sectors as the major economies slipped into recession, particularly in the final quarter, which saw the world register a negative growth in the metal’s production during 2008.
Ispat Industries chairman Pramod Mittal who also leads a major ferro alloys group says trading condition became so difficult since November that ferro alloys units in South Africa responded to the crisis by switching off furnace capacity from 80 to 100 per cent. The severe power crisis in that country also contributed to the misery of ferro alloys manufacturers there. The uncertain power outlook is leading to indefinite postponement of eight major South African ferro chrome projects totalling capacity of 1.9 million tonnes.
May not be to the same extent as in South Africa, our ferro alloys industry which generally operates at capacity of 65 to 70 per cent had also to effect some sharp cuts in production since November when export orders from Japan, South Korea, Europe and the US virtually dried up. Indian ferro alloys exports were down from 902,542 tonnes in 2007-08 to 849,291 tonnes last year. Exports would have been much less but for good shipments in the first half.
Scan the balance sheets of the listed ferro alloys companies and you will know what a hit the industry took in 2008-09. Remember they are the ones with the advantage of mines linkages and own power units. So where the market collapse has left the ones without the twin benefits is not difficult to imagine.
The earlier happy days encouraged the leading ferro alloys groups to plan ambitious capex programmes. Responding to the now difficult times, Mittal has done some deep pruning of Balasore Alloys’ capex plans leaving only the building of captive power complex intact. Difficult times call for moderation of ambition and this is happening in the industry across the board.
As is the want of manufacturers everywhere, faced with big falls in demand and prices, our ferro alloys units are seeing the devil in the liberal import regime for the finished intermediates. After much pleading with the government, they could get a levy of 5 per cent imposed on ferro alloys imports.
But will that be enough to curb imports? Industry spokesperson T S Sundaresam wants a 10 per cent customs on all ferro alloys except ferro nickel which is not domestically available. This and even higher rates of import duty were prevalent in the past. The industry is asking for a 10 per cent customs so that it gets a “level playing field.” Moreover, the duty should necessarily be calibrated in tune with the changing trade reality.
Sundaresam argues that the demand for level playing field, which should not be mixed up with seeking protection, also calls for the government doing away with charging a 2 per cent import duty on chrome and manganese ores. The 3 per cent spread cannot compensate for the three to four times higher power bill that Indian manufacturers bear compared with their counterparts in South Africa, Kazakhstan and Russia.
The industry does not tire of complaining about the chrome and manganese ores pricing policy of state enterprises MOIL and OMC owning vast tracts of mineral bearing areas. Moreover, ferro alloys units outside Orissa are angry that OMC shies away from giving them any chrome ore on one pretext or another. Such complaints need to be looked into and corrected if proved true.
Source: Business Standard
New Mangalore Port Trust Signs Iron Ore Pact
The New Mangalore Port Trust has signed concession agreement with M/s Sical Iron Ore Terminal (Mangalore) Limited for the project to set up iron ore handling facilities at deep draft multi purpose berth (No. 14) on built operate and transfer (BOT) basis.
A release by NMPT chief engineer (civil) M R Hedaoo stated that NMPT chairman P Tamilvanan and Sical Iron Ore Terminal (Mangalore) managing director L R Sridhar signed the agreement here on October 19.
The project envisages setting up of mechanical facilities for handling iron ore in the deep draft berth of New Mangalore Port on BOT basis. The estimated project cost is is Rs.277.11 crore. The selected firm has offered 37% gross revenue share to port and Rs 11 crore as license fee every year, he said.
Source: Times Of India
A release by NMPT chief engineer (civil) M R Hedaoo stated that NMPT chairman P Tamilvanan and Sical Iron Ore Terminal (Mangalore) managing director L R Sridhar signed the agreement here on October 19.
The project envisages setting up of mechanical facilities for handling iron ore in the deep draft berth of New Mangalore Port on BOT basis. The estimated project cost is is Rs.277.11 crore. The selected firm has offered 37% gross revenue share to port and Rs 11 crore as license fee every year, he said.
Source: Times Of India
Monday, October 19, 2009
Sarthak Industries To Diversify Into Mining
Sarthak Industries Ltd has informed the BSE that the company has decided to diversify in the business of mining and industries based thereon.
