Indian & world foundry news




Oct 09, 2014



World Steel Dynamics predicts short lived gains for aluminum



Worldsteel elects new officers and welcomes new members



BHP Billiton price cuts questioned



Semis prices rise in Tangshan during holiday amid better market expectations



Rio Tinto hires Macquarie to fend off Glencore advances



Ferrexpo to reduce capex amid falling iron ore prices



Ukraine pins hopes on steel and coal firms ravaged by war



Ukraine wants new IMF bailout as war squeezes economy



Mr Barnett hints at more job cuts



Japan's shipments of CRC drop in first 8 months



Anglo said to begin USD 1 billion copper asset sale in Chile





BC Iron reshuffles board - Oct 09


Business Spectator reported that BC Iron has added two Iron Ore Holdings representatives to its board, after last week declaring its off market takeover offer for the junior developer unconditional.


Mr Alwyn Vorster MD of IOH and non executive director Mr Brian O’Donnell joined the board from October 7, as foreshadowed in BC Iron’s official takeover offer documents.


Mr Vorster will initially act as an executive director, moving to a non executive role in due course on conclusion of his employment contract with IOH. Mr O’Donnell will join the board as a non-executive director.


BC Iron's friendly, off market offer for IOH is scheduled to close at 5pm (AEDT) on October 14. At last count, BC Iron held an 84.28% voting stake in IOH.




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Ms Gina Rinehart's Roy Hill project is focusing on the quality of iron ore - Oct 08


SMH reported that the man who helped seal USD 7.2 billion debt package for Mr Gina Rinehart's Roy Hill project has conceded that such a deal would be harder to close in the present environment, given the recent collapse in iron ore prices.


The Roy Hill debt deal was closed in the final week of March, a month in which the iron ore price averaged USD 112 per tonne, well above the USD 79.4 per tonne seen this week.


Mr Garry Korte chief financial officer of Roy Hill noted that the good timing of the deal and Roy Hill would focus on making sure the quality of its product was good enough to attract the best possible price. The finance closed in March. I'm very happy that we closed it at that stage, it would be a little bit more challenging today..”


Mr Korte said that "We produce a product that is largely going into Japan and Korea and that is a market that values quality very highly and so for them it is absolutely critical that we produce consistent product and quality product."


Roy Hill is a joint venture between Ms Rinehart's Hancock Prospecting and South Korean steel giant POSCO, Japanese company Marubeni and Taiwan's China Steel Corporation.


Mr Korte said that the Asian joint venture partners were attracted to invest in the USD 10 billion Roy Hill project because it would give them a secure stream of the type of quality iron ore they wanted.


The quality of iron ore is more important than ever before, with producers of lower grade iron ores forced to accept increasingly wider discounts than at any time over the past decade.


He said that "The Asian steel mills continue to see more and more variability in quality, they see declines in grades and increases in contaminant levels, and that was part of the rationale that drove them to invest into Roy Hill."


He added that "There is at least a 20% price differential for marginal differences in quality so for us 20% of the selling price of iron ore is a very significant number and dwarfs a lot of cost saving opportunities."




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Arrival of ships laden with iron ore and coking coal to boost PSM production levels - September 24


According to Pakistan Steel Mills sources, two ships carrying iron ore of 20,000 tonnes and 50,000 tonnes have arrived at the Pakistan Steel Jetty at Port Muhammad Bin Qasim.


Meanwhile, the ship that brought 50,000 tons has started offloading on September 19.


A spokesman said that earlier, two ships carrying 50,000 tonnes each of coking coal from Australia were also cleared at the Pakistan Steel Jetty, while one carrying 55,000 tonnes of iron ore from Mauritania is expected to reach by October 6.


With the arrival of these ships, the total quantity of raw materials stock of PSM has increased to 160,000 tonnes of coal and 112,000 tonnes of iron ore. The management is confident that with the arrival of the latest ships, the production and capacity utilisation of the mill will further increase and help achieve the targets set by the government.


It is pertinent to mention that the current average capacity production utilisation of PSM has increased to almost 25%. The total installed capacity of the mill is 1.1 million tonnes per annum.




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BRMS unit to start processing zinc and lead 2017 - September 22


The Jakarta Post Mining firm PT Bumi Resources Minerals expects its subsidiary PT Dairi Prima Mineral to start processing zinc and lead at the end of 2017 following the inking of a contract.


The Jakarta listed company announced that Dairi had signed an engineering, procurement and construction contract last Thursday with China Nonferrous Metal Industry’s Foreign Engineering and Construction Company Limited.


Under the contract, which followed a general partnership agreement signed last October, NFC will build infrastructure and facilities to process 1 million tonnes of ore per annum at a zinc and lead mining site in North Sumatra, which is operated by Dairi.


NFC will help acquire 85% of the funds needed for the mining site development project, with the total funds to be disclosed soon.


Mr Suseno Kramadibrata CEO of BRMS said that “We expect to monetize the zinc and lead reserves operated by Dairi by the end of 2017 and add value to the respective shareholders.”




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Azovstal GD update on steel production amidst crisis - September 20


Kyiv Post reported that while business in Ukraine’s eastern war zone is no easy chore, at Azovstal, a major steelmaker in the Azov Sea port city of 500,000 people, survival tactics range from bypassing dangerous routes for supplies to inspecting and re stocking shelters for workers in case of shelling.


Mr Enver Skitishvili GD of Azovstal, which is a part of Mr Rinat Akhmetov’s Metinvest Holding, said that “We have major complications with logistics. Donetsk is almost cut off and we have almost no shipments through Donetsk.”


Mr Skitishvili said that “The plant was also forced to diversify coking coal supplies and start shipping goods and raw materials by sea to compensate for the loss of its main supply route. But the sea supplies are limited because the sea is shallow, so we have difficulties.


Mr Skitishvili said that “He expects a drop of 30 percent of production across the board because of this problem, but insists that so far it has not affected financial performance so far. Because we went to more expensive markets we’ve lost just 10% to 15% in monetary terms, no more.”


Azovstal has managed to even find some silver linings in this war, diversifying their range of products and finding new markets. Mr Skitishvili said that “We have decided to work to improve quality and mastering new steel grades. As of November of last year, Azovstal has developed the capacity and skills to produce 50 new grades of steel that nobody else makes. New standards have been introduced for some types of rolled steel, which increase the width of the metal sheet out of Azovstal’s capacity. The new GOST (Russian national standard) means that supplies of my sheets are additionally taxed. Kazakhstan, which is a part of Customs Union with Russia, adapted the same standard, locking Ukraine out of the supply chain.”




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City wants urgent meeting with province over US Steel bankruptcy - September 19


Worried Hamilton politicians are calling on upper levels of government for help after news that one of its largest employers, US Steel, has filed for bankruptcy protection.


City councillors voted to ask the province for an urgent meeting around the steel giant's announcement, which caught them off guard. It's also asked staff to rush on a report evaluating the economic impact on the city if US Steel was to close its Hamilton plant altogether.


The announcement raised questions about what the move will mean to the city, particularly as it pertains to the hundreds of jobs and thousands of pensioners who live in Hamilton.


US Steel’s stock has soared since the company announced it would be filing for bankruptcy protection in Canada, a move that caught the City of Hamilton off guard.


But in Hamilton, the move has again raised questions about what the move will mean to the city and it unleashed another round of criticism both over how the company has behaved since buying up Stelco and how Canadian governments have handled the US steelmaker.


Hamilton Mayor Mr Bob Bratina said that he was shocked to learn the news US Steel, formerly Stelco, filed for bankruptcy protection with the Superior Court of Ontario under the Companies’ Creditors Arrangement Act after the market closed. The company also cancelled more than USD 800 million (US) in capital investments south of the border, in Indiana and Minneapolis.


Mr Andrea Horwath leader of Ontario NDP said that “The Premier has many options to make sure steel jobs stay in Hamilton instead of throwing up her hands. New Democrats have long proposed a job creator tax credit, getting sky high electricity prices under control, and an industrial investment tax credit, all of which could help keep industry in Hamilton and in the province.”


Mr Duvall, a Ward 7 councillor, said that US Steel is following a pattern of dumping losses on Canadian operations to make the foreign operations look good, while receiving bailouts north of the border. Big companies and corporations are taking advantage of this loophole.


He said that "They get themselves into so much debt. They're foreign owned. They suck that (Canadian) company dry and then they their (foreign owned) company can look good and then they call for creditor's protection. After everybody's been honest, giving them credit, doing what they've got to do, and saying, 'Well to get back on our feet we've got to rob you a little bit.”




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Outokumpu showcases its expertise in surface finishes for building and infrastructure projects - September 18


Outokumpu showcased its high quality offering in surface finishes in simultaneous events in Germany and China and demonstrated why stainless steel is used increasingly in demanding building and infrastructure projects.


At both events, Outokumpu exhibited three of its latest products; 2R2 a highly reflective, smooth finish in high volume production; GritLine a bright surface with improved properties through rolling; and Laser a new surface finish with random pattern that depicts a homogeneous surface, ideal for large façade elements.


