India continues to drive global DRI production growth

With 1.31 million tonne sponge iron or DRI production during the month of September 2006, India has accounted for 31.5% share of the global production and is now inching to become 1/3rd producer by the end of 2006.

The global DRI production of 4.159 million tonne sin September 2006 was up by 14.5% YoY as compared to 3.638 million tonne in September 2005. The global DRI production during January to September 2006 totaled to 36.536 million tonnes up by 9.9% YoY.

In 000 tonne
Source - IISI

The share of Indian production is increasing every month with new capacities sprouting everyday. The country wise ranking and their share during September and during January to September 2006 is given below.

In 000 tonne
Source - IISI

Underground fires in Jharia pose serious threat to residents

Coal India Limiteds subsidiary Bharat Coking Coal Limited, which is managing Jharia coalfield in Dhanbad has sounded alarm for evacuation of almost 80,000 families living near the Jharia mines after recent discoveries of at least 6 underground leaks of toxic fumes indicating huge underground fires pointing to possibilities of massive underground explosions followed by subsidence occurring at any moment. BCCL authorities have already ordered complete evacuation of Bhuiyan Patti Basti in Jharia and as per reports more than 500 residents of this locality have moved out.

A senior BCCL officer said The villagers first spotted the emissions late last month, close to the Bhuiyan Patti Basti and around 50 yards from the LUJ pithead. It is the same case with the CT pithead, where reports have come in about toxic fume emissions. It is a very alarming situation and there is always the risk of underground blasts. Efforts are on to douse the flame.

The BCCL authorities have begun efforts to douse the underground flames and toxic emissions by filling the leakage points with earth. However, this method could increase the risk of explosion. All mining work in the LUJ pithead of the BCCLs North Tisra project has been suspended for an indefinite period.

Some senior BCCL officials blame the central government for delays in giving concrete shape to the proposed Jharia Action Plan, which calls for rehabilitating more than 80,000 families facing the threat of underground explosions and fire. Under a jointly formulated proposal, Central Coalfields Limited, Eastern Coalfields Limited and the BCCL have earmarked Rs 7,500 crores for the JAP scheduled to be completed by 2012, for which the union cabinet is still to give its clearance.

Alang ship breakers to ask for more sops from GMB

It is reported that shipbreakers of Alang in Gujarat do not see much benefits coming from the new policy announced by the Gujarat Maritime Board granting certain concession and have decided to make a representation.

Mr Vishu Gupta president Alang Ship Breakers Association

Said This policy should have come in 2004, when the regulation of 1994 had ended. What the government has given is too little, too late.

Another member said Given the bad phase the industry is passing through, only zero development charge can save more plots from closing down. Same with breaching tariffs.

The new policy mainly grants ship breaking industry 50% reduction in development charge of Rs 400 per square meter of the plot, reduction in breaching tariffs by Rs 8 per tonne, and cancellation of minimum requirement of breaking of at least 10,000 tonnes a year, among others.

According to the association, in 2004 the annual breaking at Alang was around 2.5 million tonnes with 100 plots, 106 re rolling mills, 103 oxygen plants and total 40,000 employees. But in 2006, Alangs total breaking figure is not more than 0.4 million tonnes with hardly 25 to 30 plots functioning, 30 re rolling mills and only two oxygen plants in place. The number of employees base has gone down to mere 5,000. More than 75% of plots are not functioning at all for at least two years now.

Gujarat to increase port capacity through SPV route

With the aim to enhance cargo handling capacity of Gujarat ports from current 180 million tonnes per annum to 500 million tonnes in five years, Gujarat government has reportedly given an in principle approval for the development, up gradation and management of Okha, Magdalla, Porbandar, Navlakhi & Old Mundra ports with private participation.

These five ports will be developed with the formation of special purpose vehicles with equity participation of the Gujarat Maritime Board. The investment has been estimated at Rs 1,600 crore with Rs 710 crore for the expansion of Porbandar alone.

The state government has also identified four new sites where ports or container terminals can be developed with private sector participation: Khambhat, Mahuva, Modhwa and Sutrapada at an investment of about Rs 1,200 crore, with Sutrapada requiring the highest investment of Rs 750 crore.

The projects are to be put up for investors at the Vibrant Gujarat global investors Summit scheduled for January 12th to 13th 2007.

DVC to get environment clearance for Andul power plant

ET has reported that West Bengal state owned Damodar Valley Corporation plans to kick off work on its 1,000MW Rs 4,000 crore thermal venture in Durgapur by early 2007 as DVC is confident of receiving all clearances including those from the government and Central Pollution Control Board by end of the current year.

