Indian SS makers see little relief by import duty reduction for nickel

Indias stainless steel industry announced that a cut in customs duty on nickel from 5% to 2% in the budget closing last week provided only limited relief as 50% of Indias SS industrys nickel requirements are met through import on scrap for which there is no duty relief.

Mr NC Mathur president of Indian Stainless Steel Development Association told Reuters that It is like a little pinch of salt. But whatever it is, we will pass it on to our customers. The cost of production would reduce by up to INR 4,000 a tonne on stainless steel grades which use primary nickel. He said that the prices of some grades of stainless steel would be reduced by about 2%.

Mr Mathur said that the Indian SS industry is looking at ways to bring down nickel content wherever possible. He added that low nickel grades could be used for kitchenware and automobile products but it is difficult to replace nickel for stainless steel for industrial applications such as making machinery for the pharmaceutical and food processing industry.

Mr VS Jain vice MD & CEO of Jindal Stainless told ET that When global prices are so strong, import duties tend to erode margins further. There is, after all, a limit to the extent to which consumers will agree to price increases. Beyond a point, high prices tend to wean away consumers towards other substitutes like aluminum. This has started happening globally. Stainless steel demand is strong in our country. But it may happen in our country too.

Nickel prices in the world market have risen significantly by 38% to USD 50,600 a tonne on May 5th from USD 36,800 a tonne in early January 2007. Also, the rupee value against US dollar has appreciated by 8% since January 2007. In fact just about 10 months ago nickel was pieced at about USD 17000 per tonne.

India produces 1.7 million tonnes of stainless steel and exports 600,000 tonnes annually. Production is growing at 10% to 12% a year.

Low grade Indian iron ore prices firm despite cut on export tax

The decision by the Indian government to cut the tax on exports of low grade iron ore fines would have little impact on the market price given current strong demand from Chinese buyers.

Mr Wang Xinlei manager in charge of Indian ore imports at Sinochem International said "The landed price of Indian ore imports would not ease back following the reduction of export tax on lower grade iron ore fines due to the robust China demand. In fact, the import price has already increased over USD 10 per tonne in last two months, far exceeding the export duty.

An iron ore trader also reveals that the ore freight rate for Brazil to China ore route has soared over USD 50 per tonne from USD 36 per tonne in the year start, while the fixture for Australia to China route has also risen by USD 4.68 per tonne to USD 23 per tonne.

Therefore, Indian suppliers are reluctant to lower offer price in light of steep Brazilian ore import price amid upcoming monsoon season. Market analysts expect improving demand for lower grade Indian ore fine would drive up the price in short term.

India reduced the export tax on iron ore with less than 62% Fe content from INR 300 per tonne to INR 50 per tonne due to intense lobbying by cash rich iron ore producers despite protests from domestic steel makers. Indian miners pleaded that the export tax would hit their bottom line and make Indian ore in competitive to Chinese steel mills. But with the current pricing scenario for low grade iron ore, the volumes are likely to go up due to increased margins for India ore miners.

As per unconfirmed data, about 43.59% of India's total exports were 62% Fe and lower, Fe 62% to Fe 65% accounts for 46.71% and remaining 9.7% are higher than 65% Fe.

(Sourced from MySteel.net)

POSCOs iron ore mine license issue faces another hurdle

It is likely that POSCOs wait for an iron ore mining license for an area of 6204 hectares at Khandadhar in Sundargarh district of Orissa will get longer as the union mining ministry has referred the issue to the department of legal affairs due to its differences of opinion with the Orissa government. As per reports, the department of legal affairs has been asked to clarify if it is permissible to select a late applicant, in this case POSCO, without considering the already pending applications for mining licenses in a particular area.

The union ministry of mines thinks that the POSCO proposal falls under Section 11(2) and Section 11(3) of the Mines and Minerals Development & Regulation Act of 1957, under which the state government can evaluate all the applicants and select the one it deems fit. On the other hand Orissa government is of the opinion that Section 11(5) of the Act allows the state government to grant a license to a late applicant like POSCO.

The issue has become quite complicated as both the union mining ministry and the Orissa government have cited several court judgments in their favor.

Incidentally Kudremukh Iron Ore Company had filed a petition in the Orissa High Court against the state government's recommendation for a mining license to POSCO for the Khandadhar iron ore mines the license was previously allotted to the KIOC. The high court quashed the petition and asked the central government to take an appropriate decision within 3 months.

India to press for stricter norms on ship breaking at IMO meet

ET reported that India plans to change its status from being a dump yard for breaking of ships carrying hazardous materials. The report mentions that Indias ministry of shipping is planning to put forth this point across to world players in the sector during the forthcoming meeting of the International Maritime Organization in London.

Mr Ajoy Chatterjee chief surveyor and additional DG engineering for ministry of shipping told ET that India has already sent its comments to IMO seeking that responsibilities of ship owners and administrators of the flag state whose ships proceed for recycling be fixed. Mr Ajoy added that At IMO, India will press for a legally acceptable demolition contract and deregistration of a ship from a ship seller. Deregistration is an important part of the recycling process that will ensure that demolition is transparent and that the ship is not dumped at sea or becomes a ghost ship or is illegally recycled.

It will insist that if a ship breaking yard does not have the facility to treat a particular kind of hazardous waste contained in a ship headed for recycling the onus of removing the hazardous waste should lie with the flag state.

IMO which is a specialized agency of the UN with 167 member states concerned with maritime security, safety, environmental concerns and legal matters involving shipping, is in the process of framing guidelines for the ship breaking industry and will debate the draft international convention for the safe and environmentally sound recycling of ships between May 7th and May 11th 2007.

