TATA Steel wants to buy stake in Corus Report

ET has reported that TATA Steel is believed to be in talks to buy a significant stake in Corus, which would become the second biggest steel consolidation after Arcelor Mittal. The report citing people close to the matter said that TATA Steel is believed to have valued Corus close to $10 billion and that several bankers including Standard Charted, ABN Amro, Deutsche and others have been given mandate to raise the funds.

Meanwhile, shares in Corus moved to the top of the FTSE 100 leader board on talk of this bid. A report in a leading UKs news paper suggested that an offer could come as early as this week and be pitched at 580p per share. The reports suggested management of these companies is in deep discussion over a deal.

However the report mentions a denial from TATA Steel saying that TATA Steel does not wish to comment on speculative market reports based on unconfirmed sources.

Corus was worlds 7th largest steel maker in 2005 with annual sales of $18 billion. But is ridden by high cost of steel making and is looking for a partner to balance the situation. Corus is reported to be on block for sometime, and has invoked interest of many global steel players including Severstal and Evraz. It would be interesting to watch this story of consolidation.

SAILs RSP create half yearly record on all fronts

Steel Authority of India Limiteds Rourkela Steel Plant, with outstanding performance in September 2006, has reported record first half production during April to September 2006 since its inception.

RSP has reported production of 1.46 million tones of sinter up b y 34% YoY, 1.04 million tonnes of hot metal up by 40% YoY, 0.98 million tonnes of crude steel, 0.92 million tonnes of saleable steel up by 40% YoY and dispatch of 0.91 million tonnes of saleable steel during April to September 2006 period.

RSP has crossed the one million ton mark of hot metal production after having crossed the 0.5 million ton mark in the first quarter. With this, the steel plant is poised to surpass the rated capacity of 2 million tonne during the year for the first time.

JSPLs Orissa project on track

Jindal Steel and Power Limited is confident of completing land acquisition for its proposed project at Angul in Orissa by the end of 2007 and commencing construction work by next year to keep with the scheduled start of the first phase production of its 6 million tonnes steel plant by 2009.

Mr Navin Jindal vice chairman and MD, while asserting that the work on the project was on schedule to meet various deadlines, told reporters that the company had already placed orders worth Rs 2,000 crore and issued letter of credit for over Rs 577 crore for the project. He said We have letters of comfort from banks, financial institutions, including some foreign banks.

Mr Navin Jindal informed that Orissa State Pollution Control Board has already given environment clearance for the project and permission to draw water from the Brahmani has also been given.

Mr Navin Jindal, highlighting the peripheral development work undertaken by JSPL, said that mobile hospitals & electrification of villages had already been taken up and that JSPL plans to establish a school and undertake 15 water supply projects in the area.

Anti POSCO seek intervention of Indian President

Local media has reported that Jibika Bachao Andolan has appealed to President Dr APJ Abdul Kalam to intervene and protect the rights of those displaced by POSCO India and Vedanta Alumina projects in Orissa.

Mr Rabi Behera secretary of JBA, in a memorandum to Dr Kalam said that acquisition of 4,000 acres of agricultural land for POSCO to set up a steel plant and a captive port in Jagatsinghpur would affect thousands of people. Mr Behra said "Granting special economic zone status to POSCO and 11 other ventures will displace more than 60,000 and cause huge losses to Orissa in the form of taxes."

JSL reported to be considering an acquisition in SEA

Indias stainless steel major Jindal Stainless Steel is reported to be holding preliminary talks to buy a facility in a South East Asian country although earlier reports had mentioned Eastern Europe as an option.

If JSL succeeds in buying a facility in SEA, it would rank as the 2nd largest Indian acquisition in steel sector in SEA, followed by TATA Steels Nat Steel takeover last year.

JSL already has 50,000 tonnes plant in Indonesia, which it bought for about $30 million to $35 million some time ago.

JSL currently has a 0.4 million tonne stainless steel facility at Hissar in Haryana, which is being expanded at an investment of Rs 1,800 crore. JSL has also proposes to set up an integrated SS mill of 1.6 million tonne capacity in Orissa, along with ferro chrome smelters, coke ovens and a captive power plant at an investment of over Rs 2,200 crore.

Indias 6 core sector growth up at 6.7% in April to August06

According to official figures released Indian core sector growth, measures on the index of industrial production, stood at 6.7% for April to August 2006 in comparison with 6.1% in April to August 2005.

The figures indicate that 6 infrastructure industries registered a 5.5% growth in August 2006 lower than the 5.8% growth achieved August 2005 primarily due to a near flat growth in coal output and a sharp decline in cement production. Coal, electricity, cement and finished steel witnessed lower growth rates.

