Fastener now comes in stainless steel

The process-free "Automatic" fastener is now being produced by Item in stainless steel, following higher than expected sales of other stainless steel components such as T-slot nuts.

Suitable even where vibration is present, automatic fasteners require only socket wrenches to fit (no drilling or tapping required), and are typically used as corner joints to build or modify aluminium frames where machining facilities are not readily to hand.

Automatic fasteners are a particular favourite of commissioning engineers who must work on site, but up until now could not be used in hostile or wet environments because even though zinc-plated, they would eventually corrode.

Silos Cordoba reaps benefits of strong steel

Without compromising on strength, the weight of the finished products has been cut.
This has resulted in reduced transport costs, lower fuel consumption and quicker erection.

As a result, one third of the transport costs has been eliminated and erection has been speeded up by around 20 per cent.

The designs are the result of determined work to put high-strength steels to optimum use.

Jose Cabrera Cuevas, technical executive at Silos Cordoba, said: 'Less material is needed than in the past for an equally strong or even stronger product.
'Some time ago, a delivery of new silos to Slovakia weighed 1,200 tonnes and needed more than 30 trucks.

'In the past, a similar delivery would have weighed 1,500 tonnes and would have needed 42 trucks.

'So we saved more than 12m3 of diesel oil by switching to high-strength steels.
'In addition to the cut in costs, the emissions also decreased,' he added.
High-strength steel strips are roll-formed at the factory directly from coils and are punched and cut into finished cover sheets of exactly the right shape.
The factory also includes production lines for roof parts, load-bearing structures and other parts needed for every silo.

The thicknesses of the high-strength cover sheets vary depending on their locations on the silo.

The higher up, the thinner the sheets.
Every silo is 'tailored' to the order.

The span of the silos produced ranges from small silo buildings measuring only a few metres up to the largest units that are more than 30m high and upward of 20m in diameter.

The volume of the largest silo is about 20,000m3.

Around 1,200 to 1,300 cover sheets are needed for the biggest silo, in addition to several load-bearing structural parts.

Silos Cordoba uses high-strength, hot-dip galvanized sheet steel with minimum yield strengths of between 460MPa and 500MPa for the cover sheets.
Untreated, hot-rolled steel with a minimum yield strength of 600MPa is used for the load-bearing structural parts.

Plans are afoot to use steels of even higher strength and the company is studying the possibility of going up to 700MPa.

Profile system switches to stainless steel

MiniTec UK has expanded its Profile System range with a new and unique stainless steel profile for use as machine framing for harsh production environments, high temperature processes and other areas where aluminium profiles have limited use.

The new high grade SUS304 stainless profile retains the simplicity and cost benefits of its aluminium counterpart but has significantly improved temperature and load bearing characteristics as well as excellent corrosion resistance.

The 45 x 45mm square section profile is completely interchangeable with MiniTec's aluminium profile system and benefits from a stainless version of the time-saving Powerlock fastener that requires no premachining or special assembly tools.

When compared other manufacturer's stainless steel profile systems, the combination of a very competitive pricing policy and the simplicity of machine-free assembly makes the new MiniTec profile a very attractive machine framing choice.

Although extruded aluminium profile framing systems are now the preferred construction method for production machinery and test equipment in many areas of industry with well developed cost and time saving benefits, anodised aluminium has limited corrosion resistance which can inhibit its use in hostile, clean and outdoor environments.

The new stainless steel profile opens up a wide range of application opportunities for system integrators and OEMs of manufacturing, packaging and handling machinery used for industrial production of chemicals, pharmaceuticals, food and beverage, and medical devices.

The natural finish of the stainless profile will also be of benefit for clean room processing in semiconductor and electronics manufacture with the added advantage of excellent electrically conductive characteristics for ESD.

The new range is also highly well-matched to high temperature and caustic washdown processes and will be suited to outdoor framing construction and some architectural applications such as screens.

In addition to the stainless version of the Powerlock fastener, the range is complemented with stainless accessories such as end caps and mounting feet.
There are also hundreds of other accessories that may be used from MiniTec's aluminium Profile System range including mechanical, electrical and pneumatic components for guards, doors, panelling, conveying, handling, linear motion and workstations.

Ferramenta door levers in timeless stainless steel

It encapsulates the essence of simply defined, smooth lines in a variety of subtle stainless steel finishes.

The exquisitely crafted range of lever designs are available in timeless, Satin or Mirror-polished Stainless Steel as well as the increasingly popular Dual Satin and Polished finish.

