INDUSTRY UPDATES on 11.10.2013

Coal India disinvestment only after Cabinet nod

Coal Minister, Sriprakash Jaiswal, on Friday said the Cabinet Committee on Economic Affairs (CCEA) would decide on the disinvestment of Coal India.

“If the Cabinet decides to sell shares, disinvestment would happen,” Jaiswal told media persons at the CII Clean Coal India 2013 conference.


However, the Minister said that the decision on buyback of shares or offering special dividend would be decided by Coal India board and the Government has no role to play.

Coal India shares are trading at Rs 292.90 down 0.37 per cent on the Bombay Stock Exchange at around 12.19 p.m. on Friday.

There has been ambiguity over the Government’s move to sell its stake in the public sector miner. As on September 30, Government owns 90 per cent stake in Coal India, while FIIs hold 5.51 per cent, DIIs have 2.34 per cent and remaining 2.15 per cent is with other shareholders.

The labour unions of Coal India have opposed the Centre’s move to dilute the Government’s stake in the miner.

“In September, coal production has increased 15.6 per cent, offtake by 9.2 per cent and coal supply to power sector by 9 per cent as compared to September, 2012,” said Jaiswal.

In the quarter of the current financial year, coal production has shown a growth of 9.6 per cent, coal dispatches grew 7.2 per cent and coal supplies to the power sector increases 7 per cent when compared to the similar months previous year.

“This has led to a growth of 7 per cent in coal based power generation,” the Coal Minister reiterated.

Selling pressure dissolves sugar

Sugar prices dropped by Rs 5-10 a quintal for fair quality in Vashi market on Thursday on higher selling pressure. Maharashtra’s mills sold the commodity at Rs 10-20 lower on eased local demand and absence of upcountry buying. Naka rates were unchanged for fourth consecutive day on routine activities.

Domestic futures prices were steady with thin volatility. More than sufficient supply and stock at market level kept the morale weak, said sources.

An observer said that in spot prices for fair quality declined by Rs 5-10 on need-based volume.

Maharashtra’s mills continued their selling in local market as neighbouring States such as Gujarat, Rajasthan, Madhya Pradesh and eastern States have turned to Uttar Pradesh and Karnataka due to favourable price parity considering freight and other costs. Arrivals at Vashi market were 62-63 truck loads (of 100 bags each) while local dispatches declined to 59-60 truck loads.

On Wednesday, 15-16 mills sold about 48,000-50,000 bags at Rs 2,740-2,830 (Rs 2,750-2,850) for S-grade and Rs 2,880-2,980 (Rs 2,900-3,000) for M-grade.

Rice market seen ruling tight

Sharbati and PR-14 varieties may lose their current levels while all the other aromatic and non-basmati rice varieties may continue to rule around current levels for the next few days, said trade experts.

With the trading being lukewarm, prices of aromatic and non-basmati varieties ruled almost unchanged on Thursday.

Amit Chandna, proprietor of Hanuman Rice Trading Company, told Business Line that only need-based buying is taking place in the market and the situation of the market was anticipated.

New rice variety, Pusa-1509 (sela) entered the market this week with a small consignment and quoted at Rs 7,000 a quintal.

Arrival of new rice is putting some pressure on the market but it is unlikely to see any major fall in prices currently, he added. Market may continue to rule in a tight range with marginal fluctuations even in the coming days, said Amit Chandna.

In the physical market, Pusa-1121 (steam) sold at Rs 7,800-7,900 , while Pusa-1121 (sela) quoted at Rs 7,200-7,300 .

Pure Basmati (Raw) quoted at Rs 11,000. Duplicate basmati (steam) sold at Rs 6,300-6,400. For the brokens of Pusa-1121, Dubar quoted at Rs 3,700, Tibar sold at Rs 4,400 while Mongra was at Rs 3,100 .

In the non-basmati section, Sharbati (Steam) sold at Rs 4,500 while Sharbati (Sela) quoted at Rs 4,200-4,250. Permal (raw) sold at Rs 2,350-2,400 , Permal (sela) went for Rs 2,300 , PR-11 (sela) sold at Rs 2,900 while PR-11 (Raw) quoted at Rs 2,700-2,750. PR14 (steam) sold at Rs 2,850 .

WSA awards ArcelorMittal for health and safety excellence

The World Steel Association has recognised ArcelorMittal's sites in Venezuela and Mexico for excellence in their health and safety programmes.

At the association's annual conference in Sao Paulo, Brazil, Unicon ArcelorMittal's Venezuela operations which are part of the tubular products division - and the company's Lazaro Cárdenas facility in Mexico, were both commended with separate awards for specific health and safety initiatives and overall progress in workplace safety.

Management committee member Robrecht Himpe received the award on behalf of the company.

