Dr Manmohan Singh addresses Steel Summit 2007

Dr Manmohan Singh prime minister of India inaugurated the Steel Summit, 2007 organized by the Ministry of Steel and the Confederation of Indian Industry. Mr Ram Vilas Paswan union minister for steel, chemicals & fertilizers and Dr Akilesh Das minister of state for steel were also present on the occasion.

Dr Singh in his speech said that At the very outset, let me commend the CII and all those associated with the Summit for focusing on the challenges facing steel industry and for adopting a program of action titled India Vision 2020. The year 2020 is not far away. Yet, the market environment and the state of industry may be very different from what we imagine now. Steel happens to be an industry where there are cyclical ups and downs and therefore it is very essential that in our analysis of the demand we must make a distinction between cycle and the trend. Consider the fact that even a decade ago, few had predicted the kind of demand being generated for steel today. Investment in an uncertain world is both an act of faith and a function of expectations. The state of expectations today, about Indias growth prospects, is indeed very positive. You must, therefore, think boldly about the future.

Dr Singh outlined that India today is investing about 34% of our GNP. It is a rough rule of thumb that everywhere fifty per cent of all investment happens to be in construction activity. Construction is nothing else but steel and cement and, therefore, that perspective should call planning for the future.

Dr Singh added that A future of steel in our country is indeed very bright. We have to make up our minds how best we can come up to the expectations of our country in the rising level of demand. As I see it, you have two challenges facing you. The challenge of rising demand for better quality steel and the challenge of growing competition. The question before you is whether we are prepared to deal with the challenge of change?

Dr Singh stressed on domestic potential by saying that The Indian steel industry has gone through a period of restructuring. There has been a thorough overhaul of the policy regime. This has helped India improve its ranking among global steel producers from the 9th place to the 7th place. Yet, as compared to the global average per capita consumption of 150 kilograms our per capita consumption of steel is still a mere 39 kilograms per head. Even by Asian standards we have a long way to go in the consumption of steel. In India demand is bound to grow.

Dr Singh calling the steel majors for investments in India said that The increasing number of global steel majors who have announced plans to set up steel-making facilities in India gives a fair indication of the comparative advantage of manufacturing steel in India provided we can create the right policy environment. I would like to assure you that our Government would do whatever is necessary to ensure that our industry is able to meet the growing demand for steel. It is your responsibility to ensure that good quality steel is available at reasonable prices. While I commend our business leaders for their global vision and reach, I urge them to pay equal attention to market opportunities at home. I want the Mittals and the Tatas, and all others who are eyeing global opportunities, to also invest more at home. India is a land of opportunity. Dont miss this moment! It is a combined responsibility of both Government and industry to work together to realize this vision.

SAIL to explore possibility of utilizing Kulti assets

Telegraph reported that Steel Authority of India Limited has decided to take a re look at its Kulti Works in West Bengal, which has been closed for last 4 years and that a committee has been set up to explore the various possibilities at Kulti by utilizing its asset including huge tract of unencumbered land for its internal use.

Mr SK Roongta chairman of SAIL told The Telegraph SAIL is expanding its business. We are seeing if SAIL could do something in Kulti itself. For instance, non ferrous casting could be an option there.

Kulti Works was set up in 1870 and became a part of erstwhile Indian Iron and Steel Company in 1936, which closed it down on April 1st 2003 due to un viability. SAIL appointed SBI Caps to sell the unit but that did not work out.

Observers feel the company might not be interested in selling the unit anymore. The biggest stumbling block any industry faces at the time of expansion is availability of land and considering SAILs mega expansion plans it may like to utilize the land itself.

The entire Kulti land was on a lease of 999 years to IISCO by the British government. After Independence, the lease was transferred to the Bengal government. The total area in Kulti works out to 850 acres, which includes a sprawling colony of 2,300 residential units, a 9-hole golf course and a club. The works is located on 228 acres of land even as more than two thirds of the area is unencumbered.

Nippon & Tata Steel to form JV in India for auto steel Report

Japans Nikkei business daily without citing sources reported that Nippon Steel Corp has launched negotiations with TATA Steel to jointly produce automotive use steel sheet in India.

The newspaper report said that a jointly built plant employing Nippon Steel technology will make steel sheets which are used mainly in car bodies.

