Performance of steel ministrys PSUs in last 3 years

Indias steel ministry has reviewed the performance of steel sector in India during 3 financial years and has noted that India is now the 7th largest crude steel producing country in the world, an improvement over Indias international ranking of 9th position in 2004. It added that in the last three years the production as well as the consumption growth rates of finished steel, has touched double digit figures and that the production and consumption figures for 2006-07 up by 31 % and 41% as compared to that of 2003.

It also reviewed the performance of units under its fold and the highlights are as under
1. Combined profit before tax of INR 5426 crore in 2003-04 increased to INR 15,687 crore in 2006-07 an enhancement of 189%
2. Growth in the profit before tax figures of 2006-07 as compared to 2003-04 for SAIL 259%, RINL 45%, NMDC 468%, MOIL 333%, MSTC 126%, MECON 101%, OMDC 58% and HSCL 59%
3. Loss in Bharat Refractories Ltd reduced by 91% in 2006-07 to INR 0.84 crore from INR 9.40 crores in 2003-04.
4. Contribution of the PSUs to Central Government, the State Governments and Government Insurance Companies up by 172%, INR 5873 crore in 2003-04 to INR 15945 crore in 2006-07.

Improvements in turnover

In INR crores

Improvement in production volumes

In million tonnes except for refreactory, which are in tonnes

Some of the highlights of specific achievements by PSU are
A) SAIL
1. SAILs physical and financial details for the year 2006-07 reflected debt equity ratio at a low of 0.24:1 on 31.03.2007 against 0.35: 1 on 31.3.06; 6.50:1 on 31.03.2003 and 1.87:1 on 31.03.2004.
2. Lowest ever energy consumption of 7.16 giga calories per tonne of crude steel as against 7.51 giga calories per tonne of crude steel in 2003-04
3. Lowest ever coke rate of 541 kilograms per tonne as against 553 kilograms per tonne in 2003-04
4. Capacity utilization of SAIL in saleable steel stood at 102%, 109% and 114% in 2004-05, 2005-06 and 2006-07 respectively.

B) RINL
1. Became a debt free company in Sept03, wiped out all accumulated losses in January 2006
2. Capacity utilization was 120 % in 2006-07

C) MOIL - 333% increase in gross profit and 356% increase in net profit in 2006-07 as compared to 2003-04.

D) HSCL - Achieved a record order booking of INR.775 crore during 2006-07, which is the highest since inception. The 2003-04 figure was INR 513 crores

E) Scrap handled by FSNL increased from 1.936 million tonnes in 2003-04 to 2.204 million tonnes in 2006-07, depicting a 14 % increase. Slag handled by FSNL also increased from 2.63 million tonnes to 3.61 million tonnes, indicating a 37% growth.

F) MECON became a net profit making company in 2004-05 as compared to a loss making in 2003-04. The net loss of INR 10.72 crores in 2003-04; a net profit of INR 10.73 crores in 2004-05 and the net profit further of INR 19.10 crores in 2006-07, a 278 % turnaround from 2003-04.

Suzlon acquires wind turbine major REpower

Wind power major Suzlon Energy has finally acquired control of German wind turbine manufacturer REpower by taking just 7.84% stake in the firm, after the French nuclear energy group Areva SA agreed to withdraw from the bidding contest. The deal values Repower at EUR 1.35 billion (INR 7,425 crore).

Suzlon Energy said that it reached an agreement with Areva SA, which owns 30% of Repower, under which the Areva will become a preferred global supplier ending a 5 month long bidding battle between the two. Areva has the option to sell its stake in Repower to Suzlon after one year at market price. The bidding process for REpower started when Suzlon announced a competing public offer on February 9th 2007.

Suzlon has so far paid a mere EUR 100 million for its stake but the immediate bill is likely to increase by another EUR 100 million to EUR 150 million as more shares could be tendered to Suzlon by large funds such as Blackrock group and Fidelity against Suzlon’s open offer for Repower shareholders to turn in their shares for EUR 150 a share. That would effectively give Suzlon some 75% control of Repower’s shares for a total purchase cost of about EUR 250 million. Suzlon already has a binding agreement with Martifer, a unit of Mota-Engil SGPS SA, for its 23.08% stake in Repower, which ensures that Martifer will vote its shareholding in favor of Suzlon.

Mr Tulsi Tanti CMD of Suzlon said. "We are delighted with the development. With this acquisition Suzlon has emerged as a global player with strong footprint across all the key wind markets a geographically diversified manufacturing base turbine and component level R&D centers in Europe."

