Metal Pages Plans Online Exchange for Stainless-Steel Metals

Metal Pages, a U.K. provider of commodity prices and information, plans to introduce an online exchange that will start with trading of metals connected to stainless steel and may expand into tin and zinc.

Metal-Lynx is scheduled to begin operating early next year, Metal Pages said today in an e-mailed statement. Initial trading will include chromium and manganese, it showed. The exchange will have professional-networking features similar to those on LinkedIn Corp.’s website enabling users to form their own trading groups, according to the statement.

“Bringing ferroalloys trading onto an exchange will aid price discovery and increase market efficiency,” Mark Wilson, chief commercial officer at Thompson Creek Metals Co., said in the statement. The Littleton, Colorado-based company is the world’s sixth-biggest molybdenum supplier, according to Macquarie Group Ltd.

Steel producers and mining companies have offered “considerable industry support,” according to the statement. At least one has committed to trade on the exchange, it showed.

Nigel Tunna, managing director of Teddington, England-based Metal Pages, will be co-managing director of Metal-Lynx with Norman Shapiro, who runs trading company Barex Resources, the statement showed.

Global stainless-steel production fell 0.2 percent to 17.2 million metric tons in this year’s first six months, according to the International Stainless Steel Forum. World leader China increased output by 1.1 percent to 7.1 million tons. Molybdenum for delivery in three months dropped 19 percent over the past year on the London Metal Exchange, which introduced a futures contract in 2010. Six contracts were traded last month in total.

http://www.bloomberg.com/news/2012-10-11/metal-pages-plans-online-exchange-for-stainless-steel-metals-1-.html

Higher capacity, demand to help JSW Steel in longer term

Following the ban on mining activities in Karnataka in July 2011, JSW Steel's stock has declined almost 20% compared to a 6% fall in the Nifty. Though the company continues to face hurdles in procuring iron ore in the near term, the downside looks relatively limited as the stock is currently trading very close to its 52-week low.

It currently trades below its book value and at a discount to its peers. But with capacity expansion now on stream, the company is well placed to take advantage of the growing demand for steel in the longer term.

BUSINESS

JSW Steel, with the commissioning of a 3.2-million tonnes per annum (mtpa) blast furnace at its Vijayanagar plant in Karnataka, is currently the largest private steel producer in India. Globally, it is one of the lowest cost producers with an established presence in the value-added steel segment.

About 80% of its product mix comprises flat products which cater to the growing auto and consumer goods industry. In response to the Lokayukta report in July 2011, the Supreme Court ordered a ban on iron ore mining activities by private parties in Karnataka.

Following the ban, the apex court directed state-run NMDC to increase its production of iron ore and sell the same through e-auctions in the state to address the regional demand. As a result of the shortage, JSW Steel had to cut production at its Vijayanagar plant. 

FINANCIALS

Despite various operational difficulties faced during the second quarter, the company's net sales grew 32% to Rs 7632.13 crore on a standalone basis. The growth was the result of a 19% rise in saleable steel. Its operating profit margin remained flat at 17%.

However, on account of a 42% increase in coal prices and an almost 10% depreciation in the rupee, the company's net profit declined 71% to Rs 127.12 crore. Due to the iron ore shortage, the company has reduced its production and sales targets for the year by 13% and 14%, respectively.

So far this year, JSW Steel's sales have touched Rs 14689.63 crore, which is 63% of the company's standalone sales for FY11. Compared with last year, the company's sales have grown 42% in the first six months, which is encouraging in light of the obstacles faced in the July-September quarter.

VALUATIONS

Over the past five years JSW Steel's revenue has grown 46% while profits have risen 81% when compounded annually. It has been regular with dividend payments, but the absolute growth in dividend has not been in sync with profits. It gives a return on capital of 12% and a return on equity of 13%.

At Rs 711.3, the stock trades at 0.9 times its book value. The company's debt on a standalone basis has increased 17% since March 2011 and currently stands at Rs 13,957.7 crore.

