Phase 1 of ArcelorMittal Orissa plant to start by 2011

BL reported that the first phase of ArcelorMittal’s proposed 6 million tonne capacity steel project plant in Orissa is likely to go on stream by 2011 and the second phase of an additional 6 million tonnes would be implemented thereafter.

The report quoted Dr Sanak Mishra CEO of Mittal Steel India as saying that the detailed report of the project including the power project, logistics and power plant is expected to be ready within the next 15 months. He added that the schedule of implementation would be firmed up once the rehabilitation and resettlement policy of the state government is finalized.

Dr Mishra said that Mittal Steel India is hopeful of leveraging upon the synergies of ArcelorMittal while implementing the project, which will manufacture both long and flat products.

POSCO steel project gets environmental clearance

It is reported that Indian government has accorded environmental clearance for POSCO’s proposed steel plant in Orissa. The report cited a government official as saying that “The ministry of environment and forests has given the environmental clearance for POSCO’s steel project.”

Officials said that POSCO has been told that a sum of INR 15.25 billion set aside for environmental pollution control measures should be used properly to implement conditions stipulated by the central ministry as well as the state government.

POSCO has signed a MoU with the Orissa government in June 2005 to set up a plant at Kujang near Paradip in Jagatsinghpur district of Orissa. But so far no real work has been done on the ground level due to intense oppositions form locals.

JSW Steel exploring coalmining in Mozambique

ET recently reported that JSW steel has acquired 2 more licenses for exploring coalmines in Mozambique.

As per report, JSW already has an agreement with a local player in Mozambique to conduct due diligence on a 6,900 hectare site that could be later mined for coal and has the option to carry out detailed exploration studies and prepare mining plans, after it concludes preliminary surveys. If successful it can opt to buy the mines and apply for mining license and operations.

The report cited Mr Seshagiri Rao finance director of JSW Steel as saying that “We are increasing our presence in Mozambique and the studies are going on. We have got positive results from studies conducted for the first license.” But he did not give the amount of reserves.

Mr Rao said that apart from Mozambique, JSW Steel is exploring similar opportunities in Australia and Indonesia. JSW prefers the African country, as the cost of developing coalmines in this region is comparatively lower than in Australia.

The coalmines will mostly feed JSW’s steel plants and may also be used in fuelling its upcoming 600MW captive power plant. Its present 230MW power plant is gas based.

PTC may acquire stake in coal mines in Indonesia

PTI reported that Power Trading Corporation is considering acquiring stake in overseas coal mining companies primarily in Indonesia.

Mr Deepak Amitabh VP & CFO of Power Trading Corporation told reporters "PTC is looking at coal blocks in Indonesia to support independent power producers with long term imported coal linkage.’

Mr Amitabh said "We have power purchase agreement with power producers totaling 8,000 MW and negotiations for another 16,000 MW are underway. Own coal blocks will offer some control in pricing beside assured supply mostly for small and medium Independent Power Producers.. PTC will support the independent power producers with whom we have PPA.”

The idea of stake in coal mining companies was mooted in the wake of offering assured coal linkage along with some control over price. It is like backward integration for PTC. Steady power generation would help the company in assured business.

AP government approves incentives for BF based steel plants

It is reported that the Andhra Pradesh government has approved a recent order making integrated steel plants or alloy steel units using blast furnace technology or direct reduction technology eligible for incentives offered under the Industrial Investment Promotion Policy 2005-10.

AP government said that “Blast furnace based steel plants generally have their own captive power plants and as such they require very little power as compared with electrical induction furnace. Hence, the State Investment Promotion Board has agreed to remove these units using blast furnace technology or direct reduction technology from the ineligible list of industries.’

Mr A Ramanarayan Reddy information minister of AP told reporters that power consumption by steel plants using either of the two technologies was minimum. Moreover, such steel plants normally had their own captive power units. He added that the cabinet also resolved to extend incentives to greenfield steel plants using any of the two technologies.

Mini steel plants, steel ingots or billets and alloy steel and ferroalloys manufacturing activities had been put on the ineligible list of the AP’s industrial policy since 1989 as they were viewed as power intensive industry with a low employment potential.

The government's decision to include steel manufacturing comes in the wake of a large integrated steel project in Kadapa district by Bramhani Industries Limited, which is promoted by Karnataka legislator G Janardhan Reddy. As the Bramhani Steels being proposes to use blast furnace technology, it will be entitled to the incentives, including tax holiday and concession in power and water tariff for a specified period.

Maharashtra Seamless Q1 net profit dip by 3.2% YoY

Maharashtra Seamless Limited has announced the following unaudited results for the April to June 2007 quarter:

Maharashtra Seamless Limited has posted a net profit of INR 581 million for the April to June 2007 quarter down by 3.2% YoY as compared to INR 600.3 million for the April to June 2006 quarter. It has also posted total income of INR 3628.20 million for April to June 2007 quarter up by 5.2% YoY as against INR 3448.70 million for April to June 2006 quarter.

Tamil Nadu opposition opposing TATA Steel titanium venture

It is reported that TATA Steel's move to set up a titanium dioxide plant in Tamil Nadu is facing criticism from opposition parties. TATA Steel recently entered into an agreement with the Tamil Nadu government for the second time after a MoU with signed in 2002 failed to take off.

Political outfits are alarmed that huge chunks of Tamil Nadu's southern beaches will go to private hands as the project needs a huge area of land as for every 100 tonnes of sand mined for ilmenite, 90 tonnes of sand will go waste.

Ms J Jayalalitha leader of political party AIADMK has threatened to demonstrate against the project. She alleged that the ruling DMK is acquiring land from farmers in Sathankulam taluk at very low prices and the TATA project would affect the livelihood of around 20,000 families. Ms Jayalalitha said that “The AIADMK party condemns the DMK government's initiative in acquiring land indiscriminately from poor farmers to hand it over to entrepreneurs.”

