Indian iron ore gets freight edge

Reuters quoted Sanjiv Batra CMD of MMTC as saying that India's iron ore exports to China have recovered as a shortage of ships has pushed up freight rates, handing India a temporary advantage over Brazil. The report sited Mr Batra as saying that Chinese buyers are now snapping up Indian ore, which has gained a distinct price edge. Mr Batra said "That advantage has come to us. And buyers would like to buy from India."

Mr Rahul Baldota president of the Federation of Indian Mineral Industries said that freight rates from India to China had risen to USD 30 to USD 35 per tonne from USD 20 in the last 2 months, but Brazilian exporters were facing about USD 65 per tonne. Mr Baldota said that "This advantage has come to us in the last 2 weeks. But this is a temporary phenomenon. I see the price levels sustaining for another 1 or 2 weeks. India's total iron ore exports should be 10% to 15% lower than last year.”

As per report, India's ore exports between April and June 2007 have fallen by about 9% YoY to 22.03 million tonnes as compared to April and June 2006. However, losses due to lower sales are likely to be offset in August 2007 due to a jump in international spot iron ore prices for 63.5% grades to USD 100 per tonne from USD 52 per tonne.

Sales had fallen after India imposed a duty of INR 300 per tonne on iron ore exports in the budget in February 2007. It later cut that to INR 50 for low grade ores below 62% iron content after protests from the local mining industry. Domestic steelmakers have been demanding curbs on iron ore exports as two thirds of which are bought by China to safeguard supplies for local users.

In 2006-07, India's iron ore exports were estimated at 93 million tonnes.

Indian refractory makers gearing to match steel expansion plans

It is reported that Indian Refractory Makers Association has urged the union ministry of steel to consider the domestic refractory industry as a strategic partner in future development of steel industry in India.

Mr AK Chattopadhyay chairman of Indian Refractory Makers Association, while addressing the association’s annual general meeting, said that “Steel cannot be produced without proper refractory lining and in turn the refractories industry depends heavily on the steel industry for the bulk of its production.”

He added that steel is accepted as one of the sinews of economic development and it would be in the fitness of this that the strength and vitality of the domestic refractories industry should be built into the sinews. Mr Chattopadhyay said that “Instead of keeping us always at an arm’s length just as one of the many suppliers it would be important for the steel industry to factor in the contribution of refractories to higher efficiency and productivity as it faces the changes in global market for steel. This is well within our limit of 2 million tonnes even allowing for the expansion of cement, aluminum and such other industries.”

As per report, India will require 0.9 million tonnes of refractories based on a specific rate of consumption of 13 kilogram per tonne of crude steel produced if the target of 70 million tonnes of steel capacity by 2012 is to be met.

Mr Drona Rath CMD of Mecon however pointed out that globally refractories capacity is 50 million tonnes compared to 1.5 million tonnes in India. He urged the industry to gear up to face the increase in steel capacity.

Cairn gets approval for Barmar to Salaya oil pipeline

It is reported that Cairn Energy has been granted in principle approval by India’s petroleum ministry for laying a pre heated pipeline linking its oil fields in Rajasthan to the coast of Gujarat. This 585 kilometer long pipeline will evacuate waxy crude oil to the coast for onward distribution along industries on the western coast. The pipeline will be heated along the route order to keep the waxy crude oil flowing.

The media reports cited some oil ministry officials as saying that “The approval is for the right of use of the pipeline. Now Cairn will discuss with the government the logistics, such as the route of the pipeline. The pipeline should be ready in about 18 months, in time for production to start in the first half of 2009.”

The source added that “The cost of the pipeline, around USD 600 million, would be included in the field development cost, enabling Cairn and ONGC, 70:30 partners in the field, to recover it from the sale of the oil from the field. However, Along with the pipeline, ONGC is still considering a well head refinery in Barmer.”

The official said Cairn would also be allowed to sell the oil to multiple refiners instead of the earlier approved scheme under which the entire 1,50,000 barrels per day output was to be supplied to Mangalore Refineries and Petrochemicals Ltd.

Mr P Elango of Cairn India said that it would be the first of its kind in the country. He said “Right down the pipeline, there will be 30 mini power projects, each 1 MW in size, producing power from another natural gas from a twin pipeline. The power would be used for heating up the waxy crude, enabling its flow.”

Areva to set up substation at Hazira for Essar Steel

Areva T&D India Limited announced that it has received an order worth INR 630 million from Essar Steel Limited for designing, supplying and commissioning of switchyard and transformers of various ratings for Essar Steel's substation at Hazira in Gujarat.

Essar Steel’s expansion project at Hazira entails the complete Design, Supply, Erection, Testing & Commissioning of 220 kV Switchyard on Turnkey basis and also the supply of 160 MVA, 220 kV, 90 MVA, and 220 kV Power Transformers.

Mr Rathin Basu country president of Areva said "Areva T&D is a market leader in the evolving gas insulated systems market segment in India and has the highest number of references and we also have a distinction of supplying in hydropower plants, transmission sub-stations and to independent power producers in India.”

Maharashtra State Electricity Transmission Co Ltd has also placed its first Gas Insulated Switchgear complete turnkey solutions order on AREVA T&D India. This order is valued is at INR 339 million. This project endeavors to improve the power quality and reliability for the Infotech city of Pune. The scope includes turnkey execution of the 132/22/11 kV Rasthapeth Substation involving Design, Supply, Civil Work, Erection, Testing and Commissioning of Multiple Bays of 132 kV GIS, 50 MVA and 25 MVA Transformers, Control Relay Panels and Numerical Bay control system.

One killed in induction furnace blast in Jharkhand

Ranchi Express reported that 1 person died and 2 others sustained critical injuries in a powerful blast inside the induction plant of Hari Om Smelters at Mahulisole in Jharkhand. As per report, 6 other workers had a narrow escape and they only sustained bruises, while escaping from the place of blast.

The blast was reportedly caused by short circuit and leakage in the furnace inside the plant. The blast occurred at 6.20 AM with simultaneous short circuits in the chambers. Consequently, molten iron with very high temperature was thrown out of the chambers.

Port workers to observe today as Demands Day

Exim News reported that Indian port and dock workers will observe a Demands’ Day today on August 24, as decided by the five recognized federations of the workers, by holding demonstrations in front of the offices of Major Port Trusts and Dock Labor Boards.

The affiliated unions of the five federations have already served notice of strike to the 9 Major Ports.
1. Kandla
2. Mangalore
3. Chennai
4. Vizag
5. Haldia
6. Kolkata
7. Paradip
8. Kochi
9. Tuticorin

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

Foundry park proposed near Bangalore in Karnataka

BS reported that Karnakata Foundries Association plans to set up a foundry park in Dobbespet near Bangalore at an investment of around INR 250 crore and has submitted a proposal to the Karnataka government regarding the purpose.

As per proposal, the park will come up about 50 kilometer from Bangalore and will be spread over 100 acres of land. As per report, about 55 acres had been sought for the park in the initial phase and the state government is in the process of identifying the required land.

The foundry park will have the necessary environment to house different foundries as well as allied units and will accommodate the modernization and expansion plans of a number of foundries across Karnataka.

Mr Bishnoi elected as president of INSDAG

NewInd Press reported that Mr PK Bishnoi CMD of Rashtriya Ispat Nigam Limited is elected as president of Executive Council of Institute for Steel Development and Growth.

Kolkata based NSDAG was set up under the Societies Registration Act in 1996 with representation from Rashtriya Ispat Nigam Limited, Steel Authority of India Limited, TATA Steel, other domestic steel makers and ministry of steel on the lines of Steel Construction Institute of UK. Its objectives are promoting the usage of steel, particularly in construction industry. The institute has about 800 members.

INSDAG is recognized globally as one of the leading institutes in the area of structural steel design and is a member of Living Steel Program of International Iron & Steel Institute and the World Steel Construction Council set up by IISI.

HZL reduces zinc prices by 4%

Hindustan Zinc Limited announced that it has cut zinc prices by 4% or INR 6,000 to INR 145,000 (USD 3,554) per tonne, effective immediately.

However lead prices were unchanged at INR 137,000 a tonne.

Nagpur trader nabbed for selling fake TATA Agrico products

TNN reported that Nagpur police have arrested a trader for selling and stocking goods worth close to INR 0.1 million illegally embossed with the logo of TATA Steel in raids carried out by the crime branch and the brand protection team of TATA Steel. Police said that Mr Vaswani, owner of Ashok Hardware, was selling items that illegally bore TATA Steel's logo, which misled customers and caused losses to the company.

As per report, the team initially found 25 crowbars with TATA Steel's logo at Ashok Hardware. Further investigations revealed that the crowbars were manufactured locally and the logo was fake. The team also raided Ashok Hardware's godown and found 200 illegally branded iron buckets. The police team raided another godown at Wadi and seized 600 fake TATA Steel crowbars.

The report cited Mr Suhail Qureshi country manager brand protection of TATA Steel as saying that such actions would continue in the future as well.

PFC inks a MoU with KREDL for power projects in Karnataka

Projects Today reported that Power Finance Corporation has sign a MoU on August 20th 2007 with Karnataka renewable energy development to finance non conventional power projects such as wind, hydro, solar and biomass etc in Karnataka. Mr MK Goel director of institutional appraisal & development of Power Finance Corporation and Dr B Shivalingaiah MD of Karnataka Renewable Energy Development has signed the MoU in the presence of Mr HD Revanna minister for energy PWD of Karnataka and Mr Dilip Rau additional chief secretary and principal secretary of Karnataka. The MoU will be valid up to March 31st 2009.

As per the proposed agreement, Karnataka Renewable Energy Development will recommend to Power Finance Corporation financial assistance to companies proposing to execute power projects based on renewable energy such as wind, hydro and biomass. Power Finance Corporation will fund 50% of the cost at interest rates normally attributable to such projects and will also arrange the balance funds from financial institutions with which it has tied up.

PFC and KREDL shall cooperate to leverage their respective strengths and competencies built over the years for development of non conventional and renewable sources of energy, avail clean development mechanism benefits from the small scale renewable energy power projects and for promoting energy efficiency in all sectors for mutual benefit.

It is estimated that Karnataka has a potential to add 11150MW through renewable energy sources. At present, the installed capacity of electric power from non conventional renewable energy sources in Karnataka is 1630MW. In addition to this, KREDL has drawn an action plan to add 1500MW of power through renewable energy sources by the end of 11th Five Year Plan period in the state.

Update on coal production, import and consumption in India

Dr Dasari Narayana Rao union minister of state for coal informed parliament the quantum of coking coal and thermal coal produced and utilized in India during the last 3 years as under

In million tonnes
2006-07 imports are up to February 2007
Utilization has been arrived by adding dispatches of domestic coal for the year adding to imports

Dr Rao added that most of the coal produced in India contains higher ash but low sulphur compared to the coal available in the international market. With a view to improve the quality of coal by reducing the ash content, the coal is washed using various technologies. Since the sulphur content is considerably low in Indian coal, no special technology is used to reduce the sulphur content. However, only in case of Assam coalfield, the sulphur content is higher where production is insignificant as compared to total domestic production.

Dr Rao informed that domestic coking coal is being procured from Eastern Coalfields Limited, Bharat Coking Coal Limited, Central Coalfields Limited, Western Coalfields Limited and South Eastern Coalfields Limited by the public sector undertaking of India.

Details of country wise and year wise total quantity of coking and thermal coal imported in India during the last 3 years are given below

Coking Coal

In million tonnes
06-07 is up to February 2007

Thermal coal

In million tonnes
06-07 is up to February 2007

Global DRI production in July 2007

International Iron and Steel Institute have released the production figures for direct reduced iron for the month of July 2007. The global production of DRI in June 2007 was 4.200 million tonne almost flat YoY.

Global DRI production during January to June 2007 amounted to 30.702 million up by 7.7% YoY. India’s production in this period amounted to 9.970 million tonnes up by 17.5% YoY, accounting for 32.4% of total global DRI production.

The production update is as under

In 000 tonnes
Source – IISI

Capesize coal and iron ore rates hit new all time high

Platts reported that Capesize coal and iron ore rates have hit new all time highs, driven by coal and iron ore trades and charterers taking ships on long term, period business and that brokers are predicting that the market could go higher still. As per report, Capesize iron ore rates on the key iron ore route of Brazil to China have hit a new all time high of USD 65.75 per tonne to USD 66 per tonne, basis for 160,000 tonnes parcel smashing the previous record of USD 59 per tonne set in late May 2007.

The report said that Jinan Steel has fixed a 160,000 tonnes cargo from Ponta da Madeira to Qingdao, with a loading window of September 10th to September 19th at USD 66 per tonne on a yet to be nominated Transfield ship. In addition, Pioneer Metals reportedly paid USD 62 per tonne for a 170,000 tonnes cargo from Guaiba Island to Qingdao for September 27th to September 30th loading, which equates to USD 65.88 per tonne for the standard cargo size of 160,000 on this route.

The report cited a Capesize broker as saying that "Rates have already broken the records and at this time of year rates typically rise for the remainder of the third quarter and throughout most of the fourth quarter. I don't see anything on the horizon, other than charterers holding back from time to time and seasonal factors, that will stop this market going higher.”

CVRD and Baosteel ink MoU for slab plant at Anchieta in Brazil

Companhia Vale do Rio Doce announced that it has signed a MoU with Baosteel Group Corporation to build a steel slab plant with an initial production capacity of 5 million tons per year. In the beginning of the plant construction, CVRD will hold a participation of 20% and Baosteel will hold up to 80%.

The plant will be located in the industrial district of Anchieta in the state of Espirito Santo of Brazil is expected to generate 3 thousand direct jobs when it starts operating.

CVRD release said that “This initiative is consistent with CVRD’s strategy of attracting new investments in the steel industry in Brazil, thereby increasing iron ore consumption and promoting job generation and income growth in the country.”

Bekaert and OneSteel cord JV in Australia to close down

Bekaert, together with OneSteel, has decided to close the steel cord plant based at Geelong in Australia. The plant employs 74 people. A company release said that “This follows an extensive review of business performance which has included customer and market outlooks, financial performance, plant operations and sourcing alternatives.”

It added that employees, customers and suppliers have been advised of the closure which will occur by the end of the year, after all customer supply contracts and commitments for 2007 have been completed.”

Bekaert Australia Steel Cord Pty Ltd is a joint venture business formed in 1986, between Bekaert and OneSteel Pty Ltd, supplying steel cords and hose wires to tire and hydraulic hose manufacturers in Australia, New Zealand and South East Asia.

However a Bekaert release said that “It remains committed to its customers within Australia and New Zealand. Therefore, the company is developing transitional supply arrangements from its other steel cord plants located within North and South East Asia.”

China says that AD probes by US violates WTO rules

Mr Gao Hucheng vice minister of commerce of China said that the recent anti dumping and anti subsidy investigations launched by the US against Chinese goods violate rules of the World Trade Organization. Mr Hucheng while addressing a press conference held by the state council information office said that the US investigations and the measures that it might take against Chinese goods would lead to double taxation, which is banned by the WTO.

It may be noted that US has launched 5 separate investigations into Chinese products, including art paper, steel pipe and tyres since November 2006.

China has been the fastest growing export destination of the US for 5 consecutive years and is expected to overtake Japan as the third largest export market of the US at the end of 2007 or early 2008. According to Chinese customs sources, China's foreign trade value reached USD 1.17 trillion in the January to July 2007 up by 24.4% YoY. The EU remained China’s largest partner with a trade value of USD 190.1 billion up by 28.5% YoY followed by the US with USD 167 billion up by 17.5% YoY and Japan with USD 130 billion up by 15.2% YoY.

Ryerson shareholders re elect the board

It is reported that Chicago based Ryerson Inc shareholders voted to re elect all 11 Ryerson directors nominated by the board paving the way for a vote on Ryerson's proposed USD 2 billion buyout by Platinum Equity Fund at a special meeting in October or November 2007.

Mr Neil Novich CEO of said "I would like to thank our stockholders for their continued support.

Mr Larry Clark MD of Harbinger Capital Partners one of the Harbinger funds said that "Today's vote ceased to be about who was best equipped to lead this company. It became about the need for certainty versus the desire for opportunity. If the Platinum Equity transaction is completed on its announced terms one quarter of a billion dollars of stockholder wealth will have been created. That's more value than the company created on its own over the previous eight years."

Harbinger Capital Partners started to agitate for change at Ryerson late last year and in January 2007 vowed to propose its own slate of board members. It has argued that Ryerson's lackluster financial and stock performance mandated new leadership. Faced with a rebellious large investor, Ryerson hired an investment bank to look for alternatives, including a sale, and postponed its shareholder meeting scheduled for May 2007. It said it contacted more than 50 potential buyers and met more than 30 times with suitors before agreeing to sell the company to an affiliate of Platinum Equity for USD 34.50 a share in cash with the investment firm backing its bid with a commitment letter from its bank.

Reasons for hike in iron ore prices in China

Prices for both domestic and imported iron ore in China have seen a sharp upswing in 2007. 66% iron ore concentrate at Tangshan, which was quoted at CNY 610 per tonne in August 2006 has gone up by 67.2% to CNY 1020 per tonne and imported iron ore price also increases by 59.5% to CNY 1005 per tonne from CNY 630 per tonne in August 2006.

There are several factors for this situation

1. Steel market revives leading to robust iron ore demand. Against such a backdrop, prices for steel products in home market experience overall revive in July to August 2007 and present strong up trend, especially those for major varieties like construction steel products. This encourages iron ore suppliers to raise iron ore prices.

2. The government tightens control on rectification of ore mines thus decreasing iron ore output. Due to government's control on rectification of ore mines, many small mines have been shut down, decreasing domestic resources.

3. In North China electric power limitation also affect iron ore concentrate output

4. Several blast furnaces will be put into operation in the second half of this year, thus steel makers present robust demand for iron ore concentrate.

5. Some even replenish resource for the winter in advance, further tightening spot supply.

6. Resources in North China flow into South China. China suffered several natural calamities in July. Floods attacked South China, Huaihe River Drainage Area or even North China. On account of floods in South China, southern steel makers strengthened purchasing from North China, especially Northeast China. This also to some extent intensified short supply in North China.

7. Inventories at ports keep declining. As imported iron ore market goes upwards, ports eye nice transactions, increasing enquiries and extremely short supply. Against such a backdrop, shipments appear satisfying and inventories keep decreasing. High grade iron ore resources are in severe shortage. Inventories at 23 ports amount to 43 million tons, among which nearly 10 million tons are Indian ore, which are mainly controlled by several big trading companies, presenting some kind of monopoly.

8. Ocean freight rate hits new records continuously. Rising ocean freight rate also lend buoyancy to spot iron ore market. Statistics show freight rate for Brazil to China averaged USD 27.63 per tonne in 2006 and for Australia to China at USD 11.87 per tonne but so far in this year the figure for Brazil to China has hit USD 62.782 per tonne.

9. As 2008 iron ore benchmark price negotiation approaches, steel makers are busy replenishing resources, further sharpening the insufficient supply.

(Sourced from MySteel.net)

Cargill and Robinson Steel to form steel JV in Illinois

A leading global trader, processor and distributor of iron & steel Cargill has agreed to enter into a JV with Robinson Steel to produce and distribute RPS® Sheet and Plate under license. It us expected to be closed within the next 45 days. Terms are not disclosed.

Cargill and Robinson JV will have an initial capacity of 200,000 tons per year of cold reduced cut to length hot rolled steel from a jointly owned 100,000 square foot production facility located in Granite City Illinois. Cargill will source the hot rolled band and provide all of the sales and marketing to support the venture. Robinson will manage and operate production of the facilities.

Mr Mike Taylor president of Cargill Steel Service Centers said that “Our strategic relationship with Robinson will allow us to immediately increase our product offerings to meet our customers’ growing demands for panel flat sheets and plates with RPS® quality, the recognized industry standard. He added that this venture is perfectly aligned with our growth strategy and expands and extends our market leadership position in the processing of hot rolled steel bands.”

Mr Paul Labriola president & CEO of Robinson Steel said that “We are proud that Cargill selected RPS® to complete its product line and we are excited to pursue the opportunities that will result from bundling our unique value proposition with Cargill’s global iron and steel supply chain and risk management capabilities.”

As a licensed distributor, Cargill will have access to production from Robinson’s other Granite City processing line and the East Chicago, Indiana facility.

Robinson Steel is headquartered in East Chicago. In addition to cold reduction lines it operates seven RPS® Laser Production and Distribution Centers providing precision cut parts to OEM’s and fabricators.

China to miss pollution reduction goals for 2007

According to China State Environmental Protection Administration China has managed to cut emissions of sulphur dioxide in January to June 2007 but is likely to miss reduction targets for 2007.

China’s State Environmental Protection Administration said emissions of sulphur dioxide have fallen 0.88% to 12.63 million tonnes in January to June 2007. It attributed the fall in sulphur dioxide emissions to the installation of more desulfurizing facilities in coal fire power plants and the closing of 5.5MW of small coal fired plants.

State Environmental Protection Administration official said that “While power capacity increased by 18.3%, the sulphur dioxide emission dropped by 5.2% which offsets the emission from other industries. Although we have made some progress, the situation of cutting emissions remains grim."

According to a report by the environment watchdog State Environmental Protection Administration reported that 62% of 585 Chinese cities regularly suffer from air pollution and have no centralized sewage treatment facilities. The figure was 7.3% points lower than for 2005. 39 cities had severe air pollution and were put on agency's black list. The report further found that the ratio of quality water in the major urban areas either for drinking or industrial use had dropped by 7.2%.

In a separate statement, State Environmental Protection Administration said heavy polluters would be blocked from filing for IPO in China's booming stock market. Companies now must get environmental clearance from the State Environmental Protection Administration if they want to go public.

China has pledged to cut emissions of several major pollutants by 10% between 2006 and 2010 but is already well behind targets for sulphur dioxide and chemical oxygen demand a measure of water pollution that has increased by 0.24% so far 2007.

Sino Hua-An to acquire 49% stake in Linyi Jiangxin

It is reported that Malaysian electronic retailer Sino Hua-An International Bhd is expecting to formalize its proposed acquisition of a 49% stake in Chinese steel maker Linyi Jiangxin Steel Company Limited, which owns a steel plant located next to its metallurgical coke plant in Linyi city of Shandong province in China, for about CNY 500 million by 2007 end.

In a statement to Bursa Malaysia Bhd, Sino Hua said that its directors had in principal agreed to the plan and is set to sign a MoU in due course. It said “The acquisition would enable it to synergistically diversify into downstream steel production activity and give it another earnings stream.”

Sino Hua said that the proposed acquisition would be subject to, among others, satisfactory completion of legal and financial due diligence, independent valuation on the steel plant and profit guarantee by the vendors.

Mr Tunku Naquiyuddin executive chairman of Sino Hua in an interview with The Edge Financial Daily said that the relevant parties would sign a MoU on the proposed acquisition very soon. He said it is yet to finalize the funding method for the acquisition but would opt for one that would not drain its cash flow or cause earnings dilution in the company. He said "We are looking at all options. It could be bond issuance or bank borrowings, but we will examine the effect of the US sub prime mortgage market first. We do not envisage any problem with funding needs."

He added that the planned acquisition would pave the way for its coke plant to further increase its production capacity to beyond 1.8 million tonnes a year from its current capacity of 1.2 million tonnes.

Linyi Jiangxin Steel Company is jointly established by Huasheng Jiangquan Group and Shandong Wen Ting Investment Company Limited.

Acquisition Of Chaparral Steel by Gerdau Ameristeel clears antitrust hurdle

Chaparral Steel Company and Gerdau Ameristeel Corporation announced that the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, in connection with the Agreement and Plan of Merger signed by Chaparral, Gerdau Ameristeel and certain other parties expired at 11:59 PM Eastern Time on August 22, 2007 without action by either the Federal Trade Commission or the Department of Justice.

Expiration of the HSR waiting period without action by such regulators is a condition to completion of the proposed merger. However, the consummation of the merger remains subject to other customary conditions, including adoption of the Agreement and Plan of Merger by Chaparral's stockholders.

On July 10th 2007, Gerdau Ameristeel had announced that it agreed to acquire Chaparral Steel Company, a manufacturer of structural steel and steel bar products, for USD 86 per share in cash, aggregating to a total price of USD 4.22 billion.

The Midlothian, Texas based Chaparral Steel operates two mini mills, located in Texas and Virginia. The company has approximately 1,400 employees and an annual installed capacity of 2.9 million tons. For fiscal 2007 the company reported earnings of USD 269.3 million on net sales of USD 1.72 billion.

Metalloinvest and ArcelorMittal ink 5 year iron ore deal

It is reported that Metalloinvest, a group of Russian metallurgical companies, has signed a deal to supply iron ore products to the ArcelorMittal for five years. Metalloinvest under the contract will supply up to 10 million tonnes of iron nuggets and iron ore concentrate to ArcelorMittal's plants based in Eastern Europe and Kazakhstan.

Mr Maxim Gubiev GD of Metalloinvest said that the contract supplies will cover a fourth of all iron ore raw produced by enterprises of the holding but the deliveries to domestic market would not be affected. Given the overall growth of production, the share ratio of export deliveries to domestic ones won’t change materially, up to 55% of the overall.”

Metalloinvest output of this product is estimated at 36 million tonnes this year.

Metalloinvest is also reported to be in talks over new contracts with a number of large sized partners including US Steel.

Alert Steel to acquire Steel Giant

It is reported that South African steel retailer Alert Steel has agreed on August 20th 2007 to buy smaller peer Steel Giant with shares and cash to the maximum value of ZAR 12 million.

As per report, Alert Steel would pay ZAR 3 million in cash on the closing date of the deal, ZAR 3 million worth of shares at ZAR 1.75 each and another ZAR 3 million within six months of closing the transaction. It said in a note to the JSE that Alert would pay the balance in shares based on the profitability of its business in the financial years ending June 2008 and June 2009.

Steel Giant has four retail operations situated on the West Rand of Gauteng and the North West Province. The deal is subject to conditions including the cession and delegation of the premises leases to Alert, and written consent to the cession of material contracts. South Africa’s competition authorities would also have to approve the deal before it was finalized.

Management buy out complete at Barrett Steel Buildings

It is reported that UK based Barrett Steel Buildings, the specialist design and build fabricator of structural steel, has been bought out by its senior management for an undisclosed sum. New majority shareholders Mr John Brennan and Ms Sue Sharples will act as joint MD with Ms Sharples retaining her responsibilities for the company’s financial function.

Barrett Steel Buildings, which has a turnover in excess of EUR 25 million plans to continue its growth and expects to win a number of contracts as part of its work for the 2012 Olympics. Its projects ranges from single storey retail, industrial and distribution schemes to multi storey solutions in the commercial, education and retail sectors. Current work includes a EUR 1.5 million scheme for the redevelopment of Tong School in Bradford.

Mr Brennan said “As a team we are delighted to take the company forward into the future. We remain optimistic that construction activity will continue to grow, boosted by work for the 2012 Olympics. Publicly funded construction remains strong, particularly in education which is a key sector for Barrett Steel Buildings Limited. We are also seeing strong demand in multi-storey commercial and retail projects in which Barrett Steel Buildings has developed extensive expertise. The company has recently invested two million pounds in new production facilities which will enable the company to develop its competitive edge.”

Ms Sharples commented: “The selling shareholders, who are also directors of Barrett Steel Limited, the national steel stockholding group were keen to transfer the business to the current management team and we are delighted to say we have their full support. Our Bradford site is adjacent to the Barrett Steel Ltd site and the directors of both companies plan that the close working relationship between the two businesses will continue.

Mr Richard Barrett, formerly a major shareholder, becomes non executive chairman of the Barrett Steel Buildings’ new holding company for a period of two years to aid the smooth transition of the business to its new ownership. He said “I remain fully committed to the continued success of Barrett Steel Buildings Ltd and am keen to help the new management team with the next stage of the company’s development.”

Xinxing Ductile Pipe signs to regroup Chuanjian Pipe

It is reported that Xinxing Ductile Iron Pipes Company Ltd and Sichuan Chuanjian Pipe Company Ltd have signed a letter of intent to regroup the latter. In a bid to consolidate the Southwest market, Xinxing Ductile Pipe has talked with Sichuan Province based Chuanjian Pipe about production and sale of cast pipe and fittings.

Based on mutual benefit and complementary principle, Xinxing Ductile Pipe will inject capital to the Sichuan pipe maker and take shareholding of not less than 55% in the regrouped one.

As the largest ductile cast iron pipe producer in West China, Chuanjian Pipe can produce 100,000 tonnes per year of centrifugal ductile cast iron pipe and 15,000 tonnes per year ductile iron fittings. Its products have got ISO 9001 and ISO 14001 certificates. Chuanjian Pipe Co has registered capital of CNY 50 million by end of 2006 its total assets reached CNY 201.82 million and revenue up to CNY 155.45 million.

It's planned the company will have 110,000 tonnes per year capacity just after the regrouping and then grow to 200,000 tonnes per year. This regrouping will also help Xinxing Ductile Iron Pipe to form a rational industrial pattern, consolidate southwestern market and improve competitiveness there.

(Sourced from MySteel.net)

ArcelorMittal Bremen to install converter gas recovery system

SMS Demag has announced that it has received an order from ArcelorMittal Bremen GmbH in Germany to modernize the primary dust collecting system of the oxygen steelworks and to prepare it for retrofitting with a converter gas recovery system.

The first stage of this project is to revamp the cooling stacks of the two 290 tonnes converters and to equip them with SMS Demag Baumcoadjustable skirts. These can be moved hydraulically onto the converter mouth during the blowing phase and they enable the primary gases to be captured efficiently under suppressed combustion. In addition, diffuse dust emissions are substantially reduced.

The SMS Demag supply scope includes the planning of the integrated plant and the supply of all core components, among which are the adjustable skirts with their hydraulics and the electrical induced-draught fans. It also supplies the basic engineering for the electrical equipment and the X-Pact® electrical and automation systems. The completion of the modernization work is scheduled for the beginning of 2009.

Air Products Signs Third Contract With China's Guofeng Steel

Air Products announced that it has been awarded a new contract by Tangshan Guofeng Steel Co Ltd for the supply of industrial gases. This is the third Air Products long term contract signed with Guofeng Steel since 2003 to supply gaseous oxygen, nitrogen and liquid argon to its steel mills at Hebei Province in Northern China.

A new air separation unit adjacent to Guofeng Steel is to be built and is scheduled to come on stream in late 2008. This will be the third Air Products built air separation unit in Tangshan for Guofeng Steel. The new ASU will be designed and built primarily by Air Products engineering and manufacturing centers in China.

Mr Zhang Zhen GM of Guofeng Steel said that "Air Products safety and technical standards as well as its commitment to customers deeply impress us. We are delighted to sign the new contract with Air Products to support our business expansion.”

Mr Wilbur Mok president of Air Products Asia said that "Guofeng Steel has been an Air Products' strategic customer since 1999. We are honored to have been selected as its partner once again to support its next phase of expansion. It underscores the satisfaction of a long standing customer in Air Products."

Tangshan a major industrial city in Hebei Province is one of the leading steel production centers in Northern China and Guofeng Steel has nine production facilities that manufacture 7 million tonnes of iron and steel annually.

Taigang Stainless's H1 net profit up by 300%

Shanxi Taigang Stainless Steel Co Limited has said that it’s net profit during the H1 of 2007 up by 299.10% YoY to CNY 2.74 billion and its main business income increased by 173.75%YoY to CNY 40.1 billion in the H1 of 2007 with gross profit rate of 13.64%.

It added that stainless CR sheet made greatest contribution by CNY 13.6 billion while common medium plate registered highest gross profit rate of 22.22%.

Taigang Stainless has expanded production scale by acquisition of steel sector of its parent Taiyuan Iron and Steel (Group) Co Ltd. It said that 1.5 million tonnes stainless steel project was put into operation in the latter half of last year and its capacity has swelled this year.

Besides, the steelmaker has optimized product mix, reduced costs and raised efficiency. Prices for steel products also climbed remarkably from those in the same period of last year.

Taigang Stainless also predicted in the report that net profit in the first three quarters will increase by over 150% YoY.

(Sourced from MySteel.net)

AVTOVAZ looking for strategic investor among Russian steel makers

RBC reported that Russian auto major AVTOVAZ is not content with just being a partner of foreign carmakers and is looking for a strategic investor among Russian metal companies. Such an investor would be granted orders from AVTOVAZ.

On August 21st 2007 a high ranking Rosoboronexport representative divulged that AVTOVAZ was considering Russian metal companies as possible strategic investors without giving the exact names. Analysts believe that Magnitogorsk Iron and Steel Works is the most likely candidate.

Earlier Mr Sergei Chemezov chairman of AVTOVAZ's board of directors and GD of Rosoboronexport had said that the plant was willing to sell a blocking stake to a strategic investor and was in talks with Magna, Renault, FIAT and Porsche.

AVTOVAZ is currently the customer of several Russian steel makers including MMK, Severstal and Novolipetsk Steel.

Citic Pacific H1 profit jumps by 44% YoY due to steel

Bloomberg reported that Citic Pacific Ltd, the Hong Kong arm of China's biggest state owned investing company, profit during January to June 2007 surged by 44% YoY on steel production and the sale of a stake in a phone services unit.

Citic Pacific Ltd said in a statement to the city's stock exchange that its net income rose to HKD 4.97 billion (USD 636 million) in January to June 2007 from HKD 3.44 billion in H1 of 2006 while its sales fell to HKD 19.6 billion from HKD 22.88 billion.

Citic Pacific Ltd is benefiting from increased investments in steel and property projects in China where the economy grew at its fastest pace in 12 years in the six months ended June 30th 2007.

Mr Larry Yung chairman of CITIC said that “As the Chinese economy continues to grow, the demand for high quality special steel will continue and the profit contribution from the company's steel manufacturing business doubled.”

Anshan Steel to supply rails for high speed Zhengzhou-Xi'an link

It is reported that Anshan Steel has received steel rail orders of 40,000 tonnes for China's first express railway Zhengzhou-Xi'an Line. Anshan Steel will make supplies to Zhengzhou-Xi'an Line in October 2007.

With operation scheduled in July of 2009, Zhengzhou-Xi'an Line is China's first express railway line and can afford the train running at 350 kilometers per hour. It needs 120,000 tonnes of high quality steel rails, out of which first batch of 40,000 tonnes would be provided by Anshan Steel.

As the producer of China's first steel rail, Anshan Steel boasts advanced technologies in high speed steel rail production. It has yielded several kinds of steel rails for many railway lines.

(Sourced from Mysteel.net)

Shoudu Iron & Steel H1 net profit up 27% YoY

Interfax China reported that Shenzhen listed Shoudu Iron and Steel Co Ltd, China's largest steel wire producer, has reported a YoY net profit increase of 26.66% to CNY 387.13 million (USD 50.95 million) for the H1 of 2007.

Shenhua announces USD 3.6 billion CAPEX for increasing coal output

Bloomberg reported that China Shenhua Energy Company would spend about CNY 27 billion (USD 3.6 billion) by the end of 2009 to expand its coal output.

Mr Chen Biting chairman of Shenhua Energy said the investment would come as Shenhua pursues a target of 200 million tonnes of annual production by the end of the decade. He added that the company aims to have power output capacity of 20,000MW by 2010.

Shenhua plans to sell as many as 1.8 billion shares in China by the end of 2007 to raise funds to expand mines, power production and its transport network as well as for domestic and overseas acquisitions.

Mr Chen said “Our share sale will be priced at a level that fully reflects the company’s real value. We would not promise too low a price for our share sale to attract investors.” He added that “I haven’t heard anything that would delay the share sale. Even if there are delays, our capital expenditure would not be affected.”

NSSC cuts SS plates and CR prices

Nippon Steel & Sumikin Stainless Steel announced that it has reduced the selling price by JPY 95,000 per tonnes for nickel series cold rolled sheet and plate for distributors for August 2007 order to reflect lower nickel ingot price.

It however rejected the order receipt from distributors and keeps the 40% output reduction for cold sheet at Hikari plant in September 2007 compared with April to June 2007 level.

Xstrata calls for halting coal mine approvals in Australia

Bloomberg reported that world's largest exporter of thermal coal Xstrata wants Australia to halt new mine approvals to help ease port congestion that has caused a fourfold increase in penalties paid by the company because of delays.

The report cited Mr Peter Coates CEO of Xstrata's coal unit as saying said that the bottleneck at Newcastle cost Switzerland based Xstrata AUD 2.2 million a week in the H1 of 2007 as compared with AUD 500,000 in H1 of 2006.

He said that “That's a massive amount. Development consent should not be given unless a coal company comes in with a clear contract for port and rail capacity. We require 32 million tonnes of capacity this year to run our business and ended up with 26 million tonnes. The crazy part about this system is because of this common user turn of arrival system we had to give away our capacity to new starters so you have growing mines taking a share of our capacity.''

According to the latest port data the line of ships waiting to load cargoes at Newcastle stretched to a record 79 on July 2nd 2007 and stood at 54 on August 20th 2007.

According to government forecasts Xstrata, BHP Billiton and Rio Tinto Group are losing sales, hamstrung by insufficient port and rail capacity and Australia risks losing as much as AUD 7.9 billion in export revenue in the next decade if port and rail congestion is not resolved.

Chongqing to expand domestic iron ore base to match expansions

It is reported that Chongqing Iron and Steel Company Limited has started construction of an iron ore base in the city's Ba'nan with total investment of CNY 250 million. The base is expected to produce 400,000 tonnes of crude ore and 200,000 tonnes of ore fine and realize industrial output value of CNY 120 million.

It will become an important raw material supply base for the steel maker. Insiders say this move can bless the steelmaker to shake off pressure from rising imported iron ore price as well as surging ocean freight rate.

Chongqing Iron and Steel already owns Taihe Iron Ore Plant in Sichuan's Liangzhou but its capacity is about 2 million tonnes and Chongqing Iron and Steel Company will pour CNY 10 billion to expand its capacity to 5 million tonnes. Besides it has resumed iron ore plant in Qijiang and is seeking resources in regions such as Nanchuan, Wushan and Ankang.

Chongqing Iron and Steel will finish the relocation in 2010 with capacity expanding from 3 million tons to over 5 million tonnes. This means it will demand more iron ore. However, in the past among the 5 million tonnes of iron ore it consumed, over 60% is from overseas. Its own mines merely provided 10%. According to an official of Chongqing Iron and Steel, Chongqing Iron and Steel aims to realize self sufficiency for over 6 million tonnes of crude ore and seek over 70% of raw materials from home market by 2010.

The steel maker will increasingly rely on imports if it does not expand its ore mines. On the other hand, price for imported iron ore is soaring. Global institutions and iron ore giants all expect tight iron ore supply and price hike next year.

Chongqing Iron and Steel is one of China's biggest medium plates producers. It is famous for vessel plate, boiler plate and shipbuilding plate. Its boiler plate occupies a market share of over 11%; shipbuilding plate, over 13%. Medium plates, the key products, contribute over 44% to the steel maker's business income and over 70% to the profit.

(Sourced from MySteel.net)

Vokutaugol H1 losses reach RUB 439.567 million

Vokutaugol announced that its H1 net losses reached RUB 439.567 million up by 165% YoY as compared to RUB 165.766 million in H1 of 2006. Its revenues for the H1 of 2007 reaches RUB 7.672 billion up by 14.1% YoY.

Its profit from sales declined by 9.4% YoY to RUB 5.384 billion, gross profit being down by 14% YoY to RUB 644.894 million from RUB 749.656 million and pretax losses coming to RUB 380.622 million from RUB 322.667 million.

Vorkutaugol was set up in 1934 in Pechorsky coalfield and involves 5 mines. It has the largest coal reserves in Europe about 4 billion tonnes. In June they were acquired by Severstal and is under control of Severstal Resurs.

Gladstone Pacific Nickel refinery to start by 2008 end

Gladstone Pacific Nickel Limited has announced its JV with a New Caledonian company as the launching pad for their proposed nickel refinery in Gladstone in central Queensland. The new refinery is due to begin construction by the end of next year.

The two companies will together develop a mine in New Caledonia, which will provide ore for the Gladstone operation and balance ore will come from Marlborough north of Rockhampton.

Mr Gavin Becker GM of Gladstone Pacific Nickel said that they still have a lot of work to do. He said "We are expecting formal environmental approvals by the end of the year when we finish our supplementary report and we're doing our engineering studies. There is a big funding requirement for the project to get away but nickel prices are very strong so the project is looking very viable."

Xinggang launch operation of 7 projects

It is reported that on August 18th 2007, seven projects in Xinggang including high grade steel melting & rolling, 198 square meter sintering machine’s desulfurizing, generating electricity by remained blast furnace gas and others were completed and have launched operation. Meanwhile, 80,000 cube meter gas tank and some other project are to begin construction.

To strengthen the Xinggang’s competing ability and boost the upgrading, it introduced world’s advanced technology and built the integrated high grade steel project with an investment of CNY 550 million and introduced RH vacuum refining furnace and breakdown rolling machine into long products manufacturing.

With these high grade steel projects launching production, the types of steel product of Xinggang increase from 7 to 13. It now has the capacity of producing high grade alloy steel, spring steel, bearing steel, gear steel and other high speed wires. As a result Xinggang has become a high grade, special manufacturer in the world capable of low, medium and high carbon and alloy steel wire rod.

Xinggang will now demolish the outdated sintering facilities, and the emission of sulfur dioxide will decline to lower than national standards.

Kuzbassugol appointed new GD

AK&M reported that Russian a coal producer Kuzbassugol board of directors have decided to dismiss its GD and appoint Mr S Liskovets as the new GD.

Kuzbassugol was set up on the basis of Severokuzbassugol, Leninskugol and Belovugol by the intiative of some holders and entites supported by the regional governor. The holders involve Scarlet Ventures Ltd with 48.3%, Kuzbass Nedra with 19.99%, MONOLIT with 19.93% and Severstal with 11.53% stake.

Pakistan calls for support from South Africa for its steel sector

It is reported that that Pakistan and South Africa have identified sectors including mining, steel, auto, chemical and plastics, scientific and engineering research and standards to increase cooperation between the two countries. This was discussed at a meeting held on Tuesday between members of the Engineering Development Board and a visiting 6 members delegation led by Mr Willem Vander Spuy director of South Africa’s Department of Trade & Industry.

The South African delegation underlined the importance of a specific work program in these sectors so that the relationship could be built on a sustainable basis. The delegation assured that South Africa is keen to build a partnership with Pakistan and seeks to increase interactions between the two governments and respective business community.

Mr Zahid J Yaqub GM of Pakistan’s Engineering Development Board gave a sixty minute presentation covering macro economic indicators, investment environment, competitiveness and efficiency improvement initiatives, production trends of automotive products, home appliances, steel industry, telecommunication, plastics, performance of selected industries.

Mr Zahid in particular requested for South African help in steel production. He said that a steel policy was under preparation covering incentives to investors for steel making in various areas of the country. In this regard, he also mentioned ten possible iron ore based sites including Kalabagh for setup of a new steel mill in the country.