India, so far has been the global dump yard, as it allowed breaking of SS Blue Lady last year, which was reported to have contained more than 1200 tonnes of asbestos. This was done after even countries like Bangladesh refused its entry. Indian governments move, after allowing.

Paradip Ports proposal to build 2 berths approved

BL reported that Paradip Port Trust's proposal for the construction of two berths, one for handling iron ore exports and the other for coking coal imports, on BOT basis under the public private partnership model has received the in principle approval of the Public Private Partnership Appraisal Committee of the Union Government.

Mr K Raghuramaiah chairman of Paradip Port Trust told Business Line that "We will now appoint consultants on financial and legal matters to prepare relevant documents and shortly invite bids.

Mr Raghuramaiah said that "Transcare Logistics India Pvt Ltd, which prepared a business plan for the port, has forecast a big jump in the volume of both iron ore and coking coal traffic in the coming years. The throughputs of iron ore export and coking coal import at Paradip Port has already increased substantially from 1.03 million tonne in 1999-2000 to 11.88 million tonne in 2006-07 and from 1.5 million tonne to 4.27 million tonne respectively.

Each berth will have the capacity of 10 million tonnes. The iron ore berth is estimated to cost INR 505 crore and the coal berth INR 388 crore. The berths should be ready for operation by 2010-11.

RINL bags Best Dealer award for tax payments to AP government

Rashtriya Ispat Nigam Limited has been adjudged as the Best Dealer in the Visakhapatnam Division for the year 2006-07 considering its outstanding contribution in payment of taxes to the State Exchequer and compliance of VAT provisions.

Mr PK Bishnoi CMD of RINL received the above award from Dr.YS Rajasekhar Reddy chief minister of Andhra Pradesh at a function held at Visakhapatnam.

During the year 2006-07, RINL, Visakhapatnam Steel Plant has contributed INR 122 crores to the State Exchequer against the sales made under APVAT, CST and Entry Tax.

Since implementation of APVAT with effect from 1st April, 2005, RINL has successfully implemented and complied with the provisions laid down under APVAT Act 2005.

Dhamra Port to be commissioned by January 2010

Dhamra Port Company Limited is hopeful that its proposed Dhamra port project will be commissioned by January 2010 although it has been facing various difficulties.

Mr Santosh K Mohapatra CEO of DPCL during an interview with Kalinga Times denied facing any major problems in acquiring land for the proposed railway link to connect Dhamra with the existing broad gauge line at Bhadrak and said that We should have all the land in next two months.

Mr Mohapatra while answering a question on environmental clearances and apprehensions of conservationists that the port will have adverse impact on the Olive Ridley turtles said that The Environmental Clearance is already in place. We have held various dialogues with the conservationists to remove some of misinformation about location of the port and its channel which is away from the normal movement of turtles. Besides, to ensure that the port development actually does not affect the turtles adversely we are taking the advice of best international experts in the field.

Mr Mohapatra informed that Dhamra Port has enough cargo but admitted that the delay in implementation of the proposed steel plants projects of TATA Steel and other companies will affect the prospects to some extent but not significantly.

DPCL, a JV between TATA Steel and L&T, has been formed to build and operate a port at Dhamra on Build, Own, Operate, Share and Transfer basis. The new port will be the deepest of its kind to handle super cape size vessels carrying up to 180,000 tonnes of cargo.

Delay in development of already allotted coal blocks

PTI reported that a Parliamentary Committee has rapped the coal ministry for failing to ensure development of captive coal blocks by the allottees and demanded that such blocks be de allocated if they continued to remain unutilized for a certain period.

The Parliamentary Standing Committee on coal and steel said in a report that The Committee are perturbed to note the lackadaisical approach of the coal ministry in monitoring the progress of captive coal blocks allotted to different parties. The Committee feels that the main objective of exploration of coal from the blocks has remained a distant dream. The Committee is dismayed to note that the blocks allotted as back as 1998 to 2000 have still not been developed and only eight coal blocks have started producing coal.

The panel suggested the if the blocks allotted have not been developed even after 36 months to 54 months of their allocation the same be de allocated.

The Committee added that The Committee desires that the Coal Controllers office should be strengthened adequately so that they can monitor the progress as provided under the rules and take corrective steps.

The official sources said that the coal ministry reasons that failure to develop the blocks was primarily due to lack of core competence, expertise and experience in coal mining of the allottees besides the time consuming procedure of obtaining required statutory clearance.
The source added that however, out of 19 blocks allotted up to 2002, 11 blocks have already come into production and 6 more are expected to commence production this year.

Konecranes eying crane market in India

Like many global steel majors, Konecranes is also eying Indias crane markets comprising of power, refinery and steel players and has flown in 170 of its executives for a 3 day annual conference at New Delhi to give them a taste of the market. It is reported to be in talks with upcoming refinery, power projects and steel plants for supplying cranes.

Mr Pekka Lundmark president & CEO of Konecranes told the media that "Of course, we are in talks with all those coming up with new projects that involve material handling.

Mr Lundmark added that "The steel market too is interesting because of the merger mania. Lot of new capacity could be created due to consolidation in the industry.

Konecranes manufactures cranes that have a lifting capacity ranging from 60 kilograms to 2000 tons and currently has a 10% share of the Indian hoisting equipment market. Konecranes India Pvt Ltd has already started operations in February 2007 in Pune. At present, India accounts for less than 1% of Konecranes.

NTPC commissions 500 MW init at Kahalgaon power plant

Mr Sushil Kumar Shinde union power minister has formally inaugurated National Thermal Power Corporations 500 MW Kahalgaon Super Thermal Power Plant in Bhagalpur district of Bihar on May 6th 2007.

With the commissioning of the proposed project, the total installed capacity of KSTPP has gone upto 1,340 MW.