To initiate the same, it has made several mining applications for allotment of major minerals in Madhya Pradesh, Maharashtra and Karnataka for securing continuous availability of raw material through its own mines.
These initiatives have now resulted in the form of securing in principle approval for a manganese ore mine spread over an area of 95 hectares in Chhatarpur district of Madhya Pradesh.
For other mining applications, the company expects to get approval very soon. In near future, full fledged mining activities in these mines will start
Source: The Hindu Business Line
To initiate the same, it has made several mining applications for allotment of major minerals in Madhya Pradesh, Maharashtra and Karnataka for securing continuous availability of raw material through its own mines.
These initiatives have now resulted in the form of securing in principle approval for a manganese ore mine spread over an area of 95 hectares in Chhatarpur district of Madhya Pradesh.
For other mining applications, the company expects to get approval very soon. In near future, full fledged mining activities in these mines will start
Source: The Hindu Business Line
Assman Agrees Manganese Ore Price With China
It is reported that Assmang Limited has settled a monthly fixed price agreement with Chinese users and the November offer is accepted by the majority in the Chinese market.
AS per repot, the current manganese ore price stands at USD 6 per tonne, which is lower than the Australian offer USD 6.5 per tonne.
Meanwhile BHP Billiton had introduced Japan the same type of price agreement, which has started in October.
However, BHP Billiton has encouraged China to use floating price depending on the market, and has already offered the price for October.
Source: Steel Guru
AS per repot, the current manganese ore price stands at USD 6 per tonne, which is lower than the Australian offer USD 6.5 per tonne.
Meanwhile BHP Billiton had introduced Japan the same type of price agreement, which has started in October.
However, BHP Billiton has encouraged China to use floating price depending on the market, and has already offered the price for October.
Source: Steel Guru
Sunday, October 18, 2009
EPA Approves Baltimore South Iron Ore Project
Western Australian Environmental Protection Authority has released a report confirming the Balmoral South Iron Ore Project can be managed to meet the EPA's environmental objectives, thereby recommending that Ministerial approval be given, Australian iron ore company Australasian Resources Limited, the developer of the project announced on October 5th 2009.
The Balmoral South Iron Ore Project is located 80 kilometers southwest of Karratha township in Western Australia, where an open cut mine to produce 80 million tonnes per annum of magnetite ore is being contemplated. Processing facilities including crusher, concentrator and pellet plant for the production of 24 million tonnes per annum product, with up to 14 million tonnes per annum of pellets for export, are to program. Production is scheduled to start in 2013.
Adjacent to the Balmoral South Project site, Citic Pacific Ming is implementing the "Sino Iron Project". This project includes construction of Cape Preston port as the iron ore shipping port, and ARH has, through its subsidiary, International Minerals Pty Limited, an arrangement entered into with Citic Pacific allowing access to the port facilities currently under construction by Citic Pacific.
Source: Steel Guru
The Balmoral South Iron Ore Project is located 80 kilometers southwest of Karratha township in Western Australia, where an open cut mine to produce 80 million tonnes per annum of magnetite ore is being contemplated. Processing facilities including crusher, concentrator and pellet plant for the production of 24 million tonnes per annum product, with up to 14 million tonnes per annum of pellets for export, are to program. Production is scheduled to start in 2013.
Adjacent to the Balmoral South Project site, Citic Pacific Ming is implementing the "Sino Iron Project". This project includes construction of Cape Preston port as the iron ore shipping port, and ARH has, through its subsidiary, International Minerals Pty Limited, an arrangement entered into with Citic Pacific allowing access to the port facilities currently under construction by Citic Pacific.
Source: Steel Guru
Saturday, October 17, 2009
2010 Benchmark Talks Off To A Bad Start
The debate over the next year's iron ore benchmark prices has got off to an acrimonious start with China seeking to separate its negotiations from other countries while global giant miners refuse to budge downwards on prices.
Shan Shanghua, secretary-general of China's top iron ore negotiator China Iron and Steel Association (CISA), said on Friday that iron ore contracts should run for a calendar year instead of beginning on April 1, according to the Japanese financial year.
