Indias 2006-07 coal production 430.58 million tonnes

Dr Dasari Narayana Rao minister of state for coal informed the Rajya Sabha that the total production of coal in different parts of the country by all coal companies during the year 2006-07 provisional was 430.58 million tonnes.

State wise details of the production of coal is as under

In million tonnes

Dr Rao said that as many as 130 coal blocks have been allotted to different consumers to be operated by private & public sector for captive end uses by government to increase domestic production to reduce the gap between demand and supply.

CIL has identified to take up 119 coal projects for an ultimate capacity of 256 million tonnes with a contribution of 111.08 million tonnes in 2011-12, the terminal year of 11th Plan, SCCL has identified to take up 25 projects for an ultimate capacity of 43.35 million tonnes with a contribution of 5.75 million tonnes in the terminal year 2011-12 of 11th Plan and further, CIL under Emergency Coal Production Plan has identified 16 opencast projects & mines where production from the existing mines & projects will be enhanced to a higher level yielding additional 71.3 million tonnes.

Anti POSCO Khandadhar Surakhya Samiti formed

Statesman News Service reported that POSCO's proposed steel plant near Paradip is facing yet another hurdle as the people from nearly 40 villages spread over 5 gram panchayats have launched an anti POSCO agitation under the banner of Khandadhar Surakhya Samiti for opposing any move by Orissa government to hand over Khandadhar iron ore mines to POSCO.

Mr Khagendranath Pradhan Rourkela district president of BJP and an advisor to the Samiti said that Khandadhar Surakhya Samiti has vowed not to allow POSCO to undertake mining activities in Khandadhar area, which, it feared, would lose its natural beauty.

Khandadhar is a popular tourist place in the state with 2 huge natural and attractive waterfalls.

Earlier the Orissa government had recommended to the centre to provide prospecting license to POSCO for the mines in December 2006. But it led to a row Kudremukh Iron Ore Company opposing the move and approaching Orissa High Court. Recently the HC had recently asked the centre to decide the matter within 3 months.

Indian government identifies 81 coal blocks for captive mining

Dr Dasari Narayana Rao minister of state for coal announced at the meeting of Parliamentary Consultative Committee attached to his Ministry that in order to meet the coal demand, 81 additional coal blocks with geological reserves of about 20 billion tones have been identified by coal ministry for allocation to Government companies and private companies for permissible end use.

41 blocks with reserves of 15.7 billion tones are earmarked for power sector. These blocks for the power sector have been further categorized in 3 separate lists on the basis of method of allocation.
1. Government Company Dispensation Route
2. Screening Committee Route
3. Tariff based Bidding as per Ministry of Power Guidelines.

40 blocks with total reserves of 4.3 billion tonne would be considered for allocation for the non power sector.
1. Government Company Dispensation Route 17 blocks with estimated 1847.75 million tonnes reserves
2. Screening Committee route 23 blocks with 2464.23 million tonnes reserves.

Dr Rao said 1422 applications have been received for 38 blocks advertised for allocation through Screening Committee. These have been forwarded to the state governments and administrative ministries concerned for their views and recommendations.

Dr Rao added that for allocation under Government Company Dispensation route about 200 applications have been received for allocation of 27 blocks.

Emphasizing the importance of quick development, the Minister informed that specific time bound milestones have been prescribed for development of coal blocks. An effective system of monitoring at the level of Ministry as well as the Coal Controllers Organization has been put in place. A system of bank guarantee has been introduced, and it would get forfeited if the allottee fails to achieve the guaranteed level of coal production. He further informed that of the 19 coal blocks allotted prior to 2002, 11 have commenced production so far. 6 more coal blocks are expected to come into production during the current financial year. Other coal blocks are at different stages of development.

Azerbaijan accuses Vedanta of illegal mining Report

PTI reported that non ferrous major Vedanta has been accused of illegal mining by Azerbaijan government and has complained to the Indian government that Vedanta's Sterlite Industries was illegally exploiting gold in its territories that have been occupied by Armenia.

The report cites a highly placed official as saying that "India has assured Azerbaijan that it will probe the issue. The government has also told them that Indian companies will have to operate in accordance with inter governmental agreements and local legislation."

Azerbaijan raised this issue with a high level Indian delegation which visited the Central Asian country recently. According to the report, the commerce ministry of India has forwarded the complaint of the Azerbaijan government to the department of mines for taking up the issue with Vedanta.