Mr Tanti added that “Given our arrangement with Areva, we now, directly and through voting pool agreements, already control over 60% of REpowers capital. In the next one week we will also know how many shareholders have finally tendered into our offer. Suzlon Energy and Areva have signed a binding agreement governing a framework regarding both the firms shareholding in REpower. With this the bidding contest between Suzlon and Areva comes to an end."

Yes Bank was the advisor to Suzlon on this transaction.

Areva is one of the world’s largest manufacturers of nuclear reactors and transmission & distribution equipment.

Mukand to expand capacity to 0.55 million tonnes

Times News Network has reported that specialty steelmaker Mukand is investing INR 300 crore to expand its capacity by 80% to 550,000 tonnes by October 2007. As per report, about INR 30 crore will also be spent to enhance the manufacturing and assembly capability of its industrial machinery division.

With this Mukund intends to capitalize on the high demand for these products in the national and international markets. The expansion will also see the product mix including more of value added products such as heat treated wire rod coils and bars.

Mr Niraj Bajaj MD of Mukand said that With the kind of growth in orders we are witnessing right now, the company will easily absorb the added capacity. About 75% of the investment will be met through internal accruals.

Mukand now produces 300,000 tonne of alloy steel and stainless steel per year, heavy machinery and is involved in the construction of highways. Its machinery business contributes just about 15% of the overall revenue but the segment clocked a growth of 47% in 2006-07, more than double the rate of the steel business.

Government puts financial guarantee for timely development of coal blocks

It is reported that Indian coal ministry has decided to ask central and state PSUs, who are being allotted coal blocks, to furnish bank guarantees so as to ensure timely production of cola. This decision follows a recent review by the ministry for the development of coal blocks being allotted for captive and commercial mining to both public and private sector companies.

As report cites a top coal ministry official as saying that "The PSU allotees have to furnish guarantees for one year production in the mine at the rate of royalty for a particular grade of coal. At the prevailing rates, bank guarantee to be provided against 1 million tonnes production works out to about INR 10 crore. He added that deductions will be made from the bank guarantees in proportion to the slippage in production as indicated in the mining plans and on the exhaustion of the bank guarantees, these blocks would be re allocated.

The official added that "The government felt it imperative to apply the bank guarantee norm, currently in vogue for private sector firms, for PSUs too to meet the targeted production of 105 million tonnes during 2011-12 from the blocks allotted to private and public sector companies."

Out of the 229 blocks identified so far for allocation to PSU and private firms for commercial and captive mining, 130 blocks with total reserves of about 27 billion tonnes have already been allotted and another 81 blocks with reserves of 20 billion tonnes are currently under process for allocation. These 81 include 27 blocks earmarked for allocation to PSUs exclusively and another 38 blocks are offered for captive mining for which PSUs are also eligible. Eleven blocks have so far come into production with a yield of 18 million tonnes during 2006-07 which is expected to rise to 29 blocks during the current fiscal with a minimum production of 25 million tonnes.

Builders calls fro removing procedural restrictions on cement import

The Builders Association of India the apex body of builders and engineering construction contractors wants the Government to do away with procedural delays RELATE DTO clearance from the Bureau of Indian Standards FOR importing cement.

Mr PR. Mundle president of BAI said "All procedural problems relating to steel imports were removed through notification in 2003. However the same has not been done in the case of cement. We appeal to the Central government and the Commerce Minister to direct the Directorate General of Foreign Trade to issue a similar kind of notification as it did with the steel industry four years ago."

He said "The cement imported has to be actually collected by a BIS official from the manufacturer overseas and brought to India for testing. Thus it would take a minimum of four months to obtain registration making the entire process lengthy and cumbersome."

BAI press release said without the procedural hindrances contractors and builders would be able to import cement without delay for their projects and costs would reduce for the infrastructure and housing sectors.

The release said "With the process of consolidation taking place in the Indian cement industry over the last 4-5 years just three cement groups control 46.6% of the market share in India. Cement prices are thus controlled by them and starting from January 2006 prices have spiraled from INR 164 per bag to more than INR 250 per bag."

Power failure hits Paradip Port operations

It is reported that Operations at Paradip port have been badly hit by power failure after Orissa based power supplying agency Gridco the has been unable to supply power to the port since the afternoon of May 22nd 2007 when a violent storm uprooted a 132 KV transmission tower located on an isolated island in the midst of the Luna river. Inquiries reveal that normal supply is unlikely to be restored quickly. Paradip port requires about 15 MW of electricity a day.

As per report, mechanized berths Right now the worst hit are the port's mechanized berths dependent entirely on electricity for its functioning. There are 5 mechanized berths including 2 coal berths, 2 fertilizer berths and 1 iron ore berth. Of these the coal and iron ore berths are particularly affected.

