Essar Steel reaches wage agreement with USW for Algoma

It is reported that Essar Global’s subsidiary Essar Steel Holdings has arrived at a settlement at its recently acquired Algoma Steel Inc in Canada sorting out the issues that had threatened a possible work stoppage by the United Steelworkers union. As per report, the union voted to approve a salary hike for the workers.

The collective agreements have been ratified with USW Local 2,724 for salaried personnel and Local 2,251 for hourly personnel for a 3 year term. According to the terms of the agreement, Essar Steel has agreed to increase wages by 3.5% every year besides also agreeing to improve medical benefits and better deal after retirement.

A spokesperson from Essar Steel confirmed the development to PTI by saying that “The company confirms that both United Steelworkers voted in favor of the offer that was offered to them last week. This agreement is a crucial part of Algoma’s long term strategy to stay competitive and ensure continued prosperity for both our owners and the community. Building on the momentum we have developed over the last five years, this agreement is a crucial part of Algoma's long-term strategy to stay competitive, secure jobs and continued prosperity for both our owners and the community.”

Ontario based Algoma is the third largest steel company in Canada, accounting for 15% of the steel production in Canada. It produced 2.4 million tonnes of steel in 2006. Essar Group had completed its acquisition for USD 1.73 billion in all cash deal in June 2007.

Public sector units to spend INR 230 crores on CSR this year

It is reported that public sector undertakings under the ministry of steel will spend INR 230 crore on Corporate Social Responsibility during 2007 -08. Out of this, the major contributions are from Steel Authority of India Limited of INR 100 crore, Rashtriya Ispat Nigam Limited of INR 27 crore and National Mineral Development Corporation of INR 89 crore.

Under the schemes, about 126 villages to be known as “Model Steel Villages” will be provided with necessary amenities and constructive programs to bring about all round improvement of the villages including promotion of steel use. Of these SAIL will be responsible for 79 villages, NMDC for 40, MOIL for 2 and RINL for 5 villages.

Mr RS Pandey secretary steel while reviewing the progress of the initiatives for implementation of the CSR activities at a recent meeting urged the public sector undertakings to ensure implementation of the planned programs in a time bound manner. He said that administrative mechanism for CSR programs should be strengthened and suitable officials be given administrative and financial powers to streamline implementation.

It was also resolved that the public sector undertakings would also be organizing around 150 health camps in about 100 districts in the country during the current fiscal year 2007-08. In addition, they would also be providing assistance to national, state and reputed local organizations involved in the field of arts, culture, tourism, sports and other allied areas.

The review meeting was attended by SAIL, RINL, NMDC, MECON, MOIL, MTC, KIOCL, HSCL, BRL and FSNL.

SAIL to import more coking coal through Vizag Port

Moneycontrol.com reported that Steel Authority of India Limited is looking to import coking coal through Visakhapatnam port in view of difficulties at Haldia and Paradip ports. Normally SAIL’s coking coal import through Visakhapatnam caters to the requirement of Bhilai plant and Rourkela plant is served by Paradip and Bokaro & Durgapur plants by Haldia.

In a normal situation, 3 rakes of imported coking coal a day on an average are loaded at the Visakhapatnam port for Bhilai plant and the plan now is to step up loading by at least 50% to load 4.5 rakes day to meet the requirements of other plants.

SAIL is to import more than 13 million tonnes of coking coal through the ports of Haldia, Paradip and Visakhapatnam in the current fiscal as against 10 million tonnes in 2006-07. An estimated 60% of the import is to be handled by way of Paradip and Haldia, 2.5 million tonnes at Paradip and 5.5 million tonnes at Haldia and the rest is to be handled at Visakhapatnam port.

In the January to April 2007 the total import has been around 2.98 million tonnes as 1.18 million tonnes at Visakhapatnam, 1.53 million tonnes at Haldia and 0.27 million tonnes at Paradip. The shortfall from the target has been more than 1 million tonne.

SAIL is also exploring the possibility of coastal movement of imported coking coal between Visakhapatnam and Haldia. The highlights of the plan are
1. Big bulk carriers with full load will call at Visakhapatnam port
2. Discharge part of the load to smaller vessels requiring lower draft, which will call at Haldia for the second round of discharge.

EIA public hearing for JSW Bengal Steel soon

PTI reported that a public hearing would be held on August 17th 2007 for environmental impact assessment of JSW Bengal Steel's proposed INR 10,000 crore plant at Salboni in West Bengal with a capacity of 3 million tonnes per annum.

Mr B Gupta MD of JSW Bengal Steel said that the public hearing by the district magistrate of West Midnapore would take place near the plant site in the presence of officials of the ministry of environment and forests. The report would be submitted to the ministry, following which an approval would be given for setting up the plant.

Mr Gupta said that environmental impact assessment is required by law for all category I industries.

He added that JSW Bengal Steel is directly acquiring nearly 500 acre from the farmers by paying market prices and would get another 4500 acre from the state government very soon for around INR 100 crore. He said that the entire land acquisition process was expected to be over soon and construction of the boundary wall would follow.

Videocon to set up steel & power plants in WB

It is reported that Videocon Group has submitted an INR 15,000 crore proposal to the West Bengal government for setting up a 3 million tonnes per annum steel plant and a 1,200 MW power plant in the state.

The proposed projects are likely to come up in the Asansol Durgapur region. Videocon has already identified 2 different sites in the region, one of the sites spread over 1,500 acres and the other 2,000 acres of land.

It is learnt that, Videocon Group will float 2 separate companies for steel and power projects.