The two former Soviet republics Azerbaijan and Armenia are locked in a long standing land dispute with Azerbaijan claiming that Armenia has occupied 20% of Azheri territory.

Vedanta Resources, which is listed in London, has annual sales of USD 1.9 billion. A large part of its operations are in India where it has major market share in aluminum, copper, zinc and lead. It agreed to buy 71% stake in iron ore exporter Sesa Goa for USD 1.37 billion last month.

Usha Martins 2006-07 net surges by 56.21% YoY

Indias leading wire rope and specialty steel manufacturer Usha Martin has posted a net profits of INR 290.2 million for the January to March 2007 period up by 42.39% YoY as compared with INR 203.8 million for January to March 2006 while net sales for the quarter has recorded at INR 4,018.6 million up by 11.62% YoY as compared with INR 3,600.1 million during January to March 2006. The companys total income for the quarter has recorded at INR 4,037.4 million up by 10.09% YoY as compared with INR 3,667.4 million during the same quarter, a year ago.

Usha Martin has posted INR 1,014.8 million in net profits for the 2006-07 up by 56.21% YoY as compared with INR 649.6 million during 2005-06 and net sales for the period is INR 14,086 million up by 14.04% YoY as compare with INR 12,352 million in 2005-06. The companys total income for the period has recorded at INR 14,229.3 million up by 14.32% YoY as against INR 12,446.8 million in 2005-06.

Usha Martin principally operates in three manufacturing divisions that of wire and wire rope, steel and cables. The companys products include specialty steel long products, steel wire ropes, and jelly-filled underground telecommunication cables. The company has manufacturing facilities in Ranchi, Jamshedpur, Hoshiarpur, UK, Thailand and UAE.

Indian government announce rehabilitation package for CILs ECL

Indian government has sanctioned a rehabilitation package for the Coal India Limiteds subsidiary Eastern Coalfields Limited. Highlights of the rehabilitation package for ECL are as under

1. Infusion & Investment of funds - An investment of INR 2,956.83 crores from 2003-04 to 2012-13 for augmentation of production to be met from internal resources of ECL.

2. Waiver of non payment of loans & interests
(i) Waiver of unsecured loans amounting to INR 519 crores during 2008-09 by CIL provided ECL achieves the outlined milestones.
(ii) Waiver of interest on unsecured loans mounting to INR 168.65 crores upto 2002-03 and future interest of INR 33.73 crore per annum from 2004-05 to 2008-09 by CIL till such time the unsecured loan is waived.
(iii) Waiver of INR 82.47 crore of apex charges for the earlier years up to March 31st 2004 and further waiver of service charges at INR 14 crore per annum from 2004-05 by CIL.
(iv) Waiver of electricity duty at INR 18 crore per annum from 2004-05 for 5 years from governments of West Bengal and Jharkhand.

3. Conversion of loan to equity - Conversion of current account balance of INR 1,532 crore of ECL as on March 31st 2003 by CIL into equity share capital in proportion to ECL bringing down its negative net worth.

4. Other proposals
(i) No interest to be charged on current account balance by CIL.
(ii) Moratorium on repayment of further unsecured loan and current account balance till ECLs networth becomes positive.
(iii) Gratuity and leave encashment wages provided to the voluntary retirement scheme optees to be routed through current account.
(iv) Repayment of EDC, Canada (foreign currency loan) loan and interest by CIL.
(v) Exemption to ECL from Section 41(1) of the Income Tax Act, 1961 in respect of remission arising out of writing off loans, interest and other liabilities.
(vi) Exemption to ECL from payment of fees for increase in the authorized share capital.
(vii) ECL to start payment of arrears of NCWA-VII from April 2006 in three installments during 2006-07, ie 50% of the arrears by May 2006, 25% before Deepawali and balance 25% by March 2007, instead of disbursement over three years as approved by board for reconstruction of public sector enterprises.

5. The company shall ensure rationalization of manpower through VRS and natural attrition, within the stipulated time frame.

Orissa approves 4 projects worth INR 7,225 crore

BS reported that the Orissa government, in a meeting of the high level clearance authority chaired by Mr Naveen Patnaik chief minister, has approved four projects in the steel and power sector involving investment worth INR 7,225 crore.

