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TATA STEEL JAN SALES UP 9% TO 5.56 LAKH TONNE

By ceoaisra, Section AISRA NEWS
Posted on Fri Feb 05, 2010 at 11:07:24 PM EST
Tata Steel on Friday said it witnessed a 9% rise in sales at 5.56 lakh tonne in January on the back of improved demand from the construction and white goods sectors. The company's sales during the year-ago period stood at 5.11 lakh tonne. The steel major said in the reporting month, there was an 8 % increase in sales of flat steel products and 10% in that of long products. However, the company did not give out any details on the volume of these products. Flat steel products are primarily consumed by the automobile and white goods sectors, while 550.45 long steel is used 543.20 j mainly by infrastructure firms. During the month, the company saw its saleable steel output rise 11% to 6.07 lakh tonne from 5.48 lakh tonne a year ago. Its crude steel and hot metal production rose by 14% and 13% in January to 5.96 lakh tonne and 6.50 lakh tonne, respectively, against the year-ago period. Tata Steel produced 5.25 lakh tonne of crude steel and 5.74 lakh tonne of hot metal during the month under review. The firm said it "completed January with an increase in its hot metal, crude steel and saleable steel production over the corresponding month last year."    

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`SAIL'S DISINVESTMENT MAY NOT GO THROUGH THIS FISCAL

By ceoaisra, Section AISRA NEWS
Posted on Fri Feb 05, 2010 at 02:31:21 AM EST
Steel Authority of India Ltd's proposed disinvestment may not be through this fiscal as it is not clear yet if the Union Cabinet will approve the proposal shortly. "We're not sure," Mr S.K. Roongta, Chairman of SAIL, told newspersons here on Thursday. "It is for the Government to decide; perhaps, the Ministry of Steel will be able to throw light on it." The process, he said, would start once the Government gives the green signal. "We're ready with our preparation in this regard," he observed while talking to newspersons on the sidelines of the IREF-CON2010, the Eighth India International Refractories Congress organized by the Indian Refractory Makers Association. The SAIL Chairman did not foresee any major change in steel prices in the coming months unless raw material prices jumped significantly. "The product prices have stabilised," he said pointing out that the prices of long products, after some increases, had stabilised now while the flat product prices had remained stable. Between August and December last year the prices had actually dropped, he said. In reply to a question he said that no decision had yet been taken on the proposal to form SAIL Videsh. "We've no information in this regard," he said, adding that he was not aware of any development on the report of proposed disbanding of International Coal Ventures Ltd. "We all would like ICVL to make some progress but the participation in ICVL does not prevent its members from bidding for assets independently," he observed. Asked if SAIL would bid for the coal blocks to be auctioned by Coal India Ltd, he replied that the ST Mining, the joint venture between SAIL and Tata Steel, had already responded to the EoIs floated in this regard and was one of the shortlisted firms. SAIL was also in touch with Coal India Ltd and its subsidiary Bharat Coking Coal Ltd to bring to production some of the coal blocks lying unexplored. Referring to the recent fire in Bhilai Steel Plant, Mr Roongta said the engineers and others were busy bringing the plant back to normal production as early as possible. Later, he left for Bhilai. Inquiries with Bhilai Steel Plant revealed that one of the boilers in the power and blowing station was commissioned on Thursday and hopefully three blast furnaces would start production shortly. Six out of the plant's seven blast furnaces were in operation when the fire took place. As a result of the fire, the loss of production of hot metal is estimated at more than 60,000 tonnes. The plate mill started production from Wednesday, add BSP sources.      

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SAIL HIKES FLAT PRODUCT PRICES, OTHERS TO FOLLOW

By ceoaisra, Section AISRA NEWS
Posted on Thu Feb 04, 2010 at 12:43:57 AM EST
Despite the steel ministry's concerns and suggestions to control rising steel prices, SAIL on Tuesday announced a new round of hike in steel prices of Rs 500 per tonne for flat products. A severe cost-push and an uptrend in international prices have triggered the price rise, say industry players. "The price rise is in line with the market," a SAIL spokesperson. Tata Steel, Essar Steel, JSW Steel and Ispat Industries may also increase prices taking into consideration the rising input costs. "We have kept our flat product prices unchanged as of now but if need be we will review it in the next few days," said Jayant Acharya, director, sales and marketing, JSW Steel. However, Ispat Industries will adjust its prices based on different grades of steel, said Anil Surekha, director-finance, Ispat industries. Prices of long products, used in the construction industry, are currently ranging between Rs 27,000 to 29,000 per tonne, whereas prices of flat products, which are used primarily in the automobile industry, are currently ruling at around Rs 32,000 to 35,000 per tonne. Seshagiri Rao, joint MD and group CFO of JSW Steel had during its Q3 results hinted at a price rise. "Internationally we are not seeing the prices coming down as the recovery is strong. Moreover, costs are getting reset, particularly for long term contract prices for iron ore and coal, so the cost push will be high. I think prices will move up from here but don't see prices coming down," Rao said. In December and January, steel makers had upped prices of their products by 3-5 % on the back of good demand and firm international prices.    

