TATA considering Vietnam for expansion strategy

Vietnam Agency reported that Indian TATA Group is considering Vietnam as one of the most important markets in Asia in its international expansion strategy.

Mr Alan Rosling executive director of TATA Group leading a delegation explore investment environment and opportunities on the sidelines of a press conference in Ha Noi told reporters that “Viet Nam is the most significant market for TATA at this moment, particularly in the production of industrial steel. Cutting edge of the TATA Group is in steel production and Viet Nam is a potential manufacturing base to expand into international markets for the group’s products.”

Mr Rosling added that “Viet Nam is going to become much more developed in ten years time, already Viet Nam is growing by 8%. If Vietnam takes 8% for five or ten years, the country will be a very different place for foreign investors.”

In May 2007, TATA Steel signed a cooperation document with the Viet Nam Steel Corporation in building a steel production plant in central Ha Tinh province.

Monnet Ispat revise Orissa steel project to 2.5 million tonnes

It is reported that Monnet Ispat & Energy Limited has decided to revise its proposal to set up a 0.25 million tonnes capacity steel plant at Mangalpur in Dhenkanal district in Orissa to 2.5 million tonnes.

Mr Sandeep Jajodia executive director and VP of Monnet Ispat & Energy Limited after meeting Mr Naveen Patnaik CM of Orissa told reporters that Monnet Ispat & Energy Limited is now planning to set up a 2.5 million tonnes steel project. Mr Jajodia said the new MoU will be signed within 6 months and the plant would be made operational 12 months thereafter.

Initially, the project cost for the 0.25 million tonnes steel project was pegged at INR 281.08 crores. However, he did not reveal the total investment required for the revised project proposal.

Mr Jajodia urged the chief minister to direct the government officials to help the company in land acquisition. Mr Jajodia said that "We have requested the government to ensure that the required land is transferred to the company so that the project can come up as per the schedule."

Monnet Ispat & Energy Limited requires between 1,200 and 1,500 acres land for its power project and has so far acquired only 450 acres of land.

Monnet Ispat & Energy Limited is also putting up a 600 MW thermal power plant at Chhendipada in Angul district with an investment of INR 2,852 crores.

Update on Essar steel plant in Trinidad &Tobago

It is reported that Essar Steel’s proposed steel plant at Savonetta in Trinidad and Tobago will open opportunities for investments in downstream areas in the country in addition to huge saving in foreign exchange.

Mr Prem Singh head of HR & administration of Essar Steel Caribbean Limited told local media that "On completion of the plant, the company expects to earn over USD 1 billion in foreign exchange, based on price trends of steel.”

Mr Singh said that the complex is expected to assist in opening up opportunities for potential investment and development of various trades and services such as shipping, logistics, plant operations and maintenance.

As per report, with the availability of flat steel produced by the new company multiple avenues will be available for downstream investments. Some of the items that downstream investors will be involved in are the production of automotive parts, ship building containers, storage tanks, cold rolling mills, refrigerators, washing machines, and office and household furniture.

He said the decision of Essar to invest in a steel plant in Trinidad was based on the availability of natural gas at competitive prices, a strategic location, a political system that is stable and it is the most industrialized nation in the Caribbean. In addition, we took into account the proximity to the American market and there are no cultural barriers.

Essar’s iron and steel complex planned for Savonetta will comprise a pellet plant, 2 hot briquette iron plants and a hot roll coil plant.

JSW considers secondary listing in global market

Financial Times reported that JSW is considering a secondary listing on overseas stock markets either in Singapore, New York or London to fund its expansion plans. Mr Sajjan Jindal vice CMD of JSW said that the plan would fit in with efforts to expand outside India through possible acquisitions in Europe for about USD 500 million.

Mr Jindal said that while most of the company's production would continue to focus on the Indian market, he sees benefits of listing about 10% of the company's shares on an overseas stock exchange in about 2 years time. He added that "I would like to see more Indian manufacturers generally gain listings outside India. This would help improve investors' confidence in companies of this sort as the Indian economy grows stronger."

He added that the proposal to go for a secondary listing was based on the projection that JSW's stock market value, currently about USD 4 billion, would increase substantially during the next 2 years as it increased output and boosted profits.

JSW has embarked on an ambitious USD 18 billion plan to expand its annual steel production in India from an expected 4 million tonnes this year to 30 million tonnes by 2020.

MOIL H1 net profit up by 131% YoY

Manganese Ores India Limited has posted net profit of INR 116.27 crore during April to September 2007 period up by 131% YoY as against INR 50.41 crore during April to September 2006.

Mr KL Mehrotra CMD of MOIL, while presenting a final dividend cheque of INR 4.57 crore to Mr Ram Vilas Paswan union minister for steel, chemicals and fertilizers, said that the turnover during the first 6 months has increased to 0.65 million tonnes from 0.55 million tonnes last year.

He added that during the year turnover is expected to be about INR 600 crore.

Mr Mehrotra said that MOIL is expanding its capacity keeping the growth of capacity in steel industry. It is planning to set up a plant in Bhilai at a cost of INR 260 crore with JV with Steel Authority of India Limited.

Indian government holds 81.57% share in MOIL.

