MEsteel.com Feb 2005 - Newsletter

" Middle East Metal And Metallurgy Exhibition 2005 "

Dubai, UAE, 27 - 29 March 2005

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which will bring together the major players in the Middle East Steel Industry

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In MEsteel's February 2005 News Letter:

- Steel News In The Middle East.
- MEsteel : New Members
- Steel Figures for January  2005
- Steel Market Overview
- International and M.E. Steel Market & Prices
- Steel Events - Discounts for MEsteel members
- MEsteel, Your Most Efficient Presence on the Internet
 

Steel News In The Middle East

Qatar: Kobe Steel wins $267m Qatar plant order

UAE: Dubai Municipality opens tenders for first phase of Light Rail project

UAE: EVERSENDAI awarded structural steel sub-contract for Rose Tower project in Dubai

Syria: Joudco exports Reinforcing Steel Bars

Egypt: Ezz-Dikheila produces over 4 million tons in 2004

Egypt: Egyptian Iron and Steel Company exports 202 kt in 2004

Qatar: $12.8bn Qatargas II foundation stone laid

Iran: Ardebil railroad construction agreement to conclude soon

Pakistan: Pakistan Steel expansion disallowed

Iran: New steel plant to be built in Ahvaz

UAE: UAE and Oman to build $2 billion smelter

UAE: Dubai Dry Docks' Safina wins $14m European deal to build 4 tankers

Iran: Essar Steel exploring opportunities to set up steel plant in Iran

Iran: Essar, Tata, RPG planning mega projects in Iran

Turkey: ERENCO calls for tenders for ISDEMIRs Coke Dry Quenching System project

Egypt: Ezz Steel halves losses

UAE: QASCO Dubai Steel FZE received ISO 9001 – 2000 Certification

Iran: Iran's annual steel output to hit 28m tons by 2010

UAE: Mahindra & Mahindra opens Electrical Steel Service Centre in Sharjah

Saudi Arabia: Secondary metallurgy station started up at Hadeed

Cyprus: New copper and brass Slitting line for East Point Holdings Ltd. of Cyprus

Egypt: Arctic API X70 grade steel slabs and coils rolled at Ezz

Iran: Welspun bags 69.000 t coated steel tube order from NIGC

Turkey: ERENCO - Tenders for various ERDEMIRs Plate Mill Projects

Iran: 550,000-tpy bar and section mill starts operation at Insig

UAE: Steel fabrication factory to be built at Techno Park in Dubai

Oman: US and Canadian companies in race for Sohar Alu smelter EPCM

Syria: Joudco exports its rebars to Lebanon, Greece and Cyprus

UAE: EISF awarded with UK Cares Product and Management Certification

UAE: Emirates Iron and Steel Factory doubled annual capacity

Iran: Isfahan Steel Mill production hits 1.80 KT

Iran: Markazi Iron Ore Company’s output to hit 7.2m tons

UAE: Qasco Dubai plans to boost production

Iran: Iran, China to build North Coke Factory in Savadkuh

Saudi Arabia: Saudis plan 950 km railway line between Riyadh and Red Sea port of Jeddah

Iran: Wide steel sheet to be produced in Khuzestan Province

Pakistan: Crisis in ship breaking industry may bring down steel scrap production

Iran: Azar Refractories wins Mobarakeh tender for dolomite factory

Iran: Kosar plant to produce about 550,000 tons of iron bars annually

UAE: J. Ray McDermott gets turnkey work on RasGas offshore expansion project

Saudi Arabia: North-south rail project to be ready by mid-2006

Iran: Iran, Russia, Azerbaijan to discuss railroad connection

Turkey: Year 2004 brought awards, achievements, and broken records for Erdemir

Jordan: Jordan Steel pretax profits up by 25%

Iran: Iran’s iron ore output to touch 3.2m tons

UAE: Gulf Piping wins $18m Russian steel fabrication deal

UAE: ADPICO Steel tube mill eyes North American marketplace

Pakistan: Pakistan Steel expansion and privatization in confusion

Saudi Arabia: Saudi seeks investors in SR10b rail project

Turkey: Steel tycoon Lakshmi Mittal confirms interest in buying stake in Turkeys Erdemir

Turkey: Eregli Iron & Steel mills set new steel production records.
 

Full stories + many more Middle East steel articles on MEsteel news

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60 New MEsteel Members

Use MEsteel to Expand your Business!

60 new steel related companies, joined MEsteel in January 2005,
totaling 2.700 active MEsteel members to do business with.

See what each company does, buys and sells,
and contact the ones of interest to you in 1 click!

Bahrain
ALMOAYED GROUP WLL

Egypt
AMERYA METAL INDUSTRIES & BAGGING
BALDWIN ENGINEERING
BANCOMAR
DELTA TRADING IMPORT & EXPORT
INDUSTRIAL ENGINEERING CO. FOR CONSTRUCTION & CONSTRUCTION (ICON)

India
ALLIED POLES INDIA LTD.