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ASIA COAL DROPS BELOW $89 AS CHINESE DEMAND WANES

By ceoaisra, Section AISRA NEWS
Posted on Thu Feb 04, 2010 at 12:41:17 AM EST
SUPPLIES FORM INDONESIA LIKELY TO INCREASE *

Australia's thermal coal prices, a benchmark for Asia, dropped 12 per cent in the latest week to a five-week low below $89 a tonne, dragged down by fast-fading demand from China.

*WORST WINTER
China's coal needs, which surged in recent months as the country battled one of its worst winter in decades, has eased sooner than expected, producers and traders said, adding that many utilities on the southern coast had probably purchased enough supplies to last thro ugh March. Scant evidence of Chinese buying for the second quarter also added to concerns that thermal coal prices, up as much as 20 per cent this year, could slide further.

RETREATING BUYERS
Thermal coal prices on the global COAL Newcastle weekly index fell $12.39 from a week ago to $89.61 a tonne, free-onboard (f.o.b) Australia's Newcastle port. "The Chinese buyers came into the market in full force in December and January but they are now retreating very quickly," said a Singapore-based trader.  "There's a lot of uncertainty about Chinese demand going forward and that's weighing on, the market. Supplies from Indonesia is also expected to increase over the coming weeks as the weather improves, so that's another bearish factor," the trader said. Producers and traders did not expect Chinese demand to wane until after the Chinese New Year, but warmer weather, the reopening of the key Qinhuangdao coal port last week and increased coal supplies in the domestic market, means there is no longer an urgent need for supplies.

LUKEWARM INTEREST
Most producers said Chinese buyers were showing lukewarm interest for the second quarter, rather waiting for lower spot prices or more favourable freight rates. Still, an Australian producer said he was in talks with a major Chinese buyer to sell 500,000 tonnes of coal for delivery in the second quarter. The buyer was looking to purchase the shipments at about $85-90 a tonne (f.o.b,), based on coal with a calorific value of 6,080 kcal/kg (NAR). Prices vary depending on ash and sulphur content.

CHANGE IN EXPECTATIONS
"The market has turned now so the price expectations may have changed," he said. The market will now keep an eye on developments on the annual price negotiations between Australian producers and Japanese utilities, as both parties gear up for preliminary talks expected to kick off later this month. Producers are likely to ask for between $95-100 a tonne, while Japanese buyers could hold out for about $85, trade sources said.    

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JINDAL STEEL IN RACE TO BUY ZIMBABWE'S ZISCOSTEEL

By ceoaisra, Section AISRA NEWS
Posted on Tue Feb 02, 2010 at 03:10:01 AM EST
ARCELORMITTAL IS THE ONLY OTHER BIDDER FOR THE STATE-RUN COMPANY

