NMDC to increase 2007-08 iron pore production by 17% YoY

Indian government has asked the public sector National Mineral Development Corporation to increase its production target to 31.6 million tonnes of iron ore in 2007-08. This is 17% higher than the production of 27 million tones in 2006-07.

Mr Ram Vilas Paswan union minister for steel, chemicals & fertilizers while reviewing the performance of NMDC advised that the company should increase its production in iron ore mines including Kumaraswamy and Donimalai. Mr Paswan said As the economy is growing at 8% to 9% per year year, the demand for steel is buoyant and NMDC should increase its iron ore production. NMDC should improve the road infrastructure and invest in equipment to increase output.

Mr Paswan also asked NMDC to increase its expenditure on corporate social responsibility. During the last financial year NMDC has spent INR 24.66 crore mostly on education, health, drinking water facilities, approach roads and culverts. He also directed NMDC to prepare a Vision Plan for utilizing over INR 5000 crore reserves. The Minister took stock of the on going projects and assured the company of full support from the Ministry of Steel.

During 2006-07, NMDC increased its iron ore output by 18% YoY to 27 million tonnes. Its net profit increased by 25.8% YoY to INR 2300 crore during the year against INR 1828 crore in 2005-06. Its total turnover also rose by 11.9% YoY to INR 4150 crore from INR 3707 crore during 2005-06.

NTPC & SCCL form JV for coal and power business

National Thermal Power Corporation and Singareni Collieries Company Limited signed a 50:50 JV agreement for development, operation and maintenance of coal blocks. The new company will leverage both the companies to pool in their experience and expertise in the areas of coal mining and power generation. The investment details were unavailable.

The JV aims to undertake acquisition and development of mines, beneficiation, processing, operation and maintenance of coal & lignite mining blocks and selling the coal & lignite.

The JV will also undertake development, operation and maintenance of integrated coal based power plants and selling the electricity generated. It will also provide consultancy services in the areas of coal mining and power generation.

POSCO to continue with Indian project

POSCO hostage crisis last week has reflected the real situation and raised questions about the possibility of commencing construction in near future although POSCO India is putting a brave front by terming the incident as unfortunate but not of much relevance and announced plans to start construction in September 2007.

Media has cited a POSCO Spokesperson as saying that There is no question of shifting the site of the project. We understand that any mega project of this magnitude is subject to such kind of hostilities but we are not perturbed by that and we will continue with our efforts. We are undaunted and these kinds of hurdles have made us more determined. With active support of the administration, we will overcome the problem.

On the other hand Mr Abhaya Sahu president of POSCO Pratirodh Sangram Samiti said that We warn the government, POSCO and the district administration not to venture into the area. If they enter, they will be held responsible for any possible consequence. He termed it as battle between the people and the government and cautioned POSCO against any direct negotiation with the people for land acquisition.

POSCO, which signed a deal with the state government in June 2005 to set up a USD 12 billion steel plant near Paradeep by 2016 has not been able to move forward a bit in last 2 years and is facing serious issues related to land acquisition, iron ore linkages and some other terms of MoU. POSCOs plans in India form a very large part of its global growth strategy and the final outcome remains to be seen.

JSW Energy eyeing thermal coal assets overseas

PTI reported that JSW Energy is looking at investing in coal assets in Indonesia to ensure steady coal supply for its 5,000 MW power expansion programs.

Mr Raj Kumar joint MD & CEO of JSW Energy told PTI "We have already identified a couple of mines of smaller sizes in Indonesia. One of them is already operational. Mr Kumar said that these mines would supply 2.5 to three million tonnes of coal every year. Mr Kumar hoped that the company would receive supply from these mines by 2010-11.

Mr Kumar however said that these investments would not suffice the company's requirement and that's why JSW Energy is also eyeing bigger coal assets in Indonesia and Australia. He said "We are looking at bigger mines in these two countries. The reserves should range between 200 million tonnes to 250 million tonnes." He said that the company has also commenced discussion indirectly with the local miners in Indonesia and Australia to form JV or long term supply contracts.

JSW Energy has plan to increase its generation capacity to 5,500 MW in the next two to three years from 500 MW at an investment of INR 15,000 crore.

Surendra Minings steel plant at Bonai to be ready by 2009

BS reported that the first phase of Surendra Mining Industries steel plant at Bonai in Sundergarh district is expected to be commissioned within next 6 months and the entire project by the end of 2009.

Mr Pradipta Mohanty chairman of Surendra Mining Industries told Business Standard that "Land acquisition process is almost complete and we hope to start the construction work soon." As per report, SMI requires about 200 acres of land and its existing sponge iron plant has about 70 acres. It is about to finish the acquisition of the remaining land.

It has sought the technical assistance of M N Dastur private limited for setting up the steel plant and the detailed project report is under preparation. After it is ready the company will approach its bankers for financing the project.