745 applicants for 15 coal blocks

It is reported that Indian government has received 745 applications from a variety of companies for 15 power project linked coal blocks with estimated reserves of 3.6 billion tonnes, which can support power generation of 18,000 MW.

The applicants range from little known traders to metals and power majors. The Central Electricity Authority has pre qualified 44 applicants, the ministry of power 32 and the ministry of coal 100.

The final allocation would be done by a screening committee comprising of members from the power and coal ministries and the state governments of Jharkhand, Orissa, West Bengal, Chhattisgarh, Bihar and Maharashtra.

Tayo Rolls announces expansion plans

TATA Steel’s subsidiary Tayo Rolls Limited, which is engaged in manufacturing and distribution of cast iron and steel rolls, announced that it would invest INR 142.50 crore in the engineering forging and forged roll project after its board approved the same.

It said "The project envisages putting up integrated facilities for manufacture of forging quality ingots including round ingots, forged bars, engineering forgings and forged rolls. This will enable Tayo to become a one stop shop for all types of rolls both forged and cast rolls."

It added that “Together with the capital expenditure for expansion of cast roll capacity from the present 13,500 tonne per annum to 15,000 tonne per annum, the total capital investment would be INR 166.11 crore, to be made in phases between 2007-08 and 2010-11.”

Tayo Rolls informed that the capacity for forged rolls would be 3,000 tonne per annum and the excess forging capacity would be used to manufacture engineering forgings for infrastructure, oil and gas, windmill and power industries.

Toyo Rolls board also approved a tie up proposal with UK based Sheffield Forgemasters for manufacture of forging quality ingots including round ingots, forged bars, engineering forgings and forged rolls.

Indian Railway to cut freight surcharge on steel

BS reported that cement, sugar and steel sectors would not be required to pay the busy season surcharge of 15% on freight cost as Indian Railways would continue mini trains even beyond the lean season without any surcharge. The busy season starts from October and continues till May.

Mr Lalu Prasad union railway minister, in his rail budget speech had announced that on demand from mineral based industries such as steel and cement freight rates for transportation of all minerals, including iron ore and limestone, would be charged at class 160 instead of 170, thus reducing freight rates for these commodities by about 6%.

A source in the Rail Bhawan said that “In the railway budget, many discount schemes were announced meant only for raw materials. Now, we would also announce major discounts for finished products also.”

The mini rake scheme was introduced to enable loads smaller than full freight rakes usually half size or 20 wagons get booked for transport by Indian Railways at full train load prices, for distances up to about 300 kilometer with connecting services for transshipment to road transport. These rakes were only permitted in the lean season, but now Indian Railways would permit their usage beyond the lean season.

Apart from announcing major discounts for the industry, Indian Railways are also in the process of signing long term service agreements with companies where they would guarantee the companies rakes for all seasons and would also pay penalty if they failed to abide by the terms of agreement. The same would apply to companies as well.

50 % of the Sethu project work almost completed

Mr NK Raghupathy CMD of Sethusamudram Corporation Limited recently announced that that it has completed dredging in about 23.16 million cubic meters or 50% of the INR 2,100 crore Sethu project work.

Mr Raghupathy said that it had floated tenders for construction of shore based facilities such as service jetty, approach jetty and reclamation of facilities like buoy yard, slipway, vessel traffic management system tower and approach road at Dhanushkodi and Mandapam in Tamil Nadu.

Mr Raghupathy added that the project would be reclaiming about 30 hectares of land at Dhanushkodi at a cost of INR 26 crore and the service jetty will come up at a cost of INR 13.3 crore. He said that the shipping fraternity has been told that the charges are going to be flexible and at present the charges would be around 50% initially.

There is also proposal for a viewing gallery, which is likely to come up at a cost of INR 100 crore. The gallery would be set up at 12 kilometers from the jetty works and 6 kilometers from Dhanushkodi.

The Sethusamudram Shipping Canal Corporation would also buy 6 pilot ships to be used in the canal and tariff rates are to be flexible in the canal.

Bombardier to set up metro coach factory in Vadodara

BL reported that Canadian firm Bombardier Transportation, in a multinationals’ first foreign direct investment in the metro coach manufacturing sector, is planning to set up India’s first metro coach factory in Vadodara by June 2008.

Incidentally, Bombardier was contemplating setting up factories in either at Hyderabad or Vadodara. It has an engineering facility in Hyderabad and a converter for locomotives of Indian Railways manufacturing facility in Vadodara. However, it chose Vadodara for various reasons like the factory being located near a rail link and several supporting companies’ presence in the region.

Bombardier will manufacture coach shells and bogies in the new factory and expand its existing factory, which manufactures converters for Indian Railways’ locomotives to make propulsion equipment for metro coaches. The factory would be a wholly owned subsidiary of Bombardier. The factory would have a capacity to roll out 40 coaches per month at peak performance and 24 coaches per month usually. It can manufacture both broad gauge and standard gauge rolling stock. The facility would have access to Bombardier Transportations’ latest technology in the sector.

Construction work for the factory would start by September end of 2007 and the factory is expected to be ready by May to June 2008. About 500 to 550 workers would be hired for the factory, comprising about 450 blue collar workers and 100 supervisors and engineers.

Mr Rajeev Jyoti MD of Bombardier Transportation India said that “Bombardier Transportation would invest upwards of EUR 25 million for the facility. By end of 2008 or early 2009, we expect to roll out the first metro coaches.” He added that factory would also integrate the coaches and test them.

JSW Steel buys Kalina land to setup HQ - Report

ET reported that two and a half acre of land at Kalina in the western suburb of Mumbai, which Orbit bought from Gujarat Ambuja 5 months ago, will sell to JSW Steel for INR 700 to INR 750 crore including INR 120 crore for floor space index.

