SAIL DSP sets new production records for 2007-08

BS reported that Steel Authority of India Limited’s Durgapur Steel Plant has concluded 2007-08 with an all time best performance in major areas of production.

1. Hot metal – 2.19 million tonnes – 105%of rated capacity
2. Crude steel - 1.91 million tonnes – 106% of rated capacity
3. Saleable steel - 1.72 million tonnes – 108% of rated capacity

DSP also took strategic initiatives which resulted in the best ever production of value added steels at 0.57 million tonnes accounting for 34% of total saleable steel.

Mr V Shyamsundar MD of DSP attributed the performance to an empowered and connected workforce.

DSP has planned growth of 10%, 15% and 23% respectively in hot metal, crude steel and saleable steel for 2008-09.

Steel export ban may hit Indian reputation as global supplier

The impending ban on export of steel scheduled to be taken up by the Cabinet Committee on Prices has triggered concerns in the commerce department as they feel that India’s reputation as a reliable supplier would be hit if the trend persists.

Officials of the commerce department said that the government should consider voluntary restraint by the steel industry rather than banning exports. However, steel ministry is understood to be pushing for a ban and the final decision wrests with CCP. Moreover, there is an opinion that it is not necessary to bar export of all types of steel.

Officials feel that banning exports would also hamper fulfillment of export obligation. Many exporters have to fulfill their obligation through exports for importing raw material free of duty under various schemes or machinery at concessional rates under the export promotion capital goods scheme. Failure to export attracts penalty as the exporter would be declared a defaulter.

While the official line is that taming inflation was the top priority, it is felt that steel exports are becoming a victim of the government’s strategy to bring down prices. The concern in the case of steel is more since India exported close to 5 million tonnes of value added steel worth around USD 4 billion during the first three quarters of 2007-08.

Mining scenario in India– E&Y Report

Given the reserves India has in thermal coal, iron ore, gold and their strategic locations, many foreign companies are keen to enter India, but some key issues need to be addressed to tap full potential.

Ernst & Young has outlined that Indian mining sector today faces 2 major issues
1. Present regulatory environment.
2. Lack of technical know how and logistics

Ms Asha Katyal associate director at Ernst & Young in an interview with BL said that the present regulatory environment can be best described as being more subjective than objective in the grant and administration of mining license in India. She said “In spite of best efforts to maintain a degree of uniformity in licensing norms across States, many inconsistencies still exist. For example, some states like Jharkhand and Chhattisgarh primarily allot leases for captive mining while others like Goa, Karnataka, Orissa and Maharashtra primarily grant leases for merchant mining.”

She added that “The present regulations do not provide for automatic conversion of reconnaissance permit to prospecting license to mining lease. Besides, even after the grant of a mining lease, most state governments hold discretionary powers to terminate a mining lease or take over a mine on grounds of non performance, environmental hazard or labor related issues.”

Ms Katyal said that mining companies are changing from being price takers to price makers. Consequently, private equity players are becoming increasingly attracted to the large amount of short-term cash being generated by mining companies. With mining costs being high in developed countries like Canada and the US, assets in Africa, China, India and East Asia offer an attractive return profile.

On asking scenario of Indian mining sector in 2012, she said that "With specific reference to the Indian market, in the next 2 to 4 years, the sector will witness a lot of mining centric M&A and fund raising activities. Mining contractors would be looking at raising funds and joint ventures to gear up and take on large mining projects. Joint ventures and alliances would get forged between mine lease owners and mining contractors."

L&T inks JV agreement with Tamil Nadu for shipyard

Larsen & Toubro Limited recently announced that it has signed a JV agreement with Tamil Nadu Industrial Development Corporation Limited to set up an integrated shipyard complex of global standards with a port facility and a total investment of about INR 3000 crore in the Kattupalli village near Ennore in Tiruvallur district of Tamil Nadu.

The JV agreement to set up the project was signed by Mr S Ramasundaram CMD of TIDCO and Mr KV Rangaswami member of the board and also president of L&T in Chennai on April 15th 2008 in the presence of Dr Kalaignar M Karunanidhi chief minister of Tamil Nadu and Mr AM Naik CMD of L&T.

The feasibility report for the project has been completed. Necessary environment studies are under progress. Construction will start by the end of 2008 and the project will be completed in 24 months.

The proposed shipyard complex will include facilities for commercial ship building including very large cargo carriers, specialized cargo ships for liquid or gas transportation and cruise vessels. It will also have the capability to build vessels for the defense sector, off shore platforms & floating production cum storage facilities for the oil & gas sector. It will also have the facilities for refitting and re engineering of commercial and defense vessels and heavy engineering fabrication and components production for ship building purposes.

L&T selected the Tamil Nadu site for this project based on its suitability, the investor friendly policies of the Tamil Nadu and the availability of large pool of technically qualified and skilled manpower in the state. This project has significant employment potential.

SAIL RSP celebrates National Fire Service Week

SNS reported that Steel Authority of India’s Rourkela Steel Plant has organized 'National Fire Service Week' at its central fire station.

Mr BN Singh MD of RSP inaugurated the celebrations by unfurling the fire service flag. Later Mr Singh released a booklet on fire safety to mark the occasion.

Mr Singh said that "Fire safety, protection of environment and development of human resources are a must to achieve progress and prosperity."

Earlier the pledge on fire safety was administered in Oriya, Hindi and English by RSP officials Mr SS Mohanty, Mr NP Singh and Mr V Nandagopal.

Indian economy to grow at 9.5% in 2008-09 – CMIE

While the government revised growth estimates for 2007-08 downward to 8.7% from 9.6% in the previous fiscal and expected current year growth to be still lower, Centre for Monitoring Indian Economy, in its monthly projection, said that Indian economy will grow at 9.5% in 2008-09 fiscal, aided mainly by growth in the industrial sector.

CMIE has painted a rosy picture of the Indian economy with the expansion at 10.4% for fiscal 2009. It attributed the current slowdown in industrial production to supply constraints in sectors like cement, aluminum, electricity and steel.

CMIE in the report said that "We expect industrial production to grow at 10.4% in 2009 fiscal. The current investment boom is expected to correct the slowdown problem. Our optimism stems from the fact that capacity addition in India continues with more and more fresh investments getting announced quarter after quarter."

It expects India's gross capital formation to increase by 15.5% in 2009 and continue to drive growth in its GDP. It said manufacturing and construction industries will power the economy in 2008-09. While service sector will grow at 10.6%, industry is expected to grow at 11.4% and agriculture by 2.9%.

CMIE said that growth of industrial production in India slipped to 5.3% in January 2008 as compared to 11.6% in January 2007, as growth in all major sectors comprising manufacturing, electricity and mining declined. Real GDP is expected to grow at 8.9% in 2008 and 9.1% in 2009. The projection of a 9.1% growth in real GDP in 2009 is based on the assumption of an adequate precipitation during the monsoon.

India's real GDP grew at 7.5% in 2005, at 9% in 2006 and at 9.6% in 2007. CMIE expects average inflation to climb to about 5.5% in 2008-09 from 4.5% in 2007-08.

SECR originating freight traffic in 2007-08 up by 11.46% YoY

South East Central Railway has handled total originating freight traffic of 121.6 million tonnes in 2007-08 fiscal up by 11.46% YoY as against 109.1 million tonnes in 2006-07. For 207-08, the target was 119 million tonnes.

In million tonnes

The total freight earning during 2007-08 amounted to INR 8235.16 crore up by 12.96% YoY as against INR 7290.64 crore earned in 2006-07. For 2007-08, the target was INR 8,084 crore.

The originating freight traffic target for 2008-09 fiscal has been set at 130 million tonnes and for achieving it, the SECR authorities have already initiated certain steps, such as doubling or tripling of important sections and additional loops at certain stations, to add to the line capacity.

KEC International wins PGCIL TLT contracts in Kerala

KEC International Limited last week announced that it has been awarded 2 separate contracts by Power Grid Corporation of India Limited for supply and construction of 400 KV double circuit Edamon Muvattupuzha Transmission line part I & II in the state of Kerala.

The total value of both the contracts is INR 155.24 crore. The line is associated with Grid Strengthening Scheme for Kerala I & II of Powergrid Network.

The job involves supply of towers, line materials, erection and commissioning. The total length of both the lines is 150 kilometers and the project is scheduled to be completed by March 2010.

TNEB inks MoU with PFC to set up co generation projects

It is reported that Tamil Nadu Electricity Board has signed a MoU with the Power Finance Corporation to set up co generation projects.

As per the MoU, PFC has sanctioned TNEB about INR 1,200 crore to generate around 250 MW of power out of co operative and public sector sugar mills in Tamil Nadu.

PFC will render its finance assistance to set up co generation projects at about 17 co operative and public sector sugar mills in Tamil Nadu.

Toshiba to set up a JV in India to make turbines

BS reported that Toshiba Corporation would set up a JV in India to manufacture turbines for large power plants. Further, the JV will explore bidding for the upcoming mega power projects.

Reportedly, Larsen & Toubro, which has already floated a JV with Mitsubishi Heavy Industries for super critical boiler plants, in advanced stages of discussion with Toshiba for the JV.

Mr Yuzo Kato MD of Toshiba India said that "We are in talks with more than one Indian company to form a JV to manufacture turbines and to bid for upcoming major power projects. The investment required for the turbine manufacturing JV could be around USD 200 million."


However, Mr Kato said that "It is too early to announce about the partner. The Indian power sector is booming and we foresee major opportunity for us in future." He added that Toshiba is targeting revenues of over INR 4,000 crore by 2015, of which a major part will come from the power and industrial sector.

Toshiba is planning to set up a facility either in Tamil Nadu or Gujarat to manufacture supercritical steam turbines of up to 1,000 MW capacity. It got an order worth USD 350 million to supply five 800 MW steam turbine generators for TATA Power’s Mundra ultra mega power project coming up in Gujarat. It also supplied 3X173 MW power generation equipments for the Teesta V hydroelectric power project in Sikkim.

Kolkata Port to float tenders for mobile harbor crane

BS reported that Kolkata Port Trust will float tenders for installing a mobile harbor crane at one of the berths at the Netaji Subhas Dock within 2 to 3 months. The estimated cost of installation of the mobile harbor crane along with its associated structures would be around INR 50 crore.

Mr AK Chanda chairman of Kolkata Port Trust said that Kolkata Dock System already has 3 mobile harbor cranes and the installation of the new crane is set to raise the capacity of the berth from the existing 0.6 million tonnes per annum to 2 million tonnes per annum.

Kolkata Port Trust had earlier announced that it would install 4 state of the art mobile harbor cranes at berths number 2 and 13 at the Haldia Dock Complex which would help enhance the productivity of the 2 berths from 8,000 tonnes per day to 20,000 tonnes per day.

