Indian iron ore spot prices have probably hit the roof

China Chamber of Commerce of Metals Minerals and Chemicals Importers and Exporters released the average reference prices for import transactions of Fe 63.5% Indian iron ore concluded last week on August 27th 2007.

The change is with respect to prices posted on August 20th 2007

The movement of CCCM released prices over last one year is as under

In USD

The increase in prices during last 12 months is inching towards 100%, but the most steep has been witnessed during last week

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

Chinese finds Indian forecasts for iron ore demand on higher side

Shanghai Securities News reported that during the recent iron ore marketing conference hosted by Federation of Indian Mineral Industries at Goa, India iron ore enterprises and the mining firms magnified China's demand, possibly in order to seek further price rise meanwhile.

The report said that during the conference, the Indian speakers wrongly reported that China's domestic iron ore is mainly underground mined and thus is more expensive than imported iron ore and concluded with a higher forecast of China's demand for imported iron ore than the real situation.

This may distort Indian spot market even further and lend negative impact on the forthcoming benchmark talks with global mining majors.

But on the other hand, the spot prices for Indian iron ore have literally hit the roof. As per the recent release from China Chamber of Commerce of Metals Minerals and Chemicals Importers and Exporters the average reference prices for import transactions of Fe 63.5% Indian iron ore concluded during the week ending on August 20th 2007, the price surged by USD 8 on FOB basis and by USD 13 on CNF basis to reach the highest ever levels of USD 100 to USD 103 and USD 135 to USD 138 per tonne on FOB India and CIF China basis respectively.

(Sourced from MySteel.net)

TATA Steel announce 2 social initiatives

BS reported that TATA Steel has pledged INR 100 crore to a social initiative program involving two projects, a comprehensive land and water management scheme and schools for tribal children, as a part of its centenary celebrations.

Mr B Muthuraman MD of TATA Steel announced the project at the Tata Steel Archives in Jamshedpur. He said “We always believe in giving back to society many times over than what we take.”

As per report, the comprehensive land and water management scheme will run for five years and will be dedicated to the economically weaker sections of society in and around Jamshedpur and the states where TATA Steel operates. The project will create irrigation facilities for tribals, set up water user cooperatives, develop wastelands and promote horticulture and agro forestry. The project will also encourage agricultural improvement through technological up gradation. TATA Steel will take on land and water management projects in Jharkhand, Chhattisgarh and Orissa and touch 40,000 tribal households. TATA Steel will depute the TATA Steel Rural Development Society, Jamshedpur as the nodal agency for implementing the project.

The second project involves setting up all day schools for children from scheduled caste and scheduled tribe families in backward districts of Jharkhand, Chhattisgarh and Orissa. The schools will be able to take 1,000 children each.

Maoist attack to hit iron ore movement in Orissa-Jharkhand border

BL reported that Maoists, protesting against arrest of 2 leaders, raided Topadih railway station under the South Eastern Railway on Monday morning, forcing suspension of freight movement, particularly iron ore movement in Orissa and Jharkhand border areas. Topadih railway station is located in Orissa while the mines are in Jharkhand.

As per report, the suspension of freight movement will affect the loading and transportation of iron ore from Kiruburu and Meghataburu mines of Steel Authority of India Ltd.

It is added that the ore movement from Karampada mines catering to exports too will be hit.

A total of seven rakes per day are normally loaded in these mines, 6 at Kiruburu & Meghataburu and one at Karampada.

Usha Martin UK acquires De Ruiter Staalkabel

Usha Martin Limited announced that its wholly owned UK based subsidiary Usha Martin International Limited has acquired the business of Netherlands based warehouse and rigging facilities distributor company De Ruiter Staalkabel BV.

The release said that the acquisition would enable Usha Martin to grow further in Europe.

CIL WCL launches coalmine exhaust based windmill

It is reported that Mr Dasari Narayan Rao union minister of state for coal has launched a unique windmill power generation project at Coal India Limited subsidiary Western Coalfields Limited’s coalmine at Saoner in Maharashtra. In addition to the power generation, this project could earn about INR 0.23 million worth of carbon credits.

The wind mill, a pioneering research & development venture of Western Coalfields Limited, will harness electricity from the exhaust air of the underground mine, which otherwise go waste and will. The windmill project has been conceived and built with technical assistance from Visvesvaraya National Institute of Technology and is designed to produce 17KW power per year. The electricity generation project will eventually have four windmills installed at a cost of INR 0.226 million at the mine site.

The first windmill has been put up at a distance of 13 meters in front of the main exhaust mine ventilator fan. An inverter and storage battery are kept at the fan house room. The windmill is connected with the two batteries through a built in charge controller. Exhaust air from the main mine ventilator rotates the windmill blades to produce electricity. This energy is utilized for keeping the two batteries in a charged condition. The batteries are connected to the inverter, which converts DC power to AC electric energy.