Orbit bought the land for INR 323 crore but paid floor space index of INR 120 crore taking the cost to INR 443 crore. This will mean a profit of about INR 300 crore for Orbit from sale of the Kalina land to JSW steel.

JSW plans to make Kalina its corporate headquarters that will house its 2,000 odd employees currently working out of the corporate offices in central Mumbai. However, as per reports Mr Sajjan Jindal's core team will however continue to operate from Jindal Mansion of Peddar Road office.

Pithampur Auto Cluster to set up its own power system

BS reported that Pithampur Auto Cluster Limited is planning to set up its own power generation and distribution system of 2MW through the conversion of an amount of INR 8 crore allocated for road construction.

Mr Gautam Kothari president of Pithampur Audyogik Sangathan said that “Our plan is to create a network for power distribution so that we can offer power to industry at lower tariff.”

Pithampur Auto Cluster Limited is a special purpose vehicle created to facilitate Pithampur auto industry on various fronts including testing, training, designing, tool room and marketing. It has been formed under the center’s industrial infrastructure upgrade scheme launched by the department of industrial policy and promotion and ministry of commerce and industry. It is taking shape on the premises of closed units of the Madhya Pradesh industries corporation.

Western Consolidated to set up unit in Uttarakhand

BL reported that Kolkata based generator set manufacturer Western Consolidated is planning to invest nearly INR 20 crore to set up its 3rd manufacturing unit at Sitarganj in Uttarakhand.

Mr Vineet Dhingra MD of Western Consolidated said that “We currently have 2 generator set manufacturing factories at Maheshtalla on the outskirts of Kolkata and Daman. The current production capacity of these 2 units is about 3,500 generator sets annually. The upcoming factory will augment the production capacity to 5,000 generator sets per annum and is expected to be operational in nine months.”

Western Consolidated is planning to enhance its production capacity to 8,000 generator sets per annum.

Suryachakra Power to set up power project in Orissa

Suryachakra Power Corporation Limited has announced that it is in talks with the Orissa government for setting up a 1200MW thermal power project and is in the process of securing various approvals for land allotment, water and all permissions excluding coal linkage and supply.

Suryachakra Power will create a 1200MW (4x300MW) thermal power project in Orissa. In the first phase, it will install 300MW at an estimated of about INR 1,200 crore.

Suryachakra Power has entered into a MoU with Desein Private Limited in New Delhi for technical consultancy, supervision and execution. It has also signed an expression of interest with Power Trading Company Limited for supply of coal for a 10 year period. Power Trading has expressed interest in buying the power generated under a separate power purchase agreement. Additionally, Suryachakra’s project development agency is infrastructure leasing & financial services limited, which will help it achieve financial closure.

Meanwhile, Suryachakra Power’s 2 wholly owned subsidiaries namely Lahari Power and South Asia Agro are setting up renewable energy based plants of 9.8MW each in Chhattisgarh and have signed MoUs with Power Trading for supplying power generated for 5 years from October 2007, subject to approval from the Chhattisgarh State Electricity Board. Its third subsidiary MSM Energy Ltd is setting up two renewable energy based plants with capacity of 10 MW each at Maharashtra.

Nippon unveils USIMINAS System Development Plan

It is reported Usinas Siderurgicas de Minas Gerais SA, an alliance partner of Nippon Steel in South America, under its System Development plan has decided to invest JPY 1 trillion (USD 8.4 billion) to expand production in Brazil under USIMINAS System Development Plan. Usiminas will boost annual output by 2.2 million tonnes to 11 million tonnes by 2011 and that it will spend JPY 680 billion on existing plants and JPY 320 billion on new facilities.

USIMINAS has also decided some of the details of the investment policy about other facilities. The outline of the current investment policy including the items decided recently is set out below.

(A) Ipatinga Works
1. Total amount: JPY 680 billion
2. In operation: 2009-2011
3. Crude steel capacity: Capacity increase of 2.2 million tonnes per year.
4. New Blast Furnace: A 5,000 cubic meter class to be the largest in Americas decided recently.
5. New steel making plant: Equipment capable of producing high-grade steels including automotive sheets and products for energy related industries.
6. Hot rolling capacity: Capacity increase of 1.1 million tons per year.
7. HSM expansion: To attend for high-grade steels mainly for automotive use. Production capacity increase of 600,000 tonnes per year.
8. Plate mill expansion: To attend for high grade steels for energy related industries. Production capacity increase of 500,000 tonnes per year.

(B) Cubatao Works
New HSM: A new 4 million ton HSM capable of producing high-grade steels including those for energy related use.

(C) Unigal
No 2 CGL: Construction of No.2 in addition to the expansion of the existing line Production capacity of the existing line after the expansion 480,000 tonnes per year

Each investment will be scrutinized technically and financially and will be implemented after the final approval of the board of directors of USIMINAS.

In addition to the capacity expansion of the existing steelworks, a new 3 million tonne steelworks for production of high-grade semi-finished steel is also under study. Selection of the location and the timing of construction are included in this study.

Salzgitter H1 pretax profit up by 51.5% YoY

German steel giant Salzgitter AG announced that its H1 pretax rose to EUR 663.6 million up by 51.5% YoY as compared to EUR 437.9 million in H1 of 2006due to a robust profit rise in steel manufacturing and steel trading businesses amidst stable growth in the economy in the second quarter. Its net profit is EUR 398.7 million up by 206.6% YoY as compared to EUR 130 million last year while return on capital employed nearly doubled to 31.4% from 16.6%.

Its consolidated external sales rose by 17% to EUR 4.72 billion from EUR 4.03 billion in H1 of 2006.

