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Tuesday, 06 April 10
UAE STEEL TRADERS FEAR LOSSES ON GLOBAL HIKE
 A sudden spurt in the price of iron ore in the international market has caught local steel traders and manufacturers and a host of other steel-dependent industries, off guard. Emirates Business has learnt that the consequent increase in steel prices has singed many traders who were bearish about steel due to the slowdown in the construction sector and the overall economic downturn in the country.
In such a scenario, they are being forced to buy steel at higher prices prevailing abroad and sell it cheaply in the domestic market to honour existing contracts that were finalised a while ago when steel prices were low based on lower global iron ore prices.
Unlike in the past, when steel prices shot up mainly due to demand and supply factors, the reason for the current increase is the high iron ore price demanded by the major ore producers – Vale, the Rio Tinto Group and BHP Billiton – which together control about two-thirds of global trade.
Brazil's Vale, the largest iron ore supplier, last week broke a 40-year custom of selling ore on a yearly contract at a fixed rate and won a 90 per cent price increase from Japanese mills. Analysts are predicting a considerable increase in costs for steel-using industries and the automobile, construction and metals industries.
Rizwan Sajan, Chairman, Danube Building Materials, said the steel price has gone up by almost 30 per cent across the Gulf Co-operation Council (GCC) states over the last couple of weeks and the price per tonne of steel is Dh3,000 in the UAE, RO320 per tonne in Oman and BD300 per tonne in Bahrain.
"Most players in GCC steel markets – the steel mills, traders and the end users – have been caught on the wrong foot as they failed to anticipate that steel prices would gain momentum in this fashion. Since domestic demand was weak, people were under the impression that there was no scope for a surge in steel prices."
Due to depressed market conditions, the domestic steel price in the UAE is even lower than the metal's price in other Middle Eastern markets like Syria, Iran, Libya and Egypt, he added. In the short-term, the high international steel price will adversely affect local contractors, who are trying to stage a comeback after the Dubai World debt settlement.
Sajan expects a price correction within a few months, but says it is impossible to predict by how much. He added that all players in the steel supply chain were working on minimum stocks and now there was a shortage in the market. "There is a general shortage in the market and overall availability is tight. This sudden, unexpected price hike is a further blow to steel traders. On one hand, we have orders from customers at very low rates while on the other, our present procurement rates from steel mills abroad are high. We are taking positions at $720 (Dh2,644) per tonne and we are not sure what domestic steel prices will be when these orders eventually arrive here," he said.
"In the event of a price crash, as in 2008, traders will incur heavy losses. We, at Danube, never speculate and have a scientific replacement model. We try to run parallel and as close as possible to international pricing."
Sajan added that Danube has opened a new office in Saudi Arabia to cater to that market. "Saudi Arabia had a ban in place on the import of steel but leading Saudi steel producers, including Sabic, could not meet ocal demand. Now the ban has been revoked and other regional players are looking at the Saudi market," he said.
A number of steel traders and manufacturers told this newspaper they expect prices to increase further, but many players in the steel supply chain are cautious about the market trend.
A large company facing pressure is RAK Steel, a joint venture of Ras Al Khaimah Investment Authority and the Middle East Traders Group, which is the second largest steel rebar-manufacturing mill in the UAE with a capacity of 500,000 tonnes per year.
Ajay Aggarwal, Chief Executive Officer, RAK Steel, said: "Steel prices have started going up due to high raw material costs and not due to any additional demand for the product. While prices continue rising, traders or manufacturers – the entire supply chain in fact – cannot absorb this price increase. They will have to pass on the high prices to end-users."
Meanwhile, other smaller traders are equally worried, if not more. A steel trader told this newspaper: "Steel prices have gone up by Dh1,000 per metric tonne MT) in a short period – from Dh2,000 to Dh3,000 per MT. The Middle East steel demand seems irrelevant to international steel price movements and, in the region, only the Saudi Arabia market is doing well because there are many new projects [coming up] there."
Scrap prices have shot up by $200 – from $220 per tonne to $420. "Everybody in the steel supply chain is scared to take on more stock. Not just steel traders, even steel mills and contractors have incurred heavy losses in the recent past due to a sudden decline in steel price from record highs because of the economic slowdown.
"Traders are now reluctant to keep huge stocks and people are buying only for a month's requirement. Traders who have taken orders from contractors for delivery in the next three months have to respect these orders and deliver steel at agreed lower prices even though they are now procuring the metal at far higher prices. Those who do not have such orders are playing it safe because there is no actual demand for steel. We don't know how long the current price trend will continue," said the trader, requesting anonymity.