The newspaper said that the plant is likely to have an output capacity of around 1 million tonnes per annum and the companies are likely to spend around JPY 50 billion (USD 423 million).

Chinese iron ore importers hoping for a roll back on export tax

A source from Minmetals Group and the China Chamber of Commerce, Metals, Minerals and Chemicals Importers and Exporters told Beijing Business News that India may roll back the export tax on iron ore quite soon.

Mr Liu Zhengang chief representative of Minmetal's Indian unit said that "The new fiscal year begins from April 1st 2007 and the Indian government is supposed to finalize the export tax before that. As usual, Indian parliament should have voted for the levy these days, but so far nothing is going on in India right now."

Official with CCCMC noted that "Chinese importers have suspended purchase Indian iron ore recently in a protest to the levy, which has put Indian government under severe pressure."

The official added that Indian parliament have hold off the vote as they are hearing voices from various sides moreover, Indian miners and exporters are lobbying the authority to roll back the duties as well.

Mr P Chidambaram union finance minister of India who unveiled the new tax in his budget last month said on March 16th that the government would consider fresh comments from the industry and may take a suitable decision on the tax.

(Sourced from Mysteel.net)

Kalinga Nagar agitation continues

FE reported lifting of 14 month long blockade of Daitari to Paradip highway in Orissa on March 9th 2006 by agitating villagers after Orissa High Court directive has failed to ease matters for industries coming up in the Kalinga Nagar Industrial Complex and the project work of almost all steel and ferroalloys units in the area is standstill.

Mr Rabindra Jarika secretary of the tribal organization spearheading the agitation Visthapan Virodhi Janmanch said that We may be withdrawing from the road blockade, showing respect to the court directive but we will not allow TATA Steel to set up its project on our land.

A senior executive of a steel project told FE that Lifting of the road blockade has only worsened the situation for projects coming up in the area. According to him this development may have brought some respite to transporters supplying iron ore to Paradip but it has put the projects in Kalinga Nagar area into further peril as the agitators are now shifting focus on industries coming up in the area.

The report also mentions that Jindal Stainless Steel Ltd, which is putting up the biggest integrated stainless steel plant in the country at Kalinga Nagar, is the worst hit as it is not being able to execute the project's second phase as it was not allowed to take physical possession of 562 acre allotted to it, in addition to 640 acre allotted for phase I. JSSL set up facilities for ferrochrome with a power and coke oven plant in phase 1.

The fate of a dozen other steel and ferro chrome plants coming up is no different.

Sumitomo to supply pipes & plates for ONGCs Mumbai pipeline

Sumitomo Metal Industries announced last weekend that it has secured an order for around 60,000 tonnes of UEO pipe, seamless pipe and marine structural plate from UAE based pipeline construction firm National Petroleum Construction Company for Oil & Natural Gas Corporations Mumbai offshore part of gas pipeline project.

Sumitomo Metals supplies the steels through Sumitomo Corporation.

POSCOs threat swings Orissa government into action

On the backdrop of recent media reports outlining POSCOs frustration over delay in progress of its mega steel plant in Orissa and likelihood of withdrawal, the Orissa government has swung into action. It is reported that Orissa government announced that it will somehow remove all hurdles within the next 3 months, without specific actions.

The report cites Mr Padmanabha Behera steel and mines minister of Orissa as saying that "We will find ways within the next three months to sort out all hurdles. One needs to understand that we are progressing as per the terms and conditions enshrined in the MoU we signed in June 2005. Already the steel giant has been given 1,100 acres of land for its proposed 12 million tonne integrated steel plant in Jagatsinghpur district."

Mr Behera reasoned that misgivings among the people in the project site were being addressed and hoped that POSCO would commence work on its project in due course.

POSCO had sought categorical assurance from the government on various issues pertaining to its project and has asked the Orissa government to spell out its stand on its project as it cannot afford to wait for an indefinite period.

Jai Balaji Sponge to commissioning new BF

Jai Balaji Sponge Ltd has informed BSE that the blast furnace of total capacity of 428,750 tonnes per annum to produce pig iron will be commissioned on March 27th 2007.

STC targeting INR10,000 crore turnover in 2007-08

It is reported that State Trading Corporation under a MoU signed with commerce ministry has projected a turnover of INR 10000 crore to be achieved during 2007-08 envisaging a growth of 11% YoY over 2006-07 excluding the wheat import turnover. Exports and domestic sales are slated to grow by 20% YoY over 2006-07. MOU was signed by Dr Arvind Pandalai CMD of STC and Mr GK Pillai commerce secretary.