Iran
ALBORZ STEEL INDUSTRIES CO.
OTAD SANAT NOVIN
PIPEGOSTAR CO.
PNA
QRPCO
TETA

Jordan
THE CENTRAL INDUSTRIAL EQUIPMENT CO

Kuwait
AL SAMOOD PETROLEUM SUPPLIES COMPANY W.L.L.
AL-KHALID DEWATERING & SHORING CO.

Malta
ELECTRICAL & MECHANICAL MANUFACTURERS LTD

Oman
OMAN INDUSTRIAL EQUIPMENT & PLANT

Pakistan
AL-IMRAN ENTERPRISES
CHEMSTEEL INTERNATIONAL
DOST MOVERS
GENERAL TECH CORPORATION (PAKISTAN BRANCH)
GILLANI ENTERPRISES
NOOR CORPORATION LIMITED
R & W TRADING CO
SAF
SHAHBAZ AND COMPANY
SIMCON INTERNATIONAL
STEEL MARKETING

Saudi Arabia
AL-RAKAYAN TRADING CO LTD
ARABIAN PIPES CO.
BASHIR ALHALEES CORP
FOWZAN H. AL-MAAREK EST.
GULF GLORY TRADING & INDUSTRIAL SERVICES

Sudan
MAKKAWI CARS & LORRIES SPRING CO. LTD
RADAH FOR CONTRACTING&INVESTMENT COMPANY

Turkey
AA PREFI PREFABRICATED BUILDINGS
CANDEMIR MAKINA
DADAYLILAR SHIPPING
GEDIK WELDING
MAFEKS
PEYKANDISTIC
SISTEM TEKNIK

U.A.E.
AL ASHAB GENERAL TRADING L.L.C
AL FAROOQ SCRAP TRD.
AL MUQARRAM USED METAL & MACHINERY TR CO LLC
BEECO LLC
CROWN CAN INDUSTRY
DANIELI & C.
EQUINOX TRADING LLC
FORBES MARSHALL P. LTD
FRIENDLINE GENERAL TRADING L.L.C.
GLOBAL STEEL FZCO
HUMAID AL MATROOSHI GEN. TRADING (LLC)
SALARY TRADING COMPANY
TRANSWORLD GROUP OF COMPANIES
VIJRAH EXIM FZCO
VIMPEX EXPORT LIMITED

United States
EDMAR MANUFACTURING

Vietnam
TRUNG THU COM.,LTD

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Steel Figures for January  2005

World crude steel production stands at 89.8 million metric tonnes (mmt) for the first month of 2005. This is 8.5% higher than for January 2004.

China again shows strong growth with production of 25.1 mmt in January.
This is 24.3% higher than for the first month of 2004.
Excluding China, worldwide production of crude steel grew by 3.4% compared to January 2004.

Production in the 25 European Union countries stands at 16.3 mmt in January, a rise of 2.3% on the same month last year.

Crude steel production rose by 4.0% in Russia to reach 5.5 mmt in January.
Production in the CIS countries stands at 9.5 mmt for January, a rise of 2.3% compared to the same month of 2004.

In the North America region, both Mexico and the United States showed growth.
Mexico produced 1.5 mmt of crude steel in January 2005, up by 8.0% compared to the same month in 2004. Production in the United States was 8.3 mmt, a rise of 5.3%.
Brazil produced 2.6 mmt of crude steel in January, a drop of 3.2% on the same month of 2004. Overall, crude steel production in the South America region remained static at 3.7 mmt for January 2005.

Asia again showed the strongest growth with total production of 43.5 mmt of crude steel in January 2005. This is 15.2% higher than for January 2004.

Production for Middle East countries was as follows.                             

Info provided by IISI

Steel Market Overview

The world's steel mills should be able to absorb recent coal and ore price hikes.
Iron ore suppliers from Brazil and Australia have just settled their prices in Asia with a record-shattering 71.5 percent rise for fiscal year 2005. Other steel producers around the world are holding out against increases on this scale, describing such an enormous price rise as unsustainable and damaging to the competitiveness of steel against other materials. They may not, however, be able to resist the ore suppliers’ demands, given the tightness of supply and the growth in global consumption, which is expected in the first half of this year.

It is clear that steelmakers dependent on imported iron ore are facing a massive expansion in the cost of their principal raw material. It comes on top of a 119 percent increase in the price of hard coking coal from major Canadian and Australian suppliers, to a 2005 level of $US125 per tonne fob from $US57 per tonne in 2004.

Other costs of producing steel have also risen – alloys, energy and transport being among the most prominent. There is much talk of steel producers “struggling” to pass on these greater expenses to their customers in the form of higher steel prices.
Last year it was, in reality, not much of a struggle. Steelmakers were in fact wildly successful in passing on higher raw material costs to their customers. They paid an 18.6 percent rise in the price of iron ore and sharp hikes in other input costs, but were still able to report record profits for 2004.

Mills’ complaints about raw material suppliers taking too big a share of the steel “value chain” are somewhat overdone. The pain was felt by end-users; there were several high-profile bankruptcies among automotive industry suppliers, and many steel-using manufacturers reported lower profits because of higher steel costs.

