Tag: steel

India monitoring steel import situation, says govt official

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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India is monitoring steel imports after shipments from China touched a five-year high in the first four months of the fiscal year that began in April, the country’s steel secretary told Reuters on Monday.

During April-July, China was the second-biggest steel exporter to India, after South Korea, selling 0.6 million metric tons, up 62% from the same period a year earlier.

India’s domestic steel industry has raised concerns over potential dumping by Chinese sellers.

“We are monitoring the situation on imports and we have apprised the commerce ministry,” Nagendra Nath Sinha, the steel secretary, told Reuters.

Separately, a senior official in the ministry said some exporters had sold their surplus into the local market due to subdued demand overseas, contributing to a fall in prices domestically.

India, the world’s second-biggest crude steel producer, exported 2.6 million metric tons of the alloy during April-July, down 0.3% on year. The country, however, was a net exporter of finished steel.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

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ArcelorMittal weighs possible bid for US Steel

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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ArcelorMittal SA, the world’s second-largest steelmaker, is considering a potential offer for US Steel Corp, three people familiar with the matter said on Wednesday.

The combination would reverse ArcelorMittal’s retreat from the United States as a production base after it sold most of its operations to Cleveland-Cliffs Inc in 2020 for $1.4 billion to focus on growing markets such as India and Brazil.

ArcelorMittal is discussing a possible offer with its investment bankers, and there is no certainty that it will press ahead with it, the sources said.

If it does launch a bid, it could mark the escalation of a bidding war that is already underway for US Steel, following rival offers from Cleveland-Cliffs and Esmark Inc for more than $7 billion.

The sources requested anonymity because the deliberations are confidential. Representatives for ArcelorMittal and US Steel did not respond to requests for comment.

US Steel workers are members of the United Steel Workers (USW) union, which has come out in support of a deal with Cleveland-Cliffs even though US Steel has rebuffed that offer as “unreasonable.”

The union’s endorsement is important because its collective bargaining agreement with US Steel makes it a party in the negotiations and affords it the right to counter with its demands.

USW International President Tom Conway told Reuters ArcelorMittal would be “foolish” to move ahead with a bid and that the union would not endorse any buyers other than Cleveland-Cliffs. He said he was not happy with how ArcelorMittal has treated workers in the past, without elaborating.

“I have no interest in talking to anybody else and I would like U.S. Steel to get their board moving and conclude this thing with Cliffs,” Conway said.

US Steel shares rose as much as 6.3 percent on news of ArcelorMittal’s bid deliberations before pairing some of the gains on the union’s opposition, to end trading up 1.4 percent at $30.65. That compares to bids from Cleveland-Cliffs and Esmark that were both worth $35 per share when submitted. Esmark’s offer is all cash, while Cleveland-Cliffs would pay for the deal half with cash and half with its own stock.

ArcelorMittal’s deliberations come after US Steel said on Sunday it had launched a process to explore interest from potential acquirers.

US Steel became an acquisition target following several quarters of falling revenue and declining profits, as it struggled with high raw material and energy costs.

ArcelorMittal, like its peers, has also been grappling with a slowdown in demand, as global economic growth slows. Last month it reported a second-quarter profit of $2.6 billion, half that of a year ago.

ArcelorMittal’s US footprint it currently limited to a joint venture with Nippon Steel Corp in Alabama. They own a plant that produces steel sheet products by processing semi-finished products, or slabs, procured from local and overseas suppliers. They are also investing about $1 billion in an electric arc furnace.

Morgan Stanley analysts said in a note on Wednesday they found ArcelorMittal’s US Steel bid deliberations at odds with its strategy of reducing its carbon footprint and focusing on growth in India and Brazil.

“We also see limited scope for cost synergies from such a deal,” the analysts added.

Also Read: Apple supplier Foxconn begins iPhone 15 production in India

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

What’s moving metal prices and what to expect this week?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Base metals prices pulled back from higher levels, but prices remain cushioned by hopes of fast track measures from Chinese government. According to a China Securities Journal report released on June 19th, citing analysts and unidentified market sources, further fiscal, monetary and industry policy stimulus can be expected to support the Chinese economy, boosting consumption and investment demand.

