Indias iron in March unaffected by export tax Indian government

Mr SS Palanimanickam minister of state for finance in reply to a question raised by Mr Suresh Kalmadi in Lok Sabha said that with effect from March 1st 2007 a duty of INR 300 per tonne has been imposed on exports of iron ore, all sorts.

He said that exports of iron ore during March 2007 are more or less at par with the estimates. He added that It is, however, too early to comment on whether exports of iron ore will be affected by this levy.

Mr Palanimanickam said that tax issues are decided by the government taking into account various factors including revenue effect need to preserve natural resources and profitability of the relevant industry. He added that Government will take appropriate action, if considered necessary, after taking into account all relevant considerations.

SAIL & KIOCL to form a mining JV

Mint reported that Steel Authority of India Ltd and Kudremukh Iron Ore Company Ltd plan to invest INR 400 crore each in a new partnership company to exploit three iron ore mines in Orissa.

The new company has not been named yet but mining is expected to begin by 2011. An environment impact study is being undertaken at present. The initial production target has been fixed in the range of 4 and 5 million tonnes of ore a year.

KIOCL has been exploring other business avenues since a court order banned its mining operations in the Western Ghats.

Structural works starts at RINLs seamless tube mill

BL reported that the first structural steel column erection of the seamless tube mill of Visakhapatnam Steel Plant was inaugurated on last Saturday by Mr Y Sivasagara Rao CMD of Rashtriya Ispat Nigam Limited.

Mr Sivasagara Rao said that it was a matter of great satisfaction to him that during his tenure the Union Government had sanctioned the expansion of the plant capacity from 3.2 million tonnes to 6.2 million tonne at an investment of INR 8,600 crore.

Mr Rao also informed that "The board has also approved the further expansion of the plant capacity to 8 million tonne and the corporate plan envisages increasing the capacity to 16 million tonne by 2020 at a total investment of INR 25,000 crore, including the INR 8,600 crore for the present phase of expansion.

Dr Manmohan Singh awards 10 SAIL employees with 4 Shram awards

Dr Manmohan Singh prime minister of India presented 4 Shram Awards for the year 2004 to 10 employees of Steel Authority of India Limited at Vigyan Bhawan in New Delhi on April 27th 2007.

The awardees are Mr Satyavan Nayak charge man cum senior technician from Plate Mill and a group comprising Mr AK Kerketta chargeman and Mr T Maharana senior technician from Coke Oven & Coal Chemicals Department of SAIL's Bhilai Steel Plant. Modifications suggested by Mr Nayak to enhance the capability of shearing line-II, conveyors and improvement in plate movement of BSP's Plate Mill have helped SAIL achieve savings of nearly INR 21 crore per annum and innovations and improvements in maintenance practices by the CO&CCD group enabled SAIL to achieve recurring savings of around INR 71 crore and one time savings of around INR 18 crore.
Shram Vir Award carries a cash award of INR 60,000.

Another 2 groups, one again from Bhilai's CO&CCD and one from Steel Melting Shop of SAIL's Visvesvaraya Iron & Steel Plant received the Shram Shri Award that carries a cash award of INR 40,000. The winners in this category are Mr Faheem Mohammed charge men, Mr Abhay Deshpande and Mr Malkeet Singh senior technician Mr Rajesh Kumar Besra and Technician Mr Nagendra Kumar Yadav from CO&CCD Bhilai Steel Plant and senior technicians Mr K Rajashekhar and Mr T Padmanabhachary, both from VISL. The VISL group was chosen for the Shram Shri for helping the company accrue savings of around INR 1.4 crore through improvements brought about in the functioning of the plant's Steel Melting Shop.

The Prime Minister's Shram Awards honor workmen, as defined in the Industrial Dispute Act (1947), who have made outstanding contributions in organizations both in the public and private sectors. Among other criteria for selection of awardees is a distinguished record of performance, devotion to duty of a high order, specific contribution in the field of productivity, proven innovative abilities, presence of mind and exceptional courage. The Shram awards are also presented to workmen who have made the supreme sacrifice of laying down their lives during the conscientious discharge of their duties.

TMEIC GE to supply electrical and automation to JSW Steel

JSW Steel has signed a USD 80 million deal with Virginia based Tmeic GE to put up a complete electrical and automation system at its hot strip mill at Toranagallu in Karanataka.

Mr Sajjan Jindal vice Chairman & MD told reporter "We are in the process of enhancing steel making capacity in the plant to 10 million tonnes in two equal phases from 3 million tonnes now. The system being provided by TMEIC GE will help us a lot.

Mr Steve Blomquist marketing director of TMEIC GE said "This project is another excellent example of TMEIC and TMEIC GE global project execution. Drives and motor equipment will be provided by TMEIC facilities in Japan while the automation system and complete electrical system engineering is being supplied by TMEIC GE offices in Salem, Virginia."