Surendra Mining will set up furnace, captive power plant and continuous casting machines during the first phase, which will make it possible to manufacture billets. During the second phase of the project, which will be roughly one year from now, blast furnace and sintering plant construction will be taken up.

Surendra Mining signed a MOU with Orissa government on 22nd December 2006 for setting up a 0.25 million tonnes steel plant and a 16MW captive power plant at Bonai with an estimated investment of INR 200 crore.

Surendra Mining took over the Vishal Metallics Private Limited having a production capacity of 100 tonnes per day in March 2007. SMI's existing sponge iron plant has a capacity of 200 tonnes per day. It already has mines in Koira sector.

RHIs Vizag refractory plant begins commercial production

BS reported that Austria based refractory manufacturer RHI Groups 51:49 JV RHI Clasil Limited has started commercial production at its manufacturing facility in India at Visakhapatnam.

Mr Andreas Meier chairman and CEO of RHI group said that In the coming days, steel and cement production will grow significantly in India and this prompted us to set up this high end quality refractory manufacturing unit at Visakhapatnam. He further added that about 66% of the Vizag units production would be exported to other countries, and the remaining would be marketed here.

Mr RV Raju CMD of RHI Clasil said that the company would double the capacity soon.

RHI Clasil Limited has an annual production capacity of 40,000 tonnes and spread over 25 acres at Parawada near Visakhapatnam.

The RHI group currently has 31 manufacturing facilities worldwide with an annual turnover of INR 7,500 crore. Currently, the market share of the RHI Group in the world refractory business is 11%.Before setting up this unit RHI was importing refractory to India and marketing it here. In the year 2006, RHI imported about INR 223 crore worth of refractory to India and sold it to various steel and cement factories.

Indias infrastructure industries grew at 8.6% in 2006-07

It is reported that a turnaround in crude oil output and higher production by refineries pushed the growth of 6 infrastructure industries to 8.6% in 2006-07 as against 6.2% in 2005-06. In March 2007, the growth of the core sector was 10% as against 7.1% in March 2006.

A surge in manufacturing pushed up the countrys industrial growth to 11.3% during 2006-07. As many as 10 out of 17 industry groups showed double digit growth during the financial year. These include wood and wood products at 29.1%, basic metal and alloy industry at 22.8%, transport equipment & parts at 14.9%, cotton textiles at 14.8%, machinery other than transport at 14%, non metallic mineral products at 12.8%, rubber, plastics, petroleum & coal products at 12.7%, metal products & parts at 11.4% and beverages, tobacco & related products at 11.3%. The sectors which did not perform well during the year are jute and other products excluding cotton and leather products.

Supreme Court stays allocation of Patrapara coal block

PTI last week reported that Indias Supreme Court has directed the central government not to grant any fresh mining leases for allotment of coal blocks for captive power projects in Orissa and has issued notices to 11 parties including the central government, Orissa government, Mahanadi Coalfields Limited, Bhushan Steel Limited, Orissa Sponge Iron Ltd and Visa Steel to respond to the allegations leveled by Adhunik Metaliks.

Adhunik Metaliks had challenged the coal ministrys decision to curtail its earlier allotment of 42 million tonnes of extractable reserves in Patrapara block and allocate the same share to Bhushan Steel Limited.

Lawyers appearing on behalf of Adhunik Metaliks had submitted that the coal ministry had reduced its 42 million tonnes of extractable reserves in Patrapara block to 31 million tonnes and allotted the block to a consortium led by Bhushan Steel. They argued that Adhunik Metals JV with 6 other companies should be allotted the Patrapara block and a separate block should be given to Bhushan Steel Limited whose requirement was much larger.

Adhunik Metaliks petition also said that the central government in its screening committee meeting had decided to expand the boundaries of the coal block, which had reserves of only 210 million tonnes as against the requirement of 326 million tonnes of Bhushan Steel Limited.

Indian Railway offers incentives to attract steel & cement traffic

Mr Lalu Prasad union railway minister while addressing at the first meeting of the Railway Industry Coordination Committee held at the Rail Museum last week offered some major concessions and incentives in freight and loading of goods in railway wagons to manufacturers and traders of coal, cement, steel, fertilizers and food grains.

Mr Yadav announced indefinite postponement of a 10% surcharge proposed on the freight for rakes charged on two point rakes and mini rakes. Mini rakes are less than full train load services, while two point rakes allow companies to load or unload a train at two points. At present, companies moving commodities like steel and cement normally unload at several points en route to their final destination. Each time they unload, the companies have to pay 10% surcharge to the Indian Railways.

Railway ministry has also decided to extend the 30% discount on incremental loading, offered to the industry, till 2010. The move has been prompted by the fact that steel and cement are amongst the major products carried by the Railways, comprising 30% and 35% respectively, of total freight traffic.

Mr Yadav also asked cement, coal, steel and other industry captains to avail of the 5% on load discount. He also asked cement and steel traders to go in for long term agreement with the railways for 5 years to 30 years. He said "This agreement will help enable them secure guaranteed availability of wagons."

