By | 2008-03-08 00:00:00

Commercial Weather Forecast: The steel price rose slightly last week (December 3rd to 9th). High speed wire rod and deformed steel bar rose higher. According to the monitoring reports, the average price of  6.5mm high speed wire rod is 4480 Yuan/ ton last week, up 80 Yuan than the former week; 25 mm deformed steel bar is 4700 Yuan/ ton, up 130 Yuan.     The main reasons for the price rise are:   The rise of material cost, such as iron ore, coal, stimulates the steel producers to raise the steel price.   The vigorous demand for constructional steel in East and South China. A batch of important project is under construction, such as subway, tunnel and International Expo. Venue etc., all have large demand of rod wire and bars.   The drop of steel wire and bar stock. Data shows that the stock is still decreasing. Compared with the beginning of November, the constructional steel stock decreases in major cities. Wire rod decreases 17.68%, deformed steel bar 4.48%.   Due to the above reasons, It is expected that the price of Wire rod and deformed steel bar will run at a higher position.

By | 2008-03-08 00:00:00

BAOSTEEL would put 14.3 billion yuan (US$1.93 billion) into iron-making assets in its Shanghai-listed unit, as part of an effort to improve efficiency and reduce pollution, the listed firm said yesterday. The assets would be paid for by a five-year interest-free loan from the parent to be repaid in equal annual instalments through the end of 2012, Baoshan Iron and Steel Co. said in a statement to the Shanghai Stock Exchange. The company also said it would issue convertible bonds not exceeding 10 billion yuan. The main asset to be transferred is a Corex-C3000 iron works, recently completed by Siemens and the largest of four such facilities in the world. The plant reduces iron using coal fines, not coking coal, thus removing the necessity of producing and using coke, which in return cuts emissions of sulphur dioxide and nitrogen oxides by more than 90 percent. The plant will produce 1.5 million tons a year of pig iron, which will ultimately feed a heavy plate rolling mill, while also generating power. The listed company controls almost all Baosteel's assets in Shanghai. New facilities and acquisitions of other steel mills are usually funded by the group before being transferred to the listed company in order to keep liabilities down and profits up. Baosteel, China's largest steelmaker, is spear-heading the government's efforts to modernize the industry. It is considering building a second, similarly sized Corex plant, but has not yet chosen its supplier, officials have said. Trading in Baoshan's shares was suspended for one day Tuesday, after weeks of speculation that it would involve itself in BHP Billiton's proposal to take over fellow Australian miner Rio Tinto. Baosteel chairman Xu Lejiang last week denied Baosteel had the capability to make a counterbid for Rio.

By | 2008-03-08 00:00:00

www.Chinafastener.com    It is reported that Stainless Steel Association in South Korea is mulling over anti dumping on stainless steel imports from China and Taiwan. Exports from China and Taiwan is surging and asking for cut in imports from TISCO and Yieh United. The association plans to undertake anti dumping measures on China and Taiwan if stainless imports continue to jump up.

By | 2008-03-08 00:00:00

Wuhan Iron and Steel (Group) Co (WISCO) plans to cooperate with General Electric (GE) to establish the largest blast furnace gas power plant in China. The power plant, with two 160-mW units, will make use of blast furnace gas, the main emission of iron and steel works. It has the capacity to generate 2.4 billion kWh of electricity a year and reduce emissions by 2 million tons of carbon dioxide. The system is also able to produce 160 tons of steam per hour as a critical part of steel production process. Delivery of the gas turbines is scheduled for late 2008 and the plant expects to begin operation in late 2009. "The partnership with GE and the blast furnace gas (BFG) project meet the demand of high efficiency and low emission for WISCO," said Deng Qilin, president of WISCO. "We will continue to drive sustainable growth and utilize the latest technologies to develop the new growth model, which is focused on energy conservation and environment protection." "One of the greatest challenges to the steel industry around the world is effectively reducing emissions," said Jack Wen, GE Energy's regional executive for China. About two years ago, Baosteel Group started to establish the first BFG-fired combined cycle power plant project by GE. "It may begin operation in November," said Zhang Chun, a GE spokesman responsible for the BFG project. "In recent years, many Chinese iron and steel works are making efforts to launch a new industrial model with higher efficiency and less emissions." Jeff Immelt, GE's chairman and CEO, said the continuous restructuring of China's growth strategy provides a great opportunity to GE. "With the special requirement of high efficiency and low emission of the Chinese steel industry, the production and services of GE will be more successful," Immelt said. According to the agreement with WISCO, GE will provide more services, including environment-related technologies, water treatment, power distribution, automation, financial services, as well as leadership training. From www.chinafastener.com Translated by Alan