"We will not insist on other countries taking China's iron ore price as a reference," he said at an iron ore conference in the coastal city of Qingdao.
The iron ore conference is usually regarded as the unofficial start of benchmark price negotiations for the next contract year.
"There may be another failure in agreeing a benchmark price next year, as happened this year, if CISA sticks to its position," a mining executive familiar with the negotiations told China Daily on the sidelines of the conference on Friday.
"BHP prefers to use spot prices, which are market-oriented and index-linked," he said. "If both sides are not happy with the benchmark price negotiation, the next year ore trading might again be based on spot rates."
Iron ore is the only commodity that is negotiated with a benchmark price system. Other commodities such as copper and oil are linked to an index.
This year's iron ore price negotiations became deadlocked in June when China insisted on a 45-percent discount on 2008-09 prices after a 33-percent cut in benchmark iron ore prices had been set with other Asia steel mills.
Shan said Chinese steel mills would not be able to make money at the current price that iron ore producers are demanding because an oversupply is causing steel prices to fall sharply.
"If the demand side is always losing money while the supply side is always making huge profits, can that relationship survive long?" he asked, insisting that global miners should offer better terms.
Chinese iron ore imports rose 36 percent to 469.4 million tons in the first nine months from a year earlier, the Customs said on Oct 14. Shipments have exceeded real demand by 50 million tons, the steel association said on Oct 12.
But mining executives from iron ore producers said the iron ore price was driven by demand, even if the demand side suffers lower profits. As long as the demand is there, there will always be possibility of rising prices.
Miners are optimistic because the economic recovery is leading to increased demand for steel.
Samarco Mineracao, an iron ore pellet joint venture between miners BHP Billiton and Vale, expects to produce at full capacity next year as demand recovers, its chief commercial officer, Roberto Lucio Nunes de Carvalho, said on Friday.
"Our expectation is to produce at full capacity of 22 million tons in the next year," he said. "Industry demand is improving. Next year will be much better than this year."
However, some Chinese steel mills are not optimistic about next year's steel demand. China's steel industry may end up losing money next year as oversupply weighs on prices. That might force steel companies to cut production next year, said Han Weidong, deputy chief of the market section of Hebei Iron and Steel Group Co Ltd.
"China's domestic steel demand is unlikely to reach 600 million tons next year, while tight bank lending next year could hurt both demand for steel and expansion at steel mills, restraining growth in iron ore consumption," he said.
A sales representative from a Hebei-based private steel company also said his company felt times were hard now because steel prices have fallen sharply since August and the iron ore spot prices remained at a high level. If the situation continues for a month, they may make cutbacks, he said.
Source: China Daily
Shan Shanghua, secretary-general of China's top iron ore negotiator China Iron and Steel Association (CISA), said on Friday that iron ore contracts should run for a calendar year instead of beginning on April 1, according to the Japanese financial year.
"We will not insist on other countries taking China's iron ore price as a reference," he said at an iron ore conference in the coastal city of Qingdao.
The iron ore conference is usually regarded as the unofficial start of benchmark price negotiations for the next contract year.
"There may be another failure in agreeing a benchmark price next year, as happened this year, if CISA sticks to its position," a mining executive familiar with the negotiations told China Daily on the sidelines of the conference on Friday.
"BHP prefers to use spot prices, which are market-oriented and index-linked," he said. "If both sides are not happy with the benchmark price negotiation, the next year ore trading might again be based on spot rates."
Iron ore is the only commodity that is negotiated with a benchmark price system. Other commodities such as copper and oil are linked to an index.
This year's iron ore price negotiations became deadlocked in June when China insisted on a 45-percent discount on 2008-09 prices after a 33-percent cut in benchmark iron ore prices had been set with other Asia steel mills.
Shan said Chinese steel mills would not be able to make money at the current price that iron ore producers are demanding because an oversupply is causing steel prices to fall sharply.
"If the demand side is always losing money while the supply side is always making huge profits, can that relationship survive long?" he asked, insisting that global miners should offer better terms.
Chinese iron ore imports rose 36 percent to 469.4 million tons in the first nine months from a year earlier, the Customs said on Oct 14. Shipments have exceeded real demand by 50 million tons, the steel association said on Oct 12.