Mr Rao said that “If the project becomes a success, it will be implemented in other coal mines in India. Economic growth of the country depends on power generation, which to a large extent, depends on coal. Therefore, higher production was necessary to meet the rising coal demand."

Janki Corporation to set up a pelletisation plant in Bellary

Projects Today reported that Janki Corporation is planning to set up a 6 million tonnes per annum pelletisation plant in Bellary district of Karnataka with an investment of INR 100 crore. The project will begin in August 2007 and complete by May 2008.

Janki Corporation has a sponge iron unit in Bellary and recently it raised the plant capacity from 60,000 tonnes per annum to 0.8 million tonnes per annum. It is now planning to install an induction furnace of 15 tonnes per day and a captive power plant of 10MW. Work on power unit and induction furnace is expected to commence by January 2008.

Krishnapatnam UMPP bidding likely to get delayed

ET reported that the bidding round for the 4,000MW Krishnapatnam ultra mega power project in Andhra Pradesh, scheduled to kick off on August 24th 2007, will have to wait a while as it can start only after the inter ministerial committee, formed to look into certain components of request for qualification and request for proposal, submits its report to the empowered group of ministers.

The inter ministerial committee formed in the aftermath of the Sasan controversy, is evaluating certain norms for components of ultra mega power project request for proposal and is likely to submit its approval in 2 weeks from now.

The report cited an official from the ministry of power as saying that “The inter ministerial committee is examining certain clauses of ultra power project request for proposal norms and till the panel submits its report, request for proposal of the Krishnapatnam project will have to be postponed.” He added that that request for proposal will happen only by the second week of September 2007 and price bids could be invited by end of September 2007.

Indian Railway frame new wagon leasing policy

Exim News Service reported that Indian Railways, which is asking private sector to invest in the wagon building program, is now finalizing a new policy to permit private players to procure wagons on lease without investing in them. So far, only Indian Railways can lease out wagons.

The report cited an Indian Railway official as saying that "Once the wagon sector is opened up for private players, it would bring new design and new technology to wagon manufacturing and maintenance."

The proposed wagon lease scheme may allow private players to invest in producing special kinds of wagons and lease them to the customers of the Indian Railways. Under the current wagon investment scheme, customers have to buy their own wagons to transport goods.

Indian industries among one of the highest power tariffs payers

BL recently reported that despite poor power supply conditions, Indian industries are paying one of the highest electricity tariffs in the world. As per government data for 2006, industrial consumers in India, across various slabs in different states, pay an average of INR 4.50 per unit, with the industrial tariff slabs as high as INR 8.04 per unit.

But, according to data sourced from the International Energy Agency for 2006, industrial consumers paid out tariffs of INR 2.25 per unit in the US, INR 1.98 per unit in France, INR 2.10 in Chinese Taipei and INR 4.11 in the UK. However, in Japan, industrial tariffs are comparably higher at INR 5.21 per unit. Although domestic tariffs in India, which ranged between INR 1.14 and INR 5.16 per unit for households across various states, are comparable to tariffs in most of these countries.

INR per unit
Source: International Energy Agency

India, however, stands out as an exception with industrial electricity tariffs much higher than domestic rates but the poor quality of supply is an added problem in the Indian context.

An earlier Emerson Network Power study had indicated that India Inc could be losing over INR 22,000 crore in direct losses due to poor power quality and operating environment related downtime estimated to be around 2.2% of the gross output of the total industrial and service sectors. Though India’s power generation cost is comparable to those in several developed countries, industrial tariffs are comparatively much higher on account of cross subsidization of agriculture and domestic sectors and high aggregate technical and commercial losses. Besides, electricity duty, which varies widely from state to state, also creates additional burden for the industrial consumers.

BHEL Trichy embarks on expansion

BS reported that Bharat Heavy Electricals Limited’s Trichy unit would soon embark on a major expansion program at an outlay of INR 732 crore. Mr RN Misra ED of BHEL said that the first phase of the capacity augmentation program taken up at an investment of INR190 crore is under progress and would be completed by the year end.

The second phase, which is also being implemented concurrently will involve an additional investment of INR 732 crore and would enhance the boiler plant capacity to 15,000 MW per annum.

The power plant equipment major is investing around INR 3,200 crore to enable the corporation to supply over 75,000 MW power generation equipment every five years to meet the nation’s capacity addition requirements. The capacity augmentation schemes would comprise addition of shop floor areas, installation of machinery and equipment, facilitating enhancement of productivity at all critical and essential work centers. This will also meet the technical requirements for manufacturing 800 MW and 1,000 MW super critical boilers.

