Indian finished steel import in 4 months surges by 60% YoY

India’s union ministry of steel announced that the import of finished carbon steel into India during April to July 2007 is up by 60.2% YoY to 1.45 million tonnes as compared to 0.905 million tonnes in April to July 2006.

The release added that exports of steel during April to July 2007 is also up by 7.2% YoY to 1.750 million tonnes as compared to 1.632 million tonnes in April to July 2006.

The release also said that the production of finished carbon steel during April to July 2007 went up by 4.1% YoY to 15.55 million tonnes as against 14.943 million tonnes in April to July 2006 and production of pig iron recorded a rise of 13.8% YoY at 1.602 million tonnes.

TATA Steel announces provisional consolidated results for Q1 of 2007

TATA Steel, which had published its standalone audited financial results for April to June 2007 on July 30th 2007, has now announced the provisional un audited consolidated financial statements for the quarter, which includes the audited financial results of TATA Steel Limited and the provisional financial results of Corus drawn under Indian GAAP by translation from the un audited IFRS accounts of Corus. The previous period figures do not include Corus and the current period includes provisional un audited financial results of Corus.

The consolidated net turnover of TATA Steel during April to June 2007 amounted to INR 31,155 crores as compared to INR 5,748 crores during April to June 2006 and the consolidated operating profit increased to INR 4,904 crores as compared to INR 1,712 crores during April to June 2006. Its profit before tax and exceptional items increased to INR 3,157 crores as compared to INR 1,498 crores during April to June 2006.

The consolidated interest expense for the April to June 2007 quarter was INR 892 crores which included interest charge of INR 725 crores on loans taken for financing acquisition of Corus. The financial results also include extraordinary item of INR 4,121 crores primarily representing actuarial gains due to increase in the yield rates on Bonds held by various Pension Funds of Corus.

Port workers unions defer strike plan

It is reported that the proposed indefinite strike from September 1st 2007 by port and dockworkers unions in major ports has been deferred by 20 days.

This was decided at a reconciliation meeting held by the Regional Labor Commissioner with representatives from the union, ports and shipping department in Mumbai. The Regional Labor Commissioner appealed to union representatives to create a congenial atmosphere for discussion’ on their demands.

The strike is to press for various demands including restoration of retirement age from 58 to 60 years, monthly interim relief of INR 1,000 to all workers and pensioners with effect from January 1st 2007 till a new wage settlement is signed.

The unions are Water Transport Workers’ Federation of India, All India Port and Dock Workers Federation, All India Port and Dock Workers Federation (Workers), Port, Dock and Water Front Workers Federation and Indian National Port and Dock Workers Federation.

SinoSteel MECC ink coke over contract with JSW Steel

Chinese Sinosteel Equipment & Engineering Company has signed a general contract with JSW Steel for its 1.9 million tonne stamp charging coke furnace and recovery projects.

As per the contract, Sinosteel MECC is responsible for the design and supply of the equipments and related technical services.

The 1.9 million tonne stamp charging coke furnace project is one of JSW's key projects during its strive to reach capacity target in 2010 under its plans to raise capacity to 10 million tons by 2010.

This is the largest stamp charging coke furnace project that China exports to overseas countries and follows a similar contract for JSW's 1.5 million tonne coke oven project in 2006.

(Sourced from MySteel.net)

TATA Steel hopes to commission Kalinga Nagar steel plant in 2010

BS reported that TATA Steel hopes to start the construction of its proposed steel project at Kalinga Nagar soon aiming to commission it by 2010. Mr HM Nerurkar COO Steel of TATA Steel said that “Orissa plant is very important for the future plans of the company and we wish to make it functional by 2010.”

Mr Nerurkar however said that it would depend on the cooperation and support of the local people. He said that if people come forward in support of the project then the company can start the construction in October 2007.

He pointed out that some families are still resisting the construction of the plant. He said “There are some misunderstandings regarding the resettlement of the displaced families. Initiatives are being taken to sort out the problems. My colleagues are working hard to sort out things there and within a short period of time we will succeed and build the plant.”

Dispelling the apprehension regarding the rehabilitation of the displaced families, he said that the company has the innovative concept of TATA Parivar under which every displaced family will be looked after for five years and TATA Steel will also monitor the standard of living of the displaced families and this will be certified by the social audit. Besides, the TATA group as a part of its centenary celebration will launch a major program for the states that the company is currently operating. He emphasized that this is going to benefit the tribal people of Orissa.

TATA Steel, which signed the MoU with Orissa government on November 17th 2004, is facing resistance from local tribals for its proposed 6 million tonne per annum integrated green field steel plant in Kalinga Nagar.

Vedanta's offer for Sesa Goa to open on Aug 31st 2007

Vedanta Resources' open offer to the shareholders of country's biggest iron ore exporter Sesa Goa for acquiring 20% stake will open on August 31st 2007. Sesa Goa said in a filing to the Bombay Stock Exchange that Vedanta has revised the schedule, as per which the open offer would open on August 31st 2007 and would close on September 19th 2007.

