A cost push might lead to a rise in prices of flat steel products next month, say companies in the sector.

“Iron ore prices are up by Rs 450 a tonne and coking coal by about 5 per cent over the last couple of months. There will be some impact on pricing,” said a primary steel producer.

Mining companies raised ore prices by Rs 400-600 a tonne in February. Seaborne prices have been rallying due to a supply disruption in Brazil, a major producer. In the past two months, global iron ore prices have moved up by around $20 a tonne to $108 a tonne.

Coking coal cost for domestic blast furnaces in the fourth quarter of 2018-19 had seen increases of Rs 800 a tonne, compared to the earlier quarter, ratings agency Icra said in its April report. This had increased steel making cost by around Rs 630 a tonne.

Jayant Acharya, director, commercial and marketing, at JSW Steel, said: “There is cost pressure due to increased prices of and already elevated coal prices. We are reviewing the situation.”

If an increase does happen, it would be the second one in this calendar year. In February, there was a rise of around Rs 500 a tonne. Though small, the hike had stemmed the downtrend in prices since since November.

“Prices fell in November, Dece­mber and January, with the total reduction in prices from November and January being Rs 5,500 a tonne. The first increase was in February and since then prices were rolled over,” said a producer.

A secondary producer, however, wondered if the market could absorb a price hike. The automobile and white goods sectors have been slowing.

“Automobile has been in the slow lane but this time of the year is typically so for the sector. The co­ated steel business is also a little off-demand during the monsoon but the construction and infrastructure segments are steady. There are a lot of projects in the pipeline that are expected to take off, now that the elections are over,” a producer said.

Around 60 per cent of steel consumption is accounted for by the infrastructure and construction segments. The growth in steel consumption has therefore largely been supported by these segments, despite the slowing of automobile sales.

Source: Business Standard

South Korean company Daehan Steel Co., Ltd. has awarded SMS group (www.sms-group.com) an order covering the completion of the rebar rolling mill in its Pyeongtaek plant. The new equipment will allow Daehan to bundle rebars in small and main packages. Starting material will be billets 130 and/or 150 millimeters square with a length of 12 meters in low and medium carbon grades. The throughput rate will be 70 tons per hour. The rebars having a diameter range from 10 to 32 millimeters will be bundled to packages of commercial lengths from six to 12 meters and will have a weight between 1.5 to 2.5 tons. For products D10 to D19, the packages will have a weight of 400 kilograms.

The rolling mill features an EBROS billet welding system, 14 HL (Housingless) mill stands and an eight-pass finishing block with VCC® (Vertical Compact Coiler) to produce five-ton coils of the rebar product sizes mentioned above. The scope of supply includes a new crop and dividing shear, a new cooling bed fitted with HSD® (High Speed Delivery) system, a newly designed cold-cutting system acting with counting stations, equipment for bundling small and main packages and for tying to ensure the packages will have a stable shape. The plant will feature latest SMS group technology for high-speed bar mills and tying equipment, such as – HSD® (High Speed Delivery) system which stands for increased productivity and maximum yield at high speeds of up to 35 meters per second. – Fully automated tying machines with energy consumption reduced by about 50 percent compared to the old-design compactors.

Established in 1954 as Daehan Trading, the company was mainly active as a wire rod producer and in the 1970s started to produce steel bars due to a rapid growth of the Korean economy. Over the years, the company became a specialized steel producer. In 1992, it changed its name to Daehan Steel and emerged as one of the most important steel producers in the Far Eastern countries. With the present investment Daehan Steel will expand its possibilities on the local market and in the neighboring countries. Commissioning of the facilities is scheduled for mid-2020. Once in operation, the plant will be one of the most advanced and productive benchmark for the markets in terms of technology, quality, efficiency and low operational costs.

Mumbai: JSW SteelNSE -0.47 %, the lone bidder for Asian Colour Coated Ispat Ltd., has increased its offer for the company by 25% to Rs 1,500 crore, a person aware of the development said.

The revision came after ACCIL’s resolution professional reached out to JSW Steel, following which a meeting was held in New Delhi last week.

JSW Steel had initially offered Rs 1,200 crore, of which Rs 800 crore would go to secured lenders including State Bank of India and Punjab National BankNSE 1.48 % and Rs 400 crore would go to unsecured lenders led by Axis BankNSE 0.81 %.

ET reported last month that the resolution professional had sought an extension of the bid deadline, even after JSW Steel had already made a binding offer for the asset. People aware of the matter told ET that resolution professional Kuldip Kumar Bassi found the bid unsatisfactory because banks would have had to forgo 76% of their loans to ACCIL, which has debt of Rs 5,000 crore.

The resolution professional had also received fresh interest for the asset from TPG Capital, Kotak Mahindra Bank NSE 0.21 % and Blackstone-backed International Asset Reconstruction Company even as the 270-day period expired on April 16.

The New Delhi bench of the National Company Law Tribunal is scheduled to hear the matter on May 13. Voting on JSW Steel’s revised offer may take place on Thursday or Friday, the person said. Bassi and JSW Steel declined to comment.

JSW Steel is almost tripling its colour coated steel capacity to 2 million tonnes over a year and a half as demand for the value-added product rises. ACCIL makes cold-rolled, galvanised and colour coated steel products and the acquisition of its 300,000-tonne capacity fits into JSW’s strategy of enhancing its downstream capacity.

ArcelorMittal had also initially shown interest in ACCIL but refrained from bidding until the acquisition of Essar Steel goes through.

Steel giant ArcelorMittal has signed a joint venture (JV) formation agreement with Japan’s Nippon Steel & Sumitomo Metal Corporation (NSSMC) to acquire and manage Essar Steel, currently undergoing proceedings under the Insolvency and Bankruptcy Code (IBC), subject to approval of its bid from regulatory authorities.

ArcelorMittal’s subsidiary, ArcelorMittal India Private Limited (AMIPL), gave a resolution plan on February 12, which outlined its intention to have NSSMC formally join its bid for Essar Steel. Sources said since it was already mentioned in the resolution plan, no alteration was required in the wake of the JV formation agreement.

Should the submitted resolution plan be selected and accepted by the National Company Law Tribunal (NCLT), ArcelorMittal and NSSMC would jointly acquire and manage Essar Steel, ArcelorMittal said in a statement. NSSMC said it would proceed with ArcelorMittal to form the joint venture and acquire Essar Steel subject to the approval of the regulatory authorities.

In the JV, ArcelorMittal will be the majority partner. The announcement of the JV formation agreement with NSSMC comes shortly before a meeting between the resolution professional and lenders, in which the eligibility of the two bidders — ArcelorMittal and Numetal — will be taken up. The meeting is scheduled for March 5.

Essar Steel was among a dozen of biggest loan defaulters identified by the Reserve Bank of India for immediate resolution under the IBC.

Commenting on the development, Lakshmi Mittal, chairman and CEO, ArcelorMittal, said, “Partnering NSSMC for Essar Steel was always our intention and adds further strength to our offer. Combining our experience and expertise creates a powerful partnership that has a proven track record – our rich history of positive collaboration dates back more than 20 years with three joint ventures in the US. We believe that together we can contribute our knowledge and technology to support a rapid turnaround in Essar’s performance, enabling it to increase production, enhance its product capabilities and make a meaningful contribution to the future growth of India’s manufacturing sector and the development of its economy.”

ArcelorMittal and NSSMC have been operating I/N Tek and I/N Kote in Indiana, USA, under joint venture agreements since 1987. I/N Tek and I/N Kote are value-added downstream finishing facilities that serve the automotive and domestic appliance markets. Also, in 2014,ArcelorMittal partnered NSSMC on the acquisition of AM/NS Calvert, a state-of-the-art downstream finishing facility in Alabama, USA.

In a statement, NSSMC said India was one of the most promising steel markets in the world, with significant growth potential in the medium- and long-term and where domestically produced steel products had a superior position.

“NSSMC has been steadily expanding local production in India and targeting sectors advantageous to NSSMC’s technological superiority. Meanwhile, NSSMC has also been seeking opportunities to engage in integrated steel production in India to steadily capture the growing demand for steel products, which is expected to increase along with the development of domestic infrastructure.

ESIL (Essar Steel) is one of the major steel companies in India having a fully integrated steel production system located in the west coast region of India,” said NSSMC.

Essar Steel has a steelmaking capacity of around 10 million tonnes annually.