Steel prices corrected for the ninth consecutive week ending June 16th. Long steel, which witnessed a pre-monsoon procurement last week, has come under pressure with prices correcting to October 2021 levels. Ex-Mumbai benchmark primary long steel prices corrected Rs 900/t to settle at Rs 53,500/t. The prices of long steel products was dragged by weak global housing and infrastructure demand.

Flat steel prices that witnessed a slight uptick last week were relatively flat week on week at Rs 55,400/t. The domestic trade-level prices have inched up however, range-bound export prices have kept the overall prices under
check.

Gold prices held steady on Tuesday, after moving in a tight range in holiday-thinned trading. Although gold is considered a hedge against inflation, interest rate hikes raise the opportunity cost of holding non-yielding bullion. Among other precious metals, spot silver eased to $24 per ounce and palladium fell 1.2 percent to $1,390.

What’s moving metal prices ?

After softer inflation and disappointing trade figures from China, factory output and retail sales too missed expectations, adding to evidence that the world’s second-largest economy cooled further in May. This sparked hopes that the People’s Bank of China might need to cut interests’ rate soon to support a sustained economic recovery. Investors are hopeful of more economic stimulus measures from China as the latest economic data releases hinted towards an economic slowdown.

This week, speeches by several FOMC officials and most Fed Chair Powell testimony will be in focus for more hints on the policy outlook, which may bring volatility in metal prices.

Metals pack gain in trade 

The metals pack gains in trade on June 20th with Jindal Steel rising 4 percent, NMDC, JSW Steel and Jindal Stainless rising upto 2 percent at 10:45 am on June 20th. At least 12 out of 15 stocks of Nifty Metal index trade in the green and is the only sectoral index along with consumer durables rising in trade.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

China to Cut Steel Output For Third Consecutive Year

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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China plans to cut annual crude steel production in 2023, according to Bloomberg, marking the third year in a row that the government has mandated reduced output in order to rein in carbon emissions from the heavily polluting sector.

China is the world’s biggest producer and consumer of the alloy, which is the backbone of its industrial economy. Since output hit a record of 1.053 billion tons in 2020, it has declined each year to remain just above 1 billion tons. The sector accounts for about 15% of national emissions, second only to electricity generation. As part of the plan, the government will also ban new steelmaking capacity.

The industry has been set a goal of peaking emissions by 2030 — the same deadline as the economy as a whole — although if production continues to fall for the rest of the decade that target would have already been met. While Beijing continues to employ large-scale stimulus to buttress economic growth, the proportion of steel used is declining as the economy transitions to less-metals intensive infrastructure. The government’s crackdown on the property market has also sapped demand for the alloy.

Some of the world’s biggest miners, from BHP Group in Australia to Vale SA in Brazil, rely on China’s steel mills to consume the vast quantities of iron ore they produce, so less demand is likely to weigh on their earnings.

Chinese steel production climbed 5.6% in the first two months of the year to 169 million tons, although Beijing’s relatively modest targets for growth in 2023, unveiled at its annual legislative meeting earlier in March, have dented expectations of a big increase in demand.

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

India to push primary steel producers to use 50% of input from recycled steel by 2047: Jyotiraditya Scindia

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Union Steel Minister Jyotiraditya Scindia on Saturday said his ministry will push primary steel producers to use 50 percent of their input from scrapped/recycled steel by 2047 to help achieve the government target of moving into a circular economy.

Currently, the level of recycled steel usage in primary steel production is only around 10 percent even though recycled steel contributes to 22.5 percent of the domestic total steel production of 140 million tonnes, the minister said while addressing the last day of the three-day international conference of material recycling in Kochi.

The 10th conference is being organised by the Material Recycling Association of India and is attended by over 2,000 delegates from 38 countries.