In the present situation however, local manufacturers are gaining an edge over international importers. "The lead time to import from Turkey, India or Brazil is three months, while we can deliver steel within a month. Therefore many traders prefer buying steel from local companies," said Suraj Malhotra, Marketing Manager at Al Ghurair Iron and Steel. The company is a leading cold rolled and galvanised steel manufacturer. It said the current price movement has affected it minimally.
However, Malhotra said various industries using steel will see a 20 per cent increase in prices within the next two months.
"We export 30 per cent of our products to Saudi Arabia. Local steel manufactures have an edge now because our lead-time is only one month. Importers from India, China or Turkey will take at least three to four months to deliver and we don't know what the price will be after four months. Traders and contractors buying steel from local manufacturers don't have to wait for four months in opening letters of credit, shipping and other delays," he said.
Ramesh Narang from Al Rama International, a leading steel trader, said: "Prices have started going up because of international reasons. Local demand for steel is not great and Saudi Arabia is the only regional market that looks encouraging. As steel traders had a bad year in 2009, they are treading cautiously. The volume of steel trade through the Dubai Gold and Commodities Exchange (DGCX) has been very low recently."
Narang said he was positive about long-term trends in the steel market but payment defaults and liquidity problems continued to haunt steel and commodity traders. He added that banks were still willing to finance genuine steel traders.
Aneesh Saifudeen, Business Development Manager, Rainbow Engineering Industry, a fabrication company in Sharjah, said: "The steel price increase is a major concern for fabrication units because there is cut-throat competition in the sector. Demand is poor in the market and profit margins are between two and five per cent.
"Compared with the boom periods in 2006 or 2007, there are many players in the market now competing for fewer projects. In order to attract the maximum business, we are keeping our margins to the minimum and most clients are demanding lower prices," he added.
Saifudeen said there was an acute shortage of some steel products, like UB beams and gif beams, because steel traders were not keeping enough stocks.
"Some of the beams used in tankers and vehicle parts fabrication are not available in the local market. There is considerable delay in getting these products from abroad. There are no local manufacturers making these specialised steel beams and we have to depend on imports."
Rainbow Engineering Industry manufactures or fabricates all kinds of heavy vehicle bodies such as high-pressure vessels, condensers and storage tanks.
Steep ore forces UAE steel plants to defer expansion
The high cost of iron ore in the international market could adversely affect expansion plans of steel manufacturing units in the country, delivering a double whammy after the deflation in steel prices caused earlier by the global economic downturn.
Expansion plans at two leading steel mills in the UAE are on hold due to the sharp decline in demand for steel on the back of the global economic slowdown.
RAK Steel, a joint venture of Ras Al Khaimah Investment Authority and the Middle East Traders Group, and the second largest steel mill in the UAE, had plans to increase production capacity of deformed steel reinforcement bars by 50 per cent to 750,000 tonnes by the end of 2009. The plant currently has a capacity of 500,000 tonnes of deformed steel reinforcement bars.
Ajay Aggarwal, Chief Executive Officer, RAK Steel, told Emirates Business: "The expansion plan is on hold as of now. We have the machinery in place but it is not been installed as yet."
Earlier, the company had announced plans for a 50 per cent expansion in steel production in view of mounting steel demand in the UAE's construction industry. It had announced a $165 million (Dh606m) investment in production for the domestic market, which is now largely served through imports from Turkey and other steel producing countries.
Al Ghurair Iron and Steel has also scaled back its original expansion plans for hot rolled (HR) steel due to the economic slowdown. Suraj Malhothra, the company's Marketing Manager, told this newspaper that the HR project was part of the original project feasibility studies. "We have a CR and galvanised steel plant. Instead of going in for an HR plant we are doubling our galvanised steel production from the current capacity of 20,000 tonnes per month. Awarding the contract for the plant will now be delayed until the fourth quarter of 2010."
Expansion is to be scaled down from the original plan, which according to some reports was worth $100m. The company's iron and steel complex, located on a one million sq ft plot in Abu Dhabi's Mussafah industrial area, was to produce 350,000 tonnes of HR, pickled and oiled steel products, of which 50,000 tonnes were of saleable cold-rolled full hard steel and 200,000 tonnes were of galvanised material.
Source: Emirates Business / Hellenic Shipping
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Thursday, 18 November 10
MUNDRA PORT AWARDED BEST PRIVATE PORT - COMMODITY ONLINE / HELLENIC SHIPPING
Adani Group owned, Mundra Port has been awarded the Annual Indian Maritime Gateway Award for the Best Private Port of the Year for the third consecu ...