TMEIC GE, a JV between Toshiba, Mitsubishi Electric and GE Electric, is the global leader in the supply of hot mill automation systems to the metals industry. The three industry leaders each provide high levels of expertise in power electronics, systems integration technology and industry application knowledge.

India to export 80 million tonne iron ore to China in 2007

Representatives from all over the world paid much attention to China's steel market and iron ore demand at a conference jointly held in Beijing by Metal Bulletin and CCCMC.

According to Mr Wang Hongsen GM of Sinosteel's Indian branch China is the biggest importer of Indian ore while India is China's third largest iron ore provider, following Australia and Brazil. Last year China imported 326 million tonnes of iron ore, of which Australia contributed 127 million tonnes, Brazil provided 76 million tonnes and India supplied 75 million tons.

India produced 154 million tonnes of iron ore last year with 52.23 million tonnes for domestic consumption, 89.27 million tonnes for exports and the remaining 12.93 million tonnes surplus. During April to December of 2006, China absorbed 54.43 million tonnes of Indian iron ore, representing 91.41% of its total exports of 59.54 million tonnes.

As per the report, India's iron ore exports face many problems
1. Backward infrastructures
2. Unsteady ore quality and false quality inspecting reports
3. Unclear iron ore policy
4. Small iron ore miners and exporters
5. Difficult long term cooperation contracting.

When asked about the influence brought by India's export tariff on the export volume and price in this year, Mr Wang said the country's iron ore exports to China would keep at over 80 million tonnes and price would fall gradually. Mr Wang added that China and India are seeking joint quality inspection. China will set up quality inspection centers in India to promote the ordered and healthy development of Sino India iron ore trades.

(Sourced from Mysteel.net)

TATA Ryerson plans auto service center for TATA Motors at Singur

TATA Ryerson announced that it is planning an investment of INR120 crore for the TATA Motors' small car project at Singur. TATA Ryerson had been allotted 10 acres for the project next to the car factory. Its facility would be ready in March 2008, the deadline for the TATA Motors to roll out their small car.

Mr Sandipan Chakravortty MD of TATA Ryerson on the sidelines of a seminar said that "We are going for the latest technology for the unit. Besides providing sheet metal products, we are importing latest technology for the first time in India for roll formed section that will replace press works for the Tata Motors small car project. We are also holding talks with two companies from Japan and Europe for blanking technology used for making car windows."

Mr Chakravortty said that the new technologies will help in bringing down manufacturing cost. The roll formed section technology will save cost by 25% to 30% than normal press works.

He said that "Our facility would be ready in March 2008, the deadline for the TATA Motors to roll out their small car."

TATA Ryerson is a 50:50 JV between TATA Steel and US based Ryerson Inc.

Sesa Goa sells 10.8 million tonnes iron ore in 2006-07

Sesa Goa Ltd announced that its January to March 2007 quarter net income increased to INR 2.54 billion up by 32.29% YoY as compared to INR 1.92 billion in January to March 2006 quarter. Its sales in the quarter also increased by 29% YoY to INR 7.6 billion.

Seas Goa reported a net profit of INR 6.06 billion for 2006-07. It sold 10.8 million tonnes of iron ore up by 7.4% YoY from 10 million tonnes in 2006-07 It exported 93.5% of production to steelmakers in countries including Japan and China.

Vedanta paid INR 2,036 per share this month for Mitsui & Cos 51% stake in the ore miner and will buy 20% more from investors at the same price, as required by Indian law pushing up the total cost to USD 1.37 billion.

Adani inks shipbuilding JV at Mundra with Japanese Tsuneishi

Exim News Service reported that Adani group has formed a INR 1,500 crore JV with Japanese player Tsuneishi Shipbuilding Company to enable it to diversify into shipping. The proposed JV to be named Adani Shipyard Ltd is expected to have a debt equity ratio of 3:1 and is expected to come up at Mundra that also houses the Adani groups Mundra Port and Special Economic Zone.

Mr Gautam Adani chairman of Adani group confirmed this development but added that the JV agreement would be signed after a feasibility study for the project was completed. Mr Adani said that "We will hold at least 51% stake in the JV pumping in anywhere between INR 200 crore and INR 300 crore."

Adani group had earlier negotiated with European and Korean players for the shipbuilding venture. Apart from shipbuilding, the proposed project is also expected to involve repair and maintenance of vessels.

Kandla Port target 100 million tonnes by 2012

BL reported that Kandla Port Trust has set a traffic target of 100 million tonnes by 2012. Mr A Janardhana Rao chairman of KPT told Business Line that "Kandla port is one of the handful few to cross the 50 million tonnes throughput level in 2006-07. The port is set to emerge as a global logistics hub in not too distant future."

