Steel producers consider another price hike as costs rise

Even as the steel ministry has expressed concern and suggested a clamp on steel prices, producers are defiant, especially with NMDC—part of the same ministry—raising input prices.

Producers are, in fact, considering if a new round of price rise can be implemented next month. A severe cost-push and an uptrend in international prices are the triggers. Landed imports were lower than domestic prices till a month earlier; these are at par now.

Seshagiri Rao, joint managing director and group chief financial officer of JSW Steel, said: “NMDC raised iron ore prices by Rs 275 a tonne, effective January 1, though the communication came to us later.”

The hike was interim and effective April 1, and the state-owned miner would be again raising prices. NMDC sources cautioned the increase would be substantial. Since April 2009, iron ore prices had doubled to touch $135 a tonne.

Anil Sureka, director (finance) at Ispat Industries, added that the NMDC price rise for long-term contracts translated to around 11 per cent. “The government should control iron ore prices first. NMDC is a government company,” he said.

Steel producers raised prices from January 1, but the NMDC price had not been factored in. Apart from Tata Steel and Steel Authority of India (SAIL), NMDC is a major supplier to most of the primary producers, including JSW Steel and Ispat Industries. Though there has been no direct communication to the producers to hold prices, the steel ministry has been suggesting that companies refrain from just looking at profits.

Producers had been earlier forced to lower prices, as the government said this was a major contributor to inflation. On the government’s directive, the price line was at $750-800 a tonne from April to July 2008, even when the international price went as high as $1,200 a tonne.

Rao said the government comments on steel prices would have a negative impact. The sector needed to attract a lot of investments, he said. It’s not just iron ore. Coking coal prices have appreciated by about $120 to $170 a tonne over the past year, while scrap export prices, the benchmark for finished steel prices, have gone up by $100 to $285 a tonne. Freight rates have increased significantly, too.

Producers said there was no ground for lowering steel prices, especially when international prices were moving up on higher raw material costs. “The current inflationary trend is led by food prices and steel is a negative contributor,” said a flat steel producer. The current prices were 14 per cent lower than the third quarter prices of last year. “There were two rounds of reduction in October and December,” noted producers.

The decision on prices of flat steel (used in the automobile and consumer durables sectors) for the next month, would be based on international prices, said Rao. Most international companies had increased prices by $50-60 a tonne for February deliveries.

The domestic ruling price of hot rolled coil, the benchmark for flat steel, was at Rs 32,000 a tonne.

(Source : Business Standard)

Raw material costs to push up China steel prices in 2010-CISA

BEIJING, Jan 22 (Reuters) - Rising raw material costs along with the recovering economies of the United States and Europe will provide "strong support" for steel prices in China in 2010, the country's steel industry body said on Friday.

But in a summary of industry prospects for 2010 posted on its website, the China Iron and Steel Association (CISA) said overcapacity and international trade barriers could still hurt local mills, and product prices were still likely to be volatile this year.

"The foundations of the economic recovery are still relatively weak, the effects of the financial crisis still persist, growth in major economies has slowed and problems like flat consumption, trade frictions and low utilisation rates have still not shown any clear improvement," the document said.

Local steel mills face considerably higher transportation, fuel and raw material costs in 2010, and rising resource taxes together with other reforms aimed at improving efficiency and protecting the environment will also add a huge burden, CISA noted.

CISA, which represents about three-quarters of China's total steel capacity, has been noticeably more bullish about the prospects for the industry in 2010 after routinely warning last year that "blind expansion" and "disorder" was hurting profits and undermining the country's negotiating position with foreign iron ore suppliers.[ID:nTOE5BM02D]

CISA did not refer to the prospects for this year's benchmark price talks with Australia's Rio Tinto (RIO.AX) and BHP Billiton (BHP.AX) and Vale (VALE5.SA) of Brazil, but it said last month that it expects the three miners to demand a 20-30 percent rise in iron ore prices in 2010. [ID:nTOE5BT06W]

(Source: Reutres)

Ball Celebrates 75th Anniversary of the Beer Can

BROOMFIELD, Colo., Jan 22, 2010 /PRNewswire via COMTEX/ -- Beer cans have come a long way since January 24, 1935, when Krueger introduced its Special Beer and Cream Ale in steel cans. As the largest supplier of beer cans in the world, Ball Corporation (NYSE: BLL) has played a key role in the evolution of the beer can, one of the most widely used and sustainable beverage packages on the market today.

