We welcome article submissions from experts in the areas of coal, mining,
shipping, etc.
To Submit your article please click here.
|
|
|
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
If you believe an article violates your rights or the rights of others, please contact us.
|
|
Thursday, 21 January 10
HANDYMAX - SHORT PERIOD OWNERS IDEAS ARE AROUND MID/LOW 20S - FEARNLEYS AS
HANDY
The BSI moved in a downward direction since last Friday reflecting minor a ...
Thursday, 21 January 10
ASF GROUP TO COMMENCE COAL SALES TO CHINA BY FEBRUARY 2010
Sydney-based China energy and resource conduit, ASF Group has struck an agreement to supply coal to China.
In September 2009, ASF announced a ven ...
Thursday, 21 January 10
INDONESIA BUKIT ASAM AGREES ON LOWER COAL PRICE
Indonesian state coal miner PT Tambang Batubara Bukit Asam Tbk has agreed with a local power plant to set 2010 coal prices at 23 percent lower than ...
Thursday, 21 January 10
CABOTAGE POLICY POSTPONED
The Transportation Ministry has decided to postpone for one year the full enforcement of the cabotage principle – a maritime term for the proh ...
Thursday, 21 January 10
MEC IN TALKS WITH TATA POWER ON COAL - TRADE
The UAE's Middle East Coal is in talks to supply coal to Tata Power, India's biggest private sector power firm, from its new Indonesian operations ...
|
|
|
Showing 6066 to 6070 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Baramulti Group, Indonesia
- Cigading International Bulk Terminal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Videocon Industries ltd - India
- Samtan Co., Ltd - South Korea
- Billiton Holdings Pty Ltd - Australia
- Georgia Ports Authority, United States
- Iligan Light & Power Inc, Philippines
- Star Paper Mills Limited - India
- Bayan Resources Tbk. - Indonesia
- Singapore Mercantile Exchange
- Kapuas Tunggal Persada - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Chamber of Mines of South Africa
- Globalindo Alam Lestari - Indonesia
- Carbofer General Trading SA - India
- Essar Steel Hazira Ltd - India
- SMG Consultants - Indonesia
- Simpson Spence & Young - Indonesia
- Bukit Makmur.PT - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Grasim Industreis Ltd - India
- The Treasury - Australian Government
- Rio Tinto Coal - Australia
- Parry Sugars Refinery, India
- Straits Asia Resources Limited - Singapore
- Borneo Indobara - Indonesia
- Bulk Trading Sa - Switzerland
- Jindal Steel & Power Ltd - India
- Medco Energi Mining Internasional
- Latin American Coal - Colombia
- Directorate Of Revenue Intelligence - India
- Sical Logistics Limited - India
- CNBM International Corporation - China
- Tamil Nadu electricity Board
- Sarangani Energy Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Meenaskhi Energy Private Limited - India
- Coalindo Energy - Indonesia
- GVK Power & Infra Limited - India
- Energy Development Corp, Philippines
- Sojitz Corporation - Japan
- Salva Resources Pvt Ltd - India
- Ministry of Finance - Indonesia
- Bhushan Steel Limited - India
- Savvy Resources Ltd - HongKong
- Siam City Cement - Thailand
- Indian Oil Corporation Limited
- Rashtriya Ispat Nigam Limited - India
- Thai Mozambique Logistica
- OPG Power Generation Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Barasentosa Lestari - Indonesia
- Global Business Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Parliament of New Zealand
- Wood Mackenzie - Singapore
- Madhucon Powers Ltd - India
- Trasteel International SA, Italy
- Alfred C Toepfer International GmbH - Germany
- San Jose City I Power Corp, Philippines
- Malabar Cements Ltd - India
- Mintek Dendrill Indonesia
- Bangladesh Power Developement Board
- Merrill Lynch Commodities Europe
- Indonesian Coal Mining Association
- Karaikal Port Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Thiess Contractors Indonesia
- Central Electricity Authority - India
- Sinarmas Energy and Mining - Indonesia
- Orica Australia Pty. Ltd.