Noting that recycling is the key cog in the wheel of manufacturing as economies move into a circular model of development, he said, “Going forward the industry should focus on the 6Rs philosophy of reduce (exploitation of natural resources), recycle, reuse, recover, re-design and reinforce”.

He said the government is committed to reducing CO2 emissions in the steel sector by 5 percent by 2030 from the current 2.85 to 1.4 CO2/tonne of crude steel, and to achieve this recycling scrap steel is an extremely important source.

“Today, scrap usage is only 15 percent in primary steel production. We will push the steel industry to increase this to 25 percent in the next five years, and by 2047, this should double to 50 percent. This means that the primary steel producers consume only 50 percent of iron ore by then,” Scindia said.

This is needed as the natural resources are finite and the demand looks infinite, he said, adding the steel industry has the biggest role to play in the whole process.

The country currently produces 25 million tonne of scrap steel and annually imports 5 million tonne of scrap steel with zero import duty, he added.

The recycling industry is highly unorganised and is worth about USD 50 billion now. There are over 25,000 recycling units in the country. However, in the metals space almost 95 percent are organised, Material Recycling Association president Sanjay Mehta said.

He also urged the minister to extend the duty-free imports of other scraps such as copper, aluminium, zinc and other metals as many countries are adopting no export of scrap policies now. For instance last month, the European Union imposed a ban on scrap exports, and so did the UAE.

Domestic recyclers used to import 25 percent of their shipments from the EU markets. Similarly, the UAE is also a large source market for the country. Counties are discouraging exports of scraps as they move into the circular economy.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

The five major factors working for the steel industry over the last two months

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The markets have been volatile since the start of the year. But over the last two months, a sector that has been doing well is the Metal index.

Starting November last year, while the Nifty 50 is flat, the Metal index has gained close to 15 percent.

Two factors that are working in favour of sentiments – one is China’s economy is unlocking. So, there will be more amount of steel and more amount of metals consumed.

Secondly, the domestic steel market that was plagued because of the imposition of the export duty, that has received relief after the duty was revoked in November.

Here are the five major factors that have worked for the steel industry in particular:

The China Push

There were two factors ailing the Chinese market – one was the property market and the second factor was no mobilization as people were stuck at home. Now the Chinese government and authorities are focusing on both of these, so good news from there.

Read Here: FIIs turning towards DLF, selling pressure on Dabur – stocks that kept dealers busy on Friday

Chinese Steel Prices

The HRC prices had corrected from around $860 per tonne at the start of our 2022 all the way to around $500. But with this unlock theme playing out, the pricing is currently at around $620-630 per tonne. So that’s giving you a case that domestic prices will get some kind of support.

Domestic Steel Prices

Indian steel prices were at a premium compared to their Chinese counterparts, meaning importing steel from China was cheaper.

That has quickly turned around. From a premium of Rs 8,000, the Indian steel makers went ahead and cut prices, while the Chinese players increased them. Suddenly the entire ratio has flipped and now you have the imported Chinese steel coming at a premium in comparison to the domestic one.

Brokerages like JPMorgan as well as BofAML they are expecting price increases of Rs 2,000 to 3,000 per tonne in the next few months.

Read Here: MCX shares surge after SEBI allows multiple contracts in base metals, crude

Iron Ore Prices

Iron ore prices have been on a tear, rising as much as 50 percent from the lows seen recently. Iron ore prices moving up give a bit of a base to steel companies as well. This is advantage to India because most ferrous companies in India get majority of their Iron ore from domestic sources. Domestic iron ore is at a discount to the imported one currently.

Also keep in mind that if iron ore prices move up, then steel prices get a base, and in that context, India is relatively better placed.

Finally, demand has been good. That price increase taken at the start of January has been lapped up by consumers, so that is good news. Additionally, restocking is taking place after a pause when customers stopped buying steel in anticipation of prices falling. Also in the coming quarter, the export volumes will pick up.