The projects approved include
1. 2nd phase expansion of Adhunik Metalics
2. Capacity expansion of KVK Nilachal Power Ltd
3. Setting up of a power plant by Monet Ispat and Energy Ltd
4. Capacity expansion of TATA Power Company Ltd.

Mr Ashok Dalwai industry secretary said that while a fresh MoU would be required for Monet Ispat to set up the power plant, for others the existing MoUs would be modified.

Mr Dalwai said Adhunik Metalics had signed the MoU with the state government to set up a steel plant with 0.15 million tonne a year capacity at Kuanarmunda near Rourkela. The company has proposed a second phase expansion which will take the production capacity to 0.26 million tonne a year. Post expansion, the total project cost will go up to INR 437 crore from INR 197 earlier. For steel production, the company will shift to a mini blast furnace route from the present sponge iron route.

KVK Nilachal Powers proposal seeks expansion of capacity from the existing 600 MW to 1,200 MW. This will take the total cost of the project to INR 5,000 crore from INR 2,580 crore earlier.

Indian Railways importing 40,000 wheels annually

UNI has reported that Indian Railways is facing a shortfall of 40,000 wheels annually which is being met through imports. The total annual requirement of wheels of the Railways is around 2,40,000 while the combined manufacturing capacity of the 2 indigenous sources Rail Wheel Factory in Bangalore and Steel Authority of India Limited is about 2,00,000 wheels.

The report cites a railway ministry official as saying that the reasons for import of wheels were largely shortage of capacity and requirement of special type of wheels. He is reported to have said ''The shortfall of 40,000 wheels is being met through imports. Wheels for high horse power engines and high speed coaches, which are currently required in small numbers, are also imported since economies of scale do not permit indigenous production.''

L&T may set up transmission lines in Africa

PTI reported that Larsen and Toubro is planning a foray in the African continent for setting up an inter country power transmission lines as part of its overseas expansion plan.

Mr KV Rangaswami president construction and board member of L&T told PTI that "Our next stage of expansion will be in Africa, where we are looking at projects for setting up transmission lines. However, this is at a preliminary stage. In Africa, it is not possible to restrict ones self to only one country. Inevitably, one would have to enter into inter country power transmission lines." He said that L&T is planning to have a presence in Ghana initially and cater to the surrounding nations.

Mr KV Rangaswami however said that the matter is yet to be cleared by the company's committee of directors.

L&T is currently handling about 200 projects of which some are in the West Asia, South East Asia and SAARC countries. L&T had earmarked INR 800 crore for its various ongoing projects this year and currently, it has an order book of INR 26,000 crore.

Doosan to supply boiler TATA Power's Mundra UMPP

It is reported that TATA Power Company Ltd has signed a contract with South Korea's Doosan Heavy Industries and Construction Co Ltd for sourcing boilers for its 4,000 MW ultra mega power project in Gujarat. This contract covered 45% of the total ordering under this project, which entails a total cost of INR 16,000 crore.

The agreement includes supply of super critical steam generators, air and flue gas systems, auxiliaries, fuel oil systems, electrostatic precipitators and boiler field instrumentation. The contract, which is on an engineering, procurement and construction basis, would include super critical boilers for the 5 units of 800 MW each. Doosan's scope of work would also include civil works for boilers and complete services including custom clearance, inland transportation, site handling, erection, commissioning and performance testing.

Mr Prasad R Menon MD of TATA Power said that "This agreement is a significant step toward our drawing on the technical expertise of a strong international player like Doosan Heavy Industries Construction. This partnership will provide an excellent technical solution for Mundra UMPP, which is also cost competitive."

Coastal Gujarat Power Ltd, the special purpose vehicle for Mundra UMPP, was transferred to TATA Power on April 24th 2007.

India to help Tanzania for power plants

It is reported that Bharat Heavy Electrical Limited, at a meeting of the joint trade committee between India and Tanzania, has offered to set up two 125MW gas or coal oil based power plants in Tanzania

As per report, an agreement to this effect might be signed during the proposed visit of Mr Jairam Ramesh minister of state for commerce to Tanzania in August 2007.

During the meeting, Mr Basil P Mramba Tanzanian Minister of Industry, Trade and Marketing asked Indian companies to invest more in Tanzania and highlighted areas such as power, leather, horticulture and infrastructure where Indian investments could benefit Tanzania.