But mining executives from iron ore producers said the iron ore price was driven by demand, even if the demand side suffers lower profits. As long as the demand is there, there will always be possibility of rising prices.
Miners are optimistic because the economic recovery is leading to increased demand for steel.
Samarco Mineracao, an iron ore pellet joint venture between miners BHP Billiton and Vale, expects to produce at full capacity next year as demand recovers, its chief commercial officer, Roberto Lucio Nunes de Carvalho, said on Friday.
"Our expectation is to produce at full capacity of 22 million tons in the next year," he said. "Industry demand is improving. Next year will be much better than this year."
However, some Chinese steel mills are not optimistic about next year's steel demand. China's steel industry may end up losing money next year as oversupply weighs on prices. That might force steel companies to cut production next year, said Han Weidong, deputy chief of the market section of Hebei Iron and Steel Group Co Ltd.
"China's domestic steel demand is unlikely to reach 600 million tons next year, while tight bank lending next year could hurt both demand for steel and expansion at steel mills, restraining growth in iron ore consumption," he said.
A sales representative from a Hebei-based private steel company also said his company felt times were hard now because steel prices have fallen sharply since August and the iron ore spot prices remained at a high level. If the situation continues for a month, they may make cutbacks, he said.
Source: China Daily
Chinese Crude Steel "Half The World's Total"
According to Mr Chenbin, chief of the Coordination Departmen at China's National Development and Reform Commission, it is an irrefutable fact that China crude steel capacity has approached half the world's total amount.
Mr Chen, when interpreting the recently issued Advices about containing overcapacity and redundant building of some industries and guiding them into the healthy road for development, said that “Last year, Chinese steel capacity was 660 million tonnes, with equipment operating rate of around 76%, apparent consumption of around 453 million tonnes and crude steel production of 500 million tonnes, one fourth of which was for overseas market.”
He added that now China crude steel capacity has reached as close as half the world's total and it is hard to digest all the excessive capacity through exporting it to overseas.
He said that meeting domestic demand should be put to the crucial place in the development of the country's steel industry and then proper participation in international competition. China is naturally not equipped to become the world's steel products supply base due to its lack of iron ore and consideration the environment protection.
Source: Steel Guru
Mr Chen, when interpreting the recently issued Advices about containing overcapacity and redundant building of some industries and guiding them into the healthy road for development, said that “Last year, Chinese steel capacity was 660 million tonnes, with equipment operating rate of around 76%, apparent consumption of around 453 million tonnes and crude steel production of 500 million tonnes, one fourth of which was for overseas market.”
He added that now China crude steel capacity has reached as close as half the world's total and it is hard to digest all the excessive capacity through exporting it to overseas.
He said that meeting domestic demand should be put to the crucial place in the development of the country's steel industry and then proper participation in international competition. China is naturally not equipped to become the world's steel products supply base due to its lack of iron ore and consideration the environment protection.
Source: Steel Guru
Maghreb Minerals Seeking Fluorspar Acquisitions
Maghreb Minerals has warned that it could take some significant time to make further progress on developing its flagship Bou Jabeur - Gite Est project in Tunisia as it continues to look for an industry partner to help it develop the asset.
Reporting on the year to June 2009, Maghreb’s chairman, Richard Linnell, said economic conditions had forced the company to cut back its exploration plans and had made it harder to find partners to join it in Tunisia.
However, he said that a decision to focus more on its fluorspar assets and increase its exposure to the sector had seen active involvement by the company’s shareholders in seeking out producing assets around the world.
Maghreb completed a scoping study at the lead/zinc Bou Jabeur - Gite Est project during the year and did enough work to hang on to its Tunisian licences. It also qualified, and applied, for its right to a 90% cent earn-in on the Fej Lahdoum project, where exploration work is underway.
The company ended the period with approximately £237,000 in cash, down from £1.2 million in 2008, but said it was confident that further investment could be attracted to the company to pursue its expansion into the fluorspar sector internationally. Equally, discussions are in progress to introduce partners into the lead/zinc portfolio.
Source: SmallCapNews
Reporting on the year to June 2009, Maghreb’s chairman, Richard Linnell, said economic conditions had forced the company to cut back its exploration plans and had made it harder to find partners to join it in Tunisia.