He expressed confidence that the industry will help him achieve a target of double digit growth in steel and cement movement, enabling Indian Railways to carry at least 200 million tonnes by 2011-12.

MSP Steel & Power inks MOU with Chhattisgarh for expansion

MSP Steel & Power Ltd has recently announced that it has signed a MoU with Chhattisgarh government on May 4th 2007 for its INR 850 crore expansion program in the state.

As per release, Chhattisgarh government has agreed to provide all help, incentives and facilitate clearances necessary for the aforesaid projects in the state through the Intervention of the State Investment Promotion Board.

Orissa withdraws demand of free power from IB UMPP

PTI reported that Orissa government has cleared the way for setting up of the IB Valley Ultra Mega Power Plant by withdrawing demand for free power after centre rejected this demand.

A power ministry source told PTI that This proposition being contrary to the spirit of tariff based bidding was not acceptable. However, Orissa government has recently extended its support to the project without this pre condition.

Orissa and Chhattisgarh earlier wanted a portion of power from the respective Ib Valley and Akaltara UMPPs either free or at variable cost. But with Centre rejecting this demand, Orissa has extended its support without any pre conditions.

A team appointed by the Central Electricity Authority has already visited the state and site details are being finalized.

Era Constructions bags NTPC Dadri civil work contract

It is reported that real estate company Era Constructions has bagged a contract from National Thermal Power Corporation for the Dadri project for construction of civil works for additional generation of 980 MW thermal power for supply to Delhi and its neighboring areas.

Mr HS Bharana chairman of the Era Group said "The contract value is INR 190 crore and would be completed in 3.5 years.

Era is also executing three super power stations for NTPC, which would generate 3,980 MW power in Bihar, Madhya Pradesh and Chhattisgarh.

ThyssenKrupp announces Q2 & H1 results and raises bar

German steel giant ThyssenKrupp has maintained its successful performance in the 2nd quarter 2006- 2007. In a continuing favorable operating environment, order intake and sales showed pleasing growth rates. Without the exceptional charge from the EU fine of around EUR 480 million, the Groups earnings would have reached EUR 1,052 million as against EUR 773 million in corresponding quarter of last year. After this charge, income was EUR 572 million.

The main highlights are
1. Order intake increased by 9% from the prior year quarter to EUR 14 billion and in the 1st half by 12% from EUR 24.3 billion to EUR 27.3 billion.
2. Sales rose by 11% to EUR 13.1 billion and in the 1st half by 12% from EUR 22.7 billion to EUR 25.4 billion.
3. EBITDA was EUR 1,031 million as compared with EUR 1,278 million a year earlier. Excluding the nonrecurring charge of the EU fine EBITDA in the reporting quarter would have been EUR 1,511 million. In the 1st half EBITDA was EUR 2,538 million as compared with EUR 2,176 million in the first six months of the previous fiscal year, an increase of 17% despite the EU fine.

ThyssenKrupp expects its positive performance to continue in the further course of fiscal 2006-2007. Earnings target for fiscal 2006-2007 raised to around EUR 3.5 billion, medium term target increased to EUR 4 billion on sales of around EUR 60 billion and long term earnings target EUR 4.5 billion to EUR 5 billion.

Dr Ekkehard Schulz Executive Board Chairman said that Based on the very good results in the first two quarters and improved growth prospects, we now expect to increase sales to around EUR 50 billion and generate earnings before taxes and major nonrecurring effects of around EUR 3.5 billion.

CISA urges steelmakers to optimize freight costs for iron ore imports

China Iron & Steel Association convened an iron ore working conference in Beijing on last Thursday where 70 steelmakers qualified for importing iron ore have discussed latest trend of China's ore imports market and possible solution to cap spiking freight rates.

Mr Chen Xianwen, a senior CISA official, previously told that freight costs would remain high in the long term as current global shipping capacity is unable to meet China's iron ore demand. And soaring global demand for dry bulk goods, including coke, iron ore and grains, is stretching current shipping capacity. He encouraged domestic steel mills to enhance communication for preventing overestimated demand and urge them to sign long-term shipping contracts with shipping companies to buffer against short term price fluctuations.

CISA also put forward a plan to boost cooperation in shipping issues among domestic steel mills in following five regions, Shougang-Hebei, Angang-Bengang(Liaoning), Shandong-Shanxi, East China and southwest China.

Seaborne freight rates for both Brazil to China and Australia to China routes hit record high before China's Labor Day Holiday. On April 28th 2007, the rates for Tubarao-Beilun and Tubarao-Baoshan surged to hit a new record of USD 51.327 per tonne after a nine straight day hike. At the same time, the rate for the route from Western Australia to Beilun and Western Australia to Baoshan ballooned to USD 23 per tonne. By now, average iron ore seaborne freight rate of the routes from Brazil to China has been about 47.41% higher than that in 2005 and the rate of the routes from Australia to China is about 45.15% higher.