NTPC has also offered to provide technical assistance to upgrade the efficiency of power plants in Tanzania and to train the Tanzanian technical personnel.

China to hold steel talks in June to avoid trade disputes

It is reported that China will hold the yearly steel talks with US, EU, Japan and South Korea in early June 2007 in the hope of easing tight trade relations resulting from booming steel export.

The talk with US is reportedly to be held in Washington on June 4th simultaneously, that with Japan in Tokyo. China's negotiation with South Korea will be in Seoul on June 7th 2007 yet that with EU has not made a date but also probably in early June.

Sino US talk will base on the two nations' joint commission on Commerce and Trade, participated by officials from each ministry of commerce and China Iron & Steel Association. China has had 11 talks with Japan and 9 with South Korea in past years.

Chinese steel exports in April 2007 rose to a record 7.2 million metric tonnes despite official efforts to cool off the industry's growth and rein in exports, according to the government. Industry analysts say Chinese mills are stepping up exports in an effort to beat expected new controls.

Beijing has cut tax rebates for steel exports twice since September and has imposed export duties on some products. An export licensing system takes effect on Sunday.

(Sourced from MySteel.net)

Arcelor Mittal gets 30 more days to sell Sparrows Point plant

AP reported that the US Justice Department gave Mittal Steel Co another 30 days to sell a Maryland steel mill that the it must divest to settle antitrust issues.

Mr LN Mittal CEO of Arcelor Mittal signaled earlier this week that company wouldn't meet the original May 21st 2007 deadline for selling its Sparrows Point plant near Baltimore. But the company would announce a sale in the next six to eight weeks time or before that.

The US Justice Department ordered Mittal to sell Sparrows Point as a condition of the company's pending merger with Arcelor SA of Luxembourg. The US government said the sale would preserve competition in production of tin plated steel which is used to make cans for food aerosol sprays and paint.

Under the consent decree issued February 20th 2007 the US government has the discretion to agree to one more extension of the divestiture time period not to exceed 60 days in total.

Outokumpu to exercise option in the Talvivaara nickel mining project

Outokumpu has decided to exercise its option to acquire a 20% stake in the Talvivaara nickel mining project company for a total consideration of EUR 1 and will also subscribe shares in the initial public offering of Talvivaara Mining Company Ltd, the parent company of the project company. The size of the subscription will be decided upon later.

Outokumpu has divested its mining business except for the Kemi chromite mine, which is an integral part of the group's stainless steel operations and as part of the exit mining program, Outokumpu sold the Talvivaara exploration project in 2004 for EUR 1 to what is now known as Talvivaara Mining Company Ltd.

In the agreement between the 2 companies Outokumpu retained an option to acquire a 20% free carried interest in the project company for the sum of EUR 1. Outokumpu has also been granted an option to subscribe shares in a possible share offering by Talvivaara Mining Company Ltd, the parent company for the project, with a 20% discount to the offering price, representing up to 5% ownership in the company after the offering.

As Talvivaara now intends to list on the London Stock Exchange and has started a share offering, Outokumpu has decided to exercise both options as described above.

The offering, together with a previously arranged project financing facility will secure financing for the Talvivaara project and enable its development into an operating mine. Outokumpu's ownership in the project and the parent company does not call for participation by Outokumpu in further financing of the project.

TMK & Surgutneftegas enter strategic partnership agreement

OAO Surgutneftegas and OAO TMK entered into a long term strategic partnership agreement. The agreement was signed in Moscow by Mr Vladimir Bogdanov CEO of Surgutneftegas and Mr Konstantin Semerikov CEO of TMK. This long term strategic partnership agreement is valid for three years, with possible prolongation.

Looking to strengthen their market positions in Russia and abroad, the parties agreed to cooperate in the production and supply of steel pipes. Steel pipes produced by TMK plants will be supplied to Surgutneftegas to meet its oil production needs. The volume of tubular goods shipped within the frames of this agreement is valued at USD 1 billion.

This agreement between Surgutneftegas and TMK also involves the coordination of medium term and long term joint activity for the development of new types of tubular goods according to the Scientific-Technical Cooperation Joint Program for 2007-2010, approved by both companies in 2006.