Government update on CBM blocks

Mr Murli Deora union minister of petroleum & natural gas said that Indian government had in 1997 approved coal bed methane policy. Implementation began in 2001 when the government offered CBM blocks in the first round of the policy to different domestic and foreign companies.

Mr Deora said that "Under this policy, the government has awarded 23 CBM blocks to Indian and foreign companies on equal terms and conditions through international competitive bidding system in a transparent manner. In addition to 23 CBM blocks, government of India also awarded two blocks on nomination basis to the ONGC and CIL as well as one block to Great Eastern Energy Corporation Limited through foreign investment promotion council route."

Petronet to double Dahej capacity by December

It is reported that Petronet LNG Limited will double the capacity of its Dahej terminal to 10 million tonnes by December 2008.

Mr Prosad Dasgupta CEO & MD of said that "Dahej terminal expansion will be mechanically completed by September 2008 and commissioned by December 2008. For the balance period of the financial year, we will need 15 cargoes."

Petronet, which imports all of its LNG from RasGas of Qatar, will import the cargoes only if the price is right. From 2009-10, Petronet will get an additional 2.5 million tonnes from RasGas under an agreement.

Mr Dasgupta said that it is also talking to coal bed methane producers in Australia for possible investment in a liquedification plant there and shipping the fuel to India. He added that "Some 50 trillion cubic feet of methane gas reserves below the coal seams in Eastern and Central Australia had been established and the first export might happen as early as 2012."

He further added that Petronet is also looking at venturing into power generation, with a 1,200 MW power plant being planned adjacent to its Dahej terminal in Gujarat. It would build another 350 MW power plant at its upcoming Kochi terminal in Kerala.

Passenger car sales in India in 2007-08 up by 14.4% YoY

Mr Raghunath Jha union minister of state for heavy industries & public enterprises said that, as per Society of Indian Automobile Manufacturers, the production, sale and percentage increase and decrease in production of total number of passenger cars and two wheelers during the last 3 years are as under:

Domestic Sales in numbers

The total revenue earned by government by way of taxes which includes tax accruals from auto industry during last three years is as under

The exports of total number of passenger cars and two wheelers during the last 3 years are as under:

The value of export of such vehicle is tabulated as under

Value in INR

CEAT to spend INR 1,000 crore on capacity expansion

BS reported that tyre maker CEAT will invest INR 1,000 crore in the next 2 to 3 years on expanding capacity, increasing focus on R&D, market expansion and improving customer interface.

The total investment includes setting up 2 Greenfield facilities worth INR 900 crore. One of the plants will be a dedicated radial truck and car facility. The other will make specialty and off the road tyres. The new facilities and increase in production will result in an overall hike to 15 million units a year. For the second green field facility, CEAT is in the final round of talks to set up a plant in Gujarat, Tamil Nadu or Karnataka.

CEAT also unveiled its new branding strategy, which involves a new logo. This is the first ever change of its kind undertaken by CEAT, since its inception in 1958. The re branding has resulted in its logo, the galloping rhino and catch phrase, born tough, being withdrawn. CEAT will also spend INR 25 crore on brand building, which will involve promotion of the brand through advertising in the media.

Mr Paras Chowdhary CEO of CEAT said that "The shift to a new look symbolizes the strategic transformation at CEAT. The overall design more accurately represents the company’s vision of delivering best in class products, innovation and services."

CEAT also announced a turnover of INR 2,600 crore during the financial year 2007-08 up by 8.78% YoY as against INR 2,390 crore in 2006-07. It intends to raise funds through a mix of internal accruals, borrowings and sale of land assets which it holds in Bhandup.

Suzlon & Vestas in fray for INR 600 crore NTPC project

It is reported that wind power companies such as Suzlon Energy Limited and Vestas RRB India Limited are competing for the INR 600 crore wind power project of National Thermal Power Corporation Limited.

An official at NTPC said that "To start with, we are looking at 100 MW of wind power capacity. Both Suzlon and Vestas have evinced interest. The notice inviting tenders for the project are already out. We plan to award the project within the next 3 months."

It may be noted that NTPC, which generates 29,144 MW of power, plans to use sources such as wind, hydro, solar, biomass and geo-thermal energy to generate 1,000 MW by 2017. It has signed an agreement with the Asian Development Bank for 500 MW of renewable energy generation.

OMEL to pick up stake in 2 Nigerian oil blocks

It is reported that ONGC Mittal Energy Limited, a JV between ONGC and the LN Mittal Group, is likely to take on Total of France as a partner in its 2 Nigerian oil blocks. As per report, Total is likely to pick up close to 14% and 26% in highly prospective blocks, OPL-279 and OPL-285, respectively.

Official sources said that a tie up with Total will help the OMEL led consortium to source equipment including drilling rigs. The tie up is also significant as Total has expertise in undertaking exploration and production activities in the region. The production sharing contract for both the blocks was executed on February 23rd 2007 and OMEL had planned to bring in a partner by selling a participating interest to an international oil company.

OMEL holds 60% participating interest in OPL-279 while the balance 40% is with the local Nigerian oil firm EMO. In block OPL-285, OMEL holds a 90% stake and EMO has a 10% participating interest.

Even after selling stake to Total, OMEL will remain the operator in the two blocks. The blocks were awarded to OMEL under a mini bid round in 2006 where commitment to build infrastructure had been one of the pre qualification criteria.

L&T bags INR 2000 crore contracts from Bombay Dying

Larsen & Toubro Limited recently announced its construction division has recently secured a major order worth INR 2000 crore from Bombay Dyeing for developments at the Textile Mills & Spring Mills complexes at Worli and Wadala regions of Mumbai respectively.

The turnkey construction project involves construction of mixed use developments of approximately 4.00 million square feet at the Textile Mills at Worli and 5 million square feet at the Spring Mills development at Wadala to be completed in the next 46 months by the end of December 2011.

Kirloskar Brothers receives LoA for Koderma power project

It is reported that Kirloskar Brothers has received a letter of acceptance from Damodar Valley Corporation for the water system package at 1000 MW Koderma thermal power project stage I in Jharkhand. The total value of the contract is INR 166.77 crore.

The scope of work involves supply and installation of balance of plant package. It also includes construction, erection, testing, inspection and commissioning and handing over of the project including all associated electrical civil, structural and architectural work as specified.

Maytas Infra bags bridge construction order in AP

Maytas Infra Limited recently announced that it has bagged a project for the design, construction, finance and maintenance of a bridge across Vasista branch of River Godavari at Narsapur connecting Narsapur of West Godavari district with Sekhinatipalli of East Godavari district in Andhra Pradesh from AP Road Development Corporation.

The work is awarded to Maytas Infra on April 15th 2008 and the financial closure of the project is expected to happen by October 14th 2008. The cost of the project is around INR 68 crore.

Mr PK Madhav CEO of Maytas Infra said that "We are happy to bag this order and are looking at supporting the government in the socio economic development of the area through this project. The bridge will definitely give a much needed boost to the business activity in the region and we at Maytas Infra are confident of completing this project on time, maintaining highest standards of quality."

It may be noted that Dr YS Rajasekhar Reddy chief minister of AP laid the foundation stone on April 14th 2008 at the site in presence of other dignitaries from the state. The bridge which will be connecting cities of West Godavari district and East Godavari district will be 391.50 meters long and will have foot path on both sides and will be connected to the cities by two approach roads.

The work at the site will be starting from June 1st 2008 and is expected to be complete by May 31st 2010. The construction period is 24 month from the date of signing the agreement and the concession period is 12 years with the annuity period of 1 year.

Auto ancillaries not keen on investing near Hero Honda Haridwar plant

BL reported that Hero Honda, which is commissioning its largest plant in Haridwar at a time of declining sales in the sector has not changed the mood among auto ancillary companies, which are on caution mode. Even as it inaugurated its plant recently, most of the auto part companies are yet to set up their facilities in the region.

Many of the companies such as Lumax, Minda, Sriram Pistons and Rings and Amtek Auto, among others, are considering supplies from their existing facilities rather than making fresh investments in the State.

Mr Deepak Jain executive director of Lumax Industries Limited said that "We already have spare capacity at our existing plants from where we are supplying to TATA Motors and Bajaj. We are reviewing and streamlining our investment plans in the current scenario of declining sales."

Similarly, Minda Industries Limited would also cater to the Honda plant from its other units. Mr Vivek Jindal executive director of Minda Industries Limited said that "At present, we would be supplying from our other plants located nearby."

Hero Honda initially expects 40 of the component companies to be located in the industrial park and over the next 2 years 100 vendors to be present in the premises. Hero Honda, which is producing bikes in the excise free zone in Haridwar, would have to pay higher input costs if it has to procure raw material from outside the state. This would make it difficult for the company to produce at a competitive price.

Marg Constructions to develop Cheyyur minor port

It is reported that government of Tamil Nadu has selected Marg Constructions for developing a minor port at Cheyyur in Tiruvallur district.

The proposed port will be used for handling coal for power generation besides other cargo.

Volcanic blow out for global hot band spot prices

SteelBenchmarker reported that the US hot rolled band spot price for April 14th 2008 surged by 16% to USD 1,003 per ton, FOB the mill for the eleventh consecutive rise totaling USD 426, world export HRB price rise by 8.7% to USD 946 per tonne FOB the port of export, for the ninth consecutive rise totaling USD 365, Chinese HRB ex works price surged by 4.8% to USD 657 per tonne after slipping last time and the Western European HRB surged by 8.3% to USD 1.007 per tonne ex works for the fifth consecutive time totaling USD 294.

USA
USD 1,003 per metric tonne FOB the mill
Up by USD 138 per tonne from USD 865 three weeks ago
Up by USD 443 per tonne from the recent low of USD 560 on August 13th 2007
Up by USD 373 per tonne from the recent high of USD 630 on April 9th 2007

China
USD 657 per metric tonne, ex works
Up by USD 30 per tonne from USD 627 three weeks ago
Up by USD 187 per tonne from the recent low of USD 470 on October 22nd 2007
Up by USD 170 per tonne from the previous high of USD 487 on September 10th 2007

Western Europe
USD 1,007 per metric tonne, ex works
Up by USD 77 per tonne from USD 930 three weeks ago
Up by USD 344 per tonne from the recent low of USD 663 on July 23rd 2007
Up by USD 311 per tonne from the recent high of USD 696 on June 11th 2007

World Export Price
USD 946 per metric tonne, FOB the port of export
Up by USD 76 per tonne versus USD 870 three weeks ago
Up by USD 396 per tonne from the recent low of USD 550 on July 23rd 2007
Up by USD 350 per tonne from the recent high of USD 596 on March 26th 2007

ArcelorMittal and Nippon to expand I/N Kote coating JV

ArcelorMittal announced that it is expanding its Joint Venture partnership with Nippon Steel Corporation by building a new continuous galvanizing line at the I/N Kote facility at New Carlisle in Indiana in US.