Dr Pandalai while speaking on the occasion informed that STC has projected ambitious targets for turnover and profitability during 2007-08. During the current financial year 2006-07, STC imported 5.5 million tonnes of wheat on government directives. He expressed confidence in the targets set in the MOU for 2007-08 would be achieved.

STC plans to enter into many new areas of trade such as bio fuels, mining, import of rough diamonds for cutting, polishing & export, extension of current overseas steel operations to other countries, acquiring coal blocks for power generation plants and processing of agricultural commodities in overseas countries etc with a view to achieving the stated projections of turnover and profitability.

IISI releases short term steel demand outlook

International Iron & Steel Institute has released its latest forecast of apparent steel demand for 2007 to 2008, which was prepared by its Committee on Economic Studies and reviewed by the IISIs board of directors at their meeting in Delhi on March 25th 2007.

IISI said that 2006 was a particularly strong year for steel use with a growth of 8.5% for the world It has now forecast a growth of 5.9% in 2007 taking the total to 1.179 billion tonnes an increase of 65 million tonnes over 2006.

IISI said The particularly strong positive trend is foreseen for both years in Africa, Asia and South America. Growth continues in Western Europe and after an inventory draw down in 2007 in North America a positive trend is forecast in 2008. The region wise forecast is as under

In million tonnes
Source IISI

IISI added that China remains the largest single market and the strongest growth area. Steel use will increase by 13% in 2007 followed by another 10% in 2008, taking the total to 443 million tonnes 35% of the world total.

In million tonnes
Source IISI

Xstrata announces friendly USD 4 billion cash bid for LionOre

Xstrata plc and LionOre Mining International Ltd. announced that they have entered into a support agreement for all cash offer to acquire all of the issued and outstanding shares of LionOre by way of a friendly take over bid. The Offer is for CAD 18.50 per share, valuing the transaction at approximately CAD 4.6 billion (USD4 billion). The Offer represents a 5.8% premium over the closing price of CAD 17.49 per LionOre share on the Toronto Stock Exchange on March 23rd 2007 and a 16.5% premium over the volume weighted average price of the LionOre shares over the last 30 trading days on the TSX. The Board of Directors of LionOre, after consultation with its financial and legal advisors, has unanimously approved entering into the support agreement and recommends that LionOre shareholders tender to the Offer.

The support agreement between Xstrata and LionOre provides for, among other things, a non solicitation covenant on the part of LionOre, subject to customary fiduciary out provisions that entitle LionOre to consider and accept a superior proposal, a right in favor of Xstrata to match any superior proposal and the payment to Xstrata of a termination payment of approximately CAD130 million, if the acquisition is not completed as a result of the superior proposal.

The Offer documents are expected to be mailed by April 6, 2007. The Offer will be open for acceptance for a period of not less than 35 days and will be conditional upon, among other things, valid acceptances of the Offer by LionOre shareholders owning not less than 66 2/3% of the LionOre shares on a fully-diluted basis. In addition, the Offer will be subject to certain customary conditions, relevant regulatory approvals including in Canada, Australia and South Africa, the absence of a material adverse change with respect to LionOre, and a waiver of the LionOre shareholder rights plan implemented by the LionOre Board as it may pertain to the Offer. Once the 66 2/3% acceptance level is met, Xstrata intends to take steps available to it under relevant securities laws to acquire any outstanding LionOre shares. Xstrata may waive the conditions of the Offer in certain circumstances.

The acquisition of the LionOre shares will be financed through Xstrata's existing credit facilities and cash on hand.

Macquarie Bank Limited and TD Securities Inc. are acting as financial advisors and Davies Ward Phillips & Vineberg LLP and Freshfields Bruckhaus Deringer is acting as legal counsel to Xstrata. JP Morgan is acting as financial advisor and McCarthy Tetrault LLP is acting as legal counsel to LionOre.

Colin Steyn president & CEO of LionOre said We are very pleased to support this Offer. The bid offers clear value to shareholders and also positions our operations and employees as part of a growing, successful global nickel producer. This is an extremely attractive opportunity for our shareholders to lock in the substantial growth in value they have seen recently in their investment. To realize cash at this point in the commodity cycle eliminates the risk that our shareholders would remain exposed to as a stand-alone group, and enables them to realize value for their investment at a time of historically high nickel prices.