Scientists urge quick climate change action in G8 summit

The science academies of the Group of 8 Britain, the United States, Russia, France, Germany, Canada, Japan and Italy as well as 5 major developing nations South Africa, India, China, Brazil and Mexico have called the leaders of the world's rich nations to cease squabbling over global warming and take urgent action instead, ahead of a G8 summit in Germany next month which looks headed for deadlock.

Mr Martin Rees president of Britain's Royal Society said that "The urgency of the situation means tough decisions need to be taken now to provide disincentives to carbon emissions. Much can then be done through positive changes such as developing new technology or making more efficient use of the systems already in place. Meeting the challenge of climate change demands cooperative action by all the G8 countries along with India, China, and other rapidly developing nations."

Mr Rees added that even two degrees would be a hard target to meet.

The statement from the joint science academies of the G8 plus five urged governments to push for more energy efficiency stop global deforestation share cutting edge clean technology and invest more heavily in zero carbon energy sources.

Germany which this year has the presidency of the G8, is trying to push though a strongly worded statement from the June summit insisting that action must be taken to limit the rise this century to just two degrees above pre industrial levels. It also wants the meeting to agree to cut climate warming carbon emissions to 50% below 1990 levels by 2050 and promote carbon trading as a way of raising the price of emissions and thereby boosting clean technologies.

Statoil awards 5 year contracts for pipe supplies

Norwegian oil and gas producer Statoil ASA announced that it has awarded NOK 13.2 billion contracts to supply it with pipeline and tubing steel and casings for the next 5 years. Statoil said that the suppliers include Sumitomo, Mitsui, Tenaris, V&M, Metal One & JFE, Itochu Marubeni & JFE, Butting and Europipe Gmbh.

Statoil said in a statement that the deliveries cover the entire group's needs for piping on new developments and drilling operations on the Norwegian continental shelf. They also cover supply of piping on international operations.

Mr Odd Noland a Statoil spokesman said that The demand for steel has increased significantly on a global scale in recent years. This has led to higher prices and limited availability of raw materials critical to Statoil's projects and drilling operations. With these frame agreements we have secured access to strategic equipment at competitive prices.

Russias finished steel output in 4 months up by 6.6% YoY

Russian Federal State Statistics Service Rosstat reported that Russian industrial output of finished steel roll up by 6.6% YoY in January to April 2007 to 20 million tonnes.

Rosstat said that output of iron ore grew by 3.3% to 34 million tonnes, production of coal fell by 1.2% to 104 million tonnes, production of coke was up 4.3% to 11.2 million tonnes and steel pipe production jumped 25.5% to 2.9 million tonnes.

Hyundai Steel places orders for BF with Paul Wurth

It is reported that Hyundai Steel Company has placed orders for 2 blast furnaces in April end with Paul Wurth, which will produce 8 million tonnes per year of hot metal at the first stage. Sized at 14.9 meters hearth diameter each, they will be the first blast furnaces within the Hyundai Group. The challenging project schedule considers commissioning of the BF No 1 in January 2010 followed by BF No 2 in January 2011.

Hyundai Group said that the order contains the design of the two modern BF plants including burden preparation plants and Bell Less Top charging systems, blast furnaces with modern staves cooling systems, hot blast stoves with external combustion chamber, axial cyclones and annular gap scrubbers for off-gas cleaning, pulverized coal injection plants and utilities systems. The two identical blast furnaces will be equipped with four tap holes and two slag granulation plants each. Paul Wurth will also provide services for installation and erection of the plants and perform supervision of commissioning.

Paul Wurth headquartered in Luxembourg is mainly active in engineering for the iron & steel industry and the non ferrous metals sector. Paul Wurth is one of the world leaders in the design and supply of complete plants, systems and processes as well as mechanical equipment for the iron making sector.

Norilsk Nickel to create its own energy company by year end

Itar Tass reported that the board of directors of MMC Norilsk Nickel at its meeting on May 15th 2007 agreed to form a new company on the basis of Norilsk Nickel's non core energy assets. The restructuring will be carried out as a spin off of these assets and the shares of the new independent company will be distributed on a proportional basis among shareholders of MMC Norilsk Nickel.

Mr Andrey Klishas chairman of the board of directors of MMC Norilsk Nickel said that "As a result of this spin off, the largest private energy company in Russia will be created, so the restructuring will increase the shareholder's value of MMC Norilsk Nickel. And what is more, the spin-off of these non-core assets will allow management to focus on core business.