The next 500 MW unit Kahalgaon super thermal power project is expected to commission by December 2007.

Madhucon buys coal mine in Indonesia

DNA reported that Hyderabad based construction and real estate company Madhucon Projects Ltd has acquired a 5,000 hectare coal mining block in Indonesia. The mine has been acquired through a 100% subsidiary company in Indonesia on a 30 year lease.

Mr S Vaikuntanathan director finance of Madhucon at an analyst conference said that The coal mine in the East Kalimanthan region will be exploited immediately with the commercialization of 100 hectares which start producing by August this year.

Madhucons move is in line with its plans to get into the power sector for which it has acquired 48% equity in Simhapuri Energy Pvt Ltd, a special purpose vehicle which will set up a 540 MW thermal power project in two phases of 270 MW each near the Krishnapatnam port in Nellore, Andhra Pradesh. The project will use imported coal and Madhucon has tied up with the power trading corporation on off take of 75% to 80% of the generation.

BOA clears 72 SEZs in Maharashtra

It is reported that the Board of Approval of Indian government has given permission for 72 special economic zones in Maharashtra. Out of 72 SEZs, 47 SEZs have got final approval and 23 SEZs have been given in principle approval.

According to the report, the total land required for setting up all these SEZs is around 38,800 hectares. About 45 SEZs will be developed by private developers in around 8,153 hectares of land while at least 19 SEZs will come up on land owned by Maharashtra Industrial Development Corporation and Maharashtra Airport Development Company Ltd which spread over 9,045 hectares.

At least 19 SEZs will come up on land owned by Maharashtra Industrial Development Corporation and Maharashtra Airport Development Company Ltd which spread over 9,045 hectares.

The INR 10,000 crore Maha Mumbai SEZ will be spread over 10,000 hectares and will be developed by Reliance Industries Ltd and INR 4,000 crore Navi Mumbai SEZ will be spread across 4,000 hectares. About 26% of capital investment in NMSEZ will be made by City and Industrial Development Corporation of Maharashtra and the balance by Reliance. Other infrastructure development will require an additional INR 3,000 crore. Reliance will also invest around INR 5,000 crore on a 2,000 MW of power project.

Mining majors may bid for Alcan Credit Suisse

Bloomberg, citing Credit Suisse Group, reported that global mining majors including BHP Billiton Ltd and Rio Tinto Group may put in their offer for Canadian Alcan for which world's largest aluminum producer Alcoa Inc has unveiled hostile bid of USD 26.9 billion. Credit Suisse analysts in a reported said that Alcoa could also become a target. They said that potential bidders also include Anglo American Plc, Cia. Vale do Rio Doce, OAO GMK Norilsk Nickel and Teck Cominco Ltd.

Credit Suisse analysts said We believe there is a very good possibility that other bidders emerge for either Alcan or Alcoa. With what will likely be an extensive antitrust review period, other interested parties will have plenty of time to do their work on both companies.''

Credit Suisse's analysts said that Alcoa and Alcan's alumina and aluminum businesses would be attractive to mining companies, while their packaging and rolling units would lure non mining companies. Alcoa and Alcan's combination would control about 25% of the alumina and aluminum markets.

Report of merger bid drives up AK Steel's stock

The shares of AK Steel Corp surged by 9% on Tuesday afternoon on a report that Arcelor Mittal will make a bid for it. That was enough to send shares of AK Steel shooting up. The stock closed at USD 35.02 per share up by USD 2.96 on Tuesday.

The potential deal was first reported early Tuesday morning in the Financial Times of London. The story, on Financial Times' Web site, said that Arcelor Mittal plans to offer USD 40 per share for AK Steel.

AK Steel spokesman Mr Alan McCoy would not comment on the reports.

Arcelor Mittal previously committed to divest its US steel plant at Sparrows Point to address US competition concerns after it decided to keep Arcelor's Canadian unit Dofasco within the new merged group formed by Mittal Steel's acquisition of Arcelor. A banker said "They already have to sell Sparrow Points to close the Arcelor takeover. Do you think they could do this one?"

The Middletown Ohio based company has 7,000 employees, including about 2,500 in Middletown. It employs about 1,500 at its Butler Works plant at Butler in Pennsylvania. AK Steel reported first quarter net income of USD 62.7 million as compared to USD 6.2 million. Net sales rose in Q1 of 2007 to USD 1.7 billion as compared to USD 1.4 billion in Q1 of 2006.

LionOre board backs Norilsk Nickel bid over Xstrata's

LionOre Mining International has backed a CAD 5.3 billion takeover by Norilsk Nickel over the initial bid of Xstrata.

LionOre said that the CAD 21.5 offered for each of its shares from Norilsk is a superior proposal to the CAD 18.5 a share bid from Xstrata. LionOre said The board has determined that the Norilsk Nickel off constitutes a superior proposal for purposes of the support agreement and has notified Xstrata of its determination.

Xstrata is likely to return to the bidder's table with a higher offer.

The Xstrata bid closes on May 25 while the Norilsk offer closes on June 18.

LionOre has operations in Australia and Africa and has forecast an annual production of up to 40,000 tonnes of nickel in 2007.

Daido Steel asks Japanese carmakers to buy stake

Japan Times reported that Daido Steel Co has asked some automakers including Toyota Motor Corp, Honda Motor Co and Suzuki Motor Co to buy or increase equity stakes in the specialty steel manufacturer in a bid to ward off potential hostile takeover bids.

Daido Steel already has several stable shareholders holding a combined stake of around 30%. But the firm is trying to secure larger stable shareholders to forestall unwanted takeover bids.

Honda has already accepted the request and has recently increased its stake Daido to around 3%. Honda held just 0.2% of Daido Steel shares as of March 31st 2006. Nippon Steel Corp had a 10.2% stake in Daido at the end of March 2006.

