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.