SAIL, RINL & NMDC to explore a 4 million tonne plant in Chattisgarh

Steel Authority of India Limited, Rashtriya Ispat Nigam Limited and National Mineral Development Corporation Limited have agreed to explore possibility of setting up a 4 million tonne integrated steel plant in Chhattisgarh as a JV. MoU in this regard would be entered into after obtaining necessary approvals.

Mr SK Roongta chairman of SAIL, Mr Y Siva Sagar Rao CMD of RINL and Mr B Ramesh Kumar CMD of NMDC signed an agreement in this regard at Hyderabad.

Mr SK Roongta said that This is a step towards building synergies of PSUs under the ministry of steel and will help in meeting the growing demand of steel in the country.

The details of the projects are not announced but Mr Y Sivasagar Rao told DNA Money that It is likely that SAIL being a larger company will hold a major 40% equity while NMDC and RINL will pick up 20% each.

The NMDC mines at Bailadilla will supply iron ore to the proposed steel plant. The Chhattisgarh government wants the NMDC to use part of the Bailadilla ore in projects within the state. The Bailadilla complex in Chhattisgarh, leased to the NMDC, has the best quality lumpy ore in the world, with an iron content of more than 65%. The ore is also free from sulphur and other impurities.

Indian government may revisit iron ore export tax issue Reports

As per reports in Indian media, Indian government may re examine the budget proposal for an export tax of INR 300 per tonne of iron ore following a communication from the ministry of mines seeking a review. As per reports, the finance ministry has collected a lot of data from the ministries of mines, steel and industry & commerce as well as from industry bodies for the purpose and a decision is expected in the first week of May 2007 before the finance bill goes for voting in parliament.

Introduction of the export duty led to hectic lobbying by the iron ore mining industry seeking relief on the grounds that the move would render iron ore mining uneconomical while Indian steel makers came out in support of the duty stating that the move would help in the conservation of natural resources.

The ministry of mines and has sought a comprehensive review of the proposal. The mining industry has been lobbying hard for removal of the duty, alleging that it has made Indian ores uncompetitive in the international market. Mining industry is especially pressing for waiver of duty on exports of low grade iron ore with less than 64% iron content that does not command a premium in international market.

Ministry of steel's stand is that export could be permitted only after ensuring that India does not become a net importer in the future. The steel industry has also said that operating profit of mining companies are over 85% which is highest among any industry segment.

Sinosteel plans 3 million tonne steel plant

Mr Wang Hongsen GM of Sinosteel Corporation said that it plans to set up a 3 million tonnes steel mill in India and that the relative reports will be handed to local project consultant firms besides a MoU is hopeful to be signed in May 2007. The first stage of the project will be engaged in long products at an investment of USD 500 million.

According to Mr Huang Tianwen chairman of Sinosteel board, Sinosteel seizes the investment opportunity and hopes to be the controlling part in view of India's bloomy demand for steel products. Steel mill set up in local regions can easily bless Sinosteel with high grade iron ore as Indian steelmakers repeatedly ask for barriers in exports of high grade iron ore and Indian government has taken actions.

According to undercount initiated by Mysteel, foreign steelmakers who are scheming steel mill constructions in India include Arcelor Mittal with 24 million tonnes, South Korea's POSCO with 10 million tonnes and Magnitogorsk Iron and Steel Works with 10 million tonnes besides some others.

(Sourced from Mysteel.net)

Hindalco and Vedanta bid aluminum smelter in Bosnia

It is reported that 8 companies have submitted non binding bids for a stake in Aluminij dd Mostar in Bosnia, the largest aluminum smelter in the Balkans. As per report, the list of bidder includes Glencore International AG, Hindalco Industries Ltd and Vedanta Resources.

The Tender Commission would soon shortlist the best non binding bids for the second round. The selected bidders would have at least one week for due diligence of Aluminij. The due diligence would start on May 7 and the next step would be submission of binding bids by June 26.