However, he said that a decision to focus more on its fluorspar assets and increase its exposure to the sector had seen active involvement by the company’s shareholders in seeking out producing assets around the world.
Maghreb completed a scoping study at the lead/zinc Bou Jabeur - Gite Est project during the year and did enough work to hang on to its Tunisian licences. It also qualified, and applied, for its right to a 90% cent earn-in on the Fej Lahdoum project, where exploration work is underway.
The company ended the period with approximately £237,000 in cash, down from £1.2 million in 2008, but said it was confident that further investment could be attracted to the company to pursue its expansion into the fluorspar sector internationally. Equally, discussions are in progress to introduce partners into the lead/zinc portfolio.
Source: SmallCapNews
Norilsk, BHP TO Mine Coking Coal In Russia
Norilsk Nickel plans to start mining coking coal in Russia together with BHP Billiton from 2015, a senior Norilsk official said on Friday.
The two companies would mine the Syradasai deposit in Russia's Arctic, about 100 km (63 miles) from the port of Dikson on the Kara Sea, Nikolai Matyushenko, Norilsk's deputy director for production development, told reporters.
'From 2015, we intend to mine 8 million tonnes and then to increase it to between 12 million and 15 million tonnes (a year),' Matyushenko said on the sidelines of a conference.
Source: Reuters
The two companies would mine the Syradasai deposit in Russia's Arctic, about 100 km (63 miles) from the port of Dikson on the Kara Sea, Nikolai Matyushenko, Norilsk's deputy director for production development, told reporters.
'From 2015, we intend to mine 8 million tonnes and then to increase it to between 12 million and 15 million tonnes (a year),' Matyushenko said on the sidelines of a conference.
Source: Reuters
Brazil Considering Iron Ore Export Tax
Brazil is studying a possible export tax on iron ore, a government source told Reuters on Friday, amid growing tensions between the government and miner Vale the world's largest iron ore producer.
The source said the government still has not made any final decisions on the issue.
Source: Reuters
The source said the government still has not made any final decisions on the issue.
Source: Reuters
Friday, October 16, 2009
Fortescue In Talks With Japan, Korea
Fortescue Metals Group Ltd., Australia’s third-biggest iron ore exporter, is in talks to sell to Japanese and Korean mills for the first time as it seeks to take market share from Rio Tinto Group and BHP Billiton Ltd.
“We’ve been in active discussions with them,” Executive Director Graeme Rowley said today in an interview. As “contracts come up for renewal I would expect that they will come and talk very positively with us about us joining in their supply chain,” he said, without further identifying the mills.
Fortescue, which started its A$2.8 billion ($2.6 billion) project last May, has sold all the ore produced to steel mills in China, the world’s biggest buyers. The mills it’s talking to have contracts to buy ore from Rio and BHP, Australia’s two largest exporters, Rowley said.
Fortescue, controlled by billionaire Andrew Forrest, rose 2 percent to A$4.17 at the 4:10 p.m. Sydney time close on the Australian stock exchange. The Perth-based company has more than doubled in market value this year to A$13 billion. It plans to boost capacity by the end of next year with a A$360 million expansion of its Christmas Creek mine.
The company will “largely” finance expansion plans by itself to bring production up to 95 million metric tons a year after failing to agree on terms for $6 billion in funding from China, Forrest said last week. Expansion of Christmas Creek will take total capacity to 55 million metric tons by the end of 2010, Rowley said today.
China’s demand for iron ore means it would likely play a more dominant role in pricing iron ore over time, Rowley said, adding that he supported efforts to change the annual contract period to the calendar year.
“A January 1 price date is eminently sensible,” he said. “The April 1 was based around the Japanese financial year.”
Source: Bloomberg
See also: Fortescue posts Q3 loss
“We’ve been in active discussions with them,” Executive Director Graeme Rowley said today in an interview. As “contracts come up for renewal I would expect that they will come and talk very positively with us about us joining in their supply chain,” he said, without further identifying the mills.
Fortescue, which started its A$2.8 billion ($2.6 billion) project last May, has sold all the ore produced to steel mills in China, the world’s biggest buyers. The mills it’s talking to have contracts to buy ore from Rio and BHP, Australia’s two largest exporters, Rowley said.