There is one ship each in these two berths MV Haydar is due to load 33,300 tonnes of iron ore and MV Good Season 69,000 tonnes of thermal coal. 6 vessels are waiting outside the port for berths and 3 of them are to load iron ore, including two in mechanical berths. Another 6 iron ore vessels slated for the mechanical berths and 5 thermal coal vessels for the coal berths are due to arrive within the next few days.

The railway operations at the port too have taken a beating because the tippling of iron ore rakes and unloading of coal rakes are not possible now.

Earlier on May 20th 2007 also the port had experienced power failure for about 18 hours due to storm crippling the Gridco's power supply system at Duburi near Kalinganagar.

Power trading exchange in offing

It is reported that Financial Technologies Multi Commodity Exchange and PTC India plans to set up a national electronic electricity exchange named Indian Energy Exchange Ltd. The current authorized capital of Indian Energy Exchange Ltd is INR 1 crore which can be enhanced to INR 25 crore depending on the need. The holding pattern among the lead promoters is yet to be finalized.

The proposed exchange has applied for a license to Central Electricity Regulatory Commission for approval to begin short term power trading. The exchange will begin trading after consultations with power sector participants and necessary clearances.

Short term power trading or trading on day requirement, accounts to nearly 15% of the total power trading done.

Suzlon acquires wind turbine major REpower

Wind power major Suzlon Energy has finally acquired control of German wind turbine manufacturer REpower by taking just 7.84% stake in the firm, after the French nuclear energy group Areva SA agreed to withdraw from the bidding contest. The deal values Repower at EUR 1.35 billion (INR 7,425 crore).

Suzlon Energy said that it reached an agreement with Areva SA, which owns 30% of Repower, under which the Areva will become a preferred global supplier ending a 5 month long bidding battle between the two. Areva has the option to sell its stake in Repower to Suzlon after one year at market price. The bidding process for REpower started when Suzlon announced a competing public offer on February 9th 2007.

Suzlon has so far paid a mere EUR 100 million for its stake but the immediate bill is likely to increase by another EUR 100 million to EUR 150 million as more shares could be tendered to Suzlon by large funds such as Blackrock group and Fidelity against Suzlons open offer for Repower shareholders to turn in their shares for EUR 150 a share. That would effectively give Suzlon some 75% control of Repowers shares for a total purchase cost of about EUR 250 million. Suzlon already has a binding agreement with Martifer, a unit of Mota-Engil SGPS SA, for its 23.08% stake in Repower, which ensures that Martifer will vote its shareholding in favor of Suzlon.

Mr Tulsi Tanti CMD of Suzlon said. "We are delighted with the development. With this acquisition Suzlon has emerged as a global player with strong footprint across all the key wind markets a geographically diversified manufacturing base turbine and component level R&D centers in Europe."

Mr Tanti added that Given our arrangement with Areva, we now, directly and through voting pool agreements, already control over 60% of REpowers capital. In the next one week we will also know how many shareholders have finally tendered into our offer. Suzlon Energy and Areva have signed a binding agreement governing a framework regarding both the firms shareholding in REpower. With this the bidding contest between Suzlon and Areva comes to an end."

Yes Bank was the advisor to Suzlon on this transaction.

Areva is one of the worlds largest manufacturers of nuclear reactors and transmission & distribution equipment.

Suraj Stainless commissions new piercing mill

Suraj Stainless Ltd has announced that it has successfully installed and commissioned the new piercing mill to manufacture of stainless steel mother hollow, from stainless steel round Bar, which is the raw material for their seamless Plant.

The release adds that This will help them the faster delivery for their product by not depending much on imports of the same. Now they are first in India by this process.

Ahmedabad based Suraj Group was established in 1960 and is one of producers of stainless steel seamless & welded pipes, tubes & U tubes in the country. Suraj Stainless has specialization in tubing for heat exchangers, heaters, condensers, heating elements and instrumentation in India and overseas to more than 53 countries.

BHELs 2006-07 net up by 43% YoY

Bharat Heavy Electricals Ltd has announced the following Audited results for the January to March 2007 quarter & 2006-07.

The results for the quarter ended March 31st 2007
BHEL has posted a net profit of INR 11503.7 million for January to March 2007 quarter up by 32.5% YoY as compared to INR 8679.5 million for January to March 2006 quarter. Its total income net of excise has increased from INR 57322.1 million in Q4 of 2005-06 to INR 72057 million in Q4 of 2006-07.

The results for the year ended March 31st 2007
BHEL has posted a net profit of INR 24147 million for 2006-07 up by 43.8% YoY as compared to INR 16791.6 million for 2005-06.Its total income net of excise has increased from INR 137590 million in 2005-06 to INR 179990 million in 2006-07.