Mr Mika Seitovirta CEO of Outokumpu said that “Stainless steel is the preferred material for modern building and construction due to its high mechanical strength, resistance to corrosion, aesthetics and cost efficiency. It performs well in extreme climate conditions and needs little maintenance.”


In both Dillenburg and Shanghai, China, Outokumpu displayed its broad range of surface finishes, many of which adorn some of the world’s most famous buildings, from the Chrysler building and One World Trade Center in New York, to the new headquarters of the Ping An Finance Center in Shenzhen, China. On September 15, Outokumpu announced the delivery of over 800 tonnes of special surface stainless steel for the creation of the facades of Baosteel’s head offices in Shanghai (48,000 m2 of facade) and Guangzhou, China.


Mr Seitovirta said that “These landmark buildings are more than just beautiful architectural masterpieces. They also tell about the advantages of high quality stainless steel and underscore Outokumpu’s position as one of the world’s leading innovators in advanced materials.”


The Chrysler building is a great example of low maintenance. It was built in 1930 and except of few panels which have been replaced, the stainless steel roof is original and has been manually cleaned only twice. For the One World Trade Center, Outokumpu designed a brand new surface with random patterns to fit in with the critical surface demands of the architect. The Marina Bay Helix bridge in Singapore features high strength and corrosion resistant duplex to ensure low maintenance and continuing beauty in hot and humid maritime conditions.


Mr Seitovirta stressed the importance of technical expertise and support for customers that “The requirements for cost-efficient, high performing, sustainable buildings are growing and those stainless steel suppliers that can offer technical expertise, innovation and end to end project support will lead the pack. Outokumpu is one of the suppliers; one which takes building and infrastructure to new heights.”




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Mexican and Turkish rebar producers argue against US duties - September 17


Reuters reported that US producers of steel rebar undercut each other on price and are not hurt by imports from Mexico and Turkey, foreign firms told the US International Trade Commission as they fought a push to slap duties on their steel.


US based producers have complained of a doubling of imports between 2010 and 2012 and launched a trade dispute that could end in import duties as high as 67% on reinforcing bar used to reinforce concrete.


Companies giving evidence in the final stage of the case said cheap, subsidized imports endanger a recovery in the US industry, which was hard hit by a collapse in construction during the recession.


But lawyers for the foreign producers said most imports were aimed at small scale projects, while US rebar was concentrated in large scale construction like roads and bridges, where US mills dominate the market and aggressively compete on price.


Market leaders Nucor Corporation, Commercial Metals Company and Gerdau Long Steel North America sold rebar cheaply to their in house operations marketing to contractors for big projects.


Mr Jay Campbell, of White & Case, a representative for the Mexican producers said that "Nucor and Gerdau are the price leaders and undersold other U.S. producers and each other. Imports did not suppress the US mills' profitability; the big three did this to themselves."


Mr Wiley Rein lawyer Alan Price, representing the US mills' Rebar Trade Action Coalition, said that unfair competition from imports cut operating margins to 3.7% in 2013. That was down from 4.3% in 2011 and 5.5% in 2012.


Mr Jim Darsey, Nucor executive vice president of bar products, said that Nucor cut prices to compete with imports, hurting the company's bottom line but imports just got cheaper and cheaper. Recovery remains elusive, in large part because of dumped and subsidized imports.


Mr Jim Kerkvliet, Gerdau Long Steel vice president of sales, said that his company had been forced to idle several mills, reduce staff at others and lay off 550 workers at one facility. Production, sales and financial performance took a significant hit. Construction was not expected to return to pre-recession levels until 2017.




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Kobe Steel licenses tin plating technology for copper and alloy terminals - September 16


Kobe Steel Limited announced that it has licensed Germany's Wieland Werke AG to use its New Reflow Plating process on copper sheet and strip for terminals and connectors. Wieland is Europe's leading manufacturer of copper sheet and strip for these applications.


The arrangement with Wieland is not a first for Kobe Steel. In April 2009, Kobe Steel provided Wieland with a license to make its SuperKFC series of copper alloys for semiconductor leadframes. In November 2012, Kobe Steel licensed the Germany firm to produce its CAC 5 copper alloy for terminals and connectors.


For manufacturers, the latest licensing agreement will help establish a global supply network for copper alloys, especially for automotive applications. It also addresses customer needs to procure materials from multiple sources.


Kobe Steel already supplies Asia with this material, but the licensing arrangement with Wieland will enable Kobe Steel to expand its supply to two major world markets: Europe and the United States.


Terminals and connectors are connecting components that join electrical wires to electrical devices in cars. A connector contains many terminals. Depending on the application, the surface of the terminal is plated.


With cars using more electrical components in recent years, the number of terminals and connectors needed has been increasing. In contrast, joining the terminals and connectors to electrical components is done by hand during automobile assembly. This increases the burden on workers, leading to lower productivity during assembly.


In 2007, Kobe Steel developed a plating process called New Reflow Plating to meet the need for terminals with a low insertion force. In this plating process, the partial exposure of the hard copper-tin intermetallic compound, which forms between the copper alloy sheet and soft tin-plated surface, results in good slidability and low insertion force.


Depending on the shape of the connector, terminals and connectors with New Reflow Plating can have an insert reduction force 30% lower, in comparison to conventional reflow tin-plated terminals and connectors. Copper alloys with New Reflow Plating contribute to load reduction during connection work and improved productivity in the assembly process.


As electrical components become bigger, automotive terminals and connectors are becoming increasingly diversified. Kobe Steel anticipates that the use of the New Reflow Plating process will increase in the future due to the lower insertion force of terminals and connectors that undergo this innovative treatment process.




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SMS Siemag revamped second 400 tonne converter at Duisburg Bruckhausen works of ThyssenKrupp - Sep 15


The 400 tonne converter at ThyssenKrupp Steel Europe AG, Germany, in the Duisburg Bruckhausen works went into production immediately after the successful revamp by SMS Siemag Germany, in July 2014.


The new converter vessel is one of the largest of its kind worldwide. The design developed by SMS Siemag has enabled the construction of a much larger converter vessel: With an unchanged quantity of up to 400 tonnes of material charged, the internal volume of the converter has been increased by 24%.


Thanks to the lamella suspension system developed by SMS Siemag, the existing mounting space can now be used more efficiently. The lamella suspension comprises a maintenance-free converter suspension for arranging the converter vessel in the trunnion ring without restraint.


The additional volumetric capacity enables a more environment-friendly process control and a more efficient energy recovery. This expansion will be done for reasons inherent to the production process and it is not associated with increasing volumes.


Mr Tim Moscheik, Project Manager of the converters revamp, ThyssenKrupp Steel Europe in Duisburg Bruckhausen said that “We would like to thank all parties involved for their performance and commitment. The project is a very good example of the fact that precise agreements, an open attitude towards one another, good communication and close cooperation between the subsuppliers, our specialist departments and the Oxygen Steelworks I have paid off.”


Mr Wolfgang Schulte, Senior Engineer of the Plant development department, ThyssenKrupp Steel Europe said that “Converter I, which has been on stream again for almost one year, delivers good results and fulfils our high level requirements. For Converter II, we have already awarded acceptance after a 14 days period. We are very satisfied.”


SMS Siemag supplied the converter, the supporting ring, the vessel fastening with its patented lamella suspension system of the latest generation, the trunnion bearings and the bearing supports. The solution developed by SMS Siemag makes it possible to retain and continue to use the existing converter tilt drive.


SMS Siemag has also been responsible for the dismantling of the existing converter plant, the installation of the plant components as well as the erection of a new converter platform. The revamp has been carried out by the ThyssenKrupp MillServices & Systems GmbH, Duisburg, Germany.




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Esmark to convert Ohio steel mill to serve shale boom - September 12


Reuters reported that an idled steel facility in the heartland of the United States is gearing up for a revival as an energy services provider due to surging production from the US shale revolution.


Esmark Inc said that it is converting the former Ohio Cold Rolling Company steel manufacturing plant in Yorkville, Ohio, into a transportation and logistics hub to serve the Marcellus and Utica shale plays of Pennsylvania, Ohio and West Virginia.


Esmark acquired the Yorkville facility about two years ago from a defunct steelmaker but kept the facility idled due to poor market conditions. The move to refit the plant comes amid a shale boom that has set the United States on course to become the world's largest producer of oil and gas.


The new facility, renamed Yorkville Energy Services Terminal, will provide oil and gas related infrastructure services such as fresh water off take, dry storage, as well as rail, barge and truck access.


Esmark said that a number of large and mid sized energy services companies have expressed interest in the terminal, including companies engaged in material handling, transloading and rail switching. It did not name the companies.




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Ukraine's KVV Group to buy Latvia's insolvent steelmaker - September 11


Reuters reported that Ukraine's KVV Group has offered to buy Latvia's insolvent steelmaker Liepajas Metalurgs for EUR 107 million.


Liepajas Metalurgs, the only producer of rolled steel in the Baltic countries filed for bankruptcy last year, blaming weak demand in Europe.