The new CGL will have an annual capacity of 480,000 tons and upon completion will double I/N Kote's galvanized production capacity. In addition, the new line will offer high grade, high quality coated sheets that promote improved safety and fuel efficiency in automobiles.

The new CGL will be housed in a new 240,000 square foot building and will be supplied with cold rolled coils from ArcelorMittal's Indiana Harbor and Burns Harbor operations as well as ArcelorMittal and Nippon Steel's J/V at I/N Tek. Groundbreaking is expected to take place later this year with completion slated for late 2010.

Mr Michael Rippey president and CEO of ArcelorMittal USA said that "This is truly an exciting investment and one that will ensure ArcelorMittal and Nippon Steel maintain our leadership position in supplying the North American automotive industry with high-quality steels. This approximately USD 240 million investment at I/N Kote will add a second galvanizing line that will double our production capacity and provide approximately 100 new full time jobs. ArcelorMittal is proud of the success demonstrated by our existing J/V relationship at I/N Tek and I/N Kote and we look forward to the future success of this new automotive coating line. Additionally, this investment reflects our confidence in the growing partnership between the United Steel Workers and ArcelorMittal to continuously improve every day and meet increasing customer demands."

Founded in 1991, I/N Kote is a 50:50 JV between ArcelorMittal and Nippon Steel. The facility currently produces 450,000 tons of hot dip galvanized and galvannealed sheet and 410,000 tons of electrogalvanized sheet annually.

ISRI convention sees consolidation ahead

During the Institute of Scrap Recycling Industries’ recently concluded Annual Convention & Exposition, a diverse panel of scrap industry veterans and watchers discussed the changing environment for the independent scrap recycling industry. The panelist said that the increase in the number of high profile scrap metal acquisitions is being driven by a combination of factors, most notable is the sharp increase in steel production, especially outside North America.

Mr Eric Glover an analyst with Canaccord Adams one of the panelists said that the outlook for metals and scrap metal look is very promising. He said that “At the same time, with the expectation that markets will continue to be strong going forward, there are new entrants into the market, which will continue to push for greater exporters of material. The BRIC countries continue to be growing areas for scrap metal shipments. But there are constrained supplies of material, leading toward more consolidation ahead. The days of cheap scrap are over. Prices have achieved higher price floors.”

Mr Glover added that “Along with the increased amount of manufacturing taking place outside the United States, electric arc furnaces, which use far greater amounts of scrap ferrous than traditional basic oxygen furnaces, continue to make up a larger portion of the steelmaking capacity. EAF share will reach 37% of the total global steel capacity. To meet these needs, ISSB predicts that nearly 100 million tonnes of new scrap will be needed to meet the future demands.”

He also expects to see further acquisitions in the scrap metal business. He said "We anticipate steel mills will acquire more scrap yards. However, there are not many easy fits. But, vertical integration often provides some key advantages, including insulating some steelmakers from price volatility.”

Mr Al Cozzi another speaker at the session, looked at the changing environment linked the scrap metal consolidation trend with the consolidation trend that took place in the solid waste industry late last decade. He added that the move is being driven by a number of phases, from consolidation taking place on a local level, companies moving toward becoming publicly traded, a move to become national and even international in scope. Considering the trend even further, Mr Cozzi noteed that the stages will continue, with a consolidation of the consolidators, a re fragmentation of the industry as non compete clauses end and second wave of consolidation.

Indonesia may sell stake in PT Krakatau through strategic sale

According to Mr Sofyan Djalil state minister for state enterprises of Indonesia, a strategic sell off of portions of PT Krakatau Steel would be better than an initial public offering in the current adverse conditions of the global market.

According to Mr Sofyan, concerns over the current state of the global economy and capital markets was expected to dampen the appetite of public investors, should the company be privatized by an initial public offering. He said that "Under present market conditions, it seems impossible to make Krakatau Steel go public through an IPO adding that low prices offered for shares would be a consequence.”

Mr Sofyan said that capital and financial markets across the globe have been hit hard by concerns over a US recession that could well turn into a global economic slowdown. However, he said the government would carry out further study before deciding which option should be used to privatize the nation's biggest steel maker.

He added that both options were first aired by the government during a hearing about the 2008 privatization plan with the House of Representatives in February.

At that time, the government said if Krakatau Steel took the strategic sale method, it would prefer to sell up to 20% of the company, while under an IPO, the shares sold would equal a 40% stake in the company.

The management of Krakatau Steel has been widely reported to favor the IPO option, saying that it would generate funds faster than a strategic sale.

Arcelor Mittal Galati workers end strike

It is reported that workers at Romania's top steel mill ArcelorMittal Galati ended a two day strike on Wednesday after a local court ruled their protest was illegal.

Mr Ilinca Diaconu trade union leader told Reuters that "Striking workers returned to work following the court decision to suspend the strike for 30 days. But if our demands are not met, we will use all legal weapons to accomplish them,”

Around 4,000 workers or one third of the plant's workforce started the protest this week, asking for a 30% increase in wages, now at ROL 950 lei (USD 416) after-tax. Management had offered a 9.5 percent pay increase.

Forgemasters nags major casting order from SMS Meer

Sheffield Forgemasters recently announced that it has won a GBP 5 million casting contract for German press builder SMS Meer. The contract will run over a year and will see Forgemasters produce five castings for Europe's largest 12,000 tonne open die forging press at Völklingen in Germany.

The project, on behalf of Forge Saar a subsidiary company of Saarstahl AG, is on such a vast scale that the foundation table for the press will be cast in three sections weighing up to 148 tonnes each.

Forgemasters will also supply two 280 tonne castings for the upper and lower cross heads of the press, which will be used for making products for power generation.

Mr Volker Schaffer sales director of Sheffield Forgemasters Engineering said that "This project marks a milestone for us as we are seeing the new generation of ultra large presses coming on line in Europe and subsequently, the components that we manufacture for these presses are of a much larger scale. Forgemasters has a long association with the SMS group and with the Forge Saar project we will be building on the success of previous ultra large castings for presses such as SMS Eumuco's Bohler Press and the SMS Meer Kisko project. The Forge Saar press will produce critical components for the power generation industries. The demand for large forgings is increasing as global need for these components outstrips the number of engineering companies with the capacity to fulfill the orders."

Mr Graham Honeyman CEO of Forgemasters said that "Engineering across the globe is moving towards a larger scale of manufacture to economize on productivity. We are now casting the largest ingots ever produced in the UK at 300 tonnes each to supply the large steel plate rolling mills in Russia and Asia. The same can be said for our casting output as we have seen with castings for the SMS group over the past three years. To put this in a wider perspective there is no other European foundry that can realistically cast anything over 150 tonnes finish machined weight."

ArcelorMittal to hike steel prices USD 250 a ton for US buyers

Bloomberg reported that ArcelorMittal is planning to boost prices on some contracted steel shipments in the US by USD 250 a ton to recoup surging costs for energy and iron ore.

According to an April 14 memo to sales personnel from Mr DG Mull, executive vice president for sales and marketing of ArcelorMittal, the surcharge will be added to all orders of flat rolled steel for shipment May 5 and later, but ArcelorMittal won't add the charge to spot sales or contracts that already allow prices to fluctuate.

According to Mr Robert Miller of Miller Mathis a New York investment bank focused on steel said that US steel prices are climbing even as demand stagnates because higher prices in other regions and a weak dollar are attracting the exports usually destined for North America. Hot- rolled coil, another key industry product, may now cost a record USD 1,000 a ton on the spot market.

Mississippi barging delays hits steel and ferroalloys movements

Platts reported that barge traffic on parts of the Mississippi River system have ground to a halt, while other areas are experiencing severe delays, as a result of severe flooding, causing disruptions to southbound shipments of steel and northbound shipments of ferroalloys, coal, alumina.

According to ship brokers and traders, more than 100 barges are understood to be stuck at Rosedale in Mississippi, just south of where the Arkansas River flows into the Mississippi, waiting for flood waters to recede sufficiently, according to a report by ship broker Mid Ship.

Other shipping sources confirmed there was a major backlog of barges waiting to move north. A ferroalloys trader said that the number of barges that can be moved in a single tow had been reduced. "Instead of going up 18, they are only allowed to tow 12. You may have to wait your turn." The trader estimated that barge transit times from New Orleans to Pittsburgh were now 28 to 30 days, instead of the standard 21 days.

According to ship agents, flow areas on some parts of the Arkansas River have exceeded 200,000 cubic feet a second, which has caused navigational aids to move or disappear. In areas where aids have moved, navigation is only being allowed during daylight hours.

However, a shipping agent in New Orleans told Platts that while several key areas were still above flood stage, water levels were receding, and "we're hoping that navigation can resume on the Arkansas River this coming weekend, even in a limited way."

Tube price to rise in North America

North America's pipe manufacturers are going to rise their price again because the cost of material is still on rising.

As per report Atlas Tube will rise USD 100 per short ton for square tubes. Southland Tube in South America will rise USD 100 per short ton for square tubes, mechanical tubes, etc. In addition, Independence Tube has announced to rise USD 100 per short ton for square tube 2 to 12inch, too.

The new price will be applied to only in new orders.

(Sourced from YIEH.com)

SMS Meer to equip Lucchini wheel plant

German firm SMS Meer has won a contract to equip an expanded wheel plant at Lucchini Sidermeccanica's Lovere steelworks. The expansion aims to increase capacity at the site in northern Italy's Bergamo province from 140 000 to 240 000 wheels per year by the end of 2009.

ELTI will provide furnaces for reheating and heat treatment of steel on the production line, which will be connected to a precision machining shop which has been expanded and automated.

Lucchini Sidermeccanica controls its entire supply chain, producing its own steel rather than buying from third parties. The highly automated wheel plant will operate alongside the existing steelworks, which is increasingly focusing on steels for complex and specialist applications. The research department has access to four test rigs which are able to handle individual components or complete wheel sets and can simulate speeds up to 300 kilometer per hour.

The EUR 80 million investment is being made by the Lucchini family's Sinpar holding company, funded by a medium term loan arranged by UniCredit Banca d'Impresa and Banca Intesa Sanpaolo.

Fire at WCI Steel BF reported

WCI Steel in response to media inquiries, it indicated the fire reported on April 15 caused no property damage or any interruption to operations. The fire occurred at the blast furnace when a gas bleeder did not close properly.

WCI said that there were no injuries. Local fire departments were called as a precaution. Firefighters remained on standby, but no fire department equipment was used.