Finally, steel and metals is not really about valuations. It’s more about momentum investing and that is where we have seen the stocks run-up. But more or less on a price-to-book value basis, it is pretty much in line with what they’ve been trading at.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Rama Steel Tubes to expand exports as it sees no signs of slowdown

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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[wealthdesk shortname=”Rama Steel Tube” isinid=”INE230R01035″ bseid=”539309″ nseid=”RAMASTEEL” sector=”Steel – Medium & Small” exchange=”nse”]

Rama Steel Tubes saw its shares soar to a new high of Rs 185.10 on Tuesday after the company reported its highest sales volume in the December quarter (Q3 FY23).

Executive Director Richi Bansal appeared on CNBC-TV18 on Thursday to discuss the company’s performance and outlook. He expressed confidence in receiving more orders in the future and stated that he does not see any signs of a slowdown for Rama Steel Tubes’ business.

To expand the company’s reach, Bansal announced plans to try and extend Rama Steel Tubes’ exports to 25 percent of total sales. He noted that the export margin for FY23 was expected to be better than the domestic margin. In fact, he stated that exports would contribute 25 percent to the company’s total sales mix in FY23.

Also Read | Here’s why Tata Steel and Hindalco can continue to do well in 2023

Bansal said that export volumes for the company were at 20 percent in the December quarter and he expects healthy demand for Rama Steel Tubes’ products in the coming quarters. He anticipates a growth of 25-30 percent in the fourth quarter compared to the third and expects FY23 volume to reach 1.8 lakh tonne and FY24 volume to be between 3 and 3.3 lakh tonne.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Bharat Forge unveils ‘green steel’ plans in Pune’s Saarloha plant

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Kalyani Group company, Saarloha Advanced Materials (Saarloha), has announced that ‘green’ steel will be produced in its electric arc furnace plant in Pune, Maharashtra. The company has invested Rs 400 crore in solar and wind energy to power its electric arc furnaces. Amit Kalyani, Deputy Managing Director of Bharat Forge, told CNBC-TV18 that the company is planet positive, so everything they do will aim to enhance the sustainability of the planet.

Creating the capability of making green steel by using renewable resources, recycling and reducing usage of fossil fuels is a big step towards achieving the sustainable development goals globally, he said. 

“Our steel plants are running at full capacity utilisation, but that is overall in steel production. When it comes to green steel, Saarloha can be fully converted to make green steel. Today we forecast that in the first year we will probably make between 15-25 percent of green steel,” he said.

Saarloha’s 250,000-metric tonne production capacity will allow it to produce long steel of various grades while reducing its greenhouse gas footprint to 140 kg for each tonne it produces.

On its clientele, Kalyani said the company will first target “niche” industries. “Among industries which are highly polluting and need to reduce their carbon footprint, such as energy production, oil and gas production, there are definitely some who want to reduce their carbon footprint. Those are the industries that are also keen to work with us and are taking the first mover advantage that we are providing,” he added.

Also read: Bharat Forge declares interim dividend of Rs 1.50 per share

Later they will spread to more mass markets, he said.

On pricing, he said since the Kalyani group is among the first producers, so green steel will obviously be more expensive than conventional steel. The steel industry is responsible for 7 percent of the India’s greenhouse gas emissions and 2 percent of the GDP. With expanded production to fulfil domestic and international demand, the present annual carbon dioxide (CO2) emissions from the steel industry are predicted to double from 242 MT by 2030 and triple by 2050.

Jyotiraditya Scindia, the Union Minister for Steel, said in a statement to the Rajya Sabha on Monday, December 19, that the government was considering mandating the use of green steel in public projects. He said between 2005 and 2022, emissions from the steel industry were reduced by 15 percent, and that the Centre aims to further reduce emissions by 10 percent by 2030. Both the amount of energy used per tonne of steel produced and the CO2 emission intensity have decreased, Scindia added.

Also read: JSW Steel investing Rs 10000 crore for greener steel, signs MoU with Germany’s SMS group

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Industry welcomes export duty withdrawal on iron and steel items

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The steel industry has welcomed the government’s decision to withdraw export duty on steel products and make changes to the iron ore export duties.