Concealed bolt-through fixings at 38mm centres are compatible with most locks and latches to suit doors of 38 - 44mm thickness, while sprung roses are suitable for lightly sprung locks and tubular latches.

A number of matching escutcheons are available for Euro profile, oval cylinders and lever key functions.

The range comes with a 5-year guarantee.

Wrightstyle create blast proof steel glazing

Based in Devizes, Wiltshire, Wrightsytle provides expertise, technical support, component parts and accessories to licensed fabricators who produce and install glazing systems.

Recently, Wrightstyle have designed a blast resistant steel glazing system.
In the new product, the glass is bonded to the steel framing support system, allowing shocks to be absorbed by all the components rather than just the glass.

It also looks almost exactly the same as non-protected curtain walling and its profile is a slim 60mm.

This enables building designers to create aesthetically pleasing buildings that provide better protection from terrorist bombings and other explosions.
Infamous bombings in recent years have created more awareness of the need for added protection on buildings that are at increased risk of attack.

Providing safer glazing systems could be a major contributor to this effort.
In some urban explosions it is estimated that 80 - 85 per cent of secondary blast injuries are caused by flying pieces and shards of glass.

This is a horrendous thought and solutions to help eliminate these added risks are essential.
Wrightstyle's multi panel blast system has been extensively tested in order to find how well it withstands various explosions.

The independent studies were carried out at RAF Spadeadam in Cumbria.
Initially the steel glazing system was subjected to an explosion that is the equivalent of 500 kilos of TNT, from a distance of 75 metres.
This blast strength is considered to represent an average sized lorry full of high explosives.

The System was said to be intact following the blast and shockwaves from this test.
Shortly after this, from a distance of 20 metres, a car bomb test was also performed.
Equating to the force of 100 kilos of TNT, the fact this test was nearer to the steel glazing system meant it was subject to higher pressures.

Again the system proved successful.
This indicates that in a real situation, the likelihood of some injuries to people within a building using the blast proof system would be significantly reduced.

Screw jacks come in stainless steel

A complete stainless steel screw jack is available from Power Jacks for linear motion applications where there is a high demand for corrosion resistance, hygienic installations and/or easy cleaning.

There are two series of stainless steel screw jacks the E-Series Metric screw jacks and the M-Series Imperial (inch) screw jacks.

The E-Series has six basic models in the range with capacities ranging from 10 to 300kN.

The M-Series has nine basic models in the range with capacities from 2 to 100t.
The screw jacks worm gearbox has a curved housing made from stainless steel and can be specified with a sealed gear cavity to keep water and other contaminants out.

Alternatively a standard gearbox construction can be specified.
The lubrication of the gearbox and the lifting screw can also be altered for the application for example food grade grease or nuclear grade grease.

As the requirements for each application can vary greatly so can the specification of the stainless steel screw jacks.

This can extend from a unit with just a stainless steel lifting screw and plated housing to a fully stainless steel screw jack.

Each screw jack has the same high standard array of options as other screw jack designs available from Power Jacks, which results in over 5000 available variants.
This allows the specification of the screw jack to be tailored to meet the requirements of the application taking all factors and conditions into account.

All stainless-steel screw jack designs are available for new installations or for retrofit replacements, offering compatible metric or imperial dimensions to standard alternatives.

Power Jacks stainless steel screw jacks have been successfully used in applications worldwide ranging from food processing lines to nuclear power stations to subsea oil wellheads.

Hasco expands flat steel range with P5600 grade

Customers have a choice of more than 3,000 available sizes.
All dimensions are grouped together under one order number, enabling the required ready-to-use sizes to be found easily and quickly.

Hasco's range of flat steel products has also been extended by many new materials.
Two examples are the highly-polishable case-hardening steel 1.2162 and the through-hardening cold-work steel 1.2363, which is additionally noted for its high-wear resistance.

The pre-hardened and tempered chromium stainless steel 1.2099 is also available as precision flat steel.

This material has good machining properties, dimensional stability and corrosion resistance.

All the dimensions and tolerances are oriented to practical applications and conform to DIN 59350.

Power supply contract protects steel production

ABB has won a US $28 million contract for equipment to provide a new steel plant in Turkey with the reliable power supply needed to ensure high-quality production.
The project is the largest single private investment in the iron and steel industry in Turkey and will have the capacity to produce 2.5 million tons of hot flat-rolled products and 1.2 million tons of cold-rolled products.