Mr Haralds Velmers the insolvency administrator said that “The KVV Group has provided a clear plan for re-launching the plant's operations. KVV Group is going to pay the sum over 10 years.”


Latvia's government, which had to repay EUR 74 million under a loan guarantee to Italian bank UniCredit after the company could not cover its liabilities, has welcomed the offer.


Mr Laimdota Straujuma PM of Latvia said that "It's important that (the buyer) wants to invest in the company and to resume production."




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Collapsing steel prices in China - Another ominous sign for iron ore - Mr Andy Home - September 10


Mr Andy Home, a noted columnist with Reuters wrote that “Everyone knew this was going to be a difficult year in the iron ore market. Expansions by existing producers such as Rio Tinto and BHP Billiton and ramp ups by newer players in Australia and West Africa were widely expected to generate a wall of supply in the sea borne market. The timing was always going to be problematic, given the equally widely expected slowdown in China, the world's biggest buyer of iron ore.”


He wrote “The combination of supply surge and slowing demand growth has already unleashed a battle for survival among iron ore producers. The latest victim of this brutal new iron age is fledgling Australian producer, Western Desert Resources, which has just gone into administration.”


He said “But at least Chinese steel production has been growing, even if the rate of growth has braked sharply to 2.7% in the first 7 months of 2014 from 12.1% in the year earlier period. However, it is getting harder to ignore the building pressures in the Chinese steel sector and the rising risk of some sort of demand shock along the raw materials chain.”


He wrote “The surest sign of tension in China's massive steel market is the steady decline in domestic prices. On the Shanghai Futures Exchange, the most active steel rebar contract slumped to another record low last week, extending a price decline that has run uninterrupted since the beginning of August. The SHFE's hot rolled coil futures contract has fared no better, also closing the week at its lowest level since it was launched in April this year. The two Shanghai steel contracts have tracked each other closely since April, but as the graphic below shows, rebar has fared significantly worse. That's a clue as to what lies behind this accumulating price implosion, since rebar is the form of steel most widely used in construction.”


He said “Property sales and new starts have both been falling across China with no end in sight to the downturn. Local governments have been quietly easing previous restrictions on property purchases and the central government continues to drive investment into affordable housing, but neither is sufficient to offset the profound malaise in China's previously white-hot construction sector.”


He wrote “The fact that HRC prices are also falling, even if not as fast, suggests that steel demand weakness is spreading into the broader manufacturing sector. That chimes with the latest purchasing managers indices. Both official and unofficial surveys for August painted a worrying picture of deceleration in the engine-room of global manufacturing.”




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Australian iron ore price fall starts to hurt smaller miners - Sep 9


SMH reported that the iron ore price collapse is starting to claim victims, with one exporter bound for administration and USD 250 million takeover deal under increasing doubt.


This year's 38% fall in the benchmark iron ore price continued late on Friday night, with the price slipping to USD 83.60 per tonne.


The price pressure became too much for pokie king Bruce Mathieson's Western Desert Resources, which was forced to appoint KordaMentha as voluntary administrators on Friday.


Western Desert had been trying to renegotiate funding arrangements with Macquarie for its Roper Bar export operations in the Northern Territory but was told that no support would be forthcoming.


Western Desert named the low iron ore price among the reasons for its failure, which will also hurt engineering group Thiess, which was contracted to work as the company's mining contractor until January 2017.


The collapse comes despite Western Desert having the financial firepower of Mr Mathieson and former Coles and AMP director Rick Allert behind it.


The sliding price could also cause trouble for media mogul Kerry Stokes, whose ASX listed iron ore vehicle Iron Ore Holdings is subject to a takeover offer from BC Iron. Under the terms of the acquisition bid, the deal can be terminated if the iron ore price falls below AUD 90 per tonne for 20 consecutive days during the offer period.


Friday night's fall to USD 83.6 per tonne translated to AUD 89.14 per tonne, and represents the first time the price has gone below the nominated level since the takeover was launched on August 11.


The offer period was initially scheduled to run until September 26, and has since been extended to September 30, meaning there are just over 20 days until the end of the offer period.


BC Iron has the right to extend the offer period further if it chooses. If the takeover survives the price slide, Mr Stokes will receive about USD 8.5 million in cash and about USD 112 million worth of BC Iron shares, which are more valuable and far more liquid than IOH.




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Reverberations in Goa from China's property market collapse - Sep 8


Bankers and investors around the world are extremely nervous these days the latest data from China indicates an increasingly bleak scenario is rapidly accelerating into focus. When the US property market crashed in 2005 to 2008, it triggered lasting devastation in the global economy. Now the same thing seems be happening all over again. China's property market is teetering on the brink of disaster.


Most analysts acknowledge the truth is worse than official data indicates: that last month home prices again fell in 64 of 70 Chinese cities (the biggest decline since records began). Floor space sold is down 16.3%, despite many cities scrambling to ease home purchase restrictions. New construction starts have fallen by 25%, actual housing prices are declining for the first time in modern Chinese history, and the impact has been a marked slowdown in national GDP growth (where real estate and associated sectors account for 16%).


Still, all this happening in a highly controlled command economy, with an agile and protective government united to ensure social stability is maintained, and political unrest avoided at virtually any cost. China's spectacularly fluid and dynamic labour force will be shifted around and compelled to fill the property vacuums. Premier Mr Li Kequiang has already eased controls over property sales, and this week promised more of the same. It's a very bad situation a 4% to 5% hit to China's GDP can be expected the next few years but not nearly as bad as it will be elsewhere, when the same thing happens.


Over here in India, a blithe consensus has long been held, you can never go wrong with property. For decades after Independence in 1947 just like in China all these years that view held true. Property prices never declined, and eventually demonstrated world-beating appreciation: New Delhi and Mumbai property became some of the most expensive in the world. Even little Goa's property prices are now directly equivalent to many parts of Europe. But the real data behind the hype already indicates a different story.


According to Residex, the National Housing Board's index of actual transaction prices in 26 Indian cities, there has been less than 9% nominal appreciation across the board from 2007, which gains are entirely cancelled out by the 9% inflation rate. There are regional and situational variations, but the general conclusion is inescapable Indian property values stopped their inexorable growth 5 to 7 years ago. Though absolute prices remain high, a certain ceiling has been reached. Now the only way to go is down.


The problem in the Chinese real estate sector can be summarized in one word: overbuilding. Developers competed with each other to drive up commodity prices and massively expand the luxury housing sector. Exactly the same thing happened in India too, with hugely overpriced housing estates mushrooming everywhere from Chandigarh to Caranzalem. And so just like in China prices have begun a previously unthinkable decline. Residex indicates more than 20% drop in Delhi alone.


The same is crystal clear in Goa, where prices reached unsustainable levels several years ago, and again just like China most of the rise is attributable to hot money from speculators. The 2011 Census indicated that 25% of homes in the state are unoccupied. But that remarkable percentage is actually very much higher in all the egregiously inappropriate high rise construction in Dona Paula and Dabolim, and Reis Magos and Ribandar and many other illegally urbanized villages across the state. The same census very worryingly indicates that by far the largest construction activity in Goa is unoccupied real estate more than school buildings, hospitals, places of worship, factories and worksheds combined.


The explosive real estate boom in China had a highly significant rolling effect in Goa. The market price for iron ore soared to its highest in history, and we now know the established players were joined with an army of newly-minted miners to pillage the state's resources to such an extent the Supreme Court had to recommend complete cessation of all mining activity in Goa until the illegalities could be controlled.




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Norilsk Nickel updates on Palladium - September 5


In H1 2014, palladium was the best performer among precious and most of industrial metals. A 5- month long labour strike in South Africa put a halt to 20% of global palladium production and resulted in over USD 2 billion in lost revenue. We believe that the pre strike mine production capacity could be reached not earlier than September 2014 at best.


The labour strikes affected only mine production, so that the South African PGM producers could still produce refined metal using the ore inventory accumulated ahead of the strike as well as tap into their refined metal inventory. Therefore, the negative impact of the strike on the supply of refined metal was partially mitigated. We expect a reduction of palladium supply from South Africa by over 400,000 ounces this year as ?ompared to 2013.


We estimate that there were no sales of palladium from the Russian government stockpiles (Gokhran) in H1 2014, thus confirming the market view that these stockpiles have by and large depleted by now. Gross palladium demand increased in H1 2014 on the back of expanding global automotive industry driven by strong growth in China and recovery in the developed world, combined with rising investment demand. The new ETFs launched in South Africa (by ABSA and Standard Bank) accumulated in total 850 thousand ounces of palladium in H1 2014.


As result of the apparent market deficit in H1 2014, palladium price increased 7% year on year to USD 779 per ounce.


We expect an increase of gross palladium consumption by around 2% in 2014 to 9.5 million ounces. Rising consumption combined with reduced supply of the primary metal, we forecast should drive the palladium market to a wider deficit in 2014 of over 2 million ounces (over 20% of global gross consumption) up from approximately 1.0 million ounces deficit in 2013.