In EUR million

EBT

Salzgitter said “All in all, on the basis of current information and in view of expectations of the development of the procurement and sales markets, as well as of the general conditions, and taking account of the effects of the Profit Improvement Program, we expect the Salzgitter Group to generate an operating EBT which clearly exceeds the one billion euro threshold in the current year. Express reference is made to the fact that opportunities and risks arising from currently unforeseeable trends in sales prices, input materials and capacity level developments, as well as changes in the currency parity, may considerably affect performance in the course of the remaining financial year 2007.”

It added that “In view of the persisting outstanding performance in the past years, also in a sector-specific comparison, the Management Board of Salzgitter AG has decided to raise the return target over the average of the steel cycle to a ROCE of 15 %. At the same time, the medium-term target for consolidated Group sales has been set to a range from EUR 13 to 15 billion.”

Chinese coke supply in H1 likely to exceed demand

It is reported that China Coke Industry Association has urged Chinese domestic coke producers to control excessive production growth in H2 of 2007.

CCIA urged that “We are aware of current risks in the domestic coke market and the coking industry should attempt to control excessive production growth and set production levels strictly in accordance with market demand."

The CCIA has warned of the appearance of market surplus, due to previously suspended coking projects resuming construction and large steel mills and coal companies launching new coking furnace construction projects.

It said that over 10 million tonnes of additional coke capacity is scheduled to come online during the H2 of 2007 on top of 9.95 million tons of coke capacity that came online in the H1 of 2007. Moreover, despite the elimination of a group of small scale furnaces new expanded capacity far outweighs eliminated capacity.

The CCIA forecasts that coke exports will reach 15 million tons in 2007. Furthermore, a coke export tax increase from 5% to 15% effective June 1st 2007, had no significant effect on exports, although the policy increased export costs by USD 16 per ton in June, lifting the average FOB price to USD 186 per tones.

It added that rising coke prices enabled domestic coke enterprises to generate a total profit of CNY 4.033 billion (USD 532.06 million) in the January to May 2007 up by 8.83 fold from 2006. However, 32.68% of coke producers still operated at a loss during the period. The dramatic growth in domestic coke production has also increased coking coal consumption. In H1 of 2007, China imported 2.82 million tonnes of coking coal, up by 18.03% YoY and exported 1.57 million tonnes, down by 31.85% YoY.

According to a statement released by the China Coke Industry Association China produced 156.81 million tonnes of coke in the H1 of 2007 up by 21% YoY and export of coke reached 8.05 million tones up by 22.53% YoY with coke apparent consumption reaching 148.76 million tones up by 21.54% YoY. The coke production growth rate in the H1 of 2007 was 4.12% YoY points higher than that of pig iron production, while coke production in June 2007 alone grew by 18.4%, 4.72% points higher than the growth in pig iron production.

Latest forecast of world steel prices from MEPS

MEPS said that the recent introduction of the levy on certain steel exports from China is now limiting supplies although arrivals into the EU in June were significantly up as traders anticipated the action. It said that low prices in North America are already keeping Far East exports at bay but demand has been poor and the loss of exports and new capacity has created an oversupply in a number of product categories in China.

MEPS said “In the flat products category, we foresee the world average flat products price drifting lower over the next few months. Inventories are likely to remain excessive up to the start of the final quarter in all regions. In the US a price recovery is anticipated as supply and demand rebalances. EU figures should stabilize in the near term but could decrease further as the inventory depletion phase continues. Oversupply is likely to continue in Asia for the remainder of the year - keeping prices low. A price recovery is forecast in the EU in 2008 when the inventory reduction has been completed. North American values are expected to continue their recovery. A modest rise is anticipated in Asia as the mills try to recoup higher input costs.”

MEPS added that “In the long products sector, we predict reasonably stable pricing conditions over the next few months in all regions. However, in the final quarter and into the early part of 2008, we forecast further declines in North America and EU for seasonal reasons. Asian values should pick up marginally as construction revives.”

MEPS concluded that price increases are forecast for all regions in the early part of 2008, pushing up the world figure slowly as input costs are likely to increase and modest demand improvements are anticipated.

China's steel development not related to subsidies- CCCMC

According to Mr Chen Haoran chairman of China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters the development of China's steel industry is not a result of so called government subsidies. Mr Chen said that it is in fact the US government that has provided long term and all round subsidies as high as USD 100 billion to its steel industry over the past three to four decades.

Mr Chen also expressed his regret that the US has raised anti dumping and anti subsidy charges against three Chinese steel products in the past two months, despite the two countries' ongoing dialogues aiming to resolve steel trade problems.

CCCMC said "It's contradictory for the US to accuse, on one hand, the Chinese government of intervening with the steel industry and require on the other, the Chinese government to adopt other administrative approaches such as steel export license."

China strongly opposes the abuse of trade remedies since it goes against the solving of trade problems, the healthy development of US steel industry, and in particular the benefits of the downstream industries and consumers in the US.

(Sourced from MySteel.net)

Kumba sees imbalance in global iron ore supply till 2012

South African media recently reported that Kumba Iron Ore said that sea borne iron ore prices were expected to remain strong until around 2012 as industry expansions lagged and demand grew rapidly. Mr Ras Myburgh CEO of Kumba did not rule out the possibility of a double digit increase in prices next year.

Mr Vincent Uren CFO of Kumba during an interview with Mining Weekly Online said that going forward, prices would depend on the speed at which the major producers’ expansions come on stream. He told that “They have had logistics issues and they have had difficulties in getting their own mine production up in time.” He said that that there had been an average lag of 18%.