The plant will also produce galvanising steel, dyed sheet steel and rolled steel.
ABB will supply technology including a Static Var Compensator (SVC), which compensates for fluctuations in the voltage and current of power supplies that can harm production quality in industrial plants.

The contract was awarded by MMK-Atakas, a joint partnership between Atakas Metallurgy and Port Management (Turkey) and Magnitogorsk Iron and Steel Works (MMK), a Russian company.

"This is an excellent example of 'one-stop' shopping", said Peter Leupp, Head of ABB's Power Systems division.

"The technical support provided by ABB experts in the initial phase proved extremely worthwhile for the customer and we collaborated closely on the development of a tailored solution".

The order includes transformers, high and medium-voltage switchgear, a substation Scada (supervisory control and data acquisition) system and FACTS (flexible AC transmission system).

In addition to the SVC system, ABB will supply four 155MVA power transformers, a 380/34.5kV complete turnkey switchyard and a 72.5kV open switch yard.

The company will also supply and install medium-voltage panels along with the Scada and communications system.

The initial phase of the project is scheduled to be operational by 1st, April 2009.

China steel market still under pressure

Baoshan Iron & Steel Co , the listed unit of China's largest steelmaker, said on Wednesday it expected the domestic steel market to remain under relatively heavy pressure with no fundamental turnaround in demand from key steel-using sectors.

"The company's downstream orders have recently improved compared with the last quarter, but they have still fallen markedly from a year earlier," the company said in an e-mailed response to Reuters queries.

It added that a three-month delay in the restart of its No. 1 blast furnace, which had been shut until mid-November for maintenance and resumed output in February, reduced its pig iron production by about 1 million tonnes.

China's steelmakers have been struggling with a sharp drop-off in demand as economic growth cools, and many cut production late last year in response to falling domestic prices.

POSCO sees January steel sales down 27 pct

South Korea's POSCO , the world's No. 4 steelmaker, expects its January steel sales to fall by around 27 percent to 1.9 million tonnes, hit by faltering demand, its chief financial officer said on Tuesday.

"We produce and sell around 2.6 million tonnes every month but sales are seen falling down to around 1.9 million tonnes this month (due to weak demand)," POSCO CFO Lee Dong-hee told reporters on the sidelines of a steel industry gathering.

POSCO plans to update its 2009 production plans on Thursday when it announces its fourth-quarter results.

Jump in steel exports helps industry clear stockpiles

Price stability in the global market has helped Indian steel manufacturers clear stockpiles through exports, which bounced back in quantity by an impressive 36% in December 2008, though sales realizations remained a big worry for the industry.

Steel exports reached 2.29 lakh tonnes in December reversing from a negative trend in November when exports had dropped to 1.8 lakh tonnes from 2.4 lakh tonnes in October, official sources said.

They attributed recovery in exports to price stabilization and withdrawal of 15% export duty on long steel products, besides restoration of tax refunds (DEPB) for the sector in the October-November period.

Though prices stabilizing around 550-600 dollar per tonne have generated some buying interest, sales realizations have remained quite low. Prices had peaked to 1,200 dollar per tonne in June 2008 resulting in a windfall for the industry.

However, the industry is a long way from seeing a revival in demand. "In the midst of the global economic downturn, the demand for steel plummeted in the international market," Steel Secretary P K Rastogi said.

For the April-December period, steel exports have declined by 24% to 2.7 mn tonne from 3.5 mn tonne in the comparable period of last fiscal. With the automobile and construction industries reeling under the global downturn exports for the flat products dropped by 25% in April-December over the year-ago period.

Posco in talks with Toyota to supply steel

Posco, the biggest South Korean steel maker, said on Monday that it was in talks with Toyota Motor to supply steel to the world's top auto company, which is seeking to cut costs as it heads for its first-ever annual operating loss.

Posco, one of the biggest global steel makers by output, has steel supply contracts with all major Japanese car makers for their Japanese output except Toyota.
"We are in talks with Toyota on a similar deal," a Posco spokeswoman, Ko Min Jin, said.

Posco, which earns around 70 percent of its revenue in the domestic market, sells its products at a relatively low price compared to regional rivals and a weaker won currency is also helping it gain price edge in the overseas market.
"The deal is very likely as Posco is already selling steel for Toyota for production in Thailand," said Eom Jin Seok, a Kyobo Securities analyst.

"Any deal will be positive for Posco as it will add a stable customer base at a time when domestic demand for cold-rolled steel is sure to decline."
The move is also likely to help Toyota, the biggest single customer of the world's second and third largest steel firms, Nippon Steel and JFE, which trail ArcelorMittal, press for a cut in steel supply prices.