China has witnessed strong growth momentum in ore imports tonnage in the first quarter, with ore imports rise 23.85% from the year before to 100.2 million tonnes.

Rio hires Morgan Stanley to as a takeover defense Report

Brisbane Time reported that Rio Tinto, which has been at the centre of takeover speculation, is believed to have hired Morgan Stanley, the US investment bank, to help defend it in the event of an unsolicited takeover approach.

Although Rio later issued a statement to the Australian Stock Exchange saying it was not aware of any takeover approach from BHP Billiton, the move shows just how seriously it is taking the bid speculation.

Mr Chris Lynch president of carbon steel of BHPB in Melbourne on last Wednesday when asked about any bid for Rio Tinto said that "We have people looking at a lot of different things. We won't comment on specific potential targets."

Citigroup said on previous weekend that BHPB could afford a USD 100 billion plus offer for Rio Tinto and cut USD 500 million in costs. And shares in Rio soared by more than 20% during last week on this speculation that BHP Billiton was about to launch a bid.

Chinas steel export scenario

MySteel on the weekend reported that China's April 2007 steel exports hit all time high of 7.16 million tonnes thus breaking the previous monthly record of 5.55 million tonnes set in December 2006. During this period, growth in exports is much higher than output growth.

The cumulative position of export and imports during January to April 2007 is as under. YoY comparison with the corresponding period is not given as it was much lesser during that period.

In million tonnes

The share of steel exports excluding billet exports out of their total output during January to March 2007 quarter by some of the major Chinese steel makers is as under
1. Baosteel - 12.74%
2. Anshan Steel - 22.04%
3. Benxi Steel - 10.26%
4. Wuhan Steel - 7.2%
5. Shougang - 10.93%
6. Shagang - 10.06%
7. Tangshan Steel - 3.04%
8. Jinan Steel - 12.34%
9. Laiwu Steel - 12.45%
10. Maanshan Steel - 11.77%
11. Valin Group - 19.64%
12. Taiyuan Steel - 8.39%
The ratio would be higher if billet export is included.

At present, Chinas domestic steel consumption is much lower than steel output growth. Coupled with high prices and demand in the international market so far, China's steel exports are likely to linger on a high level despite efforts of Chinese government.

(Sourced from MySteel.net)

Interpipe starts preparations for IPO on LSE

Mr Viktor Pinchuk controlled Interpipe, an asset management company controlling several steel pipe and railway wheel manufacturing factories, announced on May 7th 2007 that it is seeking advisors to help prepare for the London IPO.

Mr Oleksandr Kyrychko GD Interpipe said The objective of this first phase of preparations is to choose investment and legal advisors that will guide the IPO process in the future and develop a detailed IPO strategy.

According to the company May 7th statement this first phase in preparations for the IPO, which the company plans to hold in the second half of 2008, will last from May through August.

Interpipe is a leading world supplier of steel pipes and railway wheels. Interpipe production facilities are located at 4 pipe rolling works in Dnepropetrovsk Oblast of Ukraine. Interpipes share on the global seamless pipes market is 4.3%, in the segment of rail vehicle wheels 12.8%. The output of steel pipes in 2006 made 1.213 million tonnes and of wheel products 216,800 tonnes. Last year, Interpipe posted a turnover of USD 1.6 billion.

Incidentally Mr Rinat Akhmetov, has also expressed plans to float stock in his companies through an IPO. Mr Akhmetovs main holding company, System Capital Management, however, has not yet announced initial preparations to take any of its companys public through an IPO.

US Steel makers appeal against removal of AD duties on coated steel

YIEH reported that US Steel, AK Steel, Nucor Steel and World Steel Dynamics have appealed to the US Court of International Trade because against the judgment that International Trade Centre made in the end of 2006 to cancel some countries' anti dumping duties on coated steel products.

US ITC voted to end restrictions on imports of coated steel or galvanized steel from Australia, Canada, France and Japan, while leaving existing collection from Germany and South Korea.

BMZ to start seamless pipe production by July

BelaPAN reported that the Belarusian Steel Works based in Zhlobin Homyel region, has completed the installation of German-made equipment for manufacturing seamless hot rolled pipes.

The equipment which has been supplied by Germany's SMS Meer GmbH is being adjusted and Belarusian Steel Works will start test operating the equipment in late May and is expected to manufacture the first batch of hot rolled seamless pipes in early July.

BMZ is projected to make between 250,000 tonnes to 280,000 tonnes of hot rolled seamless pipes annually with 75% of the output to be exported.

Madar opens rebar processing factory in Dubai

It is reported that Madar Holdings subsidiary Madar Steel Industries recently opened a facility at Dubai Investments Park to process steel rebars. The new facility which will be among the largest factories in the Gulf States will start operation next month. It aims to meet rising demand on steel, especially with the current boom in the Gulf's construction industry.

