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FIMI Alleges Irregularities in Export of Iron Ore Pellets

Business Line reported that the Federation of Mineral Industries has alleged that illegal export of iron ore pellets is currently happening from India as these exports are in contravention to the Directorate General of Foreign Trade’s export policy enunciated in 2018, according to the mining industry body. FIMI letter said “We understand that few integrated steel producers are advocating for restriction on iron-ore exports from the country on the plea that the domestic steel industry is not able to meet its full iron ore requirement from the domestic sources. While the domestic steel industry is using only high grade iron ore of more than 62 per cent iron, these integrated steel producers want all iron-ore and raw materials in the country to be blocked for their use. On the contrary, the same players have been illegally exporting pellets, usually containing more than 64 per cent iron, which is only a substitute for high grade iron-ore lumps and is a precious input needed by the domestic steel and sponge-iron plants.”

According to FIMI, as per DGFT’s ITC (HS), 2018 Export Policy, only the iron ore pellets manufactured by Kudremukh Iron Ore Company Limited are allowed to be exported.

FIMI added “All other pellet producers are therefore exporting pellets in total violation of the Government’s policy. Not only are they exporting pellets illegally, they are also claiming 1 per cent duty drawback from the Government. According to our estimate, during 2013-2020, there has been illegal export of pellets to the extent of INR 25,145.36 crore (this has INR 24,896.40 crore as value of exports and INR 248.96 crore as duty drawback) by companies other than KIOCL.”

Source : STRATEGIC RESEARCH INSTITUTE
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Indian Steel Export Rebate Capped

Indian Government has amended Foreign Trade Policy 2015-20 with regard to ceiling on the Merchandise Export from India Scheme benefits available to exporters on exports made from 01.09.2020 to 31.12.2020 with immediate effect. It said “The total reward which may be granted to an IEC holder under the Merchandise Exports from India Scheme shall not exceed INR 2 Crore per IEC on exports made in die period 0l.09.2020 to 31.12.2020, period based on Let Export Order date of shipping bilks. Any IEC holder who has not made any export with LEO date during the period 01.09.2019 to 31.08.2020 or any new IEC obtained on or after 01.09.2020 would not be eligible for submitting any claim for benefits under MFIS for exports mode with effect from 01.09.2020. The aforesaid ceiling may be subject to further downward revision to ensure that the total claim under the Scheme for the period 01.092020 to 31.12.2020 does not exceed the allocation prescribed by the Government, which is INR 5.000 Crore.”

This limitation of benefits is for all exporters in India, including steel producers. It will reduce price competitiveness of Indian exports, as suppliers will have to increase prices, risking reduction of sales. The current benefit under the MEIS to each contract was 1.9 percent

The government notification also said that benefits under MEIS shall not be available for exports made with effect from 01.01.2021.

Source : STRATEGIC RESEARCH INSTITUTE
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Tata Steel Producing at 100% Capacity as Demand Revives in Q2

PTI reported that Tata Steel CEO and Managing Director Mr TV Narendran said that Tata Steel production level has now recovered to 100% as the company sees a revival in domestic demand in the current quarter led by a good monsoon and rural economy making company less dependent on exports compared to the first quarter. He said "Production is running at 100% and we are now less dependent on exports than we were in Q1. We are seeing a revival in demand in Q2 led by good monsoon and the rural economy. While the auto recovery has been led by the demand for tractors and motorcycles, we are now seeing the passenger car business pick up as well. It has also been a strong quarter for appliances.”

The other area where Tata Steel is seeing demand is where the government is spending including the oil and gas sector, water conveyance systems and railways.

Construction is still a bit slow but the monsoon quarter has traditionally been the weakest quarter for construction

The COVID-19 outbreak in India, followed by the national lockdown, impacted the steel industry severely. It disrupted the supply chain and impacted the demand as well as production. Due to the market conditions, steel makers were forced to cut down their operations by up to 50% in April. The players also had to turn to exports to find markets for their produce.

