Ukrainian Ferroalloy Production Doubles

Ukrainian Ferroalloy Production Doubles

Ukraine doubled its ferroalloy output in the first seven months of this year, according to figures released by Ukrainian Ferroalloy Producers' Association.

Output for the period grew to 871,500 tonnes. Silicon manganese production grew 83.1 per cent to 573,700 tonnes, ferromanganese rose 260 per cent to 173,000 tonnes, ferrosilicon 45 output rose 71.7 per cent to 116,400 tonnes and manganese metal production was up 7.7 per cent to 8,400 tonnes.

The country’s largest producer, Nikopol Ferroalloy Works (NFW), raised silicon manganese production 65.8 per cent year-on-year in the seven months to 421,000 tonnes while ferromanganese production was up 460 per cent to 132,500 tonnes. Overall ferroalloy output at Nikopol rose 140 per cent year-on-year to 554,000 tonnes.

Zaporizhia Ferroalloy Works (ZFW) saw silicon manganese production more than double to 103,100 tonnes with output of ferrosilicon 45 rising 120 per cent to 33,800 tonnes. ZFW’s ferromanganese was up 64.4 per cent to 40,500 tonnes and manganese metal production rose 7.7 per cent to 8,400 tonnes. Total ferroalloy output at ZFW doubled to 185,800 tonnes.

The Stakhanov Ferroalloy Plant (SZF), doubled its total production to 131,700 tonnes, while the country's two manganese concentrate producers, the Ordzhonikidze and Marhanets mining and beneficiation plants, produced 846,500 tonnes of concentrate between them in January-July - more than double the production in the same period of last year.

Ferrochrome News: IFM Sees Q4 Contract Price At Current Level

Ferrochrome News: IFM Sees Q4 Contract Price At Current Level

South African ferrochrome producer IFM says it does not see ferrochrome contract prices falling below current levels for the fourth quarter. Earlier this month contract prices for the third quarter were set at USD1.30 a pound, a fall of 4 per cent on the second quarter price but a smaller fall than had been expected. Spot market prices are around USD1.18 a pound, down from a level of around USD2.50 a pound in April 2009.

IFM sells much of its output through contracts and into the spot market in Europe and the USA.

Mr David Kovarsky CEO of IFM said that "We are happy with the price. At the moment we're going through a de stocking cycle but it doesn't reflect end consumption. By the end of this quarter we'll start seeing a revival in demand as stainless steel production starts increasing. I wouldn't expect it Q4 price to be lower than USD 1.30."

Mr Kovarsky said that "We are seeing a contraction in global steel production globally, particularly in China and Europe. The immediate challenge is volume in this quarter but I think they will pick up in the next quarter."
He added that IFM’s output for 2010 will be lower than its capacity of 265,000 tonnes due to the global economic downturn.

China To Close Down Outdated Industrial Capacity

Measure Aimed At Cutting Pollution

China’s cabinet, the State Council, announced on Tuesday that it will continue to shut down outdated industrial capacity to reduce pollution, save energy, and upgrade industry.

The industrial sectors affected include power, coal, steel, cement, non-ferrous metals, coke, paper making, tannery and printing and dyeing, according to the statement.

The statement said that by the following are expected to close by the end of 2010:
• more than 50 million kilowatts of small coal-fired power generators
• 8,000 small coal mines which are lacking in safety standards, or are not what it described as "environmentally friendly".
• coking coal makers with a coking chamber height of less than 4.3 metres
• mill furnaces below 6,300 kilovolts in the ferro-alloy s and calcium carbide

Steelmaking furnaces smaller than 400 cubic metres will be shut down by the end of 2011 and the statement added that the government will also close outdated capacity in the construction materials, light industry and textile industry sectors.

The government has been stepping up the shutdown of outdated production capacity with 21.13 million tonnes in the iron-smelting industry, 74.16 million tonnes in the cement industry and 18.09 million tonnes in the coke industry all being phased out.

Bhutan Ferroalloy and Steelmakers Resume Bank Repayments

Recovery Improving Cash Flows

Bhutan’s ferroalloy and steel industries, based at Pasakha, Phuentsholing near the border with India, have successfully made their first quarterly bank loan repayments since the onset of the global financial crisis.