The tendered stake is owned by Bosnias Muslim Croat federation and smaller shareholders. The remaining 12% is owned by Croatias TLM Company. The Bosnian government has invited all cash bids to sell an 88% stake. The nominal value for the sale of 88% of Aluminijs capital is about EUR 76.8 million.

Mr Enes Ganic chairman of the bidding commission said on March 5th 2007 that prospective buyers must maintain annual output of some 121,000 tonnes of metal, keep all 950 employees and pay for the aluminum smelter in cash.

Mostar produced 121,000 tonnes of the metal last year and had sales of EUR 240 million.

PSL secures orders worth INR 1045 crore in April 2007

PSL Ltd has announced that it bagged several Onshore & Offshore Pipeline Projects Order valuing INR 1045 Crores in April 2007 as under.

1. The onshore gas pipeline projects orders worth INR 700 crores for supply of pipes for GSPLs gas grid along with export orders from Iran & Malaysia.

2. The offshore pipeline related services project orders worth approximately INR 175 crores have been received from Allseas and NPCC, two leading turnkey offshore construction companies operating in the region.

3. Few miscellaneous orders aggregating to approx INR 170 crores for supply of equipment and pipe exports during April 2007.

Mundra Ports cargo handling in 2006-07 up by 66% YoY

Mundra Port and Special Economic Zone Ltd in Gujarat has achieved a new peak in cargo handling volumes by handling 13.5 million tonnes of dry, liquid and crude oil cargo for the financial year 2006-07 up by 66% YoY as against 8.1 million tonnes for financial year 2005-06. According to a company release, the total volume including the container cargo stands at 19.7 million tonnes for 2006-07 up by 68% YoY as against 11.7 million tonnes in 2005-06.

Mundra port has achieved these volumes on account of planning for efficient utilization and optimal scheduling of logistics related infrastructure particularly availability of rail rakes for evacuation, mechanical bagging of fertilizer and wheat and increase in warehouse capacity.

The handling equipment at the port has been upgraded and maintained efficiently to ensure uninterrupted availability thus the single point mooring facility handled over 3.5 million tonnes of crude oil imports in FY 2006-07.

NALCOs 2006-07 net profit up by 52% YoY

Indias largest manufacturer and exporter of alumina and aluminum, National Aluminum Company Limited announced a 52.39% YoY jump in net profit to INR.2380.70 crore during the financial year 2006-07, from INR.1562.20 crore in 2005-06. According to un audited financial results declared by the company, it has also achieved highest every turnover of INR 6516.78 crore, recording an increase of 22.40% YoY over INR.5324.16 crore in 2005-06.

NALCO has achieved the highest ever metal sale of 356,616 tonnes in the financial year 2006-07. This represents an increase of 3.4% against the MOU target of 345,000 tonnes. NALCO also achieved 104% capacity utilization during the year. Nalco said that its 960 MW Captive Power Plant, located at Angul near the Smelter Plant also achieved the highest ever power generation of 5968 million units, the previous best being 5679 million units in 2005-06.

Nalco in a statement said that it has been pursuing the plans of continuous expansion of production capacity in order to strengthen its business and increase market share. Soon after completion of the 1st phase expansion, the company has now launched its 2nd phase expansion involving fresh investment of INR 5,100 crore. The present capacity of bauxite Mines will go up from 4.8 million tonnes to 6.3 million tonnes, Alumina Refinery from 1.575 million tonnes to 2.1 million tonnes, Aluminum Smelter from 0.345 million tonnes to 0.460 million tonnes per year and Captive Power Plant from 960 MW to 1200 MW. As part of business development strategy, NALCO is also actively exploring the possibilities of setting up JV projects abroad for making aluminum based on its surplus alumina to the tune of 1.2 million tonnes expected to be available once the 2nd phase expansion is complete.

