Indian steel exports in 2007-08 down by 22% YoY – ISA

In a bid to soothe the government’s concerns over availability of steel, the Indian Steel Alliance has said that Indian steel exports in 2007-08 have come down by 22% YoY to 3.8 million tonnes.

Mr Moosa Raza president of ISA said that while exports had declined, imports during the period increased by 41% to 6.2 million tonnes. He added that "Most steel companies have put in additional 15% YoY to 20% YoY availability into the Indian market in March 2008 alone as compared with the corresponding period of the previous year. This means that through imports as well as domestic production, more steel has been made available to the Indian market."

He said the domestic steel industry is giving preference to small and medium enterprises while supplying the commodity to ensure that the middlemen did not hoard. He added that of India’s total steel production of 60 million tonnes, 50% is produced by a large number of secondary steel producers in the unorganized sector and sold mostly through middlemen and agents. Also, 50% of the balance 30 million tonnes is produced by public sector steel companies.

Mr Raza said that even after the recent increases by some companies, steel prices in India were much lower than international prices.

FMC opposes proposal to ban futures trading in steel

ET reported that Forward Markets Commission has opposed the proposal to ban futures trading in steel and has written to a letter to the consumer affairs ministry stating that trading of steel futures on commodity exchanges does not have any bearing with the rise in steel prices, and therefore any halt in trading will yield no result.

Mr BC Khatua chairman of FMC said that "We have submitted our case to the consumer affairs secretary on why futures trading in steel has no relation to the rising steel prices."

FMC has pointed out that only 3 contracts of steel were traded on the exchanges. Most of the contracts on MCX were illiquid and clocked a volume of only 50 tonnes in 2007. Volumes of mild steel ingots on NCDEX were better in comparison.

FMC has refuted the charge, saying that the trading on the future platform was less than 4% of India's total trade in 2007. It said that this is too low a volume to create volatility in the spot prices.

It may be noted that the government is considering a proposal to ban future trading on steel to check rising prices of the metal with an overall objective of curbing inflation, along with other measures such as ban halt to finished steel exports and appointment of a steel regulator. Their logic is that normally higher prices prevail at the commodity exchanges, creating a volatility in the spot market.

Mr Denis Turcotte to step down from Algoma Steel

Algoma Steel Inc announced that Mr Denis Turcotte CEO has conveyed his intention to resign, effective April 30th, 2008. He was appointed CEO in September 2002 after the company emerged from restructuring.

Mr Prashant Ruia Essar group director and chairman of the Algoma Steel Board said that “Mr Denis was instrumental in Algoma’s turn around. He provided outstanding leadership to Algoma throughout its initial integration with Essar and has done an exceptional job of readying the organization to play a leading role in Essar Steel’s Americas division. The Board places on record a deep appreciation for Denis’ service and wishes him the very best in his future endeavors.”

Mr Armando Plastino will assume the role of COO of Algoma Steel Inc effective immediately. Currently Vice President Operations, Mr. Plastino began his career with Algoma Steel in 1972 and served in a series of varied and progressive positions in operations, engineering and maintenance. He is a graduate of Ryerson University with a degree in Electrical Engineering Technology.

Mr Jatindra Mehra, CEO Essar Steel Holdings, welcomed Mr Plastino to his new role adding, “Since assuming accountability in 2002 for the performance of all operating areas from primary through to the finishing end, Armando and his team have made sizeable improvements to Algoma’s safety and environmental performance, productivity and cost structure. As we increase production to 4 million saleable tons, Mr. Plastino’s operational leadership will ensure Algoma’s continued success as a thriving, sustainable steelworks, positioned to compete as a low cost, high value producer of carbon steel.”

Major strides by steel ministry PSUs on CSR

The renewed thrust given by union ministry of steel on corporate social responsibility by its PSUs since a year back was reviewed on April 16th 2008 by Mr RS Pandey secretary at union ministry of steel.

The highlights of the CSR activities are

1) In 2007, the ministry had advised its PSUs to spend not less than 2% of their profits on CSR. In a unique initiative, CSR targets were also made part of MOUs signed by the ministry with its PSUs.