The Naveen Jindal-controlled Jindal Steel & Power Ltd (JSPL) is in the race to acquire a major¬ity stake in Zimbabwe Iron & Steel Company (Ziscosteel) -- the largest steelworks in the African country. JSPL is pitted against ArcelorMittal, the only other suitor for the company. Ac¬cording to JSPL sources, the qualifying round has con¬cluded. Following this, due dili¬gence will be done and then the bids will be submitted.Ziscosteel is 89 per cent owned by the government of Zimbabwe, which is looking to divest a 60 per cent stake as part of its privatisation pro¬gramme. It is not clear how much the deal would fetch the government of Zimbabwe. Ziscosteel has a capacity of a million tonnes and is a facility for long products (used in the construction sector). In¬dustry sources said a green-field facility of the same ca¬pacity would cost anywhere from $600 million (Rs 2,782 crore) to $1 billion (Rs 4,638 crore), depending on the na¬ture of integration. However, Ziscosteel has a debt of around $300 million (Rs 1,390 crore). The plant stopped operations in 2008 once the economic crisis broke out, as it was operating at less than break-even capacity. Apart from the steelworks, Ziscosteel also owns an iron ore mine in Zimbabwe. JSPL has been scouting for raw ma¬terial assets. The company will be investing $2.1 billion (Rs 9,736 crore) on building plants for steel, pellet and sponge iron, as well as a power plant in Bo¬livia, where it acquired de¬velopment rights for 20 billion tonnes of iron ore in 2007. In Mozambique, the company is engaged in coal and chromite exploration and in Madagas¬car for limestone.The company was also in the fray for Australian coal firm, Rocklands Richfield. While some of the raw ma¬terial would be used for inde¬pendent projects close to the mines, a part of it could be used to cater to Indian plants' needs. Plans are afoot to set up a seven-million-tonne steel plant and a 1,600-Mw power plant in Chhattisgarh, an 11-million-tonne steel plant and a 2,600-Mw power plant in Jharkhand, and a 12.5-million-tonne steel plant and a 2,600-Mw power plant in Orissa, The combined investment in the three states would be around Rs 96,000 crore. Spiralling raw material costs and delays in mine al¬location in India have pushed most of the companies to scout for resources overseas. India has approximately 23.59 bil¬lion tonnes of iron ore scat¬tered across states like Jhark¬hand, Orissa, Chhattisgarh, Karnataka and Goa. Of this, only 6.3 billion tonnes is proven reserves.Provens reserves of coking coal -- which accounts for 50 per cent of raw material costs for steel producers -- stand at 4.6 billion tonnes, but the quality of Indian coking coal is not suitable for making steel.  

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STEEL MINISTRY KEEN ON PUSHING AHEAD COAL JT VENTURE

By ceoaisra, Section AISRA NEWS
Posted on Sat Jan 30, 2010 at 01:14:17 AM EST
COAL INDIA'S INTEREST IN ICVL HAS COOLED OFF: MINISTER

The Steel Minister is set to take up the issue of making operational the joint venture International Coal Ventures Ltd (ICVL) with his coal counterpart. The Steel Minister, Mr. Virbhadra Singh, said: "The ardour and interest shown by Coal India at the time of formation (of ICVL concept) is not visible now. It appears to me that they want to hack out I will talk to my counterpart in the M'nistry of Coal to make sure we move ahead with ICVL - with or without them." ICVL was formed two years ago as a venture between SAIL, Rashtriya Ispat. Nigam Ltd, NMDC Ltd, Coal India and NTPC. The aim of the joint venture was to explore and acquire coal blocks overseas. The company was formed with a corpus of Rs 10,000 crore with SAIL being the major contributor. However, ICVL has made little headway in the past two years. "Coking coal is a weak link for the domestic steel industry. There is a lack of coking coal and we are importing it. We formed ICVL with the idea of acquiring overseas coal blocks. But after the formation, Coal India's participation cooled off. If Coal India doesn't want to participate, let them resign from the project. We will take it forward," he said. "The company has been formed but it is not functioning. We want to make it functional. But if somebody doesn't want to make it functional, they can resign from it." The Steel Minister said he is keen on acquiring coking coal and iron ore from other countries. "The basic thing is to acquire coking coal and iron ore. China has a huge reserve of iron ore yet it is importing iron ore. Why can't we do the same? We should protect and conserve our reserves without affecting the economy of the coun¬try. We have looked at Africa and Indonesia, who are rich in coke and iron ore, to acquire mines and compete for the leases for mutual benefit of both the countries," added Mr. Singh.  

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RE-STOCKING LIKELY TO LIFT STEEL PRICES THIS YEAR

By ceoaisra, Section AISRA NEWS
Posted on Wed Jan 27, 2010 at 01:47:25 AM EST
RECOVERY IN REAL DEMAND WILL HAVE TO WAIT *

Global steel prices are likely to climb this year on re-stocking to replenish inventories depleted by the economic downturn, but investors will have to wait longer for a recovery in real demand. The rising cost of production will help steel prices, as prices for key steel making ingredients such as iron ore, coking coal and scrap are also expected to extend gains this year.