ADB to fund TATA Powers wind energy project in Maharashtra

TATA Power Company Ltd announced that Asian Development Bank has agreed to provide an Indian rupee denominated loan of up to INR 3.52 billion (USD 79.3 million) to them for setting up and operate 100MW wind energy projects at 2 locations in the state of Maharashtra.

The tenor of the loan will be up to 13 years and will have a fixed interest rate during the entire tenor of the loan.

According to TATA Power, the project will help India's economic growth and energy diversification in an environmentally sustainable manner and will promote private sector participation in the renewable energy sector in the country.

TATA Power has already commissioned 50 MW of the total wind generation capacity as of date.

Seraikela-Kharswan district in Jharkhand calls for industrialization

Chamber of Commerce & Industry of Seraikela Kharswan district in Jharkhand has called entrepreneurs, investors, traders and common people to come forward and transform Seraikela Kharswan district into the Jharkhand's biggest industrial area.

Mr AK Srivastava president of Seraikela Kharswan District Chamber of Commerce & Industry while speaking at a seminar on the industrialization wondered that whether it was lack of political will or bureaucratic slackness or lack of infrastructure that was coming in the way of the district's industrial development. He blamed lack of prompt, transparent and time bound decisions on the part of the government for the district's slow industrialization.

Mr Srivastava said that even if the district has poor infrastructure in terms of roads and power, it still holds great prospects in terms of housing big and medium steel producing units.

CSN plans to set up 2 steel mills in Brazil

Cia Siderurgica Nacional announced that it plans to spend USD 6 billion to build 2 steel mills in Brazil to make slabs for export and domestic customers.

CSN will build a 4.5 million tonnes mill on the Atlantic Coast near Rio de Janeiro which plans to start output in September 2009 and another of the same size in the highland state of Minas Gerais to start production in August 2010. CSN said that the new mills will be supplied with iron ore from the company's Casa de Pedra mine in Minas Gerais, which plans to more than triple the mine's output to 53 million tonnes by July 2010. CSN plans to buy Chinese steelmaking equipment for the new mills.

CSN said that Baosteel may need to take part in multiple projects in Brazil to meet China's domestic demand as the country closes polluting and unproductive steelmakers. It has given Baosteel Group Corp 6 more months to decide if it wants to buy a stake 25% to 30% in the mills.

Mr Juarez Saliba CSN's head of mining while addressing an event at the company's port in Itaguai near Rio de Janeiro said that Our goal is to use about half of the new steel for the export market and the other half for Brazil and the exports will be sent to mills in the US and Europe for processing.''

Mr Saliba added that CSN expects to decide within 6 months if it will build a new steel mill in Kentucky to process 4 million tonnes of Brazilian made slabs into rolled products and, buy an existing mill and expand its rolling mill in Terre Haute in Indiana.

CSN is also spending USD 112 million to begin output of 500,000 tons a year of long products at its Volta Redonda mill in Rio de Janeiro state.

CSN operates a steel mill in Volta Redonda city, in Rio de Janeiro state, and its iron ore mine in Minas Gerais state, while it also has operations in Portugal and the US. Its current crude steel capacity is 5.6 million tonne per year. CSN posted net profit of BRL 763 million (USD 376 million) in first quarter of 2007.

ThyssenKrupp increases CRGO production capacity

By upgrading its decarburizing line, ThyssenKrupp Electrical Steel GmbH has increased its annual production capacity for grain oriented electrical steel to 260,000 tonnes. The company is using the additional capacity to expand its range of higher value added products and in the medium term, the company aims to increase the share of premium grades in total production to over 50%.

The new equipment taken into service to upgrade an existing decarburizing line is a core element of this strategy. It offers enhanced possibilities for producing premium grades, which take longer to decarburize than standard products. Using ThyssenKrupp Electrical Steels PowerCore H product line, transformers achieve efficiency levels of up to 99%.

Mr Clemens Iller Executive Board Chairman of ThyssenKrupp Electrical Steel said that we must not close our eyes to the fact that additional electrical steel capacities are being built throughout the world. Thats why we are focusing firmly on higher value added products. We aim to play a market leading role both in terms of quantity and quality in the future.