The six core infrastructure industries include crude petroleum, petroleum refinery products, coal, electricity, cement and finished steel.

SCI plans massive expansion in vessel capacity

Business line has reported that Shipping Corporation of India has made an ambitious fleet expansion program by acquisition of about 70 vessels during next 5 years at a capital outlay of Rs 15,000 crore. SCI has an acquisition plan for additional 35 vessels at an investment of about Rs 6,350 crore during the current year.

As per reports SCI plans to undertake this expansion in capacity without raising money from the capital market. Mr S Hajara CMD of SCI's told BL "Right now, we are sitting on a cash reserve of Rs 2,500 crore. For a capital expenditure plan of Rs 15,000 crore, we need equity of Rs 4,000 crore over the next five years. I do not see any financial constraints for funding the acquisition plan.

SCI is reported to have decided to look for resale contracts under which ship owners resale the contracted ship even before it is constructed and second hand vessels from global markets including Chinese shipbuilding market for a suitable resale contract.

SCIs move comes at a time when the asset prices are ruling all time.

POSCO-India announces training of local youth to placate opposition

IANS has reported that POSCO India announced that it would provide skilled training to youth of displaced families which lost their agricultural land on which the project will come up. The first batch of about 30 trainees will be admitted to the Centre for Industrial Training at Jagatsinghpur later this month.

POSCO India plans to provide skilled six month training to youth between the age group of 14 and 30 years. The training fee and other expenses like uniforms, accommodation and food will be taken care of by the company.

Steel Strips Wheels reports 30% YoY growth in July-September quarter

Indian Steel Strips Wheels has achieved all time record production and sales of 1103039 and 1105651 wheels rims during July September 2006 quarter and has achieved record growth of over 30% YoY over July September 2005.

Steel Strips Wheels, established in 1985, is a part of the Steel Strips Group, headquartered in Chandigarh. The company is engaged in the manufacturing of single piece steel wheel rims for scooters, passenger cars, utility vehicles and tractors.

Global steel demand to rise by 9% YoY in 2006 IISI

The International Iron and Steel Institute in a forecast for 2006 published at its annual conference at Buenos Aires in Argentina said that it expects global steel demand rising by 9% to 1.121 billion tonnes in 2006 from 1.029 billion tonnes in 2005. IISI also predicted a more moderate forecast of 5% growth in steel demand in 2007 to reach 1.179 billion tonnes.

IISI said "Reflecting on the current year, China and Asia have again dominated the world market for steel. Increased spending on infrastructure and construction in India would drive up apparent steel use there by 10% in 2006. But the strongest increase is seen in China, clocking a 14% increase in 2006.

Mr Ian Christmas secretary general of IISI said that the industry remained optimistic despite the slower forecast seen next year. He said "The underlying trend is slowing down a bit, but most people are still quite optimistic about next year.

Japans crude steel production in 2006 3rd ever highest

Japans ministry of economy, trade and industry expects Japans crude steel production for 2006 to reach the 3rd highest in its history after 1973 and 1974. METI said that the total amount of crude steel production will reach 115.73 million tons up by 2.9% from a year earlier.

METI has made the forecast by taking into account the expected amount of demand in crude steel during the third quarter October to December2006 and amount of actual production during the first two quarters.

The previous peak of production was 2004, after which Japanese steel makers scaled down exports of steel plate production competing with Chinese steel makers. However, Japanese firms have been resuming steel production. Steel sales are growing in sectors including automobiles, shipbuilding, machinery and construction.

Excel Coal shareholders approve Peabody bid

Shareholders in Australia's Excel Coal Ltd overwhelmingly approved a $1.5 billion takeover by US based Peabody Energy Corp. An Excel spokeswoman said that more than 99% of Excel shareholders agreed to Peabody's sweetened A$9.50 per share bid. Following court approval of the vote, Peabody anticipates financial closing of the transaction later this month.

Peabody initially offered A$8.50 per share in July and won Excel board backing, but upped its offer and bought up 19.9% of Excel's stock. The purchase price totals approximately US$1.5 billion, including previously purchased shares, plus approximately $300 million in assumed debt.

Mr Gregory H. Boyce president and CEO said "With the favorable shareholder vote, we look forward to completing the acquisition of one of the premier coal companies in Australia. We have worked closely with the Excel team on the integration plan for a number of months, and we look forward to combining and expanding our Australian platform to serve high-demand thermal and metallurgical coal markets at a time when the forecast for seaborne coal continues to grow."

Excel Coal is one of the largest independent coal companies in Australia. Excel's reserves of around 500 million tonnes of coking and thermal coal made it an attractive target to Peabody, which is looking to boost its coal sales in the Asian market.