Kandla port handled 52.98 million tonnes in 2006-07, as compared to the target of 50.8 million tonnes, up by more than 15% over 45.9 million tonnes handled in 2005-06. Kandla port would position itself as a crude handling hub in the current fiscal because of the crude handling capacity addition of over 19 million tonnes in 2006-07. KPTs container handling would receive a big boost with the recent commissioning of a new and modern container terminal. The port's container throughput in 2006-07 was 0.178 million TEUs even in the absence of a full fledged terminal.

KPT will commission 4 dry cargo berths Nos 13, 14, 15 and 16 with a total capacity of 8 million tonnes and having a draft of 14 meters by the end of 2008 and the offshore berthing facilities, with a capacity of 20 million tonnes per annum would be developed under the private public partnership scheme at port Tuna for handling large vessels requiring a draft up to 17.5 meters.

KPT is also trying to develop bunkering facilities in the port on BOT basis and has accordingly prepared a feasibility report and there were also proposals for constructing two additional cargo berths Nos. 17 and 18 with a draft of 14.5 meters for deepening the navigational channel and its approaches. The private sector would be involved in setting up a car handling terminal in the port as well as an oil jetty at Vadinar and the rail connectivity to the port would be upgraded into a double line broad gauge network and a railway siding developed at a new location.

Echjay Industries orders radial ring rolling machine

Echjay Industries Ltd of Rajkot has placed an order with SMS Meer for the supply of an MERW 32 radial ring rolling machine. Delivery is scheduled for March 2008.

The machine with its radial rolling force of 32 t is to be used predominantly for the production of bevel gears for the automotive industry.

Echjay Industries already today operates an SMS radial/axial ring rolling machine and a complete axial die rolling line from SMS. With this latest acquisition, the company is aiming to further enhance its leading position on the Indian market for forged automotive components.

ONGC & NTPC agree for CBM and coal mining at North Karanpura in block Jharkhand

It is reported that Oil and Natural Gas Corporation Ltd and NTPC Ltd have resolved a key issue on the exploitation of coal block for CBM and coal mining and have agreed on a possible sequential operation by them in the area. The block in North Karanpura in Jharkhand, which was allotted to ONGC for CBM extraction, was also allotted to NTPC for coal mining by the coal ministry.

Studies have shown simultaneous operations for coal mining and CBM extraction can take place. For extracting CBM, it is necessary to leave an area having a radius of 45 meters to 90 meters around the borehole through which the gas comes out. CBM is extracted at depths below 300 meters, while coal is mined in India up to 200 meters. Globally, however, technology for underground mining up to 300 meters is available.

As per report, ONGC had expressed concern over the allotment of three coal blocks awarded to it for extracting CBM to other three companies for mining coal one in West Bengal and two in Jharkhand. The blocks for coal mining have also been allotted to NTPC in Jharkhand, Electrosteel and Casting Ltd in Jharkhand and West Bengal Mineral Development and Trading Corporation.

Meanwhile, coal and petroleum ministries have constituted a committee to suggest a framework to work out a mechanism for simultaneous exploitation of these blocks. The committee comprises representatives from the two ministries.

Merrill Lynch raises long term iron ore price estimate by 30%

MarketWatch reported that Merrill Lynch increased its long term iron ore price forecasts by 30% on the back of tightening market conditions.

Analysts at the investment bank have raised their long term price forecast 30% to USD 36 a metric ton for iron ore fines with a grade of 63.5%.

In a client note the analysts said the new iron ore price profile is significantly above market consensus and boosts its net present valuation of Companhia Vale do Rio Doce by 31%, Rio Tinto Ltd. by 22% and BHP Billiton Ltd. by 9%.

Merrill Lynch said that the change was the result of rising capital expenditure higher operating expenses and tighter market outlook and came after a review of new and impending iron ore projects.

Review of China's Q1 steel output

China's steel output has continued hectic expansion in the Q1 as both daily and monthly output hit a record high in March. China produced 126.34 million tons of steel products in the first three months of this year up by 26.25 million tons or 26.23% YoY from 2006. Its finished steel output up by 25.7% or 9.61 million tons in March to 46.95 million tons.

The product mix has made notable progress in March with production growth of long products like rebar and wire rod starting to moderate. By contrary, capacity of CR, galvanized steel and HRC continues to accelerate, which could lead to oversupply in future.

Bolstered by robust domestic demand and buoyant export, domestic steel mills are increasing output of rebar and bar products in March. Rebar production gains 28.8% MoM to 8.41 million tons, wire rod up 20.04% to 6.92 million tons.

Output of medium plate and extra thick plate adds up to 4.29 million tons in March, a MoM increase of 17.94%. The production has come close to a peak level, but the growth pace is still appropriate. The combined output of above two varieties amounts to 11.69 million tons in the Q1 making it the 3rd fastest expanding steel product.

HR sheet output totals 754,300 tons in March, up 118.6% from 2006, the fastest growth among all steel varieties.

