India revises 2006 steel production to become No 5 in the world

India has moved up two places in global ranking to 5th place in production of crude steel. An expert committee set up by the India’s ministry of steel, which went into the issue of under reporting of capacity and production data, has revised the production figures for crude steel in calendar year 2006 to 49.45 million tonnes as against 44 million tonnes in the pre revised data. Earlier India held the 7th rank among the global steel producers.

With this change the revised ranking is as under

In million tonnes
Source - IISI

A communication from steel ministry said “It was perceived for quite some time that estimates of induction furnace and rerolling sectors were on lower side, owing mostly due to under reporting of crude steel data by the electric induction furnace route of production. This in turn has affected production figures for semi finished and rerolling sectors. At the same time, flat steel products have faced the problem of double counting due to inclusion of standalone finished output as also its purchased finished steel input in total finished steel production.”

The revised figure for crude steel production in the financial year 2006-07 is pegged at 50.71 million tonnes and that of finished steel at 51.90 million tonnes.

Indian iron ore export price surge by USD 4 to 6 in last week

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 6th 2007.

The change is with respect to prices posted on July 30th 2007

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.

RPG group merges TLT business into KEC International

BL reported that RPG Group’s KEC International Limited announced the merger of group companies RPG Transmission Limited and National Information Technologies Ltd into KEC International. The investment division of KEC International would also be demerged into a new company, which would be listed on the exchange.

The board of KEC approved the merger and four shares of INR 10 each of the company shall be allotted to the shareholders of RPG Transmission for every nine shares of INR 10 each held by the shareholders. Plus, one zero coupon redeemable preference share of face value of INR 100 shall be allotted to the preference shareholders of RPG Transmission for every one zero coupon redeemable preference share of INR 100 each held by the shareholders. The shareholders of NITEL will receive two shares of INR 10 each of the company for every 25 shares of INR 1 each of NITEL.

Mr Ramesh Chandak MD of KEC told media that the merger would bring about operating cost synergies. He said “The three companies have complementary assets and skills and the after the merger it will allow KEC to lower costs and enhance delivery. The combined entity would have the largest tower manufacturing capacity in the world, at 0.14 million tonnes per annum.”

RPG Transmission is into power transmission and railway electrification business in South Asia and NITEL carries out telecom infrastructure business in the country.

IOC awards INR 165 crore pipe order to PSL

Steel pipe manufacturer PSL announced that it has bagged a supply order worth about INR 165 crore from Indian Oil Corporation for Dadri to Panipat gas pipeline project, which is likely to be completed by March 2008.

Under the contract, PSL would supply 30 inch outer diameter API 5LX70 grade pipes with anti corrosion coating for a total length of 134 kilometer.

The order will be executed by the PSL at 2 step pipe mill at Kandla in Gujarat, which has been set up to cater to high pressure oil & gas requirement both in the domestic as well as international market.

With this order, PSL's total order book value has increased to over INR 2,300 crore.

Indian major ports post 15% YoY growth in April to July 2007

It is reported that India’s 12 major ports have recorded a 15% YoY growth in cargo handling to 164 million tonnes during April to July 2007 as compared with 143 million tonnes for the corresponding period in 2006. However shipping ministry’s target of 169 million tonnes for this period has been missed.

Except Mormugao, the rest of 11 ports reported a positive growth in the first four months of the fiscal. Kandla reported a 37% growth in cargo handling in the first four months to 20.8 million tonnes Visakhapatnam was a close second with 20.6 million tonnes and Chennai third with 19 million tonnes.

According to tentative numbers released by the Indian Port Association only 4 ports Chennai, Kandla, JNPT and New Mangalore surpassed the Ministry’s target.

Among the major cargo handled, POL saw an 18% growth to 55 million, iron ore had 5% growth to 27 million and thermal coal saw an 18% increase to 14 million.

Chinese firm to design Bramhani Industries steel plant

It is reported that a Chinese government agency will prepare the design as well as execute technical works in Bramhani Industries Limited’s integrated steel plant, which is coming up with an outlay of INR 25,000 crore at Ambavaram in Jammalamadugu constituency in Kadapa district of Andhra Pradesh. Production of the plant’s first phase will commence on completion of the works in 20 months.

Mr Janardhana Reddy promoter of the plant said that the new plant would come up in such a manner that Kadapa district that it would draw global attention. He added that the plant would be a boon for the region. Mr Reddy added that besides a commercial airport, a hangar for repairing aeroplanes would also be constructed in 4,000 acres of land allotted to Bramhani Industries Limited.