Bhutan Ferro Alloys, Ugyen Ferro Alloys and Bhutan Concast Pvt Ltd, repaid Nu 8.8 mn, Nu 8.1 mn and Nu 5.7 mn respectively on 31 March. The repayments will be disbursed among a consortium of local lending banks: Bhutan National Bank (BNB), Bank of Bhutan (BoB) and Royal Insurance Corporation of Bhutan (RICBL). The next instalment is due on 30 June.

Five local financial institutions had given a consortium loan amounting to Nu 2.5 bn to the ferroalloy and steel industries in 2006. The borrowers had also borrowed around Nu 1.6 bn from individuals.

Last year the financial institutions and the Bhutan government accepted the industries’ request to defer repayments until the global economy stabilised, on the condition that they pay at least the interest of the loans and inject equity into their projects, which accounts for 50 percent of the loan amount.


“The overall performance of the industries has been better,” the relationship manager of BNB, Pema Jamtsho told the local newspaper, Kuensel, adding that their performances would be based on the performance with the banks. “If cash flow is good, then it means they’re doing good.”

However steel industrialists pointed out that prices had yet to get back to pre-crash levels.
In 2008, the cost of finished TMT bars ranged between Nu 44 and Nu 48 a kg. Today, it is Nu 35-36.

A source at one of the ferroalloy manufacturers said the industry was doing much better compared with last year. “But the market is unpredictable and there will be highs and lows,” he added.

Huge Increase In Ukrainian Ferroalloy Production

Ukraine’s ferroalloy industry confirmed its recovery when the Association of Ukrainian Ferroalloy Producers (UkrFA) reported that production in the first two months of 2010 increased by 2.9 times to 240,700 metric tonnes compared to the first two months of last year.

Silico-manganese output rose 2.8 times to 158,100 mt, ferromanganese production rose 5.4 times to 46,100 mt; ferrosilicon output increased 2.2 times to 33,700 mt, and metallic manganese production rose 86.7 percent to 2,800 mt, all compared to the same period of 2009.

The three largest ferroalloy producers all reported significant increases: Nikopol Ferroalloy Plant, increased its output by three times to 148,600 mt, including 112,900 mt of silico-manganese and 35,700 mt of ferromanganese. Zaporozhye Ferro Alloys Plant increased its ferroalloys output by 2.6 times to 53,800 mt, including 31,600 mt of silicomanganese, 9,000 mt of ferrosilicon, 10,400 mt of ferromanganese, and 2,800 mt of metallic manganese. Stakhanov Ferroalloy Plant increased its output by 3.3 times year on year to 38,300 mt, including 24,700 mt of ferrosilicon and 13,600 mt of silico-manganese.

Blackstone Group Takes Stake In Indian Power Project

US investment company, Blackstone Group, is to acquire a 12% stake in Monnet Ispat & Energy’s Greenfield power plant to be set up in Orissa, India.

The 1050 megawatt plant is expected to cost in excess of Rs50 billion and will be funded through a mix of equity capital and debt.

Monnet Ispat is principally engaged in the manufacture of sponge, steel and ferro alloys. The Company has a combined capacity of 0.86 million tons per annum of sponge iron, 0.3 million tons per annum of steel, 0.06 million tons per annum of ferro alloys and power generation facility of 150 megawatts besides running an underground coal mine in India.

Losses Rise At International Ferro

South African ferrochrome producer International Ferro has reported increased losses as a combination of lower ferrochrome prices and a stronger Rand outweighed higher volumes.

Losses for the six months to December 2009 were R145m, up from R27m in the December 2008 half-year. In the previous six months losses were R429m.

Revenues fell 14% to R452m for the six months to December 2009, though this was up 77% on the previous six months.

There was a loss before tax of R145m in the December 2009 half, compared to a R27m loss in the December 2008 half. Losses in the previous six months were R429m. There is no interim dividend.

Sales volumes increased to 71,000 tonnes, up 35% on the June 2009 half, while production volumes increased by 4% to 95,000 tonnes as furnaces operated at full capacity for the half-year.

Meanwhile CEO David Kovarsky has suggested that Ferrochrome contract prices may rise as much as 29 percent in the second quarter as demand improves citing a tightness of supply. Mr Kovarsky said he expecs the European benchmark contract prices may rise to between $1.20 and $1.30 a pound from $1.01 a pound this quarter.