CR production keeps rising in March, albeit at a slower rate in terms of daily output. China produced 1.22 million tons of CR sheet, 1.51 million tons of CR thin and wide strip, and 2.73 million tons of CR sheets & coil up by 9.13% MoM and 39.3% YoY respectively.

Production of both galvanized steel sheets & strip and color coated steel has increased slightly from March with the output posted at 1.47 million tons and 224,800 tons respectively a YoY rise of 18% and 20.81%.

China produced 1.44 million tons of seamless tube in March up by 19.7% from 2006.

In 10,000 tonnes
Share is with respect to total out put.

(Sourced from MySteel.net)

SeverStal to double galvanizing line capacity at Cherepovets

SeverStal announced an investment of USD 77 million at its Cherepovets plant to double the capacity and improve products form its continuous hot dip galvanizing line. It said that the investment is in response to growing customer demand for improved galvanized steel particularly from the Russian construction industry.

SeverStal said the investment include the installation of a new furnace and the complete replacement of certain assemblies and units, from strip decoilers to coilers. The company will also install a brand new coating application unit. SeverStals Cherepovets plant is currently engaged in a technical and commercial tender for the basic production equipment. Danielli of Italy and CMI of Belgium are taking part in the tender and the results are expected to be announced by May 1st 2007.

Mr Alexander Stepanov technical director of the Cherepovets plant said This investment allows us to double the lines capacity to 400,000 tonnes and to expand our product range to include steel suitable for the application of paint and polymer coatings. The new products we will be able to produce as a result of the investment will be at the high value end of the market and will be used in the Russian construction industry.

Peru miners & government talks failed and strike is on

Reuters reported that Peru's largest miners union on Sunday rejected a last minute government proposal to avert a nationwide strike, and said an indefinite walkout would begin at midnight.

Mr Luis Castillo president of the National Federation of Metallurgic and Steel Miners said that the two sides had negotiated at length since Thursday to try to reach an accord, but the talks faltered. Mr Castillo told Reuters via telephone that "We are not returning to the negotiating table, what for? We have agreed to ratify our demands and we are going on strike as of midnight. But Labor ministry officials could not immediately confirm that the talks had ended.

Mr Castillo however said that "We do not rule out the possibility of dialogue during the strike because if there are no talks, we can't resolve anything.

He said that one of the union federation's demands is that President Alan Garcia fulfill campaign pledges to eliminate outsourcing among mining companies. Union leaders have said this was the main sticking point in talks.

NLMK commissions new slitting line for CRGO

Russian major electrical steels producer NLMK has installed a new coil slitting line with a capacity of 60,000 tonnes per year. It will enable NLMK to introduce a new product grain oriented steel strip with a width ranging from 80mm to 400 mm and a thickness of 0.23 mm to 0.30 mm. The line is capable of performing high precision coil slitting in automatic mode and would produce steel products of a high quality.

This investment of USD 10.5 million (RUB 270 million) was carried out within the framework of the 2nd phase of the Technical Upgrading Programme which will take place from 2007 to 2011 and is aimed at increasing the output of high value added products.

By the end of 2007, at NLMKs grain oriented steel plant, a reverse cold strip mill will be upgraded and new pickling line is to be commissioned replacing two obsolete production lines.

US companies and USW form Alliance for American Manufacturing

Aiming to preserve and promote manufacturing in the United States, US Steel, Alcoa, Goodyear and some other US based manufacturing companies have formed an unusual Alliance for American Manufacturing with the United Steelworkers labor union. The alliance is financed through labor contract provisions requiring the companies to contribute to public education and policy efforts. The alliance's other members are Allegheny Technologies, Mittal Steel and AK Steel and participants say they hope other companies and unions will either join the alliance or cooperate with it.

The alliance aims to be partly a policy research organization, tackling subjects like international trade practices and what alliance officials say is inadequate enforcement of trading regulations by the US government. The group also plans to focus on health policy because of concerns that high health costs have hurt American competitiveness.

The alliance said that the decline of manufacturing undercuts America's long term competitiveness, its research capabilities and its ability to produce sophisticated weapons needed for national security.

One of the first issues that the Alliance for American Manufacturing plans to address is how US factory owners and workers have been hurt by what the group says is the Chinese government's improper currency manipulation and industry subsidies.

Mr Terrence Straub senior VP for public policy and government affairs of US Steel said "The hemorrhaging of manufacturing jobs is hurting America down to the local level. Until and unless there is a political understanding of that and political attention paid to that our fear is much won't change and in 10 years the American manufacturing base could be gone."

MIT exploring iron making by molten oxide electrolysis

The American Iron and Steel Institute recently held an environmental briefing on Capitol Hill, highlighting the industrys efforts to reduce its environmental footprint through research projects at universities around the country. The goal of these research projects is to reduce, and eventually eliminate CO2 emissions from the steel making process.