It added that WCI officials said the fire had no impact on production or customer shipments.

Rautaruukki to supply steel structures for Port of Drammen

Rautaruukki is to supply the steel structures for the expansion of the Port of Drammen in Norway.

Rautaruukki’s steel piles fitted with rock shoes will be used in the foundations in the construction of a new Kattegat quay. Deliveries to the Port of Drammen, which is about 40 kilometers to the southwest of Oslo, will start in mid April and continue until July 2008.

Ruukki's delivery for the Kattegat quay consists of 5,700 meters of steel pipe piles fitted with rock shoes to ensure reliable foundation in the rock. The piles will be produced at Ruukki’s Oulainen plant in Finland.

Mr Einar Olsen port director of Drammen said that “Fast delivery times, best overall value for money and high quality products were the factors that clinched the deal for Ruukki. Another factor in Ruukki’s favor was the ability to deliver the piles to the site as needed.”

Ruukki has been involved earlier in two bridge construction projects in Drammen. Ruukki delivered steel piles for construction of the Drammen Bridge in 2003 and steel superstructures for the Ypsilon pedestrian bridge, which was opened in January 2008.

During 2007, the number of ships calling at the Port of Drammen increased by almost 35%. In terms of tonnage, the highest growth was in the shipping of lumber, iron products, containers and cars. A total of 3.4 million tonnes of cargo passed through the Port of Drammen in 2007.

American flat rolled market strengthens

It is reported that higher raw material costs and shortage of supply are driving the US domestic producer to keep raising prices.

America’s domestic flat price remained very strong during the last two weeks. After price adjustment, now American HR coil price is at USD 1,080 to USD 1,124 per tonne and CR coil at USD 1,191 to USD 1,235 per tonne.

It is reported that AK Steel has raised their price by USD 55 per tonne from the March 24th 2008 and USD 77 per ton from May 1st and the price raised by USD 165 per ton on the April 7th 2008. As per report, Nucor will also raise its price for delivery in June by USD 198 per ton.

(Sourced from YIEH.com)

SKF corrosion resistant bearings are 80% lighter

It is reported that a range of corrosion resistant, lubricant free, polymer bearings are said by SKF to be 80% lighter than their steel equivalents and can have balls in polymer, SS, glass or other materials

SKF has released polymer ball bearings, which offer a lightweight and lubricant free alternative to conventional steel bearings. The range offers resistance to corrosion and chemical damage, making the bearings ideal for applications subject to moisture or aggressive chemicals. The bearings consist of polymer rings and cages, and can be specified with balls made of stainless steel, glass, polymer or other materials.

Each of the bearings offers low friction and resistance to wear and fatigue, providing a long, low maintenance service life. The latest range of polymer bearings are part of an extensive range of bearing products and hub units from SKF and are supported by the company's global manufacturing, design and customer support services

SDI USD 125 million debt issue rated Ba2 – Moody

Moody's Investors Service has assigned a 'Ba2' rating to Steel Dynamics Inc's senior unsecured guaranteed debt issuance of about USD 125 million.

At the same time, Moody's affirmed SDI's 'Ba1' corporate family rating, 'Ba1' probability of default rating, the 'Ba2' rating on its existing guaranteed senior unsecured bonds and debentures and the 'Ba2' rating on its convertible subordinated notes.

The rating outlook is stable.

It said that while the recent debt issuances modestly increase the company's overall financial leverage profile, Moody's believes SDI has adequate cushion at its current rating level to accommodate a transaction of this magnitude without compromising its credit profile.

Singapore increases container turnover

It is reported that PSA Singapore has reported a 12.1% YoY growth in the volume of containers handled in the year to date.

PSA Singapore said its domestic terminals handled 7.12 million TEU between January and March 2008 against 6.36 million TEU in the same period last year.

PSA, which operates both foreign and domestic facilities, stopped disclosing throughput figures for its overseas terminals in 2007.

Rio Tinto Alcan OKs power supply deal with Big Rivers Electric

Platts reported that Rio Tinto Alcan investment committee has approved a new power supply agreement with Big Rivers Electric for Alcan's 180,000 tonne per year aluminum smelter at Sebree in Kentucky US.

Under the new arrangement the smelter's electric costs are expected to rise from USD 34.82 per MWh in the second half of 2008 to USD 55.05 per MWh in 2023, the final year of the 15 year deal. According to the Public Service Commission filing, the smelter's cost of electricity, which typically represents almost a third of a smelter's operational expenses, has increased steadily in the past few years, going from USD 27.50 per MWh in 2005 to USD 29.13 per MWh in 2006 and USD 35.29 per MWh in 2007.

Those costs are scheduled to go up only marginally in the first couple of years of the new agreement, averaging USD 34.94 per MWh in 2009 and USD 37.69 per MWh in 2010. But in 2011 they will rise to USD 42.54 per MWh. However, the costs again will remain relatively steady until 2015 when they increase to USD 47.34 per MWh.

The new power supply accord with Big Rivers, a Henderson, Kentucky based generation and transmission cooperative, is part of the coop's larger "unwind" agreement pending before the PSC.

Big Rivers asked Kentucky regulators last December to approve a complex deal whereby the co op would regain operational control of its 1,740 MW coal fired generating system in western Kentucky by terminating the final 10 years of a 25 year lease arrangement signed in 1998 with E.ON US, formerly LG&E Energy.

Pakistan abolishes customs duty on steel products

The Post reported that Pakistan government withdrew the condition of no objection certificate for the import of raw materials for the steel industry and abolished customs duty and reduced sales tax from 15% to 10% on steel products aimed at making the industry more competitive through facilitation rather than providing undue protection.

This would also help in capping local steel prices and protect steel products from the effects of rising steel prices in international markets.

Quality Wire Products planning USD 4 million CAPEX

Manama Bahrain reported that Bahrain based Quality Wire Products Company is to undergo a BHD 1.5 million expansion and will relocate its factory from Salmabad to Hidd within a year.

Mr KU Kumar MD of Quality Wire Products Company said that "The expansion will create more jobs for people with specialized skills in this industry. Now we are exporting our products to more than 20 countries. In 2002, we diversified our product range with an aim to become the largest source for all wire mesh and its related products. Our production capacity was also doubled during 2006 and in 2007. We meet the changing requirements of our customers by developing new ideas at a faster pace."

Mr Kumar said that the factory would be moved to a 10,000 square meter area in Hidd International Investment Park. He added that "We expect to complete the shifting in the beginning of 2009, when it will undergo a BHD 1.5 million expansion."

Established in 1999, Quality Wire Products Company first manufactured woven wire mesh in stainless steel and aluminum alloy and then extended to all metals. Commercial production of wire mesh started in May 2000.

Attieh Steel to construct new rebar processing center

Yieh reported that UAE based Attieh Steel is planning to construct a steel rebar processing center in Abu Dhabi, with annual production capacity of around 70,000 tonnes to 100,000 tonnes.

The main reason for this project is that the demands for steel rebar from building industry are very strong in the region.

Attieh Steel already had a rebar center at Jebel Ali in UAE.

(Soured from Yieh.com)

Maaden and Rio Tinto to sign smelter deal by August 2008

Reuters reported that Saudi Arabian mining company Maaden, which plans to sell shares to the public, expects to complete a JV with Rio Tinto for an aluminum complex by August 2008.

Mr Abdullah Dabbagh CEO of Maaden said that "We are hoping to finalize the aluminum JV with Rio Tinto by August 2008." He added that the 670,000 tonnes per annum smelter should cost about USD 7.5 billion.

It may be noted that Maaden and Alcan, which was acquired by Rio Tinto, agreed in April 2007 to develop what would be one of the world's largest aluminum making projects, including a smelter, an alumina refinery and a power station.

Foundation stone laid for GIPI manufacturing facility at Sohar

Oman News Agency reported that Mr Hilal bin Badr al Busaidi Wali of Sohar has laid the foundation stone for the new Gulf International Pipe Industry Llc plant in Sohar with USD US104 million investments and a capacity of 250,000 tonnes per annum.

Mr Abdullah bin Salim al Salmi board chairman of GIPI said that the facility will be the first of its kind in Oman to produce high pressure carbon steel pipes, 8 inches to 24 inches with 1 inch thickness.

He added that, after completion, the plant will produce more than 250,000 tonnes per annum of API standard pipes, which will reduce the reliance on imports and make the oil and gas sector in Oman self sufficient in carbon steel pipe. The project is also one of the downstream projects that enhance the government efforts to promote local industries.

Mr Hamdan al Shaqsi CEO of the new plant said that "The plant construction will be completed as per the pre set plans and is expected to start production in 2009 as the construction works will be completed before 2008 end."

The plant investment amounts to USD 104 million including USD 80 million as credit facility with a number of banks including Qatar National Bank, Gulf International bank, Bank Muscat and Bank Sohar. Gulf International Bank will be in charge of processing the loan contract.

Dubal to host 13th International Arab Aluminum Conference

Dubai Aluminum Company Limited has confirmed that it will host the 13th International Arab Aluminum Conference & Exhibition 2008 at the Grand Hyatt Hotel in Dubai from November 9th to November 12th 2008.

Sindh government vows to tap Thar coal deposits

Dr Khatumal Jeevan advisor to Sindh chief minister has expressed his surprise and regret on the reports that there was a golden opportunity for Pakistan to engage a Chinese firm at the offer of upfront tariff of 5.7 to 6.7 cents per kw for the generation of power from Thar coal which was not availed by the then government and as a result the firm returned back.

Dr Jeevan regretted that despite passing over a period of 20 years, no serious efforts were made on the part of previous governments for establishment of power plants or development of coal deposits in Thar that are considered biggest reserves not only in Pakistan but in Asia as well.

He was also surprised to know that more than a dozen MoUs were signed with the different parties for coal mining, coal washing and power generation projects in Sindh despite lapse of a considerable period of more than 10 years. He said that it was the mission of Shaheed Mohtarma Benazir Bhutto to develop the coal deposits in Sindh and now it was his duty to complete the mission of Shaheed Qaid.

He further added that he is ready to work on war footings to yield positive results within a short span of time. He called on the management of mines & mineral development department to re double their efforts by working overtime to make up for the loss of time and ensure that power generation plants are under physical construction within few months.

OVL qualifies for oil & gas contracts in Iraq

It is reported that ONGC Videsh Limited has qualified to bid for oil and gas contracts in Iraq. It is the only Indian company in the list of 35 firms that has qualified for bidding.

The qualified bidders include BP, Chevron, Exxon Mobil, Royal Dutch Shell and Total, whereas the Chinese firms CNOOC, CNPC, Sinochem and Sinopic Group.

OVL already has license for Block 8 in Iraq and was qualified to bid in future contracts.

