Wednesday, October 26, 2005

World steel production 2005 forecast

MEPS (International) Limited have just published their world 2005 crude steel production forecast, which is 1116 million metric tonnes, a figure that is up approx. 6.2% from the 2004 output level of 1050 million tonnes.

To read the original article visit MEPS at

Tuesday, October 25, 2005

Steel news service broadens out ...

Dear Steel Industry Colleague

Please be informed that the news team at has just launched a broader news service that now covers:

- all the main steel consuming end-use industries. So to check out the latest news on automotive, construction, fabrication, oil and gas, packaging, shipbuilding etc for free, visit

- all the main high quality steel groupings. So for the latest market and industry news on alloy steels, electrical (silicon) steels, engineering steels, high speed steel, stainless steel, tool steel, visit

- the latest international steel pricing news reports, at

- a range of hot topics such as the steel industry in China, steelmaking news from India, and more at

We hope that you continue making use of the free news and information services that we provide. If you have any comments, please send us your feedback to:

Thank you.

Yours sincerely.

Dr Andrzej M Kotas
Chief Executive
Mobile: +44 (0) 775 149 0885

Sunday, October 23, 2005

Arcelor strategy targets Brazil, Ukraine and India

With Brazil and the Ukraine already identified as strategic targets for Arcelor, The Hindu Business Line reports that the steelmaker has now set it sights on India for future growth.

This strategy was revealed by Alain Davezac, Senior Vice-President of Arcelor's International Business Division, who attended the Steel Metallics India 2005 conference in Kolkata last week.

Notwithstanding the country's high electricity costs and infrastructure bottlenecks, India is considered by Arcelor as a potentially cost competitive production base because of its iron ore reserves, as well as an important future "growth basin" for steel demand. South America and the CIS countries are seen by the steel producer as the other important future sources of steelmaking raw materials.

Saturday, October 22, 2005

Iron ore prices to be higher in 2006

Business Day today reports that after last year's 70% increase in iron ore prices, Chinese iron prices for the year to March 2006 could see further increases, of perhaps 10% to 15%. According to the report, Rio Tinto's view is that Chinese demand will continue to grow strongly. Macquarie analysts are also reportedly expecting 15% rises in fob iron ore contract prices next year, because of strong demand from China and Japan.

Friday, October 21, 2005

Coal prices at record highs, but investors wary [BlackDiamond]

NEW YORK, Oct 17 (Reuters) - With coal prices at historic highs, mining companies should be reaping record profits, but rail delivery problems, soaring energy costs and the effects of Hurricane Katrina are holding the industry in check.

Although Wall Street expects the Big Four U.S. coal producers to report healthy third-quarter earnings, some investors are wary of an industry that has so dramatically turned around from two years ago, when it was swimming in red ink.

Massey Energy Co. already has warned that profit will miss analysts' estimates for the quarter on lower shipping volumes and higher costs, in part due to rising fuel prices in the wake of Katrina.

While coal is poised to benefit from its image as a relatively cheap alternative to oil and gas, the miners also need those costly fuels to power their operations.

Indeed, a report by Standard & Poor's Ratings Services says the rise in spot coal prices over the past 18 months has generally not translated into positive outlooks for the producers.

"Amid a robust domestic economy and elevated oil and natural gas prices, it's no surprise that coal prices are high," said S&P analyst Dominick D'Ascoli. "Add the strong demand from Asia and low electric utility inventories, and one can see that these are good times for U.S. coal producers."

But S&P's outlook for most U.S. coal producers' credit quality is stable, rather than positive. Among the mitigating factors are increased debt, weak liquidity, business-risk issues, escalating costs, and mine disruptions, the report said.

In the first two weeks of the new quarter, the index comprising the four major coal company stocks is off about 4 percent after rising more than 45 percent in the third quarter.

But prices of the fuel itself continue to rise. On Friday, coal from the Powder River Basin in Montana and Wyoming was trading at more than $15 per ton -- double what it was a year ago. And eastern coal, from the Appalachia region, was at near-peak levels of $56 to $58 per ton.

"I expect steam coal prices to stay at the current level for four to five years," said Nick Carter, president and chief operating officer of Natural Resource Partners referring to coal for electricity generation.

The price line for metallurgical coal, which is used in steel production, looks even longer, he told a recent American Coal Council conference.