Fearing the possibility of hostile takeover bids, Daido Steel last year announced plans to introduce defensive measures, including a request for bidders to specify their objectives. The Daido Steel action came after a new system took effect May 1st 2007 to allow foreign companies to more easily acquire Japanese firms.

Daido Steel's mainstay specialty steel products are indispensable for automotive engines.

MMX postpones pellet plant at Minas-Rio complex

BNamericas reported that Brazilian mining and metals company MMX has postponed plans to install a pellet facility at Rio de Janeiro state in Brazil. A MMX spokesperson told BNamericas that the plant was due to start operations in 2010 and would be part of MMX's Minas Rio complex in southeast Brazil. The spokesman said that "Clients said they prefer to buy the pellet feed instead of pellets."

He added that the sales contracts are in place for nearly 100% of the complex's 26.6 million tonnes per year iron ore production. MMX will ship 13 million tonnes per year to Bahrain based Gulf Industrial Investment from its Amapcomplex in northern Amapstate and from the Minas Rio project.

The spokesman also said that a Japanese trading company is also due to take part of the iron ore production from the Minas Rio complex, adding MMX expects to receive the installation license for the mine at end 2007. But plans to install the pellet plant could be reinstated if the company expands its iron ore production. The 26.6 million tonnes per year output will come from nine exploration licenses, the spokesperson said, adding the company has 27 licenses in total.

London based mining giant Anglo American secured a deal this year to acquire a 49% interest in the Minas Rio iron complex.

MMX is developing two other iron ore complexes in the South American country one in Amapstate and another in Mato Grosso do Sul.

China tapping North Korea's iron ore & coal resources

China has sharply expanded its business ventures in North Korea in recent years by tapping into the North Koreas natural resources as it seeks to boost its leverage over the communist state.

A research institute run by South Korea Development Bank opined in a recent report said that North Korea has offered China the right to develop its underground resources to win much needed hard currency and win Chinese protection from US pressures.

The report said that China's investment is focused on developing the North's natural resources with 70% invested in mines of iron, copper and molybdenum.

Chinese investors include the Tonghua Steel and Iron Group, which bought 50 year mining rights to the Musan iron mine in North Korea for USD 909 million. The open pit iron ore holds 7 trillion tonnes of reserves, 66% of which is recoverable ore. China hopes to bring in 10 million tonnes of ore annually.

The Wookwang Group and Sandoong's Guoda Gold Corp. has acquired 50-year mining rights to the Ryongdong coal mine, which produces 1 million tons of coal a year.

It is believed more Chinese capital is flowing to the North because of the opaque nature of both regimes. But it is clear that China's investment has jumped since 2002, when North Korea adopted an economic reform package which eased restrictions on foreign investment. China invested a total of USD 14.37 million in North Korea in 2005, up USD 9 million from 2004 and USD 1.5 million from 2002. China invested only USD 160,000 in 1998 and USD 480,000 in 1994.

NLMK Group declares Q1 results for major companies

Novolipetsk Steel has announced its Q1 2007 as per Russian Accounting Standards financial results for the Groups major Russian companies.

NLMKs financial results decreased in Q1 2007 due to a weak pricing environment as slab, hot rolled and cold rolled steel prices in Q1 2007 were below the record levels of Q4 2006 due to seasonal factors. Sales revenue, gross profit and operating profit increased in Q1 2007 compared to Q1 2006 due mainly to the growth of prices and sales volumes as well as changes to delivery terms. The 73.3% net profit increase in Q1 2007 compared to Q4 2006 is primarily attributable to impairment losses and accretion expense on asset retirement obligations of the Prokopievskugol Group of Companies. Net profit decreased by 37% in Q1 2007 compared to Q1 2006 caused by lower gains on financial investments. The proceeds from the divestment of NLMKs stake in Lebedinsky GOK in Q1 2006 substantially exceeded the proceeds from the divestment of energy assets in Q1 2007

In RBR 10,000
VIZ-Stals sales revenue decreased in Q1 2007 compared to Q4 2006 Sales revenue declined slightly during the reporting period due to the decrease of sales volumes. The apparent slight decrease in VIZ-Stals sales volumes is due to the fewer number of calendar days in Q1 2007 against Q4 2006. The strong pricing environment resulted in an increase of VIZ Stals sales revenue in Q1 2007 compared to Q1 2006. The decrease in production costs also contributed to the growth of gross profit, operating profit and net profit.

In RBR 10,000

Stoilensky GOK demonstrates stable financial results increase compared to Q1 2006 The strong pricing environment combined with the increase of Stoilensky GOK sales volumes in Q1 2007 compared to Q1 2006 resulted in an increase of sales by 99.1% and 0.7% compared to Q1 2006 and Q4 2006 respectively. Growing iron ore prices and sales volumes resulted in gross profit and operating profit increase in Q1 2007 compared to Q1 2006 by 164.7% and 179.3% respectively. The gross profit and operating profit in Q1 2007 were close to the level of Q4 2006. Net profit at Stoilensky GOK in Q1 2007 amounted to RUR 3 bln. Net profit increased by 5.8% compared to Q4 2006 and 186.1% compared to Q1 2006. The net profit increase was primarily attributable to growth of sales revenue and interest income.

In RBR 10,000

Altai-koks financial results decrease in Q1 2007 compared to Q4 2006 is due to a continuing weak pricing environment as well as growing coal concentrate prices. Increased coke sales volumes, following the commissioning of coke battery #5 and substantial growth of chemical products prices in Q1 2007 compared to the same period of the previous year, resulted in an improvement in financial results.