Source : STRATEGIC RESEARCH INSTITUTE
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ABB Modernizes Egyptian Al Ezz Dekheila Steel

Al Ezz Dekheila Steel Company has approved the completion of a full ABB modernization at its flagship wire rod manufacturing facility in Alexandria, Egypt, with commissioning to achieve rated speed and optimum productivity for all sizes rolled finalized in a record two weeks. Legacy ABB automation and control systems were completely overhauled with the project including engineering, design and fabrication of a new level-1 automation technologies solution, based on the latest ABB Ability System 800xA, together with other networking systems and new DCS800 drives. In addition, ABB commissioned DSC800-R01/R02 rebuild kits and DSC800-R00 upgrade kit for 19 DC stands drives and provided the latest ACS880 drives for the mill’s Stelmore Conveyor application, along with interfacing with existing LCI Tyrac drives.

EZDK worked with the ABB team on the hot trial stage and oversaw all integration and testing, subsequently awarding the commissioning engineers certificates of appreciation for the quick turnaround time.

The project scope also included a new mobile application for level-2 collaborative production management system ABB Ability Manufacturing Operations Management for metals, including complete tracking from furnace charging area to C hook conveyor. Commissioning of the level-2 system started in January 2020 and has now achieved stability, despite having been carried out remotely.

Al Ezz Dekheila Steel Company Alexandria, founded more than 34 years ago, is one of the largest manufacturers of metal and flat steel products in the Middle East and North Africa. From its facility in Alexandria, EDZK produces an impressive 2 million tons of long and 1 million tonnes of flat steel products, including reinforcing bars, steel rolling mills, rolling wire and rolling steel plates. EZDK is majority-owned by Al Ezz Steel SAE, which supplies steel products to customers in the United States, Canada, Europe and China.

Source : STRATEGIC RESEARCH INSTITUTE
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Supreme Court Defers BPSL Case

India’s Supreme Court has given two weeks time to Bhushan Power and Steel promoter Sanjay Singhal and others to give their representation. The BPSL case came up for online hearing on Friday as first item on the list at 10 am, but on request of lawyers it was delayed and taken as the last case of the day. On request of more time by Singhal and Enforcement Directorate lawyers to put forth their views, the Judge gave four weeks time.

However, both JSW Steel and bank counsel placed their protest on dragging the case hurting interest of both banks and JSW. Both cousels pointed out to the judge that final order was supposed to deliver on September 8 as per last hearing.

After hearing JSW Steel and banks counsel adjourned the matter reducing the time given to two weeks.

Source : STRATEGIC RESEARCH INSTITUTE
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Vietnamese Steel Imports in Jan-Aug’20 Reach 10 Million Tonnes

Vietnamese Steel ImportsVietnam spent more than 5.6 billion US dollars importing over 9.7 million tonnes of steel and iron in the first eight months of this year, down 13.2 percent in value and up 0.9 percent in volume against the same period last year. In August alone, the country imported 1.6 million tons of the products worth 828 million U.S. dollars, surging 25 percent in volume and down 0.2 percent in value on year. The major markets supplying steel to Vietnam in the period included China, India, Japan and South Korea

In 2019, Vietnam poured nearly 9.5 billion US dollars into importing roughly 14.6 million tonnes of steel and iron, up 7.6 percent in volume but down 4.2 percent in value against 2018.

Source : STRATEGIC RESEARCH INSTITUTE
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Böllinghaus Steel Strengthens Presence in Italy

Bollinghaus Steel, producer of steel bars with headquarters in Hilden, has strengthened its presence in the Italian market and opened a branch in Milan. The company recently opened an office not only in Germany, Portugal and the United States, but also in Italy. With its own representative office, Böllinghaus Steel is further expanding its international presence and continuing its expansion course. The new branch is strategically located and well connected in Milan. With its own branches and a dense network of international sales partners, Böllinghaus Steel ensures the best on-site support worldwide.