2) A budget of around INR 230 crore, amounting to over 2% of the net profits of the PSUs, had been allocated for 2007-08 by the 11 PSUs

3) In respect of the rest 3 PSUs namely RINL, MSTC & NMDC, the funds budgeted for, have been earmarked for spending and related works are in various stages of progress. Moreover, mechanisms have been put in place to avoid lapse of earmarked funds

4) 126 steel villages were identified for adoption by the PSUs and these are to be developed in a phased manner by the PSUs namely SAIL with 79, NMDC with 40, RINL with 5 and MOIL with 2 in a 3 year time frame. The steel villages are spread over states mostly near the location of PSUs. Major activities including development of infrastructure, construction of roads, culverts, water tanks, drains along the roads; electrification mainly by solar lights improvement of environment through tree plantation and promotion of agri livelihood through sustainable income generation schemes such as teak plantation, poultry farming, water harvesting, vermiculture etc. have been taken up. 13 villages were developed by SAIL during the year 2007-08 and 46 identified for development in 2008-09, 5 villages were taken up by MOIL for adoption as model villages

5) Against a target of organizing about 150 medical and health camps in which health check ups, pathological lab treatment, medicines, post operative check ups, immunization, etc were provided by the PSUs. SAIL alone could organize more than 400 medical camps in 12 states, benefiting about 500,000 persons. The other PSUs like KIOCL, SIIL, MOIL, NMDC, MECON and RINL also organized similar medical camps benefiting a large number of people in the peripheral areas of their mines or plants

6) In view of the calamity brought in by the floods in Uttar Pradesh, Bihar and Assam, SAIL, NMDC and RINL organized immediate relief measures in these affected states and contributed INR 5 crore, INR 4 crore and INR 2 crore respectively towards the flood relief measures

7) The PSUs also contributed by way of scholarships to deserving SC/ST undergraduate engineering students, adoption of tribal children to provide free education, construction or renovation of school buildings, free uniforms and textbooks

8) Some of the innovative projects taken up under the CSR umbrella include a project Jaladhara was taken up by SAIL in Visakhapatnam whereby drinking water was provided to the villages through pipeline, by which the trekking distance of nearly 2.5 kilometers for collecting water was reduced, Grameen Prusti Yojana of NMDC for distribution of fortified food to tribal children, adolescent girls and women in the entire Dantewara from all the 1214 Anganwadi centres

9) An ITI set up by SAIL at Gua mines was inaugurated on 13th September 2007 by chief minister of Jharkhand. Classes in two streams have started from December 2007

10) In order to provide impetus to sports, Archery Academy has been set up at Kiriburu Mines, Jharkhand by SAIL for tribal students

11) Special School started exclusively for poor, underprivileged children at five integrated steel plant locations Bhilai, Durgapur, Rourkela, Bokaro and Burnpur. The facilities provided include free education, mid day meals, uniform including shoes, text books, stationary items, school bag, water bottles and transportation in some cases

12) The PSUs have taken the help of reputed organizations and NGOs and have also worked in close contact with the district administration while carrying out CSR activities

During the review meeting, which led to mutual sharing of experiences; the Steel Ministry PSUs also stated that they would consolidate the experiences gained and lessons learned; maintain the budgetary allocations for CSR for 2008-09 at not less than 2% of the net profit. The Ministry advised the PSUs to undertake a benefit analysis and impact of the CSR programs conducted during the year 2007-08 for better focus in the ensuing year 2008-09. During the meeting, the PSUs also mentioned that they have finalized road maps for carrying the way forward for 2008-09 and maintaining the momentum on CSR activities. It was decided that to enhance the experience sharing amongst the PSUs, a compendium on the CSR activities undertaken by the PSUs is to be brought out shortly.

India loses out in global rig race – Report

Bloomberg reported that Reliance Industries Limited and Oil & Natural Gas Corporation are among Indian oil and gas explorers losing offshore rigs as rivals such as Saudi Arabia, Nigeria and Brazil step up efforts to drill wells in deep waters.

US oilfield services provider Baker Hughes Inc said in a monthly report said that the number of rigs operating off India slipped to 25 in March 2008 from 31 in March 2007. Saudi Arabia almost doubled its rig count to 13 from 7, while the number in use off Brazil's coast rose by 3 to 26.