ThyssenKrupp Electrical Steel is currently the worlds 3rd largest manufacturer of grain oriented electrical steel, a material offering special electromagnetic properties which are achieved in a complex production process. It is mainly used for transformer cores. Depending on size, modern high performance transformers contain 50 to 350 tons of grain oriented electrical steel. In fiscal year 2004-05, the capacity of the two plants was 200,000 tons per year. Since then, EUR 84 million has been invested in expanding the production facilities.

Canada starts AD expiry review on plates

The Canadian International Trade Tribunal announced the initiation of an expiry review of 25.2% anti dumping duty on Russian, Chinese and South African HR steel plate. The expiry date of the duty is January 9th 2008.

The duty was imposed on HR carbon steel plate and high strength low alloy plate in thicknesses of 4.75 to 101.6 mm and widths 610 to 3,860 mm, excluding strip, originated from Russia, China and South African Republic.

According to CITT notice, the Tribunal secretary has received sufficient information including representations requesting or opposing the initiation of expiry review, submitted by interested parties by April 10th 2007.

According to the review procedure, the available documents will be submitted to the Canada Border Services Agency. The CBSA must determine within 120 day period whether cancellation of the duty is likely to result in continuation or resumption of the dumping, thus distorting competition on the local market. The CBSA should make its decision by 23 August, after which all related information is transferred to the Tribunal for further inquiry. All the interested parties will be notified accordingly.

Public hearing is scheduled for November 13th 2007 and applications for participation in public hearing should be filed before September 4th 2007.

SA Competition Tribunal approves Evraz and Highveld merger

It is reported that the South African Competition Tribunal, the final arbiter in South African mergers and acquisitions, has recently approved the merger between Evraz Group SA and Highveld Steel & Vanadium Corporation subject to divestiture of an interest in Mapochs Mine and Vanchem plants.

The Commission had recommended that the Tribunal approve this merger on condition of divestiture of an interest in Mapochs mine and Vanchem plants in line with the European Commissions ruling on the transaction.

In terms of the proposed transaction Evraz, which currently holds 24.9% of Highveld, intends to acquire an additional 54.1% of Highvelds issued share capital from Anglo and Credit Suisse International through the exercise of separate options.

IOC and striking workers ratify new deal

Reuters has reported that unionized workers at Iron Ore Company of Canada in Labrador City, Newfoundland and Labrador and Sept Iles Quebec, have ratified a new five year contract agreement and ended a seven week strike. Iron Ore Co said the new agreement includes base wage increases in each year increases in pensions, medical and travel benefits and a substantial signing bonus.

Production and maintenance workers at the company's mining site in Labrador voted about 60% in favor of a deal reached by the company and the United Steelworkers negotiating committee on April 22nd 2007. A smaller warehouse local voted 67% percent in favor. The majority of unionized workers at port and terminal operations in Sept Iles also ratified the deal on Thursday morning.

The unionized staff went on strike March 9th 2007.

Mr Terence Bowles company president and CEO said in a statement said that "We are looking forward to getting our people back to work and producing product for our valued customers. We are confident that we will put this dispute behind us and together continue to build a strong and successful IOC."

Mr Don Dinn spokesman of union said that with the strike over, things can return to normal for the workers and the surrounding communities. He said "It's a big relief for the communities. I know we still have a lot of problems and we always will have problems out there but we've got to try to make the best of what we have."

The Iron Ore Company of Canada is the largest manufacturer of iron ore pellets in Canada. It has about 1,700 employees and is 59% owned by Rio Tinto, 15% by the Labrador Iron Ore Royalty Income Fund, and 26% owned by Mitsubishi Corp. IOC produced 13 million tonnes of pellets in 2006.

