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 $100m. The company's iron and steel complex, located on a one million sq ft plot in Abu Dhabi's Mussafah industrial area, was to produce 350,000 tonnes of HR, pickled and oiled steel products, of which 50,000 tonnes were of saleable cold-rolled full hard steel and 200,000 tonnes were of galvanised material.
Source: Emirates Business / Hellenic Shipping
If you believe an article violates your rights or the rights of others, please contact us.
|
|
Monday, 07 December 09
CHINA COKING COAL PRICE MAY RISE 14% ON DEFICIT, CITIGROUP SAYS
Coking coal prices in China, the world’s biggest steel producer, may rise 14 percent next year because of a supply deficit, Citigroup Inc. sai ...
Monday, 07 December 09
JSW STEEL TO SELL MOZAMBIQUE COAL MINE FOR RS 300 CRORE
JSW Steel may sell its coal mine in Mozambique to sister company JSW Energy as the mine has become commercially unviable for the steel producer, a t ...
Monday, 07 December 09
BLACK RIDGE MINING ENTERS AGREEMENT WITH INDONESIAN COAL PRODUCER
Australian-listed Black Ridge Mining has entered into an exclusive dealing and non-circumvention agreement with Indonesian coal producer PT. Inmas A ...
Sunday, 06 December 09
THE ECI / CHINA (S7) ROUTE SOFTENED AND WAS AT US$ 25,275 PER DAY - VISTAAR
COALspot.com (Singapore): "The market was bit soft in the beginning of the week, however towards mid week that market started to pick up and th ...
Sunday, 06 December 09
NEW MANGALORE PORT GETS UPCL'S FIRST COAL PARCEL FROM INDONESIA
The Lanco Group-promoted Udupi Power Corporation Ltd (UPCL) has received the first parcel of imported coal from Indonesia at the New Mangalore Port. ...
|
|
|
Showing 6196 to 6200 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Mjunction Services Limited - India
- GVK Power & Infra Limited - India
- Commonwealth Bank - Australia
- GMR Energy Limited - India
- Essar Steel Hazira Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Petrochimia International Co. Ltd.- Taiwan
- Miang Besar Coal Terminal - Indonesia
- Planning Commission, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- ICICI Bank Limited - India
- Samtan Co., Ltd - South Korea
- OPG Power Generation Pvt Ltd - India
- White Energy Company Limited
- TNB Fuel Sdn Bhd - Malaysia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Meenaskhi Energy Private Limited - India
- Energy Development Corp, Philippines
- Parliament of New Zealand
- Ministry of Transport, Egypt
- Timah Investasi Mineral - Indoneisa
- Directorate Of Revenue Intelligence - India
- Gujarat Electricity Regulatory Commission - India
- Posco Energy - South Korea
- Ceylon Electricity Board - Sri Lanka
- Manunggal Multi Energi - Indonesia
- MS Steel International - UAE
- Semirara Mining Corp, Philippines
- Bhoruka Overseas - Indonesia
- Bangladesh Power Developement Board
- Ambuja Cements Ltd - India
- Toyota Tsusho Corporation, Japan
- Marubeni Corporation - India
- SMC Global Power, Philippines
- Coalindo Energy - Indonesia
- Wood Mackenzie - Singapore
- Ministry of Mines - Canada
- TeaM Sual Corporation - Philippines
- Mintek Dendrill Indonesia
- Kideco Jaya Agung - Indonesia
- Intertek Mineral Services - Indonesia
- Dalmia Cement Bharat India
- Carbofer General Trading SA - India
- Kaltim Prima Coal - Indonesia
- Bukit Makmur.PT - Indonesia
- Barasentosa Lestari - Indonesia
- Sindya Power Generating Company Private Ltd
- Formosa Plastics Group - Taiwan
- Orica Australia Pty. Ltd.