Fortescue, controlled by billionaire Andrew Forrest, rose 2 percent to A$4.17 at the 4:10 p.m. Sydney time close on the Australian stock exchange. The Perth-based company has more than doubled in market value this year to A$13 billion. It plans to boost capacity by the end of next year with a A$360 million expansion of its Christmas Creek mine.
The company will “largely” finance expansion plans by itself to bring production up to 95 million metric tons a year after failing to agree on terms for $6 billion in funding from China, Forrest said last week. Expansion of Christmas Creek will take total capacity to 55 million metric tons by the end of 2010, Rowley said today.
China’s demand for iron ore means it would likely play a more dominant role in pricing iron ore over time, Rowley said, adding that he supported efforts to change the annual contract period to the calendar year.
“A January 1 price date is eminently sensible,” he said. “The April 1 was based around the Japanese financial year.”
Source: Bloomberg
See also: Fortescue posts Q3 loss
China's Coal Exports Fall In September
China Securities Journal quoted statistics from China Customs showed that China exported 2.02 million tonnes of coal in September down by 2.9%YoY compared with the 2.08 million tonnes in last September, the lowest drop in this year. Average monthly exports fall exceeded 50% in the first eight months.
September eyed the fourth consecutive month on month rise in coal exports, after a bottom level of 1.14 million tonnes in this June. Analysts attribute this to coal consumption peak during summer in the northern hemisphere. Reviving worldwide economy also pulls up coal demand.
International price also climbs. Globalcoal statistics indicate thermal coal price rose 5.6% from September 28th to USD 71.88 per tonne FOB on October 9th at Newcastle Port and price for South African coal gained 7.29% to USD 64.43 per tonne. Spot price for coking coal in international market has jumped to USD 170 per tonne from USD 120 per tonne in April.
Datong Securities points out northern hemisphere observes thermal coal consumption peak recently and demand swells while coking coal demand also waxes as steel capacity utilization rate keeps rising. Global crude steel output has been increasing since this April with capacity utilization rate ascending by 18% from this January to 88% in August.
However, China's accumulative coal exports during January to September still fell 53% over last year to 16.85 million tonnes. But coal imports in the first eight months surged 160% to 73.83 million tonnes, implying net imports of 59 million tonnes. On the other hand, coke exports remain sluggish. China exported only 360,000 tonnes of coke and semi-coke during January to September a slump of 97%YoY. Coke exports recorded merely 40,000 tonnes in September.
China Customs forecast coke demand will shrink along with weak steel market and steel output reductions worldwide. Eurofer has predicted a 33% steel consumption drop in this year compared with 2008. Major coke importing countries, such as Brazil and India, are inclined to absorb overseas coking coal to yield coke as their coke production facilities improve, leading to falling dependence on Chinese coke.
Source: Steel Guru
September eyed the fourth consecutive month on month rise in coal exports, after a bottom level of 1.14 million tonnes in this June. Analysts attribute this to coal consumption peak during summer in the northern hemisphere. Reviving worldwide economy also pulls up coal demand.
International price also climbs. Globalcoal statistics indicate thermal coal price rose 5.6% from September 28th to USD 71.88 per tonne FOB on October 9th at Newcastle Port and price for South African coal gained 7.29% to USD 64.43 per tonne. Spot price for coking coal in international market has jumped to USD 170 per tonne from USD 120 per tonne in April.
Datong Securities points out northern hemisphere observes thermal coal consumption peak recently and demand swells while coking coal demand also waxes as steel capacity utilization rate keeps rising. Global crude steel output has been increasing since this April with capacity utilization rate ascending by 18% from this January to 88% in August.
However, China's accumulative coal exports during January to September still fell 53% over last year to 16.85 million tonnes. But coal imports in the first eight months surged 160% to 73.83 million tonnes, implying net imports of 59 million tonnes. On the other hand, coke exports remain sluggish. China exported only 360,000 tonnes of coke and semi-coke during January to September a slump of 97%YoY. Coke exports recorded merely 40,000 tonnes in September.