The facility is expected to process 300,000 tonnes of rebars per annum and is set up at cost of AED 75 million. The services from this facility include cutting straight steel bars to length, rebar coil straightening and bending in desired shapes. Its products will also include standard mesh and tailor made wire mesh.

Mr Sameh Hassan CEO of Madar Holding said "We are here to support the construction industry and are making every effort to ensure our service meets the highest standards."

Taiwanese Sun Steel & E United to setup SS plant in Vietnam

VIR reported that Taiwanese firms Sun Steel Corporation and E United Group are joining hands to build a mammoth USD 1 billion stainless steel making factory in the southern province of Dong Nai in Vietnam.

Mr Trinh Van Anh director of Planning and Investment Departments Investment Cooperation Bureau said that Sun Steel Corporation has notified Dong Nai Peoples Committee of its intention to establish the complex at Ong Keo Industrial Zone. Mr Anh added that The province is fully supporting the joint venture to develop the project in Ong Keo Industrial Zone. However, we need to meet both to discuss about the project.

Mr Anh said that the project would be developed in two phases. In the first phase, the joint venture would invest about USD 500 million into the project and USD 550 million would be invested into the second phase.

Mr Nguyen Hoang Dung Ong Keo Industrial Zone director said the company was working with Dong Nai Peoples Committee to clear land for the project and the industrial zone was still in the process of clearing land and building infrastructure. He said We hope to clear the land and develop infrastructure by late 2008. By that time investors like Sunsco and E United Group could start building their factories in the industrial zone.

Socotherm forms pipe coating JV in Saudi Arabia

Socotherms subsidiary Socotherm Middle East has just established a new JV Socotherm Arabia Ltd at Dammam in Saudi Arabia to enter the Saudi market of pipe coating & insulation for the transport of energy. The new plant will be installed in Dammam by the end of 2007.

The new JV has been established between Socotherm Middle East with a participation of 56.65% and three important local industrial partners: the Global Suhaimi Group, the Al Shoaibi Group and the Al Khalaf Group, with a participation of 14.5% each.

The coating facility will be the most advanced plant in the world having the capacity to coat pipe from 6 to 60 with fusion bond epoxy, 3 layer PE and internal fusion bond epoxy or liquid epoxy, as well as a double joint facility. The next phase will target water transportation segment and will have a 100 coating plant capable of coating 3 Layer PE and internal FBE.

Mr Zeno Soave Chairman & CEO of Socotherm said The Middle East Market has been dominating for over 20 years by our North American competitor but after only two years of operation in Qatar, Socotherm Middle East has received over 70% of the Middle East market share outside of Saudi Arabia. Therefore the Managing Director of Socotherm Middle East, Mr Bo Crawley, has been charged to carry out this new initiative in Saudi which expects a total investment of approximately USD 50 million.

Socotherm, a public company listed on the Italian Stock Exchange and founded in 1859 at Vicenza in Italy is a world wide pipe coating contractor with plants in Italy, Spain, Australia, Malaysia, China, Nigeria, Angola, Qatar, Argentina, Brazil, Venezuela and USA.

US scrap prices continue their downward trend

Platts reported that US steel consumers will be eagerly waiting for a reduction in surcharges this month as US mills prepare to buy scrap at prices that are on average USD 60 per long ton or more below.

The report mentions that some US mills had not made purchases yet this month as they are trying to negotiate lowers prices or do not need material. It is the second successive month of US scraps price declines following four months of upsurge to record levels in March. Scrap grades across the board are now selling below the USD 300 mark despite an up tick in export sales recently as Turkish mills came back into the market.

The price of scrap has continuously declined in America since last week, current export price of No 1 and No 2 to Turkey has dropped by USD 30 per ton to CFR USD 368.5 per tonne. In the Asia market, Japanese price has also declined, as the H2 scrap export price to Taiwan was at about CFR USD 344 per tonne. Bid prices in the recent DaimlerChrysler factory auto bundle auction were said to be down by USD 75 to USD 80 per long ton.

Some scrap processors said they had been unable to get a firm buy side quote yet this month. Processors reported that scrap inflow to their yards has increased as word got around that prices were falling.

Steel laden MV Golden Rose sinks off Chinese waters

Yonhap reported that 16 sailors went missing after a South Korean freight ship MV Golden Rose sank off China's east coast following a collision in thick fog with a Chinese ship MV Jinsheng. The accident happened around 4 AM Saturday on Korean standard time 41 kilometers southeast of Dalian in northeastern Liaoning province of China. The Chinese ship went on safely to its destination, where the crew allegedly reported the incident to Chinese authorities.

According to China's official Xinhua News Agency Chinese maritime authorities mobilized 19 boats, two helicopters and one airplane for search and rescue operations, but no survivors or bodies have been found. Only two life rafts and some articles confirmed to belong to the South Korean vessel have so far been found. The missing crewmen include 7 South Korean, 8 Myanmars and 1 Indonesian.

