Tag: steel

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

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

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China’s raw materials prices steadied after factory activity shrank less than expected in August, and while the purchasing managers’ index for steel stayed in contraction, the pace of its decline narrowed sharply.

The improvement in the steel gauge across all areas follows the restart of operations at some mills and suggests that the government’s efforts to lift the economy may be gaining traction, although new export orders were the only segment to show an expansion.

It means that China’s ferrous metals markets may have bottomed out as the government “puts a floor under steel and iron ore price declines,” said Ian Roper, commodity strategist at Astris Advisory Japan.

Still, the data continue to signal an economy operating under duress. Stringent virus restrictions and power shortages have stifled manufacturing, affecting metals consumption, while the crisis in the property sector has crushed steel demand and depressed output. Building sites also suffered during the month as much of China sweltered in an unprecedented heatwave, although government spending on infrastructure helped keep the construction PMI in expansion even as it fell on the month.

China’s steel industry has been sounding the alarm over crisis conditions for weeks. The listed unit of the world’s top steelmaker, Baoshan Iron & Steel Co., warned on Tuesday of severe challenges in the third quarter as it reported first-half earnings that missed estimates, citing squeezed margins after prices plunged more than raw material costs.

Second-quarter earnings at China’s 25 listed steel mills have slumped more than 70 percent compared with last year, close to the levels seen in 2020 when the industry was hit by the outbreak of the pandemic, according to data compiled by Bloomberg.

Baosteel said demand and prices may rebound marginally in the fourth quarter as the virus is gradually brought under control and government stimulus takes effect. After Maanshan Iron & Steel Co. reported a plunge in profits, Citigroup Inc. also said it expects consumption to improve as Beijing steps up support for its embattled economy.

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

JSW’s Seshagiri Rao explains why the steel industry is hurting

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

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[wealthdesk shortname=”JSW Steel” isinid=”INE019A01038″ bseid=”500228″ nseid=”JSWSTEEL” sector=”Steel – Large” exchange=”nse”]

Steel companies are facing multiple headwinds in the form of higher raw material prices, export duties and falling demand because of a possible recession in developed markets. In an interview with CNBC-TV18, Seshagiri Rao, Joint MD and Group CFO of JSW Steel explained what the sector is battling and where he thinks is the way forward.

The sector has been hit by a 15 percent export duty on finished steel which was imposed by the government to protect the domestic need due to geopolitical uncertainties. Rao said that this 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 said.

Global steel demand is falling because of economic conditions and financial tightness in the international market. Therefore, global demand for steel is weaker than anticipated in the current year.

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However, Rao does not expect steel prices to fall further from hereon.

“Coking coal which came down to USD 170 per tonne, again we are seeing an uptick in the coking coal prices globally. Iron ore prices are not falling below 100 percent; as and when it comes to the level again it is going up. Therefore, if the raw material price cost push remains at the current levels then I do not expect steel prices to fall further,” said Rao.

An ICRA report estimates that domestic demand will grow 7-8 percent in the coming quarters as prices stabilise. It further states that steel exports are expected to fall by 25 percent in this fiscal.

“There has been inventory build-up in domestic steel market… Steel demand has weakened on a sequential basis.” said Rao.

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

For the entire interview, watch the accompanying video

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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 planning carbon credit market for energy, steel and cement

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

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India is planning to start a carbon trading market for major emitters in the energy, steel and cement industries, as part of its efforts to hasten the transition to cleaner fuels.

The platform is likely to be announced by Prime Minister Narendra Modi at Independence Day celebrations on Aug. 15, according to people with the knowledge of the plan.

It’s been in the works since March, when consultation with ministries and companies began, said the people who asked not be named because discussions are private.

The Prime Minister’s Office and government think tank NITI Aayog didn’t immediately respond to emails seeking comment.

Also read: Equilibrium between environment and economic growth necessary, says Union Minister Nitin Gadkari

The market would initially be limited to hard-to-abate sectors, allowing participants to trade credits earned from cutting emissions, the people said.

One of the goals is to ensure state-owned energy firms like Oil & Natural Gas Corp., Indian Oil Corp. and NTPC Ltd., as well as steel and cement companies, can benefit from planned investments in carbon-capture projects, they said.

India, the world’s third-biggest emitter, surprised pundits by announcing a plan to achieve net zero by 2070 at the COP26 summit in Glasgow late last year. While that’s a decade behind its fellow Asian behemoth China, the South Asian economy is less developed and faces greater climate challenges.

The country is looking to cut 1 billion tons of emissions by 2030 as a first step in reaching its goal.