We also reiterate our view that the discount of palladium to platinum should continue shrinking. The current discount remains to be fundamentally unjustified, in our view, and we see substantial further room for platinum substitution by palladium in diesel autocatalysts as well as the palladium demand growth in gasoline autocatalysts and other applications.




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Flinders Mines reveals big iron intersections at Blackjack - September 4


Flinders Mines has revealed significant high grade and near surface bedded iron mineralisation at its Pilbara Iron Ore Project in Western Australia.


Infill and extensional drilling has now been completed with assays received for a further 80 holes.


Standout intercepts included 40 meters at 60.0% iron, 30 meters at 58.9% iron, and 30 meters at 58.8% iron and importantly, the high iron assays are enhanced by the low levels of impurities such as alumina and silica.


All of these high grade intersections are outside of the current Inferred Resource boundary and outside existing pit designs as defined during the project Pre Feasibility Study.


This mineralisation remains open to the south-east and west and is adjacent to targets previously identified for bedded iron in the hills surrounding the Blackjack deposit, providing support for FMS' lofty exploration targets.


Once infill drilling across the project has been completed a specialised track mounted drill rig will be utilised to undertake drilling in the hills over the next two months. Significant results from drilling targeting new mineralisation will be reported as they are received.


Flinders is also planning to release updated resource estimates for each of the individual deposits within the Pilbara Iron Ore Project over the next two months.


Notably, Flinders already has export arrangements in place after entering into an agreement with the Balla Balla Joint Venture between Todd Minerals and Rutila Resources.




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Workington's TATA Steel shut down with the loss of 32 positions - September 3


Following months of speculation at Workington’s TATA Steel, it has been confirmed that the site’s copper plant has shut down with the loss of 32 positions.


The company revealed last year that 75 jobs were to go across the whole site, with the foundry being the main casualty.


A rescue plan was launched earlier this year and hopes were lifted when it looked like a potential buyer had been found for the foundry. But, after extensive talks, the takeover fell through at the eleventh hour and the firm announced in June that its closure was imminent.


The last cast has now been produced and the foundry is being decommissioned. It is understood that the workers have been moved elsewhere in the plant for the time being, but it is not known what the future holds for them.


Mr Craig Scott MD of TATA Steel Projects said that “TATA Steel worked closely with unions and politicians to try to find a solution other than the closure of the foundry. Unfortunately that was not successful and so it must be remembered this action is being taken to ensure the future of the business as a whole. TATA Steel is committed to Workington and we now need to keep focussed on the future.”




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Latin American update on steel sector performance in January to June 2014 period - September 2


Facing scenarios of weak global and regional economic growth, crude steel production and finished steel consumption remained unchanged during the first half of the year compared to same period of 2013. Moreover, finished steel production decreased 1%.


Finished steel use


Finished steel consumption in Latin America and the Caribbean reached 34.2 million tonnes in January to June 2014, in line with the same months of 2013. The only countries that grew during H1 2014 were Mexico (11%), Colombia (15%) and Argentina (5%). On the other hand, Venezuela's, Ecuador's and Chile ́s production continued to decline in terms of tonnes and percent changes.


Trade Balance


Between January to June 2014, regional trade of finished steel marked a deficit of -7 million tonnes, 11% deeper than H1 2013, when it had reached -6.4 million tonnes.


During January to June 2014, all Latin American and Caribbean countries described deficits in their trade of finished steel. Mexico showed the most marked imbalance of -2.3 million tonnes. It was followed by Colombia (-1.1 million tonnes), Peru (780,092 tonnes) and Chile (743,300 tonnes). The evolution of these trade flows and the balance is presented in Graph 02.




Regional production of crude steel in 1H2014 reached 32.2 million tonnes, in line with same period of 2013. Brazil was the top producer (16.7 million tonnes), accounting for 52% of the regional output but showing a slight fall of 1%.


During January to June 2014, the countries with the highest growth rates (YoY) in crude steel production were Argentina (+12%), Mexico (+ 6%) and Peru (+ 4%). Venezuela, Chile and Colombia posted declines of -42%, -18% and -2%, respectively.


During the H1 of the year, Latin America produced 28 million tonnes of finished steel, 1% less than the output recorded for the same period of 2013. Brazil appeared as the top producer (12.5 million tonnes), accounting for 45% of the Latin American production. Mexico came to the second place with 8.5 million tonnes (31%) and showed a significant increase of 9% YoY.


Other countries that increased their finished steel production of during January to June 2014 YoY were Colombia (+ 15%) and Ecuador (+ 1%). Meanwhile, Venezuela ́s and Chile ́s output dropped -40% and -25%, respectively.


Advanced information for July 2014 indicates that crude steel production reached 5.6 million tonnes during that month, 2% less than July 2013. Also, finished steel production closed at 4.5 million tonnes, down 5% YoY. Between January to July 2014, crude steel production reached 37.8 million tonnes, in line with same months of 2013, while production of finished steel reached 32.2 million tonnes down 2% YoY.




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TATA Steel asks for 8 more years to improve air quality in Scunthorpe - September 1


TATA Steel bosses are seeking an 8 year stay of execution to cut emissions from the coke ovens on the Scunthorpe site as they fear the costs would far outweigh the environmental benefits.


The company, which employs 4,000 people in the town, has estimated the cost of rebuilding the ovens some of which date back to 1938 could be as high as GBP 833 million.


A spokeswoman for the Environment Agency said that "TATA Steel has made four requests to delay improvements for us to assess. The derogations can be permitted if we feel the costs of earlier implementation are disproportionately high compared to the environmental benefit."


The spokeswoman confirmed the requests for time-limited derogations until 2022 all related to the coke ovens. Should we believe that we are able to accept the requests, we will consult the public and professional partners on that position before making a final decision. That consultation would not start before October.”


She said that "If we don't accept Tata Steel's requests for derogations to meet the requirements at a later date, then we would issue a permit requiring all the new standards to be met by March 2016."


Company bosses have promised to deliver significant improvements on the 2,000 acre Scunthorpe site by the 2016 deadline. The improvements to meet a new directive from the European Union on industrial emissions included the removal of emissions of sulphur dioxide and a cutback in other pollutants known as polycyclic aromatic hydrocarbons from the coke ovens.


A TATA Steel spokesman said that "The PAH improvement plan will reduce emissions though a replacement and maintenance programme. The new environmental permit will formalise the commitment TATA Steel has made in the form of an agreed emission management plan. The implementation process allows for exceptions from best available techniques to be made in some limited circumstances which are set out in the industrial emissions directive as agreed after discussions with the environmental authorities.”


He said that "TATA Steel is always looking at ways of improving the health and wellbeing of both employees and the community at the same time as continuing to operate in a highly competitive global marketplace. Over recent years, Tata Steel has focused on reducing dust on the site. All the measures have been successful in reducing dust lift off."


The spokesman said that "TATA Steel's proposal, to install the best available technique for desulphurisation on all coke making activities by 2022, would reduce the emission of sulphur dioxide. The installation of coke oven gas (COG) desulphurisation is a complex project involving considerable engineering and technological resource and therefore it requires a phased implementation at the two ovens.”


He said that "It must be remembered, however, that the current sulphur dioxide emissions from coke ovens have not breached local air quality standards. TATA Steel is constantly investing in improving its environmental performance to reduce emissions as a way of lessening our impact on the local community and meeting our legal obligations.”


He added that "There are estimates of both initial investment and long-term costs. But it would be wrong to make those details public when Tata Steel's engineers are still working to identify the most appropriate technique and plant required to improve the process for both the Appleby and Dawes Lane coke ovens."




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Falling housing prices are causing violent protests in China - August 29


In a sign of growing public concern over fluctuations in the country’s housing market, homeowners in two Chinese cities gathered over the weekend to demonstrate against plans by property developers to make steep price cuts even as the industry has recently struggled to attract buyers.


According to the report, a crowd of homeowners surrounded the Shanghai sales office of property developer Greentown China Holdings Limited to protest a 25% drop in home values owned by the company.


However, in Jinan, capital of Shandong Province, owners unfurled banners to protest a similar cut and clashed with counter-protesters organized by the real-estate company.


China's economy, the world’s second largest behind the United States, is highly dependent on its real estate sector, which accounts for between 16% and 20% of China's gross domestic product growth. Because of strict capital controls and a volatile stock market, Chinese citizens invest a significant portion of their surplus income into real estate: Despite widespread rural poverty, China’s homeownership rate is 90%.


Nevertheless, local governments lend money to property developers, whose investment in steel, cement and other commodities fuels politically desirable GDP growth.


As a result, rows of apartment buildings often lacking residents dot the landscape in China’s major cities, creating widespread concerns of a bubble.




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Australia's Mr Palmer apologizes to China for Mongrel comments - August 28


Bloomberg reported that Australian lawmaker Mr Clive Palmer issued a written apology to China’s ambassador for insulting the nation after calling his Chinese business partners mongrels who want to take over the country’s resources.