Over 130 years of experience and a high-quality product range have made Böllinghaus Steel a relevant manufacturer of stainless steel long products. Since it was founded in 1889, Böllinghaus Steel has developed into an established producer of steel bars. The product range includes long products made of stainless steel - hot-rolled and cold-drawn. The company also offers individual solutions for various industries.

Source : STRATEGIC RESEARCH INSTITUTE
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Privatisation Commission Approves Transaction Structure for Pakistan Steel Mills

The Privatisation Commission Board last week approved the transaction structure for revival of Pakistan Steel Mills, which has not been operational since June 2015. PCB said “The transaction structure approval was agreed to in-principal and the concerned financial adviser was asked to expedite the procedural follow up processes.”

The transaction structure will now be presented before the Cabinet Committee of Privatization for approval.

Source : STRATEGIC RESEARCH INSTITUTE
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Nucor to Open Frostproof Steel Mill in Q4 of 2020

Local media reported that Nucor Corp is scheduled to open its USD 240 million 620,000-square-foot steel mill south of Frostproof in the fourt h quarter, more than two years after project was announced in early 2018. Nucor vice president and general manager Mr Drew Wilcox said “The company has already hired about 75% of the 250 people who will work at the mill. Those include office and other support staff but also plant workers. Our operational people are going through technical training on the equipment they’ll work on in the plant. The training is taking place at other Nucor plants across the country. Construction is still going on, but the plant will be fully operational by the end of the year. Employment should reach 250 workers next year.”

Nucor had originally hoped to open the plant by this summer, but delays in permitting extended the construction startup.

Source : STRATEGIC RESEARCH INSTITUTE
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Emirates Steel Selects Etihad Credit Insurance for Export Credit Insurance Partner

Emirates Steel has named Etihad Credit Insurance, ECI, as its credit insurance partner to provide export credit protection to its global exports. Emirates Steel has signed with ECI for a comprehensive trade credit insurance package, which will protect Emirates Steel against commercial risks of its customers such as insolvency, payment default, and political risks. Under the agreement, Emirates Steel can also leverage its credit insurance policy to obtain loans from banks, to further increase its funding capacity.

Through its extensive network and information database of more than 360 million corporates worldwide, ECI can assist in advising Emirates Steel on available options and connect the company to alternative suppliers to sustain its trade operations in the international markets, in case of any disruption.

Source : STRATEGIC RESEARCH INSTITUTE
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Chinese steel enters its stride

As China prepares to enter another period of peak demand, expectations for the
short term are bullish. Forecasts for the year have been revised upwards, in part
because of strong demand and in part because of China becoming a net importer
of steel.
There is also some caution about whether such high production and demand can
be sustained. But for 2020, the outlook is strong.

Voor meer, zie link:

media.kallanish.com/filer_public/d1/7...
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SBI Issue Recovery Notice to Mr Sanjay Singal of BPSL

IANS reported that the State Bank of India has invoked the personal guarantees of Mr Sanjay Singal, former promoter of Bhushan Power & Steel Ltd, and has sent him a demand notice for recovery of INR 12,275.91 crore. The demand notice, seen by IANS, says that no security is provided by the guarantor so the entire amount as on August 31, amounting to INR 12,275.91 crore payable by the guarantor, is unsecured as regards the guarantor.

The development comes at a time when the resolution process of the bankrupt company hangs in fire and awaits a Supreme Court verdict.

The development comes days after the Finance Ministry has asked public sector banks to put in place a mechanism for monitoring cases which may require initiation of insolvency proceedings against the personal guarantors to corporate debtors.