Railway Rake Shortage Hits More Industries In Bhutan

The Association Of Bhutanese Industries reports that the shortage of railway rakes to carry raw materials from India to Bhutan is now affecting other industries with the ferroalloy and calcium carbide industries now hit. These industries import charcoal mostly from states in southern India, such as Tamil Nadu and Andhra Pradesh.

The delay has meant that raw materials are now taking up to 20 days to arrive against seven to 10 days previously. Bringing in raw materials by trucks is not an option because of frequent strikes and mechanical problems faced on the way.

“We’re expecting the government to take up the matter urgently as, irrespective of the status of the plant, the industrialist has to pay a fixed cost,” said the ABI secretary general, Letho. However there are fears amongst some industrialists that plants may have to close if the issue is not addressed.

Turkey's Ferroalloy Imports Fall 19 Per Cent In 2009

Turkey's ferroalloy imports fell by almost 19 percent in 2009. Total imports were 314,661 metric tons according to figures from the Turkish Statistical Institute (TUIK).

Ferromanganese imports were 46,760 metric tons, down 36.22 percent on 2008; ferrosilicon imports were 62,655 metric tons, down 14.54 percent; ferrosilicon-manganese imports were 193,324 metric tons, down 1.18 percent; and ferrochrome imports totalled 2,786 metric tons, down by 98.58 percent.

Ferroalloy imports from the CIS countries accounted for 77 percent of total ferroalloy imports, while imports from Europe constituted 9.6 percent and Asian countries 8.5 percent.

India's Indsil In Oman Ferrochrome Joint Venture

India’s Indsil Hydro Power and Manganese and its group sister company, Indsil Energy & Electrochemicals have entered into an arrangement with the Muscat Overseas Group in Oman to set up a form a 50:50 joint venture to set up a 75,000 tpy ferro chrome smelter in the Sultanate of Oman at a cost of US$30 million.

The project would have access to Muscat Overseas’ chrome ore assets in Oman. Indsil will provide the technology, operating and marketing expertise for the project. The share capital would be held equally by both the parties to the joint venture. The project is expected to be operational by the end of 2011.

Ukraine To Investigate Ferroalloy Imports

The Ukrainian Interdepartmental Commission on International Trade is to investigate import the import of some ferroalloy products into Ukraine. Ferromanganese with a carbon content of more than two percent (excluding ferromanganese granules of more than 5 mm and with manganese content of more than 65 percent) and ferrosilicomanganese will be subject to the investigation regardless of origin.

The investigation has been requested by the Association of Ukrainian Ferroalloy Producers (UkrFA) and a number of ferroalloy producers including the Nikopol Ferroalloy Plant (NZF), the Zaporizhia Ferroalloy Plant and the Stakhanov Ferroalloy Plant (SFP).

In a statement released by the complainants Ukraine’s ferroalloy output decreased by 59 per cent in Q3 2009 compared to Q3 2008, however ferroalloy imports increased by 219 percent, while prices went down by 38 percent.

In 2009, Ukraine’s ferroalloy output decreased by 25.2 per cent against 2008 to 1.036 million mt, however ferroalloy imports increased by 5.4 times year on year to 103,350 mt. This included 58,940 mt of Ferrosilicomanganese imports were 58.940mt, up 4.3 times compared to 2008, ferromanganese imports were 35,600 mt - up 11.6 times - and ferrosilicon imports were 8,610 mt of ferrosilicon - up 4.1 times. Ukraine imports ferroalloys mainly from Russia, Kazakhstan, Georgia and China.

Chek-Su.VK Signs Agreement For Manganese Processing Plant

Russian mining and smelting company CHEK-SU.VK has signed an agreement to build a manganese ore processing plant in the Krasnoyarsk Region of Russia.

Supplies of ore from deposits in the Kemerovo Region will be transported to the plant via Khakassia to be processed.

The project's total value is estimated at RUB 22 billion and will be completed in 2013.

The agreement was signed at the Krasnoyarsk Economic Forum which opened on Friday. Around 1000 representatives of government agencies and business have gathered at the forum to discuss issues of modernisation.