MV Golden Rose was heading from Yingkou in Liaoning to Dangjin on South Korea's west coast carrying 5,900 tons of steel and MV Jinsheng, reportedly run by China's Shangdong Lufeng Shipping Company Ltd, was heading from Yantai in Shangdong Province to Dalian.

An investigation is under way on the cause of the collision.

Mechel commissioning new Handymax berth at Trade Port Posiet

Mechel has announced the commissioning of a new berthing wall and warehouse area at its subsidiary Trade Port Posiet OAO. The new berthing wall is 60 meters long and was developed by the Far East Marine Research Institute. Construction of the berthing wall and surrounding area was completed in 9 months. The cost of constructing the facility was about RUB 63 million (about USD 2.5 million). With the new wall commissioning, the total berthing wall length becomes 510 meters. Accepting the first 40000 tonne ship is scheduled for August 2007.

Trade Port Posiet OAO currently is capable of accepting various types of ships with up to 25000 tonnes of carrying capacity. With commissioning of the new berth, the port will be capable of accepting and handling 40000 tonne Handymax class ships as early as this year. This will enhance Mechel's capabilities in marketing coal to Asian Pacific countries.

Mr Alexey Ivanushkin COO of Mechel said that "We are pleased to announce the commissioning of the new berthing wall and new warehouse areas ahead of schedule and in line with the development program, which envisages reaching annual freight turnover of about 5 million tonnes by 2010. We plan to make Trade Port Posiet the main hub of coal transshipment for export to Asian Pacific countries, thus increasing our ability to sell our coal to this region."

The new berth has been constructed in line with the port's development program. The program envisages achieving about 5 million tonne freight turnover in 2010. The program also includes installation of specialized high performance equipment for coal transshipping and construction of additional warehouse areas in an adjacent area which will enable total concurrent storing of about 300,000 tonnes of four different grades of coal.

Trade Port Posiet is advantageously located on the Sea of Japan, south of Vladivostok on Russia's border with China and North Korea and has convenient railway connections with Siberia, North-West China, and North Korea. With Mechel's implementation of the port development program, its design throughput capacity constantly increased with the freight transshipment flow totaling about 1.5 million tonnes in 2006. In 2007, the freight turnover increases to 2 million tonnes of export coal, with the capability to clean coal by separators at the port.

Japanese Universal Metal & Aisha Steel to form steel JV

It is reported that a steel mill project at an investment of USD 96 million for producing 220,000 tonnes of steel sheets by a JV between Universal Metal Corporation of Japan and Aisha Steel Mills of Pakistan is on the anvil. As per report, the plant would be operative in the next two years.

A delegation of Japanese investors and Pakistani investment banks led by president of the Universal Metal Corporation of Japan and CEO of Aisha Steel Mills Mr Haseeb Rehman called on Mr Shaukat Aziz prime minister of Pakistan last weekend.

Mr Aziz said that Pakistan welcomes investment in the manufacturing sector and Pak Japan joint ventures in steel manufacturing will be an excellent symbol of cooperation in expanding steel production in the country. Mr Aziz added that As a result of increased economic activity in all sectors of the economy including construction, engineering and manufacturing, the demand and consumption of steel is rising in the country. The growth in steel demand is an indicator of the growth momentum of Pakistans economy.

Mr Aziz said that the government is encouraging increase in steel production with special focus on plant modernization and increasing efficiency. He said that steel industry should upgrade and modernize its plants, as outdated plants cannot achieve the required efficiency needed for a highly competitive market.

Chinas iron ore reserves estimated at 59 billion tonnes

According to a report by Chinese state controlled media People's Daily on weekend, China has identified 59.385 billion tonnes of iron ore reserves to date, most of which are low grade averaging 30% to 35%.

According to a Chinese Academy of Geological Sciences announcement during a recent conference in Beijing, under its National Iron Ore, Copper and Bauxite Resources Assessment Campaign jointly conducted by CAGS and local Land and Resource Departments of 8 provinces including Gansu, Hubei, Sichuan, Guangxi, Shanxi and Liaoning, CAGS has identified 2,974 iron ore mines, 1,248 copper mines and 369 bauxite mines in China.

According to the CAGS, 59.385 billion tonnes iron ore reserves have been identified, including 26.664 billion tonnes of already developed reserves and 32.721 billion tonnes of undeveloped reserves. Sichuan Province contains the most undeveloped iron ore deposits, amounting to 7.857 billion tonnes. Among the identified mines, a total of 1,828 magnetite mines have 41.5 billion tonnes of reserves.

China's proven copper resource reserves amount to 85.31 million tonnes, 43% of which are contained in porphyry copper mines. Large scale copper mines include Tibet's Yulong Copper Mine and Qulong Copper Mine, Jiangxi Province's Dexing Copper Mine and Yunnan Province's Pulang Copper Mine.