Earlier the offer was scheduled to open on June 21st 2007 and close on July 10th 2007.

The open offer is pursuant to Vedanta acquiring Mitsui & Co's 51% stake in Sesa Goa for USD 981 million. Vedanta Resources has made an open offer to acquire up to 78,72,404 equity shares representing 20% stake in the equity share of Sesa Goa at a price of INR 2,036.30 per share. Two wholly owned subsidiaries of Vedanta Resources Westglobe Ltd of Mauritius and Richter Holding Ltd of Cyprus made an open offer to the equity shareholders of Sesa Goa in compliance with the market regulator SEBI's guidelines.

Karnataka clears INR 636 billion investment projects

It is reported that Karnataka government has approved infrastructure and industrial projects estimated at INR 636 billion.

Mr Katta Subramanya Naidu industries minister of Karnataka said that the state high level committee on investments, chaired by Mr HD Kumaraswamy chief minister of Karnataka, had cleared 59 new industrial projects. Mr Naidu said that "The committee has approved 59 industrial and infrastructure projects, which are expected to create employment for about 1 million skilled and semi skilled youth. Of the total projects, 15 of them will come up in Bangalore Urban, 9 in Bangalore Rural, 7 in Mysore and 5 each in Mangalore and Bellary.”

The approved projects include
1. SEZs - 14
2. IT enabled services – 10
3. Biotech parks – 6
4. Sugar mills – 7
5. Steel projects – 5
6. Tourism projects – 4
7. Electronics hardware SEZ – 1
8. Steel Plants - 5
Rest 7 projects are in textiles, aviation, cement, steel and power sector.

Some of the important projects cleared are
1. Reliance Industries Ltd’s proposal to set up INR 2,400 crore gas based power project at Humnabad in Raichur. The 2x400 MW project will come up on 200 acres of land in Dhumansur village and will mainly meet the power consumption of its retail outlets across the state.
2. Arihant Ispat Ltd will set up a 100,000 tonne steel plant in Bellary district at a cost of INR 2.42 billion
3. Srirama Steel Holdings will invest INR 4.5 billion on a sponge iron plant in Bellary district
4. Dhruvadesh Metal Steels Ltd will set up a mini steel plant in Koppal district with an investment of INR 1.5 billion.
5. State owned Karnataka Power Corporation to establish two thermal power plants to produce 2500 MW of power in Bellary and Raichur. KPC would set up a 1000 MW capacity thermal unit in Raichur at an investment of INR 4160 crore and a 1500 MW plant with INR 6300 crore investments in Bellary.

Uranium deposits found in Ladakh

PTI reported that scientists’ claim to have found uranium deposits in the icy heights of Ladakh has adopted a cautious approach by Department of Atomic Energy regarding the commercial importance of the find.

Geologists from the Kumaun University have found exceptionally high concentration of uranium and thorium in Udmaru village in northern Ladakh. A preliminary study of a thick granite dyke showed that it contained abundant, small to medium grained euhedral, greenish colored zircon. Rock samples analyzed in isotope laboratory of the University of Tuebingen in Germany have revealed uranium content to be as high as 5.36% compared to around 0.1% or less in ores present elsewhere in India.

Mr Rajeev Upadhyay a geologist at Kumaun University said that "Geochemical analysis of the separated zircon grains showed exceptionally high concentration of both uranium and thorium."

However, Mr SK Malhotra head of public awareness division in Department of Atomic Energy said that “The finding was based on a very small sample size of zircon separated from the main ore body. In exploration carried out by Atomic Minerals Directorate of the DAE we have to explore a large area and establish the size of the ore body with average uranium content. It is only after such estimates it is decided whether the deposit is of commercial interest."

PGCIL plans to raise INR 2,980 crore through IPO

It is reported that Power Grid Corporation of India Limited is planning to raise up to INR 2,984 crore in an initial public offer of 5.7 crore shares. The offer, set to open on September 10th 2007 and close on September 13th 2007, would be priced in the band of INR 44 to INR 52 per share.

The issue would constitute a fresh offer of up to 3.8 crore shares and sale of 1.9 crore shares by government and Indian government's holding would fall to 86.36% from 100% after the issue.

Power Grid is planning to use the money to fund 15 transmission projects worth INR 12,700 crore.

Kotak Mahindra Capital Co Ltd, Citigroup and Enam Financial Consultants are the lead managers to the issue.

Pipavav Shipyard bags USD 520 million order for 12 bulk carriers

Sea King Infrastructure Ltd promoted Pipavav Shipyard has reportedly bagged the single largest order of any Indian shipyard till date worth USD 520 million. As per report, with this, Pipavav Shipyard’s order book has crossed USD 1 billion mark.

As part of the order, placed by AVIGI Shipping in association with Royal Bank of Scotland and Bank of Tokyo and Mitsubishi, the Pipavav Shipyard will build 12 super bulk carriers of 75,000 DWT each.

Pipavav shipyard located adjacent to Pipavav Port over a fully developed land area of around 175 acres, is being developed to be one of the largest such facilities in the world. It will provide all services under one roof and will be capable of constructing all types and sizes of vessels. SKIL had roped in Singapore’s SembCorp as its strategic partner for the yard. Punj Lloyd had recently announced the acquisition of 25.1% stake in the yard for INR 403 crore.

Krishnapattnam UMPP bidding process in advance stage

It is reported that the Indian government would open bids for the proposed ultra mega power projects at Krishnapatnam in Andhra Pradesh and Tilaiya in Jharkhand soon Mr Anil Razdan secretary in ministry of power told reporters that the bidding process for the Krishnapattanam project in Andhra Pradesh is at advanced stage and the bidding process for the fourth one would also be ready soon.

Mr Razdan however said that "We are not in a hurry to invite bids, unless inputs are ready and the local people are fully behind the project. We are reviewing each UMPP and want to see land, water, fuel linkages are available and the project receives environmental clearances."

Mr Razdan said that “We are very conscious and responsive to the sensitivities of local population. We would not like start building a project unless the local population is also fully behind the project. The risk factor of the entrepreneur is mitigated and customers can get minimum tariff.” He added that the government is also ensuring that fuel supply is available for pithead based mega power projects.

Indian government had proposed to put up nine UMPPs having 4,000 MW capacity each over the next 6 to 8 years to reduce the demand supply gap in the country's power scenario. However, some of these proposed sites in Maharashtra and Karnataka had witnessed from local people, forcing the government to look for alternative locations.

Blackstone to buy 14.5% stake in Nagarjuna Construction

It is reported that Blackstone Group will buy a 14.5% stake in Hyderabad based Nagarjuna Construction Company Limited for USD 150 million (INR 615 crore). In addition, Blackstone will also get representation on the board of Nagarjuna Construction. Nagarjuna Construction will hold an extraordinary general meeting on September 24th 2007 to obtain the approval of shareholders for the issue of shares and warrants.

Blackstone will buy equity in 2 tranches, through an allotment of 20.24 million equity shares of INR 2 each at a premium of INR 200.50 and 9.1 million with 18 months warrants of INR 225 a warrant, with each warrant convertible into a equity share of INR 2 each at a premium of INR 223. The investment by Blackstone will be equivalent to 12.2% of the equity on fully diluted basis and the total share of FIIs in equity will go up to 44% from current 32%. The issue will be made to Blackstone GPV Capital Partners Mauritius V-A Ltd, Blackstone GPV Capital Partners (Mauritius) V-H Ltd and Blackstone FP Capital Partners (Mauritius) V FII Ltd.

Mr A Ranga Raju MD of Nagarjuna Construction said that “We welcome Blackstone as a long term partner. With its global reach and proactive approach Blackstone brings immense value to the company market.”

Nagarjuna Construction intends to use the funds for additional investments in public private infrastructure projects and to expand its capital base, which would help it bid for larger projects and strengthen its position in the market. About 60% of the funds will be used for funding projects in power sector and the remaining will go to working capital and other long-term funding needs.

Kotak Investment Banking and SSKI are advisers for Nagarjuna Construction and Blackstone respectively.

Nagarjuna Construction is a construction services company in India, and through its subsidiaries, owns several infrastructure assets on a build operate transfer basis. It has been involved in road, water, buildings, electrical works and irrigation projects and has recently expanded into power, oil and gas, and metals.

This is the fourth deal by Blackstone in India in 2007 besides acquiring majority control in Gokaldas Exports for about INR 660 crore, Ushodaya Enterprises for USD 275 million and BPO firm Intelenet from Barclays and HDFC for INR 840 crore.

Ispat Industries announces limited review for Q1 of 2007

Ispat Industries Limited has informed BSE that in the limited review report for the April to June 2007 quarter, its auditors have made the following observations

1. In terms of Accounting Standard 22, net deferred tax asset of INR 618.17 crores has been recognized in the accounts upto June 30th 2007, based on the future profitability projections made by the management. However, the auditors are unable to express any opinion on the above projections and their consequent impact, if any, on the recognition of such deferred tax asset.

2. The auditors had the impact of above item been considered, there would be a loss of INR 609.80 crores (including deferred tax asset of INR 623.61 crores accounted for upto March 31st 2007) as against the reported profit of INR 8.37 crores for April to June 2007 quarter.

Centre may allow states to acquire 50% land for SEZ

Exim News Service reported that union government is considering a proposal to allow states to intervene and acquire land on behalf of special economic zone developers to the extent of 50% of the total land, as long as the SEZ developer manages to purchase the remaining 50%.

The concerned state will, however, need to convince the centre that the SEZ is absolutely necessary for the economic development of the state. In special cases, the state governments could intervene in backward areas of the state, where a SEZ could help create employment and economic activity.

It may be noted that in April 2007, land acquisition by state governments on behalf of private developers of SEZs was banned. However, now the government is reviewing whether exceptions can be made nationally to promote economic activity in the backward regions.

AP to speed up coal exploration in its Orissa coal blocks

Dr YS Rajasekhara Reddy chief minister of Andhra Pradesh has recently directed the department of mines & geology to expedite the exploration work of its coal block in Orissa.

Dr Reddy, at a review meeting with senior officials of Andhra Pradesh Mineral Development Corporation Ltd, has appreciated the company for achieving high turnover and profit in the last fiscal year and its performance in the current fiscal year.

Andhra Pradesh Mineral Development Corporation Ltd had earned INR 541 crore revenue as on August 20th 2007 as against INR 527 crore target set by the state government and up by 21.2% YoY.

Baosteel H1 net profit jumps up by 80% YoY

It is reported that Baoshan Iron and Steel Co has posted 80% YoY increase in earnings during January to June 2007. It posted net earnings of CNY 8.16 billion (USD 1.08 billion) as compared to CNY 4.53 billion in January to June 2006. Baosteel's H1 profit was boosted by CNY 871 million of investment income nearly double the year earlier investment gain of CNY 488 million. Its turnover in H1 of 2007 climbed up by 29% YoY to CNY 94.12 billion.

Baosteel sold 10.8 million tonnes of steel products in the first half as against 10.9 million tonnes in H1 of 2006.

Baosteel said that Chinese steel prices might face downward pressure in the second half of 2007 because of increasing domestic supply. It added that “This will be offset by strong domestic and foreign demand, and by the closing of some of China's obsolete production capacity, so fluctuations in steel prices will not be too large.”

Baosteel said that its stainless steel operation would face a big challenge in the second half because of large price fluctuations for the material.

EC imposes provisional AD duties on ferrosilicon imports

It is reported that the European Commission has imposed provisional antidumping duties on imports of ferrosilicon originating in China, Egypt, Kazakhstan, Republic of Macedonia and Russia. EC said the duty rates range from 2.8% to 35.5% depending on the specific company and that the provisional duty takes effect with the August 29th 2007 for a period of six months.

The decision was taken after investigations, which began in November 2006 following a complaint from European ferroalloy producer group Euroalliages.

The European Commission noted that import volumes from China, Egypt, Kazakhstan, Macedonia and Russia increased significantly, from 134,081 million tonnes in 2003 to 452,108 million tonnes in the investigation period, while their combined market share increased continually from 15.4% to 51.2% against a background of almost stable consumption. It added that over the same period, output by European Community ferrosilicon producers fell by 40% to 163,908 million tonnes in the investigation period, from 272,364 million tonnes in 2003.

The European Commission said sales of ferrosilicon by European Community producers to independent customers on the EU market decreased steadily by 38% from 250,316 million tonnes in 2003 to 156,633 million tonnes in the investigation period, so the European Community industry experienced a loss of market share amounting to 11 percentage points, to 17.7% from 28.7%.

EC said that is has provisionally concluded that there is no compelling reasons against the imposition of antidumping duties in the present case adding that it. However, the Commission will investigate further the Community interest aspects of the case before any final determination is made.

Hot band spot prices continue upturn

SteelBenchmarker reported that the US hot rolled band spot price for August 27th 2007 up by 0.9% to USD 565 per ton on FOB mill basis after falling for the eighth consecutive time. The World export HRB price down by 0.4% to USD 555 per ton FOB port of export after rising last time. The Chinese HRB ex works price surged by 7.5% to USD 460 per ton, the third consecutive rise. And the Western European HRB price up by 1.1%to USD 670 per ton ex works, after staying flat two weeks.

1. US
USD 565 per metric ton
Up by USD 5 per ton from USD 560 two weeks ago
Down by USD 65 per ton from the peak of USD 630 on April 9th 2007
Down by USD 6 per tonne below the recent low of USD 571 on January 22nd 2007

2. World Export Price
USD 555 per metric ton FOB the port of export
Up by USD 2 per ton from USD 557 two weeks ago
Down by USD 41 per ton or 17.2% from the peak of USD 596 on March 26th 2007
Up by USD 56 per tonne from the previous low of USD 499 on December 11th 2006

3. Western Europe
USD 670 per metric ton EXW
Up by USD 7 per ton from USD 663 two weeks ago
Down by USD 26 per ton from the peak of USD 696 on June 11th 2007
Up by USD 114 per ton from the low of USD 556 on November 27th 2006

4. China
USD 460 per metric ton EXW
Up by USD 32 per ton from USD 428 two weeks ago
Up by USD 3 per ton from the peak of USD 457 on May 14th 2007
Up by USD 87 per ton from the low of USD 373 on July 24th 2006

SteelBenchmarker publishes steel benchmark prices for HRB, CR coil, rebar, and standard plate in the US, Western Europe, mainland China, and the world export market every fortnight.

SeverCorr starts melt shop, caster and HSM

Platts reported that emerging US steel maker SeverCorr has begun to produce its own HR coils with the start up of the melt shop, caster and hot mill at its nearly completed mill in Columbus in Mississippi. So far it had been purchasing HR coil from other US mills since starting up its cold rolling operations earlier in 2007.

The SeverCorr melt shop, designed to produce high quality exposed steels, utilizes an electric arc furnace with a melting capacity of 1.7 million short tons per year. The mill's 265 short tons furnace capacity, with 165 short tons tapped into the ladle, combines to minimize slag carryover. The melt shop also has a ladle metallurgy furnace with a state of the art alloy feed system which allows for faster processing time.

The six stands, 74 inch wide hot mill will initially produce more than 1.5 million short tons per year of high quality steels in phase one of operations, of which 350,000 short tons will be available for direct sale to customers in a gauge range of 0.054 inches to 0.500 inches. The balance of the hot bands will be further processed into HR pickled and oiled products, CR products and substrate for the facility's galvanizing line, which will be brought online over the next several months.

Mr John Correnti CEO of SeverCorr said that "This is the announcement we have been eagerly waiting to make since the idea of building a steel mill began 4 years ago. To be able to say we are making steel less than 2 years after breaking ground is a testament to the dedication and hard work of the entire SeverCorr team."

SeverCorr is majority owned by Russian steel maker Severstal.

Harbinger sell its stake in Ryerson

Platts reported that private equity firm Harbinger Capital Partners has sold its entire stake in US metals service center group Ryerson.

A spokesman for Harbinger confirmed that the move followed a Ryerson shareholders meeting last week in which a slate of board candidates put forth by Harbinger was voted down. Harbinger's exit also marks the end of an acrimonious proxy fight initiated by the investment firm in the first week of January 2007.

Harbinger had criticized Ryerson's financial performance and rejected the proposed sale of the company to rival private investment group Platinum Equity for approximately USD 1.9 billion. That sale now looks highly likely to proceed following the shareholders meeting.

The Harbinger spokesman said he could not comment on the firm's future plans regarding investments in the service center industry.

Chicago based Ryerson is the largest North American steel distributor specializing in carbon, stainless and alloy steels in addition to nonferrous metals and plastics. The company has operations and JV in the US, Canada, Mexico and India.

Court orders CVRD to given up Casa de Pedra rights to export

A Brazilian federal court, upholding an earlier antitrust order, ruled that Cia Vale do Rio Doce must give up rights to exports from Cia Siderurgica Nacional's Casa de Pedra mine if it doesn't sell one of its own mines.

Judges of the Superior Justice Court dismissed an appeal by CVRD against the antitrust decision, saying that it already has too much control of Brazil's iron ore market. Brazil's antitrust regulator ordered CVRD in 2005 to either give up rights to exports from Casa de Pedra or sell its Ferteco mine.

Chinese HDG export offers on rebound

It is reported that hot dipped galvanized coil prices have started to rebound in Chinese market. The rebound attributed to the rise in prices of HRC and CRC.

In Shanghai, 1mm thick HDG by Benxi steel has gone up to CNY 4950 per tonne to CNY 4970 per tonne, an increase of CNY 150 per tonne from year low of CNY 4800 per tonne. If 1mm thick HDG could go past CNY 5030 per tonne, it may be able to reach CNY 5200 per tonne in the near future, else it would drop again.

This is also the case with export prices. Now a North East China based major steel maker told Mysteel that it has raised quotation for 1mm thick HDG to USD700 per tonne on FOB basis up by USD 20 per tonne from USD 680 per tonne on FOB basis in early this month. However the transaction prices are believed to be USD 10 to USD lower than the quotations. As per report, despite the earlier quotation of USD 680 per tonne, the contract price for 1mm HDG in Z120 by the above mentioned steel mill was only at USD 660 per tonne as long as the quantity is more than 3000 tonnes.

Another steel maker in North China is now offering 1mm HDG in Z120 at USD 670 per tonne to USD 680 per tonne on FOB basis as compared with USD 650 to USD 660 in the past weeks. Last transaction price heard for 1mm HDG in Z275 to Europe was at USD 805 per tonne on CNF basis.

(Sourced from MySteel.net)

CSC net income during H1 up by 88% YoY

It is reported that Taiwan's largest steelmaker China Steel Corporation posted an 89% increase in profits for during January to June 2007 period. CSC said that its net income rose to TWD 26.2 billion (USD 793 million) up by 88% YoY as compared with TWD 13.9 billion in January to June 2006 period. Sales climbed by 25% YoY to TWD 100.2 billion.

As per derived figures, CSC posted a 57% YoY increase in profit for April to June 2007 period as its net income rose to TWD 13.1 billion as compared with TWD 8.37 billion in April to June 2006. Its April to June 2007 quarter sale rose by 21% YoY to TWD 51.1 billion.

NDRC prohibits turning obsolete BF for ferroalloy production

China's top planning body National Development and Reform Commission has asked provinces in an urgent notice to wash out obsolete iron making blast furnaces and prevent them to turn to ferroalloy productions. Besides, transfer of obsolete capacities and production shifts of obsolete manufacturing equipments will also be prohibited.

Currently China eyes severe overcapacity in ferroalloy industry, but in the meanwhile some below 300 cubic meters iron making blast furnaces turn to ferroalloy productions blindly to avoid being phased out. There are over 300 blast furnaces of this kind, which will add ferroalloy capacity of over 10 million tonnes and worsen ferroalloy overcapacity if they all switch to ferroalloy productions. Moreover, many nickel chromium blast furnaces are set up or rebuilt in the name of ferroalloy projects. These furnaces are backwardly equipped with heavy emissions and low energy utilization efficiency. Besides, in substance they are iron making blast furnaces, thus construction in terms of ferroalloy projects equals to the lower of industry admittance.

NDRC said this would deteriorate ferroalloy overcapacity, impact ferroalloy producers, hinder the elimination of obsolete iron making blast furnaces and go against the structural readjustment and macro-control of steel and ferroalloy industry.

The body urged obsolete capacity elimination on time and forbad new ferroalloy blast furnaces constructions. Below 300 cubic meters nickel chromium iron making blast furnaces will be washed out before the deadline for iron making blast furnaces and newly built ones will be managed strictly as iron making projects. In addition, re inspections will be necessary if equipments turn to pig iron making. Below 1000 cubic meters blast furnaces that are built after Aug of 2005 will be shut down providing they go out of line with industrial policies; those below 300 cubic meters will be eliminated.

NDRC asked all the provinces to carefully clear ferroalloy blast furnaces and report the results to Department of Industrial Policies under NDRC before late Sep.

(Sourced from MySteel.net)

South Africa to conduct sunset review on import of wire ropes

South Africa International Trade Administration Commission has recently decided to start a sunset review on antidumping measures concerning steel cables originating or imported from China, Germany, South Korea and UK and ropes and cables from India. As per ITAC requirement, relevant defending materials should be sent to the commission before Sep 16th 2007.

On May 26th 2006, the Commission notified the Southern African Customs Union industry through notice No.673 in Government Gazette No.28847, that unless a substantiated request is made by it indicating that the expiry of the anti dumping duties on the subject product originating in or imported from the China, Germany, Korea, United Kingdom and countervailing duties on the subject product originating in or imported from India would likely lead to the continuation or recurrence of dumping, subsidization and injury.

A response to the sunset review application questionnaire was received from the relevant SACU industry on February 19th 2007. The application was lodged by Haggie Steel Wire Ropes, a Division of Scaw South Africa (Pty) Ltd, the main producer of stranded wire, ropes and cables. The Applicant alleges that the expiry of the duties would likely lead to the continuation or recurrence of dumping, subsidization and material injury. The Applicant submitted sufficient evidence and established a prima facie case to enable the Commission to arrive at a reasonable conclusion that a sunset review investigation should be initiated.

The sunset review is conducted upon expiry of 5 year imposition of antidumping duty, which will decide whether the antidumping measures will be terminated or continue for another five yeas. The relevant antidumping and countervailing duties on the subject product originating will expire on August 28th 2007.

The subject products are described as stranded wire, ropes and cables, of iron or steel, not electrically insulated, of a diameter exceeding 8mm excluding that of wire of stainless steel, that of wire plated, coated or clad with copper and that identifiable as conveyor belt cord.

Mr Mordashov buys stake in Power Machines – Report

Handelsblatt citing inside sources reported that Mr Alexei Mordashov has bought a 30.4% stake in plant supplier Power Machines, thereby becoming a partner of Siemens AG, which holds a 25% stake in the company. As per report Mr Mordashov acquired the stake from Mr Vladimir Potanin president of the Interros investment group.

As per report, Siemens and RAO Unified Electricity System both waived their right of first refusal on the stake, paving the way for Mordashov.

The newspaper said that Power Machines has attracted the interest of a number of investors as it could play a vital role in the USD 100 billion modernizations of Russia's electricity industry.

The report added that Mr Oleg Deripaska had also filed an application to the anti monopoly agency to acquire an 82% in Power Machines in July 2007.

The report also said that Siemens had originally intended to acquire a greater stake in the company but was rejected by the Russian antitrust authority on grounds of national security, as Power Machines also produces ammunitions.

Tonghua Steel JV to develop Dunhua Tadong iron ore deposits

Jilin Province based Tonghua Iron & Steel Group Co Ltd signed an agreement August 28th 2007 with Yanbian Tianchi Industry & Trade Co, Jilin Geological Survey Bureau and Huangnihe Forestry Bureau to jointly develop Tadong iron mine in Dunhua of the province of China.

Tadong iron mine is the largest ever found, with total reserves topping 136 million tonne in Jilin Province, cited around Huangnihe forestry Bureau. It has additional useless iron ore reserves of some 40 million tonnes, accompanied by navajoite, phosphorite, cobalt ore etc. Iron ore in its preferred section has Fe grading 20% or above.

Mr Zhao Shengtang head of Jilin province's land and resource administrative department with all kinds of resource, Tadong mine can top CNY 100 billion in value.

The province's Geological Survey bureau plunged CNY 12 million to prospect Tadong mine since April 2006. With other three parties, a joint venture was built to carry out the ore development project.

Mr An Fengcheng chairman of Tonghua Iron & Steel Group said that exploitation of Tadong ore mine would secure Tonghua Steel's goal of expanding steel capacity to 10 million tonnes in following years.

(Sourced from MySteel.net)

S&P foresees favorable midterm scenario for steel

BNamerica reported that Standard & Poor's foresees a favorable scenario for international steel markets in the midterm thanks to continued positive demand.

Mr Reginaldo Takara corporate and government services director during a presentation at an event in São Paulo promoted by UK based business conference organizer International Business Communications said that “However, some vulnerability could occur in 2008 due to increasing uncertainty in the global economy. It is hard to predict what will occur.”

According to Mr Takara, the increasing value of raw materials such as iron ore, in addition to higher equipment costs take a hit on the margins of steel makers worldwide.

He however said that “Meanwhile, market conditions look positive for Brazil in the long term since the country has low production costs. However its portfolio is small scale and not diversified in the context of global movements toward consolidation, which result in large international groups.”

China iron ore import figures for January to July 2007

World’s biggest importer of iron ore, China has imported 221.504 million tonnes of iron ore during January to July 2007. Its imports during July amounted to 33.605 million tonnes.

China imported iron ore from 27 countries during January to July 2007, but the top 3 exporting countries Australia, Brazil and India with 189.606 million tonnes account for 85.6% of China’s total iron ore import volumes.

The details are as under

In million tonnes

(Sourced from MySteel.net)

Maragusa to start construction of 0.5 million tonne plant in early 2008

BNamericas reported that Brazilian pig iron producer Maragusa plans to build a 500,000 tonnes per year steel plant in northern Pará state and that the construction is expected to begin in early 2008

Mr Zeferino Abreu Neto administrative director of Maragusa said that "The viability study for the steel project has been completed and is still carrying out studies regarding the economic and financial aspects of the new steel plant. Output would start in 2 years to 3 years."

Maragusa aims to plant 2,500 hectare of eucalyptus this year, which would be used to produce charcoal for its pig iron operation. He said that the startup of the second blast furnace is not a priority we would rather focus on our forestation program.

According to earlier reports, the pig iron plant involves four blast furnaces with capacity of some 12,000 tonnes per month each and Maragusa plans to start up one blast furnace a year.

Nisshin Steel to cut SS output by 40% in August and September

It is reported that Japan’s Nisshin Steel has reduced the nickel series stainless output by 40% for steel making and by 30% for cold rolling at Shunan works in August and September as compared with July 2007.

The report added that the Nisshin Steel cuts the order receipt of cold rolled sheet from distributors by 40% to 50% since April under domestic oversupply condition and the rejected the all of order since June.

As per report, Nisshin Steel decided the steel making output reduction to reduce the distributors' inventory, for the first time since July to September 2005.

ASI reports modest profit, expects 15-quarter run to end

It is reported that Algoma Steel Inc has posted its 15th consecutive profitable quarter with modest net income of USD 3.9 million for the period April to June 2007.

Its April to June 2007 net income, affected by USD 23.6 million in transaction related expenses, was the leanest since the quarterly run on profitability began more than three years ago. The company has generated an USD 830 million profit since emerging from nine months of court supervised restructuring in January 2002, including USD 27 million in the first six months of 2007 down nearly USD 85 million from a year ago.

It includes 620,000 tonnes of shipments at USD 715 per tonnes shipped down USD 38 per tonnes from April to June 2006. Shipment breakdown included 480,000 tons of sheet and strip, valued at USD 298 million and 140,000 tonnes of plate valued at USD 145 million an average price of USD 1,035 per tonnes. More than one third of all sales, an estimated USD 177 million was to customers in the United States.

However, the quarterly profitability run, which began in fourth quarter of 2003 should end during July to September 2007 quarter, as Algoma’s lone operational BF No 7 blast furnace is undergoing a scheduled 47 day partial interior rebuild beginning July 6th 2007. As per report, due to non availability of hot metal, Direct Strip Production Complex and the slab caster have also been idled during the rebuild.

Mr Brenda Stenta manager of corporate communications of Algoma Steel Inc said that the furnace with capacity for 7,000 tonnes of molten iron production daily is expected to be in full production by the end of the week.

Gas blast leaves 9 missing in south China mine

Chinese media reported that a mine gas blast in south China has left 9 people missing. Xinhua news agency without specifying what kind of mine it was said that the explosion happened on Tuesday when the workers were exploring reserves in a mine at Huaihua in Hunan province.

On the other hand, hopes are fading for the 181 miners trapped in a state-owned colliery in Shandong province since August 17th 2007 though rescuers were still struggling to pump the water out.

China has been hit by a string of fatal work safety accidents in the past month. Its coal industry is the deadliest in the world, with 2,163 miners killed in 1,320 accidents in the first seven months of 2007.

Macarthur Coal's annual profit down by 55% YoY

Macarthur Coal Ltd announced that it has posted a 55.5% fall in annual profit after adverse weather conditions affected activities at its mine sites in Queensland.

Macarthur Coal announced a net profit after tax of AUD 66.5 million for the twelve months ended June 30th 2007. The reduction in profit in comparison to last year is attributable to wet weather on both minesites, constraints in the Goonyella coal chain and the lower coal price.

Key financial results for the 2007 financial year include

(In AUD million)

Ms Nicole Hollows CEO & MD of Macarthur Coal said that the 2007 result was solid given the obstacles the Company faced during the year. She added that “Infrastructure constraints, wet weather on both mine sites and the lower coal price combined to produce a profit which, although lower than last year, is still within the profit guidance the Company circulated earlier in the year.”

Mr Shane Stephan CFO of Macarthur Coal said that it is still a satisfying result. He said "I would like to point out that although the results are significantly down on those from last year, it's still the second best profitability that Macarthur Coal has achieved in its history. So it still remains quite a solid result."

Macarthur Coal is developing coal assets in Queensland's Bowen Basin and holds a 73.3% interest in the Coppabella and Moorvale mines JV.

Ukraine doubles exports of pig iron in H1 of 2007

Ukraine’s State Statistics Committee reported that Ukraine has doubled exports of pig iron to 1.053 million tonnes in January to June 2007 valued at USD 311.706 million.

Ukraine’s coke exports during January to June 2007 also increased by 70% YoY to 329,861 tonnes valued at USD 52.193 million.

Mr Jintao visit to Australia may see mineral agreements

It is reported that Mr Hu Jintao president of China will visit Australia next week and that several agreements related to minerals and commodities may be signed during this visit.

Mr He Yafei assistant foreign minister of China at a briefing in Beijing said that Mr Jintao will visit Perth and Canberra on September 3rd to 4th 2007 and will then attend the Asia Pacific Economic Cooperation summit in Sydney during September 5th to 9th 2007 to meet business executives and officials including Mr John Howard prime minister of Australia. He will be accompanied by a delegation of Chinese investors and executives and will sign several agreements, including the purchase of minerals and commodities.

Trade between China and Australia reached USD 15.9 billion in January to May 2007 up by 35%YoY as compared to January to May 2006. Trade between Australia and China in 2006 totaled USD 32.9 billion.

Russian economy grows by 7.9% in January to July 2007

According to Russian economic development and trade ministry Russian GDP during July 2007 grew by 8% and 7.9% in January to July 2007 as compared to 6.1% GDP in January to July 2006.

The official of economic development and trade ministry forecast for GDP growth in 2007 is 6.5%. The ministry is not ruling out an annual growth of 7%.

The Russian economy grew by 6.7% in 2006.

Mt Gibson to open Koolan iron ore mine

Australian resource company Mount Gibson Iron announced the officially opening of its Koolan Island iron ore mine in northern Western Australia. The project has been under construction for about 18 months.

Mr Luke Tonkin MD of Mount Gibson said that the company plans to build a cultural education facility on the site and has already had positive results from an Indigenous training program. He said that the company is committed to providing employment for Indigenous people.

He further added that "Currently we've had about 25 local Indigenous employees commence work at Koolan Island and at the moment about seven and a half to 8% of our employed work force are from an indigenous background."

SA to tighten anti competition laws

Sapa reported that a draft amendment to tighten loopholes in the current competition legislation would soon be forwarded to South African Cabinet.

The report cited Mr Mandisi Mpahlwa trade & industry minister of South Africa as saying that the measure is meant, amongst other things, to crack down on anti competitive practices by giving competition authorities more teeth.

Mr Mpahlwa said “This requires that the state of competition be constantly monitored, particularly in sectors such as telecommunication, banking and carbon steel. Strengthening competition policies is therefore imperative to addressing such behavior in the markets.”

Mr Mpahlwa said that despite the improving level of competitiveness and the robustness of the competition authorities, there remain high levels of concentration in specific sectors and anti competitive practices continue to characterize the structure of key markets. He said “We have to make sure that there are no tensions within the system by looking at how we can improve the functioning of the system.”

High profile cases in South Africa involving anticompetitive practices include the recent conviction of Mittal Steel SA, which had been charged by the Competition Tribunal for excessive pricing to the detriment of consumers.

Newcastle asks vessels to improve loading to reduce port congestion

It is reported that several ship owners have agreed to modify the coal loading performance of their vessels to avoid the prospect of being turned away from the port of Newcastle.

Port Waratah Coal Services had identified 50 ships, which were not meeting the coal loading capability of its two terminals, but 60% of those vessels have since improved their performance.

Mr Graham Davidson GM of PWCS said that it is part of the strategy to reduce the ship queue off Newcastle. He said “Ship loading is just one part of what we do, it also involves receiving coal from the rail line and the train providers.”

He added that "I think Port Waratah's performing very well. We are balancing our stock levels to what is incoming and I'm very pleased with the performance both on an operational basis and a safety basis."