Wednesday, 17 November 10
DRY BULK MARKET LOOKING FOR SUPPORT IN COAL TRADES AND INDIAN IRON ORE EXPORTS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Nikos Roussanoglou, Hellenic Shipping reported that, the dry bulk market is lacking support to end its 13-day slide, as evidenced by Monday’s ...
Tuesday, 16 November 10
'VALLAR PLC' TO BECOME 'BUMI PLC' POST DEAL - THE JAKARTA POST
The Jakarta Post reported that, The United Kingdom’s Vallar Plc will change its name to Bumi Plc following a cash and stock transaction with t ...
Tuesday, 16 November 10
ROTHSCHILD BUYS INDONESIAN COAL STAKES FOR $3 BILLION - BLOOMBERG
Bloomberg reported that, Nathaniel Rothschild, the only son of U.K. financier Jacob Rothschild, agreed to invest $3 billion in two Indonesian coal c ...
Sunday, 14 November 10
THE FREIGHT MARKET CONTINUED ITS DOWN FALL - VISTAAR SINGAPORE
COALspot.com: The freight market continued its down fall with BDI down by 7.29 pct and closed at 2,313 points.
All other segments were also under ...
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Showing 5526 to 5530 news of total 6871 |
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- Renaissance Capital - South Africa
- IHS Mccloskey Coal Group - USA
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Minerals Council of Australia
- Goldman Sachs - Singapore
- Ceylon Electricity Board - Sri Lanka
- Global Coal Blending Company Limited - Australia
- Mercator Lines Limited - India
- Energy Development Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Timah Investasi Mineral - Indoneisa
- Central Electricity Authority - India
- Samtan Co., Ltd - South Korea
- Oldendorff Carriers - Singapore
- Australian Commodity Traders Exchange
- Attock Cement Pakistan Limited
- Sakthi Sugars Limited - India
- Simpson Spence & Young - Indonesia
- Vedanta Resources Plc - India
- South Luzon Thermal Energy Corporation
- Tata Chemicals Ltd - India
- Aditya Birla Group - India
- Altura Mining Limited, Indonesia
- Rashtriya Ispat Nigam Limited - India
- Coalindo Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Bahari Cakrawala Sebuku - Indonesia
- Indika Energy - Indonesia
- Energy Link Ltd, New Zealand
- Trasteel International SA, Italy
- Georgia Ports Authority, United States
- Baramulti Group, Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Semirara Mining Corp, Philippines
- Uttam Galva Steels Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Global Business Power Corporation, Philippines
- Rio Tinto Coal - Australia
- Indonesian Coal Mining Association
- Alfred C Toepfer International GmbH - Germany
- Agrawal Coal Company - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Metalloyd Limited - United Kingdom
- Orica Australia Pty. Ltd.
- Manunggal Multi Energi - Indonesia
- Larsen & Toubro Limited - India
- Sree Jayajothi Cements Limited - India
- New Zealand Coal & Carbon
- Vijayanagar Sugar Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Kideco Jaya Agung - Indonesia
- Straits Asia Resources Limited - Singapore
- Bulk Trading Sa - Switzerland
- Ind-Barath Power Infra Limited - India
- Dalmia Cement Bharat India
- San Jose City I Power Corp, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Price Waterhouse Coopers - Russia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SMG Consultants - Indonesia
- Bukit Makmur.PT - Indonesia
- Anglo American - United Kingdom
- Ministry of Transport, Egypt
- London Commodity Brokers - England
- Karaikal Port Pvt Ltd - India
- PTC India Limited - India
- Indogreen Group - Indonesia
- Bangladesh Power Developement Board
- PowerSource Philippines DevCo
- Sinarmas Energy and Mining - Indonesia
- The University of Queensland
- Kumho Petrochemical, South Korea
- AsiaOL BioFuels Corp., Philippines
- Port Waratah Coal Services - Australia
- Bhoruka Overseas - Indonesia
- Merrill Lynch Commodities Europe
- White Energy Company Limited
- Mercuria Energy - Indonesia
- ICICI Bank Limited - India
- Indian Energy Exchange, India
- Billiton Holdings Pty Ltd - Australia
- Marubeni Corporation - India
- Wood Mackenzie - Singapore
- Semirara Mining and Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- The State Trading Corporation of India Ltd
- SMC Global Power, Philippines
- Parliament of New Zealand
- Banpu Public Company Limited - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Barasentosa Lestari - Indonesia
- Savvy Resources Ltd - HongKong
- Makarim & Taira - Indonesia