POSCO & Hyundai Heavy to increase cross holding in defense

POSCO announced that it will buy a 1.9% stake in Hyundai Heavy Industries Co for KRW 346.6 billion (USD 374 million) from Hyundai Mipo Dockyard, Hyundai Heavys affiliate to boost their business tie up. In return, Hyundai Mipo will buy a 1% stake in POSCO for a similar value. The date for share purchase and price will be determined later

POSCO said the cross share holding is aimed at boosting their business tie up. However, market watchers said the move is part of their efforts to bolster defenses against hostile bids. The deal is a relatively rare case of a share swap between top companies in South Korea, underscoring worries about takeover attempts by unfriendly shareholders amid consolidation in major industries.

POSCO also plans to make a strategic alliance with Dongkuk Steel Mill Co. POSCO is to invest KRW 40.2 billion taking a 9.8% of a Dongkuk unit while Dongkuk will spend KRW 12.2 billion on a 9.8% stake in POSCO's coated steel plate unit. POSCO is approaching its customer companies beyond institutional investors to secure friendly shareholders. A spokesman at South Korea's Woori Bank, a unit of Woori Financial Group, said recently that the lender was seeking to purchase a 0.5% stake in POSCO, worth nearly USD 190 million, at the steel maker's request. The series of reports show that POSCO has been taking any potential takeover bid seriously.

The South Korean steel maker has a fragmented, foreign dominated share ownership and its shares are cheaper than shares in other global competitors such as Japan's Nippon Steel Corp and JFE Holdings Inc. South Korea's National Pension Fund, the country's biggest institutional investor, owns 2.9% of POSCO. In December US investor Mr Warren Buffett's of Berkshire Hathaway Inc also disclosed that it owns a 4% share in POSCO.

Evraz announces record performance for 2006

Evraz Group announced its preliminary audited results for 2006 with a strong YoY growth in sales volumes and revenues.

The highlights of performance in 2006 include
1. Revenues growth of 27.4% to USD 8.292 billion from USD 6.508 billion in 2005
2. Consolidated adjusted EBITDA up 42.7% to USD 2.652 billion from USD 1.859 billion in 2005
3. Net profit growth of 50.9% to USD 1.385 billion from USD 918 million in 2005
4. Crude steel production grew by 16% to 16.1 million tonnes
5. Total steel sales volumes climbed by 24.5% to 16 million tonnes driven by organic growth, acquisitions in Europe and inventory reductions
6. Strong leadership growing Russian long products market with favorable pricing environment through 2006
7. Successfully implemented capital investments program of USD 660 million
8. Robust level of self coverage of 80% in iron ore and 84% in coking coal
9. Commencement of iron ore production at Izykhgol and Burluk mines in Siberia
10. Acquisitions of new iron ore development license with 3.3 billion tonnes of resources in the Urals
11. Successful IPO of OAO Raspadskaya in November
12. Disposal of Neryungri coal mine project results in an impairment loss of USD 66 million
13. Acquisition of 24.9% in Highveld Steel and Vanadium Corporation for USD 207 million in July
14. Acquisition of 72.84% in Strategic Minerals Corporation (Stratcor) for USD 125 million in August
15. Successful tender offer for 100% of Oregon Steel Mills (USA) for USD 2.3 billion closed in January 2007

In million tonnes

In million tonnes

Mr Alexander Frolov chairman & CEO of, Evraz Group said Fiscal 2006 was the best year in the history of the Evraz Group. It was one of rapid growth with continuing success and we are delighted with this achievement. I am glad to present all time record highs demonstrated by strong results in almost all spheres of our business. This achievement is completely in line with our long term strategy and allowed us to deliver superior returns for our stockholders.

As at 31 December 2006 Evraz Group held 39.9% effective interest in Raspadskaya Mine and 50% interest in Yuzhkuzbassugol.

USs steel shipments in February down by 6.5% YoY

The American Iron and Steel Institute reported that for the month of February 2007, US steel mills shipped 8.350 million net tons, a 6.5% decrease from the 8.937 million net tons shipped in February 2006 and a 3.2% decrease from the 8.614 million net tons shipped in the previous month, January 2007.