The mining magnate-turned politician, who Prime Minister Tony Abbott must negotiate with to pass legislation, told Chinese Ambassador Ma Zhaoxu he regretted “any hurt or anguish” his comments may have caused. The letter was dated Aug. 25 and emailed today by Palmer’s office to media outlets.


Palmer’s comments on Australian Broadcasting Corp.’s Q&A television program on Aug. 18 were attacked by Abbott’s government, Australian business leaders and Chinese newspapers. The millionaire is embroiled in a long running legal dispute with Citic Pacific Limited which has alleged he used funds from a joint account to help finance his political campaign.


Mr Palmer said on the program that the Chinese are communists, they shoot their own people, they haven’t got a justice system and they want to take over this country. China is Australia’s largest trading partner, while Citic is Mr Palmer’s partner in the world’s biggest magnetite iron ore mine in Western Australia.




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Rio Tinto seeks Oct-Dec aluminium premium from Japan buyers - August 27


Reuters reported that Rio Tinto has offered Japanese buyers aluminium at a record premium of USD 420 per tonne for October to December primary metal shipments, up 3% to 5% from the previous quarter.


Sources involved in pricing talks said that Japan is Asia's biggest importer of the metal and the premiums for primary metal shipments it agrees to pay each quarter over the London Metal Exchange cash price CMAL0 set the benchmark for the region.


Rio Tinto's offer was below the USD 460 offer made by Russia's United Company Rusal Plc last week.


For the July to September quarter, Japanese aluminium buyers mostly agreed to pay record high premiums of USD 400 per tonne to USD 408 per tonne PREM ALUM JP, over LME prices, up 8% to 12% from the quarter before that.




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Dannemora Mineral signs LoI with Voestalpine for supply of iron ore - August 26


Dannemora Mineral has signed a letter of intent with the Austrian steel group voestalpine for deliveries of iron ore products. Deliveries cover about 300,000 tonnes of fines annually, equivalent to a quarter of Dannemora Mineral’s current production. The volume will cover a large part of the additional volumes that will be produced as a result of the planned expansion of the sorting plant.


The intention is to sign a minimum three year agreement before the end of 2014.


voestalpine currently produces more than 7 million tonnes of steel per year. The Group operates mainly in Austria, with steelworks in Linz and Donawitz but has operations throughout the world.


Dannemora Mineral AB is a mining and exploration company of which the primary activity is mining operations in the Dannemora iron ore mine. The Company intends to engage in exploration activities to increase the iron ore base locally and regionally.The Company’s most important asset is the iron deposit in the Dannemora Mine, and activity is focused mainly on the mining of this deposit at present.




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Beowulf Mining to raise up GBP 2 million for Kallak iron ore project - August 25


Beowulf Mining has unveiled plans to raise up to GBP 2 million cash that will be used to further explore and develop its Kallak iron ore project in northern Sweden.


The company has already placed GBP 1.6 million worth of stock with investors, including its leading shareholder, Lanstead Capital, which is making a GBP 1 million investment.


Existing shareholders are being offered the chance to participate in the cash call via an open offer. The equity is being sold for 3p a share, which represents a relatively modest 14% discount to Wednesday’s closing price of 3.5p.


The placing and open offer were unveiled as Beowulf updated on progress. The mining exploration group unveiled what it described as very promising assay results from the first four holes of the second phase of drilling of the Kallak North deposit. There were significant long intercepts in all holes, including one from surface to 250 metres that averaged 30.68% iron.


Meanwhile, encouraging initial assay results have been received for seven holes located at the most northerly end of the Kallak South deposit. A long and significant intercept returned 150 meters of mineralisation at 26.43% iron.


Mr Clive Sinclair Poulton chairman of Beowulf Mining said that "Amid a challenging environment for financing junior mining companies I am pleased to announce the capital raising today, coupled with intended board and advisory changes. In particular we are pleased to have secured the continued support of our major shareholder, Lanstead Capital.”


Mr Sinclair Poulton said that “We are committed to respond positively to uncertain markets and re position the company to continue its development. I look forward to presenting further updates in due course as we look to move our projects into the development phase. We are grateful for the continued support of shareholders and I hope that the inclusion of an open offer is viewed favourably.”




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China iron ore futures extend losses on Dalian Commodity Exchange - August 23


Reuters reported that iron ore for January delivery on the Dalian Commodity Exchange was off half a percent at CNY 648 per tonne.


It dropped earlier to CNY 644 near June's low of CNY 642 which was the weakest for a most traded contract since Dalian introduced it in October last year.


Mr Cao Bo analyst at Jinrui Futures in Shenzhen said that “The price may hit a new trough below 630 yuan in four months amid plentiful supply. As shipments from Brazil and Australia to China remain high, and domestic iron ore production maintains steady growth, the status of excess supply may continue for a longer time.”


According to data compiled by Steel Index, Benchmark 62% grade iron ore for immediate delivery to China .IO62-CNI=SI fell 0.8% to USD 92.30 per tonne on Wednesday, its lowest since June 20.




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BHP Billiton announces a series of changes to senior management of the Company - August 21


Mr Graham Kerr currently CFO of BHP Billiton is appointed CEO designate of the new company that BHP Billiton plans to form in a demerger. Mr Graham will retire from the Group Management Committee on October 1st 2014 and will be replaced as CFO by Mr Peter Beaven, currently President, Copper. Mr Brendan Harris, currently Head of Group Investor Relations, has been appointed CFO designate of the new company.


Mr Graham first joined the BHP Billiton Group in 1994 as a graduate and held various positions, including President of the Diamonds and Specialty Products business, before being appointed CFO in November 2011. Mr Brendan joined BHP Billiton in 2010 and has led the Company’s global investor relations team from London and Melbourne since 2011. He was previously Executive Director, Metals and Mining Research, at Macquarie Bank.


Mr Peter joined BHP Billiton in 2003 and has held various positions in the Company including President Manganese and Vice President Business Development and Chief Development Officer for the Carbon Steel Materials business. He joined BHP Billiton following a previous career with UBS where he headed the Australian advisory team for resources. Peter is a registered Chartered Accountant. He will relocate to Melbourne from Santiago.


An announcement relating to Mr Peter’s replacement as President Copper will be made in due course. In the interim Mr Edgar Basto, currently Asset President Escondida, will act in the capacity of President, Copper and, following the appointment of a permanent replacement, will take up a new role within BHP Billiton.


Mr Andrew Mackenzie CEO of BHP Billiton said that “Mr Graham has made a significant contribution to BHP Billiton including overseeing the development of the proposed demerger announced today. He has experience across commodities and in recent years has led the finance function and businesses in Canada and South Africa with distinction. Graham is the right person to lead the new company and I am pleased that shareholders will continue to benefit from his skills and experience in his new role.”


Mr Mackenzie added that “MrPeter has delivered very strong results in leading our Copper business through a period of significant gains in safety, productivity and performance. He brings very strong financial experience and expertise to his new role as CFO of BHP Billiton.”


BHP Billiton also announced that Ms Karen Wood will retire from the Group Management Committee effective. Mr Karen joined BHP Limited as Company Secretary in June 2001 shortly before the BHP and Billiton merger. Over her 13 years with the Group she has held a variety of roles including leading the global Human Resources and Corporate Affairs functions. She joined the Office of Chief Executive (later the Group Management Committee) in 2006.


In announcing Ms Karen’s retirement, Mr Mackenzie acknowledged the significant and enduring contribution that Karen has made to BHP Billiton. In her time with the Company, Ms Karen has supported each chief executive, worked on all leadership transitions and been intimately involved in every corporate transaction and significant development within the organisation. She has provided invaluable counsel to all of us and to the Board throughout and has given me personally insightful and helpful guidance as I moved into the role of CEO.


He said that “Ms Karen leaves having put in place world class Human Resources and Corporate Affairs processes and teams. She also led the headquarters of the Company back to its original home in Collins Street in Melbourne and to a wonderful building that both recognises our heritage and promotes our modern culture. Karen’s professionalism and commitment to the organisation and its people will be sorely missed. While Karen is retiring from her executive role she will continue to support me and the Board for some time on several matters including the demerger announced earlier today.”




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The European outlook for the offshore pipeline industry in 2014 is positive - August 20


According to a recent report conducted by TATA Steel, the European outlook for the offshore pipeline industry in 2014 is positive.


Operators and developers are studying, planning and building just over 7,050 mi (11,346 km) of oil and gas pipelines to bring these supplies from offshore fields to onshore markets. The total reflects a significant increase from last year's survey, which showed a total of almost 5,600 mi (9,012 km). This year's total represents a 26% increase over last year.


The increase is driven in very large part by the development of the South Stream pipeline project, and the decision by the developers to build four 578-mi (930-km) pipelines to move natural gas from Russia to Bulgaria (and then to European markets) via the Black Sea. If all four lines are built according to plan, South Stream will include more than 2,300 mi (3,701 km) of pipe.