Indian government puts deadlines for power project execution

It is reported that union government, faced with a daunting prospect of adding 78,577 MW power generating capacity during the current plan period, is not taking any chances and has fixed stringent time lines for placement of orders and project execution.

While projects totaling a capacity of around 52,365 MW are currently under execution, the newly formed National Power Project Management Board has been asked to ensure that placement of orders for the balance capacity of 23,632 MW by central and state power utilities is done by December 2007.

The report cited a power ministry official as saying that “Efforts are being made to place all orders by the end of the calendar year. In no case will they be allowed to stretch beyond March 2008, which is our final deadline.”

A number of states have forwarded a list of additional projects for commissioning during the current Plan. While Chhattisgarh has indicated it would be trying for around 5,000 MW of additional capacity through the private sector, of which part capacity has already been ordered, Tamil Nadu has also indicated plans for setting up a large capacity of merchant power plants to be developed through imported coal at coastal locations. Uttar Pradesh has also drawn up a plan to add 3,000 MW of additional capacity during the current plan period, of which the state sector is to contribute 2,000 MW.

The ongoing power shortages, seen as the biggest stumbling block in the way of India achieving a sustained nine per cent growth, have been a result of repeated failures by the government to meet generation capacity addition targets during the last several plan periods.

Pakistan way ahead of India in gas pipeline network

It is reported that Pakistan is nearly 6 times ahead of India in terms of its gas pipeline network, which stands at around 56,400 kilometer as against India’s 10,500 kilometer.

According to Assocham, Pakistan’s current pipeline density measures at 1,044 kilometer per million metric standard cubic meters per day as compared to 116 kilometer per million metric standard cubic meters per day of India.

As a result, Pakistan has connected its 1,050 towns and villages while in case of India, its connectivity is only restricted to 20 cities.

Since the pipeline network in India does not reach out to most of the demand centers, a number of industrial projects which would ideally run on gas due to its higher efficiency and environment friendly nature have to depend on much costlier and more polluting alternative fuels. Thus, the unmet gas demand in India is probably much higher than what is reported.

India currently has only 1 major cross country pipeline in the form of HBJ pipeline and there is estimated to be considerable unmet demand even in the states serviced by this pipeline. With the increased availability of gas, India needs to gear up quickly to meet the increased requirement of cross country as well as regional and local downstream gas distribution networks.

Indian government approves winding up of Bharat Yantra

It is reported that Indian cabinet has given its approval to the following proposals for winding up of Allahabad based Bharat Yantra Nigam Limited. The decision for winding up of Bharat Yantra will enable its subsidiaries to have an independent status which will improve their performance and profitability.

During a recent meeting it approved the following
1) Waiver of government of India loan of INR 1.10 crore as on March 31st 2007
2) Waiver of interest of INR 4.14 crore accrued on government of India loan as on March 31st 2007 and any addition up to the date of closure
3) Writing down of the share capital of Bharat Yantra to the tune of INR 2.31 crore
4) Opening of voluntary retirement scheme to enable the employee desirous of opting for an early separation before closure of the company
5) Budgetary support for the cost of closure of the company to the extent of INR 3.82 crore
6) Transfer of the assets and liabilities as on a cut off date of March 31st 2007 of the company among the subsidiaries
7) Transfer of shares held by Bharat Yantra in subsidiaries to the government of India
8) Closure and winding up of Bharat Yantra under the relevant provisions of Companies Act, 1956 after transfer of assets and liabilities to the subsidiary companies and transfer of shares of the subsidiary held by Bharat Yantra to the government of India. Each subsidiary will become separate central public sector enterprise

Bharat Yantra is a holding company of 6 subsidiary companies namely
Bharat Heavy Plate and Vessels Limited at Visakhapatnam
Bharat Pumps and Compressors Limited at Naini
Bridge and Roof Company India Limited at Kolkata
Richardson and Cruddas Limited at Mumbai
Triveni Structurals Limited at Naini
Tungabhadra Steel Products Limited in Karnataka

NCDEX talks to Indian construction majors on TMT future contracts

It is reported that National Commodity & Derivatives Exchange Limited has initiated dialogue with big construction firms to enlist their trading in its steel futures contracts. According to the report, NCDEX has held talks with firms including L&T, Shapurji Pallonji, Gammon India and Nagarjuna Construction.

NCDEX, which already trades in steel ingots, seems to be planning to launch a contract for futures trading in TMT bars used in construction allowing companies to directly purchase their long term requirements from the exchange and hedge their risks.

Steel manufacturers currently do not give long deliveries due to price volatility. In case a construction company plans to book its requirement six months ahead, it could do so on the exchange if the contract is offered.

Steel ingots, which already trade on the exchange, are the raw material for TMT bars and ingot prices are closely linked with steel bars prices and seen as an indicator of price movements in downstream products.

APJ and Bharati Shipyard tie for a shipyard in Orissa

SNS reported that APJ Surendra group, in collaboration with Bharati Shipyard, would set up a modern ship building factory at Chardiha in Dhamra estuary in Orissa with an estimated cost of INR 2,200 crore.

Mr Karan Paul chairman of APJ Surendra group has discussed the matter with Mr Naveen Patnaik chief minister of Orissa and a MoU will be signed in November 2007 in this regard.