Innovation - Building a Better Beer Can

From the beginning, cans have offered a light weight, durable alternative to glass beer packaging, with a large surface area for branding. The first three-piece steel beer can weighed 35 ounces and required a church key for opening. Since that time, can makers have worked to continuously improve the cylindrical package; today aluminum cans that hold 12 ounces of beer weigh just .47 ounces and feature easy-open, stay-on tabs.

The first steel beer cans featured flat tops or cone tops. The cone top cans appealed to small brewers who could fill the cans using the bottling lines they already had instead of buying new can filling equipment. The first aluminum beer cans debuted in the U.S. in 1958. These cans were made of just two pieces - the base and the body were made from one piece, and the end, or lid, was seamed on later. That is essentially the same process Ball uses to make beer cans today.

In 1963 the first pull tab beer cans appeared on the market. Consumers loved them because they no longer needed to use an opener, but the used and discarded tabs raised questions about litter and safety. In 1975, the first fixed or stay tab beer can was introduced. The safe and convenient design caught on and has remained relatively unchanged since.

In recent years, Ball has brought many innovations to the beer can which have benefitted brewers and consumers alike. They include visual effects like colored tabs, magazine-quality printing and thermochromic ink that lets consumers know their beer is cold enough to drink; as well as smooth-pouring ends and Ball's Alumi-Tek(R) bottle, which provides all the advantages of the beer can with the extra benefit of reclosability. These continuing improvements have helped keep cans a beer package of choice.

Beer Cans - a Sustainable Solution

While brewers and consumers have benefitted from the evolution of the beer can, the environment has probably gained the most from can innovations - many of which have focused on light weighting. Since Ball first began manufacturing aluminum beer cans in 1969, light weighting has been a fundamental part of its business for economic and environmental reasons. The size of the end diameter has been reduced five times, saving substantial amounts of aluminum each time. Ball's newest can end uses over 10 percent less aluminum per end than its predecessor. The amount of aluminum used for the can body has also continually been reduced. Today's 12-oz. aluminum can uses about 40 percent less aluminum than in 1970, from about 22 to 34 cans per pound today.

In addition to being the lightest beverage package, the can is also the most recycled package in the world. In 2008 the U.S. aluminum can recycling rate was 54 percent, the highest rate for any beverage container. In Europe the rate was about 70 percent in 2007. Aluminum cans are 100 percent recyclable infinitely, and using recycled aluminum requires 95 percent less energy and generates 95 percent fewer emissions than producing can sheet material from bauxite ore.

What Goes Around Comes Around - Craft Beer in Cans

Cans began as a niche package for beer in 1935 and quickly grew to become the predominant beer package in many parts of the world. Cans are light weight, unbreakable, efficient to ship and store, excellent brand billboards, and are impervious to light and oxygen, providing unparalleled flavor protection and long shelf life for the beer inside. These qualities made beer cans an attractive choice not only for major brewers, but also for craft brewers who have experienced a boom in America since the 1980s.

Craft beers were initially packaged only in glass bottles because craft brewers did not have the space or capital to install the large-scale canning equipment used by major brewers. That has changed, and recently craft beers have been appearing more often in cans. About 10 years ago Ball began working with Cask Brewing Systems to provide craft brewers with smaller scale canning and seaming equipment tailored to meet their smaller volume needs. There are now more than 65 craft brewers serving beer in cans in the U.S. and Canada, and the list continues to grow.

Beer Cans around the World

Today Ball is a leading manufacturer of beer cans all over the world, including North and South America, Europe and Asia. Ball began making beer cans in North America in 1969 when it purchased Jeffco Manufacturing Company in Golden, Colo. Jeffco had been producing beer can ends since 1962. Ball expanded internationally in 1974 when the company began licensing its beverage can making technology in other countries. Since then, the company's global beverage can business has continued to grow.

• Ball licensees manufacture cans today in Asia, Australia, Central America, South America and the Middle East.
• Ball entered the Chinese beverage can market in 1985 and built a joint-venture beverage can factory in Guangzhou. Its partner was M.C. Packaging (Hong Kong) Ltd. Today, through its own plants and joint ventures, Ball supplies almost half of the cans sold in China.
• Ball formed a Brazilian joint venture in 1995 called Latapack-Ball Embalagens, Ldta., initially building plants in Sao Paulo and Jacarei. A third plant in Tres Rios opened in November, 2009, to serve the growing can market in Brazil.
• In 2002, Ball acquired Schmalbach-Lubeca, now Ball Packaging Europe, which produced the first beer can sold in Germany back in 1951.