Installation of the first South Stream pipeline is expected to begin this fall, and will be undertaken by Saipem, who will use its Castoro Sei vessel to work toward a 2015 completion date. Construction on the second line will be undertaken by Allseas, using its new Pieter Schelte vessel. Work on this second line is scheduled for a late 2016 completion timeframe.


Due to the increase in South Stream's project scope, Europe is the clear leader in the survey for the third year in a row, with 4,178 mi (6,724 km) of pipeline systems being built and planned.


It should be noted that the long-planned GALSI pipeline project, which called for a 937-mi (1,508-km), 22- to 48 in. pipeline to move natural gas from Algeria to Sardinia and then to Italy, has been removed from the survey. Some 347 mi (558 km) of that would have been offshore, in the Mediterranean Sea. The project, announced in 2005, has suffered a number of delays and setbacks that have undermined its viability. Recent reports have indicated that this project will not proceed.


At the same time, the White Stream natural gas pipeline project remains in the survey. First announced in 2005, it calls for a 635-mi (1,022-km), 20-, 24-, and 42-in. pipeline to move natural gas from the Caspian region to Romania, Ukraine, and other European markets. White Stream may ultimately be another project that falls by the wayside, but there is some evidence that developers continue to support the project; and so it remains in the survey for this year.


The Middle East once again comes in second (as it did last year), with 1,103 mi (1,775 km) of pipelines being built or planned. Most notable here is the proposed South Asia Gas Enterprise Pvt. Ltd. (SAGE) project, also known as the Middle East to India Deepwater Pipeline (MEIDP). It calls for the construction of an 807 mi (1,300-km), 24- to 27-in., pipeline to move natural gas from the Persian Gulf and Middle East regions to India. This project it still under study, with a projected 2017 completion date.


Also in the region, Delek Group's gas partnerships have applied to export natural gas to Cyprus through a pipeline from Israel's deepwater Leviathan field. The aim is to start gas deliveries in early 2016, but the project requires agreement between the bidders and the Cypriot government no later than Aug. 21, 2014. There is also a proposal to build a pipeline from the Leviathan to Egypt. But no details have been announced for either, so they are not included in the survey.


Similarly, there have been reports of a possible long-distance subsea pipeline to move Iranian natural gas to markets in Oman. Iranian Petroleum Minister Bijan Namdar Zanganeh has said that the two countries have discussed five options for gas transmission, and that they hoped to finalize a deal this year. Again, with no details on route, length and diameter announced, this project has not been included in the survey.


Continuing the trends from last year, the South Pacific region once again comes in third, with 813 mi (1,308 km) of systems being planned and built. Most notable here are the Wheatstone and Ichthys pipelay projects, which have both begun construction. Allseas is building the 140-mi (225-km), 44-in. natural gas trunkline from the Wheatstone processing platform to an LNG plant in Western Australia. Saipem is building the 552-mi (888-km), 42-in. Ichthys natural gas pipeline, which will run from an offshore processing facility to Darwin, Australia. Saipem is using its semisubmersible laybarge SEMAC-1 for the shallow-water portion and the laybarge Castorone for the larger deepwater portion.


Offshore South America, Petrobras is moving forward with plans to move gas from the Guara and Lula Northeast FPSOs in its Lula field to other systems that will take the gas to onshore markets. Petrobras has contracted Saipem for construction of subsea facilities for the Lula Norte, Lula Sul, and Lula Extremo Sul projects offshore Brazil. The location is in the Santon basin presalt region, around 300 km (186 mi) from the coasts of Rio de Janeiro and São Paulo states.




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Azerbaijan's ore to go to European markets in 2015 - August 18

The Azerbaijan Steel Production Complex CJSC said that Russian Electrostal Heavy Engineering Works OJSC and Dashkesan Ore Dressing Plant OJSC signed a contract.


The Dashkesan Ore Dressing Plant is a structural unit of the Azerbaijan Steel Production Complex CJSC.


Under the contract, modern equipment and spare parts will be purchased from Russia for the Dashkesan Plant. The equipment and spare parts will be used to modernize of the production process. The works specified in the contract, should be carried out by January 1st, 2015.


According to the message, Following the works, the iron ore concentrate's quality will rise from 60 to 66% to 7%, being accompanied with an increase in production capacity. This will allow the plant's products to go to European markets in 2015.


During its visit to Russia, the Azerbaijani delegation also got acquainted with the production process at two enterprises the Lebedinsky GOK and Oskol Electric and Steel Works, which are owned by the company 'Metalloinvest'.


These enterprises are located in the cities of Gubkin and Oskol of the Belgorod Province. They produce five million tons of iron per year. The use of these plants' experience is considered to be appropriate for development of possible cooperation directions.


Azerbaijan Steel Production Complex CJSC is also planning to send its employees to these enterprises to enhance their work experience.


Azerbaijan Steel Production Complex CJSC was created by presidential decree in April, 2013. It is engaged in the design, construction and management of a steel production complex in Ganja city and Dashkesan District of Azerbaijan.


The complex covers all production stages starting from iron ore mining up to steel production, and uses new technologies in this area, as well as modernizes material and technical base and its efficient use, and carries out other works related to this industry's development.




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Japanese steel mills to raise prices of wire rods prices for Oct shipment - TEX - August 16


TEX reported that export negotiations on steel wire rods for Asia by the Japanese blast furnace mills have started for October shipment.


It seems to be in the latter half of August for negotiations to go into full swing while a mill of them begins to offer its prices. Other mills have not fixed their offer prices yet but according to a feeling, they are on track to raise their prices by USD 20 to USD 30 from current ones.


In the environment of demand for wire rods in Asia, adverse factors are not found so far. The Chinese automotive industry is still strong. In Thailand, economic measures by the military Government have been penetrated, and manufacturing sectors like the automotive industry have not been worsened as much as initially expected. In Indonesia, although it has experienced a downturn in economic growth, production of wire rod users starting with car producers is said not to be bad. Therefore, it is said that demand in quantity is expected to be the same as this quarter.


Against the Japanese mills' price increase, customers are seen to rebel on the grounds of a price drop of raw materials for a blast furnace like iron ore. Against this, the Japanese mills have a policy to explain politely their necessity to raise prices due to increases of costs like an electricity charge and personnel expenses and to get consent.


A concern in the next quarter is that the No.4 wire rod mill (with a capacity of 700,000 tonnes a year) at the Pohang Steelworks of Korea's POSCO is said to have an enough capacity. Although its supply to Hyundai Motor is good, the company is thought to allocate certain quantity to export. The company had got orders below Japanese prices in the past. However, as the present management focuses on cost performance, its flexibility on prices like before is said to be narrowed.


Movement of the Chinese wire rod mills is also concerned. In the USA, Thailand and so on, an antidumping case has been filed against Chinese wire rods, and such wire rods are shut out. Chinese wire rod mills seem to seek outlets to Central and South America, Africa, Middle East and so on. Accordingly, there is a possibility for the market prices to be collapsed in the remote regions.




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Sumitomo joins Goldman in expecting the aluminum market to swing into deficit - August 14


According to trading house Sumitomo Corporation, the global aluminum market will swing into a deficit this year for the first time since 2006 as cuts in output deepen and demand from automakers grows.


Mr Shingi Yamagiwa Sumitomo’s manager of light metals trading said that “Global consumption will outpace supply by 61,000 tonnes in 2014, flipping from a surplus of 580,000 tonnes last year. The deficit will widen to 493,000 tons in 2015.


Sumitomo, which owns stakes in smelters from Malaysia and Australia to Brazil, joins Goldman Sachs Group Inc in predicting demand will overtake supply this year.


Goldman Sachs said recently that the world will face a 579,000 tonne shortfall after seven years of oversupply and low prices resulted in the closing or curtailment of 50 smelters.


Mr Yamagiwa said that “We’ve brought forward our deficit forecast to this year following more cutbacks amid strong demand, especially from North America.”


Sumitomo reversed its January projection, when it saw a surplus of 312,000 tons this year. Prices collapsed 36% from a peak in 2011 until the end of 2013, forcing producers to shut smelters to trim supplies. That process accelerated in January after Indonesia banned the export of unprocessed ores including bauxite, a raw material used to make aluminum.


The metal entered a bull market last month and prices are up 14% this year, the second most among the six main industrial metals traded on the London Metal Exchange.


Alcoa Inc the largest US aluminum producer, last month shut its facility in Point Henry, Australia and said that it will curb capacity at two smelters in Brazil, where producers are reducing output to the lowest in 12 years. Oslo based Norsk Hydro ASA said in May it would permanently close its Kurri Kurri plant in Australia.




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South Korea to return Japanese steel scrap due to radiation contamination - August 13


Reuters reported that South Korea plans to return some steel scrap imported from Japan due to radiation contamination, the first returned shipment since Seoul heightened nuclear safety checks in 2012.


A spokeswoman at the agency said that the Nuclear Safety and Security Commission detected caesium 137 at a higher than allowed level in 20 kilograms of steel scrap out of a total 20 tonnes imported earlier this month.