In RBR 10,000

US dollar weakness and low volume of transshipments resulted in OJSC TMTP financial results deterioration. A decrease in the volume of transshipments, due to poor weather conditions resulted in lower
sales revenue and profits in Q1 2007 compared with Q1 and Q4 of the previous year. Moreover, another factor contributing to the decrease in the companys financial results was US dollar weakness because the sea port tariffs are regulated by state authorities and denominated in US dollars.

In RBR 10,000

The growing volume of logistics and transportation services, as well as the ongoing optimization of the transportation routes resulted in a substantial growth of financial results of LLC NTK in Q1 2007 compared to the same period of the last year. Increased quantity of shipments by company owned railcars enabled LLC NTK to cut railcars usage fees paid to Russian Railways, which, in turn, contributed to the increase of sales revenue and net income of LLC NTK.

In RBR 10,000

The improvement of OJSC Lipetskcombanks financial results was primarily attributable to growth of the credit portfolio. As a result, net profit in Q1 2007 amounted to RUR 48.9 million, an increase of 6.8% and 87.0% compared to Q4 2006 and Q1 2006 respectively.

In RBR 10,000

Indicated companies of the Group include Novolipetsk Steel, LLC VIZ Stal, Stoilensky GOK, OJSC Altai-koks, OJSC Lipetskcombank, LLC NTK and OJSC TMTP. VIZ Stal forms part of NLMKs Group since August 2006 and Altai-koks forms part of NLMKs Group since April 2006.

Interpipes Niko Tube and Nikopol Pipe to merge assets

Metal Expert reported that CJSC Interpipe Niko Tube and CJSC Interpipe Nikopol Pipe Company both part of the major Ukrainian tube & wheel manufacturer Interpipe, are planning to merge their assets into one enterprise.

As per report the merger of the two Nikopol based plants into one company is a logical process within the framework of the parent company restructuring and optimization of management costs. The final decision will be made at the extraordinary general stockholders meeting of the two companies, which are to be held on June 15th 2007. The process of merger will take some 5 months to 6 months.

Interpipe Niko Tube which produces seamless pipes in the diameters range of 32mm to 114mm for oil refining, geological survey industries, the machine building including boiler pipes and pipes for general applications. Production capacity of the plant is over 280,000 tonnes of the pipes per year. In 2006 the shipments amounted to 235,567 tonnes of steel pipes and the company earnings to UAH 1.06 billion (USD 201.2 million).

Interpipe NTK specializes in production of steel seamless pipes in the diameters range of 146mm to 325mm for oil and gas industry, machine building including boiler pipes and pipes of general application. Production capacity of the enterprise exceeds 200,000 tonnes of the pipes per annum. In 2006 NTK shipped 132,800 tonnes of the products.

Chinas economic growth expected to continue

According to the China's State Information Center, China's economy is forecasted to maintain its fast growth in the Q2 of 2007 with its gross domestic product rising by 10.8%.

The SIC report predicted that the Q2 of 2007 will witness a slight slowdown in growth of the economy compared with that of the Q1.and also the Consumer Price Index a main gauge of inflation is predicted to rise to 3% in the next quarter.

According to figures from the National Bureau of Statistics China GDP totaled CNY 5.03 trillion (USD 653 billion) in the Q1 of 2007 up by 11.1% and figures back up the SIC's predictions showing a CPI of 2.7% in the first three months of the year 1.5 % higher than that of the same period.

Mr Li Xiaochao a spokesman of NBS previously stated that this rapid economic growth has been driven by rising levels of foreign investment and domestic consumption coupled with the booming import and export industry warning that such speed of growth could put the economy risk of overheating.

Experts with the SIC asserted that China should continue to strengthen macro-control measures to solve problems that include excessive liquidity and a huge international payments surplus.

South Korea's Q1 steel imports rise by 33.4% YoY

The Korea Iron and Steel Association said that South Korea's imports of steel products in Q1 of 2007 rose by 33.4% YoY and expect the steel imports to hit a record high of over 25 million tons in 2007 as compared to 22.5 million tonnes in 2006.

According to a report by the KOSA the expansion of steel imports is mainly driven by increased demand for Chinese iron bars and other steel products.

KOSA said South Korea imported 6.44 million tons of steel products in the first three months of 2007 while exports of steel products rose 4.3% to 4.79 million tons during the same period.

The association expects the country's steel imports to hit a record high of over 25 million tons this year. In 2006, South Korea's steel imports reached 22.5 million tons.

Liberian government signs law ratifying Mittal Steel agreement

The Inquirer reported that Ms Ellen Johnson Sirleaf president of Liberia has finally signed a law for the mineral concession agreement that was signed early this year between the Liberian government and the Mittal Steel. Ms Sirleaf signed the agreement after it was submitted to her by the National Legislature after that it ratified the agreement.

The signing of the agreement, which took place at the Foreign Ministry in Monrovia, gives the holding company, Mittal Steel, the right to begin mining operations at the former holdings of the LAMCO JV Company in Nimba and Grand Bassa counties.

Ms Sirleaf before signing the document thanked the negotiation team for the hours spent in examining the old concession agreement and envisaging that some areas in the agreement could be improved. Ms Sirleaf also commended Mittal Steel for the spirit of cooperation in partnership with government that was exhibited in the negotiated process of the agreement. She then called on every Liberian citizen to cooperate so that the nation can get maximum benefit from having the agreement signed.

As per available information, the old contract allowed Mittal Steel to set the price of iron ore, thereby giving it control of royalty rates and tax payable and encouraging transfer pricing. The new contract is based on market prices. Mittal Steel also lost the right to take control of Liberia's two major economic public assets the port of Buchanan and the railway to Yekepa. It also observed that the capital structure of the concession remains as before but noted that under the new agreement the parent company is responsible for liabilities incurred by the operating company in Liberia. In addition the new contract removes a tax holiday.