- Bayan Resources Tbk. - Indonesia
- The Treasury - Australian Government
- Heidelberg Cement - Germany
- Australian Commodity Traders Exchange
- Antam Resourcindo - Indonesia
- Vizag Seaport Private Limited - India
- Ind-Barath Power Infra Limited - India
- Bhatia International Limited - India
- Singapore Mercantile Exchange
- Bahari Cakrawala Sebuku - Indonesia
- Jindal Steel & Power Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Interocean Group of Companies - India
- Latin American Coal - Colombia
- Xindia Steels Limited - India
- Maharashtra Electricity Regulatory Commission - India
- PetroVietnam Power Coal Import and Supply Company
- CIMB Investment Bank - Malaysia
- Global Green Power PLC Corporation, Philippines
- Oldendorff Carriers - Singapore
- Altura Mining Limited, Indonesia
- Electricity Authority, New Zealand
- Bulk Trading Sa - Switzerland
- CNBM International Corporation - China
- Pendopo Energi Batubara - Indonesia
- Binh Thuan Hamico - Vietnam
- Mercuria Energy - Indonesia
- Aditya Birla Group - India
- Asmin Koalindo Tuhup - Indonesia
- Sojitz Corporation - Japan
- Deloitte Consulting - India
- European Bulk Services B.V. - Netherlands
- The State Trading Corporation of India Ltd
- Australian Coal Association
- Rashtriya Ispat Nigam Limited - India
- Maheswari Brothers Coal Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Larsen & Toubro Limited - India
- Chettinad Cement Corporation Ltd - India
- Merrill Lynch Commodities Europe
- Jaiprakash Power Ventures ltd
- Coastal Gujarat Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- Petron Corporation, Philippines
- Thiess Contractors Indonesia
- Riau Bara Harum - Indonesia
- Grasim Industreis Ltd - India
- Eastern Energy - Thailand
- Semirara Mining and Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Sical Logistics Limited - India
- Price Waterhouse Coopers - Russia
- Sinarmas Energy and Mining - Indonesia
- Sakthi Sugars Limited - India
- Globalindo Alam Lestari - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- International Coal Ventures Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Sree Jayajothi Cements Limited - India
- Energy Link Ltd, New Zealand
- Cigading International Bulk Terminal - Indonesia
- Baramulti Group, Indonesia
- Tata Chemicals Ltd - India
- IHS Mccloskey Coal Group - USA
- Kartika Selabumi Mining - Indonesia
- Kepco SPC Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Bukit Baiduri Energy - Indonesia
- Rio Tinto Coal - Australia
- IEA Clean Coal Centre - UK
- Medco Energi Mining Internasional
- Aboitiz Power Corporation - Philippines
- Renaissance Capital - South Africa
- Eastern Coal Council - USA
- PTC India Limited - India
- Meralco Power Generation, Philippines
- Edison Trading Spa - Italy
- PowerSource Philippines DevCo
- New Zealand Coal & Carbon
- Banpu Public Company Limited - Thailand
- Indonesian Coal Mining Association
- The University of Queensland
- Salva Resources Pvt Ltd - India
- Coal and Oil Company - UAE
- Kobexindo Tractors - Indoneisa
- Chamber of Mines of South Africa
- Krishnapatnam Port Company Ltd. - India
- Orica Mining Services - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Trasteel International SA, Italy
- Gujarat Sidhee Cement - India
- Indika Energy - Indonesia
- Indian Oil Corporation Limited
- Siam City Cement - Thailand
- Videocon Industries ltd - India
- Attock Cement Pakistan Limited
- Karbindo Abesyapradhi - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Agrawal Coal Company - India
- Therma Luzon, Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indian Energy Exchange, India
- Kapuas Tunggal Persada - Indonesia
- Kumho Petrochemical, South Korea
- Savvy Resources Ltd - HongKong
- Power Finance Corporation Ltd., India
- Bharathi Cement Corporation - India
- Ministry of Finance - Indonesia
- Madhucon Powers Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- PNOC Exploration Corporation - Philippines
- Lanco Infratech Ltd - India
- Global Business Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- LBH Netherlands Bv - Netherlands
- India Bulls Power Limited - India
- GAC Shipping (India) Pvt Ltd
- Anglo American - United Kingdom
- Star Paper Mills Limited - India
- Cement Manufacturers Association - India
- Gujarat Mineral Development Corp Ltd - India
- Electricity Generating Authority of Thailand
- Borneo Indobara - Indonesia
- Mercator Lines Limited - India
- Indogreen Group - Indonesia
- San Jose City I Power Corp, Philippines
- McConnell Dowell - Australia
- Thai Mozambique Logistica
- Makarim & Taira - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Goldman Sachs - Singapore
- Vedanta Resources Plc - India
- Georgia Ports Authority, United States
- Central Java Power - Indonesia
- Independent Power Producers Association of India
- Romanian Commodities Exchange
- Parry Sugars Refinery, India
- Bhushan Steel Limited - India
- VISA Power Limited - India
- London Commodity Brokers - England
- Global Coal Blending Company Limited - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GN Power Mariveles Coal Plant, Philippines
- ASAPP Information Group - India
- Minerals Council of Australia
- Tamil Nadu electricity Board
- Wilmar Investment Holdings
- Central Electricity Authority - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indo Tambangraya Megah - Indonesia
- Malabar Cements Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Iligan Light & Power Inc, Philippines
- Port Waratah Coal Services - Australia
- Siam City Cement PLC, Thailand
- Karaikal Port Pvt Ltd - India
- SMG Consultants - Indonesia
- Economic Council, Georgia
- Standard Chartered Bank - UAE
- Straits Asia Resources Limited - Singapore
- Sarangani Energy Corporation, Philippines
|
| |
| |
|