The Trichy complex is targeting a turnover of INR 10,000 crore by 2011-2012 and has drawn up plans for the same.

It has recruited about 700 artisans and 110 supervisor trainees.

SIFL bags best state undertaking award in Kerala

BL reported that Kerala based Steel and Industrial Forgings Limited has bagged the first ever award for the best performing public sector undertaking instituted by the Kerala Industries and Commerce Department and Mr K Shamsudeen MD of the company is chosen as the best chief executive officer.

Mr Elamaram Kareem industries minister of Kerala, while announcing the award, said that the awards had been instituted as part of the government’s efforts to encourage the PSUs to perform better.

Dutch and Paris courts clear obstacle to ArcelorMittal merger

It is reported that Arcelor Mittal has won the latest rounds of a legal battle with hedge funds and other investors over the offer terms for shares in Arcelor SA it doesn't already own.

A court in Paris has thrown out a shareholders revolt against the finalization of Mittal Steel's merger with Arcelor. A Dutch court also ruled against Dutch shareholders including hedge funds SRM Advisers and Trafalgar Asset Managers Ltd unhappy with the terms.

ArcelorMittal in a release said that it has noted decisions by the District Court of Rotterdam and the Tribunal de Grande Instance of Paris which reject the attempts by certain minority shareholders in Arcelor to prevent the merger of the two companies based on the announced terms. And an Extraordinary General Meeting of shareholders of Mittal Steel Company NV will be held, as previously announced, at 1400 CET on August 28th 2007, at the Hotel Okura Amsterdam in Amsterdam, to resolve on the first step in the merger process.

The hedge funds had argued that ArcelorMittal's May 16th offer for the last 6% of Arcelor was too low. When Mittal Steel bought Arcelor last year, it paid investors 11 ArcelorMittal shares for every 7 Arcelor shares and now they are offered 8 shares of the merged company for every 7 shares of Arcelor.

Chinese HRC prices firming up

It is reported that hot rolled steel coil prices continue to creep northward in China and the market is getting stronger. In Shanghai market, commercial 4.5mm to 11.5mm HRC prices increased to CNY 4150 per tonne to CNY 4180 per tonne, which is a step away with the year high of CNY 4220 per tonne.

As per report, the sentiments point that HRC prices would hit new high sooner or later. If commodity grade 4.5mm to 11.5mm HRC could goes past CNY 4200 per tonne, then it would move forward to CNY 4400 per tonne to CNY 4500 per tonne in the near future.

As per report, export prices are also on the rise. Most steel makers have raised offer for Q235 or SS400 HRC to USD 550 per tonne on FOB basis and S235JR or S275JR to USD 560 per tonne to USD 565 per tonne on FOB basis.

A North China based steel maker told Mysteel that “We are offering SS400 4.5mm to 11.5mm in 1500mm width HRC at USD 550 per tonne on FOB basis, 1600mm to 2000mm wide material at USD 565 per tonne on FOB basis and S275JR HRC export prices to Europe is no lower than USD 565 per tonne on FOB basis for November shipment."

Some steel makers are reluctant to export due to surge in domestic prices. On the other hand, overseas customers are not fully ready to accept updated quotations citing that their local prices are not rising as fast as in China. European buyers say that China is not the exclusive supplier in the world and they could import from other countries like Russia and India. Also there has been rumor on anti-dumping on Chinese steel products recently. However, it is almost certain that HRC export prices would go up further and importers would have to accept in the end.

(Sourced from MySteel.net)

Nucor completes acquisition of Magnatrax

Nucor Corporation announced that it has completed the acquisition of Magnatrax Corporation via the merger of Magnatrax with a wholly owned subsidiary of Nucor, for a cash purchase price of approximately USD 280 million.

Operating through its seven fabricating plants along with the associated engineering service centers and transportation facilities located in various parts of the US, Magnatrax is a leading provider of custom-engineered metal building systems for the growing North American non residential construction market. Via its American Buildings Company, Kirby Buildings Systems, Gulf States Manufacturers and CBC Steel Buildings subsidiaries and divisions, Magnatrax primarily sells, engineers and fabricates custom metal building systems, which include primary and secondary wall and roof panels, trim and accessories.

Mr Dan DiMicco chairman, president & CEO of Nucor said "Nucor has been in the metal building systems industry since 1987. The addition of the Magnatrax brands, facilities and, most importantly, people, significantly enhances Nucor's market position in one of our core downstream businesses."

Zinifex posts AUD 1.333 billion profit in 2007 FY

Melbourne based Global zinc major Zinifex Limited announced that its net income during July 2006 to June 2007 increased by 24% YoY to AUD 1.33 billion.