Peabody Energy is the world's largest private sector coal company, with 2005 sales of 240 million tons of coal and $4.6 billion in revenues.

Ms Xie points to relaxing of foreign ownership rules in China

The Financial Times citing Ms Xie Qihua chairwoman of China's largest steelmaker Baosteel reported that China may relax its restrictions on foreign ownership of steel companies in order to accelerate the consolidation of the industry.

Ms Xie said that the ban on foreign companies taking control of steelmakers may not be permanent and as the Chinese economy develops, this ruling could be revised or updated. She said that Different stages of development require different rules.

Ms Xie is a powerful voice in the Chinese steel industry because of the size of Baosteel, in which the government holds a 78% stake. The FT said it was unlikely she would comment about the possibility of a potential change in ownership rules unless it reflected official thinking.

Ms Xie also suggested that she could be open to expanding Baosteel's relationship with Arcelor Mittal. When asked if she was interested to develop what is currently a fairly insubstantial link with Mr LN Mittal, Ms Xie said "We'll see."

Mr Mittal had recently urged Beijing to loosen rules on foreign ownership as a means to help Arcelor Mittal expand in China.

Steel makers hope for higher global steel price levels in 2007

Despite huge oversupply of steel from China and the inventory build up in United States, some of the steelmakers on the sidelines of the annual meeting of the International Iron and Steel Institute in Buenos Aires opined that steel prices will rise in 2007 as real demand remains strong.

Mr Akio Mimura president of Nippon Steel Corp said "My hope is to increase prices, always, but it depends on the raw material price, what we have next year.

Mr Vinod Mittal MD of Ispat Industries Limited said "We're expecting a price increase of around 10% to 12% for rolled products in 2007.

Mr George Skindilias MD of Halyvourgiki Inc said that 2007 would be another record year for the steel industry in terms of prices. He said "Prices are going to go up next year, anywhere between 3% to 10% for all products.

Steelmakers however acknowledged that the issues overhanging prices is China's soaring production and its shift from net importer to net exporter.

Mittal Steel Temirtau strike to end soon

AFX has reported that Mittal Steel Temirtau has settled the wage increase and other issues of striking miners & steel workers. The offer of a more than threefold pay raise for miners and 20% pay raise to metal workers was announced at a meeting with miners, who received it with applause.

Mr Narendra Choudhary GD of Mittal Steel Temirtau said that coal miners' new wages would be effective from October 1st. Mr Choudhary also said that a separate offer was made to steelworkers to raise their wages by 20% raise from October 1st and by another 10% from February 1st 2007. Mr Choudhary also said that the company would allocate as much money as needed to improve safety at mines and urged miners to return to work.

Mr Vladimir Dudnik leader of trade union said that workers are likely to accept the offer. He said that a decision on the offer would be made at a trade unions' congress that would be held in the next few days.

Coal miners had been striking for the eighth day, a protest triggered by the death of 41 miners in a methane gas explosion last month and steelworkers have been holding talks with the management over wages for two months. Steelworkers' wages average $300 a month and miners are paid an average of $350 a month.

Chinas coal production putting pressure on domestic prices

Xinhua has reported that Chinas coal production grew by 8.4% YoY to reach 1.35 billion tons during January to August 2006. Chinas total coal production in 2005 increased to 2.2 billion tons from the 1.3 billion tons in 2000 and is expected to reach 2.5 billion tonnes by 2010.

China's coal prices see signs of downswings due to China's ever increasing coal capacity. Influenced by Chinese government's export rebate cut, China's coal exports went down while imports went up. China's coal exports sharply fell down by some 4 million tons during the first eight months while imports rocketed up by about 6 million tons. During the first eight months, average sales prices for commodity grade coal slid by 5.81 Yuan per tonne. Sales prices for coal were even cut by some 30 to 50 Yuan per tonne in some regions.

The Chinese government has considered issuing policies to set up large and developed coal bases in the next few years and it will also encourage the reform and development of the countrys existing coal mines. China now has 32 coal companies producing over 10 million tons of coal per year. Among them, two companies produced more than 100 million tons of coal annually. Five companies produced over 50 million tons of coal and more than 10 companies produced 30 million tons coal per year.

China is one of the worlds largest coal producers and consumers. Coal accounts for 87.4% of Chinas proven energy reserves and makes up more than 70% of Chinas total energy consumption.

Mechel buys controlling stake in Moskoks

Mechel announced that it has acquired a controlling stake in Moscow Coke and Gas Plant OAO for about $300 million from its management and other shareholders and now has about a 77% stake

Moscow Coke and Gas, known as Moskoks, has an annual production capacity of about 1.5 million tonnes of coke. In 2005, Moskoks posted net income of about $25 million on revenue on $111 million. Its products are sold domestically and abroad, particularly to Ukraine and European Union countries.