Toyota plans to halt output at its domestic plants for 11 days in February and March, while Hyundai Motor, the top South Korean top auto company, plans to cut domestic output by up to 30 percent in the first quarter as drivers put off big-ticket purchases, leaving dealers' lots full of unsold cars.
Shares in Posco were down 4.2 percent to 378,000 won in late morning trade, lagging a 1.7 percent drop in the broader market.

Steel: take the slowdown seriously

The bad news continues to surround steel. While many believe that the current state of affairs in the industry is the result of an overreaction to the sudden disappearance of liquidity, there are reasons to believe that unfortunately it is not so simple. There is clear evidence of demand destruction around the world as also in India. The government needs to do more and that too differently, to see that the economy at large and the steel industry in particular remains in shape.

The government has two issues to confront. At one level, it has to see that consumption of steel increases and the government wants to achieve that at one level by supporting the steel consuming sectors such as construction and automobiles. At another, it seeks to pull the steel industry out of trouble by creating conditions so that steel prices can be raised in the home market. The government understands that the industry faces competition mainly from imports and if the same can be restricted directly or indirectly and the costs of imports can be raised through raising tariff barriers, the industry will get some relief.

Different countries have faced the problem differently in varying degrees. Invariably, each has witnessed a drop in industrial output and a slowdown in construction. All major industrial nations have announced stimulus packages to boost their sagging economies up. The government of India has also done its bit.

However, more thoughts should have gone into devising measures to pull the industry out of trouble rather than trying measures, which in certain cases will be opposed by the user industries and in other will leave the economy with no impact. The actions taken so far indicate that the government has not really appreciated the depth of the problem in the real economy and looks complacent. The steel industry can actually see a catastrophe if not handled carefully now.

Not a measure for the steel industry, but the government should go for a massive income tax cut to boost the sagging sentiments of the working population and especially those who can go for the big spends. Impact of an excise duty cut is not noticed. It does not bring confidence back. Income tax cuts will have a clear impact. It should be so high that people come out on to the street to celebrate it.

Production cuts staring steel giants in the face

Perhaps no soothsayer could predict that steel, the world’s biggest volume industrial commodity, after seeing a growing demand surge six years ago would see a shocking market collapse at the end of July 2008.

Even at the inaugural meeting of World Steel, the new avatar of the International Iron & Steel Institute, someone as important as Lakshmi Mittal wanted us to believe that the demand in emerging markets would act as a bulwark against prices seeking lower levels.

But this is not a typical cyclical downturn we are seeing in steel. As the miseries visiting all base metals and minerals in the wake of global economic meltdown and uncommon shortage of credit will confirm, the road ahead for steel makers will remain bumpy for quite some time to come. However, what remains subjects of conjencture are what will be the extent of fall of steel production this year and for how long the industry’s downturn will last.

The world steel production figures for 2008 are being collated. It is, however, taken for granted that steel output in the year gone by will be marginally lower than 1.324 billion tonnes in 2007. What with groups such as ArcelorMittal, Corus and Severstal having effected big production cuts. China, the world’s biggest producer and consumer of steel, is for the first time exercising discipline in production.
Observers tell us that as we go forward, we will see world steel production falling anything between 10 per cent (Credit Suisse) and 13.9 per cent (World Steel Dynamics) in 2009.

“Even in the event of a 10 per cent setback in 2009, we will be seeing the sharpest yearly world steel production fall as far as memory goes back,” says Sushil Roongta, chairman of Steel Authority of India Limited (SAIL).

As for SAIL, it has made quite a few deft tactical moves, including product mix reshuffling, to negotiate the demand side problems. In the post Second World War period, the biggest yearly fall was 8.7 per cent in 1982.

Thanks to Indian GDP still growing at 6 per cent at least, SAIL is spared the pains of production cuts. But the behemoth is also demonstrating the agility to make those steel products for which demand still remains good. But there is no way SAIL or other Indian steel makers can protect their top and bottom lines as average steel prices have skid from $1,160 a tonne in July 2008 to $500-550 a tonne now.

Looking beyond 2009, steel makers are bracing themselves for a long period of weak demand before a turnaround in world economy creates the condition for global steel production to climb back to the 2007 level and then move forward. There is hair splitting among experts as to whether it will be three or four or five years before steel production returns to 1.324 billion tonnes. The gloomiest forecast comes from an analyst with Moody’s who says we will have to wait until 2013 for the current downturn to fade away.