Mr Reddy, when newsmen pointed out that villagers of Pati and Chitimutichinthala will suffer by foregoing their lands and properties on account of the steel plant, said that the plant would not cause loss to anybody and assured them compensation and their rehabilitation soon.

Bramhani Industries Limited is constructing a compound wall encasing the plant site, roads and other civil works briskly and about 100 quarters are being constructed for factory employees.

Indian port workers to launch strike from September 1st 2007

Exim News Service reported that the affiliated unions of the 5 recognized federations of port and dock workers have decided to launch a nationwide strike at all major ports from September 1st 2007 or any day thereafter in support of their long pending demands.

Mr SR Kulkarni president of All India Port & Dock Workers’ Federation said that notice of the indefinite strike would be given to the port managements on August 16th 2007.

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

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

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

Mining lease right renewed for Obulapuram Mining Company

It is reported that lease rights of the Obulapuram Mining Company to extract iron ore from 25.98 hectares of reserve forest land at Obulapuram in Kalyandurg area of Anantapur district in Andhra Pradesh have finally been renewed for 10 years with effect from July 19th 2005. The original lease expired on August 3rd 2007.

The renewal is following an in principle approval already issued by the government of India on July 18th 2007, subject to various conditions including issuance of a no objection certificate by the Andhra Pradesh pollution control board under the water, land & tree act and clearance from the union ministry of environment & forests. The 10 year period for the present renewal is calculated from 2005, the year of transfer.

According to the order, Obulapuram Mining has been strictly asked not to use the leased area for any other purpose. In the event of violation of this condition, the land would be resumed by the government. It has also been asked to raise penal compensatory afforestation covering double the area and pay penal compensatory afforestation fee to the union government.

Obulapuram Mining Company is owned by Mr G Janardhan Reddy MLC from Karnataka, who has also been allotted about 10,000 acres of land in the neighboring Kadapa district to set up a mega steel plant at an estimated cost of INR 20,000 crores. The ore extracted from the area will be used by proposed steel plant.

PFC transfers Sasan UMPP to Reliance Power

It is reported that Power Finance Corporation Limited has transferred Sasan Power Limited to Reliance Power Limited on August 7th 2007. Sasan Power Limited, under ownership of Reliance Power Limited will now be responsible for developing the Sasan ultra mega power project at Sasan in Madhya Pradesh along with associated captive coalmines.

The power purchase agreement, escrow and hypothecation agreements were signed and transfer documents were formally exchanged in the presence of Mr Sushi Kumar Shinde union minister of power. The letter of intent for this project was issued to Reliance Power Limited on August 1st 2007.

Reliance Power Limited has quoted a levelised tariff of INR 1.196 per unit for Sasan ultra mega power project, which will have 6 units of 660MW each.

Indian Railways invites bids from global loco majors

BL reported that Indian Railways has invited qualifying bids from global loco manufacturing majors for setting up a diesel locomotives factory at Marhowra in Saran district of Bihar.

As per report, the bidder should have manufactured and supplied at least 1000 diesel electric locos to at least 3 countries and at least 200 or more of such locos should have had over 4000 HP and at least 25 locomotives should have 6000 HP.

The railway ministry, which would have 26% equity in the proposed JV, plans to provide a guaranteed yearly off take of around 100 diesel locos for some 7 years to 10 years initially.

The manufacturing capacity of new diesel locomotives factory would be around 100 locomotives per annum. Though the exact power of locos would be decided at the request for proposal stage, the railway ministry would procure locomotives with a minimum of 4500 HP at 22.5 tonne axle load and 6000 HP at 25 tonne axle load from the project.

Update on Indian ultra mega power plans

Union government has envisaged a capacity addition of 100,000MW to meet its mission of ‘Power For All by 2012’. Achievement of this target requires the development of large capacity projects at the national level to meet the requirements of a number of states.

Ministry of power, Central Electricity Authority and Power Finance Corporation are working together for development of 9 ultra mega power projects through tariff based competitive bidding recognizing the fact that economies of scale leading to cheaper power can be secured through development of large size power projects using super critical technology having advantages of low consumption of coal and lower emissions.

These 9 ultra mega power projects, each with a capacity of about 4000MW, would also have scope for further expansion. These ultra mega power projects will add about 36,000MW within a span of 6 years to 8 years and help in achievement of the targets for faster capacity addition. The fund requirement for the proposed 9 projects is estimated to be around INR 1,60,000 crores. These projects would be awarded to developers on build own operate basis. The size of these projects being large, will meet the power needs of a number of states through transmission of power on regional and national basis.