Mr Ashim Kumar Barman chairman of DVC told ET The expert committee for thermal power projects constituted by MoEF has recently cleared the Durgapur project. We are expecting a formal clearance from the ministry in the next few weeks.

Mr Subrata Biswas secretary said The Centre is in favor of this 1000MW power plant at Durgapur and CPCBs hearings for setting up the thermal power plant is already on. This process is likely to be completed in a couple of months. Initial work on the project is likely to begin by February 2007.

The proposed plant would be set up in addition to DVCs existing generation facility located at neighboring Waria. The plant will have two units of 500mw each. DVC has already identified about 1,000 acres at Andul. The proposed project is part of DVCs capacity expansion plan in the Eleventh Plan period.

Heavy industry ministry to put BHEL on advantage

It is reported that the ministry of heavy industries has moved a proposal to awarded some of the upcoming large power projects in the country to BHEL on a nomination basis at a negotiated price to provide an anchor load demand for the new super critical technology that BHEL is set to acquire from French power equipment major Alsthom.

An official said It is important for us to protect and promote transfer of technology for Indian companies. Acquiring the super critical technology for large 800MW and above will go a long way in meeting the energy needs of the country. The move to protect the domestic industry in the initial years by reserving some projects is not an exception to India as this has been a practice in the US and Europe as well.

The official said BHEL would have to match the price if the internationally contracted bids in the other projects manage to offer a lower price and that this will help in establishing a price discovery mechanism as well.

However, this proposal has not gone down well with the power ministry, which insists that such a move will discourage multinationals from entering the power sector. The power ministry wants that BHEL should compete with multinationals like Mitsubishi and bid for the projects from an equal footing.

Ispat Industries posts improved performance for Q2

Ispat Industries Ltd has reported a net profit of Rs 2.32 crore for July to September 2006 quarter as against a net loss of Rs 363.01 crore in July to September 20-05. IIL has reported July to September 2006 EBIDTA of Rs 406.03 crore as against a negative EBIDTA of Rs 149.66 crore in Q2 of 2005-06. IIL's total income for the quarter at Rs 1,892.71 crore is up by 54% as compared with the corresponding quarter of 2005-06.

In the first six month period of 2006-07, the EBIDTA of the company has increased by 712 per cent to Rs 695.65 crore from Rs 85.72 crore in the corresponding period last fiscal. During the first half of the current fiscal, production of hot-rolled steel stood at around 1.27 million tonnes as against 0.95 million tonnes in the first half of 2005-06.

Mr Vinod Mittal MD of IIL said "The benefits from the 2.24 million tonne per annum sinter plant and 1,260 TPD oxygen plant, coupled with our continuous cost efficiency efforts and better sales realizations have helped the company to achieve improved financial performance during the quarter."

Visa Steel commissions 0.1 million tonne coke batteries

Visa Steel Ltd has informed BSE that the Company has commissioned an additional 100,000 tonnes per annum out of its 400,000 tonnes per annum capacity Coke Ovens, thus taking the commissioned capacity to 200,000 tonnes per annum. The Coke Ovens are located at Orissa in India.

Chinese crude steel output to touch 420 million tonnes in 2006

China has produced 308.438 million tonnes of crude steel during July to September 2006 registering a growth of 18.4% YoY as compared to January to September 2005.

In million tonnes
Sourced from Mysteel.net

The monthly average production during the last quarter was 36.318 million tonne per month totaling to 108.953 million tonnes.

Therefore, it is estimated that the Chinese crude steel production during 2006 would certainly surpass 417.390 million tonnes and in all probabilities cross 420 million tonnes.

Tontine asks Wheeling-Pitt board to reject merger moves

Wheeling-Pittsburgh Steel Corp's largest shareholder wants to snub both potential partners, oust senior management and pump as much as $100 million more into the troubled steel maker.

Mr Jeffrey Gendell managing member of Greenwich based Tontine Management LLC, told the board of directors of Wheeling Pittsburgh that the proposals by Brazil's Companhia Siderurgica Nacional and Chicago based Esmark grossly understate the intrinsic value of Wheeling-Pitt and would particularly with regard to the CSN proposal, relegate current shareholders to minority status.