As part of a joint program between AISI and the Department of Energy, research is currently underway at the Massachusetts Institute of Technology, under the leadership of Professor Donald R Sadoway of the Department of Materials Science Engineering, to produce iron by molten oxide electrolysis which would generate no CO2 gases.

Professor Sadoway cautioned that the research is only in the beginning phases, but what has been demonstrated thus far is encouraging. Professor Sadoway said that At the laboratory scale, production of liquid iron and oxygen gas by electrolysis of iron oxide has been demonstrated. This represents a significant first step towards carbon free iron making by a technology that completely avoids emission of greenhouse gases from the smelter.

In addition to the MIT project, AISI has three other long range projects that will have a positive impact on the environment. These three projects include Iron making by Hydrogen Flash Smelting at the University of Utah; Geological Sequestration of CO2 at the University of Missouri Rolla and Integrating Steel Production with Mineral Sequestration at Columbia University. There are also several short term projects being conducted by AISI and its members that will also have important environmental impacts.

China to prohibit export oriented steel processing trade

21 Century Economic Reported that following the latest processing trade prohibition catalog issued on April 14th 2006, Chinas Ministry of Commerce is going to release a new list about which products are bound to bear restrictions on processing trade.

In particular, the ministry's paper points out that, the steel products, which had been cut of export rebates in 2006 and removed for some this year is planed to be listed into prohibition group for processing trade.

This echoes the word that China will do more following the rebate removal in order to curb investment in high pollution and high energy consuming resource sector and ease up trade conflicts.

China banned tolling on the import of iron ore, pig iron, billet and scrap steel and the re export of steel products in May 2005.

(Sourced from MySteel.net)

SDI to adopt organic or Greenfield growth option rater than M&A

US steel maker Steel Dynamics Inc issued a statement last weekend to clarify its position regarding recent consolidation activity in the US metals industry.

In response to inquiries and comments recently made in the press regarding M&A activity, SDI stated that it is not currently in talks, nor does it have any immediate plans to involve itself in, any of the potential primary steelmaking consolidation transactions that have recently been the focus of interest in the financial press.

Mr Keith Busse chairman & CEO of Steel Dynamics said that "SDI is a growth company that has always prudently evaluated growth opportunities whether they are organic or by acquisition. We believe that some of the multiples being paid, offered, or suggested for certain steel making assets may not represent the best values or alternatives for SDI shareholders. Organic or Greenfield growth in certain sectors may well be a better alternative.

Mr Busse said that "Since our start up in 1996, Steel Dynamics has achieved a compound annual growth rate of over 20% and has consistently demonstrated some of the best operating and financial metrics among US steelmakers. To a large extent, our growth has resulted from the successful construction and operation of new, efficient steelmaking operations. We have looked at many M&A opportunities over the past few years and have sought to pursue relatively few. The acquisitions we have made in recent years have been at reasonable valuations and are providing strong returns on invested capital.

He said that "Steel Dynamics continues to be interested in pursuing growth at a reasonable price, balancing the additional premium that may be required by an acquisition against the cost of internal growth project opportunities. Our management team, which we regard as one of the industry's strongest in terms of technical, commercial, and entrepreneurial skills, will continue to look at opportunities that make sense for the company, and thus, our shareholders. Each opportunity will be evaluated on its own merits. With respect to SDI's tolerance for financial leverage, it has not been our practice to over lever our company, nor do we intend to do so in the future. Through disciplined growth, our debt to capitalization ratio has declined markedly over the past few years. SDI's balance sheet and capital structure depict an extremely strong company with great financial flexibility. While we are in a strong position to undertake various projects to foster further growth, we would only expect to proceed with projects or acquisitions that are prudent from a financial and business operations perspective."

Baosteel Group Xinjiang Bayi Iron and Steel Co incorporates in Urumqi

Xinhua reported that Baosteel Group has acquired Bayi Iron and Steel Co Ltd in January 2007 by investing CNY 300,000 in the corporation and becoming its controlling share holder and has formed Baosteel Group Xinjiang Bayi Iron and Steel Co Ltd in Urumqi, capital city of northwest China's Xinjiang Uygur Autonomous Region.

Bayi is located near Chinas border with Kazakhstan, and currently has a 6 million tonnes per year capacity for finished steel products but its pig iron and crude steel capacities are only around 3.6 million tonnes per year. Bayi is planning to boost its crude steel production capacity to 4 million tonnes per year in 2007 and to 6 million tonnes per year in 2008. It is also considering adding a plate line by 2010, to increase its total production capacity to 8 million tonnes per year.

Mr Xu Lejiang GM of Baosteel Group said that the merger would serve as a good example for Boosters future mergers. Baosteel said it would inject technology and management expertise into Bayi Steel to accelerate its development.