China currently has 2.658 billion tonnes of proven bauxite reserves, including 460 million tonnes of already developed reserves and 2.198 billion tonnes of undeveloped reserves.

These reserve numbers sound pretty impressive. However, even though they are officially proven, it is difficult to assess their commercial viability as out of the stated iron ore reserves, only 50% has been commercially prospected.

RBCT may go for further expansion of export capacity

Miningmx.com reported that South Africas Richards Bay Coal Terminal may consider a further expansion of its 91 million tonne per year facility after applications for additional export handling capacity was 42% over subscribed. RBCT said that a total of 27 million tonnes quota was applied for by 26 different companies.

RBCT in an announcement said that Of the 19 million tonnes on offer, 9 million tonnes was made available with specific emphasis to empowerment firms (ARM, 3.2 million tonnes; Exxaro 2.5 million tonnes). A further 6 million tonnes was awarded to the South Dunes Coal Terminal and 4 million tonnes to Quattro users.

Mr Kuseni Dlamini executive chairman of RBCT in an interview with Miningmx said that "This will give us food for thought. We will digest this information and use it to consider further growth of our facility. As a company, we are committed to further growth if there is a sound business case for it.

Mr Dlamini said the pressure was on transport utility Spoornet, to provide enough infrastructure to keep the terminal growing. He said "We're convinced the coal is out there. But further expansions are predicated on Spoornet."

RBCT has begun a ZAR 1.1 billion 19 million tonne per year expansion to raise its capacity form 72 million tonnes per year to 91 million tonnes.

China's zinc exports to slow down driving global prices up

Chinese steel traders and analysts including Mr Feng Juncong of Beijing Antaike Information Development Co said that China which is the world's biggest producer and consumer of zinc may slash exports of the metal this quarter, supporting near record prices. China is trying to curb metal exports to reduce its trade surplus and rein in capacity growth in energy intensive and polluting industries.

Mr Feng said that Chinese net exports of refined zinc may drop as much as 45% to between 50,000 tonnes and 60,000 tonnes in the 3 months ending in June 2007 as domestic demand is growing and the government is discouraging overseas sales. Net zinc exports were 90,260 tonnes in the January to March 2007 period.

Mr Zhou Guobao head of the zinc and lead department of China's Nonferrous Metals Industry Association said that The sharp increase in zinc exports is a concern and the government will probably remove the tax rebate to slow export growth.'' But he didn't say when the tax rebate might be scrapped.

Mr Yang Yinghui a trader at Cofco Futures Co from Beijing said that a decline in record overseas sales by China which consumes a third of the world's zinc may drive global prices toward last November's record of CNY 4,580 a tonne or even higher.

China became a net exporter of zinc in 2006 for the first time in 3 years reducing global supply concern that pushed prices to records. Zinc is used to galvanize steel, helping to prevent rusting of products such as nails, house frames and car parts. China's exports of zinc rose more than fourfold in the January to March 2007 period from a year ago to 153,507 tonnes, while imports fell by 51% to 63,247 tonnes. Singapore, Italy and the US were the biggest buyers.

The Chinese government which wants to ensure that domestic supplies are sufficient to meet rising demand may reduce or cancel rebates on the 17% value added tax for some metal exports. It may remove the 5% tax rebate on exports of zinc of 99.995% purity, which can be delivered on the London Metal Exchange, in the first half of this year.

Vietnam setting up first containers manufacturing unit

VietNamNet Bridge reported that the first container production factory in Vietnam which is being built by the Hai Duong Shipbuilding Industry Complex in Hai Duong province will put out the first container in two years.

Vietnams first container factory, TGC, will make containers which meet international standards capacity of 30,000 TEU a year and then will be raised to 60,000 TEU in the second stage. The products of the factory will be provided to local shipping companies and be exported.

The project has the total investment capital of more than USD 22 million including the capital contribution from VTC the JV between the Vietnam Shipbuilding Industry Corporation and Taiwanese Toong Goen accounting for 25% of total capital. The other 75% of capital will be fed by commercial loans.

On May 9th 2007 VTC and Vietcombank officially signed the agreement on funding the project, under which Vietcombanks transaction centre will provide VTC with a loan worth USD 16 million with the grace period of 12 months.

Chinese & US steel groups to meet on May 15th at USTR

A spokesman for the US Trade Representative's office last week told Platts that a meeting with officials from the China Iron and Steel Association, China's Ministry of Commerce, and US steel producers is scheduled for Tuesday May 15th 2007. American Iron and Steel Institute might also be involved.

Mr Steven Norton spokesman in the USTR press office said that "There's no word yet on the specific agenda.

While there's no official word yet on what may be discussed there has been plenty of rhetoric recently from US steelmaking interests.