The programmes demonstrated a commitment to health and safety and fulfilled three key criteria

1. Positively embracing the worldsteel safety and health principles

2. Demonstrating a positive impact upon safety metrics

3. Being easily applicable to other member companies

ArcelorMittal Unicon joined ArcelorMittal's group wide 'Journey to Zero' campaign in 2008, taking a systematic approach with the company's leaders demonstrating their commitment to the program. Three different types of barriers to achieving the goal of zero injuries were identified: technical, organisational and behavioral. Several specific initiatives have been implemented to address the three barriers with more to come. The initiatives have shown major results in the five years since; our Venezuelan operations have reduced their lost time injury frequency rate (LTIFR) by an impressive 90%.

In Mexico, our Lazaro Cárdenas site implemented a safety management program in 2009, specifically designed for contractors. The program has been deployed across six main areas: mandatory safety training; access control; operational control risk; contractor safety supervising; golden ACES or trained safety experts overseeing work during major shutdowns, and safety evaluation performance. There have been zero fatalities at the site in three years and the LTIFR has reduced by 80%.

Commenting on the award, Mr Frank Haers group head of health and safety said that "It is a great result that two ArcelorMittal sites have made such great progress that they have won a Health and Safety Excellence Recognition Award from Worldsteel this year. Both awards are the result of a well-managed, multi year approach to bring safety to the shop floor, and ensuring everyone is engaged and taking part in the program."

Sinosteel and Hansteel Group inks strategic cooperation agreement

On September 27, the signing ceremony of Sinosteel and Hansteel Group Strategic Cooperation Agreement and for cooperation in iron ore and steel products business was held in Sinosteel headquarters.

As per the Agreement, both parties will further strengthen full cooperation in iron ore, steel, coke, iron alloy, fireproofing, lump-sum contracting and equipment spare parts and finance based on existing business, give play to respective advantages, and realize mutual benefit and win-win result. Meanwhile, they will actively explore the junction in other business scope, and further promote deepening cooperation in more lines of business

RINL September revenue up by 34%

Business Standard reported that buoyed by a whopping 63% volume growth, Rashtriya Ispat Nigam's sales revenue rose by 34% to INR 1,222 crore in September.

A source in the company said that “RINL, the Vizag based PSU steel maker, had clocked INR 913 crore sales revenue in the same month last year.”

The sales volume of the company rose to 2.73 lakh tonne from 1.68 lakh tonne in September, 2012.

Sales of valued added steel, which fetches better price, stood at 1.77 lakh tonne compared to 1.37 lakh tonne a year earlier.

Production of saleable steel increased by 23% to 2.46 lakh tonne against 2 lakh tonne a year ago. It produced 3.22 lakh tonne of hot metal during the month.

For the April to September period of current fiscal, sales of the company stood at 12.9 lakh tonne compared to 11 lakh tonne during the same period last fiscal.

RINL produced 14.6 lakh tonne saleable steel during the 6 month period, a growth of 11%. Hot metal production, however, grew by just 3% to 19.3 lakh tonne.

Sales revenue of the company during the April to September period rose marginally to INR 5,798 crore over the same period last fiscal.

Indian steel demand may touch 74 million tonne in 2013

Economic Times reported that steel demand in India is expected to grow by 3.4% in 2013, slightly higher than the rate of 3.1% rate at which global use of steel is estimated to grow to touch 1.47 billion tonne during the year.

In terms of volume, steel demand in India is expected to touch 74 million tonne in 2013. This follows a 2.6% growth in 2012 during which high inflation and structural problems restrained the use of steel.

Next year, however, demand is expected to grow by 5.6% in India, helped by accelerated attempts to implement structural reforms. These are part of the predictions made by leading international steel body, World Steel Association in its Short Range Outlook for 2013 and 2014.

Next year, global steel demand is likely to grow to 3.3%, signalling a slow but steady recovery in steel demand worldwide . The forecast said that world steel demand will touch 1.52 billion tonne in 2014. WSA, which represents 170 steel producers globally said, steel demand in 2013, is forecasted to grow by 6% in China.

Thus, despite growing by only 0.7% in the rest of the world, total global steel demand is forecast to grow by 3.1% during 2013.

Mr Hans Jurgen Kerkhoff, chairman of WSA Economics Committee said that "The key risks in the global economy, the eurozone crisis and a hard landing for the Chinese economy have continued to stabilize in last 6 months since April. The correction in the eurozone has been more severe than forecast but the improvement seen recently is now expected to continue for the rest of 2013."

In 2014, WSA said that it expects to see continued recovery in global steel demand with the developed economies overall returning to positive growth. Apparent steel use in China is expected to grow by 6% in 2013 to 699.7 mt following a 2.9% increase in 2012.

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