Mr Ian Pearce CEO of Xstrata Nickel said The combination of LionOre with Xstrata Nickel brings together two very complementary businesses and creates significant opportunity for the enlarged Xstrata Nickel business. This is an important step in our strategy to grow Xstrata Nickel into a truly global nickel business. With LionOre, we unleash opportunities to create value through additional production, strong synergy potential, access to new markets and increased opportunities for growth, and through optimization of technology. There is a unique industrial logic in the combination of these two businesses which is recognized in the price being offered to LionOre shareholders.

LionOre is an international nickel and gold producer with mining operations located in Australia, Botswana and South Africa. LionOre's nickel production is supported by significant by product credits in the form of copper, cobalt, platinum group metals and gold. LionOre also owns the proprietary Activox technology for the hydrometallurgical treatment of metal concentrates. LionOre shares are listed on the Toronto, Australian, London and Botswana stock exchanges.

Successful completion of the transaction will strengthen Xstratas position as a significant participant in the nickel industry and ensure that the growth potential in the LionOre portfolio can be optimized through its combination with Xstrata Nickels downstream processing facilities. Xstrata Nickel will also increase its degree of vertical integration and gain geographic and technical diversification across its operations.

2006 stainless steel production increases by 16.7% Y0Y

The International Stainless Steel Forum has announced that stainless steel production rose by 16.7% YoY to 28.4 million tonnes in 2006 and that all major regions of the world contributed to this strong growth. It must be noted that 2005 saw a small decline in world stainless steel production of -1.1% YoY, however, the increase in 2006 growth more than just compensates for the production decline in 2005.

Crude stainless steel production in Asia grew by 20.6% YoY to 15.1 million tonnes. Asia now produces more than half of all stainless steel in the world. The driving force was China with production of 5.3 million tonnes of stainless steel, a growth of 68% compared to 2005. The strong increase in production is partially based on new capacity which came on stream during 2006.

Until now Japan has been the largest stainless steel producer in Asia. In 2006, total production in Japan was 4.1 million tonnes, an increase of 2.3%. All other stainless steel producing countries in Asia showed growth rates of between 9 and 13%. However, production in South Korea remained flat.

The second biggest producing area in 2006 was Western Europe & Africa where 2006 SS production increased by 13.4% YoY to 10 million tonnes in this region.

The Americas increased their stainless steel production by 9.8% YoY to nearly 3 million tonnes.

Central & Eastern Europe production increased by 17% YoY to 363,000 thousand tonnes

Global stainless and heat resisting crude steel production in 2006

In 000 tonnes
Source ISSF

CISA forecasts slower crude steel output growth in 2007

China Iron and Steel Association forecast that Chinas crude steel output in 2007 will increase to 472 million tonnes from around 420 million tonnes in 2006, thus registering 12.3% YoY growth as against 18% in 2006.

Mr Luo Bingsheng executive vice chairman and secretary general of CISA while speaking at the Steel Market and Trade Conference in Guangzhou said that Chinas crude steel output in 2007 will be lesser due to lower domestic demand as China aims to reduce investment in fixed assets to prevent its economy from overheating.

Mr Luo said the slower production coupled with the Government's measures to curb surging foreign investment will keep exports at the same level as 2006 or lower. He said China will continue to reduce export tax rebates for low end steel products besides encouraging slower export growth among major steelmakers to moderate the rapid growth in steel exports. China exported 43 million tonnes of steel products in 2006 up by 109.6% YoY while imports fell 28.3% to 18.5 million tonnes.

Mr Luo said that China's crude steel consumption is projected at 450 million tonnes in 2007 that production and consumption are projected to peak around 2012 as China steers the economy toward more balanced and sustainable growth He said "Steel production changed from rapid growth to moderate growth and fixed assets investment changed towards making more sophisticated higher value products.

Cape Lambert sells 70% stake to Chinese Delong Steel

Cape Lambert Iron Ore Ltd said it has agreed to sell 70% of the Cape Lambert project at Pilbara in Western Australia to Chinese investor Mr Liguo Ding, who is the chairman of Singapore listed Delong Holdings Ltd, for USD 192.5 million. The agreement is conditional on Cape Lambert providing the purchasers with a report, which is expected to be completed in the second quarter, confirming an indicated JORC compliant resource of 300 million tonnes.