The scrap's origin within Japan was unidentifiable, according to the statement. Only the 20 kilogram of scrap, now stored separately, will be returned. South Korea imports steel scraps from various countries for recycling


The commission said that it planned to ask the Japanese government to cooperate on sharing information to prevent radioactive materials from being transferred between countries.


South Korea in September of last year extended a ban on Japanese fishery imports to cover imports from eight Japanese prefectures, including Fukushima.




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Saudi Arabia mining industry sustains development - August 12


Saudi Gazette reported that Saudi Arabia is accelerating its mineral resources development plan in an initiative that will facilitate the development of its mining sector.


Mr Sultan bin Jamal Shawli deputy Minister for Mineral Resources at Saudi Arabia’s Petroleum & Mineral Resources Ministry said that “The aim is to establish mining and its support services as the third pillar of the Saudi Arabian economy after hydrocarbons and petrochemicals. We have the minerals, the market and the potential to explore them. We are now turning to the private sector in the Kingdom and the world outside to help us achieve our ambitious goals.”


Dr Zohair A Nawab president of the Saudi Geological Survey, the Kingdom’s globally well respected minerals research and development agency based in Jeddah said that “Mineral deposits in Saudi Arabia are widespread and of many types, ranging from metallic and nonmetallic to lightweight aggregate. In the west, the Precambrian structure known as the Arabian Shield contains most of Saudi Arabia’s known metal deposits of gold, silver, copper, zinc, iron, and magnesium. East of the shield, the Phanerozoic zone contains oil resources and deposits of bauxite, phosphate, clay, limestone, silica sand, and lightweight aggregate that are of increasing importance to the industrial development of the kingdom. In total, these represent world class deposits.”


Mr Khalid S Al Mudaifer, president and CEO of the Saudi Arabian Mining Company, the Kingdom’s minerals and mining company said that “There is great potential in the Arabian Shield and an enormous diversity of minerals across the Kingdom. There is strong potential for further discoveries and these will require the application of modern techniques and a wide range of support services.”


Mr Al Mudaifer said that “The completion of Ma’aden Bauxite Mine, Alumina Refinery, Smelter and the Rolling Mill will be a historic moment for the minerals and mining industry of Saudi Arabia and the whole Middle East. It means Saudi Arabia will have the largest and most efficient vertically-integrated aluminum complex in the world. The projects are expected to support tens of thousands of jobs in downstream and support industries.”


He said that “We are exploring for and evaluating new mineral resources. We are evaluating the potential of several industrial minerals and base metal deposits. They include refractory clays, low-grade bauxite, kyanite, graphite, pure limestone, potash and iron ore. Base metals under consideration include copper, lead, zinc and nickel and copper deposits.”




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Hermes betting against zinc as smelters boosting output - Aug 11


Hermes Fund Managers Limited the pension fund manager with USD 1.6 billion in commodities, is betting against zinc as smelters in China will be encouraged to boost output to take advantage of higher prices.


Mr Joseph Murphy an analyst at Hermes said that “Stockpiles in bonded warehouses in China are rising. Money managers were the most bullish on zinc out of six main industrial metals on the London Metal Exchange as of August 1 with stockpiles in bourse-approved depots falling 26% this year.”


Mr Murphy said that “The market is seeing LME stocks drawing but is not appreciating that bonded are rising at the same time. There is a huge incentive for smelters to produce more. In the next few months, the fizzle will come off zinc.”


Zinc for delivery in three months declined 1.7% to USD 2,290.25 per tonne on the LME, trimming this year’s advance to 12%. Prices climbed the past four months, the longest streak since October 2010 amid expectations supplies will fall short of demand.


BNP Paribas SA said that the metal will average USD 2,205 per tonne this quarter and USD 2,270 per tonne in the Q4. Refined zinc demand will exceed supply by 250,000 tonnes in 2014 and 200,000 tonnes next year.




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Ausdrill off 9pct on AUD 90 million impairment - August 9>


Business Spectator reported that shares in Ausdrill have fallen after it flagged an impairment of up to AUD 90 million before tax, saying recovery in the mining services sector will be slower than earlier expected as the weak iron ore price weighs.


The group said that it had reviewed the carrying value of assets and expects to report a non cash impairment expense of between AUD 60 million and AUD 90 million in its full year results.


The company said that a review of the company’s longer term forecast on the back of the recent fall in the iron ore price and continued challenging market conditions have resulted in a view being taken that the recovery of the Australian mining services sector will be slower than Ausdrill had previously anticipated.


Ausdrill said that it is focused on improving performance and reducing debt, reaffirming plans to deleverage the business over the next 12 months. The group also flagged a corporate income tax expense in Mali of approximately AUD 2.7 million in the full year, after being notified its tax exemption has been withdrawn.


The iron ore price was trading at USD 95.50 per tonne overnight and has recently lifted off its lows after falling to USD 89 per tonne in June. So far this year it has lost more than 30%.




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Pakistan Government to release fourth bailout tranche to PSM - August 8


The News reported that the government would release fourth tranche of at least PKR 2.5 billion from its bailout package of PKR 18.5 billion to Pakistan Steel Mills later this month though the steel maker failed to bring production at 20% level in July. PSM production dropped to 8% in July as its 18 out of 20 plants were closed.


Mr Muhammad Zubair chairman of Privatisation Commission said that “We are aware of the situation emerged due to water and electricity crises at Pakistan Steel Mills. The situation will not stop release of next tranche. The commission in April linked the release of tranches with the achievement of the set production targets: 20% in July and 10% in each subsequent month.”


An official of PSM said that the steel mills recorded only 8% production of the installed capacity in July. The water level was improving and management of PSM may consider resumption of one or more plants in a day or two.


He said that PSM is required to maintain at least 110 million gallons. Only 25 million to 26 million gallons water was available a day before yesterday, while PSM needs 15 million to 16 million gallons water per day to cool its production plants.


He added that since May to date, the ministry of finance has given PKR 9.57 billion in three tranches. The next tranche may be released on August 20 to 22 2014. The mills has used the received funds for importing raw material (coal and iron ore) and paying salaries, perks and utility bills.




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Unions call on Victorian govt to use local steel to secure jobs - August 7


The Age reported that steelworkers are calling on the Victorian government to ensure that local steel is used to build its signature road project, the East West Link, amid rising fears of further job cuts from the struggling manufacturing sector.


Unions said that up to 800 jobs would be secured if the builders of the USD 8 billion first stage of the East West Link used locally produced steel, instead of importing cheaper steel from overseas.


More than 150 workers staged a protest at the Port of Melbourne, where local steel fabricators missed out on 25,000 tonnes of work earlier this year for the USD 1.6 billion expansion of Webb Dock.


Mr Terry Mulder roads minister of Victoria has moved to reassure workers that short listed bidders for the East West Link have been advised they must spend at least 80 per cent of costs locally.


A spokeswoman for Mr Mulder said that “The majority of the steel will be sourced from Australia. The guidelines clearly encourage content to be sourced from Australia.


The Australian Manufacturing Workers Union said that the Napthine government's minimum local content requirements did not prevent contractors from using imported steel and called for a stronger commitment surrounding the East West Link.


Mr Steve Dargavel State secretary said that the criteria used to determine the 80 per cent local content spend was questionable and factored in post-construction costs, such as maintenance for the life of the project. Locking out local steel fabricators from major government projects results in Victorians being sacked. 'We need real commitments and that comes down to political will.''


Mr Ben Davis state secretary of the Australian Workers Union said that shudder went through the Victorian steel industry when the government announced that Webb Dock would be redeveloped with imported steel. The majority of first world countries do not import steel, full stop so why are we any different in Victoria?




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Reliance Steel & Aluminum completes acquisition of Aluminium Services UK - August 6


Reliance Steel & Aluminum Company announced that, effective August 1st 2014, it has acquired all of the capital stock of Aluminium Services UK Limited, the holding company parent of All Metal Services, the world's largest independent raw material service provider to the aerospace and defense industries.


Established in 1974, AMS provides comprehensive materials management solutions to leading aerospace and defense OEMs and their subcontractors on a global basis, supporting customers in more than 40 countries worldwide. AMS offers a broad range of aerospace metals including aluminum, steel, titanium, nickel alloys and aluminum bronze, offering full or cut to size materials. AMS also offers in house machining and water-jet cutting for more complex requirements.


AMS has five locations in the United Kingdom (London, Belfast, Birmingham, Bolton and Bristol), along with locations in France, Malaysia and China as well as a sales office in India. Net sales for AMS were approximately GBP 174.9 million for the twelve months ended December 31st 2013. AMS will operate as a wholly owned subsidiary of Reliance Steel & Aluminum Co., through UK holding companies. Current management will remain in place. Additional transaction terms were not disclosed.


Mr David H Hannah chairman and CEO of Reliance said that "We are excited to expand our aerospace presence in this growing market. This acquisition is especially attractive given the current and anticipated growth of the global aerospace industry. AMS is a well established and trusted supplier to the aerospace and defense markets and we look forward to continuing to support their existing global customer base while maximizing opportunities for growth."