Mr Uren said that 2012 is seen to be a significant turning point, with a better balance likely to be reached between supply and demand. He said “I think that, by 2012, it will be turning towards balance, so pressure may be coming off by that stage. Until then, prices will continue to trend upwards, but the rate of increase will be coming down.”

Kumba has exported 37% of its production during the six months to June to China and expected this figure to balloon to over 50% by 2011-12 as Sishen Expansion Project production and possibly Sishen South production came online.

Valin Group acquires 55% share in Wuxi Steel

Hunan Valin Steel Tube & Wire Co recently issued a notice saying that its biggest shareholder Hunan Valin Iron & Steel Group Corporation Limited has signed a pact with China Conic Import& Export Corporation Limited on August 6th 2007 and a Shanghai subsidiary of China Resources about Valin Group's taking a 55% share in Wuxi Steel.

Wuxi Steel, based in China’s Jiangsu Province is a core enterprise under China resources Machinery & Minmetals Holdings Co of China Resources Corporation. As one of China's 72 key steel makers and of 18 pivot special steel mills, Wuxi Steel mainly produces quality and special steel products, such as bearing steel, spring steel, pinion steel and alloy electrode.

China Conic Import & Export Corporation Limited is also a subsidiary to China Resources. China resources Machinery & Minmetals Holdings Corporation had signed an agreement with Wuxi municipality in July 2004 to regroup Wuxi Steel.

(Sourced from MySteel.net)

Judge names trustee for sale of Maryland steel mill

AP reported that a US federal judge has appointed Mr Joseph Krauss as trustee to sell Mittal Steel's Sparrows Point mill near Baltimore to settle antitrust concerns.

According to the court order, trustee Mr Joseph Krauss may satisfy his responsibility by completing the planned sale of the mill to a global investment group led by privately held domestic steel distributor Esmark.

The trustee Mr Joseph G Krauss is tasked with completing the planned sale of the mill to a global investment group led by privately held domestic steel distributor Esmark Inc of Chicago Heights Illinois, according to the order filed yesterday in US District Court for the District of Columbia.

Completing the deal would clear the way for Mittal's planned USD 41 billion acquisition of Arcelor SA of Luxembourg, creating the world's largest steel maker, ArcelorMittal. The Justice Department in February ordered Mittal to sell Sparrows Point to preserve competition in the market for tin plated steel in the eastern United States. The parties have not announced a price for the mill.

Wugang Group to acquire 48% of Kungang Stock Company

It is reported that Wuhan Iron and Steel Company Limited will buy 48.41% equity in the Kungang Stock Company Limited a subsidiary of the Kunming Iron and Steel Company Ltd in southwest China's Yunnan Province.

According to a framework agreement signed by the Wugang Group and Kungang on August 1st 2007 Wugang will buy 48.41% of Kunkang's shares in cash to become the largest shareholder in the latter, while KISC will be the second largest shareholder with 47.41%.

Mr Li Xinchuang vice director of the China Metallurgical Industry Planning Institute said the move is an important step toward Wugang implementing its southwest China development strategy.

Mr Hockridge to leave BlueScope North America

BlueScope Steel announced that Mr Lance Hockridge president of BlueScope North America has given notice that he will leave within the next three months. It added that Mr Hockridge has decided to return to Australia with his family and take up a senior level executive role outside of BlueScope Steel.

Mr Hockridge joined BlueScope nearly 30 years ago when it was still part of BHP. He was named President Industrial Markets in 2000 responsible for Port Kembla's steel making operation and New Zealand Steel. Lance was instrumental in improving the levels of productivity, profitability and safety and leading the culture change at New Zealand Steel and Port Kembla Steelworks. In March 2005, he was appointed president North America, which comprises North Star BlueScope Steel, Butler Buildings, Castrip LLC, and the North American and European export trading.

Mr Kirby Adams MD & CEO of BlueScope Steel said "Lance has made an outstanding contribution to BlueScope Steel. He has had a long and successful career with the Company, starting with BHP nearly 30 years ago. Lance was a member of the Executive Leadership Team that led BlueScope Steel's successful demerger and creation of the new, publicly listed company. We recognize Lance for leading the major turnaround in safety, production and financial performances at our North American operations North Star BlueScope Steel, Butler Buildings and Vistawall. He is leaving the North American business in excellent shape. Lance will be greatly missed by all of us at BlueScope Steel. We wish him all the best in his future endeavors."

Mr Hockridge said: "I have had the most wonderful and varied career with BHP and BlueScope Steel, and have enjoyed challenges and opportunities I would never have imagined. I am most grateful, and wish the Company and its people ever greater success in the BlueScope Steel's US chief to quit.”

Schmolz & Bickenbach to build wire drawing plant in Germany

YIEH reported that due to an increase demand for drawing wires from Eastern Europe, Ugitech, a subsidiary of the Schmolz & Bickenbach Group, plans an investment around EUR 35 million in a new wire drawing plant in eastern Germany.

The investment will also include the installation of new heat treatment facilities at the plant. The plant is expected to come on stream in 2009 and a new heat treatment facility will be installed. This project is in its 3 year investment plan.

An Ugitech spokesman said that the demand for drawn wires rise and mainly come from automotive and construction industries.

Tang Eng continues to cut in SS production

YIEH reported that Taiwanese stainless steel maker Tang Eng is expecting to continue cutting production in August 2007. However, Tang Eng didn't give the exact number for production loss.

Tang Eng has regular maintenance for facilities to offset slower demand in summer. Tang Eng will base on their orders received in July to adjust the maintenance schedule.

After the continuous reduction in nickel prices in the past two months, the domestic demand for stainless steel has weakened. Many stainless mills including Yusco and Walsin Lihwa all cut production in order to stabilize the price in current market.

