JSW Steel to Earn Brand Usage Fee From Vallabh Tinplate; LME Steel Billet Down

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It looks as though “JSW Steel will earn a brand usage fee from Vallabh Tinplate, a firm it partly acquired last month, people with direct knowledge of the deal told ET. JSW Steel’s brand name will help Vallabh Tinplate get better prices in the market,” reports The Economic Times.

“It currently sells about Rs 3,000-4 ,000 per tonne lower than larger rival Tata Steel’s Tinplate Company of IndiaBSE 4.95 %. ‘Our brand name is very well known in the market for quality. It will bring comfort to customers,’ said Seshagiri Rao, JSW Steel’s joint managing director. ‘This deal gives us an entry into the tinplate industry.'”

“JSW Steel’s stated objective has been to add value-added steel to account for half of its product portfolio from the current 40%. JSW Steel bought 26% stake in privately-held Vallabh Tinplate in February and will increase exposure to 50% stake in due course. This 50% stake in the Punjabbased company is expected to cost about Rs 46 crore, and complete the company’s product portfolio in flat steel.”

In metal price news for steel…

Weakening prices ended a three-day flat streak as the cash price of steel billet fell 1.4 percent on Tuesday, March 4 on the LME to $350.00 per metric ton. After remaining flat for three days, the steel billet 3-month price fell 1.4 percent on Tuesday on the LME to $355.00 per metric ton.

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Chinese steel closed mixed on Tuesday. The price of iron ore 58% fines from India was range bound. The price of Chinese HRC fell 1.2 percent yesterday after three straight days with no change. For the fifth day in a row, the price of Chinese coking coal remained essentially flat.

The 3-month price of the US HRC futures contract held steady around $620.00 per short ton. The spot price of the US HRC futures contract remained essentially flat at $627.00 per short ton.