Under the terms of the binding agreement with Beijing based Best Decade Ltd, which owns 78% of Delong Holdings, Cape Lambert will receive 30% of the sale price at settlement of the transaction with a further 55% being paid three months after that date. It will receive the remaining 15% on completion of a bankable feasibility study and commencement of construction. Cape Lambert said it received a AUD 2 million deposit out of which AUD 750,000 is non refundable.

Mr Tony Sage CEO of Cape Lambart said We'll have plenty of idle cash after this. Cape Lambert will use some of the proceeds to fund its 30 percent share of the mine's development costs and the rest to make an acquisition or pay a special dividend. Mr Sage added that The iron ore spot price is trading well above the contract price. With this new Indian tax, the market's gone crazy.''

The drilling at the Cape Lambert project is expected to recommence in mid April. The mine will start producing about 7.5 million tons of iron ore concentrate a year by 2010 and will cost about AUD 600 million to develop. The development cost includes the cost of a plant, the upgrade of existing port facilities and the laying a 5 kilometer pipeline to carry iron and iron ore slurry to the coast.

Delong Steel, whose stock trades on Singapore's bourse, has a market value of 1.17 billion Singapore dollars (USD 771 million). Its main steelmaking operation is 430 kilometers southwest of Beijing and sells most of its output to customers in the Bohai Economic Zone.

Eurofer threatens WTO compliant over steel exports from China

European Confederation of Iron and Steel Industries have called on China to slash steel exports to below 2 million tonnes warning that it would otherwise take the case to the World Trade Organization.

Mr Gordon Moffat director general of Eurofer during a conference in China said that Chinas steel product exports to Europe jumped to more than 5 million tonnes last year from 300,000 tonne to 400,000 tonnes a year earlier. He said Increases of this extent cannot continue without repercussions on the market and repercussions on our relations to China. We expect substantial reductions this year, maybe to about two million tonnes, considerably less than five million tonnes.

Mr Peter Fish of MEPS told Reuters It will come down, but not very much, I dont think. The reduction will probably be a million tonnes or something like that from five to four million tonnes. Over the next few months, imports will decline because price offers from China and other countries are higher. But oversupply in China will happen soon. If Chinese prices drop, Chinese producers will make more competitive offers in Europe again.

Chinese steel exports in January 2007 have already hit one million tonnes.

BHP forecasts firm metal demand for decades

Bloomberg reported that world's biggest mining company BHP Billiton forecasts that prices of copper, nickel and other metals will remain high for several decades as demand from China and India climbs.

Mr Chip Goodyear CEO of BHPB in an interview in Santiago said that I'm excited about what we'll see over the next several decades as 2.5 billion people in China and India and other parts of the developing world enter the world economy. Is China and India the next reason for a multi decade increase in commodity prices? We're positive about that.''

Mr Goodyear said that The real driver in China is 15 million people a year moving from a rural or agrarian economy to an urban economy. We don't see that ending for a long time. People are striving for a better way of life.''

Mr Goodyear said that a slowdown in the US economy won't hurt demand for metals and BHP will not change production plans on the basis of an economic slowdown in the US. He said The fact is that the big drivers for commodity consumption in the world are taking place in other parts. For most of our commodities, the biggest consumer is China, not the US.

Global Steel increases stake in Zaporizhstal to 40.91%

Ukrainian Journal reported that UK's Global Steel Investments Limited has increased its share in the structure of owners of Zaporizhia based steel mill Zaporizhstalby 7.23% to 40.91%.

The registrar of Zaporizhstal's stocks said that as of December 20th 2006, Global Steel Investments Limited owned a 33.6797% stake in the OJSC, while as of February 14th 2007 the company owned a 22.5885% stake.

MMK plans IPO on London stock exchange

Magnitogorsk Metallurgical Kombinat has declared a plan of initial public offering on the London Stock Exchange for placing 13.64% (1.45 billion) of its new and existing ordinary shares as global depository receipts to international institutional investors outside Russia, including to qualified institutional buyers in the United States and also ordinary stock in Russia. The offering is subject to approval from regulators, including Russia's Federal Financial Markets Service and Britain's Financial Services Authority.