Mr S Ramadoss chief of political party Pattali Makkal Katchi said that “Ilmenite should not be a private property and the government should itself set up the plant instead of giving it to a private party like the TATAs. When the government is finding it tough to set up desalination plants in Tamil Nadu, the TATAs' talk of desalination plant, reclamation of land and agro based employment is simply unbelievable. It is simply shocking to learn that the government would acquire 10,600 acres of land for the TATAs.” He warned TATA's Tamil Nadu plans would soon turn into another Singur.

TATA Steel had announced that they would set up the plant to make titanium dioxide from ilmenite mined from the beach sands of Tuticorin and Tirunelveli districts in southern Tamil Nadu. The plant, entailing an investment of INR 25 billion, will have a capacity to mine 500,000 tonnes of ilmenite and make 100,000 tonnes of titanium dioxide a year. India imports about 70,000 tonnes of titanium dioxide annually.

AISCO and SCAN Steel tie up for TMT business

ET reported that Delhi based steel company AISCO and Orissa based SCAN Steel Group have tied up to undertake production and marketing of Steel TMT bars under the brand name of AISCO TMT. AISCO plans to expand its operations in all the states of India by year 2010.

As per report, SCAN Steel Group will utilize its sponge iron and billet casting facilities at its integrated plant in Orissa. TMT Production would be undertaken at its main rolling unit at Orissa and various other group owned and conversion units located at various parts of India.

Mr Praveen Aggarwal MD of AISCO Group said that the tie up will help them move towards overall growth and will provide quality material for use in construction industry and educate the consumers about shortcomings of poor quality steel available in the market.

Bramhani Steels Plant details

Dr J Geeta Reddy industries minister of Andhra Pradesh has updated the assembly about the plans of Bramhani Steels Limited for setting up an integrated steel plant in Jammalamadugu in Kadapa district with an investment of INR 20,000 crore to produce 10 million tonnes of steel in 4 phases.

The schedule is indicated as under

Capacity in million tonnes
Investment in INR crore

Dr Geeta informed that the Andhra Pradesh government had allocated 10,760.66 acres of land for the purpose and accorded permission for supply of 2 thousand million cubic meters water from the Gandikota reservoir. She added that power supply would be provided by Andhra Pradesh Transmission Corporation and the iron ore for the plant would be provided by the Obulapuram Mining Company Private Limited.

Usha Martin forecasts high growth prospects

It is reported that India’s leading specialty steel and wire rope producer Usha Martin Limited is expecting good growth in steel as well as value added products going forward.

Mr Rajiv Jhawar MD of Usha Martin while giving an interview with CNBC TV18 said that “We have a top line growth of about 8%, on the back of strong performance of our value added products like wire and wire ropes which is up 14% YoY. We are targeting to enhance our production capacity to 1 million ton of specialty steel in phases by 2009.”

Mr Jhawar said that “The demand for steel is fairly strong as well as for our value added products. We expect to have a steady growth going forward in this financial year. We have already started sourcing 98% of our iron ore requirement from our captive iron ore mine in Jharkhand and furthermore, we are expecting that our captive coal mine in Jharkhand will be operational towards the end of the current fiscal, when we will actually start receiving coal. We expect to save its operating cost by INR 120 crore on an annualized basis when both the mines are fully integrated and will improve the bottom line of the company.”

Usha Martin has recorded a profit after tax of INR 37.68 crore for the April to June quarter 2007 up by 38% YoY as compared to the April to June quarter 2006. During the period its specialty steel production grew up by 5% YoY and global wire ropes production up by 27% YoY.

Reliance Power gets LoI for Sasan UMPP

Reliance Power Limited, which was declared as the successful bidder for executing the Sasan ultra mega power project, has received a letter of intent from Power Finance Corporation’s subsidiary Sasan Power Limited for setting up the 4,000 MW plant in Madhya Pradesh at an estimated cost of INR 20,000 crore.

Mr Shyam Wadhera chairman of Sasan Power Limited said that the project would be handed over to Reliance Power Limited soon.

Sasan Power Limited is expecting land acquisition notification and environmental clearances shortly. Coal ministry has also agreed to provide a block for the Sasan project, which was earlier allotted to NTPC. Reliance Energy Limited has also tied up with a foreign company for getting 660 MW capacity equipment such as boilers.

Reliance Energy Limited’s subsidiary Reliance Power Limited outbid NTPC Ltd and Jaiprakash Associates to bag the project after it put in a bid of INR 1.19 per unit for the project that was initially given to Lanco-Globeleq consortium.

Sasan UMPP project is among the nine such mega projects to be set up by private players through a tariff based competitive bidding process.

BHEL Q1 net profit surge by 22% YoY

Bharat Heavy Electricals Limited has announced the following unaudited results for the April to June 2007 quarter:

Bharat Heavy Electricals Limited has posted a net profit of INR 2889.1 million for the April to June 2007 quarter up by 22% YoY as compared to INR 2366.7 million for the April to June 2006 quarter. Its total income has recorded at INR 34402.4 million for the April to June 2007 quarter up by 23.7% YoY as against INR 27794.6 million for the April to June 2006 quarter.

SRMB Udyog to open 12 exclusive steel shops across India

BL recently reported that Kolkata based rebar maker SRMB Udyog Limited is planning to foray into the retail sector by opening exclusive steel shops across India.

Mr MM Abraham VP of marketing and distribution of SRMB Udyog Ltd said that it initially plans to open 12 shops in the next 2 months and as part of the strategy, it has already opened a shop in Kerala at Kozhikode and the second such shop will be opened in Alappuzha soon.

Mr Abraham added that the opening of such shops will be a revolutionary step taken towards diversification into the retail sector and will strengthen the company’s presence across India.

The INR 500 crore SRMB Udyog Limited has emerged as No 1 in the secondary steel sector and its product 500 + X ribs is superior to any other reinforcement steel bar available in India.

Domestic coal supply unlikely to match cement capacity expansion

BS reported that lesser coal availability might affect the Indian cement industry as their requirement is set to more than double in the next 5 years and lower coal supply is pinching cement firms currently. According to a report of the working group on cement industry for the 11th five year plan period of 2007-12, the annual coal requirement will jump to 58 million tonnes by the end of 2012, with cement companies scaling up capacities to 300 million tonnes.

Mr Manoj Gaur president of the Cement Manufacturers’ Association and executive chairman of the Jaypee Group said that “Availability of coal is a matter of concern. Currently, hardly 75% of the coal supply through linkages is getting materialized.”

Mr AK Saraugi CFO of JK Cement said that “There is a lack of a clear cut policy from the government on long-term coal linkages for the cement industry. Though the industry has the option of buying from the free market and several players are importing too, high rates become the concern then.”

India’s cement industry is entitled to have 80% of its requirement through linkages. But the actual share is less than 60%, with the remaining requirement being met through the open market and imports. Moreover, as a majority of the new projects are with captive power plants, the coal requirement is set to rise further. Captive power plants consumed around 5 million tonnes of coal in 2006, 20% of the industry’s total coal consumption. By 2011-12, it is set to rise to over 18 million tonnes.

The 170 million tonnes Indian cement industry got less than 4% of the total coal production in 2006. During the last 5 years, coal consumption by the industry has increased by 42% whereas the supply through linkages grew by a mere 15%. Cement industry had consumed around 25.35 million tonnes of coal in 2006, 14.18 million tonnes through coal linkages from Coal India Ltd and Singareni Collieries.

CVRD Q2 net profit soars by 50% YoY

Companhia Vale do Rio Doce has announced its record April to June quarter 2007 net profits mainly driven by high nickel prices and a nearly 10% jump in iron ore contract prices.

CVRD’s April to June quarter 2007 net profit rose by 50% YoY to BRR 5.8 billion (USD 3.1 billion) as compared to BRR 3.9 billion in April to June quarter 2006. CVRD revenue in April to June 2007 quarter jumped by 80% YoY to BRR 18.2 billion (USD 9.7 billion), highest ever for any quarter beating previous record set in the fourth quarter of 2006 when the company had revenue of BRR 16.7 billion (USD 8.9 billion). CVRD said EBITDA soared by 99% to 10.3 billion (USD 5.5 billion).

CVRD’s consolidated exports rose by 54.1% YoY to a record USD 3.9 billion (EUR 2.8 billion).

Chinas restrictive steel export policies completed – CISA

China Securities News cited Mr Luo Bingsheng deputy director of China Iron & Steel Association as saying that China's restrictive polices for steel export have come close to an end and what's to follow is observing the effects. According to Mr Luo steel export will drop considerably in H2 of 2007 yet the resources redirected back to domestic market may not cause price plunge at home.

Mr Bingsheng said the export curbing policies have basically completed and now it's to see their effects. He said “If these policies realize expectant fruits of narrowing export notably in H2 of 2007 no new polices will follow but if price gap between domestic and overseas market still expands till being able to offset the hiked cost resulting from these policies, the export volume may rebound and further regulatory measures would be likely.”

Mr Bingsheng said that "This however may cause wide price shakes at home and we are trying every means to prevent this from happening." Mr Luo considers moderate export, like some 10% of production is good to raise the steel industry's international competitive edge. He added that they are pushing forward the qualifications granting for steel exporters in order to straighten export order. At present, China has over 11600 steel exporters. Over the steel dialogue between China and Europe, Mr Luo insists on carrying on negotiation to solve once antidumping case is aroused China will also take active legal actions to safeguard the mills' benefits.

Based on 2006 export volume and price, cut on export rebate and tax imposition will raise steel exporting cost totaling CNY 21.8 billion. Mr Luo said that in this case, profit for export would come lower than domestic sale in later half year. The export volume is predicted to fall by a big range in second half of 2007 by some 40% to 50%, translating to 51.6 million tonnes for the whole year, 20%YoY. The reduced part in H2 of 2007 will flow back and add to domestic supply. However, given strong overseas demand and similar robustness at home as well as firm cost support, the steel price is believed to stabilize with slight vibration in H2 of 2007.

China has witnessed four curbing policies on steel export in 2007
1.Cut export rebate of some special steel and stainless, CR products to 5% and cancel that of 83 customs codes incl. common carbon steel, HR plate, sections and wire rod etc, effective from April 15th 2007.
2. Exercise export license management on the 83 customs codes that were removed of export rebate from May 20.
3. Further impose a 5% to 10% export tax on the 83 customs codes and raise export tax for billet/slab, steel ingot and pig iron from 10% to 15% from June 1st 2007.
4. Scrap export rebate for common carbon welded pipe excluding petroleum casing pipe and cut that of seamless pipe and articles of iron & steel from 13% to 5% from July 1st 2007.

(Sourced from MySteel.net)

All 69 trapped Chinese coal miners rescued alive after three days

It is reported that all 69 miners who have been trapped in a flooded coal mine for more than 3 days in central China's Henan Province have been rescued alive.

Rescuers said the first man rescued, who was identified as Mr Nan Jianning met with an applauding crowd when he was brought to the ground. The last to come out was known as Mr Cao Baicheng.

Most miners rescued were escorted by rescuers and medical workers, as they could not walk on their own while some miners had to be put on stretchers. The miners were soon rushed to nearby hospitals. About 25 ambulances and 160 medical staff are standing by for the rescue.

The flooding occurred at the Zhijiancoal mine in Shanxian county about 200 kilometers west of Zhengzhou capital of Henan when 102 miners were working underground and 33 managed to escape.

Evraz to purchases 24.9% stake in Highveld from Credit Suisse

Evraz Group SA announced that its board of directors has approved the purchase of a 24.9% stake in Highveld Steel and Vanadium Corporation from Credit Suisse International for an amount of up to USD 219 million, thus exercising an option to increase Evraz's stake in Highveld pursuant to an earlier agreement. The option is to be executed before October 1st 2007.

Last month Evraz, which already has 54.1% of Highveld, offered to buy the shares it did not own in the company for ZAR 93 per share. Highveld’s board advised minority shareholders to accept the takeover offer.

After the purchase of the majority in Highveld Evraz became the world’s largest supplier of vanadium, which is used in the production of special and alloy steels.

ArcelorMittal to support EU action Chinese steel

It is reported that ArcelorMittal would support European Union action to curb the influx of cheap Chinese steel.

Mr Michel Wurth management board member of Arcelor Mittal during a conference call told reporters that "There is some indication that exports from China in Europe are not respecting all international trade laws. For that reason we feel there should be action before the year's end, and appreciate the position of the European Commission to plead in favor of fairer trade."

Mr Wurth said that ArcelorMittal appreciates that Mr Mandelson is considering action against China's trade practices."

European steel makers for several months have been threatening to demand that the EU launch an antidumping probe against Chinese steel imports. Mr Peter Mandelson trade commissioner of EU after a meeting with Mr Bo Xilai commerce minister of China in June told reporters "As a result of the huge investment and overcapacity of the Chinese steel industry we are looking at the threat of considerable price distortions, oversupply to the European market and destabilization of our market in Europe. EU would "consider what action we need to take."

However as per a commission official the European Confederation Of Iron and Steel Industries, which lobbies for the sector in the 27 nation bloc, would have to formally request EU action before Brussels could take any action and so far no such formal request from the confederation has been submitted.

CISA gearing up for 2008 iron ore talks

Mr Luo Bingsheng VC of China Iron & Steel Association said that they are doing preparatory work for the 2008 benchmark ore price talks at the moment and Baosteel would continue to act as the leading negotiator.

Both Chinese mills and global top three ore miners are mute in forecasting 2008 benchmark prices, although some investment banks have revised upward their predictions from time to time. However the big three still take the upper hand due to their monopoly power in the supply end.

Mr Chen Xianwen director of marketing union of Sinosteel cited by Shanghai Securities News as saying that CISA has stepped up efforts in enhancing regional cooperation in shipping in response to swelling freight cost of iron ore. Such cooperation would benefit all the mills involved.

According to a draft plan, five major steel mills are to organize the shipping in their areas. Shougang is planned to be responsible for Hebei province, Anben for northeast China, Jinan Iron & Steel for Shandong and Shanxi provinces, Baosteel for eastern China and Wuhan for central and southern China.

Besides, the leading steel mills have already been in discussion with major domestic shipping companies including COSCO and China Shipping. However, these shippers have less than 30 capesize vessels, representing below 2% of the global shipping capacity.

Mr Chen added that the shipping cost has soared over 10 times from a decade ago, luring a host of investors into speculating this greezy market. Therefore, capping freight cost should be placed on top of the agender for Chinese steelmakers.

(Sourced from MySteel.net)

Anben regrouping to make significant progress within 2007

Shanghai Securities News cited Mr Zhang Xiaogang chairman of China Iron & Steel Association & GM of Anshan Steel as saying that "Great progress will be made in the merger of Anshan Steel and Benxi Steel in the latter half of this year."

Mr Zhang said that the two steel makers would sign substantive agreement on capital combination in the second half of this year, pushing the merger forward. He confirmed that Anben Group would introduce share transfer mode, which was used in Tangshang Steel's merger with Xuanhua Steel and Chengde Steel. He said “The two parties will ink an agreement to form ligament relationship between property rights. Then they will deal with internal integration of the two groups, which will last for a long time.”

Mr Zhang further added that the merger would be boosted steadily with various interests protected. Besides, Anshan Steel has two listing arms in the mainland and Hong Kong respectively while Benxi Steel owns one in the mainland. The integration of the listed companies will be put in process after the merger of the two groups.

Anben Group, formed by the merger of Anshan Steel and Benxi Steel, was founded on August 16th 2005. A committee presided by Mr Liu Jie former general manager of Anshan Steel was also set up in an attempt to enhance the merger process of Anshan Steel and Benxi Steel. However, so far no substantial progress has been generated in the regrouping of either capital or assets.

(Sourced from Mysteel.net)

Cleveland Cliffs closes PinnOak Resources acquisition

Cleveland Cliffs Inc has announced that it has closed its previously announced acquisition of PinnOak Resources LLC, a premium quality metallurgical coal producer located in the United States.

As previously announced Cliffs agreed to pay USD 450 million in cash for PinnOak and assumed approximately USD 160 million in debt, which is being refinanced. Payment of approximately 25% of the cash portion is deferred until December 31st 2009. The agreement includes an earn out provision contingent on progressively improving performance.

Mr Joseph A Carrabba chairman, president & CEO of Cliffs’ said that “The acquisition of PinnOak is the latest in a series of transactions designed to further Cliffs’ position as an international mining entity. Approximately 80% of PinnOak’s sales in 2007 are expected to reach international customers. With its position in the expanding global market, PinnOak fits well with our strategy to capitalize on international demand for steelmaking raw materials.”

Mr Carrabba added that “PinnOak’s operations are running substantially below their rated capacity of more than 7 million tons per annum. Our goal is to forge sales agreements with new and existing customers for PinnOak’s premium product and to increase production accordingly.”

Cliffs indicated that it expects PinnOak production of approximately 2 million tons for the remainder of 2007 and approximately 5 million tons in 2008. As a result, PinnOak is projected to contribute approximately USD 130 million to Cliffs’ revenues in 2007. The acquisition is expected to produce approximately USD 30 million in EBITDA and have a minimal earnings impact due to acquisition and integration costs in the current year. In 2008, PinnOak is anticipated to contribute approximately USD 400 million to Cliffs’ revenue and USD 100 million in EBITDA.

Chinese iron ore import price rises by USD 13.23 per ton in H1

Xinhua reported that according to a release by China Iron & Steel Association, China's iron ore import added up to 187.9 million tonnes in first half of 2007 with price CIF averaging USD 74.64 per tonne up by USD 13.23 per tonne from that in first half of 2006 and that it has resulted in additional cost of CNY 18.894 billion for the steel industry.

Mr Luo Bingsheng deputy director of China Iron & Steel Association said that heavy cost pressure on Chinese steelmakers comes mainly from rising iron ore price.

Meanwhile, the large and medium scale steelmakers reported total buying of 37.427 million tonnes of domestic ore, average purchasing price posted at CNY 661.15 per tonne up by 15.04% YoY. In comparison, the deliver to mill price of imported ore reached CNY 648.82 per tonne up by 14.3% YoY.

(Sourced from MySteel.net)

MMX and Sojitz ink long term iron ore contract

Mineracao e Metalicos SA announced that Japanese Sojitz Corporation has formally confirmed by notice to MMX that it will purchase under long term supply contracts with MMX Minas Rio, 11 million tonnes of pellet feed per year produced at the MMX Minas Rio System.

Product purchased under the supply contracts will be delivered at the Port of Acu at benchmark prices. Sojitz will sell on the products purchased under the contract to certain Asian steel mills.

With the confirmation of this purchase by Sojitz, MMX Minas Rio has now reached a total contracted capacity of 20.3 million tonnes of pellet feed per year under long term contracts.

MMX Minas Rio's projected capacity for Phase I of the MMX Minas Rio System is 26.6 million tonnes of pellet feed.

USW urges US ITC to keep tariffs on HR

United Steel Workers said that tariffs on hot rolled steel should be kept to prevent foreign producers from unfairly dumping their products into the US market at subsidized prices as the US. International Trade Commission opened a public hearing on whether tariff orders on steel from 11 countries should continue for another five years.

Mr Leo W Gerard president of the United Steelworkers testified before the trade commission declaring that “The continuation of all of the anti dumping and countervailing duty orders on hot rolled steel is imperative to the livelihood of numerous domestic companies that employ the dedicated workers and to the retirees that are and have been the backbone of this nation’s steel industry.”

Mr Gerard said domestic producers sell more hot rolled steel than any other flat rolled product. “Hot rolled steel is without question one of the most vital steel products made in the US. Not only is hot rolled steel used in automotive and construction applications, among others, but it is processed internally to make corrosion resistant steel, cold rolled steel, tin mill, steel pipe and tube. Mr Gerard said that revoking the tariff order would pull the plug on one of the nation’s most important basic industries and erode an already diminishing manufacturing base.

Mr Gerard said “The USW and its members thank the commission for imposing the relief on hot-rolled steel in 2001. It gave the industry the opportunity to lift itself out of crisis, yet again. But countries in this review are even stronger today than in the late 1990s. They are more capable today of doing harm if the orders are revoked.” Mr Gerard told the commission, “The workers and retirees should not have to face their futures with the uncertainty unfairly traded imports creates and has repeatedly created in the past.”

Mr Tom Conway VP of USW also appeared before the ITC saying the threat to domestic steel producers is greater now than it was during 2000 the last full year before the orders at issue were imposed. He cited China's production was only 72% of US production, but this year, China's production will equal 374% of US production. China's record leaves absolutely no doubt that it will flood this market if it gets the chance.

In addition to China, the other countries covered by the current hot rolled steel tariff orders are, Argentina, India, Indonesia, Kazakhstan, Netherlands, Romania, South Africa, Taiwan, Thailand and Ukraine. The ITC calls the hearing on hot rolled steel a sunset review to determine whether revocation of the tariff orders would likely lead to continuation or recurrence of material injury within a reasonably foreseeable time. The commission vote on the review will be made in September or October.

CISA expects Chinese crude steel consumption to grow by 12% in 2007

Mr Luo Bingsheng secretary of China Iron & Steel Association while speaking at a recent association conference said that China's domestic crude steel consumption is to grow 12 % to 446 million tonnes in 2007.

Mr Luo said domestic steel mills to take precaution measures to curb crude steel output since increased supply would be attracted to domestic market in H2 by higher profits. Domestic supply of crude steel amounts to 206.93 million tonnes in January to June 2007 an increase of 18.13 million tonnes from previous year. Hectic export growth has resulted in slightly tight supply in domestic market in H1.

Mr Luo added that China's economy looks set to accelerate steadily in H2 of 2007 therefore, domestic steel demand would maintain robust growth.

Beijing has released restrictive export policies for steel products four times during April to July with the real impacts expected to be increasingly felt in the H2. Rebate cuts and export tax would add the exporting cost up to CNY 21.8 billion leading to lower profit than domestic sales.

China's steel products export is estimated to drop by 40% to 50% in the H2, thus, the full year steel products and semis shipment would reach 51.6 million tonnes and 6 million tonnes respectively.

(Sourced from MySteel.net)

Boulder Steel secures USD 91 million equity funding

Boulder Steel Limited announced that it has received commitments from companies owned by Mr Abdul Rahman Falaknaz and Mr Mohammad Yousuf Al Ali, Boulder Steel’s two major shareholders and a US based private equity company, to participate in a private placement of Boulder Steel shares that will raise USD 91 million.

Under the commitment letters and signed application forms received by Boulder Steel
1. Falak Investments AG, a Swiss company owned 100% by Mr Falaknaz, has agreed to subscribe for 30 million shares at USD 0.80 per share for a total value of USD 24 million.
2. Capital Trust Holding AG, a Swiss company owned 100% by Mr Al Ali, has agreed to subscribe for 40 million shares at USD 0.80 per share for a total value of USD 32 million.
3. American Overseas Investment Holding, a US based private equity company, has agreed to subscribe for 43.75 million shares at USD 0.80 per share for a total value of USD 35 million.

In recognition of their dedication and contributions during the early development stage of the seamless tube project, Boulder Steel has agreed to issue options to the owners of FIAG and CTH. This will allow them to maintain their equity share in the company when other option holders exercise their options. Under this agreement, FIAG will receive 30 million options, exercisable at AUD 0.20 per option over a 3 year period. CTH will receive 40 million options, exercisable at AUD 0.20 per option over a 3 year period.

The issue of the abovementioned shares and options is subject to the approval of both Boulder shareholders and the Foreign Investment Review Board, which the company will seek as soon as possible.

Dr Peter Wallner MD & CEO of Boulder Steel said “The firm commitments we received reflect the significant progress Boulder Steel has made in the development of our seamless tube project. Raising the equity funds through this placement represents a major milestone in the company’s progress toward completing the total financing package required to realize the seamless tube project.”

Boulder, through its 100% owned subsidiary Asia Pacific Seamless Tubes Limited, is developing a steel plant and production facility for seamless steel tubes. Production is expected to commence in early 2009, with 350,000 tons of steel to be produced annually after ramp-up. In addition, Boulder, in cooperation with local partners, plans to build a finishing plant for seamless tubes in the United Arab Emirates.

Algoma Steel announces BF shutdown extension

Algoma Steel Inc announced that it expects remediation work to its No 7 Blast Furnace to take longer than originally planned. Current projections indicate a mid August start up date. This represents an extension of approximately twelve days beyond original projections.

The shutdown and quenching of the furnace took longer than planned and upon inspection of the furnace interior, the scope of the repair work was expanded.

A member of the Essar Group, Algoma Steel Inc is based at Sault Ste Marie in Ontario state of Canada is a fully integrated steel producer. Algoma's revenues are derived primarily from the manufacture and sale of rolled steel products including hot and cold rolled sheet and plate.

Worthington to buy assets of Canadian Wolfedale

It is reported that Worthington Industries Inc will acquire some of the fuel cylinder business of a Canadian Wolfedale Engineering Limited in a deal expected to close this month.

Columbus based metal processor Worthington Industries said that it would purchase the cylinder production assets of Wolfedale Engineering Ltd, a maker of propane tanks for outdoor barbecue grills, campers and recreational vehicles.

Worthington Industries said that annual revenue related to the acquired assets total about CAD 12 million. The assets being purchased will be rolled into Worthington Industries' pressure cylinders business.

Wolfedale, based at Mississauga in Ontario is the largest maker of portable propane tanks and steel cylinders in Canada.

Industrea buys Boart mining equipment division

Mining Magazine reported that Australia’s mining services group Industrea Ltd has acquired Boart Longyear’s Australian mining capital equipment business for AUD 10.1 million.

The Boart Longyear MCE business is based at Cardiff in New South Wales and builds flameproof vehicles used in underground coalmines in Australia and China for carrying heavier loads such as longwall components.

The Boart Longyear MCE business will be coupled with Industrea’s existing PJ Berriman business to form an AUD 50 million mining capital division. The employees currently employed by MCE will also transfer with the business to Industrea Ltd. PJB builds lighter underground vehicles such as people carriers and service trucks.

Boart said that the sale of MCE is part of an ongoing program to divest non core businesses which do not fit within its strategy of building the world’s leading integrated drilling services and products manufacturing provider.

Fenosa to acquire 64% stake in a coal mine in South Africa

It is reported that Union Fenosa SA has finalized the acquisition of 64% of a South African coalmine from Kangra Group and the investor Shanduka for EUR 120 million.

Fenosa said that the mine is expected to produce around 2.7 million tonne of coal in 2007 and has a reserve of about 80 million tonnes of coal derivatives.

Fenosa said that “The acquisition completes the first phase of the group's Sustainable Coal program as part of its bigger 2007-2011 strategic plan.”

Union Fenosa is a Spanish gas and electricity company present in 12 countries. It provides services to almost 8.5 million customers throughout the world who consume 50,000 million kWh of electricity and more than 38,000 million kWh of gas. The Group’s total installed generation capacity to meet the needs of its customers is 9,952 MW. 27.4% of this total generating capacity is operated outside of Spain.

Queensland to revamp rail infrastructure

The Courier Mail reported that the Queensland coal industry is set for a major shake up after state cabinet endorsed the long awaited O'Donnell Report, which made three recommendations for immediate and short term gains for the coal supply chain in central Queensland.

The report's major recommendations are
1. A central co-ordination role, initially to be held by report author and former mining and railway executive Mr Stephen O'Donnell to oversee activity along the span of the supply chain.
2. It also ordered Queensland Rail to invest AUD 113 million into 510 new coal wagons to meet projected volumes.
3. A business improvement program along the supply chain for mines and ports should also begin, starting with rail operations at the current bottleneck.

Mr Peter Beattie premier of Queensland however denied that the coal industry was in crisis, despite the report finding trains and crews were unreliable, with target times being missed regularly. He said "This will be a significant shake up. Our international reputation is important to us. I do not accept there is a crisis but what I expect we do need is to perform better in a number of ways."

8 mining companies and 13 mines operate in the Goonyella Coal Chain, where industry estimates USD 1 billion worth of coal exports was lost last year because of delays. Global mining giant Rio Tinto last week warned the government that coal customers would look elsewhere if infrastructure across the state was not up to scratch.

Poltavsky ownership questioned by Ukrainian court

Kiev Post reported that according a Ukrainian investment banking and brokerage firm Sokrat Investment Group, the ownership structure of Ukrainian Poltavsky Iron Ore Mining and Enrichment Company has been questioned by a recent legal decision.

The report cited Sokrat Investment Group as saying that on July 31st 2007, the Highest Ukrainian Business Court upheld a decision, which effectively ruled that 40% of PGOK changed hands illegally in 2002.

In 2005, a group of companies comprising of Gilson Investments Limited, Emsworth Assets Limited, Calefort Developments Limited and Trimcr Freight Services Limited, which sold 40.19% of PGOK in 2002 appealed to the Donetsk Region Business Court to rule the sale illegal. On March 27th 2007, the court ruled the sale illegal. On April 25th 2007, the Donetsk Region Appellate Court upheld that decision. Now the illegality of the sale has been confirmed by one of the highest Ukrainian courts.

Since the 2002 sale, PGOK has conducted several follow on offerings and underwent other shareholder structure changes. Currently, 86% of PGOK is controlled by a Swiss company Ferrexpo AG. Ferrexpo intends to appeal to the Ukrainian Supreme Court.

Sokrat Investment Group said that "We view the news as negative for both Poltavsky GOK and Ferrexpo. Ferrexpo’s confidence and arguments for legality of its control of PGOK, which the LSE investors apparently trusted have not so far been popular with the Ukrainian courts system. Ultimately, the investors must also consider the opinions and possible biases of the courts, even if the investors themselves draw different conclusions from the facts."

CVRD eyes palletizing ventures overseas

YIEH cited an executive from Brazilan Cia Vale do Rio Doce as saying that CVRD will look for more opportunities to set up overseas new iron ore palletizing production capacity because of the soaring operating cost in Brazil.

The sources said that “The cost of capital and operation including energy costs were now very high in Brazil and they were substantially higher than in some other locations. Therefore CVRD is looking at other alternatives for palletizing such as new projects in China and Oman.”

The report added that Australia and New Zealand Banking Group Limited is reportedly arranging a project finance facility for an iron ore pellet project in China involving a joint venture of CVRD.

Freight rates push Capesize vessel orders book in H1

According to the world's largest ship broker Clarkson Research Services, 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.

As per report, ship owners have ordered 10.7 million DWT of new Capesize capacity in the January to June 2007 worth USD 75 billion, pushing deliveries well into 2012. Clarkson Research said that the booming shipyard order books are fueling demand for steel plate in Southeast Asia, where most of the world's commercial shipbuilding activity is centered. The order book for ships of all sizes is 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 the 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. They argue that the market is likely to comfortably absorb the increased fleet size in 2008 but may have more of an issue absorbing the increases from 2009 onwards.

A broker said that "It's 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.

According to brokers, around 45 new ships aggregating 8.6 million DWT are due to be delivered by the shipyards in 2008, while 2009 will see 65 ships worth 12.9 million DWT and the order book for 2010 onwards shows deliveries of around 125 ships worth 21.8 million DWT.

CSI reports Q2 results

California Steel Industries Inc announced its April to June 2007 quarter sales totaled USD 335.8 million resulting in net income of USD 8.2 million.

CSI said that it shipped about 443,332 net tons of steel products, a 16%YoY decrease compared to April to June 2006 quarter and a 2%QoQ increase over January to March 2007. Net sales are 4%YoY lower than April to June 2006 quarter, although about 7%QoQ higher than January to March 2007 quarter. Average sales prices in April to June 2007 quarter were 9%YoY higher than the same period in 2006 and about 3% QoQ higher than January to March 2007 quarter.

Net income of USD 8.2 million is lower than April to June 2006 quarter net income of USD 36.3 million and higher than first quarter 2007 net income of USD 1.3 million. EBITDA for the April to June 2007 quarter was USD 24.4 million, compared with April to June 2006 quarter results of USD 68.8 million. YTD, sales revenues totaled USD 650.5 million, compared with USD 667.1 million in 2006. Net income is USD 9.5 million versus USD 66.6 million in 2006.

Sales volumes are as follows

Mr Masakazu Kurushima president & CEO of California Steel "While we are pleased to report a profitable quarter for CSI, our market is faced with lower than usual demand, which is placing downward pressure on flat rolled sales prices. Conversely, worldwide demand for slab is driving those prices upward, placing pressure on our margins." He added that "sales of electric resistance welded pipe remain strong, both in tonnage and average prices."

California Steel Industries is the leading producer of flat rolled steel products in the western United States based on tonnage billed, with a broad range of products, including hot rolled, cold rolled and galvanized sheet and electric resistant welded pipe.

CAP and Gerdau to maintain their share in Chile market for longs

BNamericas cited Mr Mariano Nicolás Mayne ED of Chile's steel institute ICHA as saying that pricing is the main variable in the competition over sales of long steel in the Chilean market.

Mr Mayne said that “The groups do not compete directly in most of their respective business areas since Gerdau Aza does not produce flat steel or the various specialty products made by CAP subsidiary Cintac. However, both companies compete aggressively to provide long products such as structural beams for Chile's construction sector.”

According to Mr Mayne neither company's products present significant advantages over the other in technical aspects, leaving price as the main differentiating factor between the two. He said that it is difficult to speculate which of the two sells its long steel cheaper, since price varies from sale to sale. He added that “The distribution of the market between both groups is not likely to change dramatically in the foreseeable future as long as the construction sector continues to grow strongly enough to demand steel from both Gerdau and CAP as has occurred in recent years.”

CAP contends that its steel is superior for use in structural beams because it is made from iron ore from entirely owned mines, while Gerdau's contains impurities due to its origins in scrap. Gerdau on the other hand says its steel from scrap provides a special service in terms of recycling.

Integrated group CAP produces iron ore, long, flat and specialty steel at its Huachipato complex in region VIII. Gerdau Aza operates in the northern extreme of capital city Santiago and is the Chilean subsidiary of Brazilian controlled Gerdau. Chile's total steel production is split roughly 60:40 between local integrated group CAP and Brazilian owned Gerdau Aza that produces from scrap.

Philippine galvanizers opposing tariff increase

YIEH reported that Philippine government’s plans to increase the tariffs to protect Global Steel Philippines Inc are being opposed by Philippine galvanized steel producers.

Filipino Galvanizers Institute demands a public hearing before raising tariff recommended. It also believes that Global Steel Philippines Inc should not be protected in tariff and it will threaten and worsen the survival of many domestic producers and badly influence the living of thousands of workers.

It is claimed that the product quality of Global Steel Philippines Inc does not meet the standard and the price is very high.

Vietnam coal output in July 2007 up by 26.9% YoY

According to Vietnam General Statistics Office Vietnam's coal production increased by 26.9% YoY to 3.4 million tonnes in July 2007. The figure would represent a 10.4% MOM rise from the 3.08 million tonnes produced in June 2007.

Vietnam is estimated to have exported 2.8 million tonnes of coal valued at USD 90 million in July 2007 up by 46.4% in volume terms and 54.7% in value.

Between January and July 2007 Vietnam exported 19.1 million tonnes of coal valued at USD 598 million up by 23.6%YoY in terms of volume and 23.2% in terms of value.

Construction on Ermelo to Majuba rail line to start in 2008

It is reported that Construction on the 69 kilometer railway line between Ermelo on the Richards Bay coal line in Mpumalanga and the Majuba power station in KwaZulu Natal would start before next June 2008. Eskom said that it was expecting to complete the construction of the sliding in early 2011.

As per report, Eskom has invited civil engineering and rail construction companies to tender for the construction and commissioning of the 26 axle railway line between the power station and Spoornet’s coal line, west of Ermelo.

Construction of the dedicated railway comes as Eskom ramps up output at its Majuba power station to meet South Africa’s growing need for power. Due to excess capacity on the country’s electricity supply system and the fact that Majuba’s coal costs were relatively high, Eskom had not been operating the plant at full capacity up to 2002. But, with increased demand for power, Eskom increased production from the plant and, as a result, needed more coal, which were being transported by road.

All Eskom’s coal fired power stations were built close to the mines from where their coal was supplied, with the exception of Majuba. The coal fields that would have constituted Majuba’c colliery could not be mined economically and the mine had to be closed.

KKB and CMSB ink MoU for setting up steel facility

It is reported that Malaysian KKB Engineering Bhd is to expand its existing steel fabrication capabilities following the signing of a MoU recently with Cahya Mata Sarawak Bhd to jointly undertake steel fabrication activities in the oil and gas, shipping and marine sectors.

Under the MoU, CMSB and KKB will negotiate an agreement for KKB to buy 27.6 hectare leasehold land at Sejingkat here.

Cahya Mata Sarawak Bhd in a statement said that “This will enable KKB to expand its existing steel fabrication capabilities and use the land's water frontage to enable its steel fabrication business to diversify into the oil and gas as well as marine sectors.”

Cahya Mata Sarawak Bhd described the MoU as the platform for creating a win to win situation for both parties, whereby CMSB would realize its long term value on the land formerly used for its steel mill, while KKB would be able to expand and diversify its core steel fabrication business.

CMSB is the holding company for CMS group, Sarawak's largest player in infrastructure development with core business interests in construction, road maintenance, cement manufacturing, quarrying, construction materials and property development.

Russel Metal appoints Ms Laberge as director

Russel Metals Inc announced the appointment of Ms Alice D Laberge of Vancouver BC as the Company's Board of Directors effective immediately.

Ms Laberge is the former president & CEO of Fincentric Corporation a global provider of software solutions to financial institutions. She was previously CFO & senior VP of Finance for MacMillan Bloedel and is a director of the Royal Bank of Canada, Potash Corporation of Saskatchewan, the United Way of the Lower Mainland and St Paul's Hospital Foundation. Ms Laberge holds a Masters of Business Administration from the University of British Columbia and a Bachelor of Science from the University of Alberta.

Mr Anthony F Griffiths chairman of the Board of Russel Metals said that "Ms Laberge's financial expertise will complement our current board of directors. We are pleased that Ms Laberge has joined our Board."

Russel Metals is one of the largest metals distribution companies in North America. It carries on business in three distribution segments: metals service centers, energy tubular products and steel distributors.

Rosneft and Transnefteprodukt to build Achinsk pipe line

FIS reported that Rosneft and Transnefteprodukt confirmed their interest in the construction of a trunk oil product pipeline Kemerovo Achinsk.

As per report upon the startup of the Kemerovo Achinsk oil product pipeline the supplies may total about 1.5 million tones to 2 million tonnes per annum.

Steel Pipe and Tube Consultants changes corporate identity

Steel Pipe and Tube Consultants has changed its corporate identity to SPT Energy Group. This change is effective August 1st 2007. SPT Energy Group will continue to maintain its several subsidiary companies, including STARR Networks®, SCR Array and Material Traceability Services.

Mr Robert Aguilar executive managing partner of SPT Energy Group said “This progressive adjustment is a necessary action that has been brought about by changing market conditions, enhanced customer needs and planned future expansion of our group to accommodate these changes. Our core philosophy of providing the best possible value to our customers has not changed, but our ability to package our services and expand with additional services has become more streamlined. In particular, SPT Energy Group is committed to providing better people with better technology to supply better and more timely information."

SPT Energy Group has operated as Steel Pipe and Tube Consultants since 1986, primarily as a client representative and 3rd Party inspection company for offshore and land based pipelines.