Iron and Steel News - Nonferrous Metal News. Published by Sangyo press co.,ltd. September 12,2011. Iron and Steel News

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1 Published by Sangyo press co.,ltd. September 12,2011 INDEX Iron and Steel News Japan Ferrous Scrap Export Price Rises at Kanto Tetsugen's Tender Japan and Taiwan's Joint Steel Sheet Mill Starts Construction in Vietnam JFE Steel Completes Super-SINTER Installment in Kurashiki, West Japan World Stainless Foil Market to Double to 18,500T in 2015 Ferrous Scrap Price to increase in Tokyo INDEX Non Ferrous Metal News Hitachi Cable Targets 10 Billion yen Cost Cut by F2012 Japan Cemented Carbide Tool Shipment Increases by 2.6% in July Japan Cu and Zn Official Prices Increase Iron and Steel News Japan Ferrous Scrap Export Price Rises at Kanto Tetsugen's Tender Japanese ferrous scrap export price hit FAS 34,342 yen per tonne for H2 grade for October shipment at monthly tender held by Kanto Tetsugen on Friday, which was 1,023 yen higher than the price at previous tender on August 10. The price level was almost same level as domestic electric furnace steel makers' purchase price under increasing export transaction for East Asia. An exporter won the tender at 34,550 yen per tonne for 5,000 tonnes of shipment. Other 3 exporters won the tender at 34,450 yen, 34,210 yen and 34,200 yen each with 3,000 tonnes, 5,000 tonnes and 5,000 tonnes of shipment respectively. They ship the scrap by November 15. The total volume was 18,000 tonnes, which was 2,000 tonnes lower than previous tender. Thirteen exporters out of 16 eligible companies submitted 21 bids for the tender. Japanese scrap export price is FOB 34,000-34,500 yen per tonne for H2 grade for East Asia recently. The price is 500-1,000 yen higher than recent bottom in late August. The export price to South Korea increases when US scrap price increases. Under the higher export price, local electric furnace steel makers increase the scrap purchase price in September. The purchase price by makers around Tokyo increased by 500-1,000 yen to 34,000-35,500 yen per tonne for H2 grade in the month. Japan and Taiwan's Joint Steel Sheet Mill Starts Construction in Vietnam Page 1/6

2 Sumitomo Metal Industries and Taiwanese largest steel maker, China Steel (CSC) announced on Friday they started construction of a new steel sheet mill, China Steel Sumikin Vietnam Joint Stock (CSVC), in Vietnam. This is the first mill established from green field for both companies to manufacture high grade steel sheet at overseas. The new mill will complete at the end of 2012 and start operation in early 2013 as planned. The production capacity is projected at 1.6 million tonnes per year, which will become the largest steel sheet plant in Vietnam and has the first galvanizing alloying line in ASEAN. Mr.Hiroshi Tomono, the president of Sumitomo Metals, expressed he hopes the company members in Vietnam, Taiwan and Japan cooperate and originate new operative spirit and culture as well as the new steel sheet mill contributes to development in Vietnam. Mr.Tsou Jo-Chi, CEO of CSC, said the new steel mill could help local economic growth by supply of high quality steel sheet and become the lighthouse for automobile and electric appliance market in Southeast Asia. The mill is constructed inside an industrial estate, Ba Ria Vung, Tau province, South Vietnam. Sumitomo Metals and CSC started the foundation work in late May while required a time to acquire an additional ground. Sumitomo Metals started operation of a seamless steel tube steel plant with blast furnaces worked by charcoal on September 1. In Thailand, the firm has invested in construction of a new plate mill. The firm has activated overseas investment and advanced correspondence for growing markets. Page 2/6