MMK's ordinary shares are quoted on the stock exchange of the Russian Trading System and the Moscow Inter-Bank Currency Exchange. MMKs capitalization in the Russian trading system is about USD 10 billion.

ABN AMRO Rothschild, Morgan Stanley and Renaissance Capital are joint global coordinators of the subscription and Gazprombank is joint global manager.

Mr Viktor Rashnikov MMC board chairman expressed the hope that IPO will lead to the broadening of the MMC shareholder base and provide new possibilities for the continuation of the companys growth and development on the international metallurgical market.

MMK is Russias largest ferrous metallurgy enterprise with a production cycles from preparation of ore to the deep reprocessing of ferrous metals with a total output of steel was 17.6% and of metal products 19.5% in 2006. MMK produced 12.4 million tons of steel last year and shipped 11.3 million tons including 5.27 million tons for export.

FMG and BaoSteel ink long term iron ore agreements

Fortescue Metals Group Ltd has announced an offtake agreement with Shanghai Baosteel Group Corporation for up to 20 million tonnes of iron ore per annum. This agreement covers a first phase quantity of up to 5 million tonne per annum, being 11.1% of fortescue's initial 45 million tonne annum production. Baosteel has also committed to purchase a further minimum of 11 million tonnes per annum up to a maximum of 15 million tonnes per annum out of a total of 25 million tonnes per annum of Fortescue's first expansion tonnage being achieved.

The long term off take agreement has been signed by FMG Chichester Pty Ltd, the owner of Fortescue's Pilbara Iron Ore and Infrastructure Project iron ore deposits, Fortescue Metals Group Ltd and Baosteel Trading Co Ltd.

The products specified under the agreement cover FMGs reasonably anticipated annual mining plan product mix including both high grade lumps and fines together with super value fines. Pricing under the agreement is based on the annual industry benchmark pricing for Pilbara premium iron ores and will reflect similar pricing for like products to Baosteel from other major international suppliers.

It also provides for a broad strategic relationship between the companies that Fortescue will preferentially seek out other opportunities with Baosteel for the mutual benefit of both parties. Baosteel has agreed to an ongoing program to undertake certain technical work on Fortescue's behalf for which a commensurate commercial fee will be paid. The program is designed to support the optimization of Fortescue's iron ore products for the market.

Fortescue and Baosteel have also signed a MoU to form a JV to explore and develop a potentially large area of banded iron formation magnetite material close to the Fortescue rail corridor and between the mine site at Cloud Break and Port Hedland in Western Australia's Pilbara region. The primary purpose of the JV is to explore and develop an area of banded iron formation mineralization, targeting at least one billion tonnes of Magnetite resource. The exploration area is located close to the Fortescue railway line currently under construction and lies between the mine site at Cloud Break and Port Hedland.

FMG has secured buyers for the majority of its planned 45 million tonnes a year output as it plans to export about 30 million tonnes of iron ore in the first year from its mine ahead of ramping up to 45 million tonnes a year. The USD 3.7 billion project was due to start exporting iron ore in March next year but damage from cyclone George, including at least two deaths at its construction site, has put the timetable and forecast cost into doubt.

Nippon Steel has no concrete plans to raise stake in POSCO

Nippon Steel Corp confirmed that it has no immediate plans to increase its 5% holding in POSCO. Nippon Steel said in a March 8th 2007 statement to South Korea's Financial Supervisory Service that it had 4.36 million shares in POSCO as of March 2nd 2007.

Mr Akio Mimura president of Nippon in an interview after attending a board meeting of the International Iron & Steel Institute in New Delhi said We don't have any concrete plans to increase our stake' in POSCO. We already have an alliance. Mr Lee and I are eager to enlarge deals that give both parties merits in terms of profit an increase in production capacity and technology.''

Nippon and POSCO on October 20th 2007 said that they would spend more than USD 900 million to increase stakes in each other to deter bids amid industry consolidation.

The Korea Economic Daily citing an unidentified POSCO executive has earlier reported that POSCO would increase the friendly stakes to 50% by the end of the year as Arcelor Mittal had made it a takeover target. Ms Ko Min Jin a spokeswoman for POSCO informed on March 16th 2007 that 41% of its shares are owned by friendly investors.