Ball's can manufacturing operations around the world share best practices, borrowing and implementing the best ideas to help ensure that high quality, innovative, sustainable beer cans will remain a favorite beer package among brewers and consumers for many years to come.

Ball Corporation is a supplier of high-quality metal and plastic packaging for beverage, food and household products customers, and of aerospace and other technologies and services, primarily for the U.S. government. Ball Corporation and its subsidiaries employ more than 14,500 people worldwide and reported 2008 sales of approximately $7.6 billion. For the latest Ball news and for other company information, please visit http://www.ball.com/.

Forward-Looking Statements

This release contains "forward-looking" statements concerning future events and financial performance. Words such as "expects," "anticipates," "estimates" and similar expressions are intended to identify forward-looking statements. Such statements are subject to risks and uncertainties which could cause actual results to differ materially from those expressed or implied. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Key risks and uncertainties are summarized in filings with the Securities and Exchange Commission, including Exhibit 99.2 in our Form 10-K, which are available at our Web site and at http://www.sec.gov/. Factors that might affect our packaging segments include fluctuation in product demand and preferences; availability and cost of raw materials; competitive packaging availability, pricing and substitution; changes in climate and weather; crop yields; competitive activity; failure to achieve anticipated productivity improvements or production cost reductions; mandatory deposit or other restrictive packaging laws; changes in major customer or supplier contracts or loss of a major customer or supplier; and changes in foreign exchange rates or tax rates. Factors that might affect our aerospace segment include: funding, authorization, availability and returns of government and commercial contracts; and delays, extensions and technical uncertainties affecting segment contracts. Factors that might affect the company as a whole include those listed plus: accounting changes; changes in senior management; the current global recession and its effects on liquidity, credit risk, asset values and the economy; successful or unsuccessful acquisitions, joint ventures or divestitures; integration of recently acquired businesses; regulatory action or laws including tax, environmental, health and workplace safety, including in respect of climate change, or chemicals or substances used in raw materials or in the manufacturing process; governmental investigations; technological developments and innovations; goodwill impairment; antitrust, patent and other litigation; strikes; labor cost changes; rates of return projected and earned on assets of the company's defined benefit retirement plans; pension changes; reduced cash flow; interest rates affecting our debt; and changes to unaudited results due to statutory audits or other effects.

(Source: Ball Corporation)

Sainsbury's packaging head promises: can has future

UPDATED - Sainsbury's head of packaging has said that the decision to move Basics canned tomatoes into cartons does not mean 'the end of the can', after the metal packaging industry criticised the move.

Sainsbury's revealed yesterday that it was planning to move all its canned Basics chopped tomatoes into cartons made by SIG Combibloc, as part of its project to cut the weight of its packaging by a third by 2015.

The supermarket said that the move would save 500 tonnes of packaging and 156 tonnes of carbon emissions every year.

The Metal Packaging Manufacturers Association (MPMA) criticised the move, saying that it could increase waste going to landfill and "seemingly failed to consider adequately" the high recycling rate of steel packaging, which stood at 70% across Europe in 2008 according to recent figures from Apeal.

But Stuart Lendrum, Sainsbury's head of packaging, today told Packaging News that the move was right for the particular product and for the supermarket's customers, but refuted suggestions that weight was the only driving force in the decision.

"This decision is not based purely on weight," Lendrum said. "The space efficiency of this format is fantastic and has a big impact throughout the supply chain, whether it's in our lorries or in our customers' kitchen cupboards."

He added that there was now over 80% coverage through bring banks and kerside collections for carton recycling and that the move to kerbside collection for the format was likely to accelerate in the near future.

"This certainly does not mean the end of the can. We now have a handful of SKUs in liquid cartons. There may be more but it will find its balance," said Lencrum.

In its reponse to the Sainsbury's move, the MPMA also warned against making public claims that one packaging material is more environmentally friendly than another.

"Errors made now in accommodating partially understood drivers could produce catastrophic effects impacting present and future generations," it said.

Lendrum said: "When we make a change like this it is a step on the journey - it is not the destination."

(Source : PackingNews.co.uk)