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India’s proposed market follows a similar one in China, which last year launched a mandatory trading system for all large power plants. But the market has been plagued by delays and problems with data collection, and has seen only lackluster buying and selling of allowances.

A detailed plan for establishing the carbon market is likely to be ready in the fourth quarter, the people said.

India is also looking to introduce methanol-blended fuels in land and marine transport, build more carbon capture projects, and encourage the adoption of electric vehicles as part of its climate goals, they said.

The carbon-market plan was previously reported by the local Mint newspaper.

Also read: Fuel producers can sell domestic crude oil to non-govt entities from October

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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

Speciality steel firms can now apply for production-linked incentive scheme till July 31

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

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The government has extended the deadline to submit applications under the production-linked incentive (PLI) scheme for speciality steel for the fourth time. The new deadline is July 31, 2022.

The first deadline was March 29. But that was later changed to April 30, then to May 31 and to June 30.

Speciality steel is a value-added variety. It is made by using finished steel and then coating, plating, applying heat treatment, etc., to convert it into high-value-added steel for use in sectors such as defence, space, power and automobiles, among others.

The Ministry of Steel released a notification on June 29 stating: “…the undersigned is directed to convey…to further extend the last date for receipt of applications for the PLI scheme for speciality steel from June 30, 2022, to July 31, 2022. The application window will be kept open up to July 31, 2022”.

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On Thursday, the metal stocks were trading in the red. Steel majors like Jindal Steel and JSW Steel were down by over 2 percent, while Steel Authority of India and Tata Steel were over 1 percent down.

The PLI scheme was approved by the Union Cabinet on July 22, 2021. The Rs 6,322-crore scheme was launched with an objective to boost the production of speciality steel in India.

Also Read: PLI scheme 2.0 in works for textiles with ‘suitable’ investment criteria

The move is expected to attract an additional investment of about Rs 40,000 crore and generate 5.25 lakh job opportunities.

(With agency inputs)

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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

Steel sector urges Centre to withdraw export duty, fears it may affect investments in capacity creation

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

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The Indian Steel Association (ISA) has urged the Centre to review the recent imposition of export duty on steel products. While the industry body welcomed the removal of import duties on key raw materials, it claimed that the export duty may adversely affect fresh investments in creation of steel capacity along with the Atmanirbhar Bharat Abhiyan for Steel.

ISA’s Secretary General Alok Sahay told CNBC-TV18 that it isn’t possible for prices to correct as the cost of making steel is already very high due to volatility in coal prices. The association has requested the Union Government 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 told CNBC-TV18 that the sudden imposition of export duty by the Centre will force steel mills to stop export bookings, even as he questioned what will happen to the orders taken or still in the pipeline.

Also Read: Export duty on steel sends metal stocks into a tailspin but fuels auto shares

While appreciating the government’s efforts to reduce inflation, he opined that steel prices aren’t culprit behind worldwide inflations and overdrafts availed by different governments. Pointing to nearly 2 million tonnes of steel orders in the pipeline, where either LCs have been established or the sales contracts have been signed, he said that impact of the duty will be borne by exporters.

Reminding that from chasing the government’s target of USD 1 trillion of export revenue per year, the industry is now being asked not to export steel because with a 15 percent duty it won’t be a competitive proposition.

Pointing to the confusion created by the government’s orders, he stated that on one hand the steel industry was being encouraged by a PLI scheme to expand capacities, while on the other hand exports are being discouraged.

He explained that low-grade iron ore isn’t required by Indian steel mills due to lack of beneficiation plants, hence banning iron ore as well as pellets is contradictory to each other.

Suggesting that the imposed duty should be withdrawn, Sharma said that even if it remains, the industry should be given at least 3 months to taper off existing orders and supply the orders taken. He requested the Centre to look into Coal India’s production numbers and try increasing the coal output to at least 1500 million tonnes per year instead of the existing 800 million tonnes, which will immediately cool down prices of all of commodities across the product list.

Also Read: FM Nirmala Sitharaman says entire burden of excise duty cuts borne by Centre

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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

Centre mulls extending last date for specialty steel PLI scheme after receiving only 10 applications

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

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The government’s ambitious PLI scheme for specialty steel has received just 10 applications, even as the last date to submit interest under the scheme was extended twice, after certain concerns were raised by steel makers.

The last date to submit applications under the PLI Scheme for specialty steel is expected to be extended again for the third time, a senior government official said.

Initially, March 29 was the last date for manufacturers to apply for the benefits under the Production-Linked Incentive (PLI) scheme for speciality steel. It was later extended till April 30 and again to May 31, 2022. Replying to a question on the number of applications received by players under the scheme, the official said 10 applications and 58 registrations have been received by the players, so far.