3 JFE Steel Completes Super-SINTER Installment in Kurashiki, West Japan JFE Steel completed introduction of "Super-SINTER" to no.2 sinter line in Kurashiki area of West Japan works in August. Super-SINTER is JFE Steel's technology to reduce CO2 emission largely in iron ore sintering process by utilizing hydrogen type gas fuel (city gas). The firm expects for CO2 emission reducing by approximately 200,000 tonnes per year as total when the firm finished planned adoption of the technology at domestic iron works. Super-SINTER is a technology to blow city gas into a sinter machine, as a partial alternate for coke powder. City gas is fed on upper surface of iron ore which was put inside the sinter machine. The technology utilizes difference of combustion points between coke powder and hydrogen fuel. Thus the favorable sintering temperature can be sustained for a long time without upsurge of maximum combustion temperature. Energy sufficiency improves largely in sintering process as a result. JFE Steel introduced Super-SINTER to one sintering line in Keihin area of East Japan iron works and started the commercial operation in January The firm confirmed reduction of CO2 emission by 60,000 tonnes per year. The firm continuously adopted Super-SINTER to no.2, no.3 and no.4 sintering lines in Kurashiki area of West Japan iron works from December 2010 to August In Chiba area of East Japan iron works, the adoption completed for no.4 sintering line in May JFE Steel now examines additional Super-SINTER introduction in Fukuyama area of West Japan iron works and Philippine Sinter Corporation, the wholly-owned subsidiary to process sintered iron ore in the Philippines. World Stainless Foil Market to Double to 18,500T in 2015 World stainless foil (with less than 100 micrometers of thickness) market was 9,500 tonns in volume and 25 billion yen in value in 2010, according to Fuji Keizai, Japanese marketing research company. The market is expected to increase by 10.5% to 10,500 tonnes in 2011 from 2010 and by 8% to 27 billion yen in value. Fuji Keizai forecasts the market continues expansion trend, which would increase by 94.7% to 18,500 tonnes in 2015 from 2010 or 45.5 billion yen in value. By applications, 36.8% of the total demand was for automotive and motorcycle exhaust catalysts, 13.7% was for tactile switches and dome switches, and 7.4% was for suspensions of hard disk drives (HDDs) in weight. The market is expanding for automotive and motorcycle exhaust catalysts in China and South East Asia, where gas emission controls are started and automotive sales are strongly increasing under growing economy. The market is decreasing for tactile switches and dome switches when the market of handheld devices is replacing to smart phones from conventional cell phones. The market is expanding for HDD suspensions adopted to digital televisions and recorders. Ferrous Scrap Price to increase in Tokyo Ferrous scrap market price would increase around Tokyo after the price slightly increased in early September. The price Page 3/6

4 is around 28,500 yen per tonne for H2 grade at the dealers' purchase price including freight. Local electric furnace steel makers pay 34,000-35,000 yen for H2 grade while higher price is 35,500 yen. Ferrous scrap price around Tokyo increased in September for the first time since early July when the scrap export price shows sign of rebound. The scrap export price is FOB 34,000-34,500 yen per tonne for H2 grade for East Asia, which is 500-1,000 yen higher than the recent bottom. The exporters increased the scrap purchase price to around FAS 33,500 yen and the price would increase more. Some local electric furnaces hold the scrap inventory and keep the purchase price unchanged. However, market sources see the makers increase the scrap purchase price due to steel demand increase in autumn. One dealer source sees the makers would increase the scrap purchase price to prepare for the operation in two three-day weekends in September. Non Ferrous Metal News Hitachi Cable Targets 10 Billion yen Cost Cut by F2012 Hitachi Cable announced on Friday the firm withdraws from optical submarine cable business under the revised 3-year plan through fiscal 2012 ending March The firm improves the profitability by restructuring loss making business. As a part of the effort, the firm also reorganizes businesses of telecommunication cable, packaging materials and copper tube. The firm reduces around 1,200 of manpower in domestic business while the firm reshuffles domestic and offshore operations. Through the actions, the firm targets 10 billion yen of lower cost in fiscal 2012 compared with fiscal The firm tries to seek growth in core business areas including industrial infrastructure, electrical power infrastructure and telecommunication infrastructure. The firm targets 20 billion yen of consolidated recurring profit with 440 billion yen of annual sales in fiscal 2012 compared with targeted 7 billion yen of recurring profit with 460 billion yen of sales in fiscal The firm will post 24 billion yen of onetime loss for the restructuring in fiscal 2011 for better future profitability. The firm withdraws from optical submarine cable business in September The firm reorganizes domestic plants for telecommunication cable in fiscal 2011 while the firm keeps optical cable making joint venture with Corning Cable Systems of USA. The firm also reorganizes domestic copper tube business and packaging business in fiscal The firm reduces the domestic manpower by around 1,200 in fiscal 2011 while the firm keeps offshore manpower to expand the business. The firm reduces the offshore company by 1 to 2 in UK and by 1 to 2 in USA in fiscal 2011 and reorganizes other business in Southeast Asia in fiscal The firm keeps focusing on infrastructure business under the mid-term plan. The firm increases the sales weight of the core business from 55% in fiscal 2010 to 65% in fiscal Page 4/6