*DE-STOCKING DRIVE
"We're bullish for steel this year," said Nomura analyst Mr Gavin Wood. "We think destocking will drive the volume recovery and it is going to have a bigger impact than most people expect." Nomura expects European hot-rolled coil (HRC) import prices to rise to $743 a tonne this year, compared with $518 a tonne last year and versus $943 a tonne in 2008, at its peak. Macquarie predicts HRC will rise to $639 a tonne this year, backed by a forecast of a 30 per cent rise in iron ore benchmark prices this year.

CHINA RISK
"We're not expecting a major underlying recovery but we think there's going to be strong price recovery, also helped by higher raw material costs," Mr Wood said. A big risk to prices is China, the world's top producer, which could flood the rest of the world with its steel exports, if domestic demand begins to slow. China's steel production reached 518 million tonnes in the first 11 months of 2009, accounting for 47.5 per cent of the global crude steel production at 1.09 billion tonnes in the same period.

MANAGING OVERCAPACITY
"The big question mark is how will Chinese industry manage this overcapacity? If they just sell it off abroad then it would be very negative for the overall industry," Moody's analyst Mr Matthias Hellstern told Reuters in a recent interview. And for a recovery in real demand from key steelmaking consumers such as the construction and car industry and real consumption, the industry will have to wait until next year, and possibly another two years, to see the boom times of 2007. The lack of that recovery, coupled with the uncertainty on when and how strong demand will be could squeeze margins as raw material prices rise. "With the slow pace of underlying demand recovery in the mature economies (2007 demand levels are not expected to be reached until 2012 or beyond) there is a limit to how far and how fast producer profitability can recover on the basis of pricing momentum alone," said Mr John Lichtenstein, global leader of steel at consultancy Accenture.

SIGNS OF IMPROVEMENT
There must be continued signs of improvement in economic data as well as infrastructure investments particularly in Europe and in the Americas - for the whole recovery to be sustainable. "The question is whether the demand is sustainable," Mr Hellstern said. "In my opinion, this is a catch-up effect rather than real growth." December and 2009 production data from the World Steel Association is expected to be released on Friday.

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STATES MAY ALLOCATE COAL BLOCKS TO USER INDUSTRIES

By ceoaisra, Section AISRA NEWS
Posted on Wed Jan 27, 2010 at 01:42:39 AM EST
The coal ministry has said that provisions are likely to made in the proposed amendments to the Mines and Mineral (Development and Regulation) Act to enable state governments to allocate coal blocks to user industries. This is separate from the auction route for allotment of blocks, which will also be present in the modified legislation. "We are considering amendments to the MMDR Act, which will be placed before Parliament in the budget session. If coal blocks are available with us, we will surely give it to the states," Coal Minister Sriprakash Jaiswal said here today. Jaiswal, who was speaking on the sidelines of the third Asian Mining Congress, indicated that a dual-track system would be in place, where state governments would be given a certain number of coal blocks, based on availability. Additionally, an auction route would also be present in which the highest bidder would gain control of the resources in a specific block. However, he did not give the details of the mechanism that would be employed for the implementation of this scheme. Last month, the Union Ministry of Mines had written to the state government notifying that all coal blocks would be auctioned, on the basis of the proposed MMDR Act, according to which a licence would be granted by the state government only to a company selected by the Centre through bidding.  

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STRONG ASIAN DEMAND MAY DRIVE UP COAL PRICES

By ceoaisra, Section AISRA NEWS
Posted on Thu Jan 21, 2010 at 02:25:44 AM EST
OUTLOOK POSITIVE ON HOPES OF BROAD-BASED RECOVERY IN GLOBAL ECONOMY

The year has begun on a positive note for coal with prices .showing a rising trend. Outlook for the popular energy source is getting increasingly constructive thanks to optimistic expectations of recovery in global economic activity, and more importantly continued stellar role played by the two Asian giants, China and India. "Continued strong import demand from China and India should support a premium in Pacific coal, while a broad-based recovery in other Asian countries will further support upside momentum," said Barclays Capital in a report recently.

MARKET DRIVERS
This is a big change from the situation obtained in 2009 when the market was driven by weak demand in the Atlantic basin in the wake of recession experienced by major industrial economies. In addition, gas prices were attractively low in a market with oversupply. However, countries in the Pacific basin came to the coal market's rescue and turned key positive influencers. The strength of import demand from China and India saved the market from a near-imminent collapse. There is hope 2010 will continue to register large import demand from Asian economies; and that the western countries would show broad-based recovery as is widely anticipated. In the event, coal price risks are skewed to the upside, according to Barclays Capital. India is turning into a large producer, importer and consumer of coal. A significant part is used by the power utility sector followed by steel (coking coal). According to a report of the working group on coal and lignite, the projected domestic availability of coal shall be 680 million tonnes (mt) against the projected demand of 731 mt in the terminal year of the Eleventh Plan period, that is, 2011-12.