MMC Norilsk Nickel is one of the worlds largest producer of nickel and palladium and one of the major producers of platinum, copper and cobalt. MMC Norilsk Nickel shares are listed with several national stock exchanges in Russia.

Consteel scrap pre heating ordered for CMC micro mill at Mesa

It is reported that Danieli Corp has contracted Pittsburgh based Core Furnace Systems to design and supply a Consteel scrap preheating package system for the new micro mill being developed by Danieli at Commercial Metals Co at Mesa in Arizona.

Consteel is a proprietary technology in which heat from the electric arc furnace is diverted through a fourth stack in the vessel to preheat scrap on a continuous basis prior to charging. A patented conveying system delivers the preheated furnace charge through the EAF sidewall.

According to Core Furnace Consteel installations are producing over 15 million tons of steel annually worldwide. CMC's micromill project will represent the seventh installation in the US in a project designed to operate at a limited capacity to source scrap in the metropolitan area and supply local buyers with rebar.

Suezs Sita acquires UK scrap recycler Easco

UKs Norfolk Eastern Daily Press reported that Waste Management Company Sita, part of large French industrial and services group Suez, has purchased Easco for an undisclosed sum.

Easco which until now was part of the Serruys family's SPC empire has more than doubled its turnover in the past three years to about EUR 90 million and last year handled 512,000 tons of ferrous and non ferrous metals. Easco exports more than 50% of its metals to Europe the Indian sub continent and the Far East.

Mr Pers Anders Hjort CEO of Sita said that he expected the UK would eventually follow the European trend with the waste industry becoming more active in scrap metal and scrap metal firms becoming more active in the waste industry. He said Easco has a good working relationship with its customers and clients and we hope to reinforce this and expand the business."

Mr Richard Cubitt of SPC said that it would be business as usual for Easco's staff and customers. Mr Cubitt said that "It will be run as a standalone business. Sita will continue to operate it in the same way and will use it as a springboard for expansion in the sector."

China hikes interest rate and bank reserve requirement

The central bank of China announced that China will raise the one year deposit and loan interest rates by 0.27 and 0.18% points respectively to 3.06% and 6.57% as of May 19th 2007. The People's Bank of China will also raise banks' reserve requirement ratio by 0.5 % points to 11.5% as of June 5th 2007.

Mr Zhou Xiaochuan governor of China's central bank at a press conference said that China will continue to use monetary instruments to maintain macro economic stability and may also consider other instruments to maintain macro economic stability in the country. Mr Zhou noted that China's macro economic stability is very important both for the nation and for its impact on the world economy.

China has raised the bank reserve ratio seven times over the past year each time by 0.5% point. It stood at 7.5% of deposits before the first increase last June. The last increase was April 16. But the tightening policies have largely failed to prevent the economy from becoming overheated. The gross domestic product grew 11.1% in the first quarter of the year compared to last year at 10.7 %.

Gazprom to buy 50% stake in Beltransgaz

RIA Novosti reported that Russian energy giant Gazprom has signed a deal to purchase a 50% stake in Belarusian pipeline operator Beltransgaz for USD 2.5 billion. Gazprom will make equal payments in 4 stages from 2007 to 2010, acquiring a 12.5% stake in Beltransgaz at each stage, which will ensure stable gas supplies to central and western European consumers.

Gazprom transports gas to the European Union via the Belarusian branch of the Gazprom controlled Yamal Europe pipeline, with an annual capacity of 24.8 billion cubic meters and also through gas pipelines owned by Beltransgaz, the Belarusian pipeline monopoly, which has a capacity of 51 billion cubic meters.

Chinese steelmakers warned for a looming market downslide

Chinese steelmakers faced with mounting pressure from spiking ore imports price, roaring freight rates, further restraining policies on steel export and accelerating elimination of backward capacity, which all could reverse the trend of current strong price uptrend, warned market observers.

Weak bargaining power in ore talks - They have yet to have strong leverage over benchmark ore talks although Baosteel has taken the leading role in last year's negotiations. The market condition still tips in favor of suppliers with the top three miners holding over 70% of the global iron ore supply. Moreover, India government has announced an export tax on iron ore in view of China's rigid demand and buying crave for ore imports. And China has an increasing reliance on ore imports, showed by the latest figures. Ore imports meet 54.84% of China's total iron ore requirements in the first quarter, up by 3.74% from 2006. Some institution investors, therefore, have revised their forecast for 2008 benchmark ore price from decline to increase.