- Ambuja Cements Ltd - India
- Formosa Plastics Group - Taiwan
- Krishnapatnam Port Company Ltd. - India
- PNOC Exploration Corporation - Philippines
- Standard Chartered Bank - UAE
- Aboitiz Power Corporation - Philippines
- CNBM International Corporation - China
- TeaM Sual Corporation - Philippines
- Jindal Steel & Power Ltd - India
- Thiess Contractors Indonesia
- LBH Netherlands Bv - Netherlands
- International Coal Ventures Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Heidelberg Cement - Germany
- Kepco SPC Power Corporation, Philippines
- Malabar Cements Ltd - India
- Latin American Coal - Colombia
- Asmin Koalindo Tuhup - Indonesia
- McConnell Dowell - Australia
- Directorate Of Revenue Intelligence - India
- Wilmar Investment Holdings
- Riau Bara Harum - Indonesia
- Maheswari Brothers Coal Limited - India
- Singapore Mercantile Exchange
- Coal and Oil Company - UAE
- ASAPP Information Group - India
- Electricity Authority, New Zealand
- Star Paper Mills Limited - India
- Chamber of Mines of South Africa
- Africa Commodities Group - South Africa
- Leighton Contractors Pty Ltd - Australia
- Neyveli Lignite Corporation Ltd, - India
- Miang Besar Coal Terminal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Eastern Energy - Thailand
- Cement Manufacturers Association - India
- Deloitte Consulting - India
- Karbindo Abesyapradhi - Indoneisa
- Planning Commission, India
- Parry Sugars Refinery, India
- Siam City Cement PLC, Thailand
- Madhucon Powers Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Orica Mining Services - Indonesia
- Bharathi Cement Corporation - India
- Kapuas Tunggal Persada - Indonesia
- Indo Tambangraya Megah - Indonesia
- Toyota Tsusho Corporation, Japan
- CIMB Investment Bank - Malaysia
- Commonwealth Bank - Australia
- Central Java Power - Indonesia
- GMR Energy Limited - India
- Power Finance Corporation Ltd., India
- Globalindo Alam Lestari - Indonesia
- Jaiprakash Power Ventures ltd
- Jorong Barutama Greston.PT - Indonesia
- VISA Power Limited - India
- Mjunction Services Limited - India
- Chettinad Cement Corporation Ltd - India
- Ministry of Mines - Canada
- GN Power Mariveles Coal Plant, Philippines
- Grasim Industreis Ltd - India
- Romanian Commodities Exchange
- Medco Energi Mining Internasional
- Edison Trading Spa - Italy
- Therma Luzon, Inc, Philippines
- Essar Steel Hazira Ltd - India
- Bayan Resources Tbk. - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Gujarat Sidhee Cement - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Meralco Power Generation, Philippines
- Xindia Steels Limited - India
- Binh Thuan Hamico - Vietnam
- Cigading International Bulk Terminal - Indonesia
- Sindya Power Generating Company Private Ltd
- Maharashtra Electricity Regulatory Commission - India
- SN Aboitiz Power Inc, Philippines
- Tamil Nadu electricity Board
- Posco Energy - South Korea
- Sical Logistics Limited - India
- Carbofer General Trading SA - India
- Mintek Dendrill Indonesia
- Bukit Baiduri Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Salva Resources Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Bhatia International Limited - India
- IEA Clean Coal Centre - UK
- Sarangani Energy Corporation, Philippines
- Antam Resourcindo - Indonesia
- Sojitz Corporation - Japan
- Economic Council, Georgia
- MS Steel International - UAE
- Borneo Indobara - Indonesia
- Petron Corporation, Philippines
- Lanco Infratech Ltd - India
- Ministry of Finance - Indonesia
- Kaltim Prima Coal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Indian Oil Corporation Limited
- PetroVietnam Power Coal Import and Supply Company
- Siam City Cement - Thailand
- OPG Power Generation Pvt Ltd - India
- Independent Power Producers Association of India
- India Bulls Power Limited - India
- The Treasury - Australian Government
- Electricity Generating Authority of Thailand
- Kartika Selabumi Mining - Indonesia
- Kobexindo Tractors - Indoneisa
- Thai Mozambique Logistica
- GAC Shipping (India) Pvt Ltd
- Australian Coal Association
- Kohat Cement Company Ltd. - Pakistan
- Interocean Group of Companies - India
- Gujarat Electricity Regulatory Commission - India
- Eastern Coal Council - USA
- Holcim Trading Pte Ltd - Singapore
- Videocon Industries ltd - India
- Meenaskhi Energy Private Limited - India
- Bhushan Steel Limited - India
- GVK Power & Infra Limited - India
- Global Green Power PLC Corporation, Philippines
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