Using data from the London based Iron and Steel Statistics Bureau, Peter Marsh of Financial Times says leaving out the war years, “there have been only four occasions since 1991” when the world steel industry took four years or more to live down a downturn by climbing back to the earlier production high point.

Aware that steel demand and price falls are fallouts of the worst economic crisis since the Great Depression, industry officials are not likely to be swayed by some intermittently mild improvements in metal prices. Some analysts do see the possibility of steel prices edging forward, albeit haltingly in the second and third quarters of 2009. But they will not guarantee that such price rises are sustainable.

Steel prices expected to rise this quarter

PRICES of steel goods should rise and stabilize early this year after falling steeply in the past two quarters, as raw materials become costlier and demand may be boosted by state infrastructure spending and house sales, industry leaders said late last week.

But realty firms may not hike prices of units, since they had already raised prices last year and will not want to risk losing buyers, a property analyst said.
Prices of flat steel sheets used for roofing and gutters will rise by 3%-5% within the first quarter from current prices, Filipino Galvanizers Institute President Salvio D. Perez said in a telephone interview.

An 8-foot long 0.4mm galvanized iron (GI) sheet, which currently costs P380, may rise to P400, Mr. Perez said.

"We are looking at price increases in the first quarter because prices of raw materials are going up after foreign mills started production cutbacks," Mr. Perez said, adding that scrap iron, also an input, have become costlier as well.

Sberbank and MMK sign credit facility agreement

It is reported that Mr Herman Gref chairman of the board and CEO of Sberbank and Mr Victor Rashnikov chairman of the board of directors of OAO signed a nonrenewable 2 year credit facility for RUB 3.0 billion.

The credit facility is provided to finance the construction of the plate mill complex at MMK with a design capacity of 1.5 million tonnes of plates per year. The plates are intended for production of pipes, building of ships, vessels and bridges.

The implementation of the plate mill complex is bound to further significantly strengthen the general operational efficiency of MMK. It will secure state of the art production of high quality plates meeting international standards and capable to successfully compete both in the domestic and export markets.

In its turn, Sberbank considers the credit line for MMK as another major step towards effective support of Russian strategic enterprises.

Production pruning - US weekly raw steel production dips by 51% YoY

American Iron & Steel Industries reported that in the week ending December 20th 2008, US's raw steel production was 1.022 million tons while the capability utilization rate was 42.9%. Production was 2.102 million tons in the week ending December 20th 2008, while the capability utilization then was 88.1%. The current week production represents a 51.4% YoY decrease from the same period in 2007.

Production for the week ending December 20th 2008 is down by 12.5% WoW from the previous week ending December 13th 2008 when production was 1.168 million tons and the rate of capability utilization was 49%.

Adjusted YTD production through December 20th 2008 was 99.319 million tons, at a capability utilization rate of 82.1%. That is a 5.6% YoY decrease from the 105.206 million tons during the same period last year, when the capability utilization rate was 87%.

District wise production for the week ending December 20th 2008
1. Northeast Coast: 94
2. Pittsburgh/Youngstown: 105
3. Lake Erie: 24
4. Detroit: 29
5. Indiana/Chicago: 269
6. Midwest: 117
7. Southern: 342
8. Western: 42
(In thousands of net tons)

AISI's estimate is based on reports from companies representing about 75% of the US's raw steel capability and includes revisions for previous months.

Downsizing deals - Severstal Warren layoffs total about 300

It is reported that about 300 steel workers at the OAO SeverStal Warren mill began a temporary layoff last Monday with the total expected to reach 500.

Mr Gary Steinbeck director of the USW sub district office in Niles said that the company didn't give a timetable when the furloughs might peak. He said that ''Some people are using vacation time. They'll go into layoff as they come off vacation.''

Mr Steinbeck previously said that 100 of workers will remain on the job to do maintenance and other jobs.

A top executive said earlier this month that the number of laid off workers could change but would be substantial. About 100 salaried workers also were expected to be idled. The mill then known as WCI Steel had a total work force of about 1,200 when Russia based OAO SeverStal bought it in July.

Severstal is cutting staffing and production throughout its global operations as it tries to adjust to plunging orders during a worldwide economic meltdown.

Venezuela urges aluminum firms to present recovery plan

BNamericas quoted Mr Arquímedes Hidalgo spokesperson for the Sintralcasa union as saying that Venezuelan aluminum producers are required to present a sector recovery plan to the country's basic industries and mining ministry during the first quarter of 2009.