Xinhua New Agency cited Mr Li Rongrong minister of the state owned Assets Inspection and Management Commission as saying that the incorporation is a landmark for implementing the steel industry policy and breeding up Chinese steel giants competitive on the global arena and the merger would have profound and positive impact on the steel industry both in China or even in central Asia.

An industry source comments that the move is an important step taken for Baosteel, if it is going to fulfill its target of making domestic acquisitions. And through Bayi, Baosteel will gain much improved access not only to China's northwestern markets but also to Central Asian countries such as Kyrgyzstan, Tajikistan and Kazakhstan, all of which border Xinjiang. Meanwhile, Baosteel is also able to get access to Bayi's captive iron ore.

(Sourced from Mysteel.net)

Housing sector key point of US economic weakness

As per data released and the US Federal Reserve most recent Beige Book point to the fact that the US housing market remains the key point of national economic weakness.

Several districts reported weakness among those manufacturers that support the residential housing sector. Most districts said that residential real estate activity was still weakening and that residential home building was still slowing, which has been underlined by extremely poor existing home sales and lower than expected new home sales.

There may be a strong element of weather related volatility at work here the slump in existing home sales in March came amid bad weather conditions in much of the US and followed a better than expected performance in February when the weather had been much better.

But combined with the new homes sales figures showing a further slight build in inventory the figures leave little doubt that the sector remains weak and will likely continue to act as a drag on the overall economy.

Not all is doom and gloom in the US manufacturing sector, however, with the markets surprised by yesterdays stronger than expected durable goods orders. They were up 3.4% MoM in March and, even stripping out the volatile transport sector they showed growth of 1.5%. Non defense capital goods excluding aircraft a proxy for business investment showed strong growth of 4.7% in March 2007.

CSC forms alliance with China's Nanjing Iron & Steel United Co

Taiwanese China Steel Corp announced that it has made a strategic alliance with China's Nanjing Iron & Steel United Co Ltd.

General Manager of CSC in a statement said that they are looking for further cooperation opportunity and visits will be taken place between the two sides in the first stage. CSC will also establish ERP systems for NISCO.

With a production capacity of over 6 million tons crude steel, NISCO United is a major producer of HR Coil, CR coil, wire rod and heavy plates. NISCO United has also planned to expand its facility to reach annual output 10 million tons.

Hmisho Trading orders combined wire rod and bar mill

Syrian Hmisho Trading Group announced that it placed an order with SMS Meer for the supply of a new combined wire rod and bar mill.

The new mill is to be used for production of rebars with low and medium carbon content in the size range from 8mm to 40 mm for round bars and 5.5mm to 16 mm for wire rod in coils. The mill will have a capacity of 300,000 tonnes per year and it is scheduled to go into production in 2007.

SMS Meer is to supply the complete wire rod and bar mill with electrical equipment and automation system. The mill integrates the latest technologies, including the EBROS billet welding machine for the rolling of endless bars.

A 12 meter long reheating furnace with a capacity of 60 tonnes per hour for square billets of 130 mm will supply a single strand continuous rolling mill. The continuous rolling mill consists of a roughing mill with six H/V rolling groups and an intermediate/finishing multi pass train with eight H/V housing less stands. Down line of the mill, a water box allows quenching of the bars to improve the mechanical properties of the low carbon steel. The High Speed Delivery system equipped with a rotating channel will be installed on the inlet side of the cooling bed to transport straight bars at speeds of up to 36 meter per second. Fully automated bundling and a tying station also form part of the scope of supply.

The wire rod is produced in a 10 stand finishing block with coil diameters of 210 mm and 180 mm. The product dimensions are rolled in the line on a single pass series at the maximum mill speed of 80 meters per second. Two water cooling sections and the 65 meter long loop cooling conveyor guarantee optimally controlled product cooling. Behind the cooling section, the line is completed with bundling and transport equipment and a coil compacting and tying station.

Thach Khe iron ore mine in Vietnam to start in May Report

VIR reported that Vinacomin led consortium is all set to start mining at Vietnams largest iron ore site Thach Khe, if the prime minister gives his approval. As per report, the ground breaking ceremony of the Thach Khe Iron Ore Investment Company comprising 9 domestic companies will fall in the first half of May 2007 even though the feasibility study of the mining project carried out by Russias Giproruda Institute is not expected to be completed until October 2007.

Mr Doan Van Kien CEO of Vinacomin attributed the consortiums eagerness to launch TICs project because of Vietnams urgent need to become a self sufficient steel nation. He also said that Vietnam had wasted a lot of time tapping Thach Khe deposit.

The Thach Khe deposit in the central Ha Tinh province was discovered by Soviet and Vietnamese geologists in the 1960s and geologists estimated that Thach Khe had iron ore reserves of some 500 million tonnes to 600 million tonnes out of which at least 300 million tonnes is thought to be commercially exploitable. According to the feasibility study, the Thach Khe mining project may require about USD 400 million in total investment capital.