Mr Gendell said "Based on numerous inquiries that we have received from fellow shareholders over the past three months, it has become increasingly clear to us that we are not alone in our deep concern and frustration over the process and direction that the board of directors and management have established for Wheeling-Pittsburgh's owners. From our perspective, and we believe from the perspective of many other of the company's shareholders, the CSN and Esmark proposals, as currently structured, are unacceptable and, in the absence of dramatic enhancement, will be opposed by us in any vote seeking their approval."

Mr Gendell has suggested the best course of action for the company and its shareholders is to terminate discussions with CSN, remain independent and immediately begin a search for a new senior executive management team.

Tontine's proposal comes as shareholders prepare for a November meeting at which they'll have to decide between a company supported slate of directorial candidates and another backed by Esmark.

Tontine controls nearly 1.5 million shares of Wheeling-Pitt stock.

ThyssenKrupp denies report of its bid for Corus

ThyssenKrupp denied a newspaper report on Sunday that it was mulling a counter bid for Corus Group, whose board has accepted an offer from TATA Steel.

A ThyssenKrupp spokesman said "We are not considering a bid for Corus,"

UKs Sunday Times had earlier reported that ThyssenKrupp was considering a bid, Brazilian Companhia Siderurgica Nacional had hired investment bank Lazard to advise on its options for a counterbid and that Severstal was less likely to intervene" because it was busy with its flotation in London.

Coal prices not likely to see January 2006 levels

As the production costs for coal continue to increase, the coal prices increases, which happened earlier this year are unlikely to repeat in the medium and long term.

Mr Bill Meister senior VP at Marston & Marston while speaking at the American Coal Council's Coal Market Strategies conference last week said that "Market prices for most coals may continue to fall in the short term due to increasing volumes. But the increase in the cost of production means that market prices are unlikely to fall more than another 10% to 15%.

For coal markets in the medium and long term, costs of production will increase in certain regions and remain relatively flat in others for a variety of reasons. He said "If producers can exhibit discipline regarding increases in production, market prices may rebound slightly, but they are unlikely to exceed January 2006 levels. However, increased volatility may result in future short term peaks."

Severstal could launch London IPO this week report

UKs Sunday Express has reported that Severstal could launch its upcoming London flotation as early as this week and that Severstal's flotation could be valued at 8 billion sterling, freeing up the company to make acquisitions.

The Sunday Times noted the forthcoming IPO and also reported that Mr Alexei Mordashov was lining up Sir Richard Sykes, rector of Imperial College and a former CEO of Glaxo SmithKline PLC to become Severstal's chairman.

4th Chinese Aluminium Conference in Shanghai

Metal Bulletin & Minmetal are organizing the 4th Chinese Aluminium Conference on 15th to 17th November 2006 at Shanghai in China, the biggest producer of aluminium and now rapidly emerging as the worlds biggest user of the metal as demand for new housing, vehicles, consumer goods and infrastructure there continues to grow.

In 2005 China produced over 7 million tonnes of primary aluminium, with consumption estimated at a similar level. And though growth rates for consumption are slowing from 15-16% per year today, in absolute terms the outlook remains impressive, with usage forecast to rise to 13 million tonnes by 2010. Even then predicted annual growth rates of 8% to 9% per year outstrip most other major marketplaces.

While considerable smelter and refinery expansions are on the drawing board, and Chinese build lead-times are comparatively short, at the same time much of Chinas existing smelter capacity has a decidedly uncertain future. According to the National Development & Reform Commission, a good quarter of Chinas 10.3 million tonnes of smelter capacity remains idle, a victim of rising costs and raw material shortages. In 2005, 40% of the countrys smelters were making losses and even the major producers were very much at the whim of unpredictable electricity supplies and spiralling spot alumina prices.

And while the need for infrastructure throughout the country is on the one hand driving demand for aluminium, inadequate supplies of energy, water, bauxite and alumina, as well a struggling transport network, are in various measure putting restraints on aluminium industry production growth.

China has made strides in the transition from controlled to market economy, towards a modern industry that can compete, not only on cost but also quality, at international level, but there are many hurdles still to be overcome. Deregulation needs to continue in many spheres to allow for greater efficiency and flexibility in meeting market demands and securing greater access to investment finance.

Luliang Coke ordered to halt production due to pollution

Yieh has reported that Chinas State Environmental Protection Administration has ordered Luliang Coking Plant in Luliang City of Shanxi province of China to cease production at their coke plant as it does not meet the required pollution control measures. Production at the Luliang Coking Plant will only be allowed to restart when they meet pollution control measures.

Luliang has a combined annual capacity of 600,000 tons and two new ovens with a similar capacity are nearing completion.

