India likely to touch 110 million mark in steel production by 2011-12

It is reported that Indian steel ministry has envisaged an investment of close to INR 280,000 crore in the Indian steel sector by the end of 2011-12 financial year. The estimates are based on expansion plans of various companies taken into consideration during a recent review meeting called by the government, which was attended by all steel majors. Apart from the companies that attended the meeting, the estimates also took into account the expansion plans being undertaken by public sector companies as well as what the secondary producers have undertaken.

Mr RS Pandey steel secretary said that “Based on the current expansion program, that the companies have presented, the ministry. It is estimated that the capacity of all the companies put together to touch close to 120 million tonnes. Even if they operate at 90% of the installed capacity, the production level will be at 110 million tonnes.” Mr Pandey added that "Most of the capacity expansions announced by steel firms are translating on the ground and they are pretty ambitious about it. We will be reviewing their progress periodically to ascertain ground realities.”

The Inter Ministerial Group on steel sector will shortly meet in a bid to remove the bottlenecks impeding various projects. Mr Pandey said "The IMG will be meeting shortly to help in translating the promised investments in the steel sector into ground realities.”

Indian industry currently produces close to 50 million tonnes per annum. The likely major additions, which are expected to be completed, some partially, by 2012, are as under
1. TATA Steel - 25 million tonnes
2. JSW - 15 million tonnes and
3. Essar Steel - 10 million tonnes
4. Steel Authority of India Ltd – 13 million tonnes
5. Rashtriya Ispat Nigam Ltd - 3 million tonnes
6. ArcelorMittal Steel - 6 million tonnes
7. POSCO - 4 million tonnes plant.

Steel ministry also expects the iron ore required to go up from the current 80 million tonnes per annum to around 175 million tonnes during the period.

Indian government in the national steel policy had envisaged a total production of 110 million tonnes by 2020. The ministry had originally billed steel production to 65 million tonnes by 2012, which had been revised to 80 million tonnes.

Indian port workers to launch strike from September 1st 2007

It is reported that the affiliated unions of the 5 recognized federations of port and dock workers have decided to launch nationwide strike at all major ports from September 1st 2007 or any day thereafter in support of their long pending demands. Mr SR Kulkarni president of All India Port & Dock Workers’ Federation had earlier said that notice of the indefinite strike would be given to the port managements on August 16th 2007.

As per report, labor unions have served notices at Kandla, Mangalore, Chennai, Vizag and Haldia. Further course of action shall be known on August 28th 2007.

All India Port & Dock Workers’ Federation has listed the following demands of the port and dockworkers
1. Restoration of retirement age to 60 years
2. Merger of 50% dearness allowance with pay with effect from April 1st 2005
3. Interim relief at INR 1,000 per month to the workers including pensioners with retrospective effect from January 1st 2007
4. Filling up of vacancies including promotional vacancies
5. Regular or perennial jobs should not be contracted out or outsourced
6. Major Ports should not be turned into corporates
7. Reject the retrograde recommendations of the respective consultants monitored by the port of Rotterdam experts

Mr Kulkarni pointed out that these issues had been pending with the union government for a long time and that there had been no response to the representations made by the senior leaders of the federations to the minister of shipping and labor minister to intervene in the matter. He alleged that union government is adopting a discriminatory policy towards port and dock workers by not raising their retirement age to 60 years at a time when it had authorized the retirement age of employees in public sector undertakings to be enhanced to 60 years and was also considering increasing the age of retirement of central government employees from 60 years to 62.

Mr Kulkarni highlighted that "All the major ports were making profits and did not depend upon any budgetary support from the government. Under these circumstances, the federations had been left with no option but to direct their affiliates to issue strike notices on August 16th 2007 and mobilize the workers to launch a nationwide strike with effect from September 1st 2007."

Indian industrial production in Q1 up by 11% YoY

According to quick estimates of the index of industrial production released by India’s Central Statistical Organization, India’s industrial production has grown up by 9.8% in June 2007 as against 9.7% during the June 2006. The index of industrial production has estimated a growth of 11% during April to June 2007-08 as against 10.5% in the April to June 2006-07.

The Index of 6 core infrastructure industries having a combined weight of 26.7% in the index of industrial production with base 1993-94 stood at 223.1 in June 2007 and registered a growth of 5.3% YoY as compared to a growth of 7.7% YoY in June 2006. During April to June 2007-08, 6 core infrastructure industries registered a growth of 6.9% YoY as against 7.4% YoY during the April to June 2006.

1. Crude Petroleum
Crude petroleum production has registered a negative growth of 1.8% YoY in June 2007 compared to a growth rate of 1.2% YoY in June 2006. It registered a fall of 0.7% during April to June 2007-08 as compared to 0.2% during the April to June 2006-07.

2. Petroleum Refinery Products
Petroleum refinery production has registered a growth of 9.8% YoY in June 2007 compared to growth of 10.5% YoY in June 2006. While it has registered a growth of 13.2% YoY during April to June 2007-08 compared to 11.9% YoY during the April to June of 2006-07.