Vinacomin will become TICs largest shareholder with shares of 30% to the USD 150 million in charter capital and Vietnam Steel Corporation, which previously intended to take the biggest slice in the mining consortium, will make up 20% of the TICs shares. TICs remaining shareholders are Ha Tinh Mining and Trading Corporation with 24% shares, VNPT with 4%shares, Song Da with 5% shares, BIDV with 5% shares, Vinashin with 5% shares, Bitexco with 4% shares and Thang Long Mineral with 3% shares. Foreign investors are welcomed to join TIC as a result of the governmental direction to get foreign investors involved with such a robust mining project, but their shares should not exceed 30% of the total.

Wuhans Q1 profit zooms up by 605% YoY

Hubei Province based Wuhan Iron & Steel Co announced that its profit went up by 605% in the Q1 of 2007 on recovered steel prices.

Wuhan Iron & Steel in a statement to the Shanghai Stock Exchange said that its net income in the Q1 of 2007 was CNY 1.4 billion (USD181 million) as against CNY 200 million in Q1 of 2006. Its sales also increased by 49% YoY to CNY 12.4 billion.

According to the China Iron and Steel Association steel prices have improved in China after the government started to close inefficient capacity. Prices have climbed 4.7 % so far in 2007, which had tumbled in the Q1 in 2006 due to oversupply.

Cambrian Mining to buy Falls Mountain Coal and may sell on to WCC

Western Canadian Coal Corp announced that it has entered into an agreement with Cambrian Mining plc governing the respective rights of Western and Cambrian with respect to the acquisition by Cambrian of Falls Mountain Coal Inc from Pine Valley Mining Corporation and the possible subsequent disposition by Cambrian to Western. The Agreement, expected to close on or about June 26th 2007.

Cambrian Mining PLC said it has conditionally agreed to buy Falls Mountain Coal Inc from Pine Valley Mining Corp to develop the Brazion assets and the Brule mine. The agreement calls for payment of the following consideration.
1 CAD 15.65 million in cash upon closing which includes working capital adjustments
2. Previously issued Western Canadian Coal Corp Debentures in the principal amount of CAD 11.0 million, or an additional cash payment of the prevailing market value of such debentures determined based on the volume weighted average trading price of the debentures for the five trading days immediately preceding the closing date
3. A quarterly royalty payment of CAD 1.00 per tonnes, subject to annual escalation at a rate of 2.0% per year to a maximum of CAD 1.50, for each tonnes of coal from either of the FMC coal properties or from WCCC's Brule mine that is loaded from FMC's train loading facilities; subject to an aggregate maximum of CAD 26.0 million. Beginning one year from the closing of the transaction, a quarterly minimum royalty of CAD 50,000 will be payable to an aggregate maximum of CAD 2.0 million

FMC is the owner of the Willow Creek open pit metallurgical coal mine located in the Peace River region in north eastern British Columbia, approximately 45 kilometers west of Chetwynd, including the coal handling, processing and rail car facilities associated with the Willow Creek Coal Mine.

Western is uniquely positioned to take advantage of the Willow Creek facilities which offer significant synergies to Westerns Brule mine. In particular FMCs plant would eliminate the need to build a new preparation plant and load out to serve the Brule mine. The FMC load out will enable Western to experience significant transport cost savings versus current operations and the combination of the FMC properties with the Western properties will provide the opportunity to produce coal with product mix and marketing synergies.

Alchevsk to commission BF No 1 in May

Metal-Expert reported that Ukraine Alchevsk Iron & Steel Works plans to re commission its BF No1, after the 1st category repair, in May 2007. After modernization, the furnace volume will reach 3,000 cubic meters resulting in 1.8 million tonnes per year hot metal capacity.

As per report Alchevsk will stop for a 12 day long maintenance BF No 5 on May 24th 2007 and BF No 4 in June or July 2007 for 20 days to 30 days repair.

Alchevsk will start constructing BF No 2 with the volume 3,200 cubic meter with a production capacity 2.4 million tonnes of hot metal per year in early 2008. The unit is planned to be commissioned in 2009.

CVRD concludes the take out of the bridge loan to finance Inco buy

Companhia Vale do Rio Doce announced that it has successfully completed 100% of the take out of the 2 year bridge loan of USD 14.6 billion used to finance the Inco Limited acquisition.

CVRD announced in December 2006 the conclusion of 84% of the take out of the bridge loan through the execution of three transactions
(1) Issuance of USD 3.750 billion 10 year and 30 year notes in the global capital markets
(2) Issuance of non convertible debentures in the Brazilian market in the amount equivalent to USD 2.565 billion with 4 and 7 year maturities
(3) A pre export finance transaction of USD 6.0 billion, with 5 and 7 year maturities.

The remaining portion of USD 2.25 billion was fully paid last weekend.

