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A slew of policy measures taken to protect the domestic steel industry from the threat of cheap imports have also started making a positive impact on the industry.

KOLKATA: The government will ensure rising steel prices do not lead to increase in cost of infrastructure projects.

This is particularly significant since the steel ministry has already notified that preference will be given to locally made steel for procurement by the government and public sector undertakings.

Rise in input costs and an improvement in demand, especially from segments like housing, railways and automobiles, led to the firming up of steel prices in thethe past few months.

A slew of policy measures taken to protect the domestic steel industry from the threat of cheap imports have also started making a positive impact on the industry.

During April-October 2017, consumption of total finished steel increased 4.5% to 50.33 million tonne over same period of the previous year.

“We will ensure there is no cartelisation, but at the same time we do not want prices to fall since it affects the companies.

Our objective is to see that Indian infrastructure construction does not become expensive,” steel secretary, Aruna Sharma said in an interview with ET. She said mechanisms such as reverse auction would help ensure international price discovery.

The GAIL (India) tender was case in point, she said. It had invited bids for the Vijaipur-Auraiya-Phulpur pipeline project, but cancelled it following notification of the government policy in May 2017 that called for preferential procurement of locally produced steel in government projects.

An exception was to be made only where specific grades of steel are not manufactured in the country or where the quantity sought cannot be met from domestic sources.

“While the initial cost may appear a bit higher, promoting the use of steel in infrastructure projects not only makes the lifecycle cost affordable, but is also low-maintenance and environment-friendly,” she added.

By Rakhi Mazumdar, ET Bureau | Updated: Nov 17, 2017, 12.44 AM IST

Just hours before the U.S. president set foot in China, the world’s largest steel producer announced exports have dwindled to the lowest in years, undercutting a repeated gripe from Donald Trump that lit up his campaign and spilled over into his rhetoric in office.

Exports from the country that accounts for half of global production dropped to 4.98 million tons last month, down from September’s 5.14 million, and the lowest since 2014, according to customs figures. That’s a far cry from the monthly peak in late 2015, when they exceeded 11 million tons.

Before he took office, candidate Trump frequently took aim at China’s mammoth steel industry, holding it up as an example of unfair competition. As recently as June, Trump told an audience in Cincinnati, Ohio: “Wait’ll you see what I’m going to do for steel and for your steel companies.” He added: “We’re going to stop the dumping and stop all of these wonderful other countries from coming in and killing our companies and our workers.”

The force behind the slump in steel exports has been policy makers’ desire to clean up the environment, a theme touted by President Xi Jinping in his address to a twice-a-decade congress last month, as well as to press home a long-standing campaign to curb overcapacity.

China has ordered a swath of mills to cut output. In a sign of the clampdown’s impact, steel production — which had been running at a record pace — slumped in September to the lowest in at least six months. Investors will get an update next week, when China releases factory data for October.

Before then, Trump should enjoy blue skies above Beijing.

— With assistance by Jake Lloyd-Smith, Bloomberg News

TOKYO (Reuters) – Japan’s steelmakers are in the midst of the best market conditions in at least three years as steel prices rise with construction in full swing for the 2020 Olympics in Tokyo and automakers boosting production.

FILE PHOTO: Men work at the construction site of the New National Stadium, the main stadium of Tokyo 2020 Olympics and Paralympics in Tokyo, Japan, October 13, 2017. REUTERS/Issei Kato/File Photo

But the country’s third-biggest steelmaker, Kobe Steel Ltd (5406.T), is likely to be left out as it struggles to cope with one of Japan’s biggest industrial scandals, involving widespread cheating on product specifications. The company says it has lost customers and analysts say more could cancel contracts after a seal of industrial quality was revoked last week.

Last week, Japan’s biggest steelmaker, Nippon Steel & Sumitomo Metal Corp (5401.T) reported an 800 percent increase in net profit in the first half of the 2017/18 financial year.

JFE Holdings (5411.T), the country’s second-biggest steel maker, posted net profit in the first half after a net loss in the year-ago period, and it forecast that full-year profit will more than double.

Besides the construction for the Olympics and higher demand from auto manufacturers, Japanese steelmakers are also being boosted by a country-wide boom in hotel and shop building.

Overseas, a cutback in steel production in China is helping them recover from a period of high inventories and slack profitability.

“With large redevelopment projects in central Tokyo, construction materials are in tighter supply,” said Kiyoshi Imamura, managing director at Tokyo Steel Manufacturing Co Ltd (5423.T), Japan’s top electric-arc furnace steelmaker.

Prices for the company’s main product, H-shaped beams used in construction, rose to 81,000 yen ($711) per tonne in October, the highest since 2011, amid a tight domestic market and higher overseas prices.

The Japan Iron and Steel Federation has estimated the Olympics-related projects would boost steel demand by 2-3 million tonnes in total.

“This is the first time since 2013 to see the steel market being pulled by stronger demand, instead of pushed by higher costs of materials,” said Atsushi Yamaguchi, an analyst at SMBC Nikko Securities.

“This solid trend will continue through early next year,” he said.

“TIDE IN OUR FAVOR”

Backed by healthy demand from manufacturers, the average price of Nippon Steel’s products rose to 83,500 yen per tonne in the April-September half, the highest since the six months through March 2015.

“The tide is running in our favor with strong local demand from manufacturers, particularly automakers, and with construction demand getting into full swing,” Toshiharu Sakae, Nippon Steel’s executive vice president, told an earnings news conference on Friday.

FILE PHOTO: People walk in front of the construction site of the New National Stadium, the main stadium of Tokyo 2020 Olympics and Paralympics in Tokyo, Japan, October 13, 2017. REUTERS/Issei Kato/File Photo

Investors are generally upbeat about the steel market.

“Business condition for steelmakers looks fairly healthy with falling exports from China and strong capital expenditure worldwide,” said Naoki Fujiwara, chief fund manager at Shinkin Asset Management.

Shares in steelmakers could have attracted more attention if Kobe Steel’s scandal did not happen, he said.

“As long as the data cheating stays at the one company, rivals will likely benefit as Kobe Steel customers will likely reduce orders,” he said.

($1 = 113.8700 yen)

Souce from: John Myers | Duluth News Tribune

TOKYO (Reuters) – Embattled Kobe Steel Ltd (5406.T) said on Thursday a Japanese Industrial Standards (JIS) certificate for some products made at its Hatano plant near Tokyo has been revoked because of data falsification.

The logo of Kobe Steel (Kobelco) is seen at the company headquarters in Kobe, western Japan October 24, 2017. REUTERS/Thomas White

The move could hurt its business, which has been already impacted as some customers are switching orders to competitors.

 Kobe Steel Chairman and Chief Executive Officer Hiroya Kawasaki will hold a news conference at 3 p.m. (0600 GMT) in Tokyo on Thursday to give details as well an update on the data fabrication scandal that has rocked Japan’s third-biggest steel maker.

Kobe Steel had been told by Japan’s industry ministry to disclose the results of its safety checks by around Thursday.

Its revelations of widespread tampering in the specifications of its products have sent a chill through global supply chains for cars, trains, airplanes and other equipment.

Kobe Steel’s Hatano copper tube plant southwest of Tokyo has been inspected by a certification company to see whether it has complied with the JIS in terms of quality management systems and product specifications.

“We have been told by the certification company that the JIS H 3300 certificate for copper and copper alloy seamless tubes has been revoked due to improper quality management at the plant,” a Kobe Steel spokesman said.

As a result of the revoke, it will be no longer able to sell those products with the JIS label. But they can still be sold without asserting they are JIS-compliant if customers accept it.

Still, customers may switch suppliers or pick Kobe’s competitors for future orders, industry experts said.

Global automakers, aircraft companies and other manufacturers have scrambled to identify potential hazards in their products because of the falsification, although four Japanese carmakers said last week they have found no safety issues with aluminum parts supplied by Kobe Steel.

The company is now subject to a U.S. Justice Department probe while checks continue at hundreds of its clients involved in complex supply chains spanning the globe.

Reporting by Yuka Obayashi; Editing by Chang-Ran Kim and Raju Gopalakrishnan

Our Standards:The Thomson Reuters Trust Principles.

LONDON (Reuters) – As China smog war, Global crude steel output hit its lowest since February last month, with mills in top producer China cutting production as Beijing intensified its campaign for clearer skies, data from the World Steel Association (worldsteel) showed on Monday.

Crude steel production for the 66 countries reporting to worldsteel hit 141.4 million tonnes in September, a yearly increase of 5.6 percent but a monthly drop of 2.3 percent and the lowest output on a monthly basis since February.

Crude steel output in China, which produces roughly half the world’s steel, stood at 71.8 million tonnes in September, a yearly increase of 5.3 percent but a monthly drop of 3.7 percent, worldsteel data showed.

Output drops of 30 million tonnes or more are expected in China this winter as Beijing intensifies its war on smog.

Official figures from China show it has cut 110 million tonnes of legal steel capacity and 120 million tonnes of illegal capacity since the start of last year, but the cuts are only now starting to translate into lower production.

Average global steel prices have climbed some 50 percent since the 12-year lows of December 2015, according to consultants MEPS, driven by capacity cuts in China, soaring infrastructure spending, and increased trade protectionism.

Next year however, worldsteel expects no growth in steel demand in China as Beijing infrastructure spending fades and the country resumes efforts to rebalance the economy and protect the environment.

The steel industry, worth about $900 billion a year, is seen as a gauge of the world’s economic health.

Souce from: Reporting by Maytaal Angel. Editing by Jane Merriman, Reuters

Deal to unload £15bn pension liability clears Britain’s biggest steelmaker for tie-up.

A worker outside the main entrance to the steel works operated by Tata Steel in Port Talbot, UK © Bloomberg

A deal to merge the European steel operations of Tata Steel and ThyssenKrupp could be struck this month, after Tata removed a significant obstacle by offloading its UK retirement fund.

The Indian group announced on Monday that it had ditched the £15bn ($19.8bn) British Steel Pension Scheme (BSPS), which it had argued threatened the survival of its UK business, upon receiving approval from regulators.

Tata Steel in August agreed a deal to restructure its 130,000-member British pension fund after nearly a year of negotiations.

As well as a liability for Britain’s largest steelmaker, the pension scheme was a stumbling block to a merger since the two companies announced they were in talks over a joint venture more than a year ago.

ThyssenKrupp said on Monday those negotiations were “well on the way” and that “an agreement could be possible before the end of this month”.

It added that, as its executive board was “discussing strategic options”, a supervisory board meeting scheduled for September 12 had been postponed.

“There are small details to clarify but nothing that would derail the deal,” said a person familiar with the situation. A ThyssenKrupp supervisory board meeting is now expected for September 23 or 24.
A detailed memorandum of understanding would be the next likely step, followed by due diligence and then signing of a final deal, said the person.

“In response to the statement issued by the ThyssenKrupp AG regarding its board meeting, Tata Steel would like to clarify that it continues to be in strategic discussions with ThyssenKrupp,” said a Tata Steel spokesman.

“Most of it has been agreed,” said another person briefed on the talks. The enlarged entity would have two joint leaders, one from each company, they added, while the board of Tata Sons, the holding company of the Indian conglomerate, must also approve the deal.

A merger would create Europe’s second-largest steelmaker behind only ArcelorMittal and represent a major consolidation move in a sector plagued by overcapacity.

ThyssenKrupp wants to exit steelmaking to concentrate on more lucrative capital goods, such as elevators and components for industry. But its labour unions have been unenthused about a steel combination with Tata, fearful of job losses.

“There are no real alternatives,” said Ingo Speich, portfolio manager at Union Investment.

He said a German solution such as a joint venture with Salzgitter would not solve overcapacity problems, whereas a Europe-wide deal with Tata makes strategic sense.

“The earlier the agreement comes the better it is,” he added. “This insecurity has been bad for the [ThyssenKrupp] share price.”

Activist investor Cevian Capital would prefer ThyssenKrupp spin off its steel unit first before entering a joint venture, said a person with knowledge of the matter.

Tata’s separation of its UK pension scheme was affected through a rarely used mechanism called a regulated apportionment arrangement (RAA), requiring regulators’ consent.

The UK steelmaker said it had approval from regulators and the trustees of the BSPS to offload the scheme into the Pension Protection Fund, the government’s pensions lifeboat. In return, Tata agreed to inject £550m into the old scheme along with a one-third equity stake in Tata Steel UK.

The company will also sponsor a new pension scheme, which all members of the old scheme will have the option to transfer into, but with lower future annual increases for pensioners.

Source: FINANCIAL TIMES

NEW DELHI: Steel Minister Chaudhary Birender Singh today said India needs to raise per capita consumption of the commodity, while asking the industry to play ethical by differentiating between ‘ease of doing business’ and ‘ease of making money’.

It is not just the duty of the government or the steel ministry in specific, each one has a role to play, he said at KATM conference on raw materials for steel & power.

He was speaking on the key role society has to play with regard to various issues be it increasing steel consumption or protecting the domestic steel industry.

Singh said: “When there was dumping in our country, many of the producers of steel became traders. Is it fair on the part of a man who…has the responsibility to produce… Why? because there is a possibility that without doing anything you can make easy money.”

‘Ease of doing business’ is very different from ‘ease of making money’. Each one has a role to play, he said.

India has the potential to equal the world average per capita steel consumption. At present, the world per capita steel consumption is 208 kg and that can be achieved in India, Singh said.

The National Steel Policy aims more than doubling the per capita steel consumption to 158 Kg by 2030-31, from 61 kg at present.

The steel consumption in the country will increase with the improvement in lifestyle and development of infrastructure in housing, he said.

“Steel consumption can grow only when we will improve our lifestyle, living standard. Everybody wants a better life, house and in it I expect 70 per cent steel and 30 per cent rest of the items…,” he said.

Prime Minister Narendra Modi has taken it as a challenge that everyone has a roof, he said.

Singh further said that there was a ‘socio-economic caste census’ survey, showing there is a requirement of 5 crore houses. The government has a mission to complete it by 2022, he said.

“We also want round the clock electricity, clean drinking water, best education for children and health-care for everyone.

“I do agree that if this kind of infrastructure is made available…then of course the consumption would be on the same level which one can think in any of the developed country,” he said.

Talking about the approach of the common man, the minister said he thinks that these things will be created or made available by the government may be the state government or the Centre.

He further asked the industry to make full use if the resources available in the country.

India has surplus power, iron ore reserve which will last for at least next 30 years. Besides that re-cycling is one area that can reduce the demand for iron ore and coal for steel making.

Scraps can also bring down our demand for raw material for steel making and is of best grade. At present, 8 MT scrap is imported, he said.

These steps will save 30-35 per cent of country’s forex exchange, he added.

The Finance Ministry recently imposed countervailing duty (CVD) on imports of certain flat steel products from China.

The decision to impose the duty was taken by the finance ministry after the Directorate General of Anti-Dumping and Allied Duties (DGAD) found that despite sufficient demand in India and capacities, the domestic industry has lost sales opportunities, which is a direct consequence of subsidised imports from China.

Source: The Economic Times

Tata agreed to drop the pension fund last month (Source: Getty)

Tata Steel is set to offload its £15bn pension fund this week, according to reports.

The deal to separate the British Steel Pension Scheme (BSPS) from the business, which was agreed last month, could be sealed as soon as tomorrow, the Sunday Times reported.

Under the regulated apportionment arrangement (RAA), a rarely used restructuring arrangement, the Indian-owned firm will cut ties with BSPS.

In return, the BSPS, which supports around 130,000 members, will receive £550m from Tata Steel and a 33 per cent equity stake in Tata’s UK steel operations.

Steelworker members of the BSPS will be given the option of joining a new Tata scheme paying lower benefits or entering the Pension Protection Fund. Either option would give members less generous benefits.

The move could pave the way for a merger between Tata and German company Thyssenkrupp, since the pension scheme was seen as a key sticking point to any agreement.

Source:  Courtney Goldsmith, CITY A.M.

DUNKIRK, N.Y. (WIVB) – A fire broke out at 8:56 a.m. Sunday morning at Specialty Steel, 836 Brigham Road when a vat of hydrochloric acid on fire.

A ventilation system in the building threw the smoke and fire into the system and an outside ventilation system caught fire as well.

Smoke could be seen for miles around the building.

The plant was evacuated. No evacuations were necessary for the surrounding neighborhood.

Dunkirk Fire used foam to extinguish the fire inside. Chautauqua County Haz-Mat was also notified.

There were no injuries.

Everything is contained and there is no danger to the public, Dunkirk Fire said.

Source: By Kaley Lynch, News 4 Digital Producer