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When asked about the rationale behind extending the last date again, the official informed “the ministry is yet to come out with the modified scheme.” Certain steel makers had earlier raised concerns over the scheme, following which the government had begun the process to make certain modifications in the PLI Scheme for Speciality Steel. In the modified scheme, the government is working on a uniform incentive on the production of speciality steel. More grades, especially those used in the defence sector, will be added to the scheme.

For secondary players, cap on minimum investment and setting up minimum capacity will also be removed, he informed. On July 22 last year, the Union Cabinet, chaired by Prime Minister Narendra Modi, had approved a Rs 6,322-crore PLI scheme to boost the production of speciality steel in India.

The move is expected to attract an additional investment of about Rs 40,000 crore and generate 5.25 lakh job opportunities.

Also Read: Government approves 61 applications under PLI scheme for textiles

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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

Steel prices could drop to Rs 60,000 per tonne by March on weak seasonality: Crisil report

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

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Steel prices, which have been on a song for the past two years, are finally set to correct on weak seasonality and may trade at around Rs 60,000 per tonne by the end of the current fiscal year, down from the Rs 76,000 per tonne peak it scaled last month, says a report.

Prices are still holding high because of the continuing uncertainty over supply disruptions, decarbonization measures globally, especially in China and geopolitical risks stemming from the Russia-Ukraine war, which has driven up raw material costs, Crisil said in a report on Monday.

Price corrections are likely due to the onset of monsoon next month which will pull down demand as constructions will be on hold along with the likely lower premium realisation that domestic mills may get from exports, the report said.

According to Koustav Mazumdar, an associate director with the agency, the onset of the weak demand season because of the monsoon and less-lucrative exports mean domestic steel prices should begin easing and ultimately move towards Rs 60,000 per tonne by March 2023, down from the Rs 76,000 per tonne peak it scaled in just last month, which will still be well above the pre-pandemic levels.

Also read: Steel prices at 6-month high as China cuts 2022 crude steel output

Flat steel prices could rise 3-5 percent this fiscal year after surging over 50 percent in 2021-22. Hetal Gandhi, a director at the agency, reasoned that despite a moderation in demand in January-March, steel prices inched up owing to higher input costs and buoyant exports. Also, domestic supply stayed tight, eliminating the differential between global landed and domestic prices, which was once nearly Rs 15,000 per tonne.

On the other hand, export realization premia surged to USD75 per tonne in early May. While steel mills made the best use of elevated global prices, domestic demand began to waver. Soaring construction costs, and multiple price hikes by companies in the auto, consumer appliances and durables space drove down demand in Q4FY22. In Q1FY23, domestic demand could see an optical recovery due to low-base, but consumer sentiment remains sluggish with higher input costs leading to postponement of purchases and construction decisions.

Similarly, elevated prices and the resultant inflationary pressure impacted sentiment across the globe, eventually leading to a price correction. Since April, hot-rolled coil prices declined over 25 percent in Europe and the US to USD 1,150-1,200 per tonne from a peak of USD 1,600 in mid-March. While domestic exports to these markets will remain high in Q1, retreating prices will narrow the arbitrage for domestic mills. To sum up, exports will remain range bound at 13-14 million tonne this fiscal on the back of revised quota to Europe and supply constraints in Southeast Asia.

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However, the agency does not see a free fall as a myriad of uncertainties will limit a freefall in domestic prices, which though are showing signs of fatigue after a relentless rally over the past two years as the monsoon season sets in. The report attributes the still firm prices to the heightened geopolitical risks that have limited the price corrections, which started moderating early this year.

However, the Russian invasion of Ukraine in late February, cranked the prices up again on supply-disruption fears. In Europe and the US, where the impact was greater, prices crossed the USD1,600 per tonne-mark. Then rising input costs added to the pain. Prices of international coking coal rose 47 percent to USD670/ per tonne in three weeks from USD455 per tonne in late February, due to the flooding of mines amid high demand from countries that traditionally imported from Russia.

While coking coal prices have eased from their peaks, they continue to get support from strong demand at USD500 per tonne. All this has kept domestic steel prices elevated. In April, they hit an all-time high of over Rs 76,000 per tonne, which is 95 percent over March 2020 levels, when Covid-19 was declared a pandemic.

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

3 Mins Read

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 steel cos can cash-in on global steel shortage due to Russia-Ukraine war: TV Narendran

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

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The Confederation of Indian Industry (CII) president and Tata Steel CEO, TV Narendran, believes that business sentiment continues to remain positive on the back of a decent recovery post the COVID-19 lockdowns being lifted but he has cautioned about rising raw material costs and higher commodity prices in the short term.