So how will this year’s leap in ferrous raw material charges play in the market? MEPS calculates that the higher prices for iron ore, coal, coke and freight will add roughly $US100 to the cost of producing one tonne of steel. This is a significant increase but it has to be put in context. The price of steel has risen by far more than this.

The MEPS World Average Price for flat rolled carbon steel products went up from $US387 per tonne in January 2003 to $US449 per tonne one year later, and to $US725 per tonne in January 2005. Over those two years the price of steel increased by 87 percent or by $US338 per tonne.

Looked at another way, the MEPS average flat product price in 2004 was $US540 per tonne, and this year our estimates suggest it may be $US680 - 690 per tonne – bringing the mills additional revenues of $US140/150 per tonne. Taking this into account, a raw material increase of $US100 per tonne starts to look manageable.

Our projection for flat rolled steel prices this year is for them to reach a peak during the first and second quarters and then gradually decline, though without any drastic fall. If the decrease in prices by the end of the year is of the order of 10 percent, steel mills’ current margins may be somewhat eroded. Nevertheless, a number of them may still report further record results for calendar 2005, despite rising costs of other inputs - due to strong first half performances.

(Sources: MEPS)

International and M.E. Steel Market & Prices
-----------------------------------------------------------------------------------

  >>  Flat Products

Both US end users and service centres continue to be overstocked as we move into 2005. Consumption has failed to recover, partly because consumer durables' demand is sluggish and auto companies' inventories of unsold cars and trucks are high. Despite attempts by the mills to hold onto strip transaction prices, we have noted further weakness in the cold rolled and galvanised product categories.

There are few transaction price changes to report in Canada. However, the level of activity is down and customers appear to be very cautious about ordering.
Prices of domestically produced Chinese flat products continue to show an overall upward trend. Export volumes are rising whilst the import trend is negative. The supply/demand balance for strip products is very tight in Japan and is expected to remain so throughout the first quarter. Carmakers are sucking in large quantities of material, leaving less and less for the distribution sector. Consequently, stock levels are low and domestic mill prices continue their upward tendency. Inventories of imported steel at the ports, at end November, rose by 11.1 percent compared to October - the first increase in two months.

South Korean service centres have imported large tonnages of strip products, particularly coated coil, in recent months because domestic supply was inadequate. However, the economy is slow and, therefore steel sales have been sluggish. Inventories in the distribution sector are now too high for current demand. Direct mill business is still strong, and Posco is expected to lift prices during the early part of the year. Demand in Taiwan is fair but many observers believe that, in the short term, it will weaken.

Average EU flat product prices rose by less than 1 percent in January. This is substantially below our expectations. The threat from imports,  has materialised. The mills were unable to reach their target increases for most customers because inventory levels are now sufficient for current activity. In Poland and the Czech Republic, flat product prices are still moving upwards. All the mills are reported to have good export order books.

> In the Middle East, Import prices went up by 30-40 usd/t for HR Coils, to reach about 570-580 US$/T CFR Dubai for Ukrainian Origin.

Earlier booked Iranian coils are reaching Gulf Ports at 570-580 US$/T.

Narrow Chinese HR Coils made their entry, with price levels of 530-580 USD/T CFR Dubai, for thicknesses mostly between 1.5 and 2mm.

Galvanized coils increased by about 30 US$/T. Prepainted coils in thinner thicknesses are getting harder to find from Far East, and prices consequently increased.

Plate prices remained stable at around 605-620 US$/T base CFR Dubai for Ukrainian origin.

  >>  Long Products

US demand continues to hold up fairly well for the time of year. Weakness of the US dollar should deter imports which have kept the lid on transaction prices. Canadian construction activity is dull. The mills continue to fight hard to maintain transaction values.
Chinese prices of construction steel have started to inch up, despite the very cold weather in some parts of the country limiting building activity. Construction has also slowed in Japan for seasonal reasons.

The South Korean construction sector continues to contract, leading to a soft market for long products. The civil engineering market in Taiwan is very weak. Building is holding up a little better.

Long product prices in the EU have fallen sharply since our last investigation in December. A drop in the price of scrap in recent weeks has been the main influence in this trend. Bar and rod prices have fallen in the two new EU entrants, reported in this report, over the past month. The onset of Winter weather and only modest construction growth have impacted on selling values.

> In the Middle East, Imports from China continued at about 500 US$/T CFR Dubai for merchant bars and angles, in competition with similar levels from CIS, while Japan is reported to have sold between 500 up to 550 US$/t , depending on the type and size of products.

Turkish rebars softened to about 440 US$/t CFR Dubai.
The beams market weakened slightly in February.
China continued selling JIS beams at levels between 510-530 US$/T CFR Dubai.
Small quantities of Taiwanese UB/UC and PFC arrived for the first time in some Gulf Ports.
Meanwhile European mills, Highveld - S. Africa, and Thailand are reported to sell beams now around or slightly under the 600 US$/T level, CFR Dubai.

Check monthly Middle East price indications per product type,
latest news on steel prices and price graphs on

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