Earlier this week at its general meeting the AISI applauded nomination of Mr William G Woody Sutton as Assistant Secretary of Commerce and urged the US Congress to move swiftly for this confirmation. Mr Andrew G. Sharkey III president & CEO of AISI emphasized the need for a clear strategy to address the unfair competitive advantage that foreign governments such as China are advancing through massive subsidies currency manipulation counterfeiting and piracy border taxes and other protectionist policies."

TMK Artroms Q1 net profit up by 6.3% YoY

Romanian tube maker TMK Artrom Slatina announced net profit of RON 12.419 million in Q1 of 2007 up by 6.3% YoY. Its revenue for the Q1 also went up by 55.69% to RON 134.332 million whereas expenses totaled RON 121.913 million increasing by 63.43% from the year ago quarter. Fixed assets increased by 1.62% amounting to RON 375.514 million.

Artrom said that its turnover rose by 64.53% totaling RON 131.237 million and sales amounted to RON 121.917 million as compared with RON 70.506 million a year earlier.

TMK Artrom specializes in the production of seamless pipes in the machine building range. The plant was acquired by TMK in March 2006 together with TMK Resita metallurgical works.

Wheeling Pittsburgs Q1 loss up YoY

Wheeling Pittsburgh Corporation reported an operating loss of USD 52.9 million and a net loss of USD 59.9 million for January to March 2007 quarter as compared to an operating loss of USD 0.1 million and a net loss of USD 2.1 million for Q1 of 2006. Its steel shipments during the quarter totaled 603,893 tons or USD 659 per ton versus 620,668 tons or USD 680 per ton for the Q1 of 2006. And net sales for the Q1 of 2007 totaled USD 397.7 million as compared to net sales of USD 437.0 million in Q1 of 2006.

Wheeling Pittsburgh said that the decrease in net sales versus the year ago quarter was due to a decrease in the volume of steel products sold and average steel product selling price drop of USD 21 per ton, reflecting the remnants of the service center inventory overhang condition, as well as the absence of coke revenue in the first quarter 2007 due to the deconsolidation of the Mountain State Carbon joint venture effective January 1st 2007.

Mr James P Bouchard chairman & CEO said that "The Company's first quarter results were significantly impacted by a very low January production level which was a result of the anemic order book inherited in December 2006. The loss, while a bit higher than expected, includes approximately USD 4 million in accruals for a salary workforce reduction implemented in March. The eventual reduction of over 90 salaried employees represents an important step in improving the cost competitiveness of Wheeling Pitt as it is expected to save approximately USD 9.0 million on an annualized basis. The mission of the new management team is to remedy the difficult production, supply chain and selling problems of the Company. We continue to work diligently to rectify these problems in order to improve the operational and financial performance of the Company. The issues are complex and extensive and will take time to resolve. On the commercial side, we are making progress through a significant improvement in the order book. The proposed combination with Esmark has entered the review process with the Securities and Exchange Commission and we anticipate that the closing of the transaction will occur this summer."

Mittal Steel Galati may sell auxiliary units

Romanian media reported that Arcelor Mittal Romanian unit Mittal Steel Galati intents to sell some of the auxiliary companies whose business is slightly different from the core business of steel. As per report, Mittal Steel Galati is planning to outsource certain services by selling certain auxiliary businesses and then hiring the buyer.

The report cites Mr Augustine Kochuparampil CEO of Mittal Steel Galati as saying that "In the West, no steel works has its own oxygen plant. They sold them and now they are buying oxygen for an optimal price, much better than the cost of having their own oxygen plant." Mr Kochuparampil said that another reason for this move is to reduce the number of employees.

Japan special steel HR output to drop in April to June quarter

According to Japans ministry of economy trade and industry, Japans output of hot rolled special steel products will decrease by 2.6% to 5.294 million tonnes in April to June from January to March, which is the first drop in 4 quarters.

The estimated output is 1.9% higher than demand outlook by METI as of March. However, the output decreases from previous quarter due to lower automobile output and output reduction under less availability of ferrous scrap.

Barapukuria coal mine lacks safe working condition

It is reported that an investigating body formed following the incident in which a British consultant died in the mine recently reported that the workers in Barapukuria coal mine are vulnerable to accidents due to faulty geological and hydrological designs and lack of proper working condition. 3 member probe body was formed by Petrobangla, parent organization of the Barapukuria Coal Mine Company Limited on April 27th 2007.

The report submitted by probe said that high temperature and excessive humidity, absence of efficient rescuers and lack of monitoring system led to the April 26 incident that claimed the life of mining consultant Mr Albert Banes Davis.

The probe report recommended that Chinese developer of the mine CMC and the BCMCL should take measures to maintain a standard temperature and humidity in the mine. Otherwise, more accidents might occur. They blamed the mine authorities BCMCL for certain lapses in the mine operation, and recommended measures to avoid recurrence of such accidents. The probe body also noted that the mine authorities failed to maintain either ideal temperature or humidity in the mine.