But with an interest coverage ratio of four times, the company is in a comfortable position to pay off its outstanding debt. It has a debt-equity ratio of 0.78 times.

GROWTH DRIVERS

The 3 mtpa expansion project at Vijayanagar Works has commenced production, enhancing its overall production capacity to 11 mtpa. The second pellet plant at Vijayanagar has also commenced operations and is currently under trial run.

The implementation of another 300 MW captive power plant at the same location is on track and is expected to be commissioned before the end of FY12. The 10%decline in international coal prices will bring some relief to the company's production costs.

CONCERNS

The company continues to grapple with iron ore shortage because of the mining ban. Also, the cost of iron ore and coking coal remain high compared with the previous year. 
http://economictimes.indiatimes.com/features/investors-guide/higher-capacity-demand-to-help-jsw-steel-in-longer-term/articleshow/10620244.cms

JSW crude steel production grows by 9% in Q1 FY 2012

JSW Steel Limited has reported 9% growth in crude steel production in Q1 FY 2012 compared to that of corresponding period of last fiscal year.

JSW Steel Ltd., belonging to JSW group, part of the O P Jindal Group, is one of the lowest cost steel producers in the world. The group has diversified interest in mining, carbon steel, power, industrial gases, port facilities, Aluminium, Cement and Information Technology.

JSW Steel Limited is engaged in manufacture of flat and long products viz. H R Coils, C R Coils, Galvanised products, Galvalume Products, auto grade / white goods grade CRCA Steel, Bars and Rods.

Incorporated in 1994, it has grown to US $ 9 billion in little over fifteen years. JSW Steel Limited has the largest galvanizing and colour coating production capacity in the country and is the largest exporter of galvanized products with presence in over 100 countries across five continents.

http://www.commodityonline.com/news/JSW-crude-steel-production-grows-by-9-in-Q1-FY-2012-2011-07-06-40560-3-1.html

More Tata Steel investment for Flintshire 'solar steel'

The steel giant Tata is to invest another £3.5m in a project that brings together solar power technology and steel.

The company will expand its development at its site at Shotton, Flintshire, alongside specialist firm Dyesol.
The expansion will see another 20 staff taken on to the project team.
It is hoped the investment will develop better ways of integrating solar cell technology with steel to use in buildings.
The process produces a dye used to coat metals used in buildings, which can absorb sunlight and create energy, such as electricity or heat.
"This project forms a key part of the Tata Steel strategy to develop a new range of functional coated steel products based on renewable energy for use on the roofs and walls of buildings," said Peter Strikwerda, managing director of Tata Steel Colors in Shotton.
The company has already put £11m into the project and said it hoped the initial development phase would be completed by the end of June.
The project has also been backed with £5m research technology funding from the assembly government.
http://www.bbc.co.uk/news/uk-wales-12910814

SAIL in pact with Swiss co to develop high strength steel

Steel Authority of India (SAIL) today announced the signing of a collaborative agreement with CBMM (Companhia Brasileira de Metalurgia e Mineracao of Brazil) Technology Suisse SA, based in Geneva, Switzerland.

Popular for its application in transportation of oil & natural gas, API grades of line pipe steel have a huge market in India with annual demand being estimated to be 1 million tons (MT) in the coming years.

Demand for API X-80 grade steel with superior high strength qualities, is likely to increase sharply. The agreement aims at enhancing SAIL`s (Q,N,C,F)* market share in the special steels segment.

Earlier, too, Research & Development Centre for Iron & Steel (RDCIS) had initiated and successfully completed collaborative programmes with CBMM for development of API X-60 & 70 grade steel plates and HR coils at Bhilai and Bokaro Steel Plants, respectively.

As per the agreement, which carries a tenure of two years, SAIL plans to develop high strength steel of API X-80 specification for line pipe and structural applications. The international demand for API grades of steel is projected at 8 MT per annum, generating a large untapped market for Indian steel producers.