3. Coal
Coal production has registered a growth of 1.3% YoY in June 2007 compared to a growth rate 11.8% YoY in June 2006 and grew up by 0.7% YoY during April to June 2007-08 as compared to an increase of 8.0% YoY during the April to June of 2006-07.

4. Electricity
Electricity generation has registered a growth of 6.8% YoY in June 2007 compared to a growth rate 4.9% YoY in June 2006 and grew up by 8.3% YoY during April to June 2007-08 as compared to 5.3% YoY during April to June of 2006-07.

5. Cement
Cement production has registered a growth of 5.6% YoY in June 2007 as compared to 11.7% YoY in June 2006 and grew up by 6.8% YoY during April to June 2007-08 as compared to an increase of 10.2% YoY during April to June of 2006-07.

6. Finished carbon steel
Finished carbon Steel production has registered a growth of 5.6% YoY in June 2007 as compared to 10.2% YoY in June 2006 and grew up by 7.7% YoY during April to June 2007-08 as compared to an increase of 10.3% YoY during April to June of 2006-07.

Sector wise growth rate in Production

Source: Concerned ministries

JSL orders for HSM for Kalinga Nagar SS project

It is reported that Siemens Group Industrial Solutions & Services’ unit Metals Technologies has received an order from Jindal Stainless Limited for a new hot strip mill. The order includes the plant layout, the mechanical equipment, the drives as well as the entire basic and process automation. Production start is scheduled for 2009.

For the first stage, the scope for Siemens comprises of a primary descaler, a reversing roughing stand with attached edger, a coil box, a crop shear and a secondary descaler, a 6 stand finishing mill, a laminar cooling section and one down coiler and a plate cutting and stacking facility. The mill will be equipped with latest technological equipment such as a fully hydraulic edger, long stroke HAGC in all mill stands, L block bending and shifting devices in conjunction with the SmartCrown system for superior profile and flatness control, laminar cooling edge masking units, Siemens’ new laminar cooling control model as well as a pinch roll polisher.

Non salient pole main motors will be manufactured by the Siemens Dynamowerk in Berlin and will be powered through latest multi level converter technology Sinamics SM150. Low voltage drives and a Motor Control Center will be supplied by Siemens Limited India. All of the components and systems to be used are part of the Siroll HM solution for hot rolling mills.

Siemens will also provide customer training as well as supervision of installation and commissioning including fine adjustment of the technological models and control systems.

Jindal Stainless decided to build a new 1.8mm wide hot strip mill to be located at Kalinganagar in Orissa. After the first project phase, the mill will be able to produce 1.6 million tonnes per year of austenitic and ferritic stainless steel strips including a minor quantity of plates. In a later project phase the plant can be upgraded to a production capacity of 3.2 million tonnes per year by installing a second reheating furnace, a seventh mill stand and a second down coiler.

Japanese Metal One seeks 5% stake in TATA Metallic JV

It is reported that Japanese trading giant Metal One Corporation has applied to the foreign investment promotion board for a 5% stake in a 3 party JV, the other 2 being TATA Metaliks and Japan’s Kubota. TATA Metaliks will hold 51% in the JV while 44% stake will be held by Kubota and Metal One plans to invest INR 3.75 crore in it for a 5% stake.

The venture will allow TATA Metaliks to foray into the ductile iron pipes business. The project is likely to involve an investment of INR 150 crore. This manufacturing unit located at Kharagpur in West Bengal will use liquid pig iron from TATA Metaliks and is likely to become operational by the end of 2009. It would produce 0.11 million tonnes per annum initially.

While TATA Metaliks will bring its expertise in the manufacture and sales of ductile iron pipes, fittings and accessories, Metal One will primarily be a provider of supply chain and distribution network. The JV will be largely led by TATA Metaliks with Kubota as the technology partner. Kubota is one of the world’s largest ductile iron pipe makers.

For Metal One, this would be its second minority equity partnership in the Asian region. It acquired a 5% stake in Thai Metal Trade early in August 2007. Thai Metal Trade is Thailand’s largest hot rolled product service centre, steel distributor and manufacturer.

Economic advisory council approves RIL gas price

It is reported that Prime Minister’s economic advisory council has approved Reliance Industries' USD 4.33 per million British thermal unit price of gas from KG D6 fields saying that it is in line with industry practices and priority allocation to fertilizer and power sectors will have to be at market prices.

Mr C Rangarajan chairman of economic advisory council, in his report dated August 8th 2007 said that the formula is broadly in line with industry practices that use a mix of a base price and pass through of traded prices of competing fuels. However, he asked for doing away with US dollar linkage so as to remove the anomalies arising out of linkage to the currency exchange rate.

Reliance Industries' delivered price of USD 5.5 per million British thermal unit to USD 6.2 per million British thermal unit translated into a power generation cost of INR 2.2 to INR 2.5 per unit. This is slightly higher than power generated through domestic coal of INR 2 to INR 2.34 per unit, but lower than power produced from imported coal of INR 2.75 to INR 2.9 per unit. The price would also result in substantial savings in subsidy when fertilizer plants using more expensive naphtha, fuel oil and LNG switch over to Reliance Industries fuel.

MECON order book crosses INR 400 crore marks

Steel industry consultancy firm MECON Limited announced that its order book for 2007-08 has reached INR 400 crore mark and that the total value of turnkey contracts executed by MECON had touched INR 3,000 crore till date.

Mr D Rath CMD of MECON while speaking on the sidelines of annual general meeting of Indian Refractory Makers Association said that it had been awarded contract for expansion of all SAIL plants. MECON is also eyeing to bag contracts for steel plants being put up by private players like Jindal and ArcelorMittal.

He added that on overseas projects, MECON is looking at markets in Nigeria, Jordan, South Africa and the Middle East.

Gujarat to begin shipbuilding projects in JV with private players

Exim News Service quoted Mr Narendra Modi chief minister of Gujarat as saying that it would soon begin shipbuilding projects in JV with the private sector since public private partnership model can now be effectively used to create new opportunities.

Mr Modi, while inaugurating the first privately operated airport in Ahmedabad Aviation and Aeronautics Limited said that "Gujarat is the fist state where rail track was laid through private partnership. Today, we have entered the arena of civil aviation and air flight training in JV with the private sector and are in the process of doing the same in the field of ship making and its maintenance."

Sikkim reaffirms stand on hydro power projects despite opposition

BL reported that Sikkim government would continue with its program on hydropower generation in the state. Mr Pawan Chamling chief minister of Sikkim said that “State government will continue to stand by its commitment and will not compromise on the ongoing power projects which are in the overall interest of the state and its people.”

Mr Chamling said that “Sikkim is endowed with abundance hydro power potential, which is estimated to be around 8,000MW. In order to tap this potential, a number of hydroelectric power projects have been planned by my government for sustainable economic development of the State. We will go ahead with the projects as envisioned. We have taken cautious steps with regards to environment and ecological balance by choosing to implement run of the river type projects.”

Sikkim government’s reaffirmation of its stand on hydropower projects has come at a time when the indefinite hunger strike and Satyagraha, spearheaded by the Affected Citizens of Teesta against a slew of such projects planned for Dzongu in North Sikkim, has entered its 57th day. The Opposition parties in the Sikkim have also taken up the issue in support of ACT and have launched a campaign against the state government, criticizing it for ignoring the plea of the affected people.

TATA Sponge announces new board and MD

TATA Sponge Iron Ltd has informed BSE that the members at the 24th Annual General Meeting of the Company held on June 25th 2007 have accorded to the following approvals

1. Re appointment of Mr NP Sinha, Mr PK Lahiri and Mr AD Baijal as Directors of the Company.

2. Appointment of Mr PC Parekh, Mr Suresh Thawani and Mr Sudhir Deoras as Director of the Company.

3. Approval of the appointment and terms of remuneration of Mr Suresh Thawani, MD of the Company for the period from March 10th 2007 to March 9th 2010 or attaining the age of 60 years, whichever is earlier

4. Approval of the revision in the terms and conditions of appointment and remuneration of Mr Sudhir Deoras Joint MD with effect from July 11th 2006 to March 3rd 2007.

HZL achieves LME registration for lead ingots

PTI reported that Hindustan Zinc Limited a subsidiary of Sterlite Industries India Limited has achieved the London Metal Exchange registration for lead ingots produced at its Chanderiya lead smelter.

With the registration, lead ingots produced by the company can be acceptably delivered at the LME warehouse.

HZL said the LME registration, recognized worldwide as one of the most demanding standards, signifies highest product quality and uniform physical characteristics of lead ingots.

The product registration, branded Vedanta 99.99, denotes a 99.99% purity of lead produced and signifies that these lead ingots are acceptable for delivery at the LME warehouse.

China's coke exports in H1 surge by 22.4% YoY despite curbs

In order to limit exports of high energy consumption resource oriented products, Chinese government decided to lift up the export tariff from 5% to 15%. However, coke exports continued to rise with quick pace during the first half owing to the widened price gap between domestic and international market caused by strong demand in international market.

In June 2007, China exported 1.303 million tonnes of coke up by 3.34% YoY and down by 19.27% MoM. During the first half of 2007, China 's coke exports amounted to 8.046 million tonnes up by 22.4% YoY. In June 2007, China 's coke export prices averaged some USD 185.75 per tonne up by 31.52% YoY and 7.14% MoM.

Export volumes to major destinations

Volume in 10,000 tonnes
Price in USD

Region wise exports a

Volume in 10,000 tonnes
In June 2007, Shanghai and Xinjiang Province also exported 154100 tonnes and 73900 tonnes of coke respectively.

In June 2007, about 1.031 million tonnes of coke was exported via Tianjin Port accounting for 79.15% of China’s export in June 2007. From January to June 2007, about 6.497 million tonnes of coke is exported via Tianjin Port accounting for 80.74% of China’s total coke export volume during January to June 2007. About 1.191 million tonnes of coke was exported via Nanjing Port during January to June 2007 accounting for 14.8% share.

During the first six months, China produced 155.729 million tonnes of coke out of which 8.046 million tonnes of coke was exported accounting for 5.1% of total coke production

Meanwhile, the import tariff for coke was cancelled to encourage imports of resource oriented products, however, China only imported 200 tons of coke during January to June 2007.

It is expected that the future market will remain steady with possibility of slight upswings caused by tight supply of coal. As ratio of coke exports against fresh coke only stands some 5%, falling coke export will not cast too much negative influence on domestic market.

(Sourced from MySteel.net)

ConsMin confirms third potential suitor approach

It is reported that Australian minor Consolidated Minerals confirmed that it has received an indicative, non binding approach from a third potential suitor. In its statement today, Consolidated Minerals said that “It noted media speculation concerning the possibility of another party having expressed an interest in proceeding with an off-market takeover offer for the Company. Consolidated Minerals confirms that it has received a confidential, non binding, indicative and incomplete approach from a third party.”

Consolidated Minerals said that it is granting due diligence access to the unidentified third party to allow it to determine whether to make a formal offer for the company. It said "That party is being granted due diligence access to allow it to determine whether to formally proceed with such an offer.

The release added that "The Board of Consolidated Minerals will apprise the market of any further developments.”

Consolidated Minerals' announcement is another step in a long running saga, in which both Pallinghurst Resources and Territory Mining have been vying for the company.

In addition, Ukrainian conglomerate Privat Group had taken a 13.5% stake in ConsMin, effectively blocking a compulsory acquisition of ConsMin.

POSCO to start construction of Mexican steel plant in September

BNamericas reported that the Mexican unit of South Korean steelmaker POSCO would start construction of a USD 250 million steel plate plant at the Altamira industrial park in Tamaulipas state on September 5th 2007.

POSCO official said Construction of the 400,000 tonnes per year plant is scheduled to be completed in June 2009.

Mr Min Dong Kim president of POSCO México said "We will be producing high quality steel for the automobile industry. Our final destination will be automobile companies in Mexico and the US. He said 60% of production will stay in Mexico and the rest will be exported to the US.”

The plant is POSCO first investment in Latin America although it has a joint venture in the US, USS POSCO with Pittsburgh based US Steel.

BlueScope net profit in FY 2007 up by 102.9% YoY

Australian steel major BlueScope Steel Limited has doubled its annual net profit. Its net profit during July 2006 to June 2007 period rose to AUD 686 million up by 102.9% YoY as compared to AUD 338 million in pervious year. It revenue also increased to AUD 8.913 billion up by 10.9% YoY as compared to AUD 8.031 million in the previous year. Its EBITDA also rose to AUD 1.423 billion up from AUD 850 million.

Mr Kirby Adams MD & CEO of Bluescope said that "We mark FY 2007 as another great year for BlueScope Steel shareholders and our second best year ever. New records were achieved in safety and environmental performance, full year revenue of nearly $9 billion and net cash flow of over $1 billion before M&A activity. Relative to FY 2006, NPAT and EPS doubled and our balance sheet gearing dropped from 38% to 28%, providing BlueScope Steel with a very strong financial platform for its continuing growth. This is a great financial result delivered by a strong management team and all the employees at BlueScope Steel, and very pleasing personally, as I near the end of my seven and one half years' tenure as CEO of BlueScope Steel.”

Mr Adams said "Highlights from the year included stronger pricing, particularly in export markets, improved domestic versus export mix, and more dispatches of HRC as we enjoyed the full year benefit of the Hot Strip Mill expansion as well as record steel production at Port Kembla Steelworks. Raw materials cost inflation was, again, a huge impost on the Company, adding AUD 365 million to our costs of production and was primarily in the form of higher costs for iron ore, scrap, zinc, aluminum and freight.”

Mr Adams added that "As part of our ongoing processes, we actively and regularly review our business portfolio. During FY 2007, we ceased our loss-making tinplate production, sold the Vistawall business and closed our Taiwan operations. In April, the tin mill operation ceased; customers were transitioned to alternate suppliers, and closure costs were lower than expected. At June end, we realized the value of the Vistawall business, which we acquired through our purchase of Butler Manufacturing in 2004, through its sale to Oldcastle Glass for USD 190 million. The sale represents a strong financial return for shareholders and the excellent improvement reflects work by BlueScope Steel and Vistawall’s management and employees. We continued the withdrawal from our Lysaght Taiwan business but regrettably, costs were higher than expected.”

Mr Aadms also said that "FY 2007 stands as the safest year ever for people at BlueScope Steel sites. Records were achieved at most of our 91 operating sites. Our LTIFR for the year is a world best standard at 0.4 compared to the International Iron and Steel Institute industry average of around 4.0. This is an outstanding achievement and I congratulate the work by every one of our employees and contractors, for their dedication to the principle of Zero Harm.”

South African NUM to decide on coal wage offer today

It is reported that South Africa’s biggest workers union, the National Union of Mineworkers expects to have a decision on whether it accepted the wage increase offer from coal producers Exxaro, Xstrata, BHP Billiton and AngloCoal on August 20th 2007.

Mr Lesiba Seshoka a spokesman of NUM said that the union would be holding a caucus meeting after which it should have reached a decision. He said that “It would be fair to say that we will have a decision on August 20th 2007.”

The coal employers, represented by the Chamber of Mines are offering increases of between 10% for lower paid workers and 7.5% for higher paid employees. Meanwhile NUM is demanding a 15% pay hike for its members.

Smaller union solidarity had agreed to the employers’ offer after a three day strike.

US SSINA releases 5 month market data

The Specialty Steel Industry of North America has released the latest available statistical data on imports, US consumption and import penetration for January to May 2007 as compared to January to May 2006.

Imports of total specialty steel comprising stainless steel, alloy tool steel and electrical steel in YTD May 2007 were 424,507 tons, a 13% increase compared to YTD May 2006; US consumption was 1,217,026 tons, a 2% decrease; five month import penetration was 35%, a five percentage point increase.

Alloy tool steel
Imports in YTD May 2007 were 45,128 increased by 6% YoY as compared to YTD May 2006 while US consumption and import penetration were not calculable.

Electrical steel
Imports in YTD May 2007 were 47,353 tons, a 98% increase compared to YTD May 2006; US consumption was 147,138 tons, an 11% increase; Five-month import penetration was 26%, a twelve percentage point increase.

Stainless Steel
Imports of total stainless steel in YTD May 2007 were 332,026 tons, a 7% increase compared to YTD May 2006; US consumption was 994,829 tons, a 5% decrease; five-month import penetration was 33%, a three percentage point increase.

In tons
Source SSINA

SSINA is a Washington DC based trade association representing virtually all continental specialty metals producers. Its member companies are AK Steel Corporation, ATI Allegheny Ludlum Corporation and ATI Allvac, Carpenter Technology Corporation, Crucible Specialty Metals, Electralloy, Haynes International Inc, ThyssenKrupp Mexinox SA de CV, North American Stainless, Outokumpu Stainless Inc, Precision Rolled Products Inc, Latrobe Specialty Steel Company, Universal Stainless and Alloy Products and Valbruna Slater Stainless Inc.

Thermal coal demand to outpace supply pushing prices up

Reuters recently reported that Asia's thermal coal supply squeeze, which has driven spot prices to record highs of over USD 70 per tonne, is set to worsen next year as Indonesia and Australia struggle to meet feverish demand growth in China and India. As per report, tight supply could push spot prices to average about USD 75 a tonne in the first quarter of 2008 and long term contract prices between Australian producers and Japanese utilities by as much as 10%.

Mr Peter Ball VP marketing at Indonesia's largest coal producer PT Bumi Resources told Reuters "The market is going to be very, very tight next year. It will be worse than this year. Apart from China and India, demand will also rise when Mexicans start to come to the market. When they finally do, we do not know where the coal is going to come from."

The impact of China's surging appetite for coal in recent years has largely been cushioned by a corresponding swell in Indonesian coal output, which has surged by 20% to 25% each year. But after years of solid production, Indonesia's output growth is set to halve largely on a dearth of investments in the last decade. Indonesia's government has forecast coal output to rise just 10% to about 196 million tonnes in 2007. Top five Indonesian producers Bumi, Banpu , PT Adaro, PT Kideco and PT Berau, which account for nearly 75% of Indonesia's total coal output, have forecast total production to rise just 7.5 million tonnes to 155 million tonnes in 2008.

As per earlier forecasts, Australia, the world's largest thermal coal exporter, is forecast to ship 121.1 million tonnes of coal in 2007-08, compared with 114.7 million tonnes last year. But some remain sceptical given the failure to reach past forecasts and the delays dogging various port expansion plans.

The Asian markets of Japan, Taiwan, South Korea, Philippines, India and Pakistan account for more than half of global coal demand. Some coal producers said the Asian market faces a deficit of 15 million tonnes this year and that this deficit could rise to 25 million tonnes next year.

Some producers estimated that China's large scale withdrawal from coal exports would result in a net loss of 30 million tonnes to 34 million tonnes of coal in the Pacific market this year and more than 45 million tonnes in 2008.

The scramble for alternative suppliers would mean demand for South African, Russian and even Canadian coal shipments, which have trickled into Asia since June, is set to rise.

China expresses regret over Canadian investigations into casings

Xinhua reported that Chinese ministry of commerce last week voiced regret over Canada's initiation of investigations into the alleged injurious dumping and subsidizing of seamless carbon or alloy steel oil and gas well casings imported from China.

The report cited Mr Wang Xinpei a spokesman of China's ministry of commerce as saying that Chinese government regretted that the Canadian authorities treated China's iron and steel industry as a non market oriented industry and started investigations without adequate legal and factual support. He said that the investigations failed to comply with World Trade Organization regulations and to measure up to the Canadian criteria for investigation.

Mr Wang said that by investigating so frequently, the Canadian authorities had been sending the wrong signal to other WTO members and it would hurt the sustainable and steady development of bilateral trade. He hoped that the Canadian authorities would carry out the investigations in strict accordance with WTO regulations and Canadian law and in an impartial and transparent way. He added that China would retain the right of appeal to the WTO Dispute Settlement Mechanism.

The Canada Border Services Agency announced the initiation of its investigations on August 13th 2007 following a complaint filed by Tenaris Algoma Tubes Inc of Calgary in Alberta. According to a CBSA statement the Canadian International Trade tribunal has begun a preliminary inquiry to determine whether the imports are harming Canadian producers and will issue a decision by October 12th 2007. It is investigating whether the imports are being dumped or subsidized and will make a decision by November 9th 2007. If it determined a large increase in harmful imports and the tribunal decided that retroactive anti dumping or countervailing duties were justified, duty could be levied on the goods brought into Canada from August 13th.

Canada is the first country to initiate anti subsidizing investigations into Chinese products and had so far carried out five anti dumping and anti subsidizing investigations and four re investigations into Chinese exports.

Russia to auction Yakutia coal deposits in October

The Russia State Property Fund last week announced that Russia will sell majority stakes in two firms with licenses for large coal deposits in Yakutia as a single lot and has set a starting price of USD 1.85 billion for the October 5th 2007 auction. It said it will sell 75% minus one share in Yakutugol and 68.86% of Elgaugol plus associated infrastructure.

Mr Kirill Chuiko metals and mining analyst at UralSib Bank said that "It would have been possible to raise more money by holding two separate auctions. This form of auction can be explained by the desire to sell Elgaugol. He added that Elgaugol is a complicated project. It wouldn’t be easy to find someone prepared to invest several hundred million dollars then to wait eight to 10 years for a return."

Elgaugol has a license for the Elginskoye coal deposit and is owned by Russian State Railways and the local government of Yakutia an area in northeast Russia the size of Western Europe and home to the world’s coldest place.

The winner of the auction must commit to opening the Ulak-Elga railroad for permanent use by September 30th 2010.

OneSteel and Smorgon complete their merger

Australian Onesteel announced that it has completed its merger with Smorgon Steel Group. The merger values Smorgon's assets at around AUD 1.1 billion, minus the distribution operation acquired by BlueScope Steel for around AUD 700 million.

The new OneSteel shares associated with the Smorgon merger will start trading on a normal settlement basis on the Australian share market on August 21st 2007.

Mr Graham Smorgon and Mr Laurence Cox have now been invited to join the OneSteel board from its September meeting.

Mr Geoff Plummer CEO of Onesteel said "Today effectively marks the completion of the OneSteel and Smorgon Steel merger process and management can now focus on pursuing the opportunities that the combined businesses present.”

Mr Plummer added that "I look forward to working with my management team on an effective integration that delivers the $70 million in net synergy benefits the merger provides and positions the company to optimize the growth opportunities that we are now prioritizing."

Taigang removes six 20 tonnes EAF

It is reported that Taigang has removed six 20 tonnes electric furnaces at the third smelting plant. In the meanwhile it's planning to build a 90 tonnes electric furnaces with super high power.

The dismantled six furnaces had produced a total of 9.08 million tonnes steel and 3.88 stainless steel but they are reportedly backward, consuming lot of energy and heavily polluting.

This clearance reform will reduce standard coal consumption and dust emission for per ton steel produced by 29.3 kilogram and 0.15 kilogram at the third smelting plant.

(Sourced from MySteel.net)

Mittal Steel Weirton 2008 business plan indicate HSM closure

WTOV9 reported that Mittal Steel USA’s Weirton plant’s business plan for 2008 does not include the services of its hot strip mill. As per reports, Mittal Steel confirmed on Friday that it has no plans to operate its Weirton hot mill in 2008. 7News has confirmed that Mittal Steel officials from Chicago toured the mill on Thursday.

The report cited Mr Mark Glyptis president of the US Steelworkers Union Local 29 11 said that “Even though Mittal does not have plans for the hot mill, we will push for the business plan to include the hot mill. We have a great deal of work to do. We are working very hard. Much of the strategy has not been fully developed. It is very premature to be talking about it at this point. I expect a favorable result and Weirton to be here for many, many years to come."

Mr Glyptis said that the union is going to try and negotiate with Mittal Steel and there's a possibility the business plan for 2008 could change multiple times.

He added that if the hot strip mill cut goes through it could affect about 80 employes at the hot strip mill from operations to maintenance.

After years of deep financial losses, Weirton Steel filed for Chapter 11 bankruptcy in May 2003 and was sold twice in 18 months, first to International Steel Group, then to Mittal Steel. No raw steel has been made since 2005, and the mills that once employed 13,000 people now employ just 1,250.

SCHMOLZ+BICKENBACH acquires Boxholm Stal in Sweden

SCHMOLZ+BICKENBACH AG has signed a contract with the former owners of Boxholm Stal AB located at Boxholm in Sweden to acquire the company. Subject to the approval of the cartel authorities, the contract applies retrospectively as from January 1st 2007. By mutual agreement, the purchase price is not being disclosed.

Boxholm Stal AB is one of the Scandinavian market leader for bright bars. With 80 employees the company produces approximately 40,000 tonnes of bright steel per year.

A company release said that “Boxholm Stal AB fits extremely well into the strategic focus of SCHMOLZ+BICKENBACH AG which is based on a combination of production, processing and distribution in the whole value chain. The acquisition brings additional business opportunities in Scandinavia and the Baltic states.”

SCHMOLZ+BICKENBACH is now present with customized processing in Denmark and Sweden as well as distribution companies in Finland, Estonia, Lithuania and Poland.

Chinese firms to fund Yilgran infrastructure development

Xinhua reported that 5 Chinese state owned enterprises, China Railway Materials Commercial Corp, Sinosteel, China Railway Engineering Corp, China Communications Construction Co and Angang Steel have signed an agreement with Australian Yilgarn Infrastructure Ltd to jointly compete for a railway and port project in Australia.

As per report the 5 Chinese enterprises aim to acquire a 50% stake of Yilgarn with the goal of providing railway and port services to mining companies.

Total investment of the project is estimated to reach AUD 2.5 to AUD 3 billion and the project will begin in 2008 and be completed in 2011.

The Yilgarn region in Western Australia boasts proved reserves of iron ore totalling 8.6 billion tonnes but poor transportation infrastructure has limited development of mineral resources.

Chinese carbon billet export in H1 cross 2 million tonne mark

As per the data from Chinese customs, China exported 2.030, million tonnes of carbon billets during January to June 2007 period.

The export of billets during this period took place to 18 countries, but the top 10 countries accounted for more than 90% of the export volumes. Vietnam was the top destination with about 30% share of export volumes

In tonnes

(Sourced from MySteel.net)

Global construction boom to drive Malaysian steel sector

It is reported that Malaysian steel sector has good prospects due to rising demand from infrastructure and construction projects both in Malaysia and in developing and oil rich countries.

Under the Ninth Malaysia Plan about MYR 47 billion has been allocated for infrastructure development. Construction and infrastructure activities are expected to pick up and with them, demand for steel too, as steel consumption has traditionally tracked the growth of the construction sector.

There is still ample room for growth for the steel sector as Malaysia’s apparent steel consumption per capita is still well below that of developed nations. As Malaysia progresses towards becoming a fully developed nation like Japan and South Korea, the apparent steel consumption per capita is likely to rise further.

China and India are expected to buoy demand for steel with their strong economic growth and rapid developments. Independent research house the Freedonia Group expects construction expenditure in China to expand 11.6% annually through 2010 on an expanding domestic economy, ongoing infrastructure upgrades, sustained strength in foreign direct investment and further population and household growth. According to The Freedonia Group non building construction, which uses relatively more steel as raw materials will be the fastest growing sector with expenditures climbing 10.5% annually till 2010. Growth in this segment will mainly be driven by government funding for large scale infrastructure construction such as that of the Beijing Shanghai High Speed Railway, India, on the other hand intends to develop world class infrastructure to attract foreign investments and fulfill its 10th five year plan. It said the Middle Eastern region is also going through a construction boom amid robust crude oil prices.

Cleveland Cliffs enters new USD 800 million credit agreement

Cleveland Cliffs Inc announced that it has entered into a new unsecured, USD 800 million credit agreement. The agreement includes a USD 200 million term loan and a USD 600 million revolving with a USD 200 million accordion feature that can be used to expand the size of the facility.

Cleveland Cliffs added that the 5 year agreement replaces its previous USD 500 million revolving credit facilities scheduled to expire in 2011 and a USD 150 million credit agreement facility scheduled to expire in 2008.

The new agreement, which was arranged by Bank of America and JP Morgan Securities Inc provides more flexible terms and conditions, along with improved pricing compared with the previous facility. It also includes less restrictive financial covenants to accommodate the execution of Cliffs investment strategy.

Ms Laurie Brlas senior VP, CFO & treasurer of Cliff said that "Cliffs has entered a new era of growth as an international mining entity and it is important we maintain the liquidity necessary to seize opportunities when they present themselves. The new arrangement reflects our intention to optimize Cliffs capital structure, lower our cost of capital and generate more value for shareholders. We appreciate the support and confidence of our bank syndicate."

Bank of America serves as Administrative Agent and JPMorgan Chase Bank serves as Syndication Agent. In addition, 11 other banks are participating in the syndicate.

China closes 6.9 million KW small thermal power plants in H1

Xinhua reported that China has shut down small thermal power plants with an installed capacity totaling 6.95 million kilowatts in the H1 of 2007 completing about 70% of the pre set goal for 2007. This was learned from an ongoing national meeting of the National Development and Reform Commission on construction of big capacity power plants and closure of smaller ones in south China.

China has seen a rapid growth of power industry in the recent years, and by 2006 the China's totaled installed capacity rose to 622 million kW of which 75% were from coal fired thermal power plants which have turned out to be energy consuming and heavy polluting as well, said sources from the meeting.

According to comparable figures of 2005, China has set out goals of reducing per unit gross domestic product energy consumption and discharge of main pollutants by 20% and 10% respectively by the year of 2010. To this end, China decided to close small coal fired generating units totaling 50 million KW and fuel fired power plants with capacities totaling between 7 million to 10 million kW during the 2006-2010 period.

Small thermal power plants with an installed capacity below 100,000 KW each totaled 115 million kilowatts, accounting for about 30% of installed thermal power capacity. They contributed nearly 40% of the 14 million tonnes of sulfur dioxide discharged into the air by the country's power industry last year. If the generating units with small capacities are replaced by big ones, the country could be spared from discharge of 2.2 million tonnes of sulfur dioxide each year.

Australian steel workers union concerned over job cuts in OneSteel

It is reported that the worker union in Australia is concerned over an announcement by OneSteel that could involve massive job losses at the company's pipe and tube division in Newcastle in the New South Wales Hunter region.

It is believed up to 200 jobs could go as part of a restructure at the plant's four mills in the wake of the merger between OneSteel and Smorgon.

Mr Steve Murphy from the Australian Manufacturing Workers Union says while he is uncertain about what the company will announce today his members are well aware that job cuts are on the horizon.

He added that "We've been told that there is well in excess of 50 different projects being looked at by OneSteel and Smorgon's team and what they're calling creating synergies across the business that are going to gain them around AUD 70 million and our concern from that is job security is going to be significantly threatened."

AK Steel optimistic about future prospects

It is reported that after years of slashing costs shedding jobs and restructuring operations AK Steel Corp are looking ahead with optimism although it's an optimism tempered by concerns over the effects of rising costs and foreign imports.

Mr James Wainscott president & CEO of AK Steel during a conference call with analysts said that “In July 2007 AK Steel Corp reported record second quarter profits and shipments results marked an important moment for the company. I believe AK Steel's best days are still ahead, but we have reason to celebrate our progress this quarter."

Howevre, Mr Alan McCoy VP of Public Affairs said that the growth of China's steel industry affects AK Steel, not only by driving down domestic steel prices with imports, but also by driving up the cost of alloys and other materials used to make the steel. He added that like its industry counterparts rising energy prices as well as the cost of iron ore, coke, coal and other raw materials worry AK Steel executives.

According to the Ohio Steel Industry Advisory Council statewide Ohio's steel production climbed about 1% to 14.7 million tons in 2006 as compared with 14.5 million tons in 2005 and shipments grew about 1% in 2006 to 15.6 million tons from 15.4 million tons in 2005. According to council research during first quarter 2007, though, steel industry production in Ohio slipped nearly by 11% YoY to 3.4 million tons as compared to 3.8 million tons during 2006 period.

Ukraine seeking investors for Krasnolimanska Hlyboka coalmine

Ukrainian Journal last week reported that Ukraine coal ministry plans to attract investors to complete the building of the Krasnolimanska Hlyboka mine in Donetsk region. The mine will be built in four years and the launch of the first face is scheduled for 2008-2009.

According to an investment project posted on the official Web site of the ministry, the investment sum needed to launch the mine is UAH 1.61 billion. So far Ukraine has already invested UAH 200 million in building the mine.

Chinese urban investment in January to July up by 26.6% YoY

According to China’s National Bureau of Statistics, China's fixed assets investment in urban regions totaled CNY 5.67 trillion (USD 747 billion) in January to July 2007 up by 26.6%YoY. The growth figure is 3.9% points lower than for the January to July period of 2006.

The bureau said that investment in real estate sector reached CNY 1.21 trillion up by 28.9% while the investment by State owned enterprises came to CNY 2,431.7 billion up by 16.5%. Among the industries, investment in the primary industry enjoyed a 46.2% growth to CNY 66.5 billion and that of the secondary industry rose by 28.9% to CNY 2.55 trillion. The tertiary industry witnessed an increase of 24.5% to CNY 3.05 trillion.

The bureau further added that the non metallic minerals sector saw an increase of 48.8% YoY, investment in coal mining grew by 17.2% and energy was up by 12.6%. Chinese retail sales in July 2007 rose by 16.4% YoY to reach CNY 699.8 billion.

Mr Wizel appointed as independent director of Puda Coal

China based Puda Coal Inc announced the appointment of Mr Lawrence S Wizel as an independent member of its board of directors effective August 3rd 2007.

Mr Wizel joins Puda Coal from Deloitte, where he began his career in 1965 and was a partner in the firm from 1980 until May 2006 when he retired after a long and distinguished career. During the last four years, Mr Wizel served as a deputy professional practice director in the Deloitte New York office. Additionally, Mr Wizel has extensive experience regarding multinational and multi location companies, specifically in regards to China.

Mr Zhao Ming chairman & CEO of Puda Coal said that "We are pleased to have Mr Wizel officially join our board. We look forward to working with him and believe his depth of knowledge in the capital markets and corporate oversight will be a major asset to Puda Coal. We plan to further enhance our corporate governance and oversight by pursuing other qualified directors and establishing an audit committee."

Puda Coal, through its affiliates and controlled entities, supplies premium grade coking coal to the steel making industry for use in making coke. The Company currently possesses 3.5 million tonnes of annual coking coal cleaning capacity.