By | 2008-03-08 00:00:00

Domestic supply-demand relationship is improving At present, the problem of over-capacity of production is confronting the steel industry. But taking the investment in the fixed assets of every section into consideration, the supply-demand relationship of the steel industry is improving.   In the first three quarters of 2007, the country has totally invested 782,467,800,000 Yuan in the fixed assets, up 26.4% over the same period of last year. It is estimated that a 26% increase will continue in the fourth quarter and a 20% increase in 2008. Specifically, the investment is largely invested in the manufacturing industry, real estate and transportation. All these industries consume a lot of steel, which guarantee a steady demand of steel in future.   At the same time, the investment in steel industry is declining. Our country has invested 228,149,000,000 Yuan in steel sector in 2005, reaching an all-time high. Based on the 2-3 year's operation cycle and the strengthening elimination of production capacity that has become obsolete, we think that in 2007 or 2008 the output of steel can reaches the peak and then the supply of domestic steel will change greatly, some varieties will drop behind demand.   Global demand is still strong The world economy has maintained a sound rapid growth this year. According to the latest forecast of IMF in July, the world economy will increase by 5.2% in the next 2 years. The rapid economy growth has guaranteed the continued expansion of manufacturing and infrastructure construction, which will stimulate the demand for steel. It is estimated there will continue a great demand for steel in the coming years.   In contrast, the daily-average output of crude steel in the world declines. Obviously the production can't meet the increased demand. It may take two to three years to form productive capacity from steel investment. According to such estimate, it is not possible for the oversea steel industry to form a new round of steel productivity in short period.   So under such circumstance, the increased international demand must greatly depend on the export of our country, they need imports from our country.   " A new miracle" is expected in China The experience of Japan has shown that the steel industry of a country can grow bigger and stronger by upgrading its industrial structure or by reorganization and restructuring of enterprises when it meets export restrictions or confronts great pressure in low productive capacity. The steel industry in our country will not be an export-oriented one in the future, but the transition and development of economy in our country have stimulated the down-stream industries' vigorous demand for steel and strong requirements for industrial upgrade, which will help the steel industry to form the self-upgrade ability and establish competitiveness in the world.   At the same time, the profit in our country is the lowest in the world. But under the condition of vigorous global demand, the gross profit of steel in our country will be closed up to global level. At moment, the gross profit is only about 10%. Under such a low rate, an increase of one percentage point of  gross profit will bring an increase of steel industry profit by 10%.   In these sense, although the industry faces certain cost pressure due to the raised spot price of iron ore, coke and sea transportation charges, the future of the industry is bright. The profit will increase greatly when it completes the upgrading of industrial structure and reorganization and restructuring of enterprises. Compared with the Japanese steel industry of 1980s, we have three advantages: 1 ), we possess mine source; 2 ), industrialization has not been completed; 3) the domestic demand is strong.   Under the condition of Renminbi apprciation and the ambition to grow bigger and stronger, it is expected to see the steel miracle, which happened in Japan in 1980s, in large-scale steel enterprises of our country.

By | 2008-03-08 00:00:00

It is reported that State owned Sinosteel Group, China's largest steel trading firm plans an initial public offering in China and Hong Kong in the first half of 2008. The Shanghai Securities News quoting an unnamed company executive said that Sinosteel will fold its major operating assets into a listing vehicle, which will issue yuan denominated A-shares in China followed by an H-share sale in Hong Kong. The executive did not provide financial details of the IPO, but the newspaper quoted previous media reports as saying it could raise USD 1.5 billion.

By | 2008-03-08 00:00:00

Eurofer (European Confederation of Iron and Steel Industries) lodges an antidumping complaint to European Commission on 27th against steel wire rods imported from China.   Eurofer represents in a statement that they have filed complaint to the European Commission for adopting antidumping measures against steel wire rods imported from China and Turkey. Eurofer thinks that steel wire rods imported from China and Turkey have reached a dumping rate of 50%.   This is the third antidumping complaint that Eurofer issued against Chinese steel products. Another two appeals were lodged on 29th of last month against cold-rolling stainless steel plates and hot-dip metallic-coated steel plates and sheets respectively.   Gordon. Moffat, chief of Eurofer, says in a telephone interview that they are preparing to file an antidumping complaint against Chinese steel plate in the following 10 days.   According to the antidumping rules, European Commission shall, within 45 days from the date the statement are received, determine whether there are sufficient reasons for a formal investigation. At present, the Commission has not made any decision for the complaints.