Source : STRATEGIC RESEARCH INSTITUTE
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Emirates Steel Supplies Q Class Rebars for Barakah Nuclear Power Plant Construction

Emirates Steel has announced its contribution to the national achievement of constructing the Barakah Nuclear Energy Plant, the first peaceful nuclear facility in the Arab World. It has been a partner of the Emirates Nuclear Energy Corporation, ENEC, from the outset of the Barakah project some ten years ago up to the historic start-up of the first of its four reactors in early August. The Emirates Steel had supplied 160,000 tonnes, equivalent to 60 per cent of the Q-class and S-class rebar material used in the construction of the plant.

Besides, its specialised teams worked for two years with Enec’s dedicated business and industrial development team to ensure that the company’s quality assurance and production processes met the stringent global nuclear standards of construction.

In 2012, Emirates Steel obtained the Quality System Certificate for Nuclear Products, known as Q Class, from the American Society of Mechanical Engineers, which is a prerequisite for the products used in nuclear energy plant construction. In 2013, the company delivered its first batch of rebar products to the Barakah plant project site.

Source : STRATEGIC RESEARCH INSTITUTE
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US Crude Steel Production Capacity Utilization Rate Climbs in Week 36

American Iron & Steel Association announced that in the week ending on September 5, 2020, domestic raw steel production was 1,428,000 net tons while the capability utilization rate was 63.7 percent as compared to 61.7% in Week 35. Production was 1,813,000 net tons in the week ending September 5, 2019 while the capability utilization then was 78.0 percent. The current week production represents a 21.2 percent decrease from the same period in the previous year. Production for the week ending September 5, 2020 is up 3.3 percent from the previous week ending August 29, 2020 when production was 1,383,000 net tons and the rate of capability utilization was 61.7 percent.

Adjusted year-to-date production through September 5, 2020 was 53,269,000 net tons, at a capability utilization rate of 65.9 percent. That is down 20.2 percent from the 66,730,000 net tons during the same period last year, when the capability utilization rate was 80.6 percent.

Broken down by districts, here's production for the week ending September 5, 2020 in thousands of net tons: North East: 138; Great Lakes: 503; Midwest: 157; Southern: 558 and Western: 72 for a total of 1428.

Source : STRATEGIC RESEARCH INSTITUTE
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GMS Market Commentary on Shipbreaking in Week 36 - Back in Groove

A whole raft of sales have reportedly been concluded over the past week or so and into all markets, as subcontinent recycling locations finally get back into the groove after the prolonged absence and declining rates witnessed during the peak of the Covid-19 crisis this year. Following a first half of the year that was dominated primarily by containers and PCTCs (for HKC green recycling), it is noticeable from the sales board this week that the number of tankers for re cy cling is starting to increase as well. Prices have been on a dramatic upward curve over the last several weeks, clawing back the nearly USD 150/LDT of losses sustained during the second quarter of the year. However, amidst an improving supply of vessels, levels appear to have steadied / stabilized in ail subcontinent markets around the mid USD 300s/LDT for the time being.

Even levels from the Turkish market made a mild improvement this week, as local offerings jumped despite the Lira weakening to record lows against the US Dollar.

Meanwhile, India continues to struggle with daily, record Coronavirus cases of about 90,000 infections being registered every day (the highest of anywhere in the world at present). Even the Turkish market is being plagued with its share of an increasing infection rate, as citizens fear the possibility of a second wave hitting the country even harder.

Overall, fourth quarter supply is expected to increase further, as Owners get back to business after the summer break and deliveries become clearer in various 'as is' locations again, as ports gradually open up for take overs.

Source : STRATEGIC RESEARCH INSTITUTE
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Metinvest Announces Financial Results for H1 of 2020

Metinvest announced its unaudited IFRS interim condensed consolidated financial statements for 1H 2020. Metinvest Chief Executive Officer Mr Yuriy Ryzhenkov said “In the first half of 2020, Metinvest’s financial performance was affected by weak global pricing for steel products and the COVID-19 pandemic. However, the Group’s vertical integration, global sales network and the deep experience of our team have once again proven themselves. We managed to quickly adjust the product mix and redirect sales volumes among markets. As a result, Metinvest was able to benefit from China’s early and robust economic recovery in the second quarter of the year, expanding ore shipments to that market by more than 3 million tonnes. We also resumed steel sales to this country, selling almost half a million of tonnes of semi-finished and finished steel products during the reporting period. Coupled with a lower cost base, the Metallurgical segment significantly improved its performance, delivering an 80% year-on-year increase in EBITDA. Overall EBITDA totalled USD 715 million.”