Rising exploration spending and record oil prices have kept deep water rigs operating near capacity for 2 years, and tripled rig rentals, according to Houston based rig consultant ODS Petrodata. In February 2008, India was the largest offshore rig user in the world after the US.

Reliance is counting on offshore drilling to produce as much as 80 million cubic meters of gas a day in India in 2009, to meet a supply shortfall. Discoverer Seven Seas and Deepwater Expedition, two deep water rigs rented by Oil & Natural Gas and Reliance respectively, were taken off from operations in February 2008 for maintenance along with Oil & Natural Gas's E Thornton, a shallow water driller.

MMTC Limited Q4 2007-08 net profit up by 133% YoY

MMTC Limited has announced the following unaudited results for the quarter & year ended March 31st 2008

MMTC Limited has posted a net profit of INR 906.20 million for January to March 2008 quarter up by 132.9% YoY as compared to INR 389 million for January to March 2007 quarter. Total income has increased from INR 48895.70 million for January to March 2007 quarter to INR 94216 million for January to March 2008 quarter.

MMTC Limited has posted a net profit of INR 2061.50 million for the year ended March 31st 2008 up by 62.5% YoY as compared to INR 1268 million for the year ended March 31st 2007. Total income has increased from INR 233473.10 million for the year ended March 31st 2007 to INR 263135.70 million for the year ended March 31st 2008.

Permionics bags INR 36.75 crore order from RINL

Vadodara based Permionics Membranes Private Limited has bagged a contract from Rashtriya Ispat Nigam Limited for turn key execution of their sewage and waste water treatment plant at their Vishakhapatnam plant.

The INR 36.75 crore order, includes setting up a plant for recycling of treated water using ultra filtration and reverse osmosis membrane technology, to produce quality recycle water at RINL’s Vizag Steel Plant.

Mr Satya jai Mayor director of Permionics Membranes said that this is the fourth major order bagged by the company in the last 6 months to be executed on turnkey basis from organizations in Kerala and Tamil Nadu.

Permionics is a leading integrator of systems and solutions for industrial, institutional and service provider for the plant and projects business covering planning, installation and operation of water and waste water treatment plants.

No curbs on number of bids for UMPPs – Report

Dr VK Garg CMD of Power Finance Corporation Limited said that there is no restriction on the number of ultra mega power projects which power companies can bid.

Dr Garg said that the issue was discussed in detail by an inter ministerial group consisting of power, law and finance ministries. He added that "There is no restriction on any company from bidding for any number of mega power projects. But to discourage companies from bidding for more than one project, we have performance bonds, whose amount will multiply with every additional project. The obligations and penalties will also multiply accordingly."

However, for every additional project the company will have to pay an extra INR 150 crore as performance bonds. Dr Garg said that the INR 300 crore performance bond for the first project will increase to INR 450 crore for the second project and INR 600 crore for the third. He added that if the companies default on the projects the proportion of penalty would be 100%.

PFC and the union power ministry have been debating over the number of mega power projects which power companies can bid for, as one ultra mega projects cost over INR 20,000 crore.

NLC acquires Asia's largest spreader

Neyveli Lignite Corporation recently announced that it has acquired Asia's largest spreader for its mine II expansion project.

The 20,000 tonnes per hour spreader weighs approximately 3,000 tonnes. Its discharge boom is 90 meters and its receiving boom is 45 meters.

The equipment was supplied by TAKRAF India on a turnkey basis at a cost of about INR 114 crore.

NLC has 3 open cast mines of 24 million tonnes of lignite per annum capacity and 3 pit head thermal power stations generating 2,490 MW. It also proposed to expand its mine II capacity from 10.5 million tonnes per annum to 15 million tonnes per annum and the capacity of its thermal power station II from 1,470 MW to 1,970 MW at a total cost of INR 4,200 crore.

Reports of HR Surcharge applicability

BL reported that, faced with the possibility of a cut in excise duty, the private sector steel makers, who had announced imposition of a raw material surcharge of INR 5,000 a tonne on hot rolled steel, have now kept this in abeyance.

