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Tuesday, September 25, 2018

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Gulf Countries Finished Steel Demand Forecast (2017-2020)


Middle East Steel News

UAE: Emirates Steel appoints BNP Paribas to coordinate USD 400 mln loan
UAE: Engineering Contracting Company receives BIM certification
Iran: Steel exports grew by 27 pct YoY in the first five months of Iranian fiscal year - association
Saudi Arabia: Moda sets bid deadline for naval academy project
Bahrain: Ministry invites bids for highway project

Global Steel News

China: Iron ore and rebar futures slide as US-China trade war escalates
China: Baowu Steel in talks to take over Magang Group
China: Jianbang Group to expand rebar production capacity
India: Debt-ridden Electrosteel board approves delisting
India: Vizag Steel slag yard collapses; operations remain unaffected
Japan: Kyoei Steel keeps rebar prices unchanged for October
Russia: MMK adopts artificial intelligence to enhance efficiency in scrap procurement
Russia: Severstal to replace compressors at its Cherepovets plant
United States of America: Gerdau Special Steel to revamp its electrical steel plant in Michigan


New (Renewed) Steel Companies on MEsteel
Company Country Steel tons handled per year (kt) Brief Description
SEVEN SEAS STEEL INDUSTRIES LLC U.A.E. 100-500 Stockist ,Cutting & Bending of Steel Reinforcement Bars.

Middle East Steel News

Emirates Steel appoints BNP Paribas to coordinate USD 400 mln loan

Emirates Steel, the largest steel producer in the United Arab Emirates, has hired BNP Paribas to coordinate a USD 400 mln loan financing, sources familiar with the matter said.

The company, owned by Abu Dhabi's Senaat, a state-owned investor in the emirate's industrial sector, will use the loan proceeds to refinance part of its existing debt.

Some companies in the Gulf are refinancing their debt obligations ahead of maturity, or adding new leverage to their balance sheets, to avoid having to pay higher debt costs at a later stage due to expected increases in global interest rates.

Emirates Steel has USD 1.3 bln in outstanding credit facilities it raised in 2014 which are due in 2022.

The USD 400 mln loan, which will be completed before the end of October, will be sharia-compliant, said one source close to the matter, adding other banks expected to participate in the financing included First Abu Dhabi Bank, Abu Dhabi Islamic Bank and Union National Bank.

Senaat, the parent company of Emirates Steel, is also looking at a new financing. Sources told Reuters last year the company had approached banks for a potential debut U.S. dollar sukuk sale.

The sukuk sale is still being considered and the deal will be tied to the USD 400 mln loan for Emirates Steel, said the source close to the matter. "The two deals go hand in hand, it is part of an overall refinancing exercise," the source said, without elaborating.

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Engineering Contracting Company receives BIM certification

Engineering Contracting Company (ECC), one of the UAE's market leaders in providing unique design and build solutions, said it has become the first locally-grown company to receive certification in BIM (building information modelling) technology from BSI Assurance UK.

ECC said the milestone BIM Kitemark certification comes following the company's successful demonstration of its exceptional international standards in utilising practices and systems.

BIM is an intelligent 3D model-based platform that provides users with insights or tools for architecture, engineering and construction. It generates greater collaborative potential between the architects, designers and contractors by collating all aspects of the development into one consolidated workstream.

While the processes of BIM are not mandatory for current tenders, ECC developed an organic BIM department internally in anticipation of new industry trends and reinforcing their status as a truly unique organisation within the market, said the company in its statement.

The technology behind BIM is becoming an attractive solution in the market due to its success across major governmental entities such as Emaar, Damac, Dubai Properties and the Roads and Transport Authority. Due to the utilisation of BIM by these entities the market has observed a shift towards more widespread implementation of its systems, it added. 

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Steel exports grew by 27 pct YoY in the first five months of Iranian fiscal year - association

Semi-finished steel made up 3.02 mln tons or more than 73pct of the total export volume, up 12pct YoY.

Slab had the lion's share of semis exports with an aggregate of 1.6 mln tons to mark an 11pct YoY growth. Billet and bloom followed with 1.41 mln tons, up 13pct YoY.

Exports of finished steel products surged 109pct YoY to reach 1.10 mln tons.

Rebar was the main exported finished product with 507,000 tons, registering a 92.05pct jump YoY.

Following rebar were hot-rolled coil with 379,000 tons, up 159.59pct YoY; beams with 92,000 tons, up 26pct YoY; coated coil with 62,000 tons, up 182pct YoY; "other steel products" with 57,000 tons, up 171pct YoY; and cold-rolled coil with 11,000 tons, up 83pct YoY.

Exports of direct-reduced iron increased 4pct YoY to 350,000 tons.

Iran surpassed its 8-mln-ton export target in the last fiscal year (March 2017-18) by shipping 8.49 mln tons of steel, up 53.4pct YoY.

Iranian steelmakers have targeted 9.5 mln tons for this year (March 2018-19) and 14 mln tons by the end of the 2020-21 fiscal year.

Imports of almost all steel products were down during the period compared with last year's corresponding period.

The ISPA report shows that steel imports stood at a total of 495,000 tons during the five months to August 22, down 43.04pct YoY.

Semis imports made up 23,000 tons of the total figure, up 283pct. Billet and bloom imports went up by 340pct to 22,000 tons, as slab remained unchanged at 1,000 tons.

Imports of finished steel dropped 45pct YoY to 472,000 tons. The imports mostly included CRC with 159,000 tons, down 38pct; HRC with 130,000 tons, down 66.84pct; coated coil with 126,000 tons, down 9pct; "other steel products" with 22,000 tons, down 21pct; rebar with 20,000 tons, down 39.39pct; and beams with 15,000 tons, down 6pct.

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Moda sets bid deadline for naval academy project
Saudi Arabia

Saudi Arabia's Defence and Aviation Ministry (Moda) expects to receive bids by 15 October for the marine infrastructure and buildings contract for the proposed King Fahd Naval Academy in Mecca's Al-Qadima village.

The project has an estimated budget of USD 1bln and will be developed over 4.3 mln square metres of land.

The contract covers dredging and reclamation works, the construction of a quay wall, roads, sewage and irrigation networks.

The contract also covers the construction of several buildings.

Marine contractors such as Saudi Archirodon, local firm Huta Marine and China Harbour Engineering Company (Chec), in addition to local contractors such as Nesma & Partners, Al-Rashid Trading & Contracting, Haif Company and Al-Kifah are expected to bid for the contract.

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Ministry invites bids for highway project

Bahrain has invited tenders from leading construction firms for a major project linked to the improvement of 1.4-km-long Zallaq Highway running from Gulf of Bahrain Avenue to Jaza'air Beach Avenue, Sofitel Hotel.

The scope of work in the Zallaq Highway Reconstruction project includes installation of traffic signals at Zaid Bin Omera Highway and Jaza'air Beach Avenue intersections besides asphalt pavement construction, paving of roads and development of parking spaces, said a statement from Ministry of Works, Municipalities Affairs and Urban Planning (Works Affairs).

The project will also see setting up of road signs and markings, street lighting besides implementation of storm drainage systems, it stated.

The last date for submitting bids is October 3, the statement added.

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Global Steel News

Iron ore and rebar futures slide as US-China trade war escalates

Chinese steel and iron ore futures dropped to one-week lows on Tuesday as investors cut positions after returning from a holiday weekend with the United States and China locked in an intensifying trade war.

Washington and Beijing imposed fresh tariffs on each other's goods on Monday as the world's biggest economies showed no signs of backing down from an increasingly bitter trade dispute that is expected to hit global economic growth.

The most actively traded January rebar on the Shanghai Futures Exchange closed down 1.8 pct at 4,060 yuan (USD 592) a ton, not far from the session's low of 4,052 yuan, its weakest since Sept. 14.

January iron ore on the Dalian Commodity Exchange dropped 1 pct to settle at 497 yuan per ton. Earlier in the session, the contract touched 494 yuan, its lowest since Sept. 13.

Chinese markets were shut on Monday for a public holiday. China has said it was willing to restart trade negotiations with the United States only if the talks are "based on mutual respect and equality," the official Xinhua news agency said, citing a white paper on the bilateral trade dispute published by China's State Council.

"The sharp criticism suggests that China might prefer to wait out the current U.S. administration, rather than embarking on potentially futile negotiations," Mizuho Bank said in a note to clients.

"Given these developments, it is increasingly likely that both sides will not resume negotiations for some time, at least until there is a noticeable shift in the political mood on either side."

Liu Zhenjiang, president, China Iron and Steel Association, said last week he expects China's steel demand to remain firm, supported by infrastructure demand, despite the escalating Sino-U.S. trade dispute, adding that any efforts by Washington to "sabotage" the Chinese economy will not succeed.

China's upcoming industrial production curbs on its northern region for the second winter in a row are also expected to keep steel supply tight and support prices, traders said.

Coking coal futures slipped 0.2 pct to 1,277.50 yuan a ton and coke slid 1.4 pct to 2,316 yuan.

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Baowu Steel in talks to take over Magang Group

Top Chinese steelmaker China Baowu Steel Group is in talks to take over rival Magang Group, three sources familiar with the discussions said, a deal that would help entrench the nation's position as a serious competitor in global steel markets.

The mega-marriage would sharply narrow Baowu's gap with top-ranked international producer ArcelorMittal, and would be a major step in Beijing's drive to consolidate its bloated steel industry. Baowu and Magang's combined steel output last year surpassed total U.S. production.

It would mark the next big takeover in the country's steel sector after Baowu, the world's No. 2 steelmaker, was created by Baosteel Group's 2016 acquisition of Wuhan Iron and Steel that valued the latter at about 3 bln yuan (USD 438 mln).

The talks are yet to move beyond a preliminary stage, said a source with direct knowledge of the matter, declining to be identified as details have not been made public. The source did not indicate possible pricing.

"(A deal) would be very reasonable and normal. After all, the two companies are geographically close," the source said.

"It would be easy to collaborate and their products are complementary."

Magang is headquartered in Maanshan city in China's eastern Anhui province, about four hours' drive from Shanghai, where Baowu Group is based.

Baowu mainly churns out flat steel products used in manufacturing, while Magang's output is split between flat and long steel products, the latter used in construction.

Baowu in 2017 produced 65.39 mln tons of steel and Magang made 19.71 mln tons. Their combined output of 85.1 mln tons would be just 11.9 mln tons below ArcelorMittal's production last year and compares to the U.S. total of 81.6 mln tons.

It would also put Baowu closer to its plan to expand its capacity to 100 mln tons by 2021 from around 70 mln tons currently.

"The two companies are in talks for consolidation," said a high-level official overseeing China's steel industry, who spoke on condition of anonymity.

"I think it's a good thing for both companies - that's two giants combining. They haven't reported it to the authorities yet."

Baowu had total assets worth 745.6 bln yuan at the end of 2017, while Magang's were valued at 72.2 bln yuan.

Both producers sell the bulk of their output at home, although Baoshan Iron & Steel, Baowu's listed unit, exported 3.8 mln tons last year, about 8 pct of its total output. China is the world's top steel exporter.

The takeover could take a different route than the Baosteel-Wuhan union, two of the sources said. Baosteel bought Wuhan Steel at 2.56 yuan per share by issuing new shares at 4.60 yuan per share, valuing Wuhan at around 3 bln yuan.

While both Baosteel and Wuhan are state-owned enterprises, Magang is controlled by the local government of Anhui province.

"So if there is a merger, they might adopt a different strategy than the Baowu merger," said the first source, without giving further details.

Last week, Baowu, Magang, another major steelmaker and a state-backed asset management company created an asset management joint venture with total investment of 2 bln yuan, aiming to offer financial support for consolidation in the steel sector.

China aims to put 60 pct of its national steel capacity in the hands of its top 10 producers by 2020, up from a third currently.

Apart from linking its big steel companies, China has been shutting small, polluting and inefficient mills to address a years-long steel glut.

Peter Poppinga, executive director at top iron ore producer Vale, told an industry conference last week that China's total steel capacity is forecast to drop to 980 mln tons by 2018-2020 from 1.1 bln tons in 2015.

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Jianbang Group to expand rebar production capacity

Danieli will supply an innovative Mi.Da. (Micromill Danieli) plant to Shanxi Tongcai Industry (Jianbang Group), in Houma City, Shanxi province.

The plant, conceived for future expansion to double capacity, will initially produce 600,000 tons per year of quality rebar from 12 to 32 mm dia in endless mode, with one casting strand that has a productivity of 90 tph.

Scope of supply consists of mechanical and electrical equipment along with Danieli Automation process control system.

The high-speed caster of the new Endless Casting Rolling line will be fed with liquid steel coming from an existing BF-BOF shop.

According to Chinese regulations for structural steel, i.e. martensitic-free structure products with higher ductility to better perform in seismic areas, the mill will produce by using Ultra Fine Grain UFG technology performing "low temperature surface rolling".

Danieli China will execute the project with mechanical equipment produced at Changshu workshops and core equipment like patented FCC oscillating unit and power mould from specialized headquarters workshop in Italy.

Mi.Da. plants for bar production feature Danieli patented Direct Rolling and Bundling (DRB).

The first bundle is expected to be produced within last quarter 2019.

Janbang Group produces more than 10 mln tons per annum of long products. Over the years Danieli has supplied Janbang Group with two wire rod mills and a VOD.

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Debt-ridden Electrosteel board approves delisting

The board of Electrosteel Steels approved the proposal to delist the company, according to a regulatory filing.

The delisting proposal was taken on record and approved, in the meeting of the board of directors held today, the company said in a BSE filing.

"The company had received a letter from Vedanta Star Ltd (acquirer), wherein the said acquirer has expressed its intention to acquire up to 1,961,67,342 equity shares of the company representing approximately 10 pct of the paid up share capital of the company held by the shareholders of the company and accordingly delist the equity shares of the company from the stock exchanges," it said.

Earlier, metals and mining giant Vedanta had acquired management control of debt-laden Electrosteel Steels.

In March, Vedanta was declared as successful resolution applicant by the committee of creditors (CoC) for ESL under the Corporate Insolvency Resolution Process of the Insolvency and Bankruptcy Code, 2016.

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Vizag Steel slag yard collapses; operations remain unaffected

The slag yard of the Steel Melt Shop-I of Visakhapatnam Steel Plant collapsed in the early hours of Monday. No casualties were reported when pit-1 and 2 crashed. The reason for the accident was not immediately known. The slag yard was built at the time of commissioning of the steel plant. Production remained unaffected, an official said.

An inquiry has been ordered to find out the cause of the collapse and suggest remedial measures. The slag generated during steel-making is supplied to cement and brick units.

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Kyoei Steel keeps rebar prices unchanged for October

Japan's largest rebar producer Kyoei Steel said it will keep rebar prices for October unchanged from September as it waits for the previous month's hike to be absorbed by the market.

Osaka-based Kyoei does not release its list prices. Current market prices for base-sized rebar in Osaka are around Yen 66,000-67,000 (USD 587-596) per ton and in Tokyo are around Yen 73,000-74,000 per ton, both unchanged from a month ago, industry sources said.

Kyoei in a statement said it would wait for the market to fully absorb its Yen 2,000 per ton hike for September before adjusting prices further, but noted another rise may be on the cards in coming months.

A Tokyo-based construction steel trader said scrap prices have been high this year and other input costs such as for electrode and delivery fees were also increasing, spurring Japanese mini-mills to mull further price rises.

"It is autumn demand season, so we expect supply-demand will be tighter and distributors will be able to take stronger stances on their prices, we believe rebar market prices will increase," he said.

Japan's Ministry of Land, Infrastructure, Transport and Tourism has forecast Japan's small bar demand from the construction sector at 620,000 tons in October, down 1.9pct on year but up 8.8pct from September.

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MMK adopts artificial intelligence to enhance efficiency in scrap procurement

Magnitogorsk Iron and Steel Works (MMK) Group has developed its first programme-controlled robot capable of executing the functions of an employee working on a computer.

The robot was created by MMK Infoservice's (part of MMK Group) Centre for RPA and Innovation based on innovative RPA (Robotic Process Automation) technology.

The robot, which has already been commissioned, was developed to promote efficient cooperation between MMK's commercial department and suppliers of metal scrap. It processes incoming emails from suppliers, searches Russian Railways databases to check the status of freight cars being dispatched to MMK, updates the commercial department on the results of these checks and drafts reports about specialised services at MMK. The programme carries out these operations quickly and successfully, avoiding problems associated with human error.

The key task for MMK Infoservice's Centre for RPA and Innovation is to design and launch programme-controlled robots capable of performing routine business operations. This will give MMK's specialists more time to solve complex tasks requiring creativity and expertise.

One of the Centre's priorities is to further increase the efficiency of MMK by adopting programme-controlled robots and engaging employees in robotisation. Global experience in the robotisation of business processes using RPA technology has demonstrated its effectiveness in the digital transformation of businesses, which is the basis of the Industry 4.0 concept, a key area of MMK's strategic development.

In order to ensure large-scale use of RPA technology, in September 2018, together with PwC, MMK Group launched a project aimed at assessing the mill's business processes.

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Severstal to replace compressors at its Cherepovets plant

PAO Severstal, one of the world's largest vertically integrated steel and mining companies, has begun commissioning works a 1bln rouble investment project to replace compressors at the Cherepovets metallurgical plant (CHerMK).

The compressor units will be fully commissioned by the end of September 2018. The investment project was launched last October.

The compressor units were supplied by South Korea's Hanwha Techwin. Three main compressors which had been commissioned in the 1960s were replaced as part of the project. Outdated equipment was replaced with Samsung Air Compressor SE-110A, compressor units, each with production capacity of 2000m3/min and pressure of 6kgf/cm2, which were supplied and installed by the manufacturer.

To date, the main equipment supplier has completed the installation of compressors, checked and adjusted electrical signals and automatic valves, tuned the PID controller, capacity regulator and anti-surge protection, and checked automatic loading/unloading and response times. We have also invested in upgrading the cooling systems and power compressors. The equipment is currently being trialed.

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Gerdau Special Steel to revamp its electrical steel plant in Michigan
United States of America

Primetals Technologies has received an order from Gerdau Special Steel North America to modernize its electric steel plant in Monroe, Michigan, USA.

The project involves modernizing the existing electric arc furnace. The electric steel plant will also be equipped with a new twin ladle furnace and a new material handling system. The aim is to increase the plant's annual production capacity by 160,000 tons of rolled end products. End-to-end automation and the use of LiquiRob robot systems will increase productivity and reliability, optimize workflows in the steel works, and reduce operating costs. At the same time, robot systems will make work safer. The ladle furnace and material handling system are scheduled to come into operation at the end of 2019, the modernized electric arc furnace in the middle of 2020.

Gerdau Special Steel North America is a leading manufacturer of special bars steels, which are mainly used in the automotive industry. The order awarded to Primetals Technologies is part of an investment package totaling around USD 80 mln.

Primetals Technologies will be responsible for the engineering and supplying the process equipment for the electric arc furnace, the 110-ton twin ladle furnace, the material handling system and the structural steel work, and will also supervise the construction and commissioning of all the installations.

The scope of delivery also includes the associated electrical installations and automation, the power supply, including transformers, and the complete, end-to-end process automation. Three LiquiRob systems will handle potentially dangerous tasks, such as taking temperatures and samples. Solutions such as the automatic sand refilling, a weighing system and the automated tap hole manipulator will optimize operation of the electric arc furnace.

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Currency Converter

Country USD EURO
EU 0.85 -
USA - 1.1
China 6.85 8
Egypt 17.89 21
Iran 42,000 49,374.60
Pakistan 123.1 144.8
Saudi 3.74 4.40
Turkey 6.20 7.29
UAE 3.67 4.31

Metal Prices 24-Sep-18

Product Cash 3 Mons.
Nickel 12.970 13.075
Tin 18.980 18.900
Zinc 2.530 2.526
Source: LME.co.uk

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