However, Mr LN Mittal president & CEO of Arcelor Mittal said on March 24th 2007 that he was not aware' of takeover talks with POSCO and dismissed media reports as rumors.

Mechel's Chelyabinsk to increase SS output by 650% in 5 years

Interfax reported that the Mechel group plans to increase production of hot rolled and cold rolled stainless steel products at its Chelyabinsk Iron & Steel Plant by 650% till 2011 to 300,000 tonnes per year. The Chelyabinsk plant now produces 15,000 tonnes of cold rolled and 25,000 tonnes of hot rolled products per year, he said. The plans call for expanding production to respectively 200,000 tonnes and 100,000 tonnes.

Mr Alexander Malanichev strategic marketing chief of Mechel at the Stainless Russia 2007 forum said that meeting these targets would enable Mechel to increase its share of the hot rolled products market to 80% in 2011 from 39% in 2006 and its share of the cold rolled market to 50% from 15%.

Mr Malanichev said that these plans would be realized by modernizing production facilities, expanding the product line and improving quality while reducing costs. He did not say how much the company would spend on updates at the plant, as the group's investment program to 2011 has not been approved yet.

Long queue of coal vessels reported at New Castle

The Australian reported that a queue of nearly 70 giant coal ships waiting to be loaded off Australia's largest coal port is unlikely to be cleared until the middle of the year and could cost coal producers up to AUD 460million. The report said that 67 coal ships have been waiting for more than three weeks off the NSW coast at Newcastle, costing the industry more than AUD 1 million a day in demurrage fees to shipping companies.

The report cites Mr Graeme Samuel chairman of Australian Competition and Consumer Commission warning that it could take until July to reduce the queue to a more workable length. He said "If the amended system is not reinstated, Australian coal producers could face substantial demurrage costs as high as USD 460 million for 2007.

The ACCC last month granted an interim authorization to the monopoly loader, Port Waratah Coal Services, to reinstate the original collusive system, called the Capacity Balancing System, as a means of clearing the backlog. This system was originally devised to try to find the best way to cope with more than 1.7 million tonnes of coal being loaded onto more than a dozen ships each week.

The ACCC originally granted a three year exemption for the scheme, which was interrupted by Hunter Valley coal companies who voted last September to change to a different loading system, resulting in an unintended worsening of the port bottleneck. The timing of the loading system change was exacerbated by a temporary blockage of the rail network supplying coal to the port caused by urgent AUD 270million rail infrastructure improvements.

Port Waratah Coal Services, which has two loaders, is owned by a consortium of Hunter coal companies including Rio Tinto and Xstrata, while a third loader is being developed by a rival consortium including BHP Billiton, Excel and Centennial Coal.

Most of Australia's coal export infrastructure has been stretched to capacity in recent years as a result of under investment in railways and ports and strong sustained global demand. These divisions as well as tensions between large and small coal miners led to the industry split last year, resulting in the unsuccessful attempt to clear more coal through the port.

Schnitzer recovers scrap after barge capsizes at Tacoma

Platts reported that Schnitzer Steel Industries has recovered approximately 4,000 tonnes of shredded steel scrap from Commencement Bay after a barge capsized Friday at its dock facility in Tacoma in Washington.

A company spokesman told Platts that "We recovered the metal beginning Friday and over the weekend. We don't know the cause; it's still under investigation."

The incident occurred at the General Metals. It is reported that a barge that was leaving a dock capsized sending its load of 4,000 tons of scrap metal to the bottom of Commencement Bay at Tacoma. The Coast Guard reported no one was hurt and there appears to be no ecological damage.

Schnitzer, based at Portland in Oregon is the largest exporter of ferrous scrap from the US West Coast.

Ukraines mines witness 3 accidents

RIA Novosti citing Ukraines emergency services reported that a fire broke out at 3:33 PM Moscow time at the Dzerzhinsky mine in the Luhansk Region. 634 miners were working in the shaft at the time and 608 have been evacuated and 26 stayed underground to help rescuers and do maintenance works in the pit. According to preliminary assessments, the fire broke because of the unauthorized application of an open flame.

In another accident, one miner was killed and another injured at the Ekspluatatsionnaya mine in Zaporozhye Region at around midday on Monday when an ore mine caved in at a depth of 810 meters. An investigation is underway.

As per a spokesman of emergency services a fatality occurred when the miner transported equipment along a single track rail line at the Krasnoarmeiskaya-Zapadnaya mine in the Donetsk region at around 10:00 PM on Sunday.

