Metals News - Metals Place

Corus to restart its Scunthorpe steel plant

2010-03-13T03:35:02Z

Steel giant Corus is restarting a blast furnace at its Scunthorpe site 13 months after a slump in demand forced it to close.

The Queen Bess furnace is being relit on Monday.

Corus said market conditions remained "extremely challenging" but the restart would allow better customer service and drive down operating costs.

Corus said it had "no immediate plans" to create jobs, but staffing levels were reviewed regularly.

The Queen Bess furnace is one of three operating at the Scunthorpe site. A fourth, Queen Mary, is held in reserve and used when one of the others is renovated.

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Site director Sean Lyons said: "The restart of the third blast furnace is positive news, as we are bringing Queen Bess back on line so we can improve customer service.

"But the market outlook for 2010/11 remains extremely challenging for the business. Prices for finished steel products are still below sustainable levels.

"We have said throughout the last 18 months that we will match production levels to demand, and the restarting of Queen Bess will allow us to continue to do that.

"It should not be assumed, however, that we will return to full production soon."

Some 4,000 staff are employed at the Scunthorpe site, compared with 4,500 before the recession.

Queen Bess was shut down in December 2008, alongside one in Port Talbot and one in the Netherlands.

The shutdowns were part of a 30% cut in production due to weakening demand in Europe.

Iron ore price rise disadvantageous to China

2010-03-13T03:33:03Z

Iron ore's spot price in the Chinese market has surged to an 18-month high after the Spring Festival holiday, placing Chinese negotiators in the uphill price talks with major iron ore producers in an even more difficult position, the daily China Business News reported on Monday.

Price for Fe 63.5% ore imported from India was $140 to $142 per ton on Feb 26, $10 higher than before the holiday. According to Xiben, a domestic steel spot trading platform, the price for Fe 65% in Liaoning province, a major steel industrial base, increased 30 to 50 yuan per ton by Feb 25.

Analysts from Xiben attributed the price hike to steel mills' restocking after the traditional Chinese New Year, which fell on Feb 14 this year. Most mills stopped stocking iron ore since the beginning of February because of holiday traffic rush and bad weather.

The trend is not good news for the buyer side of the ongoing 2010 iron ore price talks between global steelmakers and the three major miners, Brazil's Vale and Anglo-Australians BHP Billiton and Rio Tinto. And China, which produces more than a third of the world's steel, is the biggest iron ore buyer.

The miners are asking the benchmark price to be more closely linked to the spot price, which the steelmakers oppose.

The supply might catch up with demand in March as the weather turns warmer and many small-to medium-sized mines in China resume production, easing steelmakers' dependence on imported iron ores, Xiben's latest report said.

China now imports 62 percent of the iron ore it needs, according to Luo Bingsheng, vice-chairman of the China Iron & Steel Association.

Ken Reser interviewed on manganese

2010-03-13T03:26:05Z

Ken Reser was one of the first to start writing about molybdenum when most investors still had trouble spelling the word, back in 2005. Around that same time, Ken realized the potential of another metal of vital importance to economies around the world that as yet had no significant production in the United States - manganese. Ken Reser has been writing and researching about manganese since 2007 and has concluded that not only is the metal a vital part of infrastructure building in growing economies, but that it should be considered a strategic metal by western goverments.

Resource Intelligence: Ken, there are a lot of reports out there that say that manganese should be considered a strategic metal, because it has no known alternative. It's essential to the steel making industry and others - what are the uses of manganese that make it a strategic metal?

Ken Reser: Primarily, the steel industry, but it's a metal that has many applications. For instance, manganese is the fourth most traded metal commodity behind inron, aluminum and copper. Most people have no idea how widely used and important it is, really. You will find it used in military applications, batteries, various steels - manganese can even be used as an alternative to nickel in end uses like stainless steel. So it's very versatile.

RI: The US has only produced manganese twice before in the past. Once, I believe, around WWI when Germany was the main supplier of manganese and again during the Cold War when Russia was the main supplier of manganese. Now China controls the vast majority of this supply. How important is it that America finds a new source?

KR: Well, the US is totally dependent on outside sources at present and if you get trade disputes or, heaven forbid a war, you're totally at the mercy of countries like China and South Africa. China controls 97% of the world's electrolytic manganese from low-grade deposits, for example, which is used in advanced battery applications among other things. Think about it like this: in 2008, the world total production of EMM manganese was 1,190,000 tonnes. China produced 1,138,000 of that. So what if China decides that it wants to be the end producer and slaps on an even greater export tax than it already has? We need a domestic supply in North America, there's no question about that.

RI: How much manganese does the US consume?

KR: There is about 30 billion pounds consumed worldwide and the US consumes about 6% of that.

RI: So the US consumes about 6% of thirty billion pounds and yet it produces zero. Why is there no production in the United States?

KR: Well, I think they have just become complacent because for years China was willing to sell manganese cheaply. It was too easy to import it, but now if you have a trade dispute with China for example, they could cut off the supply very quickly.

RI: South Africa is also a producer of manganese. What are some of the factors affecting supply in South Africa?

KR: South Africa as well as China are both experiencing electrical supply problems. We've seen brownouts and blackouts, especially in South Africa, which is the largest producer outside China. South Africa also suffers from high transportation costs, severe infrastructure problems and political uncertainty.

RI: So if there is a cut off of manganese supply to North America, what happens?

KR: The steel industry stops. You don't produce steel without manganese.

RI: The National Research Council studied strategic metals and found that of all the metals vital to the US, it was manganese that was most crucial. If the supply was interrupted, they found that it would have the most impact on the economy.

KR: Well, I have another quote that's interesting. Brian Gillbertson, the dealmaker who helped to make BHP Billiton the biggest mining company in the world, said, "You can't make steel without manganese, and if you can't make steel the world stops."

RI: So how fast is the demand for electrolytic manganese growing?

KR: Well, manganese itself has grown roughly 8% per year, but electrolytic manganese has grown to 26% per year for quite a few years now. It's had an extremely fast growth rate. And as I said, China produces over 97% of the worlds electrolytic manganese and something like 40% of the rest of manganese production. They import the raw ore themselves, they don't export it, so obviously they've caught on to a very profitable industry themselves.

RI: They also tax the exports, don't they?

KR: They tax the exports by 20%, which I believe will be increased before long. Also, the U.S. taxes electrolytic manganese another 14% on import.

RI: China taxes it 20% going out and the US taxes it 14% coming in, so you have just tacked on 34% to the cost of product.

KR: Yes, and you're shipping it across the ocean as well.

RI: Are there any near term-manganese or electrolytic manganese producers in North America that should be on an investor's radar?

KR: There is one junior active in Arizona called American Manganese. I believe they could become the lowest cost producer of electrolytic manganese in the world, according to their studies. Other than that, there are very few manganese explorers that I'm aware of.

RI: So Ken, to sum up, where should investors look to invest in manganese?

KR: Well there are large conglomerate companies in the world such as BHP, the mines in South Africa, there are smaller producers in Australia, and there is one near term potential producer in the US. It has a long life and it seems to have the criteria for the economics. If I was an investor I would be looking at a low-cost North American project because we need a domestic supply of manganese. Everything else comes by ship and it's a big ocean to cross.

Niocan positive about niobium and tantalum

2010-03-13T03:23:21Z

In perspective of the improvement of the rare earth market, Niocan Inc. had mandated in year 2000 J.R. Goode and Associates, Metallurgical Consulting to prepare a conceptual study on Niobium Refinery and Rare Earth Recovery Project for its niobium property in Oka.

The study considered the processing of unleached pyrochlore concentrate to produce a high grade niobium product (about 99% pure), an intermediate grade tantalum product (about 80% grade), a semi-refined cerium oxide (95% grade) and a mixed rare earths product (about 80% total rare earths). In 2000 the market for rare earths was almost completely under the control of China and the project was not followed up.

Niocan's pyrochlore concentrate at its Oka niobium property contains 52% Nb2O5 pentoxide of niobium, 0.28% Ta2O5 of pentoxide of tantalum and 13.2% of rare earths including 9% of Ce2O3 trioxide of cerium (Reference Analysis by Lakefield, reported by Jean-Claude Caron, Inc. Protec; October 14, 1998).

EU magnesium prices up

2010-03-13T03:18:54Z

Magnesium prices in Europe went up further today to reach $2,950/mt, market sources say. Lower price deals continued trading around $2,850/mt.

Magnesium 99.9% FOB China remained at $2650-2750/mt.

Avanco Resources starts drilling at its nickel project in Brazil

2010-03-13T03:11:14Z

Avanco Resources has commenced a 2,000m diamond drilling program at its 100% owned Touro Nickel Project in the Carajas Province of Brazil. The drilling programme will test the coincident nickel, platinum and Induced Polarisation (IP) anomalous trends across the Touro Sill.

HIGHLIGHTS:

* Drilling has commenced at the Touro Nickel Project in Carajas Province of Brazil.
* The Company has identified numerous high priority targets to be tested with a 2,000m diamond core drilling programme.
* Induced Polarisation (IP) anomalies have been identified over a four kilometre trend. These show strong chargeabilities typical of sulphide mineralisation.
* Soil geochemistry has identified a significant trend of anomalously high nickel and platinum associated with the IP anomalies.
* Previously reported drill hole, TSD-01, intersected 130 metres at 0.09% nickel and confirmed the existence of sulphides and significant widths of nickel mineralisation within the Touro differentiated sill. Importantly, TSD-01 was drilled outside the IP anomalies.
* The Company has recently announced a fully underwritten non renounceable entitlements issue to raise $5,112,324.
* Avanco is now in a strong position to: aggressively explore for nickel sulphide at its Touro Nickel Project, to develop the Rio Verde High Grade Copper Project and to pursue additional new growth opportunities in Brazil.

Commercial Metals Co predicts $130m loss in quarter

2010-03-13T03:03:52Z

Commercial Metals Co. said it expects to post a net loss of $1.50 to $1.60 a share for the fiscal second quarter ended Feb. 28.

"This second quarter has been particularly difficult due to a combination of continued weak end-use demand in the nonresidential construction markets, unusually harsh winter conditions in the U.S. and Europe, and rapidly rising ferrous scrap prices which have outpaced finished goods prices," said Chairman and Chief Executive Murray McClean.

The estimated loss from continuing operations is forecast to be in the range of $130 million to $140 million, and includes $60 million in after-tax, one-time charges.

Analysts polled by FactSet were expecting a net loss of $32.3 million, on average.

Gold futures down to $1,102/oz, silver down to $17.04/oz

2010-03-13T02:59:52Z

Gold futures finished lower on Friday and for the week, as a drop in U.S. consumer sentiment fueled concerns that China will further tighten access to money offset a weaker dollar.

Gold for April delivery finished down $6.50, or 0.6%, at $1,101.70 an ounce at the New York Mercantile Exchange. For the week, gold fell 2.4%.

The contract earlier had benefited from a weaker dollar and a jump in crude-oil prices after the International Energy Agency raised its global demand forecast and as U.S. retail sales rose more than expected in February.

On Thursday, gold rose 10 cents, playing off a weaker dollar that helped to offset fears China might continue tightening money flows to cool its economy.

On Friday, commodities first added to gains after a report that U.S. retail sales rose a better-than-expected 0.3% last month. But a survey from Reuters and the University of Michigan that showed sentiment among consumers unexpectedly fell in March reversed the trend. See more on the weaker-than-forecast Reuters/University of Michigan survey results.

On the equities side, the SPDR Gold Trust, the largest exchange traded fund backed by gold, was down 0.5%.

Platinum and palladium have tended to benefit more from a better economic outlook, according to George Gero, metals analyst at RBC Capital. The metals, which have industrial applications in autos and oil, stand to benefit.

Palladium for April gained $2.15, or 0.5%, to $463.15 an ounce. Platinum for the same month still fell $4.30, or 0.3%, to $1,608.40 an ounce.

Copper for May delivery rose 0.3 cent to $3.38 a pound, but silver for April fell 9 cents to $17.04 an ounce.

Both copper and silver rose on Thursday after reports that Chile, the world's largest copper producer, was hit by an aftershock to last month's earthquake, with tremors this time measured at magnitude 7.2.

Still, "copper's price reaction to the aftershocks in Chile was rather subdued," Gero said.

Usually, he said, such events tend to lead to bigger reactions if many investors have short positions - bets that the metal's price will fall.

"The fact that the rally was small and short-lived indicates to us that the shorter-term players are not really positioned as short at the moment," Gero said.

Tantalum global supply declining

2010-03-13T02:56:02Z

The global economic downturn has disrupted the supply/demand fundamentals in the tantalum market in a way that may prove very beneficial to junior miners operating in conflict-free zones.

Shrinking demand for electronics brought on by the 2008 recession led to a drop in tantalum capacitor demand, which in turn forced tantalum producers to cut back production. Australia-based Talison, the world's largest producer and responsible for about a third of total global production, ceased operations in 2008 followed by two other major producers after the global crisis made operations economically unviable. The closures lead to a 40% cut in total world tantalum production.

There are indications the tantalum supply may face shortfalls once demand picks up. Nearly 70% of mined tantalum is used in the electronics capacitor industry and presently fabricators are relying on stock drawdowns for supply, but those are dwindling. And a significant number of primary producers have cut their output.

The US Defense Logistics Agency's stockpile of tantalum is heavily depleted and now the secondary tantalum supplies the industry is now relying on -scrap and slag that use to account for about 30% of total tantalum supply- are said to be running short as well.

Roskill Information Services, a UK-based metals research consultancy firm, reports that even a modest recovery in tantalum demand in the next few years could place further pressure on available supplies and raise prices. Despite demand dropping by at least 40% in 2009 from 2008 levels, Roskill expects a recovery by 2012 and predicts a coming supply squeeze.

With the worldwide recession and the loss of major suppliers, tantalum processors have begun to turn to cheaper alternative sources like war-ravaged Congo where mine workers toil in slave-like conditions under the command of armed-groups, including members of the Congolese army, who use the proceeds from their illegal mining sales to fund weapons purchases.

Investigations by advocacy groups Global Witness and the Enough Project have reported extensively on the toll the bloody conflict and illegal mining operations are having on the civilian population of the eastern Congo. The atrocities include rape, murder, forced labour, mutilation, extortion, inhumane working conditions and child labour.

Now, concerned consumers, activists, politicians and organizations are pressuring end user electronic companies to establish transparent and conflict-free supply chains. Global Witness has also urged the Congolese government to remove the army from the mines and the mineral trade.

"For more than a decade now, the country's mineral wealth has provided an incentive and a cash base for the conflict to continue. Unless the government and international donors implement a comprehensive strategy which tackles once and for all the economic drivers of this conflict, the local population will continue to suffer and the country's future will continue to be blighted," said Global Witness campaigner Annie Dunnebacke, who recently spent a month in the region.

While major processors, capacitor fabricators and electronics companies claim the supply chain for tantalum is too complex to prevent materials mined in conflict zones within the DR Congo from entering their products, advocacy groups putting boots on the ground in the region have discovered otherwise. "Information about who controls which mine site is common knowledge in the trading towns of eastern Congo," says Dunnebacke. "Companies buying minerals from militarised areas have no excuse for claiming ignorance."

As US and international legislation against the conflict mineral trade and public pressure on electronics companies mounts, the market will no doubt shift focus to miners operating in conflict-free zones over the next few years; especially as demand for tantalum rebounds along with other commodities.

India's Nalco to produce 460,000 mt of aluminium in 2010-11 FY

2010-03-13T02:51:57Z

State-owned National Aluminium Co Ltd has set a target of producing 4.6 lakh tonnes of aluminium and 16.58 lakh tonnes of alumina in the 2010-11 financial year.

NALCO, India's largest producer and exporter of alumina and aluminium, has said this in a memorandum of understanding (MoU) it has signed with the central Ministry of Mines.

In the agreement signed by company chairman-cum-managing director A.K. Srivastava with Mines Secretary Santha Sheela Nair, NALCO has projected 100 per cent capacity untilisation of its aluminium smelter at Angul and its refinery at Damanjodi in Orissa.

The company has also projected to produce 7,715 million units of power at 85 per cent PLF (Plant load factor), from its 1,200 MW captive power plant at Angul.

Besides, the company has projected higher financial targets and early completion of its on-going second phase expansion projects, a company statement said Friday.

Among other things, the company has agreed to focus on completing the various targets of Utkal-E coal block for coal production by June 2012, Aluminium Park in Angul in joint venture with the Orissa industrial Infrastructure Development Corporation (IDCO).

The company has also agreed to complete the greenfield smelter abroad and development of recently allotted bauxite deposits in Andhra Pradesh for setting up a mine and alumina project at a cost of Rs.6000 crore.

Nyrstar increases bid for CBH Resources to $195m

2010-03-13T02:37:49Z

Nyrstar NV, a zinc producer from Belgium, has recently offered an improved takeover bid of 19.5 cents per share for the Australian miner CBH Resources. CBH Resources has also confirmed today it has received an improved takeover offer worth A$213.45 million (US$195 million) from Nyrstar. However, CBH has not decided yet whether to accept the offer or not.

Earlier in December 2009, Nyrstar had offered an A$148 million takeover bid of 13.5 cents for each CBH shares. But the board of CBH rejected the offer in favor of the proposed joint venture with Toho Zinc, its largest shareholder.

Also in its recent bid, the Belgium based zinc producer offered to pay A$750 per convertible note. That brings the total offer valued at A$290 million.

CBH Resources, which produces zinc, lead and silver in New South Wales and Western Australia, has appointed a committee of its directors to provide a preliminary response to Nyrstar early next week.

Earlier in the day, shares of CBH had been placed in a trading halt by the company, pending further details regarding a potential change of control transaction. And after releasing from the halt, the shares of the company jumped around 30% and closed at 18 cents.

Russia to set up a $3b free economic zone in India

2010-03-13T02:33:02Z

Russia may create a free economic zone worth $3 billion in India intended to involve investors from third countries, the deputy chief of Russia's federal property agency said in an interview with the Russian government daily.

The interview was published on Friday, amid Prime Minister Vladimir Putin's visit to India, which is expected to see the signing of around 15 deals worth more than $10 billion.

A joint titanium enterprise, which is being created on account of India's debt to Russia, is planned to become the basis for the project, Russia's first initiative of such kind, Yury Medvedev told Rossiyskaya Gazeta.

He said the project would test a scheme that allows for the discharge of debts to Russia by countries through investments in their economies beneficial for Russia.

Russia, which holds a 51% stake in the Titanium Products Private Ltd., intends to invest some $120 million in the project, he said.

"A concept to create and develop the free economic zone was worked out in Russia and stipulates the involvement of nine more enterprises, which can work in cooperation with the joint enterprise," he said, adding the main problem for the Titanium Products Private Ltd. was to gain a prerogative right for the lease of land.

"In the future, it will be possible to assign the joint enterprise the operating right for the development of the zone," Medvedev added.

Russian and Indian investors, as well as those from third countries, are welcome to join the project in future, he said.

Medvedev said Russia was also planning to invest $676 million in the charter capital of the Sistema Shyam telecommunication company, a joint venture project between Russia's major industrial and financial group, Sistema, which holds a 74% stake, and India's Shyam Group.

Indian ferro-chrome prices rise to $1.15/lb CIF China

2010-03-13T02:30:56Z

Market sources report that Indian ferro-chrome prices have gone up by a few cents to $1.05-1.15/lb CIF China for 58-60% Cr content material.

China's Hebei to acquire 80% stake in Shijiazhuang Iron & Steel

2010-03-13T02:24:03Z

Hebei Iron & Steel Group plans to purchase an 80% stake in Shijiazhuang Iron & Steel Co Ltd for RMB 1.9 billion, said Yan Shengke, board chairman of the latter firm.

Wang Yifang, chairman of Hebei Iron & Steel Group, said that the company will soon release the results of the acquisition.

Hebei Iron & Steel Co Ltd, which was formerly known as Tangshan Iron & Steel Co Ltd and is the listed subsidiary of Hebei Iron & Steel Group, is considering a group listing, Wang added.