Coke production in Luliang City accounts for around 10% of Chinas annual coke production but as many projects do not meet the pollution control requirements the city is facing big problems.

Earlier, the Shanxi Environment Protection Bureau ordered construction on 27 new projects to be halted until the needed environmental impact assessments were completed.

Minas Gerais to receive $7 billion mining investments

BNamericas has reported that Brazilian and foreign miners are due to pump 15 billion reais ($7.01billion) into mining projects in the state of Minas Gerais of Brazil during the 2003 to 2010 period.

The federal and Minas Gerais state governments are due to invest 10.3 million reais this year in aerial geophysical surveys covering some 110,000 square kilometers and some 41,000 square kilometers have already been flown over and the results available since early October.

Mr Wilson Brumer state economic development secretary told BNamericas that "I believe that it is a natural process to see companies interested from now on and I believe they will look at the results to further analyze them. By the year end, results of a survey of another area, covering 69,000 square kilometer will be made available. I can say that 96% of this area has been flown over.

Minas Gerais covers a 550,000 square kilometer area and is the home of gold, iron ore and other mining projects.

Turkish steel sector to face higher electricity cost

Turkish Zaman has reported that according to new regulations issued by Turkeys Board of Energy Turkish industries will no longer benefit from discounts in electricity tariffs. However, it is said that they could still get cheap electricity pending approval by the Cabinet. The Board of Energy said that the EPDK had to approve electricity tariffs suggested by the Turkish Electricity Distribution Corp foreseen by the relevant law.

The new regulations will mostly affect iron and steel producers because they will raise input costs and hinder them in the international market.

The new regulation bans special incentives for electricity, but allows incentives through direct income support to a certain group of subscribers.

Metals UK & MetalTech from JV in Texas

It is reported that Metals UK Ltd has teamed up with MetalTech Service Centre at Houston in Texas to form Metals Group Inc. Metals Group Inc will be offering Duplex, Super Duplex and Ni Alloys.

Mr Rob Pattenden sales director said Having a strong presence in the UK and Europe, particularly now we have opened our Spanish warehouse in Bilbao, America was the next logical step for us representing a market with rapid growth potential. Teaming up with Metaltech Service Centre we have a great opportunity to build our worldwide presence and to further concrete our ambitions of being a worldwide supplier of choice.

Western Plains to start Peculiar Knob iron ore project by 2008

Iron ore junior Western Plains Gold Ltd is looking to position itself as a player in the iron ore game and establish a modest operation out of South Australia by 2008 after picking up the advanced Peculiar Knob and Hawks Nest projects located northwest of Oxiana Ltd's emerging Prominent Hill copper gold project. Mr Bob Duffin chairman said that the initial strategy was to kickstart the high grade Peculiar Knob project into production by early 2008 at a rate of one to two million tonnes per annum.

He told AAP that "What we're going to do is move very quickly to capitalize on the high demand for direct shipping ore by developing the Peculiar Knob mine. With Peculiar Knob the total capital costs will be less than $30 million and we think at current prices we can generate a cash operating surplus at the port of between $15 to $25 per tonne."

Western Plains has also caught the eye of the Chinese.

Western Plains Gold Ltd has signed a non-binding memorandum of understanding with China Kingdom International Group Co Ltd which is conducting due diligence on the project. Should the two parties come to a binding agreement, China Kingdom will subscribe for $5 million in new Western Plains shares, take a stake in the project and all of its output. In addition, China Kingdom will sole fund the project development.

Outokumpu commissions water recovery plant at BHPBs Finucane Island

Outokumpu Technology has installed a fresh water recovery plant to optimize environmental benefits on turnkey basis at BHPB's Finucane Island facilities at Port Hedland in Western Australia.

Outokumpu Technologys turnkey package comprised of design and all mechanical and structural works for a 15m SUPAFLO high rate thickener, feed trommel, flocculant mixing plant, clarified water storage tank and more than 1.6 kilometers of pipe work and associated valving.

Designed to cope with fluctuating feed rates that change from minute to minute, the system screens process water and filters solids, then removes the thickened tailings, before routing the process water to the clarified water storage tank for re circulation throughout the plant. Tailings, meanwhile, are carried by the pipe work system to the plants tailings dam.

The plant, incorporating SUPAFLO high rate thickening technology, is integral to the plant expansion, which forms part of BHP Billions rapid growth project No3, which will increase annual iron ore sales capacity by approximately 20 million tonnes.