The report cited a top official of a private steel company as saying that "If excise does not come down, the manufacturers would send a debit note at a latter date to recover the surcharge. If some companies have already shown the surcharge in their invoices and later excise duty comes down, these companies would then send another credit note to the buyers for adjusting the reduction in the excise duty."

He added that "This would lead to cumbersome accounting problems, which is why the surcharge seems to have been kept in abeyance."

Fitch assigns AAA(ind) ratings for TATA Steel non convertible debenture

It is reported that Fitch Ratings has assigned a national rating of 'AAA(ind)' to TATA Steel Limited's proposed non convertible debenture issuance of up to INR 7.5 billion reflecting its position as a low cost steel producer in India with significant iron-ore and coal linkages.

Fitch also noted that TATA Steel's geographically diversified operations spread across Europe, India and South East Asia with an established distribution network and successful refinancing of a substantial proportion of its bridge facilities.

The stable outlook reflects the Fitch's expectation that the combined entity will realize cost improvements to further de leverage the balance sheet and maintain a financial profile consistent with its rating.

Fitch however warned that the lack of raw material linkage at TATA Steel UK is a key concern which needs to be addressed, in order to underpin stability in EBITDA margins.

Everest Kanto forms subsidiaries in Hungary and US

Everest Kanto Cylinder Limited has informed BSE that its Dubai based subsidiary EKC International FZE has formed a wholly owned subsidiary in Hungary by the name of EKC Hungary Limited. Further EKC Hungary Limited has formed a wholly owned subsidiary in USA by the name of CP Industries Holdings Inc.

Together EKC Hungary Limited and CP Industries Holdings Inc shall be acquiring all the assets of CP Industries Inc.

CP Industries Inc manufactures and sells large seamless pressure vessels for the containment and transportation of pressurized gases and is a global leader in this business.

Rural Electrification Corporation performance in 2007-08

Rural Electrification Corporation Limited has informed BSE about the provisional financial highlights for the year 2007-08

Rural Electrification Corporation Limited has posted provisional and un audited loan sanctions of INR 607640 million during 2007-08 up by 84.55% YoY as against INR 329250 millions in 2006-07. It recorded the provisional and un audited loan disbursement of INR 163030 million during 2007-08 up by 18.72% YoY as against INR 137320 millions. While, the provisional and un audited profit before tax is INR 13000 million during 2007-08 up by 29.22% YoY as against INR 10060 millions.

Other highlights of Rural Electrification Corporation Limited in 2007-08 are

1) A leading power sector public financial institution

2) Consistently rated 'Excellent' by government of India for MoU performance for Fiscal 1994 to Fiscal 2007

3) Rated among top 10 PSU in India

4) 'AAA' rating by CRISIL, ICRA and FITCH for domestic long term borrowing. International long term borrowing rating by Fitch & Moody is per with sovereign ratings for India

5) Nodal Agency for 'Rajiv Gandhi Grameen Vidyutikaran Yojna' aimed at electrification of villages of India

6) Accorded 'Mini Ratna Grade 1' status by government of India for operational efficiency

Kandla Port targets t 100 million tonne throughput by 2012

BL reported that Kandla port, which has emerged as India’s number one cargo handling port with a traffic throughput of 64.89 million tonnes in 2007-08, hopes to cross 100 million tonnes mark by 2012.Sources point out that this should be possible because of the additional infrastructure being created in the port.

Four dry cargo berths with an aggregate capacity of 8 million tonnes to handle vessels requiring drafts up to 14 meters, are being built on a build operate transfer basis at a cost of about INR 440 crore and these should be ready for operation by the end of 2010.

Moreover the construction of 2 additional cargo berths is on the anvil to handle vessels of 75,000 DWT and 90,000 displacement.

There is also a proposal to have 1 additional oil jetty constructed by a private firm, mainly to handle petroleum products, at Vadinar.

Offshore berthing facilities, with capacity totaling 20 million tonnes of multifarious products, will be developed at a cost of about INR 1,200 crore at satellite port Tuna in two phases for handling Panamax/post Panamax vessels requiring draft of 15 meters. In all, there will be four offshore berths scheduled to be commissioned by end 2010.