So why is the stock market skittish? Westminster Securities analyst Richard Price points to macroeconomic worries like uncertainty over inflation and interest rates, as well as production costs and supply cuts.

The market is pondering whether recent high coal prices represent a new plateau in a cyclical industry, he said.

"I think it probably is close to a new plateau," Price said. "I don't see metallurgical coal coming down."

Powder River Basin steam coal was high because deliveries are curtailed as a result of rail repair work following derailments earlier this year.

Meanwhile, Price said, power plant coal inventories are at historic lows -- "I have even heard of some below 10 days, which is unusually low."

But since most major utilities buy on long-term contracts, "it's the smaller utility buyers, like ones owned by municipalities, that are getting stuck with the high prices," Price said.

About 50 percent of U.S. electricity is generated in coal-fired power plants, he said.

Phil Saunders, a senior vice president of Atlanta-based energy company Southern Co. told industry newsletter Coal & Energy Price Report that concerns about natural gas shortages are putting pressure on coal stockpiles. "There are a lot of questions about whether we will be able to keep the lights on."

Tuesday, October 11, 2005

Coal Producers Hurt by Lack of Miners [BlackDiamond]

Coal Producers' U.S. Growth Hurt by Lack of Available Miners
Oct. 10 (Bloomberg)

Massey Energy Co. and Arch Coal Inc. can't find enough workers for their mines in Appalachia, the second-biggest U.S. coal-producing region, as they struggle to keep up with rising demand.

The number of coal miners dropped to 99,358 last year from 159,777 in 1990, and more than half are older than 55. Fewer than 100 mine engineers graduated from U.S. schools last year, a fifth of what's needed to replace retirees, according to the U.S. Mine Safety and Health Administration. Mining is the second-most deadly industry, based on U.S. Labor Department data.

"Baby boomers were the last generation to enter the coal mining workforce,'' said Ray McKinney, administrator of the federal mine safety agency in Arlington, Virginia. "We're really concerned about the shortages.''

President George W. Bush is promoting coal to help meet the country's electricity needs over the next decade. Demand for coal is surging as natural-gas prices climb, making it more attractive to run coal-fired power plants. At today's prices, the gas to generate one megawatt-hour of electricity would cost about $133, compared with $27 for coal.

Benchmark gas futures touched a record $14.80 per million British thermal units last month, and the average price this year is more than triple what it was in the 1990s, when most new power plants were gas fired. The price of coal has doubled in about three years, to $58.50 a ton, based on prices at a terminal on the Big Sandy River in West Virginia, the benchmark for Appalachian coal.

Massey, Arch Coal and other mining companies are recruiting using billboards and ads in college magazines. Massey hired an airplane to pull a banner over Myrtle Beach, South Carolina, earlier this year, advertising job openings to high school and college students gathered there for spring break.

"We're trying to find the labor to increase production", Don Blankenship, Massey chairman and chief executive, said at an investor meeting Sept. 26 in New York. "Underground work is different, and sometimes young workers get discouraged."

Massey, the fourth-largest U.S. coal producer, in July said the labor shortage was its biggest impediment to growth. The company is offering free cars and vacations to managers who retain workers. The company also built a medical center in Madison, West Virginia, near many of its mines, as a convenience for workers and a way to control health-care costs.

Massey Shares
Shares of Massey are up 35 percent this year, the smallest gain among the four biggest U.S. coal producers. Massey's coal output was 40.4 million tons last year, down 7.5 percent since 2001, when production peaked. The company lost money from 2001 to 2003 and swung to a profit of $13.9 million last year.

Shares of Peabody Energy Corp., the biggest U.S. coal miner, are up 85 percent this year. Peabody produced 227 million tons of coal last year, up 17 percent from 2001, and had profit of $175.4 million.

Finding and keeping workers ``is something we're paying a lot of attention to,'' Steven Leer, Arch Coal's chief executive, said in a Sept. 14 interview. Shares of Arch Coal, the second-biggest U.S. coal company, have climbed 82 percent this year. The company had profit of $113.7 million last year, up from $16.7 million the year before, as production rose.

Pittsburgh-based Consol Energy Inc., the third-biggest U.S. coal producer, has funded training programs at two-year technical colleges and a new training center at West Virginia University.

Competing with GE
The need for more workers is acute in the Appalachian region and will get worse in other U.S. coal-producing regions over the next 10 years, according to McKinney.

Wyoming's Powder River Basin produces 40 percent of U.S. coal, and the next-biggest regions are Appalachia and Illinois. Richmond, Virginia-based Massey Energy is the biggest coal company in Appalachia and is the biggest employer in the region.

Coal mining is both lucrative and dangerous. Miners' salaries average $50,734 a year, 37 percent higher than the average for all U.S. industries, according to Labor Department data. Mining has the second-highest rate of fatalities, according to the agency. Only the category that includes agriculture, forestry and fishing is more deadly.

According to the mine safety agency's Web site, "nearly every coal miner knows first hand the destructive impact of black lung disease."

"We have to compete with General Electric as much as Arch and Massey," said Tom Hoffman, a spokesman for Consol Energy. "We can't go to a recruiting fair looking like a dinky old coal mining company."

Coal Demand
U.S. coal demand will grow 3.1 percent this year, outpacing a 1.9 percent increase in supplies, according to the Energy Department. The U.S. has enough coal for 250 years.

Coal demand is expected to double in the next 20 years as utilities build more coal-fired power plants. Coal generates more than half of U.S. electricity today.

"Mining is tough, dirty work in sparsely populated areas," said J. Davitt McAteer, a mining professor at Wheeling Jesuit University in West Virginia who was an assistant secretary of labor and head of the Mine Safety and Health Administration during the Clinton administration.

Massey, which loses 60 percent of new hires in their first year, is offering a $25,000 retention bonus to those who stay three years. The company also pays $500 bonuses twice a year.

"Massey's getting desperate and casting a wider net," said Phil Smith, a spokesman for the United Mine Workers of America union in Fairfax, Virginia.

Even regulators are feeling the pinch of too few coal industry workers. "We had two guys we wanted to hire from a mining company, but the company got wind of it and offered them each a $10,000 retention bonus," McKinney said.

Sunday, October 09, 2005

Iran Steel Industry Group [Iransteelcenter]

Are you are active in the Iranian Steel Market? Are you dealing with alloy
steel and stainless steel? Do you speak Farsi?

If your answers are YES, then you are invited to join the IranSteel Group

Come and join your free community. Post your orders/offers in Farsi/English.
Get all updates on our stock materials. Find new markets and new customers.

We are waiting for you come and join at:

Best Regards
Gholamreza Rashidi
Iran Steel Group

Wednesday, October 05, 2005

Stainless steel 2006 production forecast

The International Stainless Steel Forum (ISSF) has just released its world stainless steel production forecast for 2005 and 2006. This predicts that global stainless steel output (crude steel) will be 25.0 million metric tonnes in 2005, growing to 26.5 million tonnes in 2006, a 2005/2006 increase of 5.9 per cent.

The full press release may be found on the ISSF website.

Monday, October 03, 2005

Stainless steel in danger from China [MEPS]

Remarkable growth forecasts for China’s stainless steel sector were made at a recent industry meeting in Shanghai. Chinese production capacity in 2006 will be double the figure in 2004. Moreover, if current expansion plans are fully realised, China could be melting more than 16 million tonnes per year in 2010 – equivalent to more than 60 percent of current world output.

China is already having a determining influence on global stainless markets. In the first half of this year, its stainless crude steel production jumped by 54 percent year-on-year, while output in almost every other country was falling, according to figures from International Stainless Steel Forum.

The surging expansion of domestic production is making China less of an import market, and more of an exporter in its own right. The oversupply that has characterised the global stainless steel sector this year may become persistent.

Mills supplying the Asian market are already suffering. Leading producers – including Posco, Nisshin Steel and NSSC – have cut back their operating rates in order to reduce the oversupply that has undermined prices. European mills have switched more of their exports to Russia, whose own stainless production has suffered as a consequence – falling 40 percent in January-August 2005.

One large nickel supplier expects Chinese stainless consumption to grow by 9 percent per year for the next decade. Even if this rapid growth rate is realised, it will still leave China with an exportable surplus of stainless steel from its newly expanded plants.

Few people believed China would install so many new stainless production units. Indeed, even some in the Chinese industry accept that the country is building up excess capacity that could overhang the market for years to come. Several other producers are already too advanced in construction work to cancel their expansions; but they may have to delay start-up or mothball some installations if they are to protect their profitability.

Source: Stainless Steel Review