EU to discuss gas cooperation with Iraq

Reuters reported that European Union hopes to reach an outline agreement to import Iraqi gas via a planned pipeline across Turkey when Iraqi Prime Minister Mr Nuri al Maliki makes his first visit to Brussels this week.

The centerpiece of the 3 day visit will be enhanced energy cooperation, details of which will be discussed by EU energy commissioner Mr Andris Piebalgs and Iraqi oil minister Mr Hussain al Shahristani.

Mr Maliki will also discuss trade ties, the security situation and EU assistance for rebuilding Iraq’s administration with European Commission president Mr Jose Manuel Barroso and foreign policy chief Mr Javier Solana, as well as NATO training for Iraqi army and police officers with NATO secretary general Mr Jaap de Hoop Scheffer.

Connecting fields in western Iraq to a planned Arab gas pipeline would enable Baghdad to supply gas to Nabucco, construction of which is due to start in 2010 and be completed in 2013.

EU is keen to diversify away from Russia, which provides a quarter of Europe’s gas needs and hopes Iraq will eventually feed into Nabucco via a pipeline planned to run from Egypt through Jordan and Syria to Turkey. The political agreement would be the second boost in a week for the EU’s troubled USD 6 billion Nabucco pipeline project, due to transport gas across Turkey to central Europe, after Brussels secured a promise of gas supplies from Turkmenistan.

Kuwait posts a record KWD 19 billion revenue in 2007-08

Kuwait has posted a record actual revenue of KWD 18.93 billion in the last fiscal year ended on March 31st 2008, 127% higher than budget projections of KWD 8.32 billion. Revenues are also up by 22% YoY to KWD 19.3 billion as against KWD 15.5 billion in 2006-07. Actual oil revenue reached a record KWD 17.72 billion up by 138% YoY on budget projections of KWD 7.45 billion.

Kuwait, which has been pumping 2.5 million barrels per day, calculated last year’s budget at a conservative price of USD 36 a barrel, when the actual average price topped USD 75. Preliminary figures for spending reached KWD 7.49 billion, sharply lower than the budget projections of KWD 11.3 billion.

Kuwait posted a provisional surplus of KWD 11.44 billion, but the actual final figure is expected to be lower following the adjustments. Local economic reports have forecast that Kuwait’s surplus for the past fiscal year will top USD 32 billion. It has projected a deficit of USD 11.2 billion.

This is Kuwait’s 9th consecutive year of windfall due to high oil prices. In the 8th fiscal years preceding last year, Kuwait’s budget surpluses have totaled around USD 72.5 billion. In all those years, it projected a deficit.

Basha Dam construction likely to start in 2009 – Report

Daily Times reported that the construction work on Diamer Basha Dam project in Pakistan will likely commence after the international competitive bidding in 2009. Draft detailed engineering designs and tender documents of the project have been submitted by consultants and are being reviewed for finalization.

According to official source, German Company Lemhyer has submitted a detailed engineering design to WAPDA, which is being reviewed by the authority. WAPDA has made many recommendations to government including setting up 4 hydropower stations of 1,150 MW for royalty purposes to North West Frontier Province and Northern Areas. It has also informed the authority that 4,500 MW electricity would be generated by the dam project.

In the draft of detailed engineering, WAPDA has also recommend to keep flow rate of water at the level to fill the dam in four years and suggested to store 60% water in the dam and release 40% to generate power and irrigate crops. It has also recommended maintaining water outflow of 35,000 cusecs and keeping the height of dam at 1,160 meter instead of 1,170 meters set earlier to store water at the time of sudden melting of glacier.

WAPDA has also indicated that 27,000 families would be affected by the construction of dam and recommended setting up 9 model villages near Gilgat to accommodate these affected families. It has also recommended allotting 5 Marlas for residence per family and 6 canals to 1 family for agriculture purpose.

Iran to export gasoline from 2012 – Report

It is reported that Iran's economically and politically costly gasoline imports should end in 2012 when refinery upgrades will make the nation an exporter of the motor fuel.

Mr Fereidun Fesharaki CEO of FACTS Global Energy said that "Iran will certainly be a sizeable gasoline exporter post 2012. The government has gone past the point of no return on this."

Iran is the world's 4th largest crude oil producer, but lacks the refining capacity for domestic needs, forcing it to import large amounts of gasoline and burdening its finances. The imports also make Iran vulnerable to pressure over its nuclear program.

WISCO BF utilization quotient reaches world levels

It is reported that Wisco’s blast furnace utilization quotient has reached international leading level, which is one of the key indicators of the production efficiency.

At present, the utilization quotient of more than 3,000 cubic meters large scale BF reaching 2.3 to 2.4 tonnes per cubic meter per day is the best level. To enhance 0.1 percentage of BF utilization quotient can increase benefits by CNY 44.38 million.

In 2007, the NO.7 BF of WISCO utilization quotient reached 2.66 tons per cubic meter per day, in November 2007, the utilization quotient even reached 2.94 tonnes per cubic meter per day, ranked world’s leading level.

On April 15th, Wisco strengthened the large scale blast furnace smelting technology research and application, which passed the identification of provincial Science and Technology Department.

Rebar price still climbing in Jinan

It is reported that construction steel price remained strong in Jinan market at present.

The average quotation of deformed bar was CNY 5070 per tonne up by CNY 30 than that of last week and by CNY 120 as compared to the end of last month. Analysts said prices of deformed bar are likely to move up CNY 300 to 500 later.

Mr Wang Andong said average price of wire rod and deformed bar was CNY 4400 and CNY 4500 per tonne in Jinan market in the middle of January, and reached to CNY 5140 to 5070 respectively on April 14th. Deformed bar average price at the beginning of last year rose up CNY 1370 per tonne than at the end, moved up CNY 650 per tonne till now, rose up nearly 15%. Price of deformed bar per tonne of Jigang was above CNY 5000 at present. Construction steel price kept at the highest level now.

Insiders think construction steel price soared due to the cost promoting and increasing demand. They all agreed construction steel price will keep rising this year, but might be dropping back in June and July since the steel production restriction during Olympic Games.

Analysts expressed enterprises, which they need construction steel should purchase in advance if they had enough capitals.

Tangshan invested CNY 1 billion in energy saving and emissions reduction

According to Mr Wang Yifang the board chairman of Tangshan Iron & Steel Group Co that although there is a gap between energy cost in Tangshan Steel and international first class level, it is expected that every energy cost index in Tangshan Steel may exceed domestic advanced level by 2010.

Tangshan Steel saved 315,000 tonnes of standard coal with a value of CNY 370 million in 2007. The company plans to complete an investment of CNY1.028 billion in 20 items of energy saving and emissions reduction projects. According to the program, Tangshan Steel is making efforts to decrease energy cost per tonne steel to below 590 kilogram standard coal and to reduce new water cost per ton steel to less than 3.9 tonnes. Meanwhile, the recycling rate of solid waste should reach 100%. Tangshan Steel is expected to reduce almost 200,000 tonnes of standard coal in this year, to reduce over 4,000 tonnes of sand and powder and to decrease 160 tonnes of COD and over 4,000 tonnes of sulfur dioxide.

Moreover, Tangshan Steel is also accelerating outdated capacity elimination. It plans to close down 400 CBM BFs, 60 squared m sintering systems and four sets of 250CBM lime upright stoves. Meanwhile, Tangshan is active in technology alteration and it plans to stop all general wire production and to further close down high energy cost and low value added products lines.

US ITC initiates preliminary investigation into steel line pipe from China

The United States International Trade Commission announced on Apr 14th 2008 to initiate preliminary investigation to determine whether there is a reasonable indication that a US industry is materially injured or threatened with material injury, or the establishment of such an industry is materially obstructed by reason of imports of certain circular welded carbon quality steel line pipe from China and Korea that are allegedly subsidized and sold in the United States at less than fair value.

ITC shall make preliminary determination prior to May 19th 2008 and submit the result to Department of Commerce prior to May 27th 2008.

(Sourced from MySteel.net)

Liuzhou Q1 profit falls on storm crisis

China Knowledge reported that Liuzhou Iron & Steel Co Ltd net profit suffered a sharp decrease of 68.87% for the first quarter of this year, eroded by growing operating costs amid the worst weather in five decades that hit the country at the beginning of the year.

According to its filing with the Shanghai Stock Exchange Liuzhou Iron & Steel Company Limited net profit plunged to CNY 67.17 million or CNY 0.047 apiece compared with CNY 216.17 million or CNY 0.17 a year earlier. Operating revenue climbed 39.95% YoY to CNY 6.55 billion in the same period, but operating costs soared to RMB 6.025 billion up 50.17% over 2006.

The harsh storm crisis forced the company to halt operations of 6 blast furnaces, leading the output to decline sharply. In addition, the company's financial expenditure added CNY 63.79 million against the previous year partly offsetting its profit.

Seamless pipe market in Southern China heats up

It is reported that China’s price level of seamless steel pipes is still in a high level. The main reason is that domestic billet price keeps rising.

As per report the quotation price for size 159*6mm is quoted at CNY 7,000 per tonne, 38*3mm is quoted at CNY 7,100 per tonne and 273*8mm is quoted at CNY 7,400 per tonne respectively.

The market analyst predicted that seamless steel market price will up further blaming shortage for supply and higher raw material costs.

China First Heavy builds new steel base in Heilongjiang Qiqihar

It is reported that China First Heavy Industries which is located in Heilongjiang Qiqihar plans to build world’s first class casting steel base through continuous expanding its technical superiority.

Mr Zhang Jingqi a vice factory director of CFHI said” This is the continuous cold rolling mill which is for Baosteel, the thickness of the plate rolled out by this machine is as a piece of paper, can fill the domestic blank in this area. This is the world’s largest 5 million heavy plate rolling mill for Anshan Steel, it is mainly used in the manufacturing of national large scale ship, in the past years, and this plate was mainly depended on import.”

He added that there are also nuclear power pressure vessels for foreign countries, the size is the largest and the making difficulty is the highest in the world.

CFHI has invested more than CNY 2 billion, and makes efforts to build the international first class casting steel base before 2010. At that time, the main casting products’ production capacity will be double, and the technology will also be further upgraded.

Hanjin Shipping to boost dry bulk activities

It is reported that Hanjin Shipping is to increase the prominence of its dry bulk activities by absorbing a subsidiary and ordering new vessels.

As pre report, Hanjin plans to merge with Keoyang Shipping, which specializes in dry bulk transportation of iron ore and coal for POSCO, KEPCO and their affiliated companies. If approved by shareholders, Hanjin Shipping will take over Keoyang Shipping’s total owned fleet of 17 dry bulk vessels.

Hanjin Shipping said “The main reason for this merger is to avoid the overlap of the bulk business run by Keoyang Shipping and Hanjin Shipping and eventually to improve the efficiency of the management and bring synergy effect to the business.” The company hopes that the move will also serve to enhance its bulk business with relatively stable profitability. The dry bulk sector currently accounts for around 20% of the company’s total sales.

As per report the matter will be put to a vote by shareholders at a meeting on May 29th 2008 at which shareholders who oppose the resolution can exercise the appraisal rights of dissenting shareholders. Hanjin Shipping has proposed a transaction of 0.4550678 Hanjin Shipping share for each Keoyang share owned.

In 2007 Keoyang Shipping’s total sales recorded KRW 140.2 billion with operating profit of KRW 24.8 billion and net profit of KRW 20 billion. Its total asset reached KRW 338.9 billion and liability ratio, 35% as of 2007.

Handan to step up efforts in seeking stake in other mills

According to Mr Liu Rujun president of Handan Iron & Steel Group located in northern China's Hebei province, it intend to step up consolidation of its subsidies in terms of resources, assets, capital and etc. Hangang would take more aggressive moves in cross regional M&A and build up over 30 million tonnes per year of high end steel plates in the years ahead.

Handan has already submitted a proposal to the provincial government to acquire its shares in Xingtai Steel and Shijiazhuang Steel. Both are also located in Hebei.

An official from Hangang Group told that the company has long been seeking a way to acquire the two smaller steelmakers in order to achieve 30 million tonnes per year of capacity. However, Xingtai Steel and Shijiazhuang Steel are held 74% and 80% respectively by foreign companies, making their acquisition more complicated.

As part of its recent proposal, Hangang has asked for Hebei provincial government's support to transfer the 26% stake it owns in Xingtai Steel and the 20% it owns in Shijiazhuang Steel to Hangang. Even though this would not secure Hangang a majority stake in either company, if the proposal gets the go ahead from the provincial government, the purchases would leave the steelmaker in an influential position in southern Hebei province.

Currently, Hangang Group has a crude steel capacity of 15 million tonnes per year and is also planning a new 1.5 million tonnes per year integrated flat mill in Hengshui City, Hebei Province.

Achenggang develops bulb flats

It is reported that recently, Achenggang has successfully rolled a new steel product 20 bulb flat steel.

As per report, the successful development of bulb flat steel is designed by Achenggang itself and is the rated as most difficult variety, which for Achenggang has developed far.

Ball flat steel which is used in ship is difficult to roll, the product composition, dimension and performance of 20 bulb flat steel exploited by Achenggang reached the international standard requirements.

The successful development of this product will help the company increase a new point of economic growth and provide a high value species for the further development of Achenggang.

Shagang and Greek AGLEF ink chartering contract

It is reported Shagang Group Trading Company and AGLEF Shipping Company, which is under AGLEF Group signed long term chartering vessel contract. Mr Agelicoussis the board chairman of AGLEF Group and Mr Shen Wenming Shagang Group’s vice general manager were present the ceremony.

In recent years, Shagang Group developed rapidly, and the demand of overseas high quality iron ore is increasing with the expansion of company’s scale. The demand volume of imported iron ore increased to more than 19 million tonnes in 2007 from 16 million tonnes in 2006. Greece AGLEF shipping company is a subsidiary of world’s famous ship Group AGLEF Group, owning more than 50 units dry bulk carriers and tankers.

As per report, the contract signed Shagang Group and Greece AGLEF Group is about 10 year iron ore transportation and 5 year new shipbuilding. The AGLEF Group is the third enterprise that signed long term chartering vessel contract with Shagang Group after Singapore Glorywealth Company and South Korea STX Company.

Sinosteel accelerates its overall listing

It is reported that Sinosteel accelerates its overall listing. Insiders revealed that the company is planning to acquire 67% stock rights of a company in Xi’an that they hold less than 51% shares at present. Two parties were in the process of negotiation.

The responsible person revealed the two subsidiary companies of Sinosteel, Sinosteel Anhui Tianyuan Technology Company and Sinosteel Jilin Carbon Company will be listed and be integrated gradually.

Sinosteel hold 24.48 million shares of Sinosteel Anhui Tianyuan Technology at present, accounted for 29.14% among the total shares of the company, and 50.13% shares of Sinosteel Jilin Carbon. Shares of Sinosteel Anhui Tianyuan Technology were trading at CNY 9.67 on April 15th, increased by 2.87%, and CNY 7.05 for Sinosteel Jilin Carbon, increased by 5.07%.

US approves sale of Sparrows Point plant to Severstal

US Department of Justice has approved the sale of the Sparrows Point steel plant to Russian steelmaker OAO Severstal.

Ms Gina Talamona a spokeswoman for the department said that "The division has granted its approval to the Trustee's proposed sale of Sparrows Point to Severstal.”

Mr Michael Henson a spokesman of Severstal said that "Severstal is working diligently to close the deal in the second quarter.” He added that Severstal plans to close on the sale in the next month.

US Justice Department ordered Luxembourg based ArcelorMittal to sell Sparrows Point because of antitrust concerns over the production of tin plate, which is used to make cans, among other things.

Severstal announced last month that it had agreed to buy the 119 year old Baltimore County plant, which employs 2,500, for USD 810 million in cash. The government ordered sale was overseen by a trustee appointed by the US Department of Justice.

Ukrainian metal exports to go up after WTO accession

Mr Ihor Burakovskyi Director of the Institute of Economic Research and Political Consultations at a press conference said that after Ukraine gains the WTO full fledged membership, export of Ukrainian metal products will increase from 14 to 15%.

According to Mr Ihor Burakovskyi, increase of metal products export will not occur at a time, but during several years.

He said "According to our tentative calculations 14% of metal products export will take place not at the expense of increasing the production volumes, it will be a clear effect of the WTO accession. It will occur due to abolishment of the exiting quotas for supply of the Ukrainian metal to the EU and the USA"

In addition, increase in exports, according to him, will take place also due to cutting export duties for the Ukrainian metal roll in the WTO member countries.

OMK Vyksa operating results for Q1 2008

Vyksa Steel Works part of United Metallurgical Company has reported its operating results for March and the first quarter of 2008.

VSW produced 134,946 tonnes of pipes of various grades in March and 361,565 tonnes from the beginning of the year. It manufactured 67,257 tonnes of large diameter pipes in March. LDP output in January to March was 176,677 tonnes, which is somewhat less than in the comparable period in 2007.

Mr Vladimir Kochetkov executive director of VSW said a certain reduction in pipe production resulted from lower demand in the Russian market of medium and large diameter pipes for oil and gas pipelines in the first quarter of 2008.

It is expected that VSW will increase its LDP output in the second quarter owing to the launch of LDP deliveries under a number of large projects, including gas pipeline construction for the subsea part of Nord Stream, Bovanenkovo-Ukhta and Central Asia-China.

The VSW Wheel Rolling Facility produced 72,640 railroad wheels in March 2008, or 1.5 times as many as in March 2007. The total output for the first three months of 2008 reached 213,640 wheels, which is 24% higher that in the equivalent period in the previous year.

Globaltrans seeks up to USD 509 million in IPO

Reuters reported that Russia's largest privately owned freight rail operator Globaltrans Investment expects to raise between USD 390 million and USD 509 million floating a 29% stake on the London Stock Exchange. It has not set a date for the offering

Globaltrans set a price range of USD 11.50 to USD 15.00 per Global Depositary Receipt for its initial public offering, implying a market capitalization of USD 1.35 billion to USD 1.75 billion. The offering will comprise up to 33.9 million GDRs representing newly issued shares and GDRs being sold by the two owners of Globaltrans: Envesta Investment Ltd, which represents its management, and Transportation Investment Holding Ltd.

Mr Sergei Maltsev CEO of Globaltrans said in a statement that "Following the IPO, we intend to invest further in our rolling stock in order to expand our business into other high margin segments, such as building materials. He said the company already counted several large metals and oil firms among its customers, including Rosneft, Evraz Group and Magnitogorsk Iron and Steel Works.”

Envesta has also granted joint bookrunners Deutsche Bank and Morgan Stanley an over allotment option to purchase additional GDRs at the offer price, exercisable within 30 days of the announcement of the offer price.

Deutsche Bank is also global coordinator of the IPO.

Evraz Group prospective US dollar notes issue rated 'BB' - Fitch

Thomson Financial reported that Fitch Ratings assigned its 'BB' senior unsecured rating to Russian steel maker Evraz Group S.A.'s prospective US dollar notes issue.

The report said proceeds from the notes will be used for general corporate purposes, including the funding of CAPEX and potential acquisitions. Fitch also expects the proceeds to be used in part to refinance debt from the recent acquisition of IPSCO's Canadian operations. Fitch also affirmed Evraz and core unit Mastercroft Ltd.'s 'BB' long-term issuer default rating and 'B' short-term IDR.

The outlook for the long term IDRs is stable.

Russian industrial output in March 2008 up by 6.5% YoY

RIA Novosti quoted the Federal Service for State Statistics said in a statement that Russia's industrial production grew 6.5% YoY in March and 6.2% YoY in January to March.

The statement said "The index for industrial production in the first quarter of 2008 compared to the first quarter of 2007 is 106.2%, in March 2008 compared to March 2007 is 106.5% compared to February 2008 to 111.7%."

Russia's Central Bank earlier said net capital inflow into Russia, which is reaping the benefit from high world oil prices, reached a record USD 82.3 billion in 2007, almost double the previous year's figure.

Mr Arkady Dvorkovich a senior economic adviser to the Russian president said at the Russian economic and financial forum in Switzerland in March said foreign direct investment in Russia is expected to exceed last year's figure of USD 28 billion in 2008.

Severstal-Avto net profit in 2007 up by 52% YoY

RIA Novosti reported that Russian auto maker Severstal-Avto net profit calculated to International Financial Reporting Standards grew 52% YoY in 2007 to USD 102 million.

Severstal-Avto, a subsidiary of Russia's largest steelmaker Severstal, said its revenue in the reporting period climbed 56% to USD 1.9 billion and those earnings before interest, taxes, depreciation and amortization grew 50% to USD 242 million.

Severstal-Avto is a holding company that owns automakers including leading Russian jeep and minivan maker UAZ.

Greek minister backs South Stream project

According to Mr Christos Folias development minister of Greece, it has agreed to join the Russian backed South Stream gas pipeline project, further boosting energy ties with Russia.

Mr Folias said "We have agreed to be part of the South Stream project. We are now discussing technical details to formulate a document that we can then sign. The political will is there from both sides. That is a given.

He said that he did not view Nabucco pipeline as a competitor. He said that "I do not want to see them as athletes competing against each other. I would say they are complementing each other and are offering Europe multiple energy providers, which is good."