Hebei Iron & Steel Group, which is headquartered in Shijiazhuang, Hebei Province and is one of the world's top 500 enterprises, for several years has had an average annual output of 38 million tons of steel.

Last year, Shijiazhuang Iron & Steel sold 1.84 million tons of steel and 1.75 million tons of rolled steel for RMB 6.68 billion in total, and its profits amounted to RMB 220 million.

Tellurium rises to $210/kg in China

2010-03-13T02:20:39Z

Tellurium ingot prices in China have risen to around Rmb1,440-1,460/kg, market sources report.

EU steelmakers says 90% iron ore price hike in China unacceptable

2010-03-13T02:15:41Z

The European steel industry has warned that an iron ore price rise of up to 90% will have a "huge impact" on the region's economic recovery.

The European Confederation of Iron and Steel Industries, (Eurofer), said it was outraged by reports that the major iron ore producers were seeking a rise of up to 90% in contract prices this year.

Eurofer said the industry was still reeling from the effects of the most serious financial and economic crisis since the 1930s.

"European governments should be aware of the implications for the wider economy if these price increases become reality," the industry body said.

"Increases of this magnitude will have a significant impact on steel prices and as such on the whole manufacturing and construction value chain and ultimately on the European consumer. This will reduce demand for many price-sensitive products and therefore slow economic recovery or even push economies back into recession."

Eurofer said the steel industry was increasingly concerned at the degree of concentration in the iron ore industry.

"It is striking in this respect that there is little variation in the level of price increases being talked about by the large producers which dominate the iron ore industry," the group said.

"The European steel industry has already indicated to the European competition authorities our concerns at the excessive pricing power now held by iron ore producers."

Speculation over the pricing talks has been in overdrive in the past week, with the latest reports suggesting that the global miners - BHP Billiton, Rio Tinto and Vale - have put talks with China on hold following a disagreement over price.

The halt in talks follows news this week that Brazil's Vale had proposed a price rise of more than 90% in talks with Japanese steelmakers.

Vale, the world's largest iron ore producer, was also said to have told its Chinese customers that it planned to drop the annual benchmark system in favour of quarterly agreements.

BHP has led the push to move away from the controversial benchmark system in favour of a quarterly pricing system aligned to market clearing prices.

The spot price is now around $138 a tonne, double last year's benchmark.

London-based ING forecast an 80% iron ore price rise in a report issued yesterday. ING said high spot prices set the level from which mining companies were likely to start negotiations.

"While there may be a speculative element to the current spot price, the spot market does reflect a price set by incremental demand," the analysts said.

Indian iron ore prices hit $142/mt CIF China

2010-03-13T02:11:21Z

Higher steel prices prompted steelmakers to buy iron ore again. Prices for 63.5% Fe Indian fines have shot up to $140-142/mt CIF China.

Pig iron prices in China rise to $445/mt

2010-03-13T02:07:29Z

Spot pig iron prices in northern China's Hebei province increased by 30-40 yuan ($4-6) over the week to 2,930-3,030 yuan per mt ($430-445/mt), on the back of improved demand from steel millls, market participants said.

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Vale withdraws from China iron ore price talks

2010-03-13T02:05:16Z

Brazilian miner VALE SA has quit the 2010 annual iron ore benchmark price talks with China, the National Business Daily reported Thursday, citing an unnamed industry insider in Hebei, a major steel making province in China. The source said Vale could not accept the low price proposed by Chinese negotiators.

However, industry analysts noted Vale's withdrawal could just be a negotiating strategy as Vale also withdrew from the annual talks with China in 2009.

Vale clearly stated its intention to move the benchmark price closer to the spot price, which means an about 80% increase over last year's benchmark level.

Silico-manganese prices in China down to $1,200/mt

2010-03-13T02:02:38Z

Chinese silico-manganese prices fell back more than 2% this week due to lacklustre demand from the steel sector.

Silico-manganese was trading at 8,100-8,300 yuan ($1,185-1,214) per tonne this week, down 200 yuan per tonne or 2.4% from last week.

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