Mr Hidalgo said that "The plan will be drawn up under the premise that no more raw materials will be produced for export. It will all be tagged for diversifying what we already have. A Mibam committee in charge of the issue said that USD 1.9 billion will be needed for getting companies up to date."

A mining ministry official said that the ministry has allegedly approved a recovery plan that includes paying off debt and updating technology at companies in the sector.

It may be noted that unions from the four state companies in Venezuela's aluminum production chain namely Alcasa, Venalum, Bauxilum and Carbonorca, have been asking the government for several months to invest in technological upgrades at their plants to overcome the operational crisis they are currently experiencing.

Thainox to halt production for 1 month on weak demand

Thainox Stainless PCL, Thailand's largest stainless steel producer, said on Tuesday it planned to stop production for one month due to weak global demand.

The shutdown would help the firm save costs at its plant in Rayong on Thailand's eastern seaboard, and allow it to carry out maintenance work, it said in a statement. It had sufficient inventory to serve the market, it added.

"However, during this period, the customers will still be able to place an order and we continue to deliver the finished products as usual as the Bangkok office and other departments not directly related to production continue to work," it said.
Thainox, Southeast Asia's largest stainless steel maker, has an annual capacity of 300,000 tonnes of stainless steel, widely used in the construction, automobile and household sectors.

Around 60 percent of its output is sold on the domestic market and the rest exported, according to the company's website. Thainox gets its raw materials, including hot-rolled coils, from abroad.

Kim Eng Securities said in a research note the company was now running at a low utilisation rate of 53 percent, mainly due to a lack of hot-rolled coils.
Thailand's Mahagitsiri family, which founded the company, recently raised its stake to 58 percent. South Korea's POSCO owns 15 percent, and other major shareholders include Nippon Steel .

Recession reports - Russia sets aside USD 340 billion for package

RIA Novosti reported that Russia's government has earmarked RUB 10 trillion for an anti crisis package which is comparable to the country's annual budget. The press office said that "In total, RUB 10 trillion have been set aside for anti crisis measures. This money will come from the federal budget, the Central Bank and reserve funds."

This is almost double the amount of Russia's overall reserves. As of December 1st, Russia's Reserve Fund was RUB 3.6 trillion and National Wealth Fund, RUB 2.1 trillion.

The government is also ready to provide RUB 92 billion from the federal budget in financial assistance to the so called core enterprises, as well as up to RUB 200 billion worth in state guarantees. The government issued on last Thursday a list containing the names of 295 companies that will receive state support including companies working in transport, energy, oil and gas, communications, media and other sectors.

Mr Alexei Kudrin finance minister of Russian said last Saturday that the country would have a budget deficit of RUB 1.5 trillion to RUB 2.5 trillion, which is almost 6% of GDP. He said that spending would not be cut even if oil prices plunged below USD 20. In the 2009 budget approved by parliament, revenue exceeded expenditure by RUB 1.9 billion but the document assumed an average oil price of USD 95 a barrel. Mr Kudrin said that "Even if oil plummets to USD 20 per barrel, we will not slash spending at least not at the federal level. The government would restructure its spending projections but there would be no reductions. He added that public sector employees, pensioners have nothing to fear.

Economic Development Ministry official earlier said that budget expenditure could be cut by 8% but that the figures did not include the anti crisis measures adopted by the government. Ms Yelena Lebedinskaya of the Economic Expert Group said that anti crisis expenditure could push the total deficit to RUB 9.5 trillion. She said that “Deficit would have to be made up with borrowing limited by the budget code to 1% of GDP and tapping the Reserve Fund.”

Stainless steel output will decline by almost 1 million tonnes in 2008

In the first three quarters of this year, global stainless steel production was approximately one percent up on the 2007 out turn. In our September issue we predicted a modest decline in output for the full year. Now we believe that the reduction could be approaching one million tonnes – over 3 percent.

Stainless steel making in 2008 is expected to be down in all regions of the world. Consumption has collapsed in recent months. This was due, mainly, to credit difficulties encountered by both end users and distributors. However, the situation was exacerbated by a number of factors.

Service centers in the industrialized nations slashed prices in an effort to generate cash and reduce stock levels in line with the weakening demand. This had the effect of undermining mill prices because their premium for short delivery had been eliminated. Furthermore, inventories at the mills built up in the third trimester – forcing them to cut selling values in an effort to generate business.

A steady decline in raw material costs has taken place – particularly nickel over the past year but also molybdenum in the last six weeks. This encouraged buyers to limit forward orders on the mills and live off existing material or purchase ex-stock from the service centers. During the early part of the final quarter, the market became awash with steel and serious oversupply ensued.

The steelmakers' reaction to the dire situation was to cut output drastically. This action has been taken by virtually every producer as they strive to re balance supply and demand in the hope of lifting prices.

It is likely that production curbs will extend for the next three months. Mill demand should then start to pick up but output is likely to be restrained into the summer. It is probable that 2009 will be an unprecedented third consecutive year of declining global stainless steel manufacturing.

ArcelorMittal's $400 price hike on offer in 2009 US tinplate deals

ArcelorMittal USA has offered a price increase of $400/ton in its tinplate sales negotiations with various can manufacturers in the USA for shipments in 2009, it was learned in Tokyo Wednesday. As a result, other US tinplate producers are expected to follow suit for their domestic shipments in 2009.

The US steel industry has been operating at less than 50% of capacity since the beginning of December. Its steel capacity utilization was 49% last week. In the USA, domestic demand for steel products is way down in consuming sectors ranging from autos to building materials. As a result, local transaction prices of steel products face a steep fall as a whole.

Under the existing circumstances in the USA, it is a matter of attention that ArcelorMittal USA is trying to win a considerable price increase in its tinplate contract negotiations for shipments in 2009. The price increase is believed to have stemmed from the company's policy to meet a surge in the costs of raw materials.

In the USA, most of the domestic tinplate shipments are usually negotiated under annual supply contracts, for which negotiations on contract renewals start from the October-December quarter of each year. For shipments in 2008, the contract renewal negotiations started in the October-December quarter of 2007 and a price increase of $100/ton was agreed after the beginning of 2008. At the time, though, the price terms settled were devoid of a pass along to meet a surge in raw materials costs because there were no forecasts that prices of raw materials such as iron ore, coking coal and tin would soar to an abnormal level.

In the USA, consumer spending is considerably declining in the repercussions of the financial crisis, a situation that applies to foodstuffs as well. But canned foodstuffs are an exception. Among general households, more of them are opting to avoid purchasing perishable foods while stocking up on canned nonperishable in large amounts for thrifty life. Accordingly, tinplate demand for canned foods is described as favorable.

A major price increase for tinplate shipments in the USA will exert a favorable influence on tinplate exports out of Japan, Europe and the USA to Latin America, market sources forecast. As far as US steelmakers are concerned, they are expected to exercise moderation in reducing what they charge for tinplate exports to Latin America.

Meanwhile, Japan's integrated steelmakers find it difficult to respond with active tinplate exports to the USA even if local transaction prices of tinplate have advanced considerably in 2009. For the main bottleneck, Japanese tinplate imports into the USA are subject to the existing 95% anti dumping duty. Back in June 1999, the US steel industry filed an anti dumping case against tinplate imports from Japan. Then, the US International Trade Commission admitted injury of the imports to US steel mills in its final determination, under which the 95% AD duty was imposed on the imports. The AD duty came under a sunset review in 2006, which led to its continuance.

Baoshan raises prices to trim its losses

BAOSHAN Iron & Steel Co has raised product prices for February delivery to trim losses, its first increase in five months, trade sources said yesterday.
Analysts said the rise is based on a stabilized market sentiment but may not be sustainable. Domestic steel prices stabilized last month after plunging more than 50 percent from June's peak as mills reduced output to sustain the market as demand dropped.

Prices for cold-rolled products were raised by 300 yuan (US$44) a ton, or more than 8 percent, while those for hot-rolled coil were raised by between 100 yuan and 200 yuan a ton, a gain of up to 6.2 percent, according to trade sources and industry consultancy Mysteel.

Prices for zinc-galvanized sheets were raised by 250 yuan a ton while those for color coated sheets went up by 450 yuan a ton, they said.

"Not only Baosteel, several other mills have been gradually raising prices by small margins," said Xu Xiangchun, director of Beijing Lange Steel Informaiton Research Center, an industry data provider.

The Shanghai Securities News reported on Tuesday that several mills including Angang Steel Co, Beijing Shougang Co and the private-sector Shagang Group had raised prices for January. Angang raised prices for cold-rolled products by 230 yuan a ton, it said.

But Xu said he didn't see price rise by major mills spreading into February and March as there were uncertainties over market trends.
"Mills raised prices as they are eager to trim losses, given their expensive inventories of both products and raw materials," Xu said. "Even after hikes, the products would still be sold below cost."