5 Japan Cemented Carbide Tool Shipment Increases by 2.6% in July Japanese domestic shipment value of cemented carbide tools totaled 24.7 billion yen in July, year-to-year plus by 2.6% and month-to-month minus by 3.9%, according to Japan Cemented Carbide Tool Manufacturers' Association. The shipment showed stable recovery from temporary down to billion yen in April and May despite of month-to-month minus. The shipment maintained strong especially for indexable insert chip and export. Domestic production of cemented carbide alloy, the main material for tools, exceeded 500 tonnes for 2 months in a row. The shipment of cutting tools, mainly used to manufacture automotive parts, totaled 18.6 billion yen in July, year-to-year plus by 2.9% and month-to-month minus by 3.1%. The shipment of indexable insert chip, the main item among cutting tools, kept very high volume in July to follow the monthly record million chips in June Export represented 7.73 billion yen in the total shipment value, year-to-year plus by 4.8% and month-to-month minus by 0.6%. The export value kept highest level since July 2008 for 2 months in a row despite of super-strong yen trend. The demand is especially strong for indexable insert chip from emerging countries. Indexable insert chip represents around 75% in the total export value. As for domestic production of cemented carbide alloy, the output volume exceeded 500 tonnes for the first time since September 2008 in June and kept the high level in July. Japanese domestic production and shipment values of cemented carbide tools are likely to maintain steady since mother alloy production is increasing. Demand for cemented carbide tools is expected to increase for October-March compared with April-September along Japanese car makers' productive expansion. See an attached table. Page 5/6

6 Japan Cu and Zn Official Prices Increase JX Nippon Mining & Metals announced on Friday the firm increases the official copper ingot price by 20,000 yen to 750,000 yen per tonne for September shipment. The firm reflects higher copper price at London Metal Exchange. The monthly averaged official price increases by 14,000 yen to 747,000 yen without any more revision in September. LME copper price increased by slightly more than US$ 100 to US$ 9,041 per tonne at settlement on Thursday from Monday, based on which JX Nippon Mining & Metals revised the official price. Mitsui Mining & Smelting announced the firm increases the official zinc ingot price by 5,000 yen to 215,000 yen per tonne for September shipment due to higher LME zinc price. The monthly averaged official price increased by 3,500 yen to 215,000 yen without any more revision in September. LME zinc price increased for 3 trading days in a row through Thursday. The price increased by US$ to US$ 2,196 per tonne at settlement on Thursday from Monday, based on which Mitsui Mining & Smelting revised the official price. Copyright 2011 SANGYO PRESS CO.,LTD. No reproduction or republication without written permission. Published by SANGYO PRESS CO.,LTD. Edited by Masumi Tanifuji Chichibu building 5F, 1-8-6, Shinkawa, Chuo-ku, Tokyo, JAPAN TEL : FAX : jmb@sangyo.co.jp Page 6/6