Demand for Brahmani Coalfield Limited likely to get louder

Statesman News Service reported that the moment Talcher will have separate Lok Sabha seat under the reorganization plan of constituencies louder voices from frontline political leaders are expected to be heard demand formation of a separate coal company named Brahmani Coalfield Limited for Coal India Limiteds subsidiary Mahanadi Coalfields Limiteds existing Talcher coalfield operations.

Though coal ministers and union coal secretaries, who had visited Talcher coalfield in the past, have expressed positive opinion on the demand could not go ahead in that direction ostensibly due to lack of political will and IB valley factor.

IB Valley, combined with Basundhara Coalfield in Sundargarh, produced about 30 million tonnes of coal during 2006-07 and slated to produce around 32 million tonne in 2007-08.

Talcher Coalfield has crossed 50 million tonne production in 2006-07 and is set to touch 58 million tonnes in 2007-08. Talcher Coalfield is poised to grow with an addition of a 20 million tonnes mine Bhubaneswari in March last and another 10 million tonnes mine named Kaniha is likely to be opened up later this year in addition to number of other mines in pipeline.

Torrent & Gujarat Power sign MoU for Pipavav project

Ahmedabad based Torrent Power Limited announced that it has signed a MoU with Gujarat Power Corporation Limited for setting up over 1000 MW coal based power project at Pipavav district in Gujarat. The Pipavav power project is proposed to be commissioned by March 2012.

The power project would be set up through a special purpose vehicle. A substantial portion of the required land has been already acquired near the Pipavav port.

Torrent Power is engaged in generation, transmission and distribution of power. It has an operational power generation capacity of 500 MW and distributes over 7 billion units of power annually to Ahmedabad, Gandhinagar and Surat. It is also setting up a 1,130 MW gas based combined cycle power project near Surat.

Arcelor Mittal sells its 25% stake in Severgal to Severstal

Russian Severstal announced that it has agreed to buy a 25% minority stake held by Arcelor Mittal in Severgal, a JV located at the Severstals Cherepovets site.

Arcelor Mittal terminates the Extragal License Agreement with Severgal and will remain a non exclusive agent for some Severgal products.

In addition, Arcelor Mittal and Severstal have agreed to separately pursue their respective development plans in the automotive market.

The Severgal JV was originally set up to serve the former CIS automotive market. While it has the capacity to produce coated products for both the industry and the automotive markets, the hot dip galvanizing line is currently mostly dedicated to supplying the booming domestic industry market.

Gerdau to buy stake in Dominican Inca

It is reported that Latin America's biggest steelmaker Brazil based Gerdau SA has agreed to buy a stake in Industrias Nacionales CA of the Dominican Republic for USD 42 million.

Gerdau said in a statement that it will acquire 30% of Multisteel Business Holdings Corp that controls Industrias Nacionales which manufactures 400,000 tonne of rebars, wire rods, tubes, beams and other steel products.

Mr Andre Gerdau Johannpeter CEO of Gerdau said that This operation secures the entry of the Gerdau Group in a new consumer market for steel that is in clear expansion. It is part of our strategy for expansion in the Americas.''

Mr Jorge Gerdau Johannpeter chairman of Gerdau said the company is expanding in Brazil US Canada Mexico Colombia Peru and Spain to boost profit by increasing its share of markets where it already operates and Gerdau plans to help Inca increase investment and will provide management, technical and marketing advice.

Global flat product prices steady in May MEPS

UK based steel consulting group MEPS reported that the recent upward price trend in the US has not been sustained and modest price reductions for most strip mill products has been noted. MEPS said that a combination of factors is responsible for the deterioration.

It said Although service centre inventories are declining, they are still above the desired level and the destocking phase persists. Real consumption, which has failed to recover, remains lackluster and now scrap costs have started to slide, with two consecutive monthly drops. However, import competition continues to be low, due to the weak dollar and good demand elsewhere in the world. These same conditions are encouraging US mills to start looking at export opportunities.

MEPS said that imports are currently not a factor in the Canadian market, with lead times out to September and in the Ontario region, producers are reporting slower demand from the auto and manufacturing sectors. It said Service centre inventories are comfortable at 2 months to 2.5 months supply but we have reports of falling business levels. Order books at the mills have weakened, resulting in some discounting.

MEPS said that the return from the extended early May holidays has heralded a number of positive price developments in the Chinese market and that export business continues to flourish. MEPS said that It is difficult to assess how the steel export licensing system together with the export tax levy and the strengthening exchange rate between the Yuan and US dollar will affect overseas transactions in the longer term. Many of the implications are set out in the MEPS on line forecasts.