China Customs forecast coke demand will shrink along with weak steel market and steel output reductions worldwide. Eurofer has predicted a 33% steel consumption drop in this year compared with 2008. Major coke importing countries, such as Brazil and India, are inclined to absorb overseas coking coal to yield coke as their coke production facilities improve, leading to falling dependence on Chinese coke.
Source: Steel Guru
Antam Tambang Anoounces Increase In Nickel Output
Indonesia's state-owned miner PT Aneka Tambang Tbk forecast on Thursday its nickel output would jump 42 percent next year after restarting its third ferronickel smelter and on expectations of demand picking up.
Antam expects to produce 17,000 tonnes in 2010, up from 12,000 tonnes this year, Alwin Syah Loebis said.
"FeNi 3 has resumed operations. We also see that nickel demand is increasing. So we are production can be higher," Loebis said.
FeNi 3, its third ferronickel smelter, is expected to resume full operations in November after months of maintenance, he said.
The price of nickel MNI3, used in stainless steel, stood at $18,400 a tonne at 0702 GMT on Thursday, after gaining 57 percent so far this year. But the price is still about 64 percent below a record high of $51,800 a tonne hit in May 2007.
Antam also confirmed it was in talks with PT International Nickel Indonesia (INCO.JK) on the possibility of resuming its nickel supply agreement.
"Inco has exploration near our facility while we are also looking for nickel supplies nearby. We expect to conclude discussions in the near future," Loebis said without elaborating.
The agreement to supply nickel from PT Inco's Pomalaa mine in Sulawesi ended in August 2008.
Under the agreement, which started in February 2003, PT Inco which is 60.8 percent owned by Brazil's Vale Inco supplied about 1 million tonnes of nickel ore annually to Antam's ferronickel smelters.
If an agreement is reached, Antam may use the nickel to feed its ferronickel plant FeNi3 in Pomalaa.
Antam currently sources nickel ore from its mines in Halmahera, North Maluku, for the smelters.
Antam, which is 65 percent-owned by the Indonesian government, is involved in the exploration and production of nickel ore, bauxite and iron sands, smelting of ferro-nickel, and exploration, production and refining of gold and silver.
Source: Reuters
Antam expects to produce 17,000 tonnes in 2010, up from 12,000 tonnes this year, Alwin Syah Loebis said.
"FeNi 3 has resumed operations. We also see that nickel demand is increasing. So we are production can be higher," Loebis said.
FeNi 3, its third ferronickel smelter, is expected to resume full operations in November after months of maintenance, he said.
The price of nickel MNI3, used in stainless steel, stood at $18,400 a tonne at 0702 GMT on Thursday, after gaining 57 percent so far this year. But the price is still about 64 percent below a record high of $51,800 a tonne hit in May 2007.
Antam also confirmed it was in talks with PT International Nickel Indonesia (INCO.JK) on the possibility of resuming its nickel supply agreement.
"Inco has exploration near our facility while we are also looking for nickel supplies nearby. We expect to conclude discussions in the near future," Loebis said without elaborating.
The agreement to supply nickel from PT Inco's Pomalaa mine in Sulawesi ended in August 2008.
Under the agreement, which started in February 2003, PT Inco which is 60.8 percent owned by Brazil's Vale Inco supplied about 1 million tonnes of nickel ore annually to Antam's ferronickel smelters.
If an agreement is reached, Antam may use the nickel to feed its ferronickel plant FeNi3 in Pomalaa.
Antam currently sources nickel ore from its mines in Halmahera, North Maluku, for the smelters.
Antam, which is 65 percent-owned by the Indonesian government, is involved in the exploration and production of nickel ore, bauxite and iron sands, smelting of ferro-nickel, and exploration, production and refining of gold and silver.
Source: Reuters
Coal India Raises Coal Prices By 11 Per Cent
After a gap of about two years, state-owned Coal India Ltd today revised coal prices by an average 11 per cent pet tonne, which will increase the input cost for various industries, especially steel and power.
"Coal prices will be increased by 11 per cent midnight today," CIL Director(Technical) N C Jha told PTI in New Delhi.
The last time prices were revised by Coal India was on December 13, 2007.