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Poseidon Nickel reveals 178,700t nickel metal resource at Black Swan - August 5


Poseidon Nickel has now revealed a JORC 2012 Resource estimate of 30.7 million tonnes at 0.58% for 178,700 tonnes contained nickel for the recently acquired Black Swan Project.


Poseidon is acquiring the Black Swan Project from OJSC MMC Norilsk Nickel, and as the new project owner has now reported the resource to JORC 2012 standards as required.


The Black Swan resource includes an Indicated Resource of 8.4 million tonnes at 0.70% nickel, for 59,100 tonnes contained nickel.


Poseidon’s total resource base has now more than doubled to over 330,000 tonnes of contained nickel.


Golder Associates Private Limited have now re estimated the resource, and are familiar with Black Swan having previously carried out previous resource estimation work for Norilsk Nickel


Poseidon is looking to move Black Swan forward quickly, and has contracts for pre-start engineering activities, which are expected to be completed by the end of the month.


Last month Poseidon made a game changing pathway to production acquisition of the Black Swan processing plant from Norilsk Nickel that removes the AUD 300 million Capex from the equation. The cost was AUD 1.5 million.


As well as the ability to process large nickel inventory on site and the increase in throughput capacity. The processing plant will be able to process Windarra ores in addition to the large remaining nickel inventory on site.


The acquisition includes the Black Swan processing plant and Black Swan open pit mine containing 185,800 tonnes nickel in ore.




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Atlas Holdings and Turnspire Capital partner with Founder Don to acquire banker steel - August 4


Atlas Holdings LLC, through its operating company, Bridge Fabrication Holdings LLC, together with Turnspire Capital Partners LLC announced that they have partnered with Don Banker to acquire Banker Steel Company LLC, a structural steel fabrication business based in Lynchburg, VA Mr Don Banker will continue as the company’s Chief Executive Officer and will retain a significant ownership interest. Further terms of the transaction were not disclosed.


Banker Steel Company LLC is a leading fabricator of structural steel components used in commercial and infrastructure projects. Founded in 1997 by Don and Carol Banker, the company’s reputation as one of the premier steel fabricators in the country is based on providing value added services throughout the construction process, beginning with design assistance and extending through Banker Steel’s strong network of sub contractors and erectors used to assemble projects on site.


The company operates from two fabrication facilities in Lynchburg, VA and one in Orlando, FL which aggregate a total of 340,000 square feet with a capacity of 600,000 man hours, or production of up to 50,000 tons of steel fabrications per annum.


The company’s strong market presence and recognition as a high quality and reliable supplier has resulted in Banker Steel being the fabricator of choice on a number of marquee projects, including Barclays Center in Brooklyn, NY, the award winning Washington Nationals Park in Washington, DC and the Hudson Yards, the largest mixed use development in New York City since Rockefeller Center.


Atlas Holdings Partner Ed Fletcher said that “We are tremendously excited to welcome Don, his wife Carol and the rest of the Banker team to the Atlas family. Under Don’s leadership, Banker Steel has built a stellar industry reputation that is well-deserved. We look forward to partnering with Don to expand his structural steel fabrication footprint by leveraging the Atlas team of Operating Partners and financial resources.”


Mr Don Banker president and CEO of Banker Steel said that “Atlas’ track record of building companies that consistently outperform their peers made this partnership decision an easy one. Atlas already has a strong understanding of the steel fabrication industry and our partnership has begun at an ideal time for Banker Steel as we continue to see substantial urban construction opportunities in our core geographic markets.”


Mr Michael Khutorsky, Managing Partner of Turnspire said that “We are delighted to partner with Don and Atlas. Banker Steel is a perfect fit for Turnspire’s strategy of investing in high-quality businesses with tremendous value creation opportunities. We look forward to collectively working together to take the Company to the next level.”




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Mittal and Glencore said to be among potential Simandou bids - August 2


Bloomberg reported that Lakshmi Mittal’s ArcelorMittal and Glencore Plc are among potential bidders for Guinea’s Simandou project, the world’s largest untapped iron ore deposit after it was seized from Israeli billionaire Mr Beny Steinmetz in April.


People familiar with its plans said that ArcelorMittal, the world’s biggest steelmaker, has declared an interest in the bidding process for two licenses covering the Simandou project in Guinea, according to four people who asked not to be identified as the talks aren’t public. Glencore is also interested.


Leading mining and steelmaking companies are jostling for a share of the riches contained in Simandou, a remote, iron bearing mountain range, to take advantage of prices for the raw material that have risen about 50% since 2008. Guinea has estimated that Simandou may cost USD 20 billion to develop, largely because it needs a 650 kilometer rail link.


The iron ore position of Glencore pales in comparison with rivals BHP Billiton Limited, Rio Tinto Group and Vale S Still, CEO Mr Ivan Glasenberg has previously expressed reluctance to invest in expensive new mining operations known as greenfield projects. The rail and port component of Simandou has been estimated to cost more than USD 10 billion.


An external spokesman for the government said that the government of Guinea is confident of a strong line up of interested parties in the Simandou concession.


Guinea in April revoked rights to half the Simandou project controlled by a venture between Steinmetz’s BSG Resources Limited and Brazil’s Vale, following claims of bribery and corruption. The decision has sparked legal battles for control of the asset.


BSGR plans international arbitration with Guinea over the seized licenses, it said after being stripped of the asset. Any attempt to negotiate fresh rights to Simandou would be challenged as unlawful.


Rio in April sued Vale, Steinmetz and BSGR, saying they conspired to steal rights to Simandou. The three deny any wrongdoing. A Guinean review in April said the evidence suggested Vale wasn’t involved in corruption. Vale and BSGR had planned a USD 10 billion mine, port and rail project on the coveted, iron rich ground.




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An embargo on Russia's Norilsk Nickel would hurt West - August 1


Mr Patrick Buffet CEO of Eramet said that "Nobody expects sanctions against Russia and Norilsk would affect Norilsk's production since it would sell to China if it couldn't sell elsewhere."


Mr Buffet said that "It's unlikely an embargo by Europe would materialise, because it would be shooting itself in the foot, since Norilsk could ship its production to Asia, creating a shortage in Europe and oversupply in Asia. The consequence would be a jump in physical premiums in Europe and a discount in Asia."


He said that the most likely scenario for western restrictions against Norilsk would be a US only embargo, which would push up nickel premiums there but not hit the world market. Nickel prices have already rallied this year after a ban by Indonesia on nickel ore exports curbed supply to China.


Mr Buffet said that a joint embargo by the United States and Europe against Norilsk would contribute to that rally, but the biggest impact on world prices is likely to come from an expected upturn in Chinese demand.


He said that Chinese stocks of Indonesian nickel ore are estimated to have fallen by half in the past five months, suggesting they could run dry within the next few months and prompt a jump in Chinese import demand.

Reuters reported that an embargo against Norilsk Nickel as part of Western sanctions against Russia would hurt nickel users in Europe and the United States rather than Norilsk itself.


Norilsk, the world's largest producer of the stainless steel ingredient, has not been targeted so far by western measures aimed at punishing Russia for its support of pro Moscow rebels in neighbouring Ukraine.




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West African Minerals delighted with new deposits in Cameroon and Sierra Leone - July 31


West African Minerals has identified two new potential iron ore deposits in Cameroon and Sierra Leone from its recent geophysics and mapping programme.


At Sanaga, in Cameroon, WAFM will now carry out reconnaissance drilling and first stage metallurgy after a magnetic survey confirmed large areas of magnetite rich material at the surface and close to rail, port and power infrastructure.


Because of this potential, follow-up work at Binga, also in Cameroon and where WAFM has carried out some preliminary work is being deferred while the drilling at Sanaga is carried out.


Mr Anton Mauve MD of WAFM said that “The economics of the two new finds eclipsed results from its work on other licences in the region. Sanaga surprised in a very positive way and now outweighs Binga and everything else, though Madina ranked a very close second.


He said that “Sanaga was the last lease we got to and it wasn’t until we had a good look with detailed mapping and ground geophysics that we realised it all added up and was a phenomenal deposit. The key issue now is the metallurgical test as we know the iron grade and volumes are there.”


Mr Mauve said that results from the metallurgical work should be ready in 6 to 8 weeks or possibly even earlier, after which it will make a decision on which deposit it start drilling, though it seems pretty clear he expects Sanaga to be the priority going forward. For resource quality, style of resource, for shape, for proximity of infrastructure, existing infrastructure it (Sanaga) ticks all of the boxes. The only one it doesn’t yet is metallurgy, which we are working on currently.”


He said that Madina, too, has turned out far better than expectations. Located 70 kilometers from London Mining’s Marampa mine on the same hematite formation, it hoped to use six trenches dug recently to indicate a 100 MT deposit with good grades. But we know it’s going to better than that,” after a strike 1.5 kilometers in length with an average width at surface of 220 metres. First assays showed grades of between 38.5% and 41.4% iron.


He added that WAFM is looking at its options for Madina, which range from a standalone operation to a disposal perhaps to one of the nearby operations or even to overseas buyers.




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