SUPPLY-DEMAND GAP

According to the Ministry of Coal, the gap between demand and supply of coal during 2006-07," 2007-08 and 2008-09 as envisaged in the annual Plan was 53.4 mt, 38 mt and 60.1 mt respectively. As per annual plan for 2009-10, the projected shortage of coal on all-India basis is about 70 mt. According to experts, there is the possibility of supply bottlenecks re-emerging in the current year because infrastructure problems have not been adequately addressed in the exporting countries, As such coal will be subject to upside price risk.      

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STEEL COMPLEX-SAIL VENTURE TO TAKE OFF BY JUNE

By ceoaisra, Section AISRA NEWS
Posted on Thu Jan 21, 2010 at 02:22:44 AM EST
The joint venture between Steel Authority of India Ltd. (SAIL) and the Kerala Government-owned Steel Complex Ltd. is expected to take off in June this year. The draft rehabilitation scheme is before the Board for Industrial and Financial Reconstruction (BIFR) and once the clean-slating of the balance sheet is finalised, the joint venture will become functional.

DELISTING ISSUE
BIFR had already had two hearing sessions on the draft rehabilitation scheme during which one of the procedures regarding the delisting of shares of Steel Complex was discussed and cleared. While the company's shares stand delisted in the Bombay Stock Exchange, steps have been initiated for delisting from the Cochin Stock Exchange, which is expected to come through within a month. The State Government and its agencies such as Kerala State Industrial Development Corporation (KSIDC) have 87, 6 per cent stake in the equity of the company and the balance 12.4 per cent is held by institutions and private investors. The rehabilitation scheme offers an exit option for the private share-holders at the same consideration at which SAIL obtained the shares.

TERMS OF AGREEMENT
The joint venture agreement, signed in December 2008, envisages 50:50 equity participation by the partners and the 87.6 per cent holding with the Government has been equally split between them. The remaining stake also will be shared equally as and when the private investors exit the company. According to Mr. P. Saidev, Chief Executive Officer, Steel Complex Ltd., a plea was made at the second BIFR hearing for the early sanctioning of the rehabilitation scheme. This elicited a favourable response and a final approval is expected by the end of next month. One of the issues is the settlement of dues to the State Government such as sales tax and electricity bill arrears and the Government has decided to write them off. The company had earlier cleared whatever liabilities it had towards banks and financial institutions through one-time settlement.

TMT BARS PRODUCTION
The clean-slating process is expected to turn the company's net worth positive by the end of the current financial year, which will pave the way for the company to come out of the purview of BIFR and for the joint venture to come into effect. The company, which now produces billets, will go into the manufacture of TMT bars under the joint venture and a re-rolling mill with an annual capacity of 65,000 tonnes will be installed for the purpose. The production of billets is nov confined to a single furnace with a capacity of 36,000 tonnes.    

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Front Page

Wednesday January 20th
. MINISTRY PUSHES BACK DATE TO ACHIEVE 124 MT/ YEAR STEEL OUTPUT (0 comments)
. COAL INDIA TO SEEK BOARD NOD FOR INTERNATIONAL DEALS (0 comments)

Monday January 18th
. STEEL MINISTRY KEEN TO LIFT RURAL DEMAND (0 comments)
. MEET TO REVIEW COAL SUPPY TO POWER PLANTS (0 comments)

Friday January 15th
. JSPL TO DEVELOP COAL MINES WITH MASSEY (0 comments)

Thursday January 14th
. INDUSTRY REFUSES TO BUY STEEL SECY'S PREDICTION (0 comments)

Tuesday January 12th
. APR-DEC STEEL CONSUMPTION INCREASES 7.7% (0 comments)

Monday January 11th
. MINISTRY PLANS SPECIAL SAIL ARM FOR OVERSEAS BUYS (0 comments)

Thursday January 7th
. BENGAL URGED TO PUT PRESSURE ON CENTRE FOR COAL BLOCKS (0 comments)

Wednesday January 6th
. STEEL MAJORS SEE PRODUCTION SURGE IN 2009 (0 comments)

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