According to the AISI, a comparison of steel shipments during January to February 2007 shows the following changes within major market classifications in US
1. Service centers and distributors down by 9.7%
2. Automotive down by 4.6%
3. Construction and contractors products up by 2.2%
4. Oil and gas down by 8.1%
5. Machinery, industrial equipment and tools down by 10.1%
6. Appliances, utensils and cutlery down by 6.6%
7. Containers, packaging and shipping materials down by 7.4%
8. Electrical equipment down by 16.2%.

AISI is comprised of 32 member companies, including integrated and electric furnace steelmakers and 125 associate and affiliate members who are suppliers to or customers of the steel industry. AISI's member companies represent more than 75% of both US and North American steel capacity.

Air Liquide to setup ASU in Dalian to supply gases to Dongbei Special Steel

Air Liquide has entered into a new long term agreement with Dongbei Special Steel Group at Dalian in Liaoning Province of China to install a new Air Separation Unit with a production capacity of 550 tonnes per day of oxygen to supply gaseous oxygen, nitrogen and argon by pipeline to the new Dongbei Special Steel Group steelworks.

Air Liquide will invest more than EUR 20 million in a new ASU to be commissioned in mid 2008. The unit will be designed and manufactured by Air Liquide Hangzhou, the Air Liquide engineering centre in China and will use the latest technologies of the Group providing both high reliability and high energy efficiency, in line with Chinese government objectives.

Mr Zhao Mingyuan Chairman of Dongbei Special Steel Group said Our Company has a bright future with ever increasing needs for our special steel products. After fruitful discussion, we have taken the decision to outsource our industrial gas needs and have selected Air Liquide. We are happy to benefit from Air Liquides worldwide expertise in the industrial gas field, in technology as well as in operations, and to build a long-term relationship with it.

Mr Jean Pierre Duprieu senior VP of Asia Pacific and member of Air Liquides Executive Committee said We are very pleased to have signed this agreement with Dongbei Special Steel Group, a very well-known Chinese State Owned Enterprise, which has decided to outsource its industrial gas needs. With this new investment we will enter the fast growing Dalian market, which will provide new opportunities to develop our business. It is also further proof of the willingness of the Group to accelerate its investments in emerging markets. With 20% of the Groups total sales, Asia is at the center of our growth ambitions.

Dongbei Special Steel Group is a leading manufacturer of high added value special steel products, resistant to high temperature or stress and used for bearings, tools, springs and structures in such industries as space, aircraft and automobiles as well as stainless steel.

Queensland premier commissions new loader at RGCT

Newswire.com reported that Mr Peter Beattie premier of Queensland commissioned a new USD 200 million ship loader in Gladstone, which will increase the RG Tanna Coal Terminals current coal export capacity by 10 million tonnes.

Mr Beattie said that RGCT capacity will increase even further when additional infrastructure is completed in the next 12 months, taking its export capacity to more than 65 million tonnes annually. He said that In the last year, Port of Gladstone has increased its capacity more than any major coal port in Australia. This is evidence of Queenslands ongoing efforts to increase coal export capacity to facilitate global demand, and the Queensland Government is proud to have invested over USD 400 million in the Gladstone expansion so far.

He said that the Government continued to partner with industry to deliver new and expanded coal mines and critical road, rail and water infrastructure. Mr Beattie said that state government is facilitating a consortium agreement to progress the USD 1 billion rail link from thermal coal reserves of the Surat Basin to Gladstone, estimated at 4 billion tonnes.

He said that State wide, Queensland has known reserves of at least 30 billion tonnes sufficient to last for more than 200 years at current extraction rates. In the year to June 30 2006, Queensland coal production reached almost 172 million tonnes of which 143 million tonnes was exported. And By 2009-10, production is forecast to rise to between 215 and 235 million tonnes, with export markets continuing to account for more than 80%. He added that Queensland continues to plan for this growth, by investing USD 2.3 billion with the private sector in expanding and upgrading Queensland port coal export capacity to 213 million tonnes per annum by the end of this year thats a 33% increase since 2005.