List of steel products under Chinas new quota system

On April 30th 2007, Chinas Ministry of Commerce and General Administration of China Customs issued a policy on New Export License System for some steel products. According to the policy, a new export license system will be carried out for 83 Tariff Codes of steel products since May 20th 2007.

Steel exporters must obtain the permits from provincial governments, the Ministry of Commerce said in a statement on its official website today. As per the statement, the export licenses will be valid for three months since its releases, and the trade mode of steel products export with license is confined to conventional trade (precluding export for reimburse loan and
international bidding).

The categories of steel products can be seen in the table under.
HS Code 7208 - Flat-rolled products of iron or non-alloy steel, of a width of 600mm or more, hot-rolled, not clad, plated or coated

HS Code 7211 - Flat-rolled products of iron or non-alloy steel, of a width of less than 600mm, not clad, plated or coated

HS Code 7212 - Flat-rolled products of iron or non-alloy steel, of a width of less than 600mm, clad, plated or coated

HS Code 7213 - Bars and rods, hot-rolled, in irregularly wound coils, of iron and non-alloy steel

HS Code 7214 - Other bars and rods of iron or non-alloy steel, not further worked than forged, hot-rolled, hot-drawn or hot-extruded, but including those twisted after rolling

HS Code 7215 - Other Bars and rods of iron and non-alloy steel

HS Code 7216 - Angles, shapes and sections of iron or non-alloy steel

HS Code 7217 Wire of rod or non-alloy steel

HS Code 7219 Flat-rolled products of stainless steel, of a width of 600mm or more

HS Code 7225 - Flat-rolled products of other alloy steel, of a width of 600mm or more

HS Code 7226 Flat-rolled products of other alloy steel, of a width of less than 600mm

HS Code 7227 Bars and rods, hot-rolled, in irregular wound coils, of other alloy steel

HS Code 7228 Other bars and rods of other alloy steel; angles, shapes and sections, of other alloy steel; hollow drill bars and rods, of alloy or non-alloy steel

(Sourced from MySteel.net)

Ukraines finished steel output up by 10% YoY in 4 months

Ukraines Industrial Policy Ministry said that Ukraine's steel industry increased its finished roll output by 10% YoY in January to April to 11.9 million tonnes.

The ministry added that Ukraine produced 14.2 million metric tons of crude steel up by 11% YoY and 11.77 million tons of pig iron up by 14% YoY.

Bangladesh likely to finalize coal policy soon

Bangladesh media has reported that the proposed coal policy is likely to be finalized next month as the Bangladeshs energy ministry is expediting its move to make it ready and that the campaigners of open pit and underground mining have intensified their efforts to pursue the policymakers.

As per reports, Bangladeshs energy ministry already invited some energy experts to hear their views in an indoor meeting last week. Having held this indoor meeting, the energy ministry officials felt that there should be more open and wide range of discussions on the issue so that the government could take a correct decision in choosing the mining methodology.

It has now planned to organize a national seminar to discuss the issue and get advice from experts to reach a conclusion that could help formulate a national coal policy as well. The official sources said the planned national seminar would take place in the third week of the current month in Dhaka. The country's eminent energy experts, academicians, economists, geologists and miners will be invited to express their views and recommendations on the coal mining issue so that the government can properly formulate the policy protecting the national interest.

An energy ministry official said the government is determined to reach a conclusion by the end of the current month on the ongoing debate on which methodology either the open pit mining or the underground.

The country's civil society, NGOs and experts are divided on the issue as to what methodology should be the appropriate for coal mining in Bangladesh. Some of them believe that open cast coal mining methodology would be the appropriate for Bangladesh as it is possible to extract 100% coal with the technology.

Outokumpu Technology bags 3 orders for grinding technology

It is reported that Outokumpu Technology has been awarded several new grinding technology contracts worth EUR 45 million by the customers in Canada, Australia and Kazakhstan. The deliveries are scheduled for late 2008 and early 2009.

Mirabela Nickel of Australia has awarded Outokumpu Technology the contract for grinding technology for Mirabela's Santa Rita nickel sulfide project at Bahia State in Brazil.

Adanac Molybdenum of Canada has ordered grinding technology for Adanac's Ruby Creek molybdenum project in British Columbia, Canada.

Shalkiya Zinc of Kazakhstan has awarded Outokumpu Technology the contract for grinding technology for the Shalkiya zinc lead project in Kazakhstan.

Fitch affirms Norilsk Nickel on LionOre acquisition plans

Interfax reported that Fitch Ratings has affirmed Norilsk Nickel's Issuer Default and senior unsecured 'BBB- ratings and Short term F3 rating. The Outlook on the Issuer Default rating is Stable.

The affirmation follows Norilsk Nickel's offer to purchase Canada based LionOre Mining International Ltd for approximately CAD 5.3 billion in cash trumping an earlier offer from Xstrata Plc valued at around CAD 4.6 billion.

Fitch notes that Xstrata's existing bid has been recommended by LionOre's Board of Directors. While Norilsk Nickel's offer is pitched at around a 16% premium to that of Xstrata, the agency believes that a further round of offers remains possible. A significant increase in Norilsk Nickel's offer above the current level could trigger Fitch to review the group's ratings. Fitch believes an acquisition of LionOre would have several benefits for its business profile, including enhanced scale and increased geographic diversity.

Norilsk Nickel is a world leading producer of nickel, copper, palladium and platinum. In financial year 2005 it generated USD 7.2 billion in revenues and had EBITDA of USD 3.9 billion.