CVRD establishes subsidiary in South Korea

Brazilian Compahia Vale de Rio Docede nominated the name for the new office set up at Seoul in South Korea in March as Rio Doce Korea and nominated Mr Roberto Gotts Chalk to be the first chairman.

The business between CVRD and South Korea started from 1976. At that time, CVRD and POSCO had signed a contract for iron ore supply. The maximum annual production was 5 millions tons in 1998. CVRDs iron ore export volume to South Korea had increased from 15% in 2003 to 24% in 2005. The exports volume of iron ore and pellet was 9.6 million tons from January to September in 2006.

This is CVRDs third agency in Asia, after the agencies in Tokyo and Shanghai.

Shagang inks long term gas supply agreement with Air Liquide

It is reported that Shagang Group forged a treaty on March 12th 2007 with France's Air Liquide Group for a 23 year long gas supply arrangement involving aggregate amount of RMB 15 billion. This is the longest and biggest contract in Air Liquide Group's history and is also China's largest industrial gas outsourcing contract.

Air Liquid signed letter of investment intention with Jiangsu Yangtze International Metallurgical Industrial Park, which relies on Shagang Group on June 28th of 2004. It has also entered into gas supply contract with the third stage project of Zhangjiagang Pohang Stainless Steel Co Ltd.

Air Liquide Group will invest USD 120 million in Zhangjiagang to set up two 60,000 meter cube per hour oxygen stations in order to provide Shagang with over 2.9 meter cube oxygen, nitrogen and argon gas every year for 23 years. Annual sales revenue is expected to achieve some RMB 750 million.

Founded in 1902, Air Liquide Group is the world leader in industrial and medical gases and related services.

(Sourced from MySteel.net)

WCI Steel reports fourth quarter results

WCI Steel Inc has announced a net loss of USD 1.1 million for the quarter ending December 31st 2006. WCI reported shipments of 283,000 tons for the quarter with revenues of USD 191.2 million from product sales, EBITDA of USD 7.5 million or USD 27 per ton and operating loss of USD 1.2 million.

Calendar year 2006 shipments totaled 1.293 million tons as compared with 1.194 million tons in calendar year 2005 and revenues including Old WCI totaled USD 894 million.

Mr Patrick G. Tatom, president and CEO said "Our performance demonstrates that WCI Steel was able to successfully weather a challenging quarter. Our shipments in the quarter exceeded our prior guidance largely due to sales of semi finished steel.

Mr Tatom added that "Our future success is driven by aggressively focusing on three strategies marketing differentiation, strengthening our core operations and pursuing external growth opportunities. We are committed to executing these strategies to build WCI as a strong, independent, custom steel producer."

WCI Steel, Inc., a Delaware corporation, was formed in March 2006 and had no assets or liabilities until May 1st 2006. Under a plan of reorganization for WCI Steel Inc an Ohio corporation Old WCI, confirmed by the US Bankruptcy Court on March 30 and effective on May 1st 2006, WCI Steel, the newly formed company, acquired substantially all the assets of Old WCI.

Mr Zadavin elected as new GD of Vorkutaugol

AK&M reported that Mr G Zadavin is elected as GD of Vorkutaugol and that Mr A Loginov its former GD will join MC Severstal Resources in Moscow.

Vorkutaugol involves 5 mines in Vorkutinsky industrial region having large coal reserves, enrichment plant, mechanical plant and coal sale division. Its stocks were acquired by Severstal in June 2003 and now it is under control of Severstal Resources. Its 2006 output increased by 16% YoY to 12.3 million tonnes and it plans to produce 13.5 million tonnes in 2007.

Mittal Steel SA to announce BF investment

It is reported that Mittal Steel South Africa would announce a ZAR 600 million project at its main Vanderbijlpark plant on Thursday.

Details of the kilns investment and an update on the reline of its Blast Furnace D, which is meant to boost yearly output, would be given on Thursday.

Mittal Steel SA plans to spend ZAR 9 billion in a capital expenditure program over a number of years and the 600 million is part of that amount. It plans to add 2.0 million tonnes a year in output at the end of the investment program where the additional amount is due to come on stream by 2009 to 2010. Mittal Steel SA produced 7.055 million tonnes in 2006.