Production of API X-80 from SAIL plants is expected to commence within one year. With CBMM as its ally in this project, SAIL will be able to substantially reduce the development time of its new product, by roping in CBMM`s long-term expertise in the sector. CBMM is a major producer of niobium in the world and supports research collaborations with leading R&D organisations and institutes to promote usage of niobium for development of new products.

Shares of the company declined Rs 3.1, or 1.57%, to trade at Rs 193.80. The total volume of shares traded was 103,639 at the BSE (12.32 p.m., Friday). 

http://www.myiris.com/newsCentre/storyShow.php?fileR=20101112123725707&dir=2010/11/12&secID=livenews

Steel prices to remain highly volatile: Tata Sons

Globally steel prices have corrected 5% in last three-weeks. Commenting on the issue, JJ Irani, Director of Tata Sons said Chinese markets, the world's largest producer of steel, has retracted but has just stopped growing. “The high growth rate in China was unsustainable.”
However, Irani said the Chinese will not cut back on steel consumption. “They will continue to produce between 500-600 million tonnes and will also continue to use that much amount.” 
On pricing front, Irani said, the “joker in the pack” remained raw material prices. “The iron ore tax in Australia may lead to higher costs,” he said. 

The other big problem has been Europe where there are fears of demand coming down for companies like Tata Steel who have a lot of their businesses earmarked to the region. However, Irani does not see any impact on Indian steel industry arising out of the Eurozone crisis. 

Going forward, Irani said steel prices will remain highly volatile.
 

Below is a verbatim transcript of the interview. Also watch the video.
Q: First a word on one market that is keeping every one troubled that is China and how much demand is actually slipping over there in order to press down prices?
A: I think the Chinese market has stopped growing. It’s not that it is retracting, but the type of increases we saw there, 50 million tonnes per year for the last 5-6 years, that sort of growth was unsustainable and may not take place but I don’t see the Chinese market actually using less steel. They will continue to produce between 500 and 600 million tonnes and also continue to use that much amount, they are not importing much and they won’t export much.
Q: Would it be fair to say that steel prices internationally have peaked off for this summer at least?
A: In the Steel prices there is a joker in the pack because it depends very much on the raw material prices. All of us are aware that raw material prices at the beginning of the year were increased without any particular reason. The three main raw material producers saw an opportunity and they increased the prices quite substantially, that resulted in windfall of profits for them and the Australian government has slapped on a windfall tax. That has prompted the rawmaterial producers to say that, 'Now that we are going to be taxed, we might have to charge even higher.'
It seems as a rather ludicrous situation in which you (raw material producers) make huge profits, you are taxed on that and because you are taxed, you say that you will increase your prices even further. So that matter is not yet resolved, but if they do increase the prices again, the raw material producers, then of course the steel makers cost will go up. Our cars, homes, and washing machines, everything that uses steel will cost that much more because the steel makers would have very little option but rather than trying to pass on these increases in costs, as a result of rawmaterial cost increases, to the final consumer. 

http://www.moneycontrol.com/news/business/steel-prices-to-remain-highly-volatile-tata-sons-_459375.html

Hyundai to raise steel export prices for June/July

SEOUL: South Korea's Hyundai Steel, the country's No.2 steelmaker, said on Friday it would raise export prices of its steel products by $30 per tonne for June/July shipments on rising steel scrap and freight costs.

Prices of H-beams, used mainly in construction, will rise to more than $810 a tonne on a cost-and-freight (CFR) basis from $780-$800 for short-distance destinations such as Southeast Asia, and to more than $850 a tonne, CFR, for long-distance destinations such as the United States, the company said in a statement.

The firm said economic recovery and growth in resource development projects was expected to boost H-beam and section demand by 8-10 per cent year on year in 2010. Hyundai Steel last month announced domestic price hikes for major steel products.
http://economictimes.indiatimes.com/news/international-business/Hyundai-to-raise-steel-export-prices-for-June/July/articleshow/5902207.cms