Donetsk to increase sales of pig iron after BF 1 restarts

Metal Expert reported that Donetsk Steel Plant is considering increasing export shipments of pig iron to the US and South East Asian markets starting in May 2007. Domestic supplies of pig iron are also possible but not negotiated for the moment because of a weak demand.

As per report BF No1 of 650,000 tones per year capacity was launched on March 20th 2007 after reconstruction performed from June 2005 to November 2006. Donetsk Steel Plant with Blast Furnace No1 reaching its full capacity in May 2007, will produce about 80,000 tonnes of merchant pig iron per month.

According to ME News estimates, March exports of Donetsk amounted to some 20,000 tonnes, Italy and Turkey importing 10,000 tonnes each. In Q1 exports totaled approximately 70,000 tonnes. Donetsk also said that if shipments to the USA and SEA start, it will cut export shipments to Italy and Turkey.

With BF No 1 on stream, Donetsk Works has expanded its pig iron production capacity up to 1.3 million tonnes per year.

Mediterranean Shipping projects containerships oversupply in 2 to 3 years

Mediterranean Shipping Co said the container shipping sector is expected to face strong challenges in two to three years as ship supply overwhelms demand.

Mr Nicola Arena chairman and CEO of Mediterranean Shipping Co while speaking on the sidelines of the 25th International Association of Ports and Harbors World Ports Conference said it would take about two to three years before the market would come to a balance.

He said The number of new containerships joining the active fleet has been outpacing demand growth because of a surge in orders for new ships in early 2000. Not only are there more ships now, but they are larger and faster. Mr Arena expects barring any disruption to the worlds economy the container shipping market to remain resilient.

According to data provided by Drewry Shipping Consultants the average containership size in 2007 is pegged at 2,191 TEUs compared to 975 TEUs in 1980. The maximum containership size in 2007 is 13,500 TEUs, compared to 3,057 TEUs in 1980.

As of early February 2007 MSC was operating 326 container vessels with an intake capacity of 1.06 million TEUs.

Akers Romanian shipyard to build 2 AHTS Vessels

Norwegian group Aker Yards has entered a contract with REM Con AS, a subsidiary of REM Offshore ASA, for the building of two Anchor Handling Supply Vessels at Aker Yards in Romania and outfitted at Aker Yards in Norway. The value of the contract is NOK 1.4 billion (EUR 172 billion). Delivery is scheduled in Q1 of 2010 and Q2 of 2010.

The vessels are Anchor Handling Supply Vessels, based on the Aker Yards design AH 12. They will have a bollard pull in excess of 300 tons and will be outfitted with a triple drum winch of 500 tons. Accommodation is planned for 70 persons.

Aker Yards operates two shipyards in Romania, Aker Braila and Aker Tulcea. Aker Braila portfolio consists of hull production, delivery of complete merchant vessels together with repair and conversion work. The yard has 1300 m long outfitting quay facilities for simultaneous mounting or repairing of 12 vessels and equipped with multiple 50 tonnes portal cranes. The mounting platform and launching berth have capacity for vessels up to 135 x 23 meters and a maximum launching and lifting weight of 2500 tonnes respectively 2200 tonnes. Aker Tulcea is one of the youngest Romanian firms in the field. It offers services in shipbuilding, conversions and repairs. It has a large covered hall where four ships can be built simultaneously.

Aker Yards is a Norwegian shipbuilding group focusing on sophisticated vessels. The product range includes cruise vessels & ferries, merchant vessels, offshore & specialized vessels. Aker Yards comprises 17 yards in Brazil, Finland, France, Germany, Norway, Romania and Ukraine. Aker Yards has approximately 20,000 employees.

Alpha Naturals Q1 earnings slide

Alpha Natural Resources Inc has ported total revenues of USD 427.4 million and net income of USD 8.3 million for the January to March 2007 quarter as compared to revenues of USD 482.1 million and net income of USD 27.2 million in January to March 2006 quarter. It attributed the slide to mild weather and a carryover of high priced business in Q1 of 2006.

Alpha recorded coal sales revenues of USD 376.9 million in Q1 of 2007 down by 11% YoY as it sold 400,000 tonnes of metallurgical coal lesser than the Q1 of 2006. Other revenues of USD 7.2 million were down from USD 11.4 million in Q1 of 2006 when the Callaway division contributed USD 3 million from construction of a segment of West Virginia's King Coal Highway. That portion of the project was completed last September.

Total coal sales for the most recent quarter were 6.6 million tons. Metallurgical coal sales volumes for the quarter were essentially unchanged on a sequential basis, but were down by 14% YoY. Steam coal sales of 4.3 million tons were down by 2% from 2006 levels and down by 9% sequentially, as Alpha withheld sales from the spot markets and adjusted its production mix to sell into the metallurgical export market.

Mr Michael J. Quillen chairman & CEO of Alpha said "A number of factors led to record operating results in the first quarter last year, and we recognized that it would be difficult to match those results, but our performance this year has been essentially in line with what we expected, Last year, a large amount of higher priced metallurgical business carried over from 2005 into early 2006, and we had an exceptionally mild winter that enabled us to start shipping metallurgical coal on the Great Lakes earlier than normal. We didn't get that head start in 2007.

Mittal Steel Kryviy Rihs finished output up by 11.3% YoY in 4 months

Ukrainian Journal reported that Mittal Steel Kryviy Rih increased its finished roll production 11.3% YoY in January to April to 2.39 million tonnes.

The Ukrainian Industrial Policy Ministry said that its pig iron production grew by 15.8% YoY to 2.47 million tonnes, sinter rose by 11.7% YoY to 4.05 million tonnes and crude steel rose by 20.5% YoY to 2.77 million tonnes.