MEPS said for Japanese domestic demand, particularly from the auto and shipbuilding sectors, remains buoyant and that the export climate is also healthy. MEPS added that However, total domestic inventories of strip mill products held by steelmakers and service centers, at end March 2007, climbed by 1.25% reversing the previous month's fall of 2.4%. They have now moved back above the 4 million tonne level considered appropriate. Quayside stocks lost 9.4% in the same time frame.

MEPS added that In case of South Korea sales have shown some positive movements, mainly for seasonal reasons. In Taiwan, domestic market sentiment is quite robust at present. Even so, the future outlook is unclear because of increasing global slab and scrap prices, together with the question mark over Chinese exports, which at the moment are adversely affecting Taiwanese sales to overseas customers.

MEPS said that there is virtually no import pressure and West European flat product prices are generally stable, whilst producers are mulling some further rises for the July September period, although buyers are anticipating little change in the second half of the year. MEPS added that third country price offers continue to stay at higher levels than those quoted at the start of 2007.

Evraz to acquire balance 50% interest in Yuzhkuzbassugol

Evraz Group SA announced that it has reached an agreement to acquire outstanding 50% interest in Yuzhkuzbassugol, which it does not own, from existing shareholders representing the management of the coal company. Evraz said that the deal is subject to regulatory permissions and Evraz board of director approval and further details will be announced after the board of directors decision.

Mr Alexander Abramov of Evraz said that it aims to complete the deal as soon as possible and to apply strict safety standards to ensure uninterrupted coal supply to Russian steel mills. He did not say how much Evraz, which until now has exercised no managerial control of the coal firm, would pay for the stake.

Mr Abramov while speaking at a briefing in Kemerovo region said "An insufficient level of personnel training is the most acute problem today. The southern Kuznetsk coal basin held 85% of Russia's coking coal. This region is key and practically without alternatives, not only for Evraz but for all steel makers in Russia. We must mine coal, and we must mine it with maximum safety."

After the tragic accident, in Yuzhkuzbassugols Yubileynaya mine, in which 38 miners died and in its Ulyanovskaya.mine in which another 110 miners died in March 2007, the price for the company could be well below its fair value. Mr Kirill Chuiko an analyst with UralSib Bank valued a 50% stake in Yuzhkuzbassugol at USD 500 million to USD 750 million. He added that "Evraz has long wanted to buy Yuzhkuzbassugol and can now receive a discount, after which it can fully integrate it with its other raw material assets.

Yuzhkuzbassugol last year produced over 16 million tonnes of coal and had earlier planned to raise 2007 output to 19.5 million tonnes. Yuzhkuzbassugol involves 11 mines, 2 enrichment plants, 2 engineering plants, transportation entity and servicing divisions. Its general director is 29 year old Mr Georgy Lavrik, who in September succeeded his father, Mr Vladimir, who died in a helicopter crash.

LionOre finds Norilsk revised bid superior to Xstrata offer

Bloomberg reported that LionOre Mining International Ltd said that a CAD 6.8 billion (USD 6.27 billion) takeover offer from OAO GMK Norilsk Nickel is superior to a bid last week from Xstrata plc.

The report adds that LionOres board of directors determined that Norilsks last bid of CAD 27.5 per share in cash is a superior proposal.

LionOre added that Xstrata, which raised its bid to CAD 25 per share on May 15th 2007, is entitled by prior agreement to match or top the Norilsk offer by June 1st 2007.

Xstrata began the contest for LionOre in March 2007, when it offered CAD 18.5 per share in an agreement.

MRS Logtica aiming for 200 million tonne by 2010

BNamericas reported that Brazilian railway concessionaire MRS Logtica plans to invest USD 1 billion through 2010 in the expansion of its equipment and track. As per report, the current growth in exportation of iron ore has prompted the MRS Logtica to announce that it will be investing USD 500 million in the purchase of 400 wagons and 200 locomotives and another USD 500 million on increasing and maintaining track and new technology.

MRS Logtica said that by 2010, it intend to have a fleet of 16,000 wagons and 500 locomotives in operation along its 1,674 kilometer long network covering the states of S Paulo and Minas Gerais. Mr Jlio Fontana president of MRS Logtica said that "We are preparing the company to transport 200 million tonnes in 2010."

Mr Fontana said that The funds are planned to be drawn from the company's own resources, although other financing options remain a possibility. If necessary, we can resort to national development bank BNDES and other financing institutions."

Amongst the company's priorities is the laying of 100 kilometer of track between the city of Barra Mansa and the port of Sepetiba in Rio de Janeiro. It will also lay a 14 kilometer line for other rail companies to access Santos port in S Paulo state the third such line to the port.
Mr Fontana added that We are focusing on all the points which present bottlenecks and the main ones are in Sepetiba and Santos."

MRS expects to transport 130 million tonnes in 2007 up by 15% as compared to 113 million tonnes recorded in 2006.