Voor cijfers, zie pdf.

Source : STRATEGIC RESEARCH INSTITUTE
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Gulf Livestock 1 Ship Carrying 5867 Cattle & 43 Crew Capsizes off Japan

A cargo ship carrying 5,867 cattle and 43 crew capsized off Japan. UAE-based Gulf Navigation owned Panamanian flagged 450 feet Gulf Livestock 1 sent a distress call near Amami Oshima Island in southwestern Japan after Category 4 storm Typhoon Maysak battered the region with winds up to 160 kilometers per hour. The ship's engine failed as it was hit by a wave, causing it to capsize. One of the boat’s engines had stalled and the vessel was overturned by a powerful wave before eventually sinking. Dead cows from the boat have also been seen in the waves. Horrific images have emerged showing water pouring into the doomed Gulf Livestock 1 which has not been seen since it sailed into a typhoon. The images show panicked crew members, battling to keep the ship afloat while water starts to pool at their feet.

Source : STRATEGIC RESEARCH INSTITUTE
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British Government Hires Credit Suisse for Tata Steel UK Talks

Sky News reported that British government’s Treasury has asked Investment banker Credit Suisse have to advise on talks with Tata Steel, which owns the giant Port Talbot plant in south Wales. The appointment of Credit Suisse, which banking sources said had agreed to work on a pro bono basis, will end speculation that negotiations between the government and the Indian-owned industrial group had been brought to an end. An earlier plea from Tata Steel sought roughly GBP 900 million of government cash in exchange for an equity stake of up to 50% in its UK business. Officials, however, are understood to have balked at the proposal on the basis that the steelmaker's parent company would have written off an equivalent sum of debt but not commit significant new capital of its own.

Sky News also said that ministers have also drafted management consultants McKinsey to draw up a blueprint for the future of the UK's wider steel industry.

Source : STRATEGIC RESEARCH INSTITUTE
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IG Metall Seeks Government Support for Green Transition of German Steel Industry

Germany’s largest union IG Metall head Mr Joerg Hofmann told Reuters that Germany’s steel industry needs state aid and deeper alliances to manage the shift toward green fuels for blast furnaces. He said “For the switch to green steel, billions of investment spending is needed. The individual providers, whether it’s Saarstahl, Salzgitter or Thyssenkrupp cannot do this on their own. A cooperation between the makers is a given.”

German steel companies including Thyssenkrupp and Salzgitter rely on coal for their blast furnaces but face pressure to shift toward renewable energy sources such as hydrogen as a way to cut their carbon emissions.

Source : STRATEGIC RESEARCH INSTITUTE
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Chinese Iron Ore & Steel Imports Export Data for August 2020’

According to latest data from General Administration of Customs, China’s iron ore imports in August 2020 fell 10.9% MoM to 100.36 million tonnes but were up 5.8% YoY. In the first eight months of 2020, China imported 759.91 million tonnes of iron ore, up by 11% YoY over January-August 2019.

China’s steel exports stood at 3.68 million tonnes in August 2020, down from 4.2 million in July and down from 5.01 million in August 2019. China exported 36.6 million tonnes of steel products in January-Augus down by 18.6% YoY

Steel products imports in August declined to 2.24 million tonnes from 2.61 million in July but up from 970,000 tonnes in August 2019. Steel imports over January-August 2020 totalled 12.2 million tonnes, up by a significant 59.6% on year.

Source : STRATEGIC RESEARCH INSTITUTE
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