Cleveland Cliffs appoints Mr Carrabba as chairman

Cleveland Cliffs Inc announced that its board of directors has elected president & CEO Mr Joseph A Carrabba as Chairman of the Board, replacing Mr John S Brinzo, who, as previously announced, retired at the company's board meeting held.

Mr Brinzo said "We took many significant steps in our leadership succession plan this past year, not the least of which was the appointment of Joe Carrabba as president and chief executive effective upon my retirement from those roles in September. Joe had served as president and chief operating officer of Cliffs since 2005, and before that, as a global mining executive for more than 22 years. His exceptional experience and demonstrated leadership abilities will continue to benefit our company as we strengthen domestically and expand globally.

Mr Brinzo added "It has been my pleasure and privilege to be a part of the Cliffs family for the past 39 years. As I step down as chairman today, I do so with complete confidence that our company's assets and resources are in very capable hands."

Mr Joseph A Carrabba said "I am truly honored to have had the opportunity to work with John, a man whose clarity of vision and exceptional leadership through troubled times for the integrated steel industry in the early 2000s led to Cliffs' dramatic transformation from a local mine manager and mineral holder to today's global merchant mining company. On behalf of everyone at Cliffs, I wish John the very best in his well-deserved retirement."

Nickel concentrate shipments from port of Esperance suspended

Metals Insider reported that Australian port of Esperance will not be allowed to process shipments of nickel concentrates until it has made improvements to its facilities.

As per report nickel concentrate shipments through Esperance have been caught up in the controversy about lead concentrate shipments and their impact on local wildlife. The ban on lead shipments has already forced the local Magellan lead mine to suspend activities.

Although the Australian authorities have allowed the loading of one 20,500 tonnes cargo of nickel concentrates, the West Australian government said over the weekend that further shipments cannot be made until the port makes improvements to its loading facility to prevent the potential escape of dust.

Most affected will be local producer Jubilee Mines and the West Australian operations of Canadas LionOre International.

Champion Minerals acquires iron ore property in eastern Labrador

Champion Mineral Inc announced that it has signed a letter agreement to acquire the Attikamagen Lake Iron Prospect consisting of 52 claims in eastern Labrador located at Schefferville in Quebec province of Canada.

Champion has agreed to acquire a 100% interest in the property by making cash payments totaling CAD 40,000 and issuance to the Vendor of 100,000 fully paid and non assessable common shares of Champion Mineral at a deemed value of USD 0.3 per share upon closing. Champion has also agreed to pay an aggregate royalty to the Vendor of CAD 3 per tonne of iron content in any and all iron ore, pellets or other product produced from the Property, calculated at the port when shipped.

The property hosts a significant taconite or superior type iron formation at least 8 kilometers in length 1.2 kilometers wide and minimum 75 meters thick. The taconite is massive, dense and very fine grained, with hematite as the main iron oxide.

Champion is a junior exploration Company focused on discovering and developing significant metal resources in eastern Canada, particularly in Newfoundland Labrador and currently has two properties the Powderhorn base metal project located in central Newfoundland and now, the Attikamagen Lake Iron Prospect located in eastern Labrador.

Sandvik Q1 earnings up by 48% YoY

Swedishs engineering firm Sandvik announced that its pretax earnings for January to March 2007 quarter rose to SEK 3.37 billion (USD 500 million) from SEK 2.68 billion in Q1 of 2006.. Its sales in the quarter also rose to SEK 20.41 billion from SEK 17.48 billion in Q1 of 2006.

Sandviks order intake during January to March 2007 quarter also rose to SEK 22.74 billion from SEK 20.99 billion in 2006. Invoicing increased in price and volume by 21%. Operating profit increased by 24% to SEK 3.5 billion and the operating margin amounted to 17.3%.

Mr Lars Pettersson CEO of Sandvik said that "The strong global demand for Sandvik's products continued during the first quarter of the year. Higher volumes, improved product mix and high internal efficiency contributed to improved earnings. Demand during the quarter remained high and all markets and business areas reported very good development of order intake and invoicing.

Sandvik is a global industrial group with advanced products and world leading positions in selected areas tools for metal cutting, machinery and tools for rock excavation, stainless materials, special alloys, metallic and ceramic resistance materials as well as process systems and sorting systems.

Mechel Targovistes Q1 loss down by 50% YoY

Romanias Mechel Targoviste announced that it posted a loss of RON 6.99 million (EUR 2.11 million) during January to March of 2007 down by nearly 50% YoY as compared to January to March of 2006, when it reported loss of RON 12.13 million. Mechel Targoviste said that its Q1 turnover amounted to RON 185.53 million (EUR 56.05 million) up by 45% YoY.

Mechel Targoviste expect that its net profit in 2007 would reach RON 61 million (USD 22 million) up seven times as compared to 2006, due to production growth. Its turnover should reach RON 778.4 million (USD 280 million) up by 20% over 2006. Sales are estimated at RON 760 million while expenses are expected to amount to RON 717.3 million.

Foundation Coals Q1 profit dips by21%

Q1 earnings for Foundation Coal slumped by 21% YoY to USD 24.6 million due to relatively soft market conditions. Foundation Coal revenue for the first three months of the year topped USD 386 million a slight drop from the same period in 2006 and its coal shipments up by 2% to 18.8 million tons.

Mr James F Roberts CEO of Foundation Coal said that higher than normal power plant inventory levels and a supply overhang softened the market but added he expects conditions to improve.

He said when that will happen the company added is uncertain where US electrical output through April 2007 was up while coal production was down slightly and the summer electricity ramp up is on deck, which should deplete customer inventories and boost demand.

Foundation Coal which employs about 3,000 people is US's 4th largest coal producer with capacity to produce about 70 million tons of coal annually from its 14 mines in Wyoming, Pennsylvania, West Virginia and Illinois.