Steep freight cost - The freight rates for traditional iron ore routes have hit historical highs recently. Current high freight costs are partially market driven and partially a result of market speculation, noted by market analysts. As a result, China Iron & Steel Association has urged Chinese steelmakers to do jointly purchase iron ore and charter ships for lowering cost. In addition, the association is also considering a regional union idea divides China into several purchasing areas.

Government tightening grip - In April China's finished steel exports rocketed to a monthly record of 7.16 million tons as steel producers were rushing exports out the door before further tightening control comes online. Chinas removed tax rebates on 83 steel product exports and lowered the rate on 76 others to 5% as of April 15th Steel producers also need to apply for export license for 83 steel products from May 20th and are reacting to speculation that, in a move to counter the widening trade surplus, the nation will introduce export tariffs on low end steel products to rein in steel exports and rise up threshold for exporters

Expediting elimination of obsolete capacity - Beijing's decision to make local officials responsible for clamping down on obsolete steelmaking plant has been welcomed by Chinese steel analysts, who believe it will expedite the removal of outdated capacity. According to the National Development and Reform Commission Ten provinces including Hebei, Beijing, Shanxi, Liaoning, Jiangsu, Zhejiang, Jiangxi, Shandong, Henan and Xinjiang-all of which are major steel production bases, agreed on April 27 to get rid of a total 39.86 million tonnes per year of pig iron and 41.67 million tonnes per year of steelmaking capacity by 2010, with more than half to be demolished by the end of 2007. NDRC has also posted a list of the backward capacity to be dismantled for the public to read on its website, alongside the schedule for each province. Beijing aims to erase 30 million tonnes per year of iron making and 35 million tonnes per year of steelmaking capacity by the end of 2007.

(Sourced from MySteel.net)

US shredded exports drop by 36% in March

US exports of shredded scrap have dropped by 36% in March when purchases from India, Turkey and Thailand reduced. The US Commerce Department has released the latest figures referred that shipments to oversea mills have decreased to 340,651 tons whereas shipment to foreign steel mills was totaled 529,952 tons in February 2007.

Turkey is the leading market for ferrous scrap exported from the US for shredded and cut grades but its required tonnages were down by 23.1% in March as compared to February 2007.

Jinchuan's April nickel output exceeds target by 4.62%

Chinese Jinchuan Groups announced that its output of nickel in April 2007 has exceeded its target by 4.62% but did not specify the actual production or target for April.

A Jinchuan spokesperson said that it aims to lift its nickel metal production by 7.8% to 110,000 million tonnes in 2007 from the 102,000 million tonnes produced in 2006.

Jinchuan Group, which accounts for about 90% of China's total nickel output, has a capacity of 130,000 million tonnes per year currently. It is in the process to raise its capacity of electrolytic nickel to 150,000 million tonnes per year by 2010.

China's hunger for nickel growing

Import of nickel ore in China boomed in 2006 because huge quantities of low grade nickel ore was imported from the Philippines that lead to a decline in average import price. As nickel is among the raw materials for the production of stainless steel the rapid growth in stainless steels production in China has raised the demand for nickel. Chinas nickel ore reserves are insufficient to meet the demands of its domestic market. Therefore, China is reliant on imports of nickel ore.

According to a RNCOS report, Nickel Market Outlook the demand of nickel in China is undoubtedly on a rise but some matters on the supply side needs serious thought. Chinas domestic supply of nickel is limited as its nickel reserves aren't very rich. Also, around 50% of the nickel production relies on imported supplies of intermediate materials. Hence, there is a little scope to raise the domestic production and this is the reason why China depends on imports heavily to meet its demand.

The market research report also talks about the Chinas import from other countries in terms of percentage, production and consumption forecast of refined nickel and forecast of stainless steel production forecast. Apart from this, the report takes into account the supply and demand scenario of nickel on global level the production consumption and market value of nickel at global scale top ten countries according to their nickel production and consumption statistics, and future prospects of the nickel industry.

To know more about the report, please send a mail to editor@steelguru.com.