The basic price of coal from Eastern Coalfields and Bharat Coking Coal has been increased by 15 per cent per tonne and all its other subsidiary companies by 10 per cent a tonne.
ECL was authorised to set a special price for its high quality A and B grades of Ranigunj coal available in limited quantity at a level commensurate with the imported coal rates.
Source: PTI
"Coal prices will be increased by 11 per cent midnight today," CIL Director(Technical) N C Jha told PTI in New Delhi.
The last time prices were revised by Coal India was on December 13, 2007.
The basic price of coal from Eastern Coalfields and Bharat Coking Coal has been increased by 15 per cent per tonne and all its other subsidiary companies by 10 per cent a tonne.
ECL was authorised to set a special price for its high quality A and B grades of Ranigunj coal available in limited quantity at a level commensurate with the imported coal rates.
Source: PTI
Bulgaria, China Sign $800mn Copper Deal
Bulgaria and China signed a major copper deal Thursday during a visit to Sofia by Chinese Vice-President Xi Jinping who pledged to further boost trade and investment between the two countries.
Aurubis Bulgaria, a subsidiary of German-based Aurubis, Europe's leading copper smelter, signed an 800-million-dollar (536-million-euro) deal with China's largest metals trader China Minmetals.
The deal, to run until 2015, was signed at a ceremony in Sofia attended by Xi, who arrived on a two-day visit to Bulgaria on Thursday, and Bulgarian Prime Minister Boyko Borisov.
Five other contracts were also inked at the ceremony, including another 19-million-dollar (13-million-euro) copper deal with China Nonferrous Metal Mining Group.
Addressing a business forum earlier, Xi hailed the "dynamic development of trade and economic cooperation" between the two countries.
"Bulgaria is now China's most important trading partner on the Balkans," Xi said.
The value of overall trade between the two countries amounts to 1.26 billion dollars, according to data compiled by the economy ministry.
But Bulgaria imports a lot more from China (1.1 billion dollars) than it exports to China (157.2 million dollars), giving it a trade deficit with China of 952.5 million dollars.
Most of Bulgaria's exports to China are copper, aluminium and lead ore.
Xi said the Chinese market was "huge and widely open for Bulgarian products such as nonferrous metals, wine, rose oil and yoghurt."
"I am convinced that with the common steady efforts of our two governments, trade and economic institutions and entrepreneurs, the economic cooperation between China and Bulgaria will receive a new impetus," Xi said.
He pointed to the success of China's investments in the Bulgarian automobile, telecommunications, energy efficiency and environment protection sectors and said that telecoms, tourism, logistics and infrastructure would be possible key sectors for Chinese investment in the future.
Source: AFP
Aurubis Bulgaria, a subsidiary of German-based Aurubis, Europe's leading copper smelter, signed an 800-million-dollar (536-million-euro) deal with China's largest metals trader China Minmetals.
The deal, to run until 2015, was signed at a ceremony in Sofia attended by Xi, who arrived on a two-day visit to Bulgaria on Thursday, and Bulgarian Prime Minister Boyko Borisov.
Five other contracts were also inked at the ceremony, including another 19-million-dollar (13-million-euro) copper deal with China Nonferrous Metal Mining Group.
Addressing a business forum earlier, Xi hailed the "dynamic development of trade and economic cooperation" between the two countries.
"Bulgaria is now China's most important trading partner on the Balkans," Xi said.
The value of overall trade between the two countries amounts to 1.26 billion dollars, according to data compiled by the economy ministry.
But Bulgaria imports a lot more from China (1.1 billion dollars) than it exports to China (157.2 million dollars), giving it a trade deficit with China of 952.5 million dollars.
Most of Bulgaria's exports to China are copper, aluminium and lead ore.
Xi said the Chinese market was "huge and widely open for Bulgarian products such as nonferrous metals, wine, rose oil and yoghurt."
"I am convinced that with the common steady efforts of our two governments, trade and economic institutions and entrepreneurs, the economic cooperation between China and Bulgaria will receive a new impetus," Xi said.
He pointed to the success of China's investments in the Bulgarian automobile, telecommunications, energy efficiency and environment protection sectors and said that telecoms, tourism, logistics and infrastructure would be possible key sectors for Chinese investment in the future.
Source: AFP
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