Baosteel, the domestic industry leader, has warned it may post a loss for the current quarter. It fell 2.22 percent to 4.85 yuan yesterday.

Iron ores at China's ports decrease

The amount of iron ore stocked at China's 19 ports dropped to 59.99 million tons as of December 19, down 19 percent from the previous month, according to MySteel.
Meanwhile, prices of spot iron ores have risen periodically.

Zeng Jiesheng, analyst with MySteel, attributed the current situation to steel price rise and the subsequent production resumption of a number of steel plants in recent time.

Currently, CIF price of Indian powder iron ore has increased to 80 US dollars/ton, up 20 percent from early November.

Chinese domestic spot ore prices have risen correspondingly. One example is factory price of powder iron ore in Tangshan up 14 percent to 722 yuan/ton.

Some analysts noted that such trend of iron ore stock drop, and price rise won't maintain long since the downstream steel market hasn't come to a real recovery.
Most steel plants that resume production currently are small and private ones, while large steel enterprises still keep output cut by 50~60 percent since they have overstocked imported iron ores under long-term agreements, according to Du Wei with Umetal.com.

Gazprom Q2 net profit triples

Russia's Gazprom announced that its net profit almost tripled in the second quarter of 2008 as the world's largest gas producer reaped earnings from record commodity prices before the global economic crisis took hold.

Gazprom said that “Its net sales of gas increased by RUR 331,171 million or 44% to RUR 1,089,464 million in the 6th months ended June 30th 2008 as compared to the 6th months ended June 30th 2007. This increase was primarily due to the increase of the volume of gas sold to Far Abroad countries and higher prices of gas sold in each geographical segment.”

It added that “For the 6th months ended June 30th 2008 net sales of gas to Far Abroad countries increased by RR 251,348 million or 61% to RUR 661,554 million as compared to the 6th months ended June 30th 2007. This mainly results from the increase of the volume of sold gas by 26% or 20.3 billion cubic meters and the growth of average prices. Net sales of gas to FSU countries increased by RUR 29,850 million or 22%, to RUR 163,637 million in the 6th months ended June 30th 2008 compared to the 6th months ended June 30th 2007. The increase of sales in this segment is explained by higher average realized prices, which was compensated by the decrease of the volume of sold gas by 2% or 0.9 billion cubic meters.”

Gazporm said that “Net sales of gas in the domestic market increased by RUR 49,973 million or 23%, to RUR 264,273 million in the 6th months ended June 30th 2008 compared to the 6th months ended June 30th 2007. This is explained primarily by increased average domestic price for gas set up by the Federal Tariffs Service. Net sales of refined products increased by RUR 131,540, or 59%, in the six months ended 30 June 2008. The increase was mainly due to the increase of refined products prices.”

It added that “Net sales of crude oil and gas condensate increased by RUR 59,622 million, or 80%, in the six months ended 30 June 2008. The increase of net sales of crude oil and gas condensate primarily resulted from the Gazprom Neft activities: net sales of crude oil increased by RUR 55,277 million or 85%, to RUR 120,081 million in the six months ended 30 June 2008 compared to the six months ended 30 June 2007.”

Wugang to invest 180 millionn Au dollars for 50 pct shares of Australian iron ore mine

Wuhan Iron and Steel Corp., parent of Wugang, will invest 180 million Australian dollars (or 127 million US dollars) to jointly exploit iron ore resources in south-central Australia with the local company Centrex Metals Ltd. (CXM).

The two sides have recently signed a framework agreement, under which the two will set up a joint venture and each holds 50 percent shares. The joint venture will exploit 11 iron ore areas in Eyre Peninsula, with an estimated deposit of 2 billion tons.

Besides, CXM will sell 15 percent shares to Wugang at a price of 0.25 Australian dollars per share. As a result, Wugang will become the second largest shareholder of CXM and owns a seat on the latter's board.

Under the agreement, the two sides will jointly build a deepwater port 60 kilometers away from the mine area, for exporting products.

According to Wugang's general manager Deng Qilin, Wugang will form an annual steel production capacity of 50 million tons in the next few years, but the company only yields 4.5 million tons of iron ores per year, far from its annual demand of 80 million tons.

Deng also said, Wugang will accelerate its pace in building iron ore bases at abroad in the next few years.

Australian CXM, a local listing iron ore producer, is mainly engaged in production of hematite and magnetite, with a licensed exploration area of over 2000 square kilometers.