“15 percent of steel that is produced in India is exported. 85 percent is for the domestic market and the domestic demand is strong because of infrastructure investments. Pretty much all steel companies have announced expansion plans and there is almost Rs 100,000 crore of private sector investment being made in India in expansion by the steel companies,” he said.

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The Russia-Ukraine war, according to the CII president has pulled out nearly 45 million tonnes of steel from global markets and the Indian steel makers thus have a chance to leverage this opportunity. He doesn’t expect any further hike in steel prices and feels it should stabilise at higher levels.

“Steel prices have pretty much stabilized and have certainly seen the peak, but we will keep fluctuating at slightly higher levels than we have seen traditionally in the past,” he said.

Supply concerns and a surge in input costs have pushed inflation to 6.95 percent, which has breached the Reserve Bank of India’s (RBI) target for the third straight month.

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There has been an activity pickup seen in the high contact sectors as well and that augurs well for the steel companies.

“In last month we had about 10 million passengers in the airlines, the hotels are picking up, hopefully with travel improving, tourism will start getting an impetus. So we are seeing some of the factors which impacted consumption are also getting addressed,” he said.

For the full interview, watch the accompanying video

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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

Steel Minister tells CPSEs to utilise CapEx to enhance capacity, install environmentally-efficient technology

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

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Steel Minister Ram Chandra Prasad Singh on Tuesday asked the steel CPSEs to utilise their Rs 1,3156-crore Capex to enhance the production capacity, modernisation of plants and install environmentally-efficient technologies.

The minister made the above remarks while chairing a meeting of steel CPSEs to review the capital expenditure incurred by them during the financial year (FY) 2021-22 and assess their CAPEX targets for the current financial year 2022-23, according to a statement issued by the Ministry of Steel.

Also Read: Domestic stainless steel demand expected to reach 20 MT by FY47: Report

“It was noted that in FY22, the capital expenditure (CAPEX) spending by steel CPSEs was Rs 10,038 crore, an increase of 38 percent over the CAPEX of Rs 7,266.70 crore in FY21. The CAPEX target for FY23 is Rs 1,3156.46 crore,” it said. The CMDs of steel CPSEs namely SAIL, NMDC, RINL, KIOCL, MOIL and MECON, along with senior officials of the ministry attended the meeting, the statement said.

“During the meeting, the steel minister emphasised the importance of timely capital expenditure for enhancing steel production capacity, modernising old plant equipment, and taking up environmentally-efficient technologies,” the ministry said. The Indian steel sector has added a capacity of 16.29 MTPA in the last five years to reach a level of 154.27 (million tonne per annum) MTPA, it added.

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

Domestic stainless steel demand expected to reach 20 MT by FY47: Report

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

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Domestic stainless steel demand is expected to reach 20 million tonne (MT) by fiscal year 2047, according to a report. In 2021-22, the country’s demand for stainless steel was 3.7-3.9 MT, as per the ‘Stainless Steel Vision Document 2047’ released in Mumbai on Wednesday.

The report was launched by Additional Secretary, Steel, Rasika Chaube at the ongoing Global Stainless Steel Expo (GSSE) 2022. The three-day event, which began on Tuesday, is organised by the Ministry of Steel, Jindal Stainless Ltd (JSL) and Virgo Communications.

The report said it expects, “stainless demand to register a compound annual growth rate (CAGR) of 6.6-7.5 percent over fiscals 2022-2025 and reach 4.6-4.8 MT.” Further, sectors like construction, infrastructure, and manufacturing — key contributors to the GDP — are expected to drive the growth. Thus, the consumption is expected to reach 12.5-12.7 MT and 19-20 MT by fiscal years 2040 and 2047, respectively.

Also Read: Steel market to improve over 6-8 months: JSPL

As of March 2022, India’s installed stainless steel capacity is at 6.6-6.8 MT. The capacity utilisation is estimated to have improved from 50 percent in 2021 fiscal year to 58-60 per cent in 2022, it said. The report further said India needs to develop enough capacities while improving its utilisation to meet the estimated demand.

India is the second-largest consumer of stainless steel and one of the fastest-growing markets. The country’s per capita stainless steel consumption has more than doubled to 2.5 kg in the 2022 fiscal from 1.2 kg in 2010. The per capita consumption of stainless steel will reach 8-9 kg by 2040 and 11-12 kg by 2047, it said.

The growth is set to jump by leaps and bounds owing to the government spending across various sectors where steel is used, Chaube said in her address. Over 1,500 participants from all over the world are attending the event which is being held for the first time for the stainless steel industry.

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