In order to enhance investors’ confidence, reduce risk perception and get good response to competitive bidding, Shell Companies have been set up as wholly owned subsidiaries of Power Finance Corporation to facilitate tie up of inputs, linkages, clearances and tie ups including water, land and power selling arrangements, obtaining environmental clearance, etc. prior to award of these projects to successful bidders.

Ministry of power has been playing an important role as a facilitator to coordinate with ministries concerned and state governments for ensuring coal linkages, environment and forest clearances, financial closure, execution of power purchase agreements and proper payment security mechanism with state government or state utilities and monitoring the progress of shell companies with regard to pre determined timelines.

Bihar Tubes to raise USD 20 million from overseas market

Bihar Tubes Limited has announced that it would raise USD 20 million (INR 80.86 crore) from the overseas market through issue of securities.

Bihar Tubes’ shareholders at the extra ordinary general meeting have approved the proposal to raise the amount through issue of foreign currency convertible bonds, global depository receipts or any other securities.

Earlier in July 2007, the Bihar Tubes board had passed the resolution to raise the USD 20 million from the overseas market. It was also decided that the borrowing power of the board would be increased up to an aggregate of INR 200 crore.

Nalco to get coal from alternate mines of MCL

It is reported that coal crisis in National Aluminum Company Limited will soon over as union coal ministry, in consultation with the Indian Railways and other coal companies, has taken a decision to provide coal from other sources to ensure that there is no shortage as against the linked quantity allocated.

A release from the coal ministry said that “The coal ministry has clarified that Mahanadi Coalfields Limited supplies 14,000 tonnes of coal per day to National Aluminum Company Limited’s captive power plants in Angul on normative basis. However, due to adverse mining conditions in the linked mines as well as evacuation problem in merry go round, there has been a shortfall in supply from the linked mine. The shortfall would be met from other mines of Mahanadi Coalfields Limited using railways wagons.”

Mr Rangnekar appointed as new MD & CEO of Sical

Sical Logistics Limited has announced that Mr Sudhir Rangnekar has been appointed as its new MD & group CEO with effect from August 3rd 2007.

Mr Karthik Menon its whole time director shall be the promoter's nominee director.

Reliance Energy emerged as sole bidder for DVC thermal plant

It is reported that Reliance Energy Limited has emerged the sole bidder for Damodar Valley Corporation's 1200MW (2 x 600MW) thermal power plant stage I at Raghunathpur in Purulia district of West Bengal.

Reliance Energy Limited, in tie up with Shanghai Electric Company, quoted roughly INR 4,800 crore for the engineering, production and construction contract.

2 Chinese companies including Dongfeng has also qualified for the price bid but did not put in an offer. Meanwhile, Bharat Heavy Electricals did not qualify for the project since it does not have prior experience of putting up 600MW units.

Chinese steel export in July crosses 6.84 million tonnes

According to the latest customs data, China's exports of finished steel products registered 5.94 million tons in Jul 2007, down by 420,000 tonnes from June 2007 level. Total steel exports including semis amounted to 6.84 million tonnes in July 2007

China exported some 39.7 million tons of finished steel products in the first 7 months up by 92.2% YoY and total steel exports amounted to 44.97 million tonnes up by 82.9% YoY. Volume of coke export also registered a YoY growth of 19.9% in January to July 2007 period

In million tonnes

On the other hand, import of finished steel in July 2007 amounted to only 1.39 million tonnes. During January to July 2007 period finished steel imports amounted to 10.94 million tonnes down by 7.8% YoY. However import of iron ore in this period at 221.5 million levels is up by 19% YoY

In million tonnes

In other words, during January to July 2007, China has been net exporter as under

In million tonnes

EU steel makers call for trade barriers against Chinese steel import

A spokesperson of ThyssenKrupp AG recently said that a group of European steel producers have requested that the European Commission start an antidumping procedure against cheap Chinese steel imports. He said that "We are involved in it. Companies making an antidumping request must control 25% of the relevant EU steel industry." The ThyssenKrupp spokesman said that it was quite a while ago the request was made but wouldn't name the exact date.

He also named ArcelorMittal as one of the companies asking the European Union to investigate possible antidumping by their Chinese peers. European Confederation of Iron and Steel Industries is also named as being part of the request.

EU's spokesman said that under EU rules, the commission has 45 days from receiving a complaint to decide whether there is a strong enough case to go ahead with a formal investigation. He added that an investigation can take up to 15 months, but the commission has an option to impose provisional duties after two months if there is strong evidence antidumping is taking place.