Assmang To Produce Ferromanganese At Machadodorp Works

South African ferrochrome producer Assmang has announced to shareholders that it plans to convert one of the furnaces at its Machadodorp Works to produce high-carbon ferromanganese, rather than ferrochrome. The converted furnace is expected to produce 4000 tonnes per month of HCFeMn and production will commence by the middle of this year.

In its statement Assmang said that it needs to meet higher than expected demand for high-carbon ferromanganese but that it does not have excess capacity at its Cato Ridge Works to expand production.

The company said that it still expects to meet its contractual obligations for ferrochrome and that it is committed to continuing ferrochrome production. Its ferrochrome furnaces were idle for much of 2009.

Nippon Steel Increases Stake In Ferromanganese Producer Nippon Denko

Nippon Steel Corporation has increased its stake in ferroalloy producer Nippon Denko from 9.5 percent to 15 percent. Nippon Denko will become an equity method affiliate of Nippon Steel.

The decision came after the companies' agreed to further strengthen their alliance, in order to enhance their competitive edge and corporate values.

The two companies have maintained a close business relationship through their trade in ferromanganese and the new agreement will enable both companies to stabilise their procurement of raw materials – including manganese ore – for Nippon Denko and to conclude a long-term sales and purchase agreement for ferromanganese produced by Nippon Denko.

India's Ferroalloy Industry Calls For Import Duty

India’s ferroalloy industry has urged the government to impose a customs duty of at least 10 per cent on ferroalloy imports.

The industry produces over 2 million tonnes of ferroalloys each year but at present is estimated to be running at a little over 60 per cent of capacity and has suffered from a fall in domestic demand due to an increase in cheaper imports.

The Indian Ferro Alloy Producers’ Association said that imports have risen more than five-fold in value progressively as the government gradually reduced the import tariff on ferroalloys from 25 per cent in 2003-04 down to zero in 2008. During that time imports have shot up from Rs2.63 billion in 2003-04 to Rs13 billion from April to December 2008.

The Association also pointed out that electricity costs are some three to five time more expensive in India than in other ferroalloy-producing countries, again putting domestic producers at a disadvantage.

ENRC Reports Increased Output

Kazakh miner Eurasian Natural Resources Corp. PLC said on Wednesday that Q4 ferroalloys production was up 55% from a year earlier. Output rose to 448,000 metric tons, up from 290,000 tons a year earlier.

ENRC also produced 984,000 tons of saleable chrome ore in the three months to Dec. 31, compared with 704,000 tons during the same period a year earlier while the company’s iron division mined 10.6 million tons of ore, a rise of 74% from 6.11 million tons a year earlier.

Aluminium output was 36,000 tons for the quarter, a rise of 16% from the 31,000 tons produced a year earlier.

The company said late last year that it expects 2010's full-year output at its core ferrochrome and iron ore operations to match 2008 levels. Almost a third of its production capacity was idled for much of 2009.

SAIL Rules Out Price Reduction

The state-owned steel major Steel Authority of India (SAIL) today ruled out any reduction in domestic steel prices in the near-term, citing the firming global price trend and the rising input costs.

"As of now, the international prices are firm; scrap and coke prices are ruling high. So, I don't see any possibility of lowering the prices in the near-term...Iron ore prices have gone up...Putting some pressure on cost," SAIL Chairman S K Roongta told reporters here today.

Domestic steel firms, including SAIL and Tata Steel, had increased prices of their different products by up to Rs 4,500 a tonne in the past two months, raising inflationary concerns and prompting the government to term the price hike as speculative.

However, Steel Secretary Atul Chaturvedi had hoped otherwise and was anticipating some correction in the steel prices this month.

Terming the "Rs 8,000-10,000 a tonne" hike in the price of long steel products--used mainly by infrastructure and construction firms--in the past few months as "not warranted by market conditions," he said it got corrected by 3,000-4,000 a tonne recently.

"As far as SAIL is concerned we have not increased our long steel prices to the extent of the increase in the market price. So, we didn't have to rollback," Roongta said.

But, he maintained that SAIL will cut prices "as and when market conditions demand it".

On any likely increase in its input cost pressure next fiscal, SAIL chief Roongta said: "There is a possibility that long-term prices (of coking coal) may go up in the long-term."

"We don't import coke, but we import large quantities of coal. As of now, we have long-term contracts (till) March, but the new contracts have to be negotiated," he added.

Roongta further said the rise in input cost will hit steel producers without captive mining reserves. "Basically, iron ore prices are moving up. Since we have captive iron ore mines it will not hit us, but it will impact those producers who do not have backward integration towards mining."

"Also ferro-alloys like ferro-manganese, ferro-silicon, copper, zinc prices have moved up," he added.

Iron ore, coking coal along with the ferro-alloys are key input in making steel. Domestic steel prices are hovering in the range of Rs 26,000-35,000 tonne.

Source: Business Standard

China To Eliminate Outdated Production Capacity

The government will step up efforts to eliminate outdated production capacity, said a statement issued by the State Council on Wednesday.

Eliminating outmoded production capacity was imperative to transform the economic growth pattern, boost economic growth quality and fight the global downturn, said the statement issued after a State Council executive meeting chaired by Premier Wen Jiabao.

Eliminating outdated production capacity was also necessary to promote energy efficiency and emissions cuts and address global climate change, the statement said.

China had made positive progress in eliminating outdated production capacity, but the proportion of outdated capacity was still too high in certain key fields, said the statement.

The problems should be tackled through the law, economics, technology and necessary administrative methods.

The State Council discussed specific targets to eliminate outdated capacity in fields such as electricity, coal, coke, ferroalloy, calcium carbide, iron and steel, non-ferrous metals, construction materials and light industry and textile industry.

To realize the targets, efforts should be made to improve market admission requirements, use market mechanisms, strengthen law enforcement, promote stimulus mechanisms and step up supervision, according to the decision reached at the meeting.

Source: Xinhua

Turkey Imported 84 Per Cent More Ferroalloys In November

According to the customs statistics compiled by the Turkish Statistical Institute (TUIK), in November 2009 Turkey imported 32,837 metric tons of ferroalloys, increasing its imports of the products in question by 84.48 percent compared to October.

In November, of the various ferroalloys, the country's ferromanganese imports increased by 2.5 times, reaching 3,289 metric tons, ferrosilicon imports totaled 5,805 metric tons, rising by 43.48 percent, while ferrosilicomanganese imports amounted to 22,173 metric tons, up 89.32 percent, all compared to October.

Source: Steel Orbis

International Ferro Metals Output Up 85 Per Cent In Second Quarter

South African-based International Ferro Metals Ltd gave an upbeat view of prices and Chinese demand after posting an 85 percent jump in second-quarter output due to the restart of a furnace.

The London-listed firm's shares jumped as much as 11 percent on Thursday after it said the sector was rebounding after being hard-hit from the global downturn last year.

Producers of ferrochrome, a key component in stainless steel, slashed output early last year, closing down furnaces, as demand sunk, but much of the capacity in the sector has been restarted.

"Since the beginning of the year, stainless steel production utilisation levels, particularly in China, have increased," Chief Executive David Kovarsky told a conference call.

"What we're seeing ... is that Chinese spot prices are outpacing this quarter's (European) contract price."

The first quarter contract price in Europe fell 2 cents to $1.01 per lb, but is expected to rise in the second quarter. The price peaked at $2.05 a lb in the third quarter of 2008.

"The spot price is indicating an increase (in the Q2 contract price), to what level, I'm not sure," Kovarsky added.

"We believe that management's decision to build inventory while ferrochrome prices and production costs are low should allow IFM to take advantage of a recovery in the ferrochrome price during 2010," analyst Mike Stuart said.

Inventories rose to 32,504 tonnes from 9,752 tonnes three months earlier because the firm wanted to wait for higher prices, Kovarsky said.

He hoped to wait until the June quarter to sell off the stocks, but might unload some of it in the current quarter if customers needed material, he added.

Ferrochrome production rose to 57,942 tonnes in the last three months of 2009, following the restart of a furnace in August, from 31,289 tonnes in the same period the previous year.

Sales rose by 61 percent, less than growth in output due to the stockpiling.

The firm had a net cash balance of 248 million rand at the end of the year, which was more than enough to cover expected capital expenditure of about 100 million rand for the remainder of the fiscal year, Kovarsky said.

Last September, IFM swung to a loss for its fiscal year to end-June on lower output and prices of ferrochrome, a key ingredient in stainless steel.
The world's biggest ferrochrome producers are Xstrata and ENRC.

Source: Reuters