This refinancing program was executed consistently with CVRD financial policy including diversification of funding sources lengthening of the average maturity of CVRD debt projected to be close to 10 years at the end of December 2007 from 8.04 years on September 30, 2006 and reduction of the average cost of debt to a level close to 6.5% per year.

Yartsevo to be commission steel plant in mid May

It is reported that Russias Yartsevo Foundry and Rolling Plant is planning to commission a new integrated steel making facility, which includes an EAF, a ladle furnace and a billet caster of about 220,000 tonne per year design capacity.

According to the Plant representatives all the units underwent hot trials by mid April and expected capacity utilization rate for May is 10% to 15% of the line design capacity. The new line is scheduled to reach its full capacity within 6 months to 7 months from its start up.

Yartsevo Foundry and Rolling Plant have already signed a contract with Stemcor which will sell square billets for export. Billet export will be stopped after Yartsevo plant has commission its own bar rolling mill of 200,000 tonne per year capacity.

Czech distributor Raven to set up new HR coil slitting line

YIEH reported that Raven, a distributor of the metallurgical material in Slovakia and Czech Republic, will set up a HR coil slitting line at it headquarters in Powazska Bystrica which is near to the Czech boarder. The new line will have 120,000 tons output capacity per year.

Raven has also installed cutting and bending facilities for rebar at Powazska Bystrica and it also plans to set up the similar production in its other four bases in Slovakia and two in the Czech Republic.

Icdas Celik orders a new melt shop and billet caster

It is reported that Turkey steelmaker Icdas Celik and Swiss equipment maker Concast have concluded a contract for the supply of an electric steelworks which will be the second works at the Biga location, at which a mini mill from Concast went into operation in 2004. Commissioning is scheduled for the third quarter of 2009.

Under the contract, Concast will provide engineering and the supply of plant and equipment for an electric arc furnace of 220 tonnes, a ladle furnace, a vacuum degassing facility and 8 strand billet caster equipped with Concast Convex technology. The electric arc furnace will be equipped with a 230 MVA transformer and altogether 8 Concast CONSO injectors. These will attain a total output of up to 48 MW.

The billet caster will have annual production of 2.2 million tonnes of billets in 180 mm x 180 mm size.

Chelyabinsk Zinc hikes 1Q zinc, alloy output 15.5% on year

Russian Chelyabinsk Zinc Plant announced that during Q1 of 2007 it produced 40,145 tonnes of SHG zinc and production of zinc based alloys was up by 15.5% from 34,763 tonnes YoY. Domestic market remained CZPs core market as 51% of the plant output was supplied to Russian customers.

CZPs subsidiary, Nova Zinc, the operator of the Akzhal zinc ore mine in Kazakhstan, mined 339,301 tonnes of ore in Q1 of 2007 from 307,606 tonnes YoY. Production of zinc concentrate totaled 14,181 tonnes 3.5% less than in the first three months of 2006. Since the beginning of the year, all zinc concentrate produced by the Akzhal mine have been supplied to the Chelyabinsk Zinc Plant.

Mr Sergei Moiseyev Chairman of Chelyabinsk Zinc Plant said that "Our core operations continued to perform well and we expect to produce 165,000 tons of SHG zinc in 2007."

Chelyabinsk Zinc Plant OJSC is a leading Russian zinc producer. It is responsible for approximately 60% of Russian zinc production volume. In 2005 the plant produced 116,000 tons of SHG zinc. According to IAS consolidated accounts, revenues in 2005 reached RUB 4.791.

China puts licensing system on some export steel products

Chinas Ministry of Commerce and General Administration of China Customs issued a policy on New Export License System for some steel products on April 30th 2007.

According to the policy, from May 20, 2007 onwards, a new export license system will be carried out for 83 tariff codes of steel products, including rebars, wire rods, HR, plates, narrow strips, and part of sections among others. The export license will be valid for a period of three months after the date of issuance. Based on export data for January to February 2007 period, total export quantities of the steel products involved in the new license system make up about 50% of the aggregate export quantities from China.

But the majority of CR, galvanized products and all pipes are exempted from the new export license system, indicating that the China government endeavor to support export of these categories of steel products.

Mr Luo Bingsheng secretary general of China Iron & Steel Association had recently disclosed this action on top of April 15th 2007 move to strengthen the curb on steel export. Mr Luo said that China will tighten policies and expects to see tangible fruits. The export volume should stand in line with last year, or even lower. On the one side, we may further cut the rebates for some varieties, revise down refund for pipe & tube especially welded pipe and impose a tax on low value added products like wire rod and rebar. On the other, the nation is also mulling license system and probe into exporters' qualifications."

During the first quarter, China exported 14.128 million tonnes of steel products including 1.781 million tonnes of billet & slab while its imports accounted for only 4.271 million tonnes including 80,000 tomes of semis. Based on the daily export figure in first quarter, annualized steel export this year could reach 57.3 million tonnes up by 33.26% YoY.