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| Routes To Distribute Manganese Ferro-Alloys To Major Steel Mills / Japan Are Changing |
| = To Launch Its Production In China, Strengthened Exchange Rate Of Rand / US$ Is Stabilizing |
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The routes to distribute manganese ferro-alloys to such major steel companies in Japan as Nippon Steel, JFE Steel, and so on are changing to a considerable extent. The reasons are that (1) the production of silico-manganese in China has started., (2) since the strengthened exchange rate of South African Rand against US-Dollar has continued for a long period, the production of manganese ferro-alloy in South Africa has turned to be not payable for its cost and this aspect has become a trigger to cause Japanese enterprises to withdraw from the operations in South Africa, and so on. Consequently, the routes to sell manganese ferro-alloys to major steel companies in Japan, which had been stabilized and fixed for a long period, are now going to face a severe shock. Nippon Denko already established Jinzhou Nichiden Ferroalloy as a joint venture company with Jinzhou Ferroalloy Works in China and two electric furnaces ( with total capacity to produce 50,000 tons per annum of silico-manganese ) constructed at this joint venture company have been commissioned from the first week of May of 2006. It is scheduled to effect the first shipment of silico-manganese from Jinzhou Nichiden Ferroalloy To Nippon Steel during the end of June to July. Also, JFE Steel and Mitsui & Co. in Japan established Erdos Manganese Alloys as a joint venture company with Erdos in Inner Mongolia and the plant, which is being constructed in Qipanjin area of Inner Mongolia to produce silico-manganese ( by two electric furnaces for the time being ), is planned to be operated from June - July of 2006. The final phase is to produce 150,000 tons per annum of silico-manganese by four electric furnaces but half of these furnaces ( two electric furnaces ) is scheduled to start its operations in 2006. By the inauguration of Jinzhou Nichiden Ferroalloy in China, the route to sell silico-manganese to Nippon Steel will change. So far BHP Billiton delivered approximately 15,000 tons per annum of silico-manganese produced by Tasmanian Electro-Metallurgical Co. ( Temco ) in Australia to Nippon Steel through the route of Japan Metals & Chemicals ( JMC ) - Mitsui & Co. ( agent : Japan Manganese ) but this business is replaced with silico-manganese to be produced by Jinzhou Nichiden Ferroalloy in China ( link deal with manganese ore to be supplied by BHP Billiton ). On this opportunity, the route of JMC - Mitsui retreats from the front line of the sale for Nippon Steel and Nippon Denko comes to the front. The production of silico-manganese in China by Nippon Denko will cover the portion to be linked with BHP Billiton and that to be produced by themselves ( including silico-manganese once produced by their Hidaka plant but stopped by end 2005, and so on. ). The route to sell silico-manganese to JFE Steel has a big possibility to change. The Fukuyama Works of the former NKK has been consuming a substantial quantity ( 14,000 tons per annum ) of silico-manganese and importing most of this large requirement mainly from China and Ukraine but a major part of silico-manganese to be consumed by JFE Steel will be supplied with silico-manganese to be produced by Erdos Manganese Alloys through Mitsui & Co. in the near future. Even after JFE Steel inaugurated ( by merger between NKK and Kawasaki Steel ), the routes to purchase raw materials established by these two steel companies in the past years have been still respected but an appearance of Erdos Manganese Alloys is anticipated to change this conventional route to a considerable extent. Owing to the fact that the strengthened exchange rate of Rand against US-Dollar has been stabilized for a long period, the ferro-alloy industry of South Africa has to face the severe situation continued for a long time and, therefore, Japanese side withdrew from Advalloy ( to produce refined ferro-manganese in South Africa ) by the end March of 2006, which was as a joint venture company established by Samancor of South Africa and two Japanese companies of JMC and Mitsui & Co.. Prior to this withdrawal, when JMC applied for the Stock Company Reorganization and Rehabilitation Act in February of 2002 and started the program for this Act from March of 2003, JMC withdrew from Advalloy and Mitsui & Co., which had taken over the shares of this joint venture company from JMC, also announced already in 2005 their intention to withdraw from Advalloy. Accordingly, Samancor has taken over all of the shares of Advalloy as of the end March of 2006. For the convenience of accounting procedure at South African side, the above acquisition of the shares of Advalloy has been replaced to the equity of Samancor from April of 2006. For a reference, as regards Middleburg Technochrome ( to produce low carbon ferro-chrome in South Africa ) as a joint venture company established by Samancor Chrome of South Africa and two Japanese companies of Showa Denko and Marubeni Corp., Japanese side dispersed from this joint venture by April of 2005 and withdrew from Middleburg Technochrome. These withdrawals from the joint ventures in South Africa were due to the fact that the strengthened exchange rate of Rand against US-Dollar has continued for an unexpectedly long period and resulted in an unprofitable operation in South Africa. Therefore, the existences of various joint venture companies established under cooperation with South African enterprises to produce ferro-alloys in South Africa are now questioned again. |
| last modified : Fri 16 Jun, 2006 [11:04] |