Baosteels iron ore requirement to increase to match expansion plans

It is reported that China's biggest steel maker BaoSteel Group Crop will need to buy 90% more iron ore by year 2012 as it plans to more than double output to tap rising demand from makers of automobiles and appliances.

Mr Li Qingyu CEO of Shanghai based BaoSteel Trading Co said that The company, which used 42 million tonnes of ore in 2006 to produce 26 million tonnes of crude steel, will require 80 million tonnes of ore to meet its target of producing 50 million tonnes of steel in 2012.

(Sourced from MySteel.net)

Corus terms EU emission scheme as a threat to steel producers

Western Mail reported that Corus has warned that EU scheme to cut pollution is counter productive and could damage the Welsh steel industry.

Mr Philippe Varin CEO of Corus said that the EU Emissions Trading Scheme first introduced in 2005 was a major contributor to rising electricity prices one of the firms big headaches. He said high electricity prices, differential wage levels and the costs of importing raw materials particularly relative to India, Brazil and China were a problem.

Mr Varin said The consequence would be we would not expand at all then shrink production. We would import steel we would continue to produce as much CO2 and it would be worse. Production would be relocated to other countries. He added that I dont think the system today is a good incentive to the bad guy to do better.

Mr Varin said a new scheme needs to extend beyond the EUs borders, In a separate written memo to the MPs committee, he said that The steel industry needs a scheme that can be extended globally so that steel companies across the globe are encouraged to improve their manufacturing efficiency.

Mr Varin added that There is to be clear no question in the four or five years to come there will be steel making in Port Talbot. The question is, in the long term, can you have a sustainable position? And that depends on our cost position.

Around 90% of new capacity in the steel industry is being developed in the 70% of the world not covered by the Kyoto agreement on cutting greenhouse gases and each firm is then given an allowance and can sell on any surplus if it cuts its pollution. The current system involves EU Governments setting an emission cap for all manufacturing plants covered by the scheme. But there are many anomalies, including the inclusion of steel but not aluminum, and the lack of a similar scheme outside the EU.

Chinese steel makers forecast excess iron ore supply in 2008

Given huge a building iron ore capacity across the world, the ore market may spot oversupply in 2008, held by a host of Chinese steel industry participants on a Beijing Conference.

Mr Li Qingyu GM of Baosteel's trading company said that Australia is building some 100 million tonnes new capacities, which are arranged for release from next year till 2010.

Mr Li Xiaowei chairman of Valin Group said that "If the iron ore capacity continues to release, its price will decline inevitably in 2008."

Mr Zhang Shengsheng vice GM of Laiwu Steel Group told Oriental Morning Post that the price is more likely to hold flat with slim possibility to drop or surge.

Chinese steel mills are also setting up JV abroad and entering into long term contracts with the global suppliers for secure material source.

(Sourced from MySteel.net)

Cleveland-Cliffs operations update for Q1 of 2007

Cleveland-Cliffs Inc announced selected operating information for the three months ended March 31st 2007.

North American Iron Ore
During the first quarter of 2007, Cleveland-Cliffs shipped 2.6 million tons of iron ore pellets from its North American mines. This compares with shipments of 2.9 million tons in last year's initial three months. The Company's first quarter shipments are not indicative of full year sales volume due to winter shipping constraints on the Great Lakes. First quarter shipments in 2007 included approximately .3 million tons of the previously disclosed 1.2 million tons of pellets purchased from upper Great Lakes stockpiles and paid for by customers in December 2006.