DGCX pushes back launch of steel rebar futures

It is reported that Dubai Gold and Commodities Exchange has decided to push back the launch of the world's first international steel rebar contract, to be traded in euros, by several weeks to give market participants more time to prepare.

Mr Griffith chairman of DGCX said that "Basically a lot of our members said they weren't ready at the time. People in physical steel said they needed more time. The contract is ready, the specifications are all done."

According to Mr Griffith the contract is set to provide a hedging tool against high price volatility in the steel rebar market of the UAE and the wider Middle East, and may be followed by another three steel-related futures if it turns out a success.

DGCX is owned 51% by the government owned Dubai Multi Commodities Center with 49% held by India's Financial Technologies Group and MCX of India Ltd.

Kunshan new SS plate mill starts operation

It is reported that China based Kunshan Dageng Stainless Steel’s new medium and heavy plate mill has come into operation.

As per report the new plant is designed with an annual capacity of 150,000 tonnes per year and can produce stainless medium plate with width of 3000mm and thickness of 80mm.

Kunshan Dageng Stainless Steel previously produced 80,000 tonnes per year of medium plate with width of 2500mm and thickness of 60mm.

Kunshan Dageng Stainless Steel mainly purchases 300 series slab from POSCO and some Japanese steelmakers. The medium plate it produced will be used in industries such as automobile, construction and medical treatment.

Record freight rates push ship orders into uncharted waters

Platts reported that record freight rates for Capesize dry bulk carriers driven by coal and iron ore trades, have pushed the world order book for new ships of this size to its highest ever level.

According to Clarkson Research Services, ship owners ordered 10.7 million DWT of new Capesize capacity in the January to June 2007 worth USD 75 billion pushing deliveries well into 2012 such is the size of shipyards order books around the world. It added that the order book for ships of all sizes was worth a record USD 304 billion as of July 1st 2007.

According to other shipbrokers, around 5 million DWT to 6 million DWT of new Capesize ships have been delivered by the shipyards in January to June 2007 while nothing has been scrapped and there have been no Capesize lost or sunk so far this year. A further 3 million DWT is due to be delivered in the remainder of 2007. Brokers estimated the world fleet at around 123 million DWT to 124 million DWT. The broker added that in 2008, around 45 new ships aggregating 8.6 million DWT are due to be delivered by the shipyards, while 2009 will see 65 ships and the order book for 2010 onwards shows deliveries of around 125 ships or 21.8 million DWT.

Shipbrokers argue that the market is likely to comfortably absorb the increased fleet size next year, but may have more of an issue absorbing the increases from 2009 onwards. A broker said that "It is hard to tell, because all of our predictions since 2002 have proved wrong and the increase in demand for iron ore by China alone has comfortably absorbed the increases in the world Capesize fleet for four and a half years.” He added that the bulk of the new deliveries from the order book would fall in 2011 and 2012.

Wheeling Pitt reports USD 41.6 million loss for Q2 of 2007

It is reported that Wheeling-Pittsburgh Steel Co lost USD 41.6 million in April to June 2007 on revenue of USD 467 million as compared to a profit of USD 9.3 million on revenue of USD 493.9 million in April to June 2006. Wheeling Pitt lost USD 59.8 million in January to March 2007 quarter.

A SEC filing indicates losses and unexpectedly high expenses for capital investments in the first half of the year are causing liquidity problems. It said "Management anticipates that we may require additional financing in the foreseeable future.”

It added that current management projections indicate it would not be able to comply with covenants of its term loan and may be unable to borrow more money. Wheeling-Pitt said it expects its proposed combination with Illinois based Esmark Inc would solve its liquidity problems.

Great Lake iron ore trade remains flat in June 2007

Lake Carriers’ Association reported that Great Lakes iron ore trade has totaled at 6.2 million tons in June 2007, a virtual tie with a year ago but a slight decrease from the month’s 5 year average.

LCA said that “The dredging crisis continued to take a heavy toll on the trade in June 2007. Iron ore shipments from the twin ports of Duluth Minnesota Superior and Wisconsin are a case in point. 1,000 foot long US Flag Lakers loaded 16 iron ore cargos in Duluth/Superior in June 2007 totaling at 965,000 tons. Yet, had these vessels been able to load to their rated capacity, those 16 loads would have totaled 1,065,000 tons. Lack of adequate dredging throughout the system negated 9% of the vessels’ carrying capacity, with the end result being that 100,000 tons of iron ore went undelivered.”

For the January to June 2007, the Great Lakes iron ore trade stands at 22.9 million ton down by 3.7% YoY as compared to the January to June 2006, but slightly ahead of the 5 year average for the first half.

Lake Carriers’ Association represents 18 American corporations that operate 63 US Flag vessels on the Great Lakes. These vessels carry the raw materials that drive the economy: Iron ore and flux stone for the steel industry, limestone and cement for the construction industry, coal for power generation collectively, these vessels can transport as much as 125 million tons of cargo a year when high water levels offset the lack of adequate dredging of Great Lakes ports and waterways.

Shengli to build steel processing plant at Thai Binh in Vietnam

It is reported that Shengli Investment and Development Ltd Co plans to build a USD 130 million steel processing plant in northern Thai Binh province.

In the first phase, the company will invest USD 50 million over a 20 hectare area, with the plant expected to have the capacity to process 1 million tonnes of steel a year.

The second phase, which will see the addition of processing facilities, will be built on a separate 35 hectare site at an estimated cost of USD 80 million and will raise the plant's capacity to 2 million tonnes.

IUD orders for BF gas based power plant from Mitsubishi heavy

Mitsubishi Heavy Industries Ltd has announced that it has received an order, jointly with Sumitomo Corporation from Industrial Union of Donbass Corp of Ukraine for a blast furnace gas fired gas turbine combined cycle power generation unit to be installed at Dunaferr Danube Ironworks Private Company Limited a major steelmaker in Hungary and an IUD affiliate. The new unit is scheduled to go on stream in December 2009.

The blast furnace gas fired gas turbine combined cycle power generation facility will be built at an ironworks in Dunaújváros in central Hungary approximately 80 kilometers south of Budapest. The 150 MW power generation systems are targeted at effectively utilizing the exhaust gas from the existing blast furnace in order to meet part of the plant's electricity needs.

The system will mainly consist of an M701S gas turbine, a steam turbine, a heat recovery steam generator and a generator. The order calls for Mitsubishi Heavy Industries to supply the entire power generation system. Mitsubishi Heavy Industries Takasago Machinery Works will be responsible for the gas turbine, gas compressor, heat recovery steam generator, condenser and the balance of plant, while the Nagasaki Shipyard & Machinery Works will provide the steam turbine. Mitsubishi Electric Corporation will build the generator.

Industrial Union of Donbass is a holding company embracing more than 40 businesses both within and outside Ukraine, including enterprises engaged in refining and processing of ferrous metals.

In 2006, a team comprised of Mitsubishi Heavy Industries and Sumitomo received an order for a BF gas fired based combined cycle power plant for IUD’s Alchevsk Iron and Steel Works in Ukraine.

Iron ore import price jacks up further in China

It is reported China boosted by robust demand, reducing availability and bullish prospect for next year's ore price, the spot market has seen further price hike in recent two weeks pushing it to a new high. Indian fine ore with 63.5% Fe content has jacked up to USD 118 per tonnes to 119 per tonnes from USD 106 per tonnes posted in mid July 2007, a 12.3% growth.

As steel prices firm up from August 2007 domestic steel plants all put into high gear and pose growing demand for iron ore, adding launch of a new batch of blast furnace in Q3, China steelmakers stop riding the fence.

Reduced ore import in June 2007 worsened supply demand imbalance further. At present, inventory of imported ore stands at 44.09 million tonnes, slightly lower than the corresponding period last year. Yet, pig iron output has risen 16.4%YoY in H1.

There is rumor that the three top ore suppliers would cut ore output in fourth quarter in preparation for the approaching new benchmark price talks, which is also a trigger to steelmakers' frantic purchasing of imported material. Moreover, the shipping freight rate predicted unlikely to fall back in Q4 is also pouring oil on the flames.

(Sourced from MySteel.net)

Tokyo Steel gets KR accreditation for SBQ plates

It is reported that Tokyo Steel Manufacturing got standard of shipbuilding steel products for South Korean Register of Shipping grade KR. With the Korean Register of Shipping standard, it can sell the shipbuilding grade plate. It already has accreditation for Nippon Kaiji Kyokai NK, American Bureau of Shipping ABS and Lloyd's Register LR.

As per report Tokyo Steel launched the shipbuilding plate at JPY 80,000 per tonne for Kaiji Kyokai and Korean Register of Shipping grades for August 2007 order. It is trying to market the new item in shipbuilding boom South Korean market.

Taiwan scraps imports touches 5 million tones in 5 months

According to a statistics released by Japan, the scrap import in Taiwan during January to May 2007 was totaled some 4.9 million tonnes. The import of scrap from January to March 2007 amounts to 2.05 million tones up by 12% YoY.

The report further added that America is the largest exporter of scrap to Taiwan, which accounts for 33.7% in total. US exported around 692,000 tonnes to Taiwan from January to March up by 82.5% YoY.

Japan is the second largest provider with 306,000 tonnes of scrap in January to March 2007 quarter and it was decreased by 44% YoY compared with January to March 2006 quarter.

Suzuki Sumiden to reduce production of SS wire

YIEH reported that Japanese Suzuki Sumiden Stainless Steel Wire Company Limited announced that it plans to decrease stainless steel wire output by 30% in August 2007 due to stock rising and sale down.

Suzuki Sumiden said that it had reason to cut their output because NSSC had announced to cut August and September 2007 output by 5,000 tonnes per month. Suzuki Sumiden’s material is from NSSC.

Suzuki Sumiden produces diameter 0.5mm to 10mm stainless steel wire for auto usage. The production capacity of its two factories is 1,000 tonnes per month.

Hope Downs iron ore project to start production in early 2008

It is reported that the Hope Downs iron ore mine in the Pilbara is to begin production early in 2008, but plans are already afoot to boost production to 30 million tonnes per year.

The expansion will be complete by early 2009 and cost USD 350 million. The original project cost USD1 billion and created a mine with an output of 22 million tonnes per year. The expansion will include the installation of primary and secondary crushing facilities adjacent to the Hope Downs 1 south ore body and an additional railway siding. It will also include new overland conveyors, trainload out facilities, mining fleet and rolling stock.

Hope Downs is a high grade Marra Mamba iron ore deposit amenable to open pit methods. The project is a 50:50 joint venture of London UK based Rio Tinto and Hancok Prospecting of West Perth.