Mechel said that the purchase is in line with its strategy of further developing its mining segment and expanding its presence in coal and coke chemical markets. Mechel said Moskoks' competitive advantage is self sufficiency in electricity, which is produced by its own power plant.

Mr Alexey Ivanushkin COO of Mechel said "We continue to implement our strategy of further developing our mining segment. The acquisition of Moscow Coke and Gas Plant OAO allows for an increase of Mechel's competitiveness as we enter new sales markets for coal and its byproducts.

Ukraine to sell balance 1.3% in Mittal Steel Kryvy Rih

As per an official of Ukraines State Property Fund Ukraine government plans to sell 1.3% in Mittal Steel Kryvy Rih via four separate stakes at stock exchanges late this year or in early 2007. The property fund said that it would sell four stakes of around 0.33% each without giving details on the starting price for the moment.

As per reports, the official announcement for the tenders will be published sometimes in October to December and the sale will take place 30 days after the announcement is published.

The 1.3% stake remained in state hands after the government sold 93.02% in the steel plant to Mittal Steel in October 2005 in a record sale for $4.8 billion.

Salzgitter wants to buy Arcelor-Mittal's Thuringia plant

The Frankfurter Allgemeine Zeitung reported that Salzgitter AG is interested in acquiring Arcelor Mittal's Thuringia plant in Germany if the price is right.

Mr Wolfgang Leese CEO of Salzgitter told the newspaper at the Buenos Aires world steel conference We are not going to get drawn into a bidding war. He added that the price must be in line with Salzgitter's estimate of its value, without clarifying how much he would be willing to pay.

Arcelor Mittal launched sale proceedings for the Stahlwerk Thuringen steel mill last month to meet EUs conditions of merger. Arcelor must sell the mill in Unterwellenborn, near the state capital of Erfurt, to fulfill anti trust conditions as part of its planned merger with Mittal Steel.

TMK announces IPO on LSE and RTS

The Pipe Metallurgic Company TMK is going to hold an IPO of its GDRs and ordinary shares. TMK is planning to float its GDRs on the London Stock Exchange, and its shares on the Russian Trading System SE. The shares will be offered by TMK's major shareholder TMK Steel Limited.

The floatation is to be approved by all regulating authorities, including the required registration and approval by the Federal Financial Markets Service & the UK Financial Services Authority.

Credit Suisse, Dresdner Kleinwort and the investment company Renaissance Capital are joint global coordinators of the IPO.

AK Steel adds $190 surcharge on electrical steel in November

AK Steel Holding announced that it will add a $190 a ton surcharge to invoices for electrical steel products shipped in November.

The steelmaker said the surcharges are based on reported prices for raw materials and energy used to manufacture the products, with the September purchase cost used to determine the November surcharges.

Arcelor Mittals management profile 16 Michael Pfitzner

Mr Michael Pfitzner has been appointed in Arcelor Mittals management committee board last month as Head of Commercial Co-ordination.

Mr Michael Pfitzner joined Mittal Steel as Director of Marketing in February 2006. He has over 25 years of extensive industry experience in commercial functions with several steel companies namely Mannesmann, Saarstahl, Krupp Thyssen Stainless and Salzgitter. In his last assignment at Salzgitter, where he worked for nearly 5 years, Michael was a Member of the Executive Board responsible for Sales and Distribution.

Mr Michael has a Degree in Economics from the University of Bonn Germany.

Vessels for breaking to get customs clearance in Vietnam

Vietnams ministry of natural resources and the environment has officially asked the Government to allow custom clearance of old vessels that docked in Vietnams ports before November 1st 2006 and were contracted prior to July 1st 2006 when the Law on Environmental Protection came into effect.

MoNRE decided to ask the government to allow the clearance of the imported vessels in order to help the enterprises that have imported old vessels according to Decree 49 dated May 19th 2006 which permitted import of old vessels. A lot of old vessels have been rejected for clearance and they are being kept at ports, causing difficulties to the importers.

The Law on Environmental Protection prohibits importing used vehicles for local demolishment. MoNRE said that the demolishment of old vessels releases toxic substances into the environment and Vietnamese enterprises are allowed to demolish old domestic vessels only.

BF blowout at Corus Port Talbot plant

It is reported that 4 workers were taken to hospital with burns after a blow out at the blast furnace at Port Talbot Corus steel plant.

As per report, the accident happened after a scheduled maintenance.

Port Talbot BF had a similar incident in 2001 when 3 workers were killed.