Australian Iron Ore
First-quarter sales revenue at Portman of USD 100.3 million on 1.9 million tonnes, versus USD 60.2 million on 1.5 million tonnes for the same period in 2006, reflected higher volume and prices. Average per-tonne revenue was USD 52.13, versus USD 41.12 last year, an increase of 27%. The 27 percent increase in first- quarter revenue rates reflected the impact of the 9.5% increase in 2007 iron ore prices versus the 2006 price settlement of 19%, which did not occur until the second quarter with retroactive application to the beginning of the year.

Following is a summary of production tonnage for 2006 and estimates for 2007

In million
(1) Long tons of pellets of 2,240 pounds.
(2) Metric tons of 2,205 pounds. Cockatoo production reflects Cliffs' 50% share.

Production during the first quarter at Tilden was lower as a result of scheduled equipment repairs. Hibbing first-quarter production was lower due to an unscheduled plant shutdown from mid-February to mid-March, caused by a free flowing water shortage attributable to adverse weather conditions. Production at Wabush was .3 million tons higher than the same period in 2006 as a result of design improvements to mitigate pit dewatering issues. The increase in Portman's first-quarter production primarily reflected the completion of the two-million-tonne per annum expansion project at Koolyanobbing in late 2006.

Mr Joseph A. Carrabba president & CEO of Cleveland-Cliffs said "Business conditions in North America continue to exhibit strength, with demand from steel companies remaining firm. This environment bodes well for Cliffs' domestic iron ore business and appears to signal another very good year for our Company."

ICG reports Q1 2007 results

International Coal Group Inc announced its Q1 results for 2007. During January to March 2007 its revenue was USD 228.3 million as compared to USD 213.5 million in January to March 2006 quarter. ICG reported a net loss of USD 8.1 million January to March 2007 as compared to a net loss of USD 6.2 million in January to March 2006. Its EBITDA increased to USD 12.9 million for the first quarter of 2007 compared to USD 10.6 million QoQ.

ICG Said The increased net loss was primarily due to higher interest expense associated with the senior notes issued in June, 2006. Additionally, certain mining operations experienced low productivity due to geologic issues that significantly decreased output and increased production costs at those sites. These costs offset the benefits from increased sales in the first quarter of 2007.

Its EBITDA increased to USD 12.9 million for the first quarter of 2007 compared to USD 10.6 million in Q1 of 2006.

Mr Ben Hatfield President & CEO of ICG said that "We expected the first two quarters of 2007 to be our most challenging as ICG executes the transition of replacing income from expiring brokered coal contracts with margin from new production being developed at the Philippi, Raven and Beckley complexes. However, the first quarter was tougher than anticipated as weak demand for coal early in the quarter forced production schedule cutbacks and costly re handling of coal inventory. Even as the market improved in February and March, production costs at certain mines in the Buckhannon, Vindex and Flint Ridge complexes were higher than expected, making those mines unprofitable at current market prices. Consistent with ICG's stated commitment to exercise market discipline and eliminate unprofitable production, we idled Buckhannon's Sago Mine and sharply curtailed production at Vindex's Carlos surface mine and Flint Ridge's No. 1 surface mine. As the mining sequence is completed over the next few months, the Flint Ridge surface mine will be idled."

ICG is a leading producer of coal in Northern and Central Appalachia and the Illinois Basin. The Company has 11 active mining complexes, of which 10 are located in Northern and Central Appalachia and one in Central Illinois.

Universal Stainlesss Q1 profit up by 70% on aerospace sales

Universal Stainless & Alloy Products Inc announced that its Q1 profit is up by 70%, aided by strong aerospace sales and a lower income tax rate. The company said that its quarterly earnings rose to USD 6.8 million from USD 4 million in the prior year period. Its sales grew to USD 56.2 million from USD 44.9 million.

Mr Mac McAninch Chairman & CEO said in a statement that The strong aerospace sales helped drive growth. He expects the industry to continue its demand, with airlines ordering new airplanes to help make their fleets more fuel efficient.

Universal Stainless said it expects strong demand from the aerospace industry to continue, as airlines take deliveries of new planes to make their fleets more fuel efficient. The company also expects high nickel prices to continue.