SIAC buys Bison Structures in UK

Irish group SIAC Construction has acquired the UK structural steel fabrication division of the Bison Group Bison Structures. As a result of the latest deal, the business will be known as SIAC Tetbury Steel. It will continue to be run by Mr Richard Cooper MD and there will be no redundancies.

Founded in 1971 and based at Tetbury in Gloucestershire, it was originally known as Tetbury Steel and in 1989 Bison Group bought it. The Bison Group retains it s concrete products and manufacturing capability and operates in the residential, education and retail sectors.

Mr Finn Lyden MD of SIAC said This acquisition forms part of a plan to grow our UK business over the next five years. Bison Structures is a successful business and complements our existing business in the UK. From the customers perspective, we can provide a one-source service from design, fabrication, steel structure, decking, cladding and glazing, with one point of contact to manage the project lifecycle.

SIAC already has a modern steel fabrication facility in Ireland, SIAC Butlers Steel, and for 40 years has been involved in large steel projects in Ireland, the UK and the Middle East.

AK Steel tables new contract after last weeks rejection

The day after its second proposal was soundly rejected, AK Steel has presented a new contract proposal to International Association of Machinists Local 1943 representing its locked out workers.

The newest offer from AK Steel incorporates reduces proposed wage increases, raises health care insurance and institutes random drug testing.

Members of the IAM voted down the previous proposal by 1050 to 489 in last Wednesday vote second time after they had voted down AK Steel's first proposal in a September 25th 2006 vote.

The workers have been locked out of the company's Middletown Works since March 1, when their contract expired.

ThyssenKrupp orders 3 new coilers for HSM

ThyssenKrupp Steel of Germany has placed an order with SMS Demag for the supply of three new coiler units for the hot strip mill in Beeckerwerth taking the total orders to two during 2006. Commissioning of the first coiler unit has been scheduled for December 2007.

The scope of supply includes three shiftable coilers, including all pertaining mechanical equipment, utility systems as well as the entire electrical and automation systems. The fully hydraulic three-roll coilers are designed for tube grades up to a thickness of 25.4 mm.

This modernization is a systematic continuation of ThyssenKrupp Steel's strategy to ensure that the Beeckerwerth hot strip mill is always state of the art, with the aim of meeting the continuously growing customer requirements on the market for high strength tube grades.

Antam to restart normal operations by November end

Indonesian producer Aneka Tambang expects its troubled FeNi III ferronickel smelter to be back in normal operations only in late November. The company had previously said it hoped to get the new plant back up and running in October after it was taken down in July following a leak.

Mr Kurniadi Atmosasmito said that the smelter has indeed restarted trial operations but normal production levels are now only expected to be reached late next month.

The companys official production forecast for this year stands at 13,000 tonnes to 16,000t of nickel in ferronickel, depending on how quick the restart of the FeNi III plant proves, down from an original 20,000 tonnes at the start of the year.

Guangzhou Shipyard posts surge in profits

Guangzhou Shipyard International Co Ltd announced last week that it will report a 500% third quarter profit increase from last year due to higher efficiency and improved margins. The company is benefiting from high demand for new tankers and low labor costs that help it win orders from overseas.

The company posted a RMB 15.96 million ($1 million) profit for the third quarter of 2005. For the six months ended June 30, the company had reported net profit of RMB 65.2 million, up 139% from RMB 27.24 million the previous year.

China's largest ship builder, China State Shipbuilding Corps only listed shipbuilding unit Guangzhou Shipyard, by the end of the first half of this year, has secured new shipbuilding orders with contract value of RMB 3.6 billion, raising total outstanding orders to RMB 11 billion. Shipbuilding capacity is fully booked with accumulated orders to build 39 vessels until mid 2009.

Guangzhou Shipyard makes oil and oil product tankers and chemical products ships, as well as steel structure and mechanical and electrical products. Guangzhou Shipyard has three shipbuilding docks, with annual capacity of 14 tankers in 2007 and 16 in 2008.

Churchill Mining puts 2 rigs in Sendawar coal project

Churchill Mining PLC has announced deployment of its two drilling rigs to the primary coal resource targets at the Sendawar Coal Project in Kalimantan, Indonesia.

Churchill said that the initial pilot phase drilling program and appraisal work confirm that the tenement block called AAM is highly prospective for semi soft coking coal.

Churchill said that it wants to accelerate its drilling program by contracting at least another three rigs, with the aim of establishing an initial mining reserve of 5 million tonnes, as part of an overall target of a first resource of 200 million tonnes in the primary target area.