Zlomrex to merge steel distribution companies

Zlomrex announced that it formed Poland’s biggest steel distributor Zlomrex Steel Services by consolidating companies from the group which distribute steel. The group would sell 1.4 million tonnes of steel products annually.

As per report, ZSS will first acquire Austrian VoestAlpine Stahlhandel and that merge with its Centrostal Gdansk. It would also like to acquire the steel operations of Stalexport. Centrostal Gdansk will be withdrawn from the stock exchange while ZSS would be listed in the fourth quarter of this year

Mr Przemyslaw Sztuczkowski CEO of Zlomrex said “We want to build Poland’s biggest group with PLN 2.5 billion (EUR 655 million) of annual sales.”

EU SS producers under pressure from Chinese imports

It is reported that European producers might seek regulatory action to prevent Chinese SS makers from selling stainless steel in the region at below market prices as Chinas production rises and has become a net exporter of stainless steel products in last quarter of 2006.

Mr Jean Yves Gilet VP of stainless steel at Arcelor Mittal at Kyoto in Japan for attending a meeting of International Stainless Steel Forum said that We are facing a lot of pressure in Europe. There are a lot of imports from China steps to protect the European makers would not happen today but if China continues we have to be very careful.

European stainless steelmakers are looking for ways to cope with prices that have fallen 35% this year, partly because of increasing Chinese imports. China, which overtook Japan as the biggest maker of SS in 2006, had boosted capacity faster than domestic demand was growing.

Mr Chai Zhiyong president of Shanxi Taigang Stainless Steel Co on the sidelines of forum said that China might make as much as 50 % more corrosion resistant steel this year after a 68% increase in 2006 to 5.3 million tones.

Export tax hike likely to lift coke prices in China

Interfax-China, citing a senior Shanxi Coking Industry Association official, reported that the Chinese government's move to further raise the tax on exported coke on June 1st 2007 will more than likely raise coke prices.

Mr Zhao an official with Shanxi Coking Industry Association said that "Shanxi Coke Enterprise Association members are due to hold a meeting at the end of this month to discuss the most suitable way of collectively raising coke prices to combat increased costs. The increased export tax on coke is likely to raise export costs for coke producers."

Mr Zhao noted that high coking coal prices in the international market and short supplies in the domestic market have placed pressure on domestic coke producers. Mr Zhao declined to comment on how much the policy will slow China's coke exports or affect coke prices.

According to the Shanxi Coking Industry Association official major coke producers have managed to collectively raise coke prices three times since the beginning of the year under the guidance of the SXCIA. Coke prices were raised by CNY 30 (USD 3.92) per ton in January CNY 50 (USD 6.53) per ton in February and between CNY 100 (USD 13.07) and CNY 120 (USD 15.68) per ton in May.

Chinese ministry of finance earlier this week announced that the export tax on coke will be increased from a current 5% to 15%. The Chinese government previously imposed a 5% export tax on coke in December 2006.The government is aiming to reduce China's coke exports and slow coke production due to its high energy consumption and severely environmentally polluting nature.

Kryvorizkyi iron ore complex 2.48% shares sold

According to Ukrainian Independent Information Agency 2.48% holding of shares of Kryvorizkyi Iron Ore Complex were sold for UAH 98.897 million on Ukrainian International Stock Market. The price of one share was UAH 2. The opening bid of 2.48% stock of shares was UAH 49.448 million at UAH 1 per share.

Ukrainian International Stock Market that three companies took part in the tender.

As UNIAN reported earlier before the tender 6.68% of shares belonged to the State after within a framework of Ukrrudprom privatization, Solime Ltd bought 93.07% for UAH 689.42 million at the beginning of August 2004.

Kryvorizkyi Iron Ore Complex is one of the biggest iron ore sinter manufacturer in Ukraine with an annual output of around 6 million tonnes.

SeverCorr to open the plant in fall of 2007

Interfax reported that the SeverCorr plant that is being built in the United States will come on stream in the fall of 2007.

Mr Andrei Laptev head of strategic planning of Severstal at a conference organized by Metal Bulletin and Eurasian Metals said that the first phase of the plant will have capacity to make 1.5 million tonnes of flat products per year. He said that If a decision is made to build the second phase, the plant's capacity will double to 3 million tonnes by 2010.

Mr Leptev added that investment in the construction of the first and second phases of the plant would total about USD 1.5 billion.

Auto grade steel sheet is expected to make up 15% to 20% of the plants finished product.

MultiServ bags 3 contracts in US and New Zealand

It is reported that MultiServ a division of Harsco Corp has been awarded three new contracts related to on site processing and recycling of steelmaking slab by products, two in the United States and one in New Zealand. These contracts are expected to generate additional service revenues of more than USD 35 million over their duration.