NTPC’s Pakhri Barwadih coalmining venture delayed

It is reported that procedural and infrastructure delays have upset the plans of NTPC Ltd to achieve fuel security and reduce dependence on Coal India Ltd as it will not be able to begin production from the first of its captive coal blocks at Pakhri Barwadih in Jharkhand as planned by December 2007. As per report, NTPC is yet to select the operator for the Pakhri Barwadih block which has gross reserves of 1,350 million tonnes.

The report cited a senior NTPC executive as saying that “Due to a delayed land acquisition notice issued by the coal ministry and the absence of a railway link, we do not see anything happening shortly. We have suffered this setback due to the delays by the coal ministry. Availability of land is the main issue which is holding other things up.”

However, the report also mentioned a senior coal ministry official countering NTPC’s claim by saying that “The land acquisition notice has already been issued. There was no intentional delay on the part of the coal ministry. It has also been observed that there was no consistency in the proposals submitted by NTPC and every time the proposals have been submitted with a different quantum of land. NTPC is trying to blame others for their inaction.”

NTPC’s coal production plan from its captive blocks is part of its strategy to ensure a stable source for its energy, including coal and gas, needs to cushion the impact of supply and pricing disruptions. NTPC has been allocated 8 captive coal blocks by the government. They are Kerandari with 228 million tonnes, Chatti Bariatu with 243 million tonnes, Chattrasal with 150 million tonnes, Dulanga with 260 million tonnes, Talaipalli with 965 million tonnes, Brahmini with 1,900 million tonnes and Chichro Patsimal with 356 million tonnes. NTPC believes the coal from these captive blocks will be one fifth cheaper than what it pays to CIL for current supplies.

It has an overall demand of 115 million tonnes per annum of coal. NTPC imports 4 million tonnes per annum of coal to meet its overall requirement. The rest of its coal requirements are met through supplies by CIL.

IWAI to acquire 6 cutter dredging units

It is reported that Inland Waterways Authority of India will acquire 6 cutter suction dredging units, workboats and accommodation boats for national waterway no. 1 and no. 2 at an estimated cost of INR 113.45 crore.

The cabinet committee on economic affairs, while approving the proposal, said that the delivery of all the cutter suction dredging units along with the workboats and accommodation boats will be received within 22 months from the date of award of contract to shipbuilders.

Yokogawa to supply control systems for NTPC Barth

Yokogawa Electric Corporation has announced that Yokogawa India Limited has received an USD 11.8 million contract from National Thermal Power Corporation Limited to supply automation and control system for a new supercritical coal fired Barth Power Plant in Bihar, which will generate a total of 1,980 MW and its Unit 1 is planned to start operation in October 2009.

In Barth Power Plant project, Yokogawa India is providing instrumentation systems for the boilers and other utilities of 3 power generators, including the CENTUM CS 3000 R3 distributed control system, PRM plant resource manager, DPharp EJA pressure differential pressure transmitters and IR8A infrared gas analyzers.

As part of its full turnkey project solution, Yokogawa India is also providing engineering, installation, and commissioning services.

As per release, NTPC selected Yokogawa for this project because of the extensive track record that Yokogawa India has acquired over the past 20 years in the installation of control systems for various kinds of coal fired and captive power plants in the Indian power market.

Cochin Shipyard delivers 4th PSV to Norway’s Deep Sea

It is reported that Cochin Shipyard Limited has delivered the fourth of the series of 8 platform supply vessels that it is building for Norway based Deep Sea Supply. It has further orders for 12 more platform supply ships for various foreign owners.

The protocol for delivery and acceptance of the vessel was signed by Mr Annfinn Folsland from Deep Sea Supply and Mr CK Thomas executive director of Cochin Shipyard.

UT 755 L design vessel is built for satisfying the specific demands of the offshore industry for transport of deck cargo, pipes, liquid cargo, cement etc and unloading to rigs and production platforms and pipe laying barges. As the offshore industry moves into deeper waters, demand for such advanced vessels is expected to rise.

The ship is built and classified under the most stringent rules and regulations of Det Norske Veritas and is classed for unmanned engine room and dynamic positioning grade I. The vessel also satisfies clean notion of DNV, which signifies high standards of environmental safety.

CVRD announce USD 11 billion CAPEX for 2008

Companhia Vale do Rio Doce announced that its board of directors has approved an investment budget of USD 11 billion for 2008, the largest annual investment program ever undertaken by CVRD or by any mining company in the world.

The program involves more than 30 projects, located in Brazil, Peru, Chile, Canada, Australia, Indonesia, New Caledonia, Mozambique and Oman. Investments in Brazil will account for 73% of the budgeted resources for 2008, an amount of USD 8 billion.

In USD billion

In USD billion

The main projects in terms of financial disbursements in 2008 are

CVRD said that the decision to invest on such a huge scale is firmly based on their confidence in the long term fundamentals of the global economy and on the belief in a structural change in the demand for minerals and metals. It added that “CVRD will concentrate on organic growth, with the development of a wide portfolio of projects founded on its world class asset base. In order to support this expansion, CVRD will invest heavily in logistics infrastructure and energy generation.”

The completion of the planned investments should lead to a significant increase in CVRD's main products.
CVRD production

Iron ore, pallets, coal and alumina in millions tonnes except
Nickel and copper in 1,000 tonnes

Iron ore - Operation reaching annual production of 450 million tonnes in Q4 of 2012
Pallets - Does not contain production volume from JV’s Nibrasco, Kobrasco, Itabrasco, Hispanobras and Samarco.
Nickel - Does not include volumes of finished nickel produced under tolling agreements with concentrate purchased from third parties.

The 2008 budget is part CVRD's strategic plan and underpins the 5 year, USD 59 billion investment program and consequently involves a significant increase in CAPEX for organic growth as compared with the period 2003-2007, estimated at USD 18 billion.

The budget includes financial disbursements in investments in consolidated format according to US GAAP. The main CVRD subsidiaries consolidated according to US GAAP are
1. CVRD Inco
2. MBR
3. Cadam
4. PPSA
5. Alunorte
6. Albras
7. Valesul
8. RDM
9. RDME
10. RDMN
11. Urucum Miningo
12. Centro-Atlântica Railroad
13. CVRD Australia
14. CVRD International
15. CVRD Overseas.

Chinese September trade surplus is USD 23.914 billion

China’s General Administration of Customs announced that China recorded a trade surplus of USD 23.914 billion in September 2007 down by USD 1 billion as compared to USD 24.97 billion in August 2007. Exports in September 2007 increased by 22.8% YoY to USD 112.481 billion while imports increased by 16.1% YoY to USD 88.567 billion.

China’s trade surplus for January to September 2007 is USD 185.65 billion. During this period exports increased by 27.1% YoY to USD 878.242 billion while imports increased by 19.1%to USD 692.592 billion.

The export import data for some of the items during January to September 2007 is as under
Exports

In million tonnes

Imports

In million tonnes

AISI welcomes decision on sunset review for HR import into US

The American Iron and Steel Institute has welcomed the decision of the US International Trade Commission in the 5 year sunset review of the antidumping and countervailing duty orders covering imports of hot rolled sheet into US.

AISI said “We are pleased by the unanimous decision of the ITC to maintain antidumping orders on hot rolled steel from China, India, Indonesia, Taiwan, Thailand and Ukraine. This reflects, at least in part, the Department of Commerce’s previous determination that likely dumping and subsidy margins from all of the 10 countries under review would be substantial and revocation of the orders at issue would be likely to result in a resumption of unfairly traded imports from each of the 10 countries.”

AISI added that “US domestic steel industry will be vigilant and aggressive in responding to any resumption of injurious dumping in the US market and we fully expect that US trade remedy laws will be vigorously enforced going forward, as the President has promised.”
AISI serves as the voice of the North American steel industry in the public policy arena and advances the case for steel in the marketplace as the preferred material of choice. AISI is comprised of 31 member companies, including integrated and electric furnace steelmakers, and 130 associate and affiliate members who are suppliers to or customers of the steel industry. AISI's member companies represent approximately 75% of both US and North American steel capacity.

African and Australian thermal coal prices rising

Reuters reported that physical coal prices FOB for some origins and delivered into Amsterdam Rotterdam Antwerp rose recently due to continued strong demand and tight supply. It added that traders and utilities agreed that there was considerable room for prices to move higher until the end of the year.

Prompt South African coal cargo prices seemed to be under pressure earlier a November loading Panamax was offered at AUD 68.25 a tonne FOB against no bids. There were also API4 index linked bids and offers below the index. Recently, prompt South African had been indicated at around AUD 69.00. But later in December loading cape traded at AUD 69.70 a tonne FOB.

DES/CIF ARA coal was bid at AUD 110.00 a tonne for a 50,000 tonne December delivery parcel of multi origin material recently on electronic trading platform globalCOAL. DES ARA traded recently at AUD 111.00 but consumers have paid over AUD 115.00 a tonne in Europe during the past month.

Market sources said Australian coal prices also strengthened recently. There have been trades at around AUD 77.00 a tonne FOB Newcastle direct between suppliers and end-users in Asia.

China to unveil National Coal Policy soon

It is reported that, following the new steel industry policy released in 2005, China's first coal industry policy may also soon to come on stage. As the first policy for coal industry, it mainly aims at guiding the sector's medium and long-term development. As per report, the new coal policy constituted by National Development & Reform Commission was submitted to the State Council before the National Day Holidays.

In June 2005, the State Council issued a document, suggesting how to promote the coal industry's healthy development. Based on this document, the new policy is more detailed and with further provisions set on admittance threshold and better organized exploration of the resource etc. The policy's 11 chapters include admittance, organization, layout, technology, trade and transportation, environment protection, safety production, energy conservation and safeguards etc.

In order to consolidate the coal industry, China has released a series of measures these two years, like fixing 45 projected mining areas, implementing compensation system for using coal resource in eight provinces, mapping construction blueprint for 13 large size coal bases, constituting the 11th five year plan etc. The coal industry's 11th five year plan projects to form 6 to 8 100 million tonnes, 10 50 million tonnes large scale coal enterprises and group by 2010, with combined output taking up 50% of the total.

In primary energy resources of China, coal takes up 76% in output and 69% in consumption, in 2006, and China’s crude coal output reached 2.325 billion tonnes up by 8.1% YoY. The predicted output in 2007 is at 2.5 billion tonnes up by likely 6.5% YoY. While faced with reducing resource availability and increasing production accidents etc, around 9000 collieries were shut down by May, still with over 20,000 left across the nation, which includes two conglomerates, four 50 million tonnes groups, and 31 10 million tonnes groups.

(Sourced from MySteel.net)

USW welcomes US ITC decision on tariffs for HR imports

The United Steelworkers said that the affirmative ruling by the US ITC on retention of tariffs of hot rolled steel imports from China, India, Indonesia and three other countries is the correct outcome, based on the facts presented by the union and the domestic steel companies at a public hearing held in July 2007.

Mr Leo W Gerard president of USW said "American steelworkers and the companies employing them produce world class steel, but the predatory practices and government subsidization policies by some of the largest foreign steel producers are illegally dumped."

Mr Gerard added "Hot rolled steel is without question one of the most vital steel products made in the US. Not only is hot rolled steel used in automotive and construction applications, among others but it is processed internally to make corrosion resistant steel, cold rolled steel, tin mill, steel pipe and tube."

According to the ITC rulings, the six commissioners made affirmative determinations to retain tariffs on imports from China, India, Indonesia, Taiwan, Thailand and Ukraine. Negative determinations to remove import tariffs were made for Argentina, Kazakhstan, Romania and South Africa.

Queensland Supreme Court overturns Xstrata mine decision

APP reported that the Queensland Supreme Court has overturned a Land and Resources Tribunal decision allowing a coal mining company to expand its mine without any conditions to offset greenhouse emissions.

Mr Toby Hutcheon coordinator of Queensland Conservation Council said that the council had sought to have conditions imposed on Xstrata's Newlands mine extension near Mackay in north Queensland to avoid, reduce or offset a proportion of its greenhouse gas emissions. He said "The Supreme Court has agreed with QCC that this was an unfair judgment by the LRT.”

Mr Hutcheon added that the decision would now allow the case to be reheard. He said "QCC would be pushing for this matter to be progressed as soon as possible. We have lost seven valuable months in the campaign towards stabilizing Queensland greenhouse gas emissions."

A spokesman for Xstrata said it was too early to comment on the next move regarding the proposed expansion. He said "We are currently considering the decision and taking the appropriate time to review the application.”

Ukraine to take final call on Kryvyy Rih iron ore JV soon

Interfax reported a working group assessing the feasibility of a JV to supervise the construction of the Kryvyy Rih Ore Dressing Plant has suggested cooperation with the Ukrainian Mining and Metallurgical Company.

Ms Valentina Semenyuk State Property Fund told Interfax that "The group will issue a report for the government next Wednesday and the government will make the final decision.”

Mr Anatoliy Kinakh economic minister of Ukraine, who is also the group's leader, said that the group recommends the establishment of a joint stock company in which the government will have no less than 50% plus one share.

He said that "The joint venture will complete the construction of the plant, which was suspended in 1997, because of lack of funds. No budgetary funds will be invested in the project, but the government will retain control over the plant."

Mr Kinakh further said that the plant will help Ukraine meet its international commitments and promote the development of Dolinskaya's social infrastructure.

Malaysian steel industry refutes builder association claim about surge in rebar demand

The Malaysian Iron and Steel Industry Federation said that its integrated steel mill members who are producing steel bars have not experienced any increase in the demand since June 2007.

It made this statement in response to recent press statements by Master Builders Association Malaysia and Real Estate and Developers' Association Malaysia claiming that there was a shortage of steel bars and persistent selling of steel bars at above government controlled price.

In a press release here recently, Malaysian Iron and Steel Industry Federation however claimed that following the press statements of Master Builders Association Malaysia and Real Estate and Developers' Association Malaysia last week, Malaysian Iron and Steel Industry Federation steel mill members have received a surge of orders.

Malaysian Iron and Steel Industry Federation this can only attribute to panic buying by the consumers caused by the recent articles. It said "The surge in demand for steel bars has clearly caught the steel bars producers by surprise as historically during the period of Ramadan, the demand is much less than other months of the year."

Malaysian Iron and Steel Industry Federation Since the last price increase in June, all the integrated steel mills have adhered strictly to the ceiling price for steel bars set by the government. It also said that it will support a fact finding discussion under the auspices of the Ministry of Domestic Trade for any claims of its members contravening the law.

Malaysian Iron and Steel Industry Federation said despite the fact that scrap prices have started to increase recently, all Malaysian Iron and Steel Industry Federation integrated steel mill members have maintained their regular price and supply to the domestic market. It said "Therefore, Malaysian Iron and Steel Industry Federation do not see the need to resort to drastic measures such as banning the export of steel bars and billets."

Russia government plans to tighten limit on steel import from China

It is reported that Russia pipe import from China has increased sharply; therefore, Russia is planning to have import quota control on Chinese steel pipes.

In the first 8 months of this year, Russia’s trade deficit with China has reached USD 4 billion. This is the first trade deficit with China since last ten years. As the rapid trade amount between the two countries increases, this trade deficit gap will keep widening.

The great amount of steel pipe from China is threatening the survive of Russia‘s relevant enterprise. The organization of Russia steel pipe industry development said that the total steel pipe import from china will be 8.5 times up more than last year. If China government does not place a curb on steel export to Russia, Russia will start anti dumping investigation and have quota control on the import of steel pipe from China soon.

GFMS forecasts strong demand for base metals

GFMS Metals Consulting, the market analyst, has reported that the base metals market continues to be governed by fundamentals that were in place a year ago. At the end of September 2007 only aluminum and zinc prices were lower than at the same point in 2006 however, GFMS does expect price decreases in a number of base metals in 2008.

GFMS said that
1. Most aspects of the fundamentals remain favorable
2. Underlying demand growth remains firm following previous de stocking
3. Strong demand is expected to come from the semi manufacturing sector where a product remains unfinished
4. Chinese demand will increase in 2008
5. Raw material prices will tend to reinforce the tight supply situation as miners are in a strong position

GFMS also takes the view that the US sub prime crisis will have a limited impact on base metal performance in the coming months and that demand is likely to be less in some residential construction and automotive markets.

During the remainder of 2007, GFMS expects weak Japanese and US demand continue. Demand from Europe, India and China should remain strong and some recovery is expected in the US and Japan in 2008, at a point when Euro zone growth is forecast to slow.

Qatar Steel delays USD 1.34 billion fund raising

Gulf Times Newspaper reported that Industries Qatar’s subsidiary Qatar Steel has postponed the USD 1.34 billion fund raising for its expansion in view of the current turmoil in the debt market.

According to a news item posted on the Doha Securities Market website “Qatar Steel has temporarily decided to postpone the USD 1.34 billion finance raising exercise relating to financing the Phase II Expansion Project and refinancing of its current loans due to the current turmoil in the international credit markets.”

The debt market has been rattled by sub prime crisis in the US that shook not only its mortgage but also equities market as well. However, it said the expansion project was still viable and negotiation with various contractors were proceeding towards finalization of the contracts and long lead item procurement.

IMS completes acquisition of French Produr

IMS International Metal Service has completed the acquisition of the French company Produr.

Based in Chambery, Produr realized in 2006 a turnover of EUR 12 million for May 2007 distributed 500 tonnes and employs 53 people.

Integrating Produr enable IMS, already leader its market in France, strengthening its position with the sale of items with high added value. The addition of a Sales force specializing in this market will strengthen the network of IMS in France.

Ex POSCO researchers held in technology leak case to Chinese firm

Yonhap reported that 2 former POSCO researchers have been arrested on charges of leaking computer files detailing a steel manufacturing process to a Chinese company.

The report cited a POSCO official as saying that the technology streamlining a steel manufacturing process had been developed over a period of 10 years, and could cost the company up to KRW 2.8 trillion (USD 3 billion) over the next five years.

Kobe Steel begins toll services for PVD coatings in the US

Kobe Steel Ltd announced that it started PVD coating services in the United States in October through subsidiary KOBELCO Advanced Coating Inc. Also known as KOBAC, the company is based at Buffalo Grove in Illinois and provides toll services mainly to cutting tool, mold and automotive parts manufacturers.

Physical vapor deposition is a method of coating a hard film on a work piece. The coating increases wear resistance and durability of parts, increasing product life by two to ten times in comparison to uncoated products. PVD coatings are typically applied to cutting tools, molds and sliding parts in machinery and automotive parts. PVD coatings offer an excellent solution to make coatings resistant to oxidation at high temperatures and high hardness films with good adhesion to the substrate. PVD coatings are especially capturing the attention of the automotive industry as they can increase fuel efficiency.

PVD coatings are also environmentally friendly to manufacturing industries. In comparison to the wet type plating method used in surface treatment processing, PVD coatings are drawing attention as there is no waste solution to be disposed. The application of PVD coatings is expected to further grow mainly in the automotive field.

Kobe Steel is Japan's largest manufacturer of PVD systems with a supply record of over 300 units. Since 1986, Kobe Steel has been manufacturing arc ion plating systems. In 1998, Kobe steel developed an original unbalanced magnetron sputtering system. In addition, the company began toll services in 2000 after developing an original DLC coating. In Japan, Kobe Steel established the Takasago Coating Center in April 2007. Located within the company's Takasago Works in Hyogo Prefecture, the new center offers toll services for PVD coatings to domestic cutting tool, machinery and automotive parts manufacturers.

RHI and voestalpine likely to increase refractory prices in 2008

Thomson Financial reported that refractory specialist RHI AG and steel conglomerate voestalpine AG are both likely to pursue significant prices increases to compensate for their rising raw materials costs.

While voestalpine is still in negotiations regarding its long term supply contracts, Mr Wolfgang Eder CEO of voestalpine has already indicated that a 5% price hike as of the beginning of next year will not suffice. Mr Eder refused to comment on whether voestalpine's price increase is likely to be in the double digit territory but did say that the price hike will be significant.

A squeeze in the supply of magnesite has led to sharply higher raw materials costs for RHI, which plans to pass these costs on to its customers by raising its prices by around 15% to 20%. Mr Andreas Meier CEO of RHI said “We can live with the fact that these price increases might also lead to lower volumes, but as the world leader in the refractories segment, we must take this step and our clients also understand this.”

Gerdau Ameristeel may sell USD 1.59 billion shares to fund Chaparral buy

It is reported that North America's second largest mini mill steel producer Gerdau Ameristeel Corp plans to sell as much as USD 1.59 billion in shares to help pay for the acquisition of Chaparral Steel Co.

Florida based Gerdau Ameristeel in a prospectus filed with the US Securities and Exchange Commission said that its parent company Gerdau SA of Brazil will purchase 73.1 million shares and an additional 36.9 million will be available to the public. It said that the prospectus includes an over allotment option of 16.5 million shares, with about 5.54 million available to the public and the remainder for Gerdau SA to maintain its current ownership stake of about 66.5%.

Ms Barbara Smith CFO of Gerdau Ameristeel in a telephone interview said that “When we announced the deal, we said we would be open to the share sale to strengthen the balance sheet.'' But she declined to comment on the timing for the sale.

Gerdau Ameristeel is seeking to reduce debt after acquiring Texas based Chaparral for USD 4.22 billion to boost metal output by a third and add 2.9 million tons of steel used in non residential construction.

Gerdau Ameristeel with annual production capacity of 9 million tons trails only Nucor Corp in North American steel output from mini mills. The mills use scrap metal as a raw material rather than the iron ore and coal used in blast furnaces.

Jiangyin Bekaert commissions additional steel tire cord capacity

It is reported that after eight months’ construction, capacity expansion plan phase two of Jiangyin Bekaert Alloy Materials Company Ltd was launched commercial operation recently.

With this, the capacity of steel tire cord in Jiangyin Bekaert increases to 125,000 tonnes per year and therefore the company becomes the largest production base in China.

In 1992, Bekaert set up its first JV plant in Jiangyin with Jiangsu Fasten Group. During the following ten plus years, Bekaert formed Bekaert China Technology Center, Bekaert Jiangyin Steel Wire Manufactures Company Ltd and other companies. With the capacity expanded by the second phase, Bekaert has total capacity of 250,000 tonnes in China.

Bekaert is a large international company, with its headquarter based in Belgium and the company has a leading position in developing and manufacturing steel wires, steel tire cords, advanced materials and also in membrane plating technology development. The company has a sale income of EUR 3.2 billion per year.

Minnesota Steel gets environmental approval to start construction

It is reported that MN Steel Gets Green Light to Start Construction on New Mill on Iron Range Minnesota Steel has been given the green light to begin construction of a steel mill near Nashwauk. The go ahead comes from the Minnesota Pollution Control agency which granted the company an air emission permit today. The project is expected to take six years to complete.

The new plant will create about 2000 jobs during the construction phase. Some 700 full time jobs once the facility is up and running and an anticipated 21 hundred spin off jobs. The economic impact is expected to be about USD 600 million a year.

Minnesota Steel Industries plans to construct a USD 1.6 billion electric arc furnace steel mill, capable of producing 2.5 million tonnes tons of steel per year.

Celtic urges shareholders to reject Severstal Bid

It is reported that Celtic Resources Holdings Plc urged shareholders to reject a GBP 161 million (USD 326 million) offer from Russian steelmaker OAO Severstal because it undervalues the gold and molybdenum producer.

Celtic Resources Holdings in a statement said that “Celtic's prospects as an independent company are excellent.'' It added that Severstal is trying to buy Celtic without paying for these prospects.

Severstal's offer is subject to it getting 50.1% of the stock. Celtic management rejected the takeover bid on September 18th and September 28th 2007.

Severstal, controlled by Russian billionaire Mr Alexei Mordashov has 30% of Celtic and said on October 8th 2007 that it will run the company as though it was a unit even if its 270 pence a share offer fails. After acquiring an initial 22% stake in Celtic in August, Mr Mordashov said that he would create a non ferrous metals unit that might be sold or spun off.

Iron ore mountain landslide kills 6 in China

Xinhua reported that 6 villagers were killed in a landslide in east China's Anhui province.

According to local officials the villagers were collecting iron ore in a mountainous area when rocks and dirt suddenly rushed down and engulfed them. Rescuers managed to pull them out of the debris, but later they died in hospital.

Work safety watchdog asked the related departments to investigate potential risks and stop people from illegally collecting ores.

Peabody chairman Mr Engelhardt resigns

Associated Press reported that Mr Irl F Engelhardt Chairman of Coal miner Peabody Energy resigned effective immediately and will be replaced by Mr Gregory H Boyce president & CEO of Coal miner Peabody Energy.

Mr Engelhardt worked at Peabody Energy for 28 years where Mr Boyce joined the company in 2003 as COO and took the CEO title in 2005.

Belon has no plans to sell control to MMK

Thomson Financial citied Mr Andrei Dobrov president of Belon Group as saying that his shareholders have no plans to sell their company to Magnitogorsk Iron & Steel Works at present.

Mr Dobrov said 'We do not plan on giving up control, on selling a controlling interest, at least not until we are traded on an international exchange at the end of 2009.”

MMK earlier this month acquired a 10.75% stake in the company and then said it could not rule out taking a majority stake in the future.

MMK is the only Russian steel major which does not already control sizeable iron and coal assets.

PTC workers back on job while negotiating

It is reported that the strike by the United Steelworkers at steel tubing maker PTC Alliance appears to be coming to an end. As per report, union said the company has agreed to its proposal sent recently that workers return to the Alliance plant starting on Sunday under terms of the old contract that expired September 30th 2007.

Mr Mike Johnson president of Steelworkers Local 3059 said the company and union will continue to negotiate a new contract. He said “We will still be negotiating and retaining the right to strike if we can not reach an agreement at some point. We will be in working, but there is a whole lot ahead.''

Mr Johnson said Union members will continue picketing at the plant until they start returning to work Sunday night. He said it is possible that the company might not operate the plant at full staffing. He added that the Steelworkers leadership plans to meet with union members at the Moose Lodge in Alliance to discuss the return to work.

The union is trying to get language in the new contract that protects workers' jobs and the contract in case the company is sold. The company and union previously said their main dispute has been over non economic issues.

PTC Alliance, headquartered near Pittsburgh has issued statements saying the Alliance plant machinery is operating and that the strike has not affected customer orders. PTC Alliance also said that it is committed to getting a consensual agreement with the union.

Hunan Steel sees 9 months profit up 50% to100% YoY

Hunan Valin Steel Tube & Wire Co Ltd announced that it’s January to September 2007 period net profit is expected to have risen by 50% to 100% YoY due to higher product prices and an improved product lineup.

Hunan Valin Steel Tube & Wire in a statement filed with the Shenzhen Stock Exchange said that the net profit in the third quarter is expected to have risen by about 40% YoY. In the January to September 2007 period, it posted a net profit of CNY 581.86 million. The net profit in the third quarter of 2006 was CNY 279.58 million.

Hunan Valin Steel Tube & Wire also said that it has received approval from the securities regulator to issue 520 million A shares for a private placement to its parent company and Arcelor Mittal.

Spain to support coal mining firms with EUR 101 million

Reuters reported that Spain is to spend EUR 101 million helping three coal mining companies cover their 2007 losses. Spain industry ministry said in a statement that Spain's cabinet approved the payments to cover losses in current production.

Empresa Carbonifera del Sur will receive EUR 14 million while Hullera Vasco Leonesa and Minero Siderurgica de Ponderrada will both receive EUR 44 million.

A report from the European Commission in May 2007 said EU rules allowing special subsidies to the coal industry which has been unprofitable in most European Union countries for many years, should end after 2010.

Nippon Steel reduces acceptance of orders for H Beams

Nippon Steel announced that it has reduced H beam order acceptance volume from distributors by total 50% effective for contracts in October 2007 as compared with the volumes in October 2006.

As per report, H beam shipment is impacted by revision of Japanese building standard law.

However, Nippon Steel has kept H beam selling price unchanged.

New reheating furnace in operation at Hylsa Monterrey

It is reported that a new walking beam slab reheating furnace is commissioned by a consortium of Tenova, LOI Italimpianti, Techint, and Ternium at the Hylsa flat rolled mini mill at Monterrey in Mexico.

According to Tenova, the steel plant technology business unit of the Techint organization, the new furnace has a throughput capacity of 330 tonnes per hour and incorporates the latest burner technology for reduced fuel consumption.

The new FlexyTechTenova flameless burner also produces very low levels of emissions while delivering the highest degree of quality available in reheating technology. It added that “These burners have already been successfully installed by Tenova LOI Italimpianti on recent high capacity reheating furnaces for which NOx emissions were an important concern."

The new furnace replaces a battery of pit furnaces that now are being dismantling, so production capacity will be increased at the same time that reheating quality is increased, along with process reliability and flexibility.

Serov AK to begin argon production by year end

It is reported that the JSC Metallurgical Plant in the name of Serov AK an enterprise of the metallurgical complex UGMK plans to implement the production of argon by the end of current year a gas which is a necessary component for the treatment of steel in a stove scoop.
The size of the unit is quite impressive: the height of construction stands at 60 meters while the overall weight is around 120 tonnes. Prior to its assembly, a number of factors including wind strength were taken into account.

Building of the argon block at the JSC Metallurgical Plant in the name of Serov AK is conducted within the framework of the second stage of building of the air separation unit. Previously at the metallurgical plant, the technological process for the acceleration of smelting came at the considerable expense of electric power resources.

An oxygen workshop for the air separation unit was brought into action in 2006 within the framework of an erection project at the JSC Metallurgical Plant in the name of Serov AK of the steel smelting complex.

S&P lowers Zlomrex long term corporate credit rating

It is reported that Standard & Poor's Ratings Services lowered its long term corporate credit rating on Poland based integrated steel group Zlomrex SA to 'B' from 'B+', citing constrained liquidity and refinancing risks given high short term debt, limited cash resources and available credit lines, cash payments for acquisitions during the second half of 2007, and negative free operating cash flow.

The senior secured debt rating on the EUR 170 million 8.5% callable bonds due 2014 issued by subsidiary Zlomrex International Finance SA was lowered to 'B-' from 'B'.

S&P said the ratings were removed from credit watch and the outlook is negative, S&P affirmed its 'B' short term credit rating on Zlomrex.

It said Zlomrex's financial policy and acquisition led growth strategy are more aggressive than expected, following the completion of its acquisition of Polish steel distribution company Stalexport Trade and the expected completion of its announced acquisition of Croatia based reinforcement steel bar manufacturer Zeljezara Split by year end 2007.