Mr Peter Mandelson European commissioner for trade, during a meeting with Mr Bo Xilai trade minister of China in June 2007, has warned that the over production of Chinese steel might lead to price disruptions in the European markets.

According to Chinese industrial statistics, during January to June 2007 period, China exported 17.09 billion tonnes of steel to Europe up by 47.7% YoY from the January to June 2006 period. In June 2007, 4.43 million tonnes of steel was exported.

3rd China US steel dialogue ends in disagreement

It is reported that the 3rd Sino US steel dialogue ended in disagreement in Washington August 3rd 2007 after a day and half discussion between the two sides over steel market development, US steel report, China's steel industry policy and US steel industry's trade remedy measures etc.

Mr Wang Shouwen head of the foreign trade department under China’s ministry of commerce led the Chinese delegation with other members coming from NDRC, CISA, CCCMC as well as steel manufacturers Baosteel, Angang and WISCO. The US side includes the department of commerce, AISI, the tube association and the giant steel mills etc.

The US delegates alleged that China's surge in export, to 52 million tonnes in 2006, has threatened profits of American mills and showed doubt on possibility of Chinese target of forcing out 100 million tonnes steel capacity by 2010 and progress of this year's 30 million tonnes elimination efforts.

The Chinese side clarified China's steel industry policy, stressing its steel development is based on domestic needs and the limited export is just for global balance; said the nation has taken a string of forceful curbs to export also. It was yet dissatisfied with US accusation of dumping and subsidization. Mr Chen Haoran director of CCCMC said surged US import of Chinese steel products were driven by its own demand and didn't hurt US steel industry. Despite record high import from China last year, the US market has kept strong and its profits proved unprecedented high.

Toward the AISI report issued July 30th 2007 claiming China's steel industry received over USD 52 billion subsidies from the government in past ten years, the Chinese delegation called it unfounded and criticized its sudden attack before startup of the dialogue. CISA has also said recently it will take measures to protect Chinese steel makers if the US takes action against them via the World Trade Organization.

(Sourced from MySteel.net)

Voestalpine Q1 net profit up by 58.1% YoY

Austrian steel giant voestalpine AG announced that its net profit for the first quarter increased by 58.1% YoY and full year earnings are expected to be boosted by at least 30% for the financial year 2007-08 as a result.

The first quarter headline figure was EUR 242 million up from EUR 153 million a year earlier.

Revenues for voestalpine's four divisions in the first quarter grew 14.8% YoY to EUR 1.961 billion to which voestalpines Steel Division contributed the lions share of EUR 965 million 7% more than in the same quarter of 2006.

Samuel ManuTech buys Kentucky SS tube unit from Dofasco

The Canadian Press reported that Samuel ManuTech Inc would pay USD 28.5 million for Dofasco’s stainless tube making facility in Elizabethtown Kentucky in US. Samuel ManuTech said that it expects this acquisition to be accretive to earnings in its first full year of operations. The proposed transaction is expected to close in the coming days.

Sale of Elizabethtown for the January to June 2007 period is approximately USD 16 million.

Mr Mark Samuel chairman & CEO of Samuel ManuTech said that "Combined with our flagship associated tube industries facility located in Markham at Ontario and our new greenfield site Tubos Samuel de Mexico located in Saltillo at Mexico, this acquisition is an important step in broadening Samuel’s existing stainless steel tubular products capability and geographic reach throughout North America and Mexico."

Samuel Manu Tech produces a wide range of steel, plastic and related industrial products and services from locations in Canada, the United States and Mexico.

Last week, Samuel ManuTech sold Energy Steel Products Inc for USD 25 million to a Dallas based private equity firm.

Gerdau sales in H1 of 2007 up by 13.7% YoY

Gerdau announced its January to June 2007 period result.

Highlights of the January to June 2007 results are
1. Output of crude steel reaches 8.3 million tons in January to June 2007 up by 8.2% YoY more than the volume produced in 2006.
2. Gross sales revenue reaches ZAR 15.3 billion (USD 8.0 billion) in January to June 2007 up by 13.7% YoY more than the same period 2006. Of this amount, 64.1% consists of exports and sales by overseas companies.
3. Exports from the Brazilian units contributed USD 645.4 million to gross sales revenue in the 1st half of 2007.
4. Net profit reaches ZAR 1.7 billion (USD 0.9 billion) in H1 of 2007, down by 4.6% YoY than H1 of 2006. The net margin was 13.1%.
5. Operating cash generation EBITDA reported an accumulated ZAR 2.8 billion (USD 1.5 billion) in the H1 of 2007 up by 8.4% YoY higher than the H1 of 2006. EBITDA margin was 21.2%.
6. Second quarter dividends will be paid on August 29th 2007.
7. The acquisitions announced this year represent an expansion of Gerdau's business to 4 more countries, the company's footprint now extending to 13 countries.
8. Gerdau's internal control structure receives full compliance certification under section 404 of the Sarbanes Oxley Act.
9. Fitch and Standard & Poor's rating agencies raised their risk classification for Gerdau to Investment Grade for the issue of foreign currency debt.
10. Gerdau signs agreements for new labor contracts with the United Steelworkers USW at various North American units.
11. In 2007, Gerdau commemorates 60 years as a participant in the capital markets and uninterrupted payment of dividends to its shareholders.

South African government considering setting up a steel plant

South African media reported that South African government plans to build its own carbon steel plant to counter the monopoly of ArcelorMittal’s local subsidiary Mittal Steel SA. SA government would look to partnering an international player and is reported to be talking to various potential investors.

As per report a feasibility study into the costs and location of plant is being carried out under the auspices of South Africa's recently unveiled industrial policy. A task team has been set up with representatives from the Industrial Development Corporation, national mineral research organization Mintek and the public enterprises and minerals and energy departments to assess costs and the viability of different locations and technologies. It expects to finalize the feasibility study by March 2008. The project will in part be funded by the Industrial Development Corporation, which helped set up Iscor.

The report cited Mr Nimrod Zalk chief director of Industrial Policy as saying that there is undoubtedly scope for additional steel investment in SA. He added that "We are thinking in terms of security of supply, but it obviously also makes sense from a pricing point of view."

Sidenor H1 net jumps up by 91.2% YoY

Thomson Financial reported that Greek steel maker Sidenor’s first half group net profits jumped by 91.2%YoY to EUR 69 million on robust steel sales, exports and good weather. During January to June 2007, its EBITDA was up by 47.5% YoY to EUR 141 million and turnover for the first half of the year was up by 23.4% YoY to EUR 733 million.

Sidenor said that sales were driven by higher volumes as well as higher average prices. This was due to solid demand for steel products, and rising exports to the Balkans. It said that good weather in the first half of the year facilitated a spurt in construction and hence rising demand for its products.

Sidenor said recent investment in production facilities has also improved productivity and that the results were also boosted by the solid performance of units Stomana Industries and Corinth Pipeworks on rising steel pipe sales. It also added that they expect they will be able to maintain their solid performance for the rest of the year, even though they expect steel prices to ease off current highs.

Fluor bags contract for BHPB Rapid Growth Project

Fluor Corporation has announced that BHP Billiton has awarded the Mine & Port Development JV a contract to provide engineering, procurement, construction management and commissioning services for an iron ore expansion project in Western Australia.

Total project value is USD 1.8 billion and Fluor's share of the engineering, procurement, construction management Contract is 50%. The project was booked in second quarter 2007.

The expansion, known as BHP's Rapid Growth Project, will boost annual output capacity at the Jimblebar, Whaleback and Port Hedland iron ore mines by 20% to 155 million tonnes from 129 million tons per annum. In addition to expanding the mine site, Fluor, through the JV, will also perform rail and port modifications with final completion expected in early 2010.

Mr Dwayne Wilson president of Fluor's group for Industrial & Infrastructure said "We are very pleased to continue our successful relationship with BHP Billiton. Fluor's long term presence in Australia combined with our substantial mining experience allows BHP Billiton to increase overall mine efficiency in addition to expanding output."

Fluor Corporation provides services on a global basis in the fields of engineering, procurement, construction, operations, maintenance and project management. Mine & Port Development JV is a 50:50 JV between Fluor Australia Pty Ltd and Sinclair Knight Merz.

Chinese coking industry profits in H1 surge by 8 folds

Shanghai Securities News reported that China Coking Industry Association unveiled first half statistics of China's coking and chemical industry. In the first half of 2007, Chinese coking enterprises in scale, meaning all the state owned coking enterprises and the non State enterprises with annual sales income of over CNY 5 million reported a total coke production of 156.8 million tonnes up by 21% YoY.

Meanwhile, the apparent consumption of coke totaled 148.8 million tonnes up by 21.54% YoY. Also, coking enterprises in scale realized profits of a total more than CNY 4 billion rising by 8.53 times as compared with the same period of last year, mainly lifted by the surging demands in steel, chemical, non ferrous metal and machinery industries which have registered following growth in H1 of 2007
1. Crude steel – 18.92% YoY
2. Pig iron – 16.84% YoY
3. Ferroalloys – 35.33% YoY
4. Carbides – 24.13% YoY
Crude steel and pig iron accounted for 87% of the China’s coke consumption

Mr Huang Jingan director of the coking association said that the whole coking and chemical industry had suffered a slump in the second half of 2005. Currently, the average profit margin in the coking industry is only CNY 25.72 per tonne of coke and 32.68% of the enterprises are still in loss.

As demand for coke grows wildly, the coke prices in Shanxi and Hebei, two provinces with the largest productions of coke, both in North China, were raised by CNY 20 to CNY 100.

China exported about 14.5 million tons of coke last year, less than 5% of the total domestic production but almost half of the trading volume in the entire international market. China has mainly utilized the rebate rate and quota to curb the coke export. Three years ago, the coke enterprises could enjoy a 13 percent export tax rebate. However, that policy was eliminated and those companies now pay 15% more in taxes. Consequently, the average export price of coke reached a record high of USD 186 per tonne in June 2007 far exceeding the lowest ever USD118.9 per ton in February 2006.

Global steel industry to set emission reduction targets

US Steel industry sources announced recently that an association of major steelmakers worldwide will introduce a global target for reduction of greenhouse gas emissions to take the initiative in fighting global warming.

The sources said the Brussels based International Iron and Steel Institute will decide on the introduction at its general meeting scheduled for October in Germany, following a New York meeting in mid July 2007 when member companies agreed to set a target.

Russian iron ore export to EU on decline in 2007

Rusmet reported that growth of export deliveries of Russian iron ore raw materials to the countries of Europe has started to decrease and it forecast a decline in deliveries during 2007.

During January to March 2007, about 5.9 million tonnes of ore and iron ore semi finished products were shipped to EEC from Russia. Among main reasons of such a considerable decline, practically full reduction of shipment of raw materials to Ireland. Besides, shipment of deliveries of raw materials shortened sufficiently to Finland down by 52% YoY, Romania by 27% YoY, Spain by 26% YoY and Czech Republic by14% YoY.

In spite of growth of export to some countries such as Poland at 38% YoY, Slovakia at 6% YoY and Hungary at 3%YoY, traditionally consuming significant volumes of Russian raw materials, general trend of deliveries turned out to be negative.

Rusmet added that “However, taking into account nature of this decline, it is still too early to speak about possible export prospects. Russian metallurgical raw materials in Europe remain in demand.”

SA coalminers to launch strike on August 10th midnight

It is reported that South African Trade union Solidarity would go on strike at coal mines around the country from Sunday over an inadequate pay offer, particularly for artisans. The strike notice would be served on the Chamber of Mines on Friday August 10th 2007 and the strike would begin on Sunday August 12th 2007 at midnight. The strike will exclude the National Union of Mineworkers, South Africa's biggest mining union, which said last week it would recommend a new wage offer to its members and represents miners.

Mr Reint Dykema spokesman of Solidarity said in a statement “"It will be the first official strike in more than 50 years after negotiations in the Chamber. Solidarity members are unhappy with the fact that lower levels have been offered 10%, while the artisans are being rebuffed with an 8% offer. Mines will now have to see how long they can manage without artisans, miners and officials. It appears that artisans are being overlooked when it comes to remuneration, when they should rightly be in the front ranks. Artisans are the backbone of mining. The time has come for them to receive proper remuneration for their professional services.”

Mr Dykema said that the affected coalmines include Anglo Coal, Xstrata, Optimum Colliery and Exxaro. He added that the largest disruption was likely to be to coal production for export from Richards Bay and coal supplies to Eskom for electricity generation.

The union's members were unhappy with the lower categories of workers being offered a 10% increase and artisans 8%. The union is negotiating a 15% increase.

German government approves program to curtail coal mining by 2018

The German government has given the green light to implementing a program for curtailing the production and use of coal, which once was a major source of energy in the country. Under the Cabinet of Ministers’ decision adopted on Wednesday the last tonne of coal is to be mined by 2018.

An agreement to end coal mining was achieved between Germany’s government and the federal lands North Rhine-Westfalia and Saar, the country’s two main coalmining areas.

It has been decided that the feasibility of the newly adopted piece of legislation will be considered again in 2012, but this does not mean it may be revised, though.

Mr Jurgen Ruttgers minister president of North Rhine-Westfalia said that the federal Cabinet’s decision heralds an end to the era of coal in Germany. He said “Today is a landmark day in the history of German industry.”

Mr Hubertus Schmoldt leader of the mining, chemical and energy industry workers’ union said the law sounded a verdict of historic importance.

Coalmine flooding in China claims 8 lives and 4 missing

It is reported that 8 coalminers were killed, 2 injured and other 4 missing after flood water rushed into a coal mine in southwest China's Guizhou Province.

Twenty miners were working underground at the Longhua colliery in Qianxi County at 6:10 PM on Tuesday when the flooding occurred. Six escaped and 14 were trapped. The rescuers managed to save two coal miners while 8 were confirmed dead, including the colliery director and deputy director. And 4 remain missing.

The provincial administration for work safety supervision said that the rescuing work is under way, together with the probe into the accident,

Longhua, a township owned high gas coal mine with annual designed output capability of 60,000 tonnes, is undergoing technology renovation to the goal of producing 300,000 tonnes of coal annually.

POSCO cuts stainless steel price for July

POSCO announced that it has lowered the domestic price of its hot rolled stainless steel products by 8% last month, due to falling nickel prices. POSCO lowered its HR SS price to KRW 4 million (USD 4,300) per tonne in July 2007 from KRW 4.35 million in June 2007.

POSCO also cut the price of cold rolled stainless steel products by 7.6% to KRW 4.27 million per tonne from KRW 4.62 million per tonne.

Ms Ko Min-Jin spokeswoman POSCO said that the price cuts are retroactively applied from July 16th 2007.

In June, POSCO cut the price of hot rolled steel to KRW 4.35 million per tonne from KRW 5.05 million per tonne and that of cold rolled stainless steel to KRW 4.62 million per tonne from KRW5.32 million per tonne.

Sideruna aims for 30,000 tonnes capacity by 2009

BNamericas cited Mr Reinaldo Torres president of Sideruna as saying that Brazilian pig iron producer Sideruna expects to reach capacity of 30,000 tonnes per month by 2009 at its new plant in Mato Grosso do Sul state. Sideruna also aims for 40,000 tonnes per month capacity at the plant located in Campo Grande city by 2012.

Mr Torres said the facility kicked off operations in June 2007 and is currently able to churn out 10,000 tonnes per months. Plans include an expansion to 40,000 tonnes per months once the company secures a long term supply deal, which could be with one or two clients. Negotiations are going well, that's all I can say. He added that but there is a problem with transport logistics and could face difficulties taking the pig iron from Campo Grande to ports.

Sideruna decided earlier this year to shut down its operations in the southeastern state of Minas Gerais and will only produce pig iron from its Mato Grosso do Sul plant.

Bumi expects slow rate of coal output in 2007

Bloomberg reported that Indonesia Company PT Bumi Resources expects output to be at the lower end of its range in 2007 because heavy rainfall is hampering production and transportation.

Mr Nalinkant Rathod a commissioner at Bumi said that it expects output at 58 million tonnes the lowest point in its 58 million tonnes to 60 million tonnes range. He added that “Every thing is not hunky dory it’s a struggle, so instead of loading in 12 hours we may load in 15 hours. We only need one dry month to boost production to 60 million tonnes.”

Bumi, which said it would not renege on its contracts is offering incentives to its contractors including a unit of PT United Tractors, to produce more coal than planned at the mines run by PT Kaltim Prima and will hire companies to extract the energy from smaller mines.

Heavy rainfall has forced companies including Thailand’s Banpu Pcl and Straits Asia Resources Ltd to miss contracted shipments from their mines in the southern part of Borneo island boosting prices of the thermal coal.

Hyundai Steel to spend KRW 86 billion to expand capacity

Yonhap reported that South Korea's No 2 steel maker Hyundai Steel Company plans to spend KRW 86 billion (USD 93 million) to increase production capacity as demand for steel products is increasing.

Hyundai Steel Company said the planned spending will increase its annual production capacity to 11.7 million tonnes from the current 10.5 million tonnes with annual sales expected to gain KRW 260 billion.

Gerdau Aza to expand capacity with continued operations

BNamericas cited Mr Jorge Manríquez marketing manager of Gerdau Aza as saying that Brazilian steel group Gerdau's Chilean subsidiary Gerdau Aza will continue operating normally while working on equipment to expand capacity to 520,000 tonnes per year.

Mr Manríquez explained that although some steel plants must stop activities completely for months at a time to carry out expansion projects, Gerdau Aza's electric arc furnace has the flexibility to avoid such a halt that would cause a drop in output. He added that this particular furnace could be stopped and restarted quickly unlike other types of furnaces allowing for works to be carried out during downtime typical of the Chilean winter season.

Mr Manríquez said that the roughly USD 160 million plan to expand installed capacity from the current 420,000 tonnes per year to some 520,000 tonnes per year is expected to wrap up by about 2010. He added that so far the company has accomplished roughly 20% of that goal. Afterward, Gerdau Aza has preliminary plans to expand to 750,000 tonnes per year including expansions in rolling capacity. The executive gave a rough estimate of USD 150 million in investment for that project.

Gerdau Aza manufactures bars and rolled steel beams for the construction and metal mechanic industries at its two plants located just north of Santiago in Renca and Colina.

Tennessee metal recyclers form new association

It is reported that after months of meeting to discuss legislation introduced in US, scrap metal recyclers across Tennessee have formed Tennessee Scrap Recyclers Association to promote the interests of the industry throughout Tennessee.

Mr Dom Marchitto of Metal Management in Nashville has been elected as the group's president. Mr Brad Thompson of Thompson Metal Services located at Piney Flats in Tennessee is VP and Mr Troy Blanton, of PSC Metals in Nashville is treasurer.

In cooperation with the Institute for Scrap Recycling Industries a national association representing the industry, scrap metal recyclers have also organized The Tennessee Metal Theft Task Force. Scrap metal recyclers recently met in Nashville with representatives of law enforcement, electric cooperatives and other businesses. One of the first efforts of Tennessee Scrap Recyclers Association is to become a part of a coalition seeking legislative measures to curb metal thefts. Other issues include surveillance cameras, ID requirements, theft alert communications and other practices to aid in the law enforcement process.

Iran starts privatization of Khuzestan Steel

IranMania reported that Iran government has recently started privatization of Khuzestan Steel Company by selling 4.6% of its shares in line with the Article 44 of the Constitution.

Mr Gholamreza Kord Zanganeh MD of Iranian Privatization Organization said that he provided the possibility of increase in every share price as a reason to privatize the company in stages.

Mr Zanganeh pointed to the positive steps the IPO has taken in attracting people’s confidence as well as emphasizing public and state interests at the same time. He added that selling shares in reasonable prices is far away from a jump in prices.

Mr Zanganeh said that the remaining shares will be offered in the stock exchange soon on expectations the delivery ends up in two or three days. He added that Iran Power Plant Projects Management Company the third company eligible to privatization would be soon ceded to the private sector.

Territory Resources seals iron ore deal with Nobel Resources

It is reported that Northern Territory mine has secured a major deal to sell its entire production to Chinese steel mills through Noble resources. Territory Resources said the deal would see 1.5 million tonnes of iron ore shipped out of Darwin every year. It said this would increase to 3 million tonnes in about 18 months.

Mr Michael Kiernan chairman of Territory Resources said that the deal means his company will be expanding its search for iron ore deposits in the territory. He added that "To enter into a total off take agreement based on the ruling benchmark price for iron ore, it is substantial, it is a vote of confidence it underpins the operation now and into the future."

Severstal's Olkon mining unit H1 earnings up by 6%YoY

Interfax reported that Severstal group's Olenegorsk GOK iron ore mining unit in Murmansk region of Russia saw its net profit to Russian accounting standards grow 6%YoY in the first half of 2007 to RUB 553.672 million on higher output and sales.

Olenegorsk GOK said in a quarterly financial statement that sales revenue grew 17% to RUB 3.793 billion costs 13.6% to RUB 1.908 billion operating profit 6.6% to RUB 1.49 billion and earnings before tax 8% to RUB 1.473 billion.

Olkon mines five quartzite deposits in the central part of the Kola Peninsula. The main ore minerals are magnetite and hematite.

Zaproizhiya iron ore output in 7 months up by 3.6% YoY

Interfax reported that Zaporizhiya Iron Ore Combine, a Ukrainian and Slovak JV in Zaporizhiya region, raised production of market iron ore 3.6%YoY in January to July 2007 to 2.581 million tonnes including 374,000 tonnes in July 2007.

Zaporizhiya Iron Ore mines the Yuzhno-Bilozerskoye and Pereverzevskoye iron ore deposits and is thinking of building a new mine to increase production. Its main shareholders are Minerfin of Slovakia and Zaporizhstal one of Ukraine's largest steel companies.

Its production in 2006 grew by 2.7% YoY to 4.323 million tonnes.

Mr Tetzner joins SMS GmbH management

The supervisory board of SMS GmbH, the holding company of SMS group Germany, announced that it appointed Mr Hermann Tetzner member of their managing board. Mr Hermann is responsible for finances and controlling.

Mr Hermann Tetzner last worked with German drug company Boehringer Ingelheim as Boehringer Chief Financial Officer in US.