The long stalled Nabucco pipeline, designed to eventually pump 25 billion cubic meters to 30 billion cubic meters a year from Turkey to Austria, as a competitor to the South Stream project, which will run from Russia through a 900 kilometer underwater pipeline across the Black Sea.”

Siemens to supply gas turbines to Rosneft

Siemens Energy announced that it has signed a contract with the Russian oil and gas company Rosneft for the delivery of three SGT-800 gas turbines. The industrial gas turbine generator sets with a rated capacity of 45 megawatts each will be used in a gas turbine power plant which is fueled with associated petroleum gas produced at the Priobskoye oil deposit in Siberia. The power plant is intended to be the main power source for all Rosneft facilities affiliated with the Priobskoye oil field. The value of the order is more than EUR40 million.

The released said the project is part of the Rosneft strategy to step up the utilization rate of associated gas at the Priobskoye oil deposit. Gas turbine power plants are a very efficient way to use petroleum gas, which is a by product of oil production. Rosneft intends to construct the Priobskoye power plant in three stages. Siemens will supply three SGT-800 gas turbine generators for the first stage, which is due to be commissioned in December 2008 with a capacity of 135 MW. The second and third phases of the project are planned to be operational in December 2009 and April 2010, respectively.

Mr Frank Stieler CEO of the Siemens Oil & Gas Division said “Our industrial gas turbines are the perfect match for power plant solutions in the oil and gas industry. The Siemens SGT-800 gas turbines have shown extremely high reliability in performance and they are designed to work over a broad spectrum of environments ranging from very cold to very hot climates. Furthermore, the SGT-800 can work with a broad range of fuel qualities.”

Japan removes ferrochrome import duties

JMB reported that, with effect from April 1st 2008, Japan has abolished import duties on high carbon ferrochromium with over 4% carbon content.

As per report, ministry of finance has decided that as Japan ceased producing ferrochromium in 2003 and there was little chance of production restarting, the import duty was pointless.

Japan imports around 850,000 tonnes per annum of high carbon ferrochromium, mainly from South Africa, Kazakhstan and India, and the ministry estimates that abolition of the duty will save users around JPY 4 billion annually.

Japan will, however, maintain the duty on low carbon ferrochromium, which it continues to produce. Japan imports around 75,000 tonnes per annum of low carbon ferrochromium, mainly from Russia and South Africa.

Murray Metals acquires Hillfoot Steel Group

Murray Metals Group has confirmed the acquisition of Hillfoot Steel Group in Sheffield.

Hillfoot Steel Group Limited, which operates in the oil and gas and engineering industries, has 187 employees and an annual turnover of EUR 43 million. Its oil & gas division comprises the Hytemp business, which supplies nickel alloy forgings and bars to wellhead manufacturers and their suppliers and The Forge business, which offers a complementary forging capability. Hytemp’s high value, high quality products are predominately used in the global sub sea sector. The Stockholding division, based in Sheffield and Washington, Tyne and Wear, has a throughput of 18,000 tonnes per annum and includes an engineered-components supply business, Precision Components.

Mr Graeme Hill CEO of Murray Metals Group said that the acquisition would enable MMG to broaden its products and services in oil and gas and stockholding and underlined its strategic ambitions in these key markets. Mr Hill said that "Hillfoot Steel Group has an outstanding reputation and is renowned for the high quality of its products, services and people. This acquisition is further testimony to our ongoing plans to build through organic growth and the acquisition of businesses that share our strategic outlook, ambition and service delivery."

Mr Stephen Hepplewhite CEO of Hillfoot Steel Group Limited said that "We are delighted to be joining the expanding family of Murray Metals companies. We share with Murray Metals a focus on customer service, business growth and delivering value. Customers are increasingly looking for partners to deliver the products and services that support their growth and for these reasons we believe this union is a perfect match."

Murray Metals Group is part of rapidly expanding Murray International Holdings, a multi faceted business employing over 4000 people across the world and with interests in metals, property, private equity, outsourced services and football. It is one of the world's most successful and fastest-growing independent metal businesses, with a combined turnover of over EUR 300 million. MMG has operational centers across the UK, Europe and Asia and now employs almost 600 people. It is involved in a range of steel and special metal supply and processing services to various market sectors worldwide.

Q2 ferrochrome contracts charge settled at USD 1.92 per pound

It is reported that the major European charge chrome contracts for the second quarter of 2008 have been settled at USD 1.92 per pound. Some market players expressed surprise that the contracts were settled below USD 2 per pound.

Producers appeared satisfied with the price increase and said that it reflects accurately the state of the market ands also maintains the good relationship that they have with their customers.

Producers have, however, promised another record price hike for the third quarter of 2008 as the South African power crisis continues. The market could see a shortfall of 350,000 tonnes to 400,000 tonnes of charge chrome in 2008. There is still a wide gap between high carbon ferrochromium contract prices and the spot market price for high-carbon ferrochromium.

On April 4th 2008, high carbon ferrochromium was trading at USD 2.35 to USD 3.25 per pound, with reports of prices over USD 3.50 per pound for small tonnages.

ThyssenKrupp increase 400 series SS from April 1st 2008

Effective with shipments March 31st 2008, ThyssenKrupp Stainless North America has increased prices on all 400 series stainless steel cold rolled products by approximately 4.3%.

This increase will be achieved by reducing service center discounts by 2 points. While, all other terms and conditions remain unchanged.

Silicon steel prices in China surge

It's learned from Shanghai East China Steel Market that steel producers further hiked ex works price of the CR low and medium grade silicon steel by CNY 450 per tonne to CNY 600 per tonne excluding VAT for April on top of March price levels.

The suppliers in the trade have forward agreement with silicon steel producers and have to consult with downstream users about further price hike, but resistance from the downstream sectors, such as household appliance industry and their wait and see attitude in turn affect the market.

Suppliers, which are mostly private owned, suffered much from reversed placement of ex works price and the market price, while the producers' maintaining May ex works price unchanged with April level further strike them, increasing the risk more.

(Sourced from MySteel.net)

ENRC to secure premium to Q2 charge chrome price

It is reported that Eurasian Natural Resources Corporation is confident of securing a significant premium to the South African benchmark price for charge chrome when it finalizes its second quarter contract price for high carbon ferrochromium.

The South African benchmark price has been settled at USD 1.92 per pound for second quarter contracts.

Eurasian Natural Resources Corporation declined to speculate on the price of low carbon material which is in very short supply.

Noel Village gets Norsak qualification

Noel Village has announced that they have recently been audited by Statoilhydro and have attained Norsok qualification to M650 rev 3 for the following materials

1) ASTM A995 grade 4A MDS D46 rev 3
2) ASTM A995 Grade 6A MDS D56 rev 3
3) ASTM A351 Grade CK3MCuN MDS R16 rev 3
4) ASTM A494 CW12MW MDS N02 rev 3
5) High strength super austenitic proprietary alloy Vistar TR2000 S65C

Noel Village is currently involved in major oil and gas projects where materials specified by Norsok M650 rev 3 are required.

Rio Tinto releases update for Q1 of 2008

Rio Tinto announced that its iron ore sales reached record levels in the Q1 of 2008 though production was lower than the final quarter of 2007 after its Western Australian operations were disrupted by cyclonic weather and power outages.

The world's third largest miner said aluminum output was at a new high during the quarter, reflecting the first full contribution from Canada's Alcan Inc which Rio took over last year in a USD 38.1 billion deal.

Highlights of Q1 results are

1. Record first quarter global production of iron ore, up 16% on the first quarter of 2007.

2. Record first quarter iron ore production of 43 million tonnes in the Pilbara, Western Australia, up by 15% compared with the first quarter of 2007 as the iron ore operations deliver their rapid expansion program.

3. Strong contribution from Rio Tinto Alcan in the quarter, with a significant uplift in production compared to the first quarter of 2007. Bauxite increased by 106%, alumina by 236% and aluminum by 386%, following a good performance from the Canadian smelters.

4. On a proforma basis the respective increases for bauxite, alumina and aluminum were 20%, 10% and 2%.

5. Mined copper production declined by 6% compared with the first quarter of 2007, primarily reflecting lower grades at Kennecott Utah Copper and Northparkes.

6. Australian thermal and coking coal production was affected by heavy rains, notably in Queensland where the coal industry generally suffered production and logistics disruption.

7. Uranium production was 20% higher than the 2007 comparative period.

8. During the quarter Rio Tinto reached agreement on the first two sales under its planned program to divest around USD 10 billion of assets in 2008. The sale of the Greens Creek silver, lead and zinc mine in Alaska for USD 750 million was announced and the sale of the Cortez gold mine in Nevada was completed for USD 1.695 billion. In addition, Rio Tinto will benefit from a deferred bonus payment in the event of a significant discovery of additional reserves and resources at the Cortez gold mine and will also retain a contingent royalty interest in future production. Funds from these sales will be used to pay down part of the debt raised to finance the Alcan acquisition.

Mr Tom Albanese said that "Our expansion drive continues to pay off with a record breaking first quarter for the iron ore and aluminum product groups. Markets remain very strong and the prices of many of our products are at record highs, bearing out our view that the US slowdown will have little effect on global metal and mineral supply and demand balances.” He added that "The integration of the Alcan acquisition is going well, and our investment assumptions for this business are already being exceeded. This year we expect to invest at record levels across the group in bringing new production onstream, so we can continue to benefit from economies undergoing rapid, metals intensive phases of development."

Chinese coke price to shoot up on coking coal price hike

According to Mr Hua Zugui chairman of China Coal & Coke Holdings Ltd rising coking coal price is set to push up Chinese coke price higher in the medium and long term. Currently, Chinese coking coal export price has already surpassed USD 200 per tonne in the spot market and the coke export price is set to inch up further due to the export tax.

Mr Hua at the recent Coaltrans predicted that “China's coke demand is set to expand albeit at a slower rate in the years ahead. Therefore, the coke price would stay firm bolstered by steep coking coal price and restrained capacity utilization. Coke price index representing domestic sales and export has both hit an all time high at 384 and 503 in January 2008.”

Mr Hua foresees that “China would become a net coal importer in a couple of years. That shift would help squeeze the price spread between domestic market and global market. He notes that China's existing coke capacity should be over 360 million tonnes and around 25 million tonnes of fresh capacity would be bought on stream this year, which are sufficient to meet the total demand. However, the coke capacity utilization has been checked by tight raw materials supply, capital and transport.”

Moreover, soaring coking coal price has exacerbated the liquidity issue faced by a number of coke producing companies, who have been forced to put a cap on capacity expansion.

(Sourced from MySteel.net)

Vinacomin forms coal JV with 3 overseas partners

Xinhua reported that Vietnam National Coal Mineral Industries Group Vinacomin and its three partners from China, the United States and Japan to establish a joint venture on coal exploitation in northern Hung Yen province.