General Steel Holdings Q1 net up by 88% YoY

China's first publicly traded steel manufacturer in the US, General Steel Holdings Inc announced that financial results for its 2007 fiscal year first quarter ending March 31st 2007 as under

1. Sales Revenue increased by 82% to USD 37.6 million in the Q1 of 2007 as compared to USD 20.6 million in the same period of 2006.
2. Shipment volume increased by 64% to 87,786 tons in Q1 of 2007 as compared to 53,547 tons in the same period of 2006.
3. Overall Cost of Sales was USD 35.9 million in the Q1 of 2007 up by 85% over the same period in the previous year.
4. Gross Profit increased by 36% to USD 1.73 million in the Q1 of 2007 from USD 1.27 million in the same period of 2006.
5. Selling, General and Administrative expenses decreased by 2.2% to USD 630,200 in the Q1 of 2007 as compared to USD 644,795 in the in the same period of 2006.
6. Net Income was up 88% to USD 474,865 in the first quarter of 2007 as compared to USD 252,408 in the same period of 2006.

The release said that the primary reasons for the met income result include strong demand for General Steel's main product, hot rolled carbon steel sheets, well controlled costs and improving margins.

Mr Henry Yu Chairman & CEO of General Steel Holdings Inc said that "We are very pleased with our 2007 first quarter results. In 2006, we invested heavily in improving and expanding our operations: We added 4 new production lines, increased our capacity by 150,000 tons, brought on 16 new distributors, and increased our processing efficiency by 20%. Now, in the first quarter of 2007, we can really see that these investments are beginning to gain traction and generate positive results." He further elaborated, "We continue to see strong demand for our product and are clearly the dominate market leader in our niche. We saw the price of steel rise in the first quarter, our costs are managed and under control and our gross margin is improving. We are very excited about the remaining quarters of the year."

General Steel Holdings Inc is a leading manufacturer of high quality hot rolled steel sheets used in the construction of small agricultural and specialty vehicles. General Steel Holdings has expanded its operations to ten production lines capable of processing 400,000 tons of 0.7mm to 2.0 mm hot rolled carbon steel sheets per year. It is now the largest producer in its product category in China.

Russias nickel exports in Q1 dip by 7.4% YoY

According to the latest figures from Russias customs department Russia exports of nickel totaled 57,600 tonnes in the Q1 of 2007 down by 7.4% YoY as compared to 62,200 tonnes in Q1 of 2006.

Russias customs department said that We would be wary of reading too much into these figures since shipments by Norilsk Nickel in the far north of the country tend to be volatile during the winter shipping season. That will apply even more so in the coming period since its export port of Dudinka closes briefly during the spring melt of the Yenisey River.

Russian local agencies report that the Dudinka port will be closed between May 15th and June 15th this year.

NSSC to increase CR SS prices

Japans largest stainless steel producer NSSC has launched a hike for cold rolled stainless sheet by JPY 50,000 per ton (USD 416 per ton) because of an increasing surge of nickel.

The hike will push NSSCs price for July delivery of its 2mm 304 series CR stainless sheet to JPY 710,000 per ton on the back of the increase to a rise in its alloy surcharge. While May contract prices for non nickels 430 series makes no changes staying at JPY 225,000 per ton.

Scotia zinc mine in Canada starts production

Canadas Acadian Gold announced that its Scotia lead zinc mine at Gays River in Nova Scotia has started operations. The mine and mill are now at the commissioning phase which is expected to be completed between late June and mid July.2007.

Acadian Gold said it is still negotiating concentrates off take deals but noted that the market for both zinc and lead concentrates is very strong and that it will benefit from the high quality of Scotias concentrates output 60% zinc and 75% lead.

The mine is targeting production this year of 23.4 million pounds (around 10,600 tonnes) of contained zinc and 7.8 million pounds (around 3,500 tonnes) of contained lead in concentrates.

At full production the Scotia mine is expected to yield 39.8 million pounds of zinc and 16.5 million pounds of lead per year.

Vysokogorskiy GOK starts equipment for ore processing

FIS reported that the project on the startup of 'Derrik' complex including 2 sections of 4 screens is to take place on the eve of the professional holiday of VGOK specialists the Day of Vysokogorets.

As per report partners of Derrik Company taking part in the project are Trane & Trane Teknikk AS and technologists and engineers of the concentrating unit of VGOK. Currently the new equipment is being tested in production conditions, working with the capacity of 80 tons of concentrate per hour. Also underway is personnel training.