India's steel futures to ride on economic boom

Reuters reported that India's steel futures trading is likely to grow up to 40% by 2008 as domestic producers expand capacity to satisfy the growing appetite for steel at home and overseas.

Mr VK Goyal chairman of the Association of National Exchanges Members of India said that but base metals trading are likely to grow at a relatively slower rate because of the absence of many big producers in India. He added that with the Indian economy growing at about 9% a year and construction and demand for vehicles booming, more consumers, such as builders and auto makers, are keen to hedge against rising costs.

Mr Goyal told Reuters that "We are seeing good growth in interest for trading in steel futures in India. A builder, who has five ongoing projects and promises to hand over apartments 3 years later to its buyer at today's price, cannot afford not to hedge, given the recent price volatility." He added that India launched its first steel futures contract in 2004. Currently, the National Commodity and Derivatives Exchange trades in mild steel ingot contracts, with some 5,000 tonnes traded daily on an average.

He said that "With companies like Arcelor Mittal and POSCO getting aggressive in firming up plans for new plants in India, it is surely sending a signal to the market about the future of the steel industry in India. We are going to see more demand, more exports and more turnovers." He added that in addition to surging domestic demand for steel and iron ore, India is witnessing a sharp growth in exports of iron ore to China.

Mr Goel said that "There is always this China factor that goes on in people's minds. Domestic users are therefore more keen to hedge their requirements now, compared with 2 years ago. With many Indian exporters keen to get into long-term contracts with China, prices could catch fire."

China imported a record 9.84 million tonnes of iron ore from India in March 2007. In the year to March 2007, India exported about 90 million tonnes of iron ore. More than half of the exports went to China.

Mr Goyal added that trading volumes on Indian exchanges in base metals would grow, but at a much slower rate compared with steel. He said that "We are expecting volumes to grow by about 10 to 15 percent from current levels by next year. It is taking time for metals to catch up as we have very few big producers."

TATA Group won ‘Investor of the Year’ award

It is reported that TATA Group has won ‘Investor of the Year’ award. It has already done Britain a service by taking over and promising to rejuvenate steelmaker Corus. Now it is considering acquiring another struggling legacy company, Jaguar, the loss making marque being sold alongside Land Rover by Ford.

TATA has the estimated USD 3 billion required to buy Jaguar and Land Rover. The group’s automotive unit, TATA Motors is virtually debt free after stripping out its vehicle finance business. The problem is how such an acquisition fits with TATA’s strategy of developing low cost cars for emerging markets. TATA already faces challenges with a project to develop the world’s cheapest passenger vehicle, the “one lakh car”. This will retail at about USD 2,500. But rising raw material costs are hampering the project.

TATA managers are also fighting market share declines in their domestic car business. Analysts worry consumers are growing tired of TATA’s ageing models and sales service – the group ranked at the bottom of JD Power’s Asia Pacific 2007 India sales satisfaction index study. This is not a great starting point for acquiring two top luxury brands. But the British marques would give TATA greater international distribution, a broader product range and might help enhance its customer service skills.

The TATA group has one of India’s most capable management teams. It has a good record with other deals, such as Tetley Tea in 2000. Even so, investors seem unhappy with a Jaguar takeover – TATA Motors’ shares have underperformed the market since talk of the deal first surfaced. Winning awards for investment is one thing; turning a profit is another. Perhaps TATA should hit the brakes on Jaguar while it still can.

Consultant to study steel’s coal need

It is reported that West Bengal Industrial Development Corporation has engaged consultant Mecon to work out a formula to measure the minimum coal needed to start a plant after investors apparently made huge demands for coal blocks.

The commerce and industries department held a meeting to assess the minimum requirement of new steel plants and finalize its strategy for coal allotment.

A government official said that “We want to assess the minimum requirement to start a plant so that work can begin immediately. Instead of looking at meeting the requirements of the whole project, we will try and meet their present requirements only.”

The government has already petitioned the Centre for 20 coal blocks. Of the four blocks the government has, one at Kulti and another at Icchapur have been earmarked for the Jindal plant in Salboni. The 2 blocks it later received at Jagannathpur were reserved for Bhushan Steel. However, it has now decided that instead of handing over coal blocks to investors, the government will retain control over them through the West Bengal Mineral Development Corporation.

Agreements have been signed with the Jindals and Bhushan. The pacts with Videocon and Jai Balaji are to be signed on October 4th 2007. Talks are on with Abhijeet Group, which wants to build a power plant for commercial purposes.

Sesa Goa - outcome of AGM

Sesa Goa Limited has announced that its members at the 42nd annual general meeting held on September 29th 2007, inter alia, have approved to following business:

1) Adoption of the audited balance sheet as at March 31st 2007 and the profit & loss account for the year ended on March 31st 2007 along with the reports of directors and auditors thereon
2) Declared final dividend at INR 25 or 250% per equity share.
3) Re appointed Mr PG Kakodkar and Mr MD Phal as directors liable to retire by rotation
4) Re appointed Mr SJ Thaly & Co, chartered accountants at Panaji, as auditors of the company to hold office from the conclusion of this annual general meeting till the conclusion of next annual general meeting.

SEZs may be partly stamp duty free

ET reported that centre is likely to partially yield to state governments’ demand and allow stamp duty to be levied on the non processing areas of the special economic zones. But the suggestion by the empowered committee of state finance ministers to allow state taxes on all goods consumed in the non processing area is unlikely to make the cut.

A ministry official said that “The non processing area is as much a part of an SEZ as the processing area. It is required to support the zone. There is no logic behind imposing taxes in the non processing area while giving exemptions in the processing area.” He added that moreover, once materials come into the zone, it would be difficult to ascertain whether it is being used for construction in the processing area or the non processing area.

Initially, the commerce department was planning to exempt SEZs from stamp duty. But with land prices soaring, the states do not want to lose out on this important source of revenue. While the SEZ Act has been passed by Parliament and SEZ rules have been framed, the rules are modified from time to time through official notifications to accommodate valid interests of stakeholders. Earlier, finance ministers of states had said they wanted to impose all taxes like stamp duty and value added tax among others on the non-processing area.

Meanwhile, centre is also planning to allow states to ask developers to furnish bank guarantees for the stamp duty exemption given to them. This will help the state governments recover the exempted amount if the SEZ does not get notified or the land is used for some other purpose. The matter was discussed in a recent meeting between commerce department officials and state government representatives. SEZs in India functioned from November 1st 2000 to February 9th 2006, under the provisions of the foreign trade policy and fiscal incentives were made effective through the provisions of relevant statutes.

The Special Economic Zones Act 2005 was passed by Parliament in May 2005, which received presidential assent on June 23rd 2005. The SEZ Act, 2005, envisages key role for the state governments in export promotion and creation of related infrastructure.

Panel to discuss allocations of coal blocks

BL reported that screening committee of the coal ministry will be meeting soon to decide on the allocation of coal blocks to the steel, cement and iron sectors.

A coal ministry official said that “The meeting of the screening committee was originally scheduled to have been held in the first week of October but it has now been postponed and we will be meeting in the second week to decide on the allocation of 23 blocks for the non power sectors.”

The screening committee had met earlier in September 2007 to decide on the allocation of 15 blocks meant for the power sector out of the total 38 blocks. The screening committee is headed by Mr HC Gupta union coal secretary and has representatives from the power, steel and environment and forests ministries. It also has representations from the state governments of Orissa, Jharkhand, Chhattisgarh, West Bengal and Maharashtra.

The official said that “The steel sector will be allocated 6 blocks while nine blocks are meant for the cement sector. The other blocks will be shared between the sponge iron and aluminium units. After the last meeting, the screening committee has recommended that 31 companies be allocated the blocks and the file has been sent to the PMO for final clearance. We expect this to happen in the next 1 or 2 weeks.”

Around 8 out of the 15 blocks have been allotted on a sharing basis, while the remaining 7 blocks have been given on a stand alone basis. It is estimated that the blocks which have been identified have reserves of around 3.5 billion tonnes, which could increase once companies start mining, and is capable of generating 18,000 MW power.

Some of the companies who have been selected are DB Power Ltd, Prakash Industries, Green Infrastructure Pvt Ltd, RPG Group’s CESC Ltd, Essar Power Ltd, Adani Power Ltd, TATA Power Ltd, GMR Energy Ltd, AES Chhattisgarh Energy Pvt Ltd, Malaxmi Group’s Navabharat Power Pvt Ltd, Reliance Energy Ltd’s Rosa Power Supply Co Ltd, Lanco Infratech Ltd, and Mittal Steel India Ltd.

Before the Committee met, the Ministry had asked the various state governments to first do an exhaustive due diligence of companies whose names were forwarded to separate. In June 2007, the ministry approved allocation of 39 blocks to various sectors. Of the total coal blocks, 10 blocks having reserves worth 6,075 million tonnes were given to power companies, while 12 blocks having reserves of 800 million tonnes were allocated to public and private companies under the captive mining dispensation.

Coal SPV may look at iron ore blocks

It is reported that the special purpose vehicle promoted by 5 public sector undertakings like SAIL, RINL, NMDC, NTPC and CIL to scout and acquire coal properties abroad might also look at acquiring iron ore blocks. The acquisitions are to be undertaken with a view to ensure coal supplies for the steel and power sectors.

Mr RS Pandey union steel secretary said that “Though the first priority of the SPV would be to acquire coal blocks, a couple of companies have said that they would also like to scout for the acquisition of iron ore blocks and we are not averse to this idea.” He also said that the SPV is likely to take shape soon with the steel ministry planning to put the proposal before the cabinet.

The proposed SPV last month got the necessary clearances from the finance ministry and a couple of the other departments, including the Planning Commission. The SPV does not call for budgetary support and the understanding among all the companies is that a portion of their profits would be made available. The shareholding pattern of the new company would be in proportion to the coal requirement of the individual company.

The SPV would have an authorized capital of INR 10,000 crore and a paid up equity of INR 3,500 crore. While SAIL and CIL would chip in with INR 1,000 crore each, the other 3 companies would contribute INR 500 crore. Meanwhile, the process of signing the memorandum of understanding by all the companies involved has been completed.

The SPV is expected to meet around 10% of the requirement of SAIL and RINL. Currently, both the companies import around 15 million tonnes, but this is expected to go up to around 45 million tonnes to 50 million tonnes by the time the expansion and modernisation plans of both the companies are completed.

The SPV would be looking at 3 routes for acquiring the stake. It might look at the possibility of a buyout of an existing coalfield or may look at buying a stake through the stock exchange and lastly may take the prospecting route.

NALCO receives top export award of CAPEXIL

SNS reported that National Aluminium Company Limited has received the top export award of CAPEXIL, under the processed minerals category for the year 2006-07. It has received this prestigious award under different categories for the 20 years in succession.

Mr CR Pradhan CMD of NALCO has received the award from Mr Somnath Chatterjee speaker of the Lok Sabha in New Delhi.

During the financial year 2006-07, NALCO has achieved the highest ever sales turnover of INR 6,515 crore, including a record export earning of INR 2,585 crore.

Railway infrastructure production exceeds target in August

It is reported that Indian Railway’s Rail Coach Factory has produced 117 coaches during the month of August 2007, while Chittaranjan Locomotive Works, Diesel Locomotive Works and Integral Coach Factory produced 17 electric locomotives, 20 diesel locomotives and 106 coaches respectively. Rail Wheel Factory produced 12065 wheels and 1893 axles and except ICF, all other units have exceeded the target.

The sources of income for Indian Railways in April to August 2007 are:

Loadings in million tonnes
Freights, Passengers earnings in INR crore

The punctuality percentage of mail or express trains was 93.6% in broad gauge and 99.5% in metre gauge during the month of August 2007 compared to 93.8% and 97.3% respectively during August 2006.

Centre to sanction INR 100,000 crore for power projects

It is reported that union cabinet will shortly sanction the INR 100,000 crore worth projects under the accelerated power development & reforms program and the Rajiv Gandhi vidyut vitran yojna to improve the transmission infrastructure as part of the target to meet 78,000 MW during the 11th Plan period and a circular power grid connecting the northern region to the western grid with 765 KVA lines will be a major component.

On the targeted 78,000 MW of installed power capacity for the Plan period, about 52,000 MW is being executed and about 2600 MW had been commissioned. Apart from this, the private sector is executing about 10,000 MW and about 18,000 MW to 20,000 MW of these projects are expected to generate power by March 2008.

The circular grid will cover Seepath, Zeoni, Bina, Gwalior, Agra, Fathepur, Sasaram, Gaya and Ranchi, connecting back to Seepath in North India. After the commencement of the Krishnapatnam ultra mega power project in Andhra Pradesh, a similar infrastructure will be developed to connect the ultra mega power project to the southern grid during the start of the 12th Plan period.

About INR 40,000 crore worth projects were approved under the scheme during the 10th Plan period. The schemes undertaken nationally during 10th Plan period under the APDRP include renovation and modernisation of sub stations, transmission lines and distribution transformers, consumer meters, high voltage distribution system and computerized billing.

Gujarat signs MoUs with ship building companies

It is reported that Gujarat government has signed MoUs with a few national ship building companies on September 30th 2007.

The companies under MoUs are:

1) Haryana based IREO management advisory will be investing INR 1,600 crore for developing shipping and related maritime infrastructure facility at Shivraj Okha

2) Essar in JV with Gujarat maritime Board plans to develop a roll on roll off terminal and common user cargo jeti at Hazira with an investment of INR 750 crore

3) Stelco Strip plans to develop shipbuilding and repair yard at Dahej and Bhavanagar with an investment of INR 300 crore

4) Shri Mataji Ashapura Ports and Chidambaram Shipcare will be investing INR 150 crore and INR 50 crore respectively for development of shipbuilding and repair yard

5) Walchandnagar Industries will develop port facilities for specialized structures and equipments for oil, gas, marine and other core sectors at Dahej with an investment of INR 350 crore

6) Satyagiri Shipping Co will operate the Mumbai to Gujarat and intra Gujarat passenger cum cargo transportation and Samudra Link Ferry Shipping & Cruise Services will develop coastal passenger ferry system in Gujarat. The companies are investing INR 20 crore and INR 30 crore respectively

7) ABG Shipyard will invest INR 100.75 crore in the state for expanding shipyard facilities and to establish a maritime museum

Bihar Tubes - outcome of AGM

Bihar Tubes Limited has announced that its members at the 22nd annual general meeting held on September 29th 2007, inter alia, have accorded to the following:

10 Adoption of the balance sheet, profit & loss account and cash flow statement together with the auditors and the directors report thereon for the year ending March 31st 2007

2) Appointment of Mr CS Joshi as a director of the company, liable to retire by rotation

3) Appointment of M/s VAPS & Co, chartered accountants as the statutory auditors of the company

PFC Q2 results on October 10

Power Finance Corporation Limited has announced that a meeting of the board of directors will be held on October 10th 2007 for considering the unaudited financial results for the second quarter ended September 30th 2007.

ArcelorMittal to strengthen position in Argentina

ArcelorMittal announces its intention to launch a cash offer to acquire the 34.7% of outstanding shares in Acindar it does not currently own. The Company currently owns a 65.3% stake in Acindar. The offer is designed to help ArcelorMittal strengthen its position in Argentina and reinforce its commitment to enhancing its business in the country.

The transaction is strategically beneficial to Acindar as it will become core to ArcelorMittal’s long products strategy, acting as a platform to grow and seek further opportunities in Latin America. As part of its commitment to strengthen Acindar and its position in Argentina, ArcelorMittal is transferring the Acindar shares it currently owns through Arcelor Brasil directly under the parent corporate structure of ArcelorMittal. In connection with such corporate reorganization ArcelorMittal has decided to make an equitable offer to the minority shareholders of Acindar. The successful completion of this Offer will accordingly benefit ArcelorMittal and its shareholders.

ArcelorMittal intends to offer Acindar shareholders ARS 5.75 in cash equivalent to USD 1.83, as of October 1st 2007, for each Acindar share they hold, representing a 19.5% premium over Acindar’s closing stock price on October 1, 2007, and a 38.3% premium over Acindar’s average closing stock price over the past six months. The 34.7% stake corresponds to 296,973,709 shares of Acindar as of September 30th, 2007 and represents a potential total transaction value of ARS 1,708 million, equivalent to USD 542 million as of October 1st 2007. It is intended that the transaction would be funded entirely with cash.

The Offer will be made directly to the shareholders of Acindar by ArcelorMittal’s wholly owned subsidiary ArcelorMittal Spain and, subject to regulatory approval, ArcelorMittal intends to commence the contemplated Offer no later than 4 months.

Mr LN Mittal president & CEO of ArcelorMittal said that “Latin America is a very important steel market with great potential for further growth and one which we have identified as a key region for expansion. This tender offer for Acindar underlines our commitment to the region and demonstrates our desire to strengthen our investment in Argentina. We believe that Acindar will benefit from being a wholly owned subsidiary of ArcelorMittal and from the benefits of the simplified corporate structure that this transaction brings.”

Mr Arturo Acevedo CEO of Acindar said that “Being a member of ArcelorMittal, the world’s leading steel company, brings considerable benefits for Acindar which will be further strengthened by this transaction. For example, Acindar is in the process of completing a USD150 million capital program that will raise capacity to 1.7 million tonnes. This transaction will assist Acindar in furthering investment plans and increasing its presence in the Latin American market.”

JP Morgan is acting as exclusive arranger and dealer manager and Bruchou, Fernandez Madero & Lombardi is acting as legal advisor to ArcelorMittal in connection with the Offer.

Acindar is the largest publicly traded steel company in Argentina. Acindar today is a 65.3% owned subsidiary of ArcelorMittal. The company has been listed on the Buenos Aires Stock Exchange since 1948.

Rio Tinto gets approval for USD 42 billion Alcan buy

Rio Tinto is pleased to announce that on October 2nd 2007 it received antitrust approval from the European Commission for the proposed acquisition of Alcan Inc by a subsidiary of Rio Tinto. Receipt of this, and other regulatory clearances, is a condition to Rio Tinto's offer to acquire the outstanding shares in Alcan Inc.

The offer to purchase all of the issued and outstanding common shares of Alcan for USD 101 per common share in a recommended all cash transaction is being made by Rio Tinto Canada Holding Inc an indirect wholly owned subsidiary of Rio Tinto. The Offer represents a total consideration for Alcan common shares of approximately USD 38.1 billion.

Rio Tinto is a leading international mining group headquartered in the UK, combining Rio Tinto plc a London listed company and Rio Tinto Limited, which is listed on the Australian Securities Exchange.

MEPS forecast carbon steel price for NA

UK based MEPS said that “In the flat products sector, we forecast an upturn in selling values over the next six or seven months. The import threat is receding and volumes are expected to drop significantly providing opportunities for the domestic mills to capture a much greater share of the slightly weakening consumption. Inventories at the service centres and OEM's will need to be replenished in the final quarter of this year and beyond. The mills' order intake should improve over the coming months leading to extended delivery lead times. This, in turn, should tighten the supply side and allow the domestic mills to push for higher prices from customers. Of course, with the prospect of rising input costs including iron ore, coke freight and scrap, the mills will have sound cause to lift selling values for the early part of 2008.”

MEPS said that “With the prospect of a slow down in the US economy after recent financial problems we are not confident that real demand for steel will expand in the second half of next year. The recent fall in interest rates may help but confidence in the housing market may not return for some time. This impacts on sales of consumer goods and residential construction projects affecting all the flat products. Third quarter 2008 steel price agreements could be the high point of the year for most product categories.”

MEPS added that “We continue to predict a further modest reduction in the average long products price in North America up to the turn of the year. Difficulties in both the residential and commercial construction sectors are likely to restrict real demand and opportunities for the mills to push for price increases. However, no major collapse in selling values is anticipated because input costs to the mills will, almost certainly, increase and the import threat is likely to diminish.”

MEPS further added that “Consequently, we expect the significant fourth quarter price cuts for wire rod and rebar to be reversed quite rapidly early in the New Year. Structural sections and merchant bars are likely to record slow but steady price improvement in the first half of 2008.”

JFE Steel to hike price of thick steel plates by 15% - Report

Thomson Financial reported that Japanese steelmaker JFE Steel Corp plans to raise the price of thick steel plate used for constructing ships and heavy equipment by 15% in response to rising raw materials costs.

The business daily without citing sources said that the increase, to be introduced before the fiscal year end, will boost the price of steel plate by about JPY 10,000 a ton to about JPY 80,000 a ton, a level not seen since the bubble economy in the late 1980s.

In 2006, JFE Steel held a 35.8% share of the Japan’s domestic market for steel plate used in shipbuilding, heavy electrical machinery, construction equipment and industrial machines.

Reliance Steel & Aluminum completes acquisition of Metalweb plc

Reliance Steel & Aluminum Co announced that it has completed its purchase of the previously announced acquisition of the outstanding capital stock of Metalweb plc. Terms were not publicly disclosed. The metals service center company is headquartered in Birmingham, England and has three additional service centers located in London, Manchester and Oxford, England.

Metalweb was established in 2001 and specializes in the processing and distribution of primarily aluminum products for non-structural aerospace components and general engineering parts used in high-end industrial applications. Metalweb plc’s net sales for the fiscal year ended May 31st 2007 were approximately USD 53 million. Metalweb will operate as a subsidiary of Reliance. Current management will remain in place with Mr Derek Webb serving as Managing Director.

Mr David H Hannah CEO of Reliance Steel & Aluminum Co said that “We are very pleased to have Metalweb as part of Reliance and to have the opportunity to expand our European presence.”

Mr Derek Webb MD of Metalweb plc, said that “Metalweb will now be in a far stronger position going forward to meet the increasing challenges and opportunities of globalization for our customers.”

Reliance Steel & Aluminum Co headquartered in Los Angeles is one of the largest metals service center companies in the United States. Through a network of more than 180 locations in 37 states and Belgium, Canada, China and South Korea, the Company provides value added metals processing services and distributes a full line of over 100,000 metal products.

2 steel mills sealed for violating environment laws in Pakistan

Pakistan Daily Times reported that Pakistan’s city government on Monday sealed two steel mills and issued notice to 48 industries for violating the environment laws.

Mr Tariq Zaman Khan district environment officer told Daily Times that he raided Rashid Steel Mill in Momanpura and Saleem Steel Mill in Shadipura and sealed them under Section 146-D of the Punjab Local Government Ordinance for using rubber tyres as fuel. He added that 4 people were arrested including the owners of the mills.

The officer said cases had been registered against the violators at the Baghbanpura police station. The violators could be imprisonment for up to three years and fined up to PKR 5,000.

Mr Zaman said the city government had also issued notice to 48 industries on not following the environment laws. He added that burning tyres was dangerous to human health and city’s environment. He said that people were developing illnesses because of toxins released into the air and in ground water by factories violating environment laws.

Steel exports recover amid duty imposition concerns

Reuter reported that China's steel exports are recovering ahead of a one week holiday in October 2007 with many mills concerned that Beijing will again raise export duties to rein in the energy intensive industry.

Industry officials said the mills expected another move possibly as soon as next month, especially as China's huge iron ore imports were pushing up the raw material's spot prices to record highs and driving freight rates to all time peaks. High spot Indian iron ore prices, which have nearly doubled so far this year to around USD 155 a tonne would make it difficult for Chinese steel mills to fend off a jump in the 2008 iron ore price talks, expected to start in October 2007.

Mr Li Xinchuang VP of China Metallurgical Industry Planning & Research Institute said that "At the moment, we export too much, making supply in the domestic market tight."

China’s National Development and Reform Commission said recently that tight supply had helped push up prices of steel products over the past two months amid strong domestic demand and low stocks. A drop in exports in August 2007, the lowest monthly export figure since March, had stopped prices from rising, although industry watchers said exports should be watched closely in coming months.

Mr Li said "The government is not too keen on export quotas. But I am sure China cannot export as much next year. We will still export but not too much."

Shipping officials said despite higher export duties for steel introduced this year, exports had been on the increase this month helped by strong international prices particularly in Europe and the Middle East.

An executive at one of China's top shipping companies said "For September, exports are very strong. Some are saying that export taxes may change from the start of October 2007."

Official data showed the China's August steel product exports were down at 5.38 million tonnes, compared with 5.94 million in July 2007 and a record 7.16 million tonnes in April 2007. Strong exports came on the back of further expansion in the country's crude steel output, which was expected to be close to 500 million tonnes this year, despite Beijing's efforts to slow the expansion. This is jerking up China's iron ore imports a lot faster than global output, paving the way for more price rises next year.

Ahead of the annual iron ore price talks, China further reduced the number of licensed iron ore importers by 6 to 112 to curb imports to small steel mills, which Beijing has ordered to shut down.

Customs data showed China's iron ore imports totalled 250.81 million tonnes during the first eight months of this year, up 14.5%YoY with shipments from distant Brazil up 28.0% at 62.58 million tonnes.

Mr Li said "This year, total production will be nearly 500 million tonnes. From such a high level, how can China continue to increase the output a lot more? Such high iron ore prices are not good for the stable and sustainable development of the industry."

Officials and analysts said in addition to stocking up ahead of an expected price increase in 2006 some mills were purchasing more in the spot market amid shipment delays from Brazil and Australia.

Macquarie Research said in its China Commodities Weekly that "At present, Chinese steel mills are panicking about this shortfall in iron ore supplies leading to a strong rise in iron ore spot prices. It said referring to August 2007 iron ore imports which came in at 29.29 million tonnes down from 33.61 million in July 2007. The lower imports reflect serious production delays in Brazil and Australia, plus the diversion of some cargo to Europe.

Qatar steel market expected to grow by 25%

MENAFN reported that reinforcement steel market in Qatar is expected to grow by between 20% and 25%in 2008. The report quoted Mr Fawzi Saleh GM of Madar Building Materials during the sidelines of an Iftar party organized by the firm for its customers and employees at the Sheraton said that "The Qatari market for reinforcement steel is booming and has been reporting an annual growth of 15% since 2002. He said that with cement and ready mix now readily available on the markets has fuelled demands for reinforcement steel.

Mr Saleh added that as the Qatari economy is expected to record further growth next year, Madar which has branches in Qatar, UAE, Bahrain, Sudan and Jordan, is investing heavily in the expansion of its warehouse facilities, transport fleet and workforce here in Qatar in anticipation for the steel market growth. He added that Madar is also investing in a new cut and bend steel factory in Qatar with a capacity of some 60,000 tonnes to 70,000 tons of re bars annually.

Madar Building Materials' core business include distribution and imports of commercial steel mainly from Korea, Japan and China and timber from Romania, Austria and Slovenia dedicated for the local market.

However, Mr Youssef Al-Shehabi marketing manager of Madar Building Materials pointed out that with the construction industry in Qatar booming and a lot of construction projects under way there is a need for increase of reinforcement steel supply. He estimated that there is a gap of between 20% and 30% in reinforcement steel supply, noting that this gap would be filled soon as Qatar Steel its main supplier is expanding its production line.

Speaking before the Iftar, Mr Jaber Saeed Al Rumaihi its chairman introduced the firm's new brand name as Madar Building Materials replacing Al Fozan Building Materials. He assured the firm's customers that the changing of the brand name and logo would not affect its joint business relationship in any way. He added that "All business transactions will continue to be processed exactly as before, albeit at an even more enhanced levels of customer service and business support."

He also added that the Board of Directors of Al Fozan Group has recently embarked on an ambitious strategy to expand the business internationally and subsequently established Madar Holding

NLMK successfully completed compliance audit

NLMK announce that it has passed a regular compliance audit performed by the certification body TÜV CERT reviewing compliance with the provisions of the European Directive and the right to use mark for steel products, produced for civil construction industry.

During the audit, NLMK’s quality management systems, standard documentation, activities of the production subdivisions and technical services were checked. The auditors confirmed the compliance of the company with the mandatory requirements of the Directive, as well as NLMK’s right to use the CE marking on their products.

The system of directives, developed by the European Union makes it possible to trace the quality of the products, coming into the European market, as well as their safety for the consumers’ health and for the environment.

CE marking demonstrates the compliance of a product with the provisions of the directives and gives the product the right to be present in the European market.

Fitch affirms CAP's IDRs at 'BBB-'

Fitch Ratings has announced that it has affirmed the following ratings for CAP SA.

1. Foreign currency Issuer Default Rating BBB-
2. Local currency IDR 'BBB-'
3. Yankee bonds due 2036 'BBB-'
4. National-scale rating 'A+ (Chl)
5. Local bonds No 435 (Series D) 'A+ (Chl)'

Fitch said that CAP's credit ratings are supported by the company's dominant presence in the Chilean steel industry, the favorable outlook for its iron ore business and moderate financial leverage. It added that the rating outlook is satble.
Fitch said that BBB- ratings for CAP are due to long term relationships with both its steel and iron ore clients. Balanced against these credit strengths are the volatile nature of the steel industry in terms of prices and volumes, rising production costs for the company's steel business, rising energy costs and a relatively aggressive capital expenditure program.

CAP produced and sold approximately 1.1 million tons of finished steel during 2006. The company's steel business is focused almost exclusively on the Chilean steel market, as more than 99.4% of CAP's sales were made in the country. The company ended 2006 with market shares of 51% in the overall Chilean steel market and more than 60% in the segments of the market it targets. Imports into Chile account for about 34% of the market and are primarily focused on the steel products CAP does not produce, such as plates or specialty steel.

In the past, CAP's iron ore business has been a relatively small part of the company's cash operating profits. The changing dynamics of this market have resulted in approximately 36% of the company's operating results coming from iron ore in 2006, which is expected to increase to nearly two-thirds by the end of 2010. CAP is investing in the iron ore business to increase output from 8.5 million tons to 15.5 million tons per year. Due to the overall stability of the pricing and demand for this product, this change in the consolidated composition of the company's cash flow is positive from a credit perspective in the long term. In the short term, however, the cost of these projects could result in significantly higher consolidated leverage for the company if the global steel market turns downward.

As of June 2007, CAP generated USD 166 million of adjusted operating EBITDA, compared with USD 116 million in the same period 2006. The adjusted EBITDA includes dividends for USD 30 million as of June 2007 and USD 39 million as of June 2006, from CAP's iron ore joint venture, Compania Minera Huasco. The upturn in EBITDA was due to USD 16 million from the Steel Processing Business which was consolidated in 2007 as well as higher volumes and prices at both the iron ore and steel business, which were offset to some extent by higher costs. The company's cost structure has risen in recent years due to the increasing cost of coking coal, which is a result of the rapid growth of the Chinese steel industry and rising energy costs in Chile.

In the past energy represented approximately only an 8% of CAP's operational cost, which is expected to significantly increase in the next couple of years due to the increasing prices of the energy in Chile. Energy prices have notably increased from levels close to USD 50 per MWh to over USD 100 per MWh and in some peak hours over USD 200 per MWh during 2007 due to tighter natural gas restrictions from Argentina, higher fuel prices while electricity demand remains on the rise. Although, new diesel capacity has been installed in recent years securing the Chilean system's energy supply, the cost of this energy will be much higher.

In addition, to the good operational results, the company sold its participation in the Compania Minera Carmen de Andacollo for USD 103 million generating a profit of USD 64 million, improving liquidity for the company. As of June 30th 2007, CAP had USD 264 million of cash and marketable securities and USD 610 million of debt. CAP's total net debt to EBITDA ratio was 1.0x for the period. Fitch believes CAP's net debt could double in the near future as the company embarks upon an aggressive investment program that could result in about USD 1 billion of capital expenditures between 2006 and 2010.

CAP is the leading producer of flat and long steel in Chile. Almost all of the steel produced by its subsidiary CSH is sold within Chile either directly or via the company's steel-processing subsidiary, Cintac. CAP augments its domestic-focused steel operations with an export-oriented iron ore business that it operates through CMP. The controlling shareholder of CAP is Invercap with a 31.32% stake in the company.

Novamerican to hold special meeting with Symmetry

Novamerican Steel Inc has announced that the Superior Court of Quebec has issued an interim order providing for the holding of a special meeting of Novamerican shareholders to consider the previously announced arrangement with Symmetry.

A special meeting of Novamerican's shareholders will be held on October 31st 2007 at Montreal in Canada. The record date for the special meeting is October 2nd 2007. If approved by shareholders of Novamerican, and subject to final court approval and satisfaction of conditions to closing, Symmetry will acquire all of the outstanding common shares of Novamerican in exchange of USD 56.00 in cash per share.

Novamerican has also determined to pay, at the closing of the transaction, a special dividend to Novamerican shareholders on a pro rata basis equal to the lesser of

1. The amount by which the cash at Novamerican at closing exceeds USD 80 million.
2. The amount by which the sum of cash and inventory of Novamerican at closing exceeds USD 225 million. Payment of the special dividend is contingent on, among other things, Novamerican having more than USD 80 million of cash and USD 135 million in inventory at closing.

Mr D Bryan Jones and Mr Scott B Jones principal shareholders of Novamerican's have agreed, pursuant to a lock up agreement, to irrevocably support and vote in favor of the arrangement. These shareholders collectively hold approximately 67.5% of the outstanding shares of Novamerican.

Novamerican Steel Inc based at Montreal in Canada with eleven operating locations in Canada and eleven operating locations in the United States, processes and distributes carbon steel, stainless steel and aluminum products, including carbon steel tubing for structural and automotive markets.

Harbinger acquires 5.7% stake in US Steel

Reutres reported that Hedge fund Harbinger Capital Partners owns a 5.7% passive stake in US Steel Corp.

Harbinger said in a filing with the US Securities and Exchange Commission that it owns about 6.75 million shares in the Pittsburgh based steelmaker. The fund was not required to reveal details such as when it bought the shares or the purpose of the transactions.

Maegma to construct a HR plant in Malaysia

Malaysian’s Maegma company announced the finalization of the project to construct a hot rolling plant in West Malaysia. This new plant which will be under the building process next year is expected to target the capacity of 1.3million tons per year.

Maegma said that there has been strong import demand for HRC and CRC in Malaysian market every year and Maegma aims to target the market segmented from the current local steel suppliers with the products from this newly constructed plant.

According to the official from Maegma, this new plant will bring also positive advantages to Malaysian steel industry as well as the downstream mills in terms of increasing their competitiveness.

CSN, Pernambuco govt to meet on steel project - Brazil

BNamericas reported that Northeast Brazil's Pernambuco state government and local steelmaker CSN are due to meet this week to discuss plans for a new steel project.

Mr Benjamin Steinbruch president of CSN unveiled in late September plans to build a 4.5 million tonnes per year steel plant in northeast Brazil, without announcing a specific location. The steelmaker has requested a meeting with Mr Eduardo Campos governor of Pernambuco to discuss the project. It added that "The state will only report its position on the project after the meeting."

An official said that Pernambuco has been in contact with foreign steel producers to bring a steel project into the state. According to earlier reports, a study for a steel project in the state was delayed due to the takeover of the project's owner, Spanish steelmaker Añon, by Spanish steel group Celsa earlier this year. But the state is facing some competition. Rio Grande do Norte state in the country's northeast also wants to host the new CSN mill.

Mr Marcelo Caetano Rosado state development secretary recently told BNamericas that "We'll make all necessary efforts to bring this project to Rio Grande do Norte."

In the meantime, CSN is advancing works on two 4.5 million tonnes per year slab mills, one in Minas Gerais state's Congonhas city expected to start production in 2010, and another in Rio de Janeiro state's Itaguaí city slated to begin operations in 2009. The steel producer has crude steel capacity of 5.6 million tonnes per year and also operates its Casa de Pedra

Scope of voestalpine's expansion plans for Linz plant

Thomson Financial reported that voestalpine AG exact scope of its continuing plant expansion program in Linz will be determined how its carbon dioxide emissions are regulated in the future.

Mr Wolfgang Eder CEO of voestalpine AG told a press conference that “A big question mark is hanging over' the second phase of the Austrian steel conglomerate's L6 expansion project as it waits to see whether the EU's emission program for the period after 2012 will provide better rewards for energy efficiency.”

The environmental audit published gives approval for L6's first phase, for which voestalpine will invest around EUR 700 million and hire around 330 new employees to raise its crude steel production volume in Linz by some 18% to 6 million tonnes per year.

Mechel to fight with ArcelorMittal for Yakutia's coal assets

FIS reported that the deadline for submitting applications for the participation in the tender on the sale of the state owned 75% minus one share of Yakutugol was 5:00 PM on October 1st 2007. The report added that the organizers received three applications from 'Yakutian Coals New Technologies, Mechel and Colorprofile.

Yakutian Coals New Technologies founder is ALROSA, Colorprofile was established by Arcelor Construction France representing the interests of the world's largest steel corporation ArcelorMittal.

ARM, Norilsk to raise Nkomati nickel mine output by 300%

South African mining company African Rainbow Minerals and Norilsk Nickel, equal JV owners of the Nkomati nickel mine in South Africa's Mpumalanga Province have announced a ZAR 3.2 billion (USD 448 million) expansion which is set to increase average annual nickel production to 20,500 metric tonnes from 5,500 metric tonnes and extend the life of mine by 18 years to 2027.

Mr Peter Breese CEO of Norilsk Nickel International in the statement said that "Approval of the Phase 2 expansion cements Nkomati's long term future as it unlocks around 1 million tonnes of contained nickel resource, and quadruples annual nickel production to 20,500 tonnes. Norilsk Nickel is planning to invest ZAR 6 billion in Africa over the next three years to double nickel production."

The statement also said the expansion delivers a powerful boost to the regional Mpumalanga economy through this large direct investment and the creation of new employment opportunities. The Phase 2 large scale mining expansion will exploit two zones of the large layered poly metallic disseminated sulfide resource, which contains 904,335 metric tonnes of nickel.

The companies said Mining will continue from the underground mine, at the rate of 47,000 tonnes per month as will the development of two new open pits, Pits 2 and 3 which will produce 578,000 tonnes per month of ore at a steady state of production.

Peru mineworkers to called strike on November 5

According to Mr Julio Ortiz Pinto general secretary for Shougang Hierro Peru's workers union thirty eight unions have agreed to participate in a national strike on November 5 called by Peru's largest mining and metalworker federation FNTMMSP.

Mr Ortiz told BNamericas that among the most important unions also to participate are those at the Yanacocha gold mine, the Tintaya and Cerro Verde copper mines, zinc miner Volcán and local miners Milpo, Raura and Poderosa.

He added that the strike aims to demand several reforms related to pay and benefits, including pension funds for mine workers, guarantees against firing for directly hired employees and regulation of third-party laborers. In a special case, the federation plans to also demand pay raises and benefits for workers at US company Southern Copper's Peruvian operations, who previously said they would go on strike October 2.

US company Southern Copper union representatives were not immediately available for comment.

IOSHA amends Mittal penalty from accident

Indiana Occupational and Health Administration amended Mittal Steel USA's penalty to zero and deleted the safety order it had issued to the company in connection a March 1 accident.

Earlier on May 9th 2007, IOSHA had penalized Mittal Steel USA, now known as ArcelorMittal, USD 2,275 for a safety violation in connection with the accident which left veteran steelworker Mr David Ranus burned over 60% of his body.

Mr Ranus of Valparaiso spent two months in an induced coma and has had numerous skin grafts to repair the burns he suffered when molten metal was ejected from the furnace and covered the backhoe he was driving.

IOSHA's investigation of the accident, the safety order and Mittal's settlement agreement are contained in an 82 page IOSHA report recently obtained by The Times.

Genco takes delivery of Capesize Vessel

Genco Shipping & Trading Limited has announced that it has taken delivery of the Genco London, a 177,000 DWT Capesize newbuilding. The Genco London is the third vessel to be delivered to the Company under Genco's previously announced agreement on July 18th 2007 to acquire nine Capesize vessels from companies within the Metrostar Management Corporation group.

Genco Shipping & Trading Limited has commenced a time charter upon delivery of the Genco London with SK Shipping Company Ltd for 35 to 39 months at a gross rate of USD 57,500 per day less a 2.5% third party brokerage commission. The charter is due to expire between September 2010 and January 2011.

Taiwan government to auction some shares of China Steel

The Economic Daily News quoted an unnamed officials from the Taiwan’s ministry of finance that Taiwan ministry of economic affairs has decided to auction 97.92 million shares of China Steel Corp and 45.58 million shares of Central Reinsurance Corp.

The report added that Taiwan’s ministry of finance will assist the ministry of economic affairs in the share disposal, adding that the sale is likely to be in November 2007 following recent share price strength.

The report further added that in addition, the ministry of economic affairs plans to sell another 153 million shares, representing a 1.33% stake in China Steel next year to reduce its holding in the steelmill to 20.07%.

Anglo American to sell 61 million shares of AngloGold Ashanti

Anglo American plc has announced that it intends to offer for sale 61 million ordinary shares of AngloGold Ashanti Limited in the form of ordinary shares and American Depository Shares pursuant to the registration of such securities under AngloGold Ashanti's automatic shelf registration statement.

The terms of the offering are set forth in a preliminary prospectus supplement file recently with the United States Securities and Exchange Commission.

Goldman Sachs International is acting as the global coordinator for the offering and Goldman Sachs International and UBS Investment Bank are joint bookrunners for the offering.