MultiServ said that under a new multi year agreement with Anderson Geneva Development of Vineyard at Utah in US, MultiServ will process a 6 million tonnes stockpile of iron and steelmaking slag at the site of the former Geneva Steel Works. The products will be prepared for commercial re use by the aggregate and construction industries, where they are slated to be used in road building and asphalt paving, drainage control and other applications and as a raw feed for the production of Portland cement by cement makers throughout the Western United States.

In Michigan, MultiServ will expand its role at United States Steel Corp's Great Lakes works by assuming the responsibilities for in plant material transport of certain steelmaking by products. The material is recycled back into US Steels production in the form of feeder briquettes, a process which is also provided by MultiServ through its National Recovery Systems operations. MultiServ's newly added responsibilities for the transport and flow of materials should further enhance production throughput at the briquetting plant.

In New Zealand, MultiServ will process a stockpile of steel slag material on behalf of New Zealand Steel, which hopes to use the recovered scrap content for sale into the external market.

Sutor Technology bags HDG supply contract from Anhui Water Resources

Chinas based manufacturer of steel finishing fabrication products Sutor Technology Group Limited announced that it entered into 10,000 tons hot dip galvanized steel supply contract with Anhui Water Resources Development Co Ltd, engaged in the construction of building projects and the construction and development of water conservancy, for an employee dormitory project.

In early April 2007, about ten Chinese steel manufacturers participated in the open bidding hosted by Anhui Water Resource Development Co Ltd including Handan Iron & Steel Group Company and Wuhan Iron and Steel Corp.

Mr Guoxiang Ni CEO of Sutor said that ''We are pleased to establish corporative relationship with Anhui Water Resources Development Co Ltd and we hope to build a long time relationship with Anhui Water Resources Development.''

Sutor Technology Group Limited manufactures and sells steel finishing fabrication products through its wholly owned subsidiary Changshu Huaye Steel Strip Co Ltd and Jiangsu Coldrolled Technology Co Ltd. Its products are typically used in the construction industry, widely applied in manufacturing of electrical household appliance parts and outer casings, electronics, in infrastructure and large industrial equipment.

China to auction Gansu coal mine in June

Xinhua reported that China will auction a coal mine in the northwestern province of Gansu on June 18th 2007, with a base price set at CNY 750 million.

The report added that the mine has reserves of 934 million tonnes of coal and is part of a coal mining basin with total reserves of over 1.8 billion tonnes.

POSCO to limit price hikes to help local manufacturers

Yonhap recently reported that POSCO, in a meeting hosted by the South Korean ministry of commerce, industry and energy, announced that it will try to restrain price hikes to help local manufacturers struggling with rising costs of raw materials and will absorb the 9.6% increase in the iron ore prices.

POSCO said it aims to control its prices so that its products would not be more expensive than imports from countries like China and Japan.

Prices of raw materials have been rising because of an imbalance in supply and demand caused by economic booms in China and India. The price increases have been a harsh blow to small and midsize manufacturing companies in resource poor South Korea.

Brazils April crude steel production up by 12.1% YoY

Brazilian crude steel production climbed by 12.1% YoY in April 2007, continuing a healthy start to 2007 as steelmakers increase output to meet rising domestic demand. The Brazilian Steel Institute said that Brazilian steelmakers produced 2.708 million tons of crude steel in April an increase of 12.1% as compared with 2.416 million tonnes in April 2006. Brazils crude steel output in January to April 2007 is up by 11.5% YoY to 10.703 million tonnes as compared to 9.603 million tonnes in the first four months of 2006.

Brazils production of rolled steel products increased by 11.2% YoY to 2.080 million tonnes in April 2007 as against 1.870 million tonnes in April 2006. That was down from a record 2.140 million tons of rolled steel production in March.

According to the IBS data production of flat steel products climbed 15.4% in April to 1.308 million tonnes while output of long steel products advanced 4.8% to 772,200 tonnes.

Domestic steel sales jumped 12.7% in April to 1.598 million tons up from 1.418 million tons in the year ago period. In addition, domestic sales continued to be focused on higher value finished products such as rolled flat and long products which advanced 13.9% in April. Meanwhile, domestic sales of semi finished products such as slabs, blooms and billets in April 2007 tumbled by 11.9% YoY as compared to April 2006. Slab sales also decreased by 39.3% YoY, largely because of the surge in purchases in 2006 by Companhia Siderurgica Nacional which had to purchase slabs on the open market to feed its rolling mills after an accident shuttered its primary blast furnace.

In addition, export sales are down YoY because steelmakers are diverting production to meet domestic demand. Export sales in April 2007 slid by 2.8% YoY to 823,300 tons from 846,700 tons in April 2006. Although, in value terms, export sales jumped by 30.3% YoY to USD 508 million as compared to USD 390 million in April 2006 Exports of high valued flat and long rolled products also surged in April compared with the in 2006.

According to IBS Brazil is the world's 10th largest steel producer with annual output of more than 30 million tons the country's access to high quality iron ore and inexpensive labor allow it to be one of the world's lowest-cost producers of steel.

Terramin completes financing for Angas zinc mine

Australian junior Terramin announced that it has raised AUD 77 million of loan facilities to complete the financing for its Angas zinc mine project in South Australia. The mine, scheduled to start production in Q3 of 2008 will produce around 30,000 tonnes per year of zinc at full output.

Terramin said it has entered into senior loan agreements covering AUD 67 million with Investec Bank and BOS International and a subordinated loan facility with Sempra Metals Investments for AUD 10 million. Sempra has an off take agreement in place for Angas production of concentrates. The two banks have also provided hedging services to support Terramins anticipated hedging requirements.

Dr Kevin Moriarty Terramins executive chairman said while the initial capital cost of the Angas Zinc development remains at AUD 64 million, the loan facilities have been conservatively structured to cover environmental bonds working capital costs and contingencies to allow for any cost overruns on the project.

FMG seeks more time to meet safety requirements at Pilbara

Australian iron ore prospector Fortescue Metals Group announced that it will move workers out of its railway construction camps in the Pilbara if the company cannot meet a State Government requirement for safety improvements.

Mr Graeme Rowley a spokesman of FMG said that parts of the camp comply and other parts are still being worked on. He said that if the work safe commissioner does not grant an extension Fortescue will demolish the areas that do not comply.

Mr Rowley said that "We have sought an extension of time to complete the work on parts of the camp that are not yet fulfilled or completed in accordance with the direction, on the grounds that we just could no complete all the work on the full camp in the time that was allowed."

FMG and its contractor the Pilbara Infrastructure group were issued with work safe improvement notices in March to improve the cyclone tie downs on temporary buildings. Earlier two workers were killed at a camp during Cyclone George in March.

Gazproms 2007 export revenue estimated at USD 39 billion

Itar-Tass, citing Mr Sergei Chelpanov deputy director of Gazproms export division Gazpromexport, reported that the export revenues of Gazprom in 2007 will stay at last years level of about USD 39 billion.

Ornasteels Q1 pre tax profit surges

Malaysia Ornasteel reported that its first quarter pre tax profit reached MYR 23.891 million (USD 7 million). Ornasteel attributed higher selling prices and better sales volume of steel for this performance. It also said that the increasing quantity of goods delivered in March was an excellent record.

The spokesman of the Ornasteel said "We will focus on the production of high drawing quality CRC and thin gauge CRC to position us as a leading producer of high quality cold rolled coil."

Ornasteel expects that the steel business in second quarter will continue going up and the world steel demand is keeping growing strongly.

Gerdau Ameristeel CFO Mr Landa to retire

Associated Press reported that Mr Tom J Landa CFO of Gerdau Ameristeel Corp will retire effective July 31st 2007 after 12 years with Gerdau and that Mr Barbara R Smith treasurer will take over as new CFO from Mr Landa.

Mr Smith joined Gerdau Ameristeel in July after previously serving as CFO for Faro Technologies Inc.

Power failure hits Paradip Port operations

It is reported that Operations at Paradip port have been badly hit by power failure after Orissa based power supplying agency Gridco the has been unable to supply power to the port since the afternoon of May 22nd 2007 when a violent storm uprooted a 132 KV transmission tower located on an isolated island in the midst of the Luna river. Inquiries reveal that normal supply is unlikely to be restored quickly. Paradip port requires about 15 MW of electricity a day.

As per report, mechanized berths Right now the worst hit are the port's mechanized berths dependent entirely on electricity for its functioning. There are 5 mechanized berths including 2 coal berths, 2 fertilizer berths and 1 iron ore berth. Of these the coal and iron ore berths are particularly affected.

There is one ship each in these two berths MV Haydar is due to load 33,300 tonnes of iron ore and MV Good Season 69,000 tonnes of thermal coal. 6 vessels are waiting outside the port for berths and 3 of them are to load iron ore, including two in mechanical berths. Another 6 iron ore vessels slated for the mechanical berths and 5 thermal coal vessels for the coal berths are due to arrive within the next few days.

The railway operations at the port too have taken a beating because the tippling of iron ore rakes and unloading of coal rakes are not possible now.

Earlier on May 20th 2007 also the port had experienced power failure for about 18 hours due to storm crippling the Gridco's power supply system at Duburi near Kalinganagar.