James River Coal accelerates changes to mine portfolio

James River Coal Company a producer of steam and industrial grade coal announced several operational changes and updates designed to improve operating efficiencies

1. It will begin to exit mining operations at the BL-4 Mine at the Bledsoe complex on September 1st 2007
2. It will begin to exit mining operations at the Cabin Hollow Mine at the Bell County complex on September 1st 2007
3. Equipment and infrastructure from both mines will be reclaimed and reused in existing and new mines, significantly reducing capital needs
4. Production from a second highwall miner began June 25th 2007
5. Two additional surface mines to begin production in the first half of 2008
6. All permits required to begin such new production have been obtained
7. Two existing underground mines to complete new portals in the fall, significantly reducing travel time for miners and overtime hours
8. Belt connection between Mine 81 and Mine 74 to be completed in the fall, significantly reducing both current mining costs and trucking expense

Mr Peter T Socha chairman & CEO of James River Coal Company said that "These steps continue, and significantly accelerate, the process that we began in 2005 to fundamentally change our mine portfolio. Our goals are to have more balance in our production mix and to make adjustments based on the new regulations issued by the federal and state government. We believe that these changes will help us achieve both goals. The current changes, combined with our earlier changes announced in January, will reduce the total depth of our producing underground coal mines by almost 15 miles and result in a net reduction of over 150 mine seals. We also believe that following the full implementation of these changes, we will increase our coal production, lower our cash costs and save capital expenditures in the future."

Russian steel billets export to EU in 5 months up by 35% YoY

Rusmet recently reported that European countries imported more then 1.7 million tonnes of steel billets in January to May 2007 up by 35% YoY as compared to January to May 2006.

Among the biggest consumers of Russian steel billets in Europe are Italy, Denmark and Germany. Delivery volumes to these countries increased by 60% YoY, 81% YoY and 27% YoY respectively. Supplies to Poland tripled. Supplies to France and Czech Republic also increased.

In general, supply volumes of steel billets to non EU countries increased by 29%YoY to 1.9 million tonnes, with main destinations being Ukraine and Norway, which almost doubled import of Russian steel billets in this period.

Aquila divests Mozambique coal assets for AUD 60 million

Aquila Resources Limited has announced that it has concluded an agreement to sell all of its Moçambique coal exploration tenements to Riversdale Mining Limited. Consideration paid recently by Riversdale for the acquisition is comprised of AUD 26 million in cash and 10 million Riversdale fully paid ordinary shares, which based on closing price values the transaction at AUD 59.2 million.

The decision to divest the Moçambique interests was made by Aquila as a result of reprioritizing its Southern African activities on the exploration and development of its highly prospective iron ore tenements recently granted to it in the Northern Cape and Limpopo regions of South Africa.

As a result of the completion of this transaction and following the exercise by CVRD of its purchase option to acquire 51% of the Belvedere Coal Underground Project, Aquila will have cash reserves and liquid investments of approximately AUD 170 million. As a consequence, Aquila’s is in a strong financial position to advance the development of its coal and iron ore interests in Australia and Southern Africa, in addition to retaining the financial capacity to fund acquisition and expansion opportunities as they arise.

Mr Tony Poli executive chairman of Aquila’s said “Aquila sees this as an attractive transaction, which not only enables us to focus on our advanced coal and iron ore projects in Africa and Australia, but also to crystallize shareholder value created from the Moatize tenements. Furthermore, the combination of Aquila’s Moatize tenements with those of Riversdale gives Aquila an attractive investment position in one of the leading explorers in the Moatize Basin, as is evidenced by the announcement of the TATA Steel transaction earlier this week.”

RBC Capital Markets acted as financial advisor to Aquila in relation to the transaction.

Xstrata to make decision on Koniambo nickel project in Q4

Metals Insider reported that Xstrata expects to make a go ahead decision on the giant 60,000 tonnes per year Koniambo project in New Caledonia in the fourth quarter of this year.

Xstrata is currently conducting a review of the project it inherited when it bought Canadian producer Falconbridge. That review is expected to be completed in September 2007 but the company has already taken some concrete steps in preparation for a go-ahead decision including the establishment of a primary engineering and procurement centre in Malaysia.

It also said it is planning to place several large construction contracts in the last quarter of this year and included Koniambo in its presentation of group nickel projects with an indicative start up date of 2011.

Mr Mick Davis CEO of Xstrata was careful not to pre-empt the findings of the project review but told analysts “I think you got a pretty heavy hint today which way we’ll go.”

Strike continues at Rosh Pinah zinc lead mine in Namibia

Metals Insider reported that a strike and blockade of the Rosh Pinah zinc-lead mine in Namibia continued over the weekend into its second week with union and management failing to reach an agreement on the dispute about a dismissed worker.

The worker was the local branch chairman of the Mineworkers Union of Namibia, Petrus Amakali and the union has alleged the company trumped up charges to dismiss him. Management, on the other hand, insists that all correct procedures were observed in his sacking.

The mine, owned by South Africa’s Exxaro, last year produced around 65,000 tonnes of zinc. Concentrates are supplied to the company’s Zincor smelter, which is so far maintaining production using onsite stocks.

Henan approves Anyang Steel's share issuance

Interfax China reported that Anyang Iron and Steel Inc, the Shanghai listed subsidiary of Anyang Iron and Steel Group, has received Henan Provincial State-owned Assets Supervision and Administration Commission approval to issue additional shares to its parent company.

Sinosteel invests in molybdenum venture

According to Beijing Antaike Information Development Co, Sinosteel Corp invested CNY 420 million (USD 55 million) in a joint venture to develop a molybdenum mine in Inner Mongolia.

Antaike said in a statement citing the Northern Province’s government that Sinosteel holds 60% of the project with Chifeng Jinxin Mining Company. It said it would be Sinosteel’s first molybdenum investment.

Antaike said Chifeng obtained the mining rights and has started work at the site, which has 2.8 million tonnes of reserves and may contain 2,886 t of the metal. It said the current ore-processing capacity is 1,000 tonnes a day, which may be boosted to 6,000 tonnes next year.