- Jaiprakash Power Ventures ltd
- Kideco Jaya Agung - Indonesia
- Antam Resourcindo - Indonesia
- LBH Netherlands Bv - Netherlands
- GN Power Mariveles Coal Plant, Philippines
- Kumho Petrochemical, South Korea
- Xindia Steels Limited - India
- Eastern Coal Council - USA
- Lanco Infratech Ltd - India
- SN Aboitiz Power Inc, Philippines
- Orica Mining Services - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- PNOC Exploration Corporation - Philippines
- Indo Tambangraya Megah - Indonesia
- Kobexindo Tractors - Indoneisa
- The State Trading Corporation of India Ltd
- Timah Investasi Mineral - Indoneisa
- Renaissance Capital - South Africa
- GMR Energy Limited - India
- Banpu Public Company Limited - Thailand
- Gujarat Sidhee Cement - India
- Kartika Selabumi Mining - Indonesia
- Indogreen Group - Indonesia
- International Coal Ventures Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Formosa Plastics Group - Taiwan
- PowerSource Philippines DevCo
- Romanian Commodities Exchange
- Mercator Lines Limited - India
- Edison Trading Spa - Italy
- ICICI Bank Limited - India
- IHS Mccloskey Coal Group - USA
- ASAPP Information Group - India
- MS Steel International - UAE
- Holcim Trading Pte Ltd - Singapore
- IEA Clean Coal Centre - UK
- Anglo American - United Kingdom
- London Commodity Brokers - England
- Eastern Energy - Thailand
- Wilmar Investment Holdings
- PetroVietnam Power Coal Import and Supply Company
- Vedanta Resources Plc - India
- Semirara Mining Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Coal and Oil Company - UAE
- Siam City Cement PLC, Thailand
- Jorong Barutama Greston.PT - Indonesia
- Indika Energy - Indonesia
- Mjunction Services Limited - India
- Central Java Power - Indonesia
- VISA Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Independent Power Producers Association of India
- Electricity Authority, New Zealand
- Metalloyd Limited - United Kingdom
- Therma Luzon, Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Planning Commission, India
- Maheswari Brothers Coal Limited - India
- PTC India Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Australian Coal Association
- Oldendorff Carriers - Singapore
- Interocean Group of Companies - India
- Ministry of Transport, Egypt
- Posco Energy - South Korea
- Agrawal Coal Company - India
- Miang Besar Coal Terminal - Indonesia
- Riau Bara Harum - Indonesia
- Larsen & Toubro Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- CIMB Investment Bank - Malaysia
- Maharashtra Electricity Regulatory Commission - India
- Asmin Koalindo Tuhup - Indonesia
- Kepco SPC Power Corporation, Philippines
- Goldman Sachs - Singapore
- Bharathi Cement Corporation - India
- Leighton Contractors Pty Ltd - Australia
- Kaltim Prima Coal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Cement Manufacturers Association - India
- Port Waratah Coal Services - Australia
- Vizag Seaport Private Limited - India
- Standard Chartered Bank - UAE
- Aditya Birla Group - India
- Bukit Asam (Persero) Tbk - Indonesia
- Australian Commodity Traders Exchange
- Commonwealth Bank - Australia
- Chettinad Cement Corporation Ltd - India
- Meralco Power Generation, Philippines
- Tata Chemicals Ltd - India
- Petron Corporation, Philippines
- McConnell Dowell - Australia
- Africa Commodities Group - South Africa
- South Luzon Thermal Energy Corporation
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sindya Power Generating Company Private Ltd
- Ministry of Mines - Canada
- Electricity Generating Authority of Thailand
- Toyota Tsusho Corporation, Japan
- White Energy Company Limited
- Bhatia International Limited - India
- European Bulk Services B.V. - Netherlands
- Global Green Power PLC Corporation, Philippines
- Deloitte Consulting - India
- Sree Jayajothi Cements Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Makarim & Taira - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Indian Energy Exchange, India
- Economic Council, Georgia
- Sakthi Sugars Limited - India
- Gujarat Electricity Regulatory Commission - India
- New Zealand Coal & Carbon
- Uttam Galva Steels Limited - India
- Intertek Mineral Services - Indonesia
- Heidelberg Cement - Germany
- SMC Global Power, Philippines
- The University of Queensland
- Bukit Baiduri Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Ceylon Electricity Board - Sri Lanka
- Minerals Council of Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dalmia Cement Bharat India
- Bhoruka Overseas - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Mercuria Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Power Finance Corporation Ltd., India
- Manunggal Multi Energi - Indonesia
- Marubeni Corporation - India
- Attock Cement Pakistan Limited
- Ambuja Cements Ltd - India
- Coastal Gujarat Power Limited - India
- Altura Mining Limited, Indonesia
- India Bulls Power Limited - India
|
| |
| |
|