There is a further proposal to develop bunkering facilities on a build operate transfer basis for which an in house report has already been prepared and a special economic zone where a container transshipment terminal, LNG terminal, wood products terminal and ship repair facilities are due to come up.

The port authorities are also planning to lay an additional broad gauge line from Gandhidham to Kandla to provide better connectivity to the port and deepen navigation channels and its approaches to facilitate hassle free movement of large-size vessels to and from the port.

Meanwhile, under the National Maritime Development Program, Kandla port proposes to spend more than INR 5,000 crore, to be funded through a combination of budgetary support, internal resources and private participation.

Toyota Motor to build a new plant in India

Toyota Motor Corporation has recently announced that it is planning to build a new plant in India in a bid to challenge Suzuki Motor Corporation's dominance in the car hankering in India. It will spend about USD 347 million to open the plant in 2010.

Toyota Motor said that the factory will produce the Corolla sedan and a new low cost small car, developed specifically for emerging markets. The plant will have an annual capacity of 100,000 vehicles.

Toyota, with 0.6% of the Indian car market in 2007, has lagged behind rivals in India. Automakers including General Motors Corporation, Honda Motor Company and Volkswagen AG have already announced a combined USD 6 billion investment in India.

Update on Emco's future plans

BS reported that Emco is expanding its presence across the value chain of the power sector including into power generation, sub stations, transmission lines and balance of plant, adding capacities and investing in R&D to develop new technologies.

With an aim to de risk its business and enhance growth, Emco is increasing focus on the global markets as well. Its JV with the South Africa based Edison Power, is a step in this direction.

Mr Rajesh Jain CMD of Emco said that "We have formed Emco Energy, a company which will look at the opportunities in generation and independent power transmission company verticals. Within generation, we are setting up a 550 MW power plant, including phase 1 consisting of 270 MW merchant power plant with an investment of INR 1,240 crore. This is a coal based power plant and all the pre project activities like land, fuel linkages, water and power evacuation have been completed, except for the placing of final order for equipment, which is in the discussion stage. If things go as planned then we should be able to complete this project by 2010. For the second phase we are waiting for fuel linkages."

He added that "Today, we are exporting to more than 30 countries and currently constitutes to over 14 % of the total revenue. We further intend to take this to about 20 % in 2008 and 30 % subsequently. In order to achieve this, we have taken steps and are setting up a facility in South Africa, which should be operational in the beginning of the next year. Besides, we are also looking for acquiring companies, which have strong presence in the regions of Latin America or North America."

Mr Jain said that "We have expanded transformer manufacturing capacity to 20,000 MVA in 2007. This year our utilization would be 10 to 12,000 MVA, which should rise to 16 to 17000 MVA in 2009. We are pushing our vendors to expand their capacities about 5,000 MVA, besides investing in Africa, which should take care of our requirements."

US Steel to construct Cokonyx plant in Alabama

United States Steel Corporation announced that it has filed permit applications related to a proposed capital investment program totaling in excess of USD 150 million in Port of Epes at Sumter County in Alabama.

The program would involve the construction of a carbon alloy synthesis facility and a cogeneration facility that would create 75 full time and 250 temporary construction jobs in its first phase of operation. The program will improve the cost competitiveness of US Steel's Fairfield Works near Birmingham. Completion of the proposed program would take an estimated 18 months after the permitting process is concluded.

The proposed facility would utilize state of the art technology supplied by Carbonyx Inc that processes coal into Cokonyx™ carbon alloy material, a product that can displace traditionally manufactured coke, a key ingredient in steelmaking. The facility would produce 250,000 tons of Cokonyx™ carbon alloy material per year. All of the Cokonyx™ carbon alloy material produced at the proposed facility would be used at U. S. Steel's Fairfield Works. The Carbonyx process employs technology that results in a significant reduction in emissions and energy consumption when compared to a traditional coke making facility or other commercial non-recovery processes. Additionally, the gasses created during the process would be utilized in the proposed cogeneration facility.

After the facility has attained full production and adequate product testing has occurred, the project may then move into further phases subject to business conditions. Upon completion of all phases, 235 full time positions will have been created and $450 million will have been invested in the project over a period of years.

US Steel will work with appropriate agencies and stