Indian iron ore export prices continue to surge to record high

China Chamber of Commerce of Metals Minerals and Chemicals Importers and Exporters released the average reference prices for import transactions of Fe 63.5% Indian iron ore concluded last week on August 13th 2007.

These are the highest ever reported spot prices for iron ore

The change is with respect to prices posted on August 13th 2007

The movement of CCCM released prices over last one year indicates an increase of 68% in FOB prices and 72% in CIF prices. The price increase since January for both FOB and CIF deliveries is about 56%

In USD

The CCCMC reference prices are average prices for import transactions of Fe 63.5% Indian iron ore concluded the week prior to issuance date of such reference prices and the reference price practice is intended to regulate the domestic trading of Indian iron ore and avoid speculation on the raw material for China's booming steel industry.

Bhushan Steel Limited signs agreement with Bowen

Brisbane based uranium and coal explorer Bowen Energy Limited announced that it has formalized a partnership with Bhushan Steel Limited for development of its Rocklands Richfields Ltd. Under the deal, Bhushan will purchase two million Bowen shares at 32 cents a share. In return, Bhushan Steel Limited will be able to directly invest in the Australian coal industry and access local technical and management expertise.

Bowen said that the agreed share price represented a significant premium on the current share prices. Bowen shares closed up 3.5 cents or 14.58% at 27.5 cents.

Mr Kevin Nichol MD of Bowen described the basis of the agreement with Bhushan as "We find it, they develop it." Mr Nichol said the partnership would provide Bowen with a cash injection to advance work on its future coal projects.

Mr Nichol said Bhushan supported Bowen's bid for Rockland launched in June. He said "Bhushan has very publicly and strongly supported our off market takeover offer for Rocklands and I am confident that, with their support, we will be successful."

Bowen is offering one Bowen share plus 10 cents for every two Rocklands shares held under the bid. Rocklands itself is currently attempting a reverse takeover with China Coke & Chemicals Ltd, with Rocklands shareholders due to vote on the deal in September.

Mr Nicol added that "Rocklands has some potentially great coal assets Rocklands and Hillalong which, when combined with Bowen's own coal projects at West Rollerston and Middlemount, can transform Bowen into a major new coal producer."

Mr RS Pandey reviews RINL expansion work progress

Mr RS Pandey secretary steel with the union ministry of steel visited the expansion area of the Rashtriya Ispat Nigam Limited’s Visakhapatnam Steel Plant along with other senior officials from the ministry of steel. Mr Pandey visited Steel Melting Shop 2, Blast Furnace 3, Raw Material handling plant areas. Mr Pandey also reviewed the Gangavaram Port works.

Mr PK Bishnoi CMD of RINL, Mr PK Misra director operations, Mr HS Chhatwal director commercial & projects and Mr Y Manohar director personnel explained the dignitaries about the expansion progress.

Mr Pandey advised the officials to closely monitor the various activities so that cost overrun and time overrun are avoided. He suggested that the possibility of compressing the schedules to complete projects ahead of time should be examined. He asserted that in today’s competitive world one could learn a lot from other countries about new technologies suitable to our requirements, for cost competitiveness.

JSW Bengal to construct boundary wall of after Durga Puja

Express News Service reported that JSW Steel Bengal would start the construction of the boundary wall of its planned steel manufacturing unit at Salboni in West Midnapore after the Durga Puja.

Mr Biswadip Gupta CEO of JSW Steel Bengal after meeting Mr Buddhadeb Bhattacharjee chief minister of WB told media “On August 17th 2007, the public hearing required to get clearance from the Union environment ministry will be held at Salboni. We came here to get the blessings of the Chief Minister. We hope to start building the wall after the Pujas.’’

The project will be set up on 4,600 acres of land out of which about 4,000 acres have been vested with the state government. The company has been asked to purchase the remaining land directly from farmers. Mr Gupta said “We have already bought about 80 acres and will purchase the remaining amount in a short time."

Indian Railways freight traffic in April to July up by 5.93% YoY

Indian Railways have carried 247.05 million tonnes of revenue earning freight traffic during April to July 2007 up by 5.93% YoY as compared to 233.21 million tonnes in April to July 2006.

During the month of July 2007, the revenue earning freight traffic carried by Indian Railways was 61.80 million tonnes up by 7.72% YoY as compared to 57.37 million tonnes in July 2006.

L&T bags INR 203 crores new orders from DMRC Phase II

Larsen & Toubro Limited announced that it has secured two more design & build contracts from Delhi Metro Railway Corporation for the construction of the underground station at Saket and a tunnel as part of its Phase II Project. Valued at INR 203 crores the new station and tunnel will come up between Central Secretariat and Qutub Minar Corridors of Delhi Metro.

To be completed in 30 months, the construction of the Saket station involves 1500 meters of tunneling. The length of the station will be 284 meters. In addition, the construction involves a 945 meters link tunnel and a 260 meter ramp, both of which to be completed in 24 months. Top down construction method will be adopted for the underground station at Saket while cut & cover method will be used for tunneling and new Austrian tunneling method for 185 meters of twin tunnel.

L&T had earlier secured INR 355 crore orders for DMRC Phase II and is presently executing the Udyog Bhavan and Green Park stations along with the construction of 1 kilometer long tunnel by cut and cover method. L&T, in a JV with Dywidag, Samsung, Shimizu and IRCON, is also executing contract for the construction of two underground stations at Hauz Khas and Malviya Nagar with a 3.1 kilometer long tunnel using tunnel boring machines.

L&T had ventured into metro projects during the phase I of DMRC projects and successfully completed the INR 1940 crore project of underground metro rail corridor from Central Secretariat to Kashmere Gate with 26% share in JV with international contractors. L&T has also executed the construction of Mandi House underground station.

Kolkata Port to overhaul operations to enhance productivity

Exim News Service quoted Dr AK Chanda chairman of Kolkata Port Trust as saying that it is planning to overhaul its operations to raise the productivity and that it would float global tenders soon to invite service providers who would deliver guaranteed productivity gains initially at Haldia and later at all the port facilities. Kolkata Port Trust hopes productivity at the Haldia Dock Complex would rise to at least 20,000 tonnes per day from the present 8,000 tonnes per day per jetty.

Dr Chanda said that “For Haldia Dock Complex, the authorities would invite equipment manufacturers or operating agencies to run the operations on performance only basis, while it would provide the necessary supporting infrastructure. We will start with the newest jetties at Haldia Dock Complex which mostly handles bulk cargoes and see if we can develop new cargoes like edible products from there and dovetail these facilities to supporting infrastructure like railway lines, inland water transport jetties and container yards."

Kolkata Port Trust is moving away from older norms like availability of equipment because of the need to raise volumes and deliver lower costs and time benefits to users. He added that the interested bidders would be invited to examine and study each berth or dock individually and then come up with solutions for enhancing productivity from the on ground infrastructure, the spatial distribution of the work and a comprehensive solutions package. Some external agencies have equipment like mobile cranes in use within the port complex based on availability norms.

Kolkata Port handled over 55 million tonnes of cargo in 2006-07 and hopes to handle 60 million tonnes this fiscal.

Web based application launches for hydro projects

BL reported that Mr Sushilkumar Shinde union minister for power has launched a web based management information system called Hydropowernet of the power ministry. This application has been hosted at URL http://hydropowernet.gov.in.

Hydropowernet, an outcome of efforts put in by a dedicated team over the last one and a half years, is a web based application conceptualized and put in operations by the ministry of power for on line monitoring of hydro power projects and provides a platform for data sharing between various hydro utilities, the Central Electricity Authority and the ministry of power.

Hydropowernet has remote data updating facility for all the central hydro power utilities from the remote project sites itself and most of the data is made available on line directly from the project site itself. In addition to on line availability of extensive drilldown data on project construction activities, data is also available on generation, outages, collection of dues for the hydro stations in operations. The available information acts as a valuable management information tool and also provides inputs for informed decision making.

All major organizations which facilitate hydropower development and execution in the central sector have been integrated in the hydropower net namely ministry of power, central electricity authority and central hydro utilities like National Hydroelectric Power Corporation, Satluj Jal Vidyut Nigam, Bhakra Beas Management Board, National Thermal Power Corporation, North Eastern Electric Power Corporation and Damodar Valley Corporation.

NTPC may infuse additional equity in Ratnagiri Gas

It is reported that National Thermal Power Corporation Limited, which currently holds 28.3% equity in the 2,150MW Dabhol plant of Ratnagiri Gas & Power Private Limited, is considering an infusion of INR 500 crore as an additional equity into the project to part finance the completion of the liquefied natural gas terminal, which requires INR 1,200 crore for its completion.

A member of the NTPC board said that “We are working out the pre conditions for such an equity infusion right now. Subsequently, we will approach the board with the proposal.”

NTPC, along with other stakeholders of Ratnagiri Gas namely Gail India and Maharashtra State Electricity Board was asked by the empowered group of ministers, headed by Mr Pranab Mukherjee external affairs minister, to work out the options for completing the liquefied natural gas terminal.

All the stakeholders are examining various options. The Maharashtra State Electricity Board, which holds 15% equity in Ratnagiri Gas, has also offered around INR 250 crore as additional equity or the funds required as per the proportion of its stake.

CERC seeks clarifications from Coastal Gujarat Power on Mundra UMPP

BL reported that after the progress on the Mundra ultra mega project has halted on account of bidding glitches as Central Electricity Regulatory Commission has sought fresh clarifications from Coastal Gujarat Power Limited about certain anomalies in its application for adoption of tariff submitted before it.

Central electricity regulatory commission, in an order passed on August 7th 2007, has pointed to the failure of the apex evaluation committee that oversaw the international competitive bidding process to provide appropriate certification to the regulator on having adhered to the power ministry’s competitive bidding guidelines. Under para 6.12 of power ministry’s competitive bidding guidelines, the evaluation committee was to have furnished a certificate endorsing both adherence to the center’s guidelines and also to the bid process established by power finance corporation for the project.

According to central electricity regulatory commission, apex evaluation committee has failed to provide the certification in line with the prescribed norms and to complicate matters further, the apex evaluation committee was disbanded soon after the process of selection of the successful bidder was completed, even though the ministry’s guidelines require the committee to be in place till the time of the signing of power purchase agreement.

A central electricity regulatory commission official said that “There seems to be a clear case of disconnect between the procedure followed during the award of the project and the prescribed bidding guidelines. The guidelines are issued by ministry of power and the commission has no power to deviate.”

Mundra ultra mega project was handed over to TATA Power in April 2007 after the conclusion of a tariff based competitive bidding process.

Indian Railway to increase axle load of freight trains to 32.5 tonnes

Exim News Service reported that Indian Railways may increase the axle load of freight trains to 32.5 tonnes in the proposed dedicated freight corridor in order to help wagons increase the gross weight carrying capacity to 130 tonnes from 91 tonnes now. It is also considering to raise the average speed of goods trains to 50 kilometer an hour.

An Indian Railway ministry official said that "Axle load on the dedicated freight corridor is now kept at 30 tonnes. Still, it is being debated why not have 32.5 tonnes."

Indian Railways runs goods trains with an axle load of 21.8 tonnes now and has taken up the pilot project for introducing 22.8 tonnes axle load freight trains. Recently, 25 tonne axle load cars were also operated on a trial basis.

AIADMK sets up a committee for views on titanium project

It is reported that Tamil Nadu’s All India Anna Dravida Munnetra Kazhagam has constituted a 9 member committee to elicit people's views on the TATA Group's proposed titanium dioxide project at Tirunelveli and Tuticorin districts of the state.

Ms Jayalalithaa of AIADMK in a statement said that the committee including senior party leaders Mr O Panneerselvam, Mr KA Sengottaiyan and Mr PH Pandiyan would visit the proposed site of the project and get the peoples' views.

Ms Jayalalithaa by accusing the DMK government of being anti people said that “M Karunanidhi chief minister of Tamil Nadu had failed to deliver his promise on free distribution of land to the poor and instead, he was involved in confiscating land from farmers.”

It is noted that many political parties like Congress, PMK, Left parties and DMDK had already constituted respective committees for getting the peoples' views on the project.

NDRC forecast 11.4% Chinese GDP growth in Q3

China's National Development and Reform Commission in a research report forecast that the country's gross domestic product is likely to grow 11.4% in the third quarter of 2007. According to the report, economic growth in the third quarter will slow down and close to that of the first half but slightly slower than the 11.9% growth in the second quarter.

China government has imposed a series of measures to cool down the economy.
1. Local governments are now restraining the development of highly polluting and highly energy consuming industries.
2. The tightening monetary policies including the interest rate and required reserve ratio hikes are expected to reduce liquidity and slow down the economy.
3. Trade policies like the export tax rebate cut and curbs on the processing trade since the second half are supposed to have put the brakes on exports growth.

The report noted export growth in the third quarter is estimated to be slower than in the first half of the year and the contribution of exports to overall economic growth are expected to dwindle at the same time.

It is predicted that investments in fixed assets will continue to see rapid development in the third quarter boosted by demand from increasing urbanization, industrialization, and entry into the international market. Fixed asset investment is expected to climb faster than in the first half by 26% in the third quarter with investment in urban areas projected to increase by 26.8%.

Techint acquires Germany based Takraf

The Techint Group announced the acquisition from the German industrial holding VTC of Takraf GmbH, a company based at Leipzig in Germany, leader in the production of mining and bulk handling equipment. The acquisition is conducted through Tenova, a Techint fully owned organization, specialized in technologies and equipment for the steel and bulk handling industries. The operation is subject to the approval of the Antitrust authorities.

Takraf, with about 550 employees and an estimated turnover for 2007 above EUR 200 million, is a company that can boast a strong international presence and high skills in the engineering and supply of open pit mining and bulk material handling equipment. Based in Leipzig and Lauchhammer in Germany, where it operates also a modern factory, the company has subsidiaries in India, Brazil, Chile, Australia, South Africa, Bulgaria, United States and Canada. Takraf operates worldwide serving the mining companies, especially iron ore, copper ore and coal extraction companies, port terminals and final users of the bulk materials.

Mr Gianluigi Nova CEO of Tenova said “The operation will allow Tenova, thanks to the broad portfolio of products, to compete with the major players in a rapidly growing sector. Tenova confirms to be a strong reality in the Techint Group. This acquisition strengthens even more its leadership position as supplier of advanced technologies for the mining and steel industries”.

Mr. Richard G. Ramsauer MD of VTC said “The transition of Takraf into a worldwide renowned Group will sustain its leadership position in the industry. Tenova is the most suitable reality where Takraf can unleash its potentials and target further growth and success.”

Tenova provides technologies, products and services for the metallurgical, iron and steel, and bulk handling industries with a turnover in excess of EUR 1 billion. With the acquisition of Takraf, Tenova becomes the fourth world supplier of mining and bulk handling equipment.

Timken reorganizes into 2 business groups

Canton Ohio based Timken Company will realign itself around two major business groups
1. Steel Group
2. Bearings and Power Transmission Group

Timken's new Bearings and Power Transmission Group includes four divisions
1. Mobile Industries - Composed of the rail, off-highway, agriculture, heavy truck and passenger car and light truck market sectors
2. Process Industries - Encompasses the heavy industry, power transmission and energy market sectors
3. Aerospace & Defense - Serves the friction management and power transmission needs of commercial and military aviation customers through original equipment manufacturers and the aerospace aftermarket
4. Distribution & Services - Provides a full range of bearings, seals, grease, condition monitoring and other products and services through distributors worldwide.

The organizational changes are focused primarily on improving Timken's operating effectiveness and are also anticipated to streamline operations and eliminate redundancies. When fully implemented, the company expects to save USD 10 million to USD 20 million.

Timken has named Mr Michael C Arnold as executive VP & president, Bearings and Power Transmission Group. Mr Salvatore J Miraglia Jr will continue as president of the Steel Group.

Before, Timken had three groups Steel, Industrial and Automotive.

Evraz to acquire 100% shares in NTMK, Zapsib, KGOK, VGOK and NMTP

Evraz Group SA announced that through its subsidiaries it is commencing a mandatory offers to purchase all outstanding shares of common stock of steel mills NTMK and Zapsib, iron ore mining and processing complexes KGOK and VGOK and the Nakhodka Commercial Sea Port.

The offers are made in accordance with the Russian legislation that allows a shareholder who has accumulated more than 95% of the company's stock to make a mandatory offer to minority shareholders to buy out the letters stakes and increase the total holding in the company to 100%.

Upon the closing of the offers, the stockholders will receive RUB 63.72 for each common share of NTMK, RUB 5,604.57 for each common share of Zapsib, RUB 101.9 for each common share of KGOK, RUB 6.02 for each common share of VGOK and RUB 33 for each common share of NMTP. The prices have been set based on the opinions provided by American Appraisal Inc and OOO Audit and Consulting Firm and confirmed by appraisers' self regulating organization as required by the Russian legislation.

The offers will commence on August 14th 2007 and will be valid for 45 days. Payments for the shares will be made within 25 days after the closing of the offers. Upon completion of the offers, Evraz will own 100% of NTMK, Zapsib, KGOK, VGOK and NMTP.

Australian thermal coal prices likely to increase

Bloomberg reported that the spot price of coal at Australia's Newcastle Port may surpass last week's record as rain hinders output in Indonesia, Chinese exports drop and Japan's demand increases following the shutdown of a nuclear plant.

As per report, coal for immediate delivery at Newcastle jumped by 3.3%to AUD 72.37 a metric ton in the week ended August 10th according to the global COAL NEWC Index. That's above the previous record of AUD 70.88 reached in June and the third consecutive weekly gain.

Asian customers, including Japan and South Korea, are counting on supplies from Indonesia to fill the gap left by falling exports from China, which may result in the withdrawal of at least 25 million tonnes a year from the market. Australia, the second largest exporter of thermal coal, is struggling to increase shipments because of port and rail bottlenecks. On the other hand, Straits Asia Resources Limited, Banpu Pcl and PT Gunung Bayan Pratamacoal have warned they may miss contracted deliveries from mines in Indonesia.

Mr Andrew Harrington a commodities analyst at Australia & New Zealand Banking Group Ltd said “There has been a very strong market in the last few weeks and we have seen a bit of concern around the Japanese nuclear power stations, which means they will be using more oil fired and coal fired stations while that gets sorted.” The Kashiwazaki Kariwa plant's seven reactors were idled July 16th 2007 after a magnitude 6.8 earthquake sparked a fire and led to radioactive material leaking.

Credit Suisse Group analysts led by Trina Chen said in a report that “We expect 2008 to be a tighter year for coal than 2007, driven by rising imports from China and India. The fact that coal remains the cheapest source of energy versus other forms implies continued shifts to coal in the energy mix.”

Baosteel to sell 92.5% stake in Nantong Iron & Steel

It is reported that Baosteel Group plans to sell its entire 92.5% stake in Nantong Iron & Steel Co Ltd for CNY 601.27 million. The remaining 7.5% stake in Nantong Iron & Steel is held by Nantong Investment & Management Co Ltd, Baosteel's partner in the JV.

China Securities Journal cited sources as saying that another subsidiary of Baosteel is likely to bid for the 92.5% stake in Nantong Iron, which would make the sale part of the internal restructuring undertaken by the Baosteel Group.

POSCO to build USD 4.5 billion steel plant in southern Vietnam

It is reported that South Korea’s POSCO Group will build a hot rolled steel plant at a cost of USD 4.5 billion in central Vietnam’s Khanh Hoa province. The factory, to come up in Dam Mon peninsula will have an initial annual capacity of 4 million tonnes which will later be doubled.

POSCO has tied up with local shipbuilding giant Vinashin to develop the project. Vinashin, known formally as the Vietnam Shipbuilding Corporation, will contribute 30% of the capital required for the project. POSCO said in a statement that it had signed a MoU with Vinashin for a feasibility study to be completed by year end ahead of construction next year. The plant will be ready after 2010.

POSCO began work earlier this month on a USD 1.13 billion cold rolled and hot rolled steel complex in the southern Ba Ria Vung Tau province. It will produce 700,000 tons of cold rolled products annually from 2009 while the hot rolled steel facility will see construction kick off only in 2010. The facility will have an annual capacity of 3 million tons.

POSCO is also working on a USD 13.8 million 100,000 tonne plant in the southern Dong Nai province, which will go stream in June 2008. Its feedstock will come partly from the POSCO Ba Ria Vung Tau province based steel complex.

POSCO hopes to develop Vietnam as a gateway to the Southeast Asian market and expects to secure a frontline production base in the region by pursuing its plan to link its Vietnamese operation to ones in China and India, enabling it to obtain greater global competitiveness in the production and supply of steel based products.

Laiwu Steel signs iron ore contract with Mauritanian SNIM

It is reported that China's Laiwu Steel has signed a long term iron ore purchase contract with Mauritania's mining firm Societe Nationale Industrielle et Miniere and US Cargill on August 7th 2007. As per the contract, Societe Nationale Industrielle et Miniere will provide certain quantity of iron ore for the Chinese steel maker from 2008.

Laiwu Steel began negotiation on long term cooperation via its sales agent in China, US Cargill, in 2003 and imported some resources in the first half of 2007. The 3 parties reached consensus on the contract terms in late July 2007 thus becomes Societe Nationale Industrielle et Miniere's first long term cooperator in China.

Laiwu Steel has set up stable raw materials supply bases in South America, North America, Australia, Africa and Asia, helpful to the ensure smooth production and save purchase costs.

Mauritania's Societe Nationale Industrielle et Miniere is the 2nd largest iron ore supplier in Africa with annual capacity of some 12 million tonnes. In the past it mainly exported resources to European markets.

(Sourced from MySteel.net)

GP Investments to buy Magnesita for USD 650 million

Brazil's leading private equity firm GP Investments Ltd announced that it will pay USD 650 million to acquire a controlling stake in Brazil's Magnesita SA. The transaction involves 70.7% of the voting capital and 38.6% of Magnesita's total capital.

Magnesita is Latin America's largest producer of refractory material capable of resisting super high temperatures used in industries that need such products for operations in installations like furnace linings and thermal barriers. It has production capacity of 617,000 tonnes annually of refractory material, which is produced in 6 plants in Brazil and one in Argentina. Magnesita owns and explores reserves in three Brazilian states of magnesite ore used to make refractory materials.

GP Investment said that "GP will support the company to explore the growth opportunities in local and international markets, benefiting from the company's strong market position, key competitive advantages and the solid technological know how of its management team." GP did not say whether the purchase involves the assumption of debt. Magnesita had revenue of BRL 1.1 billion (USD 578 million) in 2006.

GP Investments is the leading private equity firm in Latin America. Its activities consist of its core private equity business and its asset management business. Since its inception in 1993, GP Investments and its predecessors have raised more than USD 2.5 billion from Brazilian and international investors and have acquired forty companies in eleven different sectors. In May 2006, GP Investments concluded its initial public offering becoming the first listed private equity company in Latin America.

POSCO and Kotobuki to build a steel facility in Japan

YIEH reported that POSCO would cooperate with Japanese Kotobuki Industries Co to build up a new steel facility at Kyushu in Japan, which will have 150,000 tonnes annual output.

The new plant is expected to run for production in 2009 and its major product is the special steel material for vessel, tool and auto parts usages. As per report, about 80% of output will be purchased by POSCO and it will sell into South Korea market.

This is the first time that POSCO has cooperated with Japanese steel mill to produce steel products in Japan.

Siemens develops a new cyclone separator for BF gas

Siemens Metals Technologies announced that it has developed a new cyclone separator design for the dedusting of top gas exiting from the blast furnace. Its releases said that “With this solution the dust separation efficiency can be flexibly adjusted in such as way that the highest possible dust quantity, hence iron, can be recycled to the iron making process without exceeding certain limitations in permissible concentrations of zinc and other heavy metal components.”

The first industrial prototype will be installed in a new Indian blast furnace for which Siemens is providing engineering, technology and equipment. The start up of this blast furnace, which will be India's largest, is scheduled for mid 2008.

In order to use blast furnace top gas for downstream heating applications in modern blast furnaces the gas is cleaned in a two stage dedusting process comprised of a dry type dustcatcher or cyclone and a wet scrubber. Whereas the dust, which is trapped in the first stage of cleaning is usually recycled to the ironmaking process, the dust from the wet scrubber is normally discarded, incurring extra costs for disposal or dumping. Therefore, in order to maximize iron recovery, there is an increasing tendency amongst blast furnace operators to employ higher efficiency dust separation cyclones instead of low efficiency dust catchers.

Panzhihua Steel considering asset restructuring

It is reported that China's Panzhihua Iron and Steel Group plans to reorganize the assets of its mainland listed subsidiaries. Shares in Panzhihua's listed firms Chongqing Titanium Industry Co Ltd of Pangang Group, Pan Gang Group Sichuan Changcheng Special Steel Co Ltd Panzhihua New Steel & Vanadium Co Ltd were suspended from trading on Monday pending an announcement of important issues. No details were given.

Mr Xiang Yuanping board secretary of Chongqing Titanium, told Reuters that "The parent company will discuss with the listed arms a restructuring of the group's production assets. But Mr Xiang declined to say whether the parent company would inject assets, including its crude steel operations, into the listed units.

Panzhihua Iron and Steel, which has already absorbed some smaller mills in China's southwestern Sichuan province, produced 6.77 million tonnes of crude steel in 2006.

PCH Group signs scaffolding contract with FMG

It is reported that under a contract signed Malaga based scaffolding and form work supplier PCH Group Ltd will provide scaffolding services to Fortescue Metals Group's Pilbara Iron Ore and Infrastructure project at the Cloud Break Mine. PCH will perform these services as part of a collaborative contracting arrangement with four other companies.

Mr James Cullen MD of PCH Group said "PCH continues to benefit from the buoyant resources sector with demand for our services continuing to grow. The Cloud Break mine is a major project for Western Australia and we are delighted to be a part of it."

Saudi Iron and Steel H1 production up by 21.7% YoY

ArabSteel reported that the total production of long and flat steel products by Saudi Iron and Steel Company during January to June 2007 is 2.248 million tonnes up by 21.7% YoY as compared to 1.847 million tonnes in January to June 2006.

The report said that most of this increase in production came from the increase of flat products production. Production of flat products during January to June 2007 amounted to 803,350 tonnes up by 53.9% YoY as against 521,658 tonnes in January to June 2006. This is attributed to a number of new projects coming on stream during H1 of 2007 and resulted in increased volume of sales to the domestic market. The total sales of flat products to the domestic market during January to June 2007 amounted to 561,000 tonnes up by 60% YoY as against 351,000 tonnes in January to June in 2006. Most of the increase in the sales to the domestic market came from the increasing sales of hot rolled products, in addition to the increase in the production of coated and galvanized products.

The total sales of long products in January to June 2007 amounted to 1.464 million tonnes up by 5.5% YoY against 1.387 million tonnes in the same period in January to June 2006.

While the sales to the domestic market witnessed a substantial increase in the first half of 2007, the volume of exports either of long or flat products retreated. This is ascribed to the increasing demand in the domestic market. The exports volume of the total sales in the first half of 2007 amounted to 108,000 tonnes against 179,000 tonnes in the first half of 2006.

The total sales in 2006 amounted to 3.898 tonnes against 3.672 million tonnes in 2005. The total sale during 2007 is expected to exceed 4 million tonnes.

Global growth in coal use outpaces other fuels

Mr Christof Ruhl deputy chief economist of British Petroleum while addressing the audience at the launch of BP Statistical Review of World Energy June 2007 said that between 2001 and 2006 the growth in global energy consumption outpaced global GDP growth with coal consumption outpacing other fossil fuels. In 2006 the coal consumption grew by 4.5% natural gas by 2.5% and oil grew by less than 1%.

Mr Ruhl said along with coal consumption the global carbon emissions have also accelerated. In the last five years, carbon emissions have increased with respect to per unit energy consumed. He added that "In 2006 out of the total coal consumption growth, China’s share was a whopping 72% and rest of the world registered 28% growth. India, which falls in the rest of the world category, is a leader in this group with 16 million tonnes oil equivalent consumption growth. On the second rung are Indonesia and the UK each having 4 million tonnes oil equivalent consumption growth."

Mr Ruhl said that though global oil prices are likely to remain stable in the short term, they might rise in the medium term. He, however, added that making a prediction would not be appropriate as the prices are depended on the OPEC’s decision to increase production. He added that the prices have come down mostly due to high oil inventories.

He also added that however, compared with the 1980s and 1990 more than three billion consumers have been added. Increase in population will not allow prices to go down to those levels.”

Baosteel becomes fourth largest shareholder of Shanxi Xisan

Shanxi Xishan Coal and Electricity Power Co Ltd in its semiannual report said that its Baosteel group now holds over 12.45 million shares accounting for 1.03% becoming the fourth largest shareholder.

Baosteel is the company's biggest customer who has contributed sales revenue of CNY 289 million in January to June 2007 representing some 7.8% of total revenue.

The steelmaker has jointly built shipbuilding base with China State Shipbuilding Corporation and cooperated in ocean shipping with China Ocean Shipping Company.

The participation into Shanxi Xishan Coal and Electricity Power is also a step the steelmaker makes to expand business to other industries.

(Source from MySteel.net)

Solidarity launches strike in South African coalmines

As announced last week, South African coal mining workers association Solidarity has started strike. Solidarity said that most of its 3,500 members in the coal sector were taking part in a strike. Mr Reint Dykema spokesman Solidarity said that workers at two of the biggest local coal companies did not report for duty. The strike kicked off at Sunday midnight at mines belonging to Anglo Coal, Xstrata, Optimum Colliery and Exxaro.

Mr Dykema said that so far miners at Exxaro and Anglo Coal operations had heeded the call to strike. He said "Especially at Matla, all the people are standing in front of the gate. We are positive lots have heeded the strike. It seems the turn out is good on Exxaro mines and at Anglo Coal. Most of our members are taking part." He said around 500 Solidarity members worked at Matla as compared with about 3,500 in total expected to take part in the strike. He had no overall estimate of how many were participating in the action.

While Solidarity represents about 3,500 of the 55,000 workers in the industry, its members are the electricians, boilermakers and riggers that keep the mines running. Mr Dykema said "It's a small amount, but it's the backbone of the operations.” Solidarity represents skilled artisans and some industry players say the stay away could dent output in the major coal-producing nation, although the much larger National Union of Mineworkers has signaled it may not join the strike.

Pay talks between the two sides broke down earlier this month after several weeks of negotiations. Employers had offered increases of 7.5% and 8% for higher category workers and 10% for those in lower categories. Solidarity had demanded 15% but Mr Dykema said it would accept a hike of 10% across the board.

ArcelorMittal may review plan to buy Laiwu Steel - Report

China Securities News reported that ArcelorMittal has consented to revise the former plan of buying into China's Laiwu Steel in order to have the project approved by relevant Chinese authority and that it will considerably hike the bid price while lower the share percentages to buy. The report cited a Laiwu person as saying that the deal is yet to be discussed between Shandong provincial commission of state owned assets supervision and management and ArcelorMittal.

In the former pact signed on February 24th 2006, Arcelor and Laigang Group, parent of Laiwu Steel, would take 38.41% of stake each in the target mill, both as the largest shareholder. Shandong Provincial government approved the case May 9th 2006, which is still subject to National Development and Reform Commission final decision.

But the National Development and Reform Commission found that Laiwu's assets were undervalued and sent a letter the local government with six suggestions in March 2007. Then, the market value of Laiwu Steel share closed at CNY 15.64 per tonne as compared with CNY 5.7 per tonne at the beginning stage.

Yet following the start year share separating reform, Laigang Group got a lower percentage of stake than last year, from 76.82% to 74.65%. This indicates Laigang Group may back off as the second largest in the listed Laiwu Steel if 38.41% is being sold to the foreign titan as per former pact. The buyer thus can actually get 37.326% stake to balance the situation. In order to seek approval, Arcelor-Mittal has decided to reduce 0.5 percentages further to ensure Laigang's controlling position.

Meanwhile, the state owned assets supervision and management commission and securities regularity commission require state shareholders to sell stake in compliance with market price of the listed companies by issuing a provisional rule July 6th. This is said having forced ArcelorMittal to accept a higher price.

However Laiwu Steel declined to comment. Mr Jean Lasar a spokesman of ArcelorMittal declined to comment on whether the company had agreed to lower its stake or would increase the price, but said negotiations with Laiwu were continuing and his company remained committed to buying a stake in the Chinese steel mill.

(Sourced from MySteel.net)

US weekly steel production down by 2% YoY

American Iron & Steel Industries reported that in the week ending August 11th 2007, US’s raw steel production was 2.043 million net tons while the capability utilization rate was 86.3 %. Production was 2.086 million net tons in the week ending August 11th 2006 while the capability utilization then was 88.7%. The current week production represents 2% YoY decrease from the same period in 2006.

Production for the week ending August 11th 2007 is down by 0.7% from the previous week ending August 4th 2007 when production was 2.058 million net tons and the rate of capability utilization was 87%.

Adjusted YTD production through August 11th 2007 was 64.734 million net tons at a capability utilization rate of 85%. That is a 5.6% YoY decrease from the 68.631 million net tons during the same period 2006 when the capability utilization rate was 90%.

AISI’s estimate is based on reports from companies representing about 75% of the US’s raw steel capability and includes revisions for previous months.

China to release energy consumption norms for nonferrous sector

Interfax reported that the Chinese government is considering releasing energy consumption standards for nonferrous metals next month in an attempt to curb heavy energy consumption in the nonferrous metals sector.

Mr Cao Baokui senior China Nonferrous Metals Industry Association official said that energy consumption standards will be set for the production of eight types of nonferrous metal, including copper, aluminum, lead, zinc, nickel, magnesium, tin and antimony, as well as for two semi finished products, namely aluminum alloy construction profile and copper tube which all together consume more than 80% of the energy for the whole nonferrous metals industry.

Mr Cao added that "The CNMIA recently drew up draft energy consumption standards for 10 nonferrous metal products. The National Development and Reform Commission will grant approval in September at the earliest, so the standard could come into effect as early as next year."

He also added that the central government is likely to shut down facilities, request technology upgrades or charge higher power prices to companies that do not meet the standards sanctions for companies that disregard the standards will not be released until later."

Shelby court scraps plan for metal recycling plant in Tennessee

It is reported that Shelby County fiscal court in Tennessee has scrapped plans for a proposed metal recycling center saying that it would be an eyesore and out of character with the rolling farmland, which surrounds the area. Their decision overrides an earlier recommendation by Triple S Planning and Zoning commissioners and essentially squashes plans of Indiana based metal recycler Omni Source Corp.

Mr Tony Carriss fiscal court Magistrate proposed a resolution to deny the change before the first reading of an ordinance that would have allowed 60 acres of agricultural land near Joyes Station Road and Isaac Shelby Drive to be developed for industrial use,

Mr Carris said in a statement that "Shelby County has been blessed with wonderful industry through the years. The scrap metal recycling facilities I have visited in the pasts are eyesores after a few years. Shelby County deserves better. This is prime land that is next to some of the best agricultural land in Kentucky and adjoins some of our outstanding, aesthetically pleasing industrial property."

Mr Ben Eisbart spokesman for OmniSource said that "We are disappointed that the opportunity to create about 125 jobs as well as make a significant investment in Shelby County has taken an unexpected turn. As more information is known, we'll be better able to evaluate our alternatives." Mr Eisbart said the company is appreciative of the support offered from Shelby County Industrial and Development Foundation and local civic and business leaders, who helped lure the prospective industry to the area.

Baogang's overall listing approved to pave way for merger with Baosteel

Beijing Times reported that China's Inner Mongolia Baotou Steel Union Co would issue 3.032 billion new A shares at CNY 2.3 per share to buy steel manufacturing assets from its parent in a deal worth CNY 6.98 billion. The move has been approved by China Securities Regulatory Commission. Mr Guo Jinglong deputy GM of Baotou Steel Union said that Baotou Steel Union thus becomes the six in China to pursuing overall listing following companions such as Wuhan Steel, Taiyuan Steel and Anshan Steel. He added that "We expect the overall listing of steel sector."

Baotou Steel Union said that all the new shares would be sold to the parent Baotou Iron and Steel Group. Thus it will increase its stake in its listed arm to 61.2% up from 26.51%. Besides the parent is exempted from the obligations for the takeover offer.

Insiders said that this paves the way for Baosteel to buy into Baotou Iron and Steel Group. The two steelmakers inked a strategic alliance deal earlier on July 23rd 2007 vowing to strengthen their cooperation and promote regrouping of their assets.

Baosteel once tried to buy the shares of Baotou Steel Union earlier this year, when Baotou Iron and Steel Group the largest shareholder of Baotou Steel Union held merely 26.51% of its listed arm which failed to satiate China's biggest steelmaker. The two then agreed that Baogang Group would partially transfer shares to Baosteel after the overall listing of Baotou Steel Union. Though the strategic cooperation did not go exactly in line with the schedule, the two groups are working on setting up a joint workgroup to study the implementation plans for the model, procedure and timetable of their asset combination.

Baosteel Group is expected to buy into Baotou Iron and Steel Group within this year and seek the controlling stake in next 3 years. Insiders said that the steelmaker would first implement strategic cooperation, then seek majority stake in the group and finally pursue the controlling shares of the listed arm.

Golden West wins extension for iron ore export facility

Golden West Resources Limited has announced an extension of time for its option over land required for developing an iron ore export facility at the southern Western Australian port of Esperance. Golden West said that the 12 month extension granted to it by the Esperance Port Authority gave Golden West until June 30th 2008 to progress commitments to establish a 300,000 tonne export storage shed at the port.

As per release Esperance is being assessed by Golden West as one possible export outlet for initial ore consignments from its maturing Wiluna West project, northeast of Geraldton. These would be in the order of one million tonnes per annum and provide a short term export corridor for Golden West as it ramps up production to 10 million tonnes per annum. And is envisaged these higher ore volumes will be exported through the proposed new port at Oakajee just north of Geraldton.

Golden West is currently preparing conceptual overviews of the West Wiluna iron project to show potential mining areas and infrastructure locations, and a scoping study is underway to define the parameters for the future feasibility study. Longrun Pty Ltd has been engaged to evaluate the infrastructure options and costs for linking West Wiluna to the proposed Oakajee port, 700 kilometers to the west. This option requires construction of a 250 kilometer long railway from West Wiluna to the south of Meekatharra at Weld Range and then joining the proposed Midwest regional rail network.

Golden West is continuing the definition drilling at West Wiluna targeting a JORC compliant resource upgrade by year's end to between 100 million tonnes to 150 million tonnes from the current Inferred resource of 50.1 million tonnes grading 61% Fe.

Moody raises Usiminas rating to Ba1

It is reported that risk classification agency Moody's Investors Service raised debt classification in foreign currency for Brazilian Usiminas and Cosipa debt from Ba2 to Ba1. With this the company is close to obtaining an investment grade classification from the agency. Moody's also attributed a corporate rating of Ba1 on a global scale and Aa1 on a Brazilian national scale.

Moody said that in 2007, due to solid financial management and the commitment to its shareholders, customers, creditors, suppliers, employees and community and of its considerable investment program of USD 8.4 billion until 2015. Usiminas has already earned the investment grade classification from two international agencies, Standard & Poor's and Fitch Ratings

Mittal Steel Sparrow Point plant fined for pollution violation

AP reported that Mittal Steel's Sparrow Point steel mill near Baltimore is being fined more than USD 98,000 for air pollution violations. The report cited an official of the Maryland Department of the Environment as saying that the violations included failure to operate a required particulate and dust control systems and that some of the violations have been corrected others must be addressed by deadlines contained in a consent decree.

The Maryland state department said that the violations have also been reported to the federal Environmental Protection Agency because of the nature and size of the emissions and violations.

Mittal Steel is planning to sell Sparrow Point steel mill to a global investment group to settle antitrust concerns.

Vinashin to build a steel mill in Ninh Thuan province of Vietnam

It is reported that Vietnamese shipbuilder Vietnam National Shipbuilding Corporation has entered a deal with the central Ninh Thuan province to build a USD 7.5 billion steel facility in Vietnam’s Ninh Phuoc district.

In the first stage during 2008-10, Vietnam National Shipbuilding Corporation will develop the project at an estimated cost of USD 1.7 billion and the remaining capital will be injected into expansion of the mill over the next 8 years. The capital arrangement has gone undisclosed so far and the mill is scheduled to open early in 2008.

Established in 1996, Vietnam National Shipbuilding Corporation has branched out into seaport construction and the steel industry aside from its core shipbuilding business. It aims to achieve revenues of USD 1 billion in 2007 up from USD 690 million in 2005. It has ongoing shipbuilding contracts worth up to USD 12.3 billion with orders from foreign companies accounting for USD 10 billion.

Vietnam National Shipbuilding Corporation is assigned by the Vietnam government to build a national shipping fleet to meet domestic transport and 30% of the export transport demand for crude oil. Between 2007 and 2010, Vietnam National Shipbuilding Corporation plans to build 7 shipyards, 6 shipbuilding industrial parks and 7 shipbuilding industrial complexes throughout Vietnam and additionally, it will invest in upgrading 10 major shipyards capable of building 3,000 tonne to 10,000 tonne ships.

For the long term, Vietnam National Shipbuilding Corporation is planning to set up a financial leasing arm and shipbuilding investment fund to woo domestic and international capital sources. It has also set its sights on turning Vietnam into the world’s 11th largest shipbuilder in the near future. It has developed its maritime carrier markets in Europe, America, the Republic of Korea and Japan.