Production was approximately 5% down on the previous year with longer than normal planned maintenance shutdowns together with lower lead grades at Century primarily responsible for this. Despite this, the company had some strong individual efforts with the Hobart Smelter delivering record zinc production and the Budel facility increasing output.

Mr Tony Barnes acting CEO said that this was a terrific result for the company and its shareholders. He said “Breaking the one billion dollar mark last year was a significant milestone for Zinifex. To post a net profit this year some 24% higher again is simply an outstanding effort.”

Mr Barnes said that Zinifex’s mining business represented the lion’s share of the profit, contributing AUD 5 million. However, the half a billion dollars contributed to the bottom line by the smelting business should not be overlooked as it increased by a substantial 175% YoY. He said “Importantly, profitability of all operations increased with Rosebery, Hobart and Budel nearly double, or better, their contributions compared to the year before.”

Mr Barnes noted the ongoing strong performance of the resources sector continued to apply upward pressure on costs across the industry. He said “The resources boom has seen all companies in the sector have to face up to increased costs and Zinifex in not immune from this. While our headline cost rate went up by 15%, this was more than offset by the continued strong price of zinc and lead which were, on average, 74% and 58% higher than the previous 12 month period.”

Mr Barnes said that Zinifex is now well positioned to enter the next phase of its transformation into a fully-fledged global mining company. He said “The merging of our smelting assets into Nyrstar to create the world’s pre eminent zinc metal producer is on track to occur in September this year and we would expect to go to market at an appropriate time thereafter.”

Citic sells 20% stake in Cape Preston project to CMGC

It is reported that the Hong Kong based Citic, proposing to build an iron ore mine and port at Cape Preston in Western Australia's Pilbara, has sold a 20% stake in the project to its Chinese contractor China Metallurgical Group Corporation.

A spokeswoman for Citic said that the new ownership arrangements would not affect the running of the project by Citic's Perth based subsidiary CP Mining.

China Metallurgical Group Corporation has the main contract to build the multi billion dollar project on Mardie Station.

New seamless tube mill commissioned at BMZ

It is reported that Byelorussia’s largest steel producer Byelorussian Steel Works official opened a complete seamless tube plant supplied by SMS Meer on July 13th 2007.

The new seamless tube plant will expand the range of finished products by 250,000 tonnes of seamless tubes per year. The new plant is designed for seamless tubes in the diameter range from 21.3 mm up to 168.3 mm. The tube lengths vary between 6 meters and 15 meters. Production includes tubes for the oil and gas industry, ball bearing tubes, boiler tubes and structurals.

SMS Meer supplied all the key equipment for the complete hot section and for the finishing section, including electrical equipment, automation and technology systems. The heart of this modern seamless tube plant is the hot section with the latest generation of PQF® technology.

The PQF® concept involving the use of the three-roll technology allows the technological limitations of the conventional two-roll MPM process to be overcome. This advanced development now enables the long-standing demands of the tube manufacturers for a further product improvement to be satisfied. It permits the rolling of premium quality products, combined with high production flexibility and a high stability of the rolling process, and hence forms the basis for a complete and reliable process automation both factors for a constant premium quality and a significant reduction in production costs.

BMZ’s plant in Zhlobin produces around 1.8 million tonnes of steel per year that is subsequently processed further into a variety of finished products such as wire rod or bars.

Plymouth Tube Co acquires Trentweld Plants from Crucible Materials

Plymouth Tube Co announced last week that an agreement has been achieved for the acquisition of Trent Tube from Crucible Materials Corporation effective August 11th 2007. The purchase includes the Trentweld Plant at East Troy in Wisconsin and the Trent Processing Plant at Chicago in Illinois.

Trent Tube’s Trentweld Plant produces 1/8 inches to 4 inches diameter welded and welded & drawn stainless steel tubing including nickel and high alloys for a variety of applications. Primary products include mechanical, air cylinder, electro polished tubing, and specialty tubing products such as tubing for aircraft, sanitary, pharmaceutical, high purity, and nuclear applications.

The Trent Processing Plant provides slit and edged stainless steel and nickel alloy coils in 0.010 inches to 0.135 inches thickness and 0.375 inches to 48 inches widths. Its customers include the Trent Weld plant as well as a broad base of other steel processors.

Mr Don Van Pelt Jr president of Plymouth Tube said that “We are excited by the addition of our new offerings to the market and look forward to promoting the strengths of these new Plymouth facilities.”

Previously, Plymouth Tube acquired the Cold Work Anneal plant also at East Troy in Wisconsin from Crucible in 2005.

Plymouth Tube Company is a privately held, family owned global supplier of specialty carbon, alloy, stainless steel, and nickel alloy tubing. Additionally, Plymouth produces steel, nickel alloy and titanium extruded shapes and cold drawn shapes. Plymouth Tube is headquartered at Warrenville in Illinois with 10 plants in the US.

Hyundai Steel halts CR production at Incheon plant

Yonhap reported that South Korean steel maker Hyundai Steel Co announced that its Incheon factory has suspended production of cold rolled steel due to rising raw material prices and a decrease in demand.

Hyundai Steel in a regulatory filing said that the operation of the plant in Incheon would be resumed on Saturday.

Canada likely to continue AD on Chinese, Russian and SA plates

Canadian International Trade Tribunal, pursuant to subsection 76.03(3) of the Special Import Measures Act, has initiated an expiry review of its order made on January 10th 2003, in Expiry Review No. RR-2001-006, concerning certain hot rolled steel plate originating in or exported from the People’s China, South Africa and Russia.

As a result, the president of the Canada Border Services Agency has initiated an investigation on April 26th 2007, to determine whether the expiry of the order is likely to result in the continuation or resumption of dumping of the goods.

The investigation has now been completed and on August 23rd 2007, pursuant to paragraph 76.03(7) (a) of SIMA, the president has determined that the expiry of the order is likely to result in the continuation or resumption of dumping of the goods from China, South Africa and Russia. A statement of reasons containing additional details concerning the determination made by the president will be issued within 15 days.

The Tribunal will now conduct an inquiry to determine whether the expiry of the order is likely to result in injury or retardation to the Canadian industry and will make its decision by January 9th 2008.

SA NUM accepts wage offer from coal producers

It is reported that South Africa’s biggest mineworkers union National Union of Mineworkers has accepted the offer from the Chamber of Mines represented coal producers of 7.5% to 10% increases for its members.

Mr Frans Baleni general secretary of NUM told media that the NUM had accepted the offer but would was considering its options before applying for a strike certificate for workers at two KwaZulu-Natal mines, which are owned by Springlake and Kangra Coal.

Smaller union Solidarity had earlier agreed to the employers’ offer, after a three day strike.

Portman January to June 2007 profit up by 9.2% YoY

It is reported that Australian iron ore producer Portman Limited's revenue jumped considerably in January to June 2007 period but its profit was not as strong. It posted a 27.52% YoY lift in revenue to AUD 266.2 million and 9.2% YoY growth in profit to AUD 57.1 million.

Ore mined at its mainstay Koolyanobbing project in Western Australia was consistent with the forecast output of 7.65 million tonnes on an annualized basis. As per report, a new mining contractor BGC will commence operations at the mine on September 1st 2007.

Portman also plans to cease mining its Cockatoo Island project in WA early in the first quarter of 2008 with final shipments at end of the first quarter 2008.

Various other options to extend operations are under review. It estimate of 2007 production is 8.4 million tonnes which includes 700,000 tonnes from Cockatoo Island and estimate of 2007 sales is 8.2 million tonnes of which 7.65 million tonnes is attributable to the Koolyanobbing operation.

Portman is 80% owned by US based Cleveland Cliffs Inc.

LKAB board approves investment in rolling stock

The Board of LKAB on August 21st 2007 voted on two investment decisions that will improve logistical operations. The two investments are

1. Four new regular traffic locomotives equipped for a 30 tonne axle load will be purchased. Two single cab locomotives are always used in each train set. LKAB already has nine IORE locomotives, three on the southern circuit and six on the northern circuit of the Ore Railway. The four new engines will operate on the northern circuit and will replace the old, remaining Dm3-type locomotives, which will be decommissioned during the period 2009-2011. Manufacturing is expected to take three years and the new locomotives are expected to be in operation during the third quarter of 2010.

2. Three new train sets, built for a 30 tonne axle load will be acquired for the northern circuit. Each train set consists of 68 cars plus six reserves, totaling 222 cars in all. The payload weight of each car is more than 100 tonnes. With this investment, decisions have thereby been taken on five of the seven train sets required for the northern circuit. Investments for an upgrade of the southern circuit to the new 30 tonnes structure have been completed.

LKAB’s performance during January to June 2007 is as under
1. Revenue increased by 12 % YoY to SEK 8 334
2. Operating income increased by 8 % YoY to SEK 3 282
3. Profit after financial items increased by 10.8% YoY to SEK 3 471
4. Income after tax amounted to SEK 2 436 up by 9.8% YoY

Luossavaara-Kiirunavaara Aktiebolag is a Swedish high tech mineral products company wholly owned by the Swedish Government. Its primary business is the mining of iron ore and its primary mines are in Kiruna and Malmberget. The ore is partially processed on site, and is transported by freight train on Malmbanan to either Narvik or Luleå depending on ultimate destination. The iron ore trains are operated by the subsidiary Malmtrafikk. LKAB's corporate headquarters are in Luleå.

Malaysian steel consumption to increase by 7% YoY

It is reported that Malaysia's apparent steel consumption is expected to increase by 7% YoY in 2008 and in 2009 from 7.7 million tonnes in 2006.

Mr Tan Sri Soong Siew Hoong president of the Malaysian Iron and Steel Industry Federation while addressing at the Asean Steel conference in Kuala Lumpur said that “Major projects for implementation under the Ninth Malaysia Plan would likely boost demand for building materials and steel products domestically. The growth rate of the Malaysian steel industry from 2007 until 2010 is expected to be lower but more sustainable averaging 6% annually.”

He added that steel consumption per capita is projected to increase to 318 kilograms in 2010 from 297 kilograms in 2007.

Mr Hoong said that Malaysian steel industry as a whole would have a made greater efforts to strengthen its position by growing the downstream sector to support the upstream sector. The industry is expected to expand its downstream activities to produce a wider range of higher valued products and the growth is likely to come from more infrastructure projects.

ThyssenKrupp setting up a new BF at Duisburg

Eux.Tv recently reported that ThyssenKrupp is setting up a new blast furnace in Ruhr city of Duisburg in Germany and hundreds of workers can now be seen clambering over the scaffolding around the 89 metre chimney. As per report, Furnace 8, the first such project to be initiated by ThyssenKrupp in 15 years and the only construction site of its kind in Europe, is to be completed before the end of 2007.

Once operational, the furnace will blast air heated to 1,210 degrees Celsius through 11,000 tons of iron ore and coke fed daily. It would have a capacity of 5,600 tonnes of hot metal per day.

Mr Hans Juergen Schulokat of ThyssenKrupp said that "This is an investment of EUR 250 million.”

ThyssenKrupp is riding the steel boom driven by China and has embarked on a EUR 6 billion investment program, with new sites in Brazil and Alabama and expansion at its Duisburg home. BF 9 is also being refurbished at a cost of EUR 90 million.

Fitch affirms US Steel's IDR at BBB- on acquisition announcement

Fitch Ratings has affirmed the Issuer Default Rating and senior unsecured ratings of United States Steel Corporation following the announcement that it is acquiring Stelco Inc. for USD 1.1 billion. As of June 30th 2007, Stelco had approximately USD 760 million of net debt on its balance sheet. The Rating Outlook is Stable.

Fitch rates US Steel as follows
--Issuer Default Rating 'BBB-'
--Senior Unsecured Notes 'BBB-'
--Senior Unsecured Revolving Credit facility 'BBB-'
--Senior Unsecured Term Loan 'BBB-'

US Steel intends to pay for the acquisition and retire the majority of Stelco's existing debt through a combination of cash on hand, utilization of existing liquidity facilities and proceeds under two new fully committed senior credit facilities totaling USD 900 million.

The affirmation is based upon the strategic advantages associated with the transaction, coupled with US Steel's solid capital structure, and strong pro forma liquidity. Stelco's operations are very complementary and management expects to realize annualized pre-tax synergies of more than USD 100 million by the end of 2008. The transaction is expected to close in the fourth quarter.

Expected leverage based on USD 3.5 billion in debt at year end 2007 will be approximately 1.8 times. The Stable Outlook reflects Fitch's view that the company will continue to maintain its asset base while preserving its strong liquidity and conservative capital structure over the next 12 to 18 months. It said “We would expect the company to use free cash flow over this period to repay some of the debt used to acquire both Lone Star and Stelco.”

Baosteel secures plate order for Qinzhou refining project

It is reported that Baosteel has secured the tender for Qinzhou refining project in Guangxi Province launched by China National Petroleum Corporation, in which it will provide steel plates for all the eight 100,000 cubic meters oil storage tanks.

As China National Petroleum Corporation's largest oil refining project in South China, Qinzhou refining project is scheduled with annual capacity of 10 million tonnes. The first stage includes eight 100,000 cubic meters oil storage tanks with operation start up slated for the end of 2008. The oil storage tanks require 5800 tons of high quality heavy plate.

So far Baosteel has secured orders for 72 large domestic oil storage tanks within 17 months after its heavy plate for oil storage tanks entered the market.

(Sourced from MySteel.net)

Vinashin & Songsan jointly to build steel mill in Vietnam

It is reported that the Songsan Vinashin Ltd Company, a JV of Vietnam Shipbuilding Industry Group and Songsan CNI Ltd Company of South Korea will jointly to set up a USD 41 million JV producing steel for shipbuilding in Vietnam. The facility would produce steel structures for shipbuilding yards and replacing imported products in Vietnams shipbuilding sector.

The factory locating at the Vinashin Shinec Shipbuilding Industrial Park in Hai Phong will start to build in October and to operate in December 2009 with 102,720 tons of steel capacity a year.

Vinashin will take 51% share and Songsan will take the rest share. With the JV the two companies have already together in process to build a first USD 35 million factory in the neighboring Hai Duong province and it is scheduled to operate in the second quarter of 2008.

BAPE to begin hearing on Consolidated Thompson Lac Bloom property

Canada’s commission of the Bureau d’Audiences Publiques sur l’Environnement announced that is holding the first part of the public hearing on the Projet de mine de fer du lac Bloom starting on August 28th 2007.

The hearing would be done in two parts

1. Obtaining information
The public hearing will take place in two parts. In the presence of the proponent and resource persons invited to answer participants’ questions, the first part will allow the public and the commission to obtain information about the project in order to learn more about it and examine all its aspects.

2. Voicing opinions
During the second part of the public hearing, whose dates and location will be announced subsequently, the commission will obtain the public’s opinion and suggestions. The commission will hear any person, group, organization or municipality wishing to express an opinion on the project, be it in the form of a brief or an oral presentation.

The commission has a maximum period of 4 months to carry out its mandate and the report will be submitted to Ms Line Beauchamp, minister of sustainable development, environment and parks by December 20th 2007, at the latest. The Minister will then have 60 days to make the report public.

Consolidated Thompson Iron Mines Limited plans to develop and operate a new iron mine on its Lac Bloom property located 13 kilometer northwest of the Town of Fermont in the RCM of Caniapiscau. The metal mine would be of the open pit type. The ore would be concentrated on site and the concentrator would produce 7 million tonnes of iron ore annually. Approximately 20 million tonnes of tailings would also be produced each year. These tailings would be stored at a nearby tailing confinement area. The concentrate would be shipped by rail to Wabush, in the province of Newfoundland and Labrador, then from there, to the Port of Sept-Îles. For the time being, the proponent intends to operate the mine and the concentrator over a twenty year period. The project represents an initial investment on the order of CAD 400 million.

Bureau d’audiences publiques sur l’environnement is a public information and consultation organization that allows citizens to express their views on a given project and to take part in the decision making process which may or may not lead to the authorization of a project.

China exports 115,694 tonnes of ferromanganese in H1

China has exported 21,206 tonnes of ferromanganese in the month of June 2007 and the total export during January to June 2007 has been 115,694 tonnes to 44 countries.

During the first half of 2007, Japan, US and Taiwan accounted for more than 50% of the exports.

Chinese ferromanganese export to different countries during January to June 2007 is as follows

In tonnes

(Sourced from MySteel.net)

AISI spent heavily on lobbying

AP reported that American Iron and Steel Institute, which represent 31 steel companies in North America, spent USD 200,000 to lobby the US federal government in the H1 of 2007.

According to the form posted online August 10th 2007 by the US senate's public records office the Washington based trade group lobbied congress on legislation related to trade, building codes in the Gulf Coast, climate change and mercury emissions. It also lobbied the departments of commerce, energy, state and homeland security, plus the White House Council on Environmental Quality, the Nuclear Regulatory Commission and the Environmental Protection Agency.

Under a federal law enacted in 1995, lobbyists are required to disclose activities that could influence members of the executive and legislative branches. They must register with Congress within 45 days of being hired or engaging in lobbying.

5 Chinese steel makers post strong profits in H1 of 2007

It is reported that 5 Chinese steel makers presented their January to June 2007 reports on August 22nd 2007 that showed strong profit growth in the first half of 2007. The performance of these leading steel makers listed on the Shanghai and Shenzhen bourses to a great extent mirrors the general performance of the steel industry.

1. Angang New Steel Co Ltd made CNY 6.848 billion (USD 902.3 million) in main operating turnover in January to June 2007 surging by 55.46% YoY and CNY 4.804 billion in net profit up by 54.52%.

2. Beijing Shougang Co Ltd made CNY 544 million in operating profit, up by 28.32% YoY and CNY 387 million in net earnings up by 26.66%. The growth of the two terms mainly benefited from investment returns.

3. Inner Mongolia Baotou Steel Union Co Ltd raked in CNY 9.162 billion in sales for January to June 2007 up by 10.83% YoY. The net profit hit CNY 454 million surging by 46.23% YoY.

4. Hangzhou Iron & Steel Co Ltd generated CNY 7.36 billion in operating turnover in the period. Its operating profit and net profit surged by 67.17% and 74.49% to hit CNY 295 million and CNY 186 million respectively.

5. Xining Special Steel Co Ltd stroke a total profit of CNY 205.187 million during January to June 2007 up by 85.91% YoY. Its net profit went up by 48.78% to hit CNY 126.3731 million in the period.

Mr Meintjies joins Peabody Energy

Peabody Energy announced Mr Charles Meintjies would join Peabody Energy as senior VP of operations improvement. Peabody Energy said that Mr Meintjes would be responsible for leading the company’s operations continuous improvement initiatives and implementation of standard operating procedures across Peabody global operations.

Mr Meintjies, former ED of corporate services at resources group Exxaro Resources, was executive VP of support services at predecessor Kumba Resources before the unbundling of the coal and base metals assets from the iron ore assets late last year. He has also held senior management positions with Iscor and Alusaf.

General Steel Holdings reports Q2 results

General Steel Holdings, Inc has recently announced its financial results for the second quarter ended on June 30th 2007. Its second quarter sales revenue reached a record USD 121.3 million up by 312% YoY, gross profits reached a record USD 8.11 million up by 410% YoY and net income reached a record USD 1.9 million up by 2086% YoY.

The highlights of achievements during April to June 2007 quarter are
1. Signed 60% JV agreement with Shaanxi Longmen Iron and Steel Group Company Ltd and began operations in June 2007.
2. Finalized 80% ownership position in a JV agreement with Baotou Iron & Steel Group. Full production will begin in third quarter 2007.
3. Purchased 30% remaining outstanding shares of Tianjin subsidiary 4. Increased aggregate production capacity from 400,000 tonnes to 3 million tonnes.

Mr Henry Yu chairman & CEO of General Steel said that ''The second quarter was a pivotal point in the growth of General Steel. We executed our growth strategy by gaining controlling interest in two targeted joint ventures. This increased our production capacity from 400,000 tons to 3 million tons, widened our product mix and gave us a solid regional presence to better serve the rapidly developing western region. We are especially pleased with results from our new Long Men Joint Venture, which started only in June and has already had a great impact on earnings. We look forward to the results we can deliver to investors in the third quarter when all three of our operating units will reflect a full three months of operation.''

General Steel Holdings, Inc headquartered in Beijing operates a diverse portfolio of Chinese steel companies. With 3 million tonnes aggregate production capacity, its companies serve various industries and produce a variety of steel products including reinforced bar hot-rolled carbon and silicone sheet and spiral-weld pipe. The company has steel operations in Shaanxi province, Inner Mongolia province and Tianjin municipality.

Carnavale confirms high grade iron at Parmegiana in Brazil

Australian based resources company Carnavale Resources Limited has recently announced an update on exploration at the Parmegiana Iron Ore Project in Brazil. It said that assay results from 26 rock chip samples taken across the 32 kilometers of strike length have confirmed high grade Fe ore units in the Northern sector of it’s tenement package.

Carnavale Resources added that assay results are pending from a further 51 samples collected along north south lines at 1 kilometers spacing along the Central northern iron ore ridge, a diamond drilling program is planned to commence in the December 2007 quarter to test the initial 32 kilometers of strike extent of the Parmegiana Project. Rock chip sampling and mapping continues on the remaining 18 kilometers of strike length in the Southern sector of the Tenement package.

Highlights of the project include
1. Rock chip sampling confirms high grade surface iron enrichment.
2. 14 of 26 samples taken at 500 Meter intervals return grades in excess of 60% Fe
3. Strike extent has been inferred from regional reconnaissance to extend for greater than 30 kilometer.

ShalkiyaZinc to raise finance to fund expansion plans

The St Petersburg Times recently reported that ShalkiyaZinc, owner of Kazakhstan’s largest zinc deposit, is expected to arrange up to USD 150 million in debt finance from Barclays Capital to fund expansion of a mine and construction of an ore processing plant.

ShalkiyaZinc has also appointed Barclays Capital the investment banking division of Barclays Bank as financial adviser to the project. It appointed SRK Consulting Group as independent project manager and Russia’s Mekhanobr Engineering as a consultant.

Mr Marat Sarkytbayev chairman of ShalkiyaZinc said that “Through the proposed expansion of the Shalkiya mine and construction of the new processing plant, the company intends to significantly increase production from our current resource base.”

ShalkiyaZinc owns the Shalkiya deposit in southern Kazakhstan, which holds about 30% of the Central Asian country’s total zinc reserves ShalkiyaZinc previously said it planned to triple output by 2010 with capacity to process 4 million tonnes per year of lead zinc ore. It sold 13,700 tonnes of zinc concentrate containing 6,200 tonnes of the metal in the first six months of 2007.