By | 2008-03-08 00:00:00

BEIJING -- China's Iron and Steel Association (CISA) has urged the State Council to rationalize the industry around the top four manufacturers in hopes of developing world-scale companies. Luo Bingsheng, CISA secretary-general, said that "all the difficulties in the steel industry are directly or indirectly related" to the slow pace of mergers and acquisitions (M&A). He said that reorganization of the industry should be based on the top four companies: Baosteel Group, the Anshan-Benxi Steel Company, the Shougang-Tangshang Steel Company, and Wuhan Iron and Steel Group Corporation. China's official industry policy states that by 2010, the crude steel output of the top 10 producers should account for 50 percent of the total, rising to 70 percent by 2020. But the recent trend has actually been just the opposite, with figures indicating increased fragmentation. The top 10 steelmakers' share of production declined to 34.66 percent in 2006 from 46.25 percent in2001. Feng Fei, the industrial economy research department director of the Development Research Center of the State Council, contended that local governments have a vested interest in opposing industry reorganization, since steel companies are among their major tax sources. While China's steel industry has been decentralizing, its competitors abroad have been banding together. In July 2006, Mittal Steel acquired Arcelor to form the first 100-million-ton-year steel maker. In February 2007, India-based Tata merged with Corus to form the world's fifth largest steel maker. Earlier this month, the world's largest mining company, BHP Billiton, proposed to acquire Rio Tinto. If the deal goes through, it is expected to increase the competitive pressure on China's steel industry. Zhao Kun, deputy general manager of the Shanghai-based Baosteel Group, has said reorganization was a key method of dealing with international competition but the government should make the decision and promulgate policies that would support reorganization. He also said the government should help smaller companies to improve their technology levels and production capacity.

By | 2008-03-08 00:00:00

On Nov 26, the first cold rolling stainless steel product line of west China was put into operation in JiuSteel Co, which will obtain an output of 53 tons of High-grade 300 & 400 cold-strip steel.   Being the hardcore of the first-stage project of JiuSteel, the cold rolling stainless steel project, start on April 17, 2004, contains an investment of 2.4 billion, it was equipped from Oct 8, 2006. The project made use of two million cubic meters of ferroconcrete, 16 thousand tons of steel structure, as a result, the workshop of the project has a bulk of 110 thousand cubic meters with advanced equipment, including a set of hood-type annealing furnace, a set of hot band annealing pickling machine, a set of cold band annealing pickling machine, 20 reversing cold mills, etc. All the equipment and steel structure have a weight of 18 thousand tons. Its cold rolling products have been put into sales since this July when the first roll of stainless steel came out.   The cold rolling stainless steel project marks that Jiusteel has become the third Company in China which has a whole stainless steel manufacturing system from steel-making to steel-rolling, following Baosteel and Taisteel.

By | 2008-03-08 00:00:00

Reuter reported that China's steel exports are recovering ahead of a one week holiday in October 2007 with many mills concerned that Beijing will again raise export duties to rein in the energy intensive industry. Industry officials said the mills expected another move possibly as soon as next month, especially as China's huge iron ore imports were pushing up the raw material's spot prices to record highs and driving freight rates to all time peaks. High spot Indian iron ore prices, which have nearly doubled so far this year to around USD 155 a tonne would make it difficult for Chinese steel mills to fend off a jump in the 2008 iron ore price talks, expected to start in October 2007. Mr Li Xinchuang VP of China Metallurgical Industry Planning & Research Institute said that "At the moment, we export too much, making supply in the domestic market tight." China¡¯s National Development and Reform Commission said recently that tight supply had helped push up prices of steel products over the past two months amid strong domestic demand and low stocks. A drop in exports in August 2007, the lowest monthly export figure since March, had stopped prices from rising, although industry watchers said exports should be watched closely in coming months. Mr Li said "The government is not too keen on export quotas. But I am sure China cannot export as much next year. We will still export but not too much." Shipping officials said despite higher export duties for steel introduced this year, exports had been on the increase this month helped by strong international prices particularly in Europe and the Middle East. An executive at one of China's top shipping companies said "For September, exports are very strong. Some are saying that export taxes may change from the start of October 2007." Official data showed the China's August steel product exports were down at 5.38 million tonnes, compared with 5.94 million in July 2007 and a record 7.16 million tonnes in April 2007. Strong exports came on the back of further expansion in the country's crude steel output, which was expected to be close to 500 million tonnes this year, despite Beijing's efforts to slow the expansion. This is jerking up China's iron ore imports a lot faster than global output, paving the way for more price rises next year. Ahead of the annual iron ore price talks, China further reduced the number of licensed iron ore importers by 6 to 112 to curb imports to small steel mills, which Beijing has ordered to shut down. Customs data showed China's iron ore imports totalled 250.81 million tonnes during the first eight months of this year, up 14.5%YoY with shipments from distant Brazil up 28.0% at 62.58 million tonnes. Mr Li said "This year, total production will be nearly 500 million tonnes. From such a high level, how can China continue to increase the output a lot more? Such high iron ore prices are not good for the stable and sustainable development of the industry." Officials and analysts said in addition to stocking up ahead of an expected price increase in 2006 some mills were purchasing more in the spot market amid shipment delays from Brazil and Australia. Macquarie Research said in its China Commodities Weekly that "At present, Chinese steel mills are panicking about this shortfall in iron ore supplies leading to a strong rise in iron ore spot prices. It said referring to August 2007 iron ore imports which came in at 29.29 million tonnes down from 33.61 million in July 2007. The lower imports reflect serious production delays in Brazil and Australia, plus the diversion of some cargo to Europe.