In an official statement, the Indian Steel Association thanked the Prime Minister Narendra Modi for the decision and the other ministries (Finance, Commerce & Steel) for supporting the same. President Dilip Oommen believes that the move will strengthen the steel sector and enable it towards an inclusive growth path.

Oommen is also the Executive Vice President of ArcelorMittal.

Effective today, exports of iron ore lumps and fines < 58 percent Fe will attract zero duty while exports of iron ore lumps and fines greater than 58 percent Fe will attract 30 percent duty.

https://twitter.com/TimsyJaipuria/status/1593667060374331393?t=dBqhK8GiWBvyrPm4x7TGCA&s=08

Tata Steel MD & CEO TV Narendran believes that India has a great opportunity to make steel for India and for the world considering the iron ore reserves that it has. He cited the example of China, Japan and South Korea, who together export around 150 million tonnes of steel despite importing most of the iron ore they need.

Export of iron ore pellets will attract zero duty.

Exports of pig iron & steel products classified under HS 7201, 7208, 7209, 7210, 7213, 7214, 7219, 7222, and 7227 will also attract zero duty.

On the other hand, anthracite and coking coal will attract 2.5 percent import duty and the import of coke and semi coke will have an import duty of 5 percent.

Seshagiri Rao, CFO of JSW Steel, one of India’s largest steel producers also welcomed the move, saying that it will act as a big sentiment boost to revive domestic steel demand, especially when the global steel demand is on a steep decline.

https://twitter.com/nigel__dsouza/status/1593796231909605376?s=46&t=Z-9KXmiHl4wjr7MVMQ0UPw

The sentiments were echoed by JSPL MD Bimlendra Jha, who, in an interaction with CNBC-TV18 last week mentioned that the upswing in the Indian steel sector is largely due to domestic demand, and that companies should not focus a lot on exports unless it makes a lot of sense from the financial standpoint.

The news also confirms a CNBC-TV18 newsbreak on Friday which mentioned that the steel minister shared detailed representations of the industry with the Finance Ministry seeking a cut, reduction or a rollback of the duties.

A 15 percent export duty on steel was imposed in May this year, which had sent stocks like JSW Steel & Tata Steel hurtling towards double-digit declines in a single session.

Also Read: Commerce Ministry may be looking to include steel in export incentive scheme

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

India considering proposal for calibrated reduction of export duty on steel

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The government is examining the proposal for calibrated reduction of export duty on steel, people in the know of the matter have told CNBC-TV18.

It is learnt that Finance Minister Nirmala Sitharaman along with top Finance Ministry and Steel Ministry officials reviewed the export duties on steel and iron ore on Monday.

However, as per sources, the duties on iron ore are likely to stay for the time being as the revenue department is yet to take a final decision.

Steel companies have been facing multiple headwinds in the form of higher raw material prices, export duties and falling demand because of a possible recession in developed markets.

Also Read: China’s stimulus helps to lift the gloom over steel markets

In May, India imposed a 15 percent export duty on finished steel, to protect the domestic need due to geopolitical uncertainties. The Indian Steel Association (ISA) had urged the Centre to review the recent imposition of export duty on steel products.

ISA’s Secretary General Alok Sahay had told CNBC-TV18 that it wasn’t possible for prices to correct as the cost of making steel was already very high due to volatility in coal prices. The association requested the Centre to look at reasons behind price volatility and the existing benchmark indexation systems which automatically change price.

The Jindal Steel & Power Limited’s Managing Director VR Sharma had told CNBC-TV18 in May that the sudden imposition of export duty by the Centre would force steel mills to stop export bookings.

Also Read: India planning carbon credit market for energy, steel and cement

Last month, Seshagiri Rao, the Joint MD and Group CFO of JSW Steel, had said that imposition of export duty has hurt the steel industry and in turn will hurt the economy. “Exports, in the last year were 18.5 million tonne whereas in this year they have already fallen, on a proportionate basis for 4 months, more than 50 percent. So, that also is impacting the overall production in India,” he had said.

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow