India’s finished steel production in April to September 2007 up by 6.6% YoY

Indian government announced that production of finished carbon steel during April to September 2007 is estimated at 24.8 million tonnes, recording a rise of 6.6% YoY over 23.256 million tonnes in April to September 2006. Production of pig iron has recorded an increase of 7.9%.

Steel Authority of India Limited produced 6.24 tonnes during April to September 2007 as compared to 6.01 million tonnes in April to September 2006. Rashtriya Ispat Nigam Limited produced 1.203 million tonnes during the first six months as compared to 1.307 million tonnes previous year.

Import of finished carbon steel during the first six months, April to September 2007 is up by 28.2% YoY over the same period last year. During April to September 2007, the imports stood at 2.45 million tonnes as compared to 1.911 million tonnes in April to September 2006.

Exports during the same period went up by 7.4% YoY from 2.42 million tonnes in April to September 2006 to 2.60 million tonnes this year.

Indian iron ore spot prices touch USD 185 CIF China

The China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters has announced that the average reference prices for import transactions of Fe 63.5% Indian iron ore concluded last week on October 23rd 2007.

The change is with respect to prices posted on October 15th 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. 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.

The China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters are the largest trading association in China.

Anti POSCO agitation intensifying in Orissa

SNS reported that the anti POSCO activists have started holding village level meetings and rallies preparing for a showdown, after Orissa government’s reassertion over the establishment of the POSCO’s project. The activists have drawn up plans to strengthen the movement by involving women and children.

POSCO Pratirodh Sangram Samiti justified its stand of rejecting CM’s offer for talks. Mr Abhaya Sahoo leader of POSCO Pratirodh Sangram Samiti said “CM's wishes to speak to the people to find a solution while at the same time he says the project will not be shifted. Our demand is to shift the project, we are not interested in talks which will revolve around the rate of compensation or the jobs, he remarked.

Mr Sahoo informed that Balithutha Road block which began last month will continue in order to prevent the entry of POSCO and government officers.

Besides, Rastriya Yuba Sangathan, Nab Nirman Samiti, Yuba Sangthan and other organizations have also renewed their pledge to fight the project and safeguard the rights of farmers of the region.

Bhushan Steel Limited’s Q2 net profit up by 49% YoY

Bhushan Steel Limited announced a 48.6% YoY jump in net profit at INR 1,034.10 million for the July to September 2007 quarter as compared with INR 695.9 million for the July to September 2006 quarter. Its net sales rose by 7.38% YoY to INR 10,681.2 million and total income stood at INR 10,815.9 million for July to September 2007 quarter.

Other highlights for July to September 2007 quarter include
1. Total sales registered a growth of 10% YoY to INR 1184.84 crore
2. Cash profit registered a growth of 32% YoY to INR 179.92 crore
3. EBITDA margin for the quarter ended was 19.76 % against 15.6 % same period last year
4. Net Profit margins for the quarter ended was 9.68% against 7 % same period a year ago
5. Net Profit grew by 49% YoY to INR 103.41 crore

Mr Neeraj Singhal vice CMD of Bhushan Steel Limited said “The consistency in quality and cost rationalization measures implemented has enabled us to grow our bottom line significantly.”

During the July to September 2007 quarter Bhushan Steel Limited formed 2 subsidiary companies outside India and invested INR 63.1 million. However, there is no effect on financial results of the company for the period ended September 2007. It also recognized a net gain arising on account of foreign exchange difference amounting to INR 2.4 million for the quarter in the profit and loss account, relating to acquisition of fixed assets.

Bhushan Steel Limited has embarked on a backward integration project in Orissa at an investment outlay of about INR 5000 crore. The first phase of this project comprising of SMS 1, 4 kilns, 110MW captive power plant & raw material handling plant is completed and production of sponge iron, power and billets already started. The whole project will be completed by March 2009.

CIL to invite tenders for coal washeries by December 07

Projects Wire reported that Coal India Limited is planning to float tenders for development of coal washeries at various locations throughout the country on build own operate basis in about two months.

As per report, CIL will select private companies to set up non coking coal washeries at various locations for supply of washed coal to thermal power stations through global competitive bidding. The selected companies would operate the washeries for 10 years.

The report cited a senior CIL official as saying that CIL is in the process of preparing tender documents and finalizing land for development of the washeries and as per the current schedule, the tender would be announced by December end 2007.

CIL's initiative to act as facilitator to set up non-coking coal washeries has also attracted many investors in the past. Two washeries under such scheme have been set up in Korba coalfields on CIL's land and are in operation for supply of washed coal to the linked consumers. CIL has also allotted land to state power utilities for setting up a washery under BOO scheme.

Mr Patnaik urges PM for consensus on new mineral policy

Kalinga Times reported that Mr Navin Patnaik chief minister of Orissa in a letter has urged Dr Manmohan Singh prime minister of India to consult the mineral rich states before approving the new mineral policy.

Mr Patnaik said that as the proposed national mineral policy would have a significant impact of the states possessing mineral reserves, a meeting of these states to thrash out the issues should be held.

Mr Patnaik pointed out that the mineral rich states such as Orissa, Chattisgarh, Jharkhand, Karnataka and Rajasthan had taken up the issue before the centre in the past but have not received any response so far. He added that these states had also expressed their views on the export of minerals with the regard to the recommendations of the Hoda Committee. Mr Patnaik said that the chief ministers of the five states had also met the union home minister and union steel minister to raise their viewpoints before them.

Mr LN Mittal and Mr Koda likely to meet on Jharkhand project

The Telegraph reported that Mr LN Mittal has invited Mr Madhu Koda chief minister of Jharkhand to London for advanced discussions on his maiden Greenfield steel project. However as per report, Mr Koda expects Mr Mittal to come to Ranchi again and see the things through his own eyes, before proceeding further.

As per report, Mr Mittal spoke to Mr Koda few days back and repeated his commitments for the execution of the proposed steel project in Jharkhand. He also thanked him for renewing the tenure of his MoU signed last year and initiating steps for the award of mining leases and coal blocks.

The report cited Mr Koda confirming that he is in regular touch with Mr Mittal who is keen to execute Jharkhand project at the earliest. He added that “He still seems to be more interested about the Chiria mines. But I clearly explained him that the state government as well as the government at the centre can do little at the moment, since the matter is sub judice.”

Mr Koda maintained that ArcelorMittal has virtually completed their site selection in Jharkhand and there is much seriousness in their efforts to begin the steel project.

Siemens to install power distribution network at TATA Steel Kalinga Nagar

Siemens Limited announced that Siemens Limited together with Siemens AG of Germany has bagged INR 330 crore contracts from TATA Steel for providing the power distribution network solutions for their Greenfield Steel plant at Kalinga Nagar in Orissa. The project is scheduled to be commissioned by end of 2009.

Siemens’ scope of work includes the supply of latest high voltage and medium voltage gas insulated switchgears, MV switchboards, controls and protection panels, sub station control and automation systems and energy management systems.

Mr J Schubert MD of Siemens said that "We are very happy to receive this prestigious order from TATA Steel. Their confidence in our capability to deliver high quality systems and solutions has resulted in this partnership. Over the years we have consolidated our experience in handling projects in the iron and steel segment in India as well as worldwide. We therefore, understand the complexities of the Industry and are able to provide top class eco-friendly solutions to our customers."

More court cases for iron ore mines allocation in Jharkhand

IANS reported that new steel projects in Jharkhand are finding the going tough as companies are moving the courts over allocation of iron ore mines. The disputes are over 3 big iron ore mining areas, Chiria, Ghatkuri and Ankua, with proven reserves of around 5 billion tonnes.

The Jharkhand government has recently signed MoUs with 52 companies in steel, power and other sectors, but so far the state government has recommended iron ore mines be given only to 7 companies.

Jharkhand government is fighting a legal battle with Steel Authority of Indian Limited in the high court for the last 2 years over the Chiria mines. In addition 4 companies have filed petitions in court over Ghatkuri mines.

Ankua mines. Kolkata based Brahmi Impex Ltd has filed a petition in Jharkhand High Court last month against the state government, alleging that rules and guidelines have been flouted while recommending the allocation of Ankua iron ore. Brahmi Impex contends that although it had fulfilled all established criteria for being considered for the state government's recommendation, it was discriminated against and left out of the allocation process without any justification.

The Jharkhand government had recommended to the central ministry of mines a couple of months ago that parts of Ankua be allocated to JSW Ltd and Essar Steel. The ministry has approved JSW's application on September 17th 2007.

Prakash Industries Q2 sales up by 40% YoY

Prakash Industries Limited has recently announced its financial results for July to September 2007 quarter.

Its sale from operations has increased by 40% YoY to INR 330 crores as against INR 235 crores. EBIDTA increased by 43% YoY and stood at INR 68 crores in the July to September 2007 quarter as against INR 48 crores in July to September 2006 quarter. Profit after tax is up by 74% YoY at INR 55 crores as against INR 31 crores in the corresponding period in the previous year. Earning per share is up by 74% YoY at INR 5 in the second quarter as compared to INR 2.87.

Prakash Industries Limited said “The second quarter is in line with our expectations where all our verticals performed well. The robust growth can be attributed to strong demand for steel from infrastructure and housing sector and resultant increased prices and has contributed as much as 80% to the revenues of the company.”

As per report, Prakash Industries has doubled the capacity of its structural mill. It is also planning foray in the power sector and has firmed up plan to set up a 500 MW power plant for which MoU has been signed with Chattisgarh government and is lining up with central government for allotment of coal block for the same and the financial closure is expected shortly.

Power sector financiers call for changes in bidding norms

It is reported that power sector financiers, including the Rural Electrification Corporation and Power Finance Corporation, have approached the union ministry of power for changes in project bid guidelines.

Currently, the norms adopted are tariff based bidding, a departure from cost based bidding till about 2 years ago. But the steep hikes in lending rates and end use limitations on external commercial borrowings by the Reserve Bank of India have created severe constraints. One of the major reasons for proposing the change was the increase in the cost of funds for the projects. For instance, when the tariff bids were made for the ultra mega projects, debt costs were about 8%.

Specialized financiers like the REC and PFC have been augmenting working funds with ECBs to ensure that the overall weighted average costs remained low. But the RBI’s current norms discouraged usage of ECBs for lending in domestic currency, which has resulted in escalation in cost of funds for projects.

AS per report, they have sought a fine tuning of the tariff bid guidelines and the change sought by financiers does not imply dumping the tariff bid route. Instead the financiers have asked that a tariff band be used as the norm for the bids.

The sources said, in the case of projects, in various stages of being implementation, project promoters had the option for passing through interest costs on to tariffs. However, in projects now being taken up through the tariff bid route, this flexibility does not exist. This implied that project promoters would have to absorb increased interest costs. The alternative: financiers would have to extend fixed price lending over the entire tenure of the loan.

RINL employee strikes medals in Australian badminton

Mr BVSK Lingeswara Rao an employee of Rashtriya Ispat Nigam Limited has won a gold medal in men’s badminton singles open and a silver medal in men’s 35 plus group at Australasian Masters Games held at Adelaide in Australia from October 5th 2007 to October 14th 2007.

Mr PK Bishnoi CMD of VSP, Mr Y Manohar ED personnel & IR and other officials have congratulated Mr Rao on his feat.

ONGC Mittal Energy buys 30% stake in Turkmenistan

It is reported that ONGC Mittal Energy, a JV between ONGC Videsh and Mittal Investment, has acquired a 30% stake in an offshore exploration block in the Caspian Sea in Turkmenistan. The stake buy is OMEL’s fourth asset.

The Turkmenistan block covers an area of 5,663 square kilometer and is located close to discovered and producing fields. The block had been awarded to Danish company Maersk Oil by the government of Turkmenistan in December 2002. With OMEL picking up 30% stake, Maersk’s participating interest has dipped to 36%, while German company Wintershall owns the remaining 34%.

ONGC in a statement said that “The block contains a number of prospects with significant reserve potential. Discoveries have also been made in adjoining areas of the block. Wintershall and Maersk have acquired seismic data and drilled one exploratory well in the block. The well provided indications of hydrocarbons. Another well is planned to be drilled by the new consortium during 2008.”

India, SA and Brazil plan to set up joint shipping company

Exim News Service recently reported that India, South Africa and Brazil have reportedly firmed up plans to set up a joint shipping company to make optimum use of their vast coastlines, which extends to nearly 17,000 kilometers.

Mr Jerry Matjila South Africa’s head of Asia and Middle East Section in the department of foreign affairs said that "We are thinking of launching a joint shipping company and 70% to 80% of the preparations are already over."

The proposal would create a lot of opportunities for businesspersons in the three countries. Countries like Sri Lanka and others could also broaden its scope.

Paradip Port banks on SPM to boost cargo throughput

Paradip Port Trust officials said that the commissioning of the single point mooring system at Paradip Port by the Indian Oil Corporation will boost liquid cargo traffic by about 1 million tonnes a month. The Port does not handle any crude now.

Inclement weather during the last few months had delayed the completion of the single point mooring project. The work that remains to be completed includes installing the mooring and connecting the laid out pipeline with the mooring. An Australian ship, which is to undertake the work, is expected to arrive soon.

After several revisions, IOC had set December 2007 as the deadline for completing the work and commissioning the single point mooring. The shipping ministry as well as the PPT authorities had fixed the Port’s traffic target for 2007-08 at 45.7 million tonnes.

Evraz increases stake in Palini e Bertoli to 100%

Evraz Group announced that, further to its acquisition in August 2005 of a 75% plus one share interest in Italian steel plate producer Palini e Bertoli, Evraz has executed a call option in respect of remaining 25% less one share.

The consideration paid for the stake was set at approximately EUR 76 million. Exercise of the option resulted in Evraz effectively owning 100% in Palini e Bertoli.

In August 2005 Evraz paid EUR 112 million for 75% plus one share in Clama SRL which owned Palini e Bertoli SpA. Evraz also acquired an option to purchase the remaining 25% minus one share in Clama owned by Annia SRL.

Palini e Bertoli, located in northern Italy, produces plate for the construction, shipbuilding and auto industries.

SeverCorr begins production

SeverStal announced that its new US venture SeverCorr has started production at its next generation steel mill, less than two years after construction began.

SeverCorr is a partnership between SeverStal and leading US steel industry veterans lead by Mr John Correnti created to build a steel mill in Mississippi to serve the fast growing Southern region of the US. It is located near a number of large steel customers, making the distribution channels more efficient.

Mr Alexey Mordashov CEO of Severstal said “Our partnership with SeverCorr, along with Severstal North America, increases our footprint in the US. The US is an important market for SeverStal based on a number of factors, we are confident about the growth prospects in the region and are investing in growing our US businesses. We believe in the strength of the US economy and are committed to the US market. There is a high concentration of customers in the regions in which we operate that demand the specialty niche steel products that our company produces.”

SeverCorr complements SeverStal’s other US business, Severstal North America, which is based in Dearborn, Michigan and primarily serves the manufacturing hub of the Midwest United States. US currently contributes 16% to SeverStal’s total revenues.

Chinese HR plate export offers remain firm

It is reported that HR plate export offers remain firm in China despite downward correction in domestic market prices. However, export tonnage has been reduced since high prices are hindering buying sentiment.

There has been an average drop of CNY 100 per tonnes in domestic prices since early October. But most market participants believe it to be healthy adjustments following such a strong rise. Now Export quotations for commercial 12mm to 30mm plate from tier two steel makers are prevailing at USD 730 to USD 740 per tonnes FOB, while those by tier one producers are at USD 770 per tonnes and up. Some even have jumped to USD 790 to USD 800 per tonnes FOB.

China’s top steel makers prefer more high value added plate exports and thus have greatly cut commodity grade plate output, which is the most important reason behind their high price level.

Despite substantial rise in export prices, most steel makers have been booked until December shipment. Most transaction prices are said to be at around USD 700 to USD 720 per tonnes FOB. However, they would not release quotations for January shipment soon due to fewer conclusions and policy risk. Prices are expected to stay at high level for some time before choosing direction.

(Sourced from Mysteel.net)

Outokumpu posts EUR 277 million pretax loss in Q3

Finland's leading metals group, Outokumpu Oyj announced a Q3 net loss of EUR 214 million. Its revenue in the Q3 of 2007 period also fell to EUR 1.23 billion from EUR 1.5 billion in Q3 of 2006. Net profit in the same period in 2006 was EUR 172 million.

Third quarter highlights include
1. Nickel related inventory losses in the order of EUR 280 million turned operating profit EUR 256 million negative, underlying operational result EUR 35 million positive.
2. End user demand for stainless steel continued strong, distributors kept on de-stocking.
3. Weak demand for stainless steel standard products and seasonality dropped deliveries to a very low level of 238 000 tons.
4. The main reference transaction price fell by 17% from the previous quarter.
5. Demand started to pick-up in late September.
6. EUR 299 million released from working capital, cash flow from operations EUR 161 million.
7. The second phase in Outokumpu's strategic development started. New investments totaling EUR 880 million approved in September and October.

Outokumpu said that "The pickup in demand for standard products will increase Outokumpu's delivery volumes and improve profits in the fourth quarter. Prices for stainless steel standard products are stabilizing and even some price increases have been achieved. It warned that nickel-related inventory losses would continue to hit results in the fourth quarter, but said the drop in prices will continue to release working capital and generate strong cash flow during the fourth quarter resulting in clearly better full year cash flow from operations in 2007 than in 2006."

Outokumpu is an international stainless steel company that operates in some 30 countries and employs 8,000 people. In 2006 the Groups sales were some EUR 6 billion, of which 95% was generated outside of Finland. The Groups headquarter is located at Espoo in Finland. The parent company, Outokumpu Oyj, has been listed on the Helsinki stock exchange since 1988.

China may reduce number of steel exporters - Report

It is reported that Chinese Ministry of Commerce will enact a regulation to restrict the amount of steel trader and an official forecast that only 200 steel traders or less will be left.

This regulations aims to better the qualification of traders and raise the access threshold of steel grade to 30,000 tonnes per year but it is estimated that about 12,000 qualified traders who engaged in steel import and export nowadays.

If this enactment takes effect, steel export volume would be effectively restrained and also market will be regulated, especially to avoid fierce competition and negative price war.

China’s ministry of commerce encourages small traders to cooperate with big traders and meanwhile will push more rules on market administration to counter the pressure from trade surplus and environmental protection.

MEPS forecast further dip in CR and HDG prices in EU

MEPS reported that EU average cold rolled coil transaction value dropped this month due to weakening demand. MEPS said that “Figures are expected to fall through the remainder of the fourth quarter as mills cut prices to attract orders. Service centers will continue to reduce inventories.”

MEPS said that “EU Average Hot Dipped Galvanized transaction figure has also moved down in October, falling by approximately 5%. This was partly due to a decrease in the extras, which reflected a drop in zinc costs. Values are forecast to decline further in the near term.”

MEPS added that “The price differential between hot dipped galvanized and cold rolled coil has reduced significantly this year. It has more than halved since March from almost EUR 180 per tonnes to just over EUR 80 per tonnes. We do not envisage this figure moving back up to previous levels in the near term as zinc prices are well below the highs recorded in 2006.”

MEPS further added that “No meaningful rises in transaction figures are forecast until the end of the first quarter for both products. EU producers will attempt to push through price increases at the beginning of the New Year. However, customers are likely to resist these initially and as such values should climb quite slowly for the first few months. The second period of 2008 is then expected to record the largest gains as mills try to recover escalating raw material costs.”

BHPB to take FMG to High Court over Pilbara decision

The Advertiser reported that BHP Billiton has applied for special leave to appeal to the High Court, in its bid to block Fortescue Metals Group from using its Pilbara rail lines. The High Court, where BHP lodged its application is the highest court BHP can take the matter to.

Earlier this month, the Full Bench of the Federal Court dismissed an appeal by BHP against a December decision which declared that the rail lines were not part of BHP's production process.

Elements of the production process cannot be forced to be opened to third party access under the Trade Practices Act. If they are declared not to be part of production, Fortescue's application to use the lines can be ruled on by the Australian Competition Tribunal.

The dispute relates to BHP's Mt Newman and Goldsworthy rail lines which transport more than 100 million tonnes of iron ore each year to Port Hedland.

Mhag unveils changes to expansion projects in Brazil

BNamericas reported that Brazilian iron ore miner Mhag has become more aggressive due to the entry of Hong Kong's Noble Group in the miner's shareholder base over its projects.

The report cited Mr Pio Sacchi president of Mhang as saying that “Under the new plan, the first stage of the project to expand operations in northern Brazil would take output to 10 million tonnes per annum in early 2009 from a previous a plan of 3.6million tonnes per annum. In a second stage, the miner aims to reach a capacity of 30million tonnes per annum by 2011 from previous plans to reach 10million tonnes per annum.”

Mr Sacchi added that "We started to better identify our reserves and with the entry of Noble there was a better analysis of the iron ore market. As a result, we came to a conclusion that this project could start up this way.”

Mr Sachhi added that “As a result of higher capacity, investments in the entire project are expected to reach USD 1.6 billion from a previous forecast of some USD 600 million.”

Mhag, which has estimated reserves of some 3.8 billion tonnes in the states of Paraíba and Rio Grande do Norte, plans to carry out an IPO next year. Noble Group snapped up in July a 30% stake in Mhag for BRL 112 million (USD 62 million) through a private placement. Noble is responsible for selling all iron ore produced by the Brazilian miner. According to press reports, the Brazilian company is producing some 600,000 tonne of iron ore per year.

Wheeling-Pittsburgh and Esmark amend merger agreement

Platts reported that Wheeling Pittsburgh and steel service center group Esmark announced that as a result of discussions with US regulators, they have amended their merger agreement regarding the timing of stockholder put and purchase rights.

The change provides that each Wheeling-Pittsburgh stockholder, as of the election deadline, will have the option of receiving one of the following for their shares of Wheeling-Pittsburgh common stock
(1) The right to elect to receive USD 20 per share in cash
(2) A share for share exchange in the parent company of Wheeling-Pittsburgh and Esmark after the combination plus a right to purchase newly issued shares of Esmark common stock at USD 19 per share
(3) A share-for-share exchange for New Esmark common stock.

The election and exercise of the rights will now occur before the date of the steel maker's special shareholders' meeting rather than on the meeting date. A date for the special shareholders meeting has not yet been set, pending final approval of the proposed merger by the US Securities and Exchange Commission.

Wheeling-Pitt and Esmark entered into a definitive merger agreement on March 16th 2007. The companies indicated that the merger is expected to close before the end of the year.

Tenova LOI Italimpianti to supply furnaces to Essar Steel

It is reported that Tenova LOI Italimpianti has obtained a new prestigious order from SMS Demag for the overall supply furnace for the new CSP mill for Essar Steel. LOI Italimpianti will supply 2 new roller hearth furnaces each 240 meters long and the provisions for a future third line.

LOI Italimpianti order includes the engineering, technological equipment supply, training and supervision to erection and commissioning. The furnace will be the first worldwide roller hearth furnace with provisions for the future third line, a confirmation of LOI Italimpianti high reliability and top quality in the CSP hot strip mills furnaces. The furnace will represent the second LOI Italimpiant CSP reference in India after the roller hearth furnace at Bhushan, currently under erection.

Tenova LOI Italimpianti is a leading supplier of industrial furnaces and services for the metal industry. Tenova design and supplies advanced technologies, products and services for the metal and mining industries. Tenova operates close to its customers through a network of 20 companies based in 14 different countries.

SDI buy of OmniSouce approved by regulators

US Federal Trade Commission announced that it has approved steel maker Steel Dynamics Inc's USD 921 million purchase of OmniSource Corp. The transaction is expected to close in November 2007.

US Federal Trade Commission included the deal on a list of transactions that received an early termination of their antitrust reviews. Early termination refers to the completion of a review before the end of a 30 day period required under antitrust law.

Steel Dynamics while announcing the deal earlier this month has said that it will give the company a platform to expand into steel scrap and recycled metals.

Privately held OmniSource, a metal recycling company, has been one of Steel Dynamic's largest suppliers.

Coalmine blast kills 3 in east China

Xinhua reported that a coal mine gas blast has killed three miners and injured seven others in east China's Jiangxi Province. The blast occurred around 12:10AM in the Yinying Coal Mine in Puqian Township of Hengfeng County in northeastern Jiangxi, when ten miners were 285 meters underground carrying out repair work.

The rescuers found the bodies of two miners after the blast and sent the eight injured to hospital. One severely injured died after treatment in hospital, while the others are still being treated.

The coal mine, which was put into operation in 1996 with a designed production capacity of 100,000 tons, is run by the township government.

Local officials are investigating the cause of the accident.

US steel import in September decline

Based on preliminary Census Bureau data, the American Iron and Steel Institute reported that the US imported a total of 2,196,000 net tons of steel in September 2007, including 1,876,000 net tons of finished steel down by 17% and 9% respectively as compared to August final data.

While overall imports year to date have declined vs. the all-time record year of 2006, total and finished steel imports year to date, on an annualized basis, remain up 8% and 11%, respectively, vs. 2005, which itself saw historically high import levels. On an annualized basis, total imports of steel in 2007 would be 34.6 million net ton.

Among the products showing large increases in September 2007 vs. the prior month were
1. Sheets & strips all other metallic coated - Up by 146% MoM
2. Tin plate - Up by 28% MoM
2. Cut to length plates - Up by 11% MoM
4. Line pipe - Up by 60% MoM

In September, the five largest suppliers of finished steel from offshore were
1. China - 264,000 net tons down by 28% MoM
2. South Korea - 161,000 net tons up by 12% MoM
3. Brazil - 110,000 net tons up by 130% MoM
4. Japan - 92,000 net tons down by 41% MoM
5. India - 79,000 net tons up by 14% MoM

Mr Andrew G Sharkey III AISI President and CEO said that “Despite modest declines in overall import levels in recent months, we are still looking at an import year in 2007 at or above the 2005 level and a relatively high steel import penetration of 23 percent year-to-date. Efficient, market-based U.S. producers of steel and many other manufactured products remain concerned about China trade and dumped and subsidized imports. General trends in global trade clearly indicate that America’s critical trade remedy laws need to be defended in multilateral negotiations and enhanced in domestic legislation.”

Atlas Consolidated unit eyes China Steel Plant purchase

Philippine mining company Atlas Consolidated and Mining Development Corporation announced that its subsidiary Berong Nickel Corp is planning to acquire an integrated steel plant in Guangxi Province in China.

Atlas and its JV in Berong Nickel, Investika Ltd, will perform a detailed due diligence over the next six months before acquiring the assets, consisting mainly of a three year old steel plant producing hot rolled steel bars and billets for the domestic Chinese market. The steel plant currently produces hot rolled steel bars and billets for the domestic Chinese market. The assets comprise three blast furnaces, sintering machines, residual heat power plant, oxygen plant railway access, wharf access and land.

The JV partners will enter into a long term contract to supply all the plant's feedstock requirements. Atlas said after the acquisition, the plan is to convert part or all of the steel plant to produce nickel pig iron and stainless steel. The plant will require 1.2 million tonnes of nickel laterite ore feedstock per year.

Atlas in a statement said that "The market for nickel pig iron and stainless steel remains firm and the pricing structure more attractive than supply laterite ore to the market."

Shougang Jingtang starts construction of 5500 cubic meter BF

It is reported that Shougang Jingtang Project's No 2 5500 cubic meter blast furnace has started construction. The first stage of the project covers two 5500 cubic meter blast furnaces and BF No 1 is now under construction.

All the 171 pile foundations of the furnace will be finished by October 31st 2007.

Mr Zhu Jimin board chairman of shougang said that the first stage would be put into operation by October 2008. The most advanced 10 million tonnes steel mill will be completed by 2010. Currently everything is under way on schedule.

(Sourced Mysteel.net)

US weekly crude steel production up by 3% YoY

American Iron & Steel Industries reported that in the week ending October 20th 2007, US’s raw steel production was 2.126 million net tons while the capability utilization rate was 89.1 %. Production was 2.063 million net tons in the week ending October 20th 2006 while the capability utilization then was 86.2%. The current week production represents 3% YoY increase from the same period in 2006.

Production for the week ending October 20th 2007 is down by 0.3% from the previous week ending October 13th 2007 when production was 2.133 million net tons and the rate of capability utilization was 89.4%.

Adjusted YTD production through October 20th 2007 was 85.790 million net tons at a capability utilization rate of 85.9%. That is a 4.4% YoY decrease from the 89.745 million net tons during the same period 2006 when the capability utilization rate was 89.8%.

AISI’s estimate is based on reports from companies representing about 75% of the US’s raw steel capability and includes revisions for previous months.

AK Steel net income up by 316% YoY in Q3 of 2007

AK Steel has announced net income of USD 108.4 million for the July to September 2007 quarter up by 316% YoY as compared to net income of USD 26.0 million in July to September 2006. The July to September 2007 quarter results include a non cash tax credit of USD 11.8 million for the increase in value of the company’s deferred tax assets as the result of a state tax law change. Results for July to September 2006 quarter included a USD 10.7 million after tax charge related to the implementation of labor agreements at the company’s Zanesville in Ohio and Butler, Pennsylvania operations, as well as a USD 3 million reduction in the value of a deferred tax asset due to state tax law changes.

Net sales for July to September 2007 quarter were USD 1,721.7 million on shipments of 1,603,000 tons. July to September 2007 quarter sales and shipments were approximately 11% YoY and 5% YoY higher, respectively July to September 2006 quarter. The company’s average selling price was USD 1,074 per ton in July to September 2007 quarter approximately 5% YoY higher than the USD 1,020 per ton average price in July to September 2006 quarter. Its July to September 2007 quarter operating profit was USD 163.5 million as compared to an operating profit of USD 55.1 million in July to September 2007 quarter. Adjusted Q3 of 2006 operating profit was USD 70.9 million per ton, excluding one time, pre tax labor contract charges of USD 15.8 million.

Mr James L Wainscott chairman, president & CEO of AK Steel said that “AK Steel once again turned in world-class operating profit exceeding USD 100 per ton. Notwithstanding somewhat softer market conditions for some products during the quarter, the company’s quarterly performance continued to enhance shareholder value.”

Mechel Urals Stampings Plant completes railway product audit

Mechel announced that the specialists of the have extended the term of certification for manufacturing rolling stock axles at Mechel’s Urals Stampings Plant subsidiary. The audit resulted in a new certificate for manufacturing rolling stock axles issued to Urals Stampings Plant for a three year term in October 2007.

The audit was carried out on the end to end technology principle. The entire production process was traced from incoming inspection and preproduction to approved inspection and warehousing. The Register of Certification on the Federal Railway Transport representatives confirmed the compliance of the production technology and characteristics of the finished products with the requirements attestable during certification.

Urals Stampings Plant mastered production of rough rolling stock axles in 1996. Recently, the subsidiary carries out full scale production of 23 different axles for the needs of railway engineering and is one of the leaders on the market for railway locomotives rough axles. These products, after machining, are partially exported to the North American market. Design and technological documentation for axles was developed by Urals Stampings Plant specialists and is the intellectual property of the subsidiary.

Urals Stampings Plant is also certified for compliance with the international standards, ISO 9002:1995 and ISO 9001:2003 for manufacturing dye forgings and tooled semi finished products from structural, carbon, and alloyed steel, and titanium and high temperature alloys. Additionally in 2002, the plant obtained the license to manufacture products for export in compliance with the

Real estate projects in Gulf hit USD 1 trillion marks - Study

A Dubai based consultancy Proleads said that work has started on more than USD1 trillion of real estate projects in Gulf region.

Proleads said in a statement that there are 885 active building sites in Saudi Arabia and its five Gulf neighbors, each with a value of at least USD10 million. The largest five projects had a combined value of USD 358 billion. Proleads estimated that the largest project, King Abdullah Economic City in Saudi Arabia, was worth USD120 billion.

The survey covered commercial and residential developments including hotels, hospitals, schools and theme parks. If infrastructure such as bridges, roads and airports were included the value of projects would be USD1.25 trillion.

According to Proleads six countries were investing a combined USD81 billion in residential real estate projects and a USD190 billion in hotels. It said the United Arab Emirates, Kuwait, Qatar, Oman and Bahrain were the other countries covered by the survey.

Global Emerging Market Group plans coking coal JV in China

Global Emerging Market Group, an investment group with head offices in both New York and London recently said that it has entered into a MoU with Hong Kong based Tomorrow International Holdings to acquire interests in a 99.6 million tonnes coking coal deposit and processing plant in Inner Mongolia region of China.

Under terms of the MoU, Tomorrow International Holdings will indirectly acquire rights to receive 55.3% of the distributions from the coal mine. Global Emerging Market Group will also have the option to acquire a further 21% shareholding in the project, giving it the rights to receive an additional 14.7% of distributions for a total of 70% of the project.

Entering into a formal agreement is subject to various conditions including Global Emerging Market Group providing Tomorrow International Holdings a technical report to be compiled by a professional consultant being engaged by Tomorrow International Holdings. The report shall contain material facts and conditions about the coal mine. Due diligence reviews on the transaction are expected to be completed by mid November with the transaction scheduled to be finalized no later than December 1st 2007.

The project involves a vertically integrated coking coal business with a reserve estimated at 99.6 million tonnes. Production is anticipated at 1.2 million tonnes per year of raw coal.

JV is being formed to own, construct and operate the underground coking coal mine, beneficiation plant and coking coal plant. The JV will operate a 1.5 million tonnes beneficiation plant to produce high grade coking coal, with thermal coal being produced as a secondary product. The coking coal output will be used in the JV's own 800,000 million tonnes per year coking coal plant to produce coke and other commercially valuable by products.

Japanese tinplate export in August up by 9.2% YoY

According to statistics, Japan exported tinplate for 46,179 tonnes in August 2007 up by 9.2% from 42,288 tonnes of same period of last year which hit the highest export volume this year.

Tin plate exports mainly took place to USA, China and Taiwan at the export volume of 372 tonnes, 1,136 tonnes and 2,448 respectively.

The export price was increased by 5.7% to USD 908.4 per tonnes FOB. The export to USA market enjoyed highest price at USD 1,018 per tonnes FOB.

CVRD shares falls after Brazilian court ruling

Morgan Stanley analyst said shares of Brazilian mining company Companhia Vale do Rio Doce fell by 53 cents to USD 32.73 because of a Brazilian Federal Supreme Court ruling, CVRD will have to either sell part of its business, or lose the right of first refusal on excess iron ore from the Casa de Pedra mine.

Pakistan taking action against substandard LPG cylinders

It is reported that the Pakistan’s Oil and Gas Regulatory Authority has started taking action against those companies involved in manufacturing of substandard LPG cylinders throughout the country.

According to the international standards presently, there are only five LPG cylinder manufacturing industries in Pakistan which are manufacturing LPG cylinders. But as per report, around 400 factories are involved in illegal manufacturing substandard and poor quality cylinders and out of these only 300 factories are located in Gujaranwala.

AS per report, most of the factories are manufacturing substandard cylinders without obtaining any license from Gas Regulatory Authority and a majority of these factories were not meeting the international standards thereby are a constant threat to users and have taken hundreds of precious human lives in explosive incidents.

LPG Distributors Association of Pakistan had provided the list of all those factories, which are illegally involved in manufacturing substandard cylinders and a three member team of OGRA has inspected the factories. After completion of this factories survey Gas Regulatory Authority will issue licenses to those that would be meeting international standards or the factories would be closed down that would not according to international standards.

MMK 16th in the list of Russia's 200 largest companies

FIS reported that capitalization of the Russia’s Magnitogorsk Metal Integrated Works as of August 31st 2007 totaled RUB 329.1 billion (USD 12.831 billion). This is the 16th place among the Russian companies as against the 17th place in the last year's rating.

In the rating of Russia's 400 largest companies 'Expert 400' by sales of the products Magnitka takes the 19th place, also one row up as compared with last year.

Steelman takes SMS Demag as its European VAR Partner

Steelman Software Solutions Inc announced it has signed SMS Demag AG to it VAR Partner Program for value added resellers, solutions and consulting providers. As a new channel partner, SMS Demag AG will significantly enhance its value proposition to customers by offering SSSI’s Steel Enterprise Management Systems software solutions.

STEELMAN’s VAR Partners focus on selling and implementing SEMS solutions to medium and large metal mills, processors and service center businesses that can benefit from better insight into corporate data, customer service, production and purchasing management . SMS is STEELMAN first European VAR; currently STEELMAN is negotiating with other companies in India and the Middle East to join its partnership worldwide.

STEELMAN VAR Partner Program gives partners the ability to target this market by reselling or integrating SEMS with ACCPAC, Oracle, SAP ERP Financials and or their own existing applications and offerings. New value added resellers joining the STEELMAN VAR Partner Program receive a variety of unique benefits including access to a private partner web site with sales tools, product information, technical information, as well as access to not for resale software.

Mr Daniel Brody MD of Steelman Software Solutions Inc said that “We are excited about working with SMS, as they bring the important combination of Metal Industry skill sets that will help our joint customers drive maximum value from SEMS data. They are the first partner that will be trained to implement our latest version 4.5 which enables companies to get more out of their SEMS on Oracle application and database server investment by providing clear, unified reporting and information delivery of their critical corporate data. With SMS and the STEELMAN SEMS, SMS customers will achieve higher and faster return on their investment with SEMS.”

Steelman Software Solutions Inc is a privately held company and is one of the world’s leading metals information management software companies. Originally developed in 1994 by experienced steel and systems professionals, STEELMAN Software Solutions Inc is a Toronto based software manufacturer specializing in the development and installation of enterprise wide software solutions exclusively for suppliers and processors of steel and other metal products.

Abu Dhabi Gas Industries to award gas pipeline network

It is reported that an award for Abu Dhabi Gas Industries Company’s USD250 million contracts to replace its existing 225 kilometer long natural gas liquids pipeline network is imminent.

A number of contractors have priced the work. This includes the UAE’s National Petroleum Construction Company, Athens based Consolidated Contractors International Company Larsen & Toubro and Punj Lloyd, both of India and UAE based Dodsal. The last one is understood to be the frontrunner for the engineering, procurement and construction work.

WISCO inks long term contract with China Shipping

It is reported that Wuhan Iron and Steel Corporation has signed a long term iron ore transport contract with China Shipping Group on October 19, in an attempt to reduce cost pressure as ocean freight rate hit record high in September 2007, after continuous hikes.

As per the contract, China Shipping will offer three 230,000 tonnes and two 300,000 tonnes cargo ships to transport 5 million tonnes of iron ore every year during the following 20 years. Thus WISCO gets a stable cost while China Shipping finds a steady market and cargo source.

WISCO's steel output is expected to surpass 30 million tonnes during the 11th "Five Year" Plan with 80% of iron ore resources supplied by overseas countries.

As one of the country's biggest shipping companies, China Shipping boasts annual transport capacity of over 300 million tons.

Danlesco Gulf launches steel fabrication unit in Fujairah

UAE's leading industrial weighing equipment provider Danlesco Gulf announced the launch of Danlesco Steel in Fujairah. The new plant will have the capacity to produce 5,000 tonnes of fabricated steel annually at Al Hayl in Fujairah.

Danlesco Steel will be engaged in the business of steel fabrication and will operate from their newly constructed 100,000 square foot plant located in the fast growing Al Hayl industrial area of Fujairah. The facility will produce industrial weighing platforms for trucks and trailers and will manufacture mild steel and stainless steel products for the construction and oil and gas sectors as well as catering to the requirements of local industries.

Mr Yousef Daneshvar founder & chairman of Danlesco Gulf LLC said that “Our research showed a strong demand for prefabricated steel structures, not only in the East Coast region but throughout the UAE. With our new facility in Al Hayl we are well placed to service the growing industrial base with particular emphasis on the construction sector. The business-friendly environment and long-term growth potential in Fujairah convinced us that this was the ideal location to launch operations with a view to steady and sustained expansion over the coming years.”

Al Jazeera Steel appoints Mr Abdulla as new chairman

Al Jazeera Steel Product Company has announced that its Board of Directors has elected Mr Mohamed Abdulla Moosa to succeed Mr Khalil Abdullah Al Khonji as chairman as of October 21st 2007.

Fitch assigns BBB- rating to Gerdau Ameristeel

Fitch Ratings announced that it has assigned a 'BBB-' rating to a proposed USD 1 billion 10 year bond due 2017 to be issued by GTL Trade Finance Inc a wholly owned direct subsidiary of Gerdau SA. The bond will be guaranteed by Gerdau and its main Brazilian subsidiaries. The proceeds will be used primarily to repay most of the USD 1.15 billion in borrowings under a bridge loan facility at Gerdau Ameristeel Corporation.

In September 2007, Ameristeel, whose controlling shareholder is Gerdau, funded the USD 4.2 billion acquisition of the North American structural steel producer, Chaparral Steel Company using primarily proceeds from a USD 2.75 billion syndicated term loan and USD 1.15 billion drawn under a bridge loan facility. Both loans are guaranteed by Gerdau and its main Brazilian subsidiaries.

The acquisition financings weaken Gerdau's credit ratios to the low end of the 'BBB-' rating category. Gerdau's total debt is expected to increase to approximately USD 8.5 billion from USD 5 billion at June 30th 2007, resulting in a consolidated leverage ratio as measured by total debt to pro forma operating EBITDA of approximately 2.5 times as compared with 1.8x as of June 30th 2007. Net debt will climb even further as the company intends to use about USD 1 billion of cash to complete the acquisition. This will result in the ratio of net debt to pro forma operating EBITDA increasing to approximately 2x compared with 0.8x as of June 30th 2007. The post acquisition leverage ratios are high for the rating category given the current peak in the industry price cycle.

Fitch's recent affirmation of Gerdau's ratings on September 14th2007 reflects an expectation that the company will use excess cash to reduce debt over the next two years to return to close to 2x and 1.5x on a total debt and net debt basis, respectively. Any additional debt financed acquisitions would further pressure credit quality and likely result in a rating downgrade.