Under an agreement reached, state owned Vinacomin together with China's CMC Import Export Corporation, US based Bantry Bay Ventures and Japan's Marubeni Joint Venture will set up the joint venture to tap three coal mines with estimated annual output of 9 million tonnes and the JV will begin to exploit the mines in 2012.

According to the Vietnam’s General Statistics Office, Vietnam exported over 4.7 million tonnes of coal valued at USD 220 million in the first quarter of 2008 decreases by 41.1% YoY and 10.7% YoY respectively.

BHPB bid for Rio – Rio rules out counter bid

AAP reported that Mr Tom Albanese CEO of Rio Tinto has again rejected the notion of teaming up with other companies to counterbid for hostile suitor BHP Billiton Ltd.

Mr Albanese said that "I think back in November, I completely rejected the concept of a PacMan type defense and I would reject that again now.”

An April 8 report from ING Bank NV said that a defensive bid by Rio Tinto for BHP Billiton, with the disposal of the petroleum assets and some mining assets, could be feasible. ING Bank listed Woodside Petroleum Ltd, Australia's second largest oil and gas producer, as a potential partner in the counter bid.

Chinese iron ore import price in Q1 surges by 80% YoY

According to the Customs statistics, China imported iron ore and concentrate of 35.68 million tonnes in March with a value of USD 4.495 billion and in the first three months, accumulative import totaled 110 million tonnes, valued at USD 14.132 billion up by 10.5% and 99.5%.

The comprehensive import price averaged USD 128.47 per tonne up by 81.4% YoY.

Mr Hu Kai analyst with umetal said staggering rise of the FOB iron ore price on spot market led to the comprehensive landed price surge. He said the mounting freight rate also pushes up ore import price, these factors will necessarily generate higher steel production cost and escalating steel price, as well as price rise on home appliance, automobile etc.

According to Luo Bingsheng the deputy director of CISA said China imported 383 million tonnes iron ore last year. This year, the iron ore import volume is estimated at 433 million tonnes up some 50 million tonnes or 13% YoY over 2007.

Ukrainian iron ore export tonnage down in 2007

It is reported that Ukraine shipments of iron ore to foreign steel mills totaled 20.74 million tonnes in 2007 down by 2.6% YoY or 530,000 tonnes compared to the same period of previous year.

Czech Republic was the top importer from Ukraine with 4.168 million tonnes. Followed were Poland and Slovakia, with 3.4 million tonnes and 3.24 million tonnes respectively. Moreover, China’s imports increased by 39.5% to 2.703 million tonnes.

NDRC urges more guidance for iron ore development in China

At the recent conference convened by National Development & Reform Committee, leading Chinese steel mills like Baosteel, Anshan, Wuhan and Shougang reached a consensus that central government should step up macro guidance in iron ore mines development both at home and abroad.

The participants of the meeting agree that it's essential to embark on strategic research on iron ore reserve in order to nail down the problems and get a clear understanding of current iron ore reserve in China. That would lay groundwork for giving advise to government policy guiding the iron ore exploitation in the future.

Domestic ore mine extraction has been disordered in recent years amid sky rocketing iron ore price for lack of sufficient input. By contrary, those high grade and easy to exploit iron ore reserves have been controlled by the world's leading ore miners. That's why Chinese companies have to pay costly price for getting access to these reserves.

(Sourced from MySteel.net)

Japanese ferrosilicon import price up by 10% in two weeks

Platts reported that prices of ferrosilicon imported into Japan from China gained 10% since the last week of March, on fears that Tianjin port in northern China may close before Beijing Olympic games this summer.

Two Japanese traders said spot deals for 75% Si grade ferrosilicon, for shipment to Japan from China in May or June were closed this week at USD 1,600 per tonnes CIF Japan. The deals were for 1,000 tonnes or more in total. On the other hand, three Japanese traders reported doing deals at around USD 1,530 per tonnes CIF Japan.

Platts assessed the spot ferrosilicon market at USD 1,530 per tonne to USD 1,600 per tonne CIF Japan this week up roughly 10% from USD 1,400 per tonne to USD 1,450 per tonne CIF Japan on the week ended March 28th 2008.

Some integrated steelmakers hold concerns that loading activities at the Chinese port of Tianjin may be affected by the Beijing Olympic game in August. Over 60% of Chinese ferrosilicon imports into Japan are loaded at Tianjin.

Chinese traders based in Japan said their government may apply restrictions on handling of coal, cokes and other minerals that may pollute air, at the Tianjin port that lies only 200 kilometer southeast of Beijing. While one Chinese ferrosilicon trader said restriction on ferrosilicon exports was not likely as the barge for loading ferroalloys was separate from that for coal and cokes, others said they need to be prepared for the worst-case scenario port operations getting suspended.

Centaurus acquires iron ore tenement in Brazil

West Perth based mining company Centaurus Resources Ltd has secured a significant tenement package in the Iron Quadrangle in Brazil through the 100% acquisition of three new projects surrounding its Liberdade operation.

Centaurus will own 100% of the tenements for a total outlay of AUD 3.2 million plus advance royalties based on defined tonnes. The projects cover an area of 105 square kilometer and are known as Itambé 1, Itambé 2, Passabém and Esmeralda de Ferros.

Liberdade, with its mining lease and high quality ore, represents the cornerstone of the Centaurus Iron Quadrangle strategy to build a portfolio of tenements in the Iron Quadrangle around a producing mine and processing facility to feed domestic and overseas demand.

Centaurus believes that Liberdade can be in production by mid 2009 with a view to funding future Brazilian exploration, development and acquisition. It will complete its first phase of resource drilling at Liberdade next week with preliminary assay results from the first drill holes having just been received.

Mechel to build coal terminal port in Vanino

It is reported that Mechel will build a coal terminal in the port of Vanino. The capacity of the terminal will total 20 million tonnes to 25 million tonnes per year.

According to Vedomosti the local authorities signed an act due to which the company will occupy 400 hectares. As Kommersant writes, the company will build the terminal in the north part of the Muchka Bay.

As per report facility will be built within 3.5 to 4 years and is scheduled to put the terminal into operation in 2012 when the company will begin to produce coal at Elginsky field in Yakutiya.

It should be pointed out that there are some plans to establish a special economic zone in the port of Vanino.

Chinese coal export in March 2008 decreases by 60% YoY

According to Chinese Customs China's coal export amounted to 1.45 million tonnes in March, a sharp drop of 60.8% YoY from the same month of last year.

For the first quarter, the nation's coal export totaled 10.2 million tonnes down by 10.7% YoY. While the export volume declined, the value of coal export in Q1 rose by 14.9% YoY to USD 762 million. The average export price in Q1 stood at USD 74.75 US per tonne up by 28.51% YoY from the USD 58.16 per tonne in the same period of last year.

Customs data also show that China's coke and semi coke export in March further dropped 19% YoY to 1.24 million tonnes, following a decline of 26.2% in January and 11% in February.

The customs has not yet released the coal import data for March.

RUSAL bauxite mines resumes operations

It is reported that four of the five mines at United Company RusAl's bauxite mines in the Sverdlovsk region resumed operations as more than 5,000 miners agreed to return to work.

A hard core of 74 miners at one pit, the Little Red Riding Hood mine, continued a hunger strike over a 50% wage hike demand and an end to weekend shifts. Miners said the company agreed to end weekend shifts and offered a 5% wage increase beginning May and 25% more by year's end.

Ms Yelena Shuliveistrova RusAl spokeswoman declined to confirm that the company had made the offers, however. "We are still in the process of negotiations"

RusAl said "The order to resume operations was issued due to the multiple requests from the majority of the miners. The four mines of the North Urals Bauxite Mining Complex came to work at midnight."

Miners at the Little Red Riding Hood mine began an underground occupation March 26. After 10 days underground, more than a week of subsequent negotiations and a three day hunger strike, the miners admitted they hadn't gotten much out of the company.

Yigang coke project broke ground in Nileke

It is reported that recently, Yigang’s 1 million tonnes coal coking project, which has an investment of CNY 1.2 billion in total, broke ground in Bubulakegou Coal Coking Base in Nikele County in Yili in China.

The base is located at a basin among mountains, 3 kilometer south the joint of S315 and S316 rail lines. The base has an area of more than 6,000 Mu, and now completed an investment of CNY 25.00 million, with the roads, electricity supply ready, and the groundwork of the major coke oven completed. The first coke oven will be completed in October 2008, and may launch production by the end of the year.

Till then, the base will have a production value of CNY 5.0 billion, industry added value CNY 3.0 billion, and profits CNY 1.5 billion in a year, and will be the most important coal coking base in Yili and even in Xinjiang in the future.

China sentences top managers to jail for mine flooding

Reuters reported that Mr Zheng Zhenxiu chairman of the privately operated Huayuan Mining Co in the eastern province of Shandong, and Mr Zhang Canjun deputy general manager have been jailed for seven years for negligence after a colliery flood killed 172 workers, the country's worst such accident in decades.

The report said "The managers failed to halt production and order an evacuation in time, delaying the chance for the miners to escape."

The tragedy happened in August 2007 when a river dyke burst in torrential rain, sending water rushing into two mine shafts. The miners were declared dead after weeks of trying to pump out the water ended in vain.

China's coal mining industry is the deadliest in the world, as mine owners push production beyond safety limits in the face of robust demand and soaring profits amid an economic boom. A total of 3,786 Chinese coal miners died in gas blasts, flooding and other accidents in 2007 down by 20% from 2006.

Zhengzhou Coal to buy parent assets

China's Zhengzhou Coal Industry & Electric Power Co will issue up to 400 million shares to its parent to buy coal mines and other assets worth about CNY3.5 billion.

The purchase comes as the listed firm's coal output is forecast to drop 15.5% to 4.3 million tonnes in 2008, while its power generation is expected to decline by 2.8% to 820 million kilowatt hours.

The firm said, citing the risks to mining from cave-ins, gas, water and slurry that "We still face very serious safety challenges. Any big safety accident could have a certain negative impact on our operation." The firm also cited coal price fluctuations as a reason for the output decline.

The listed company said in a statement to the Shanghai stock exchange on April 16th that Zhengzhou Coal Industry Ltd will pay its listed arm CNY 15.46 for each of the new shares issued, the. The listed firm will take over stakes in coal mines, chemical plants and a logistics firm.

Shenhua coal production in Q1 surges by 20% YoY

China Shenhua Group announced the first quarterly operational data. According to the company’s statistical data that it produced 44.6 million tonnes coal in the first quarter, and the sales volume was 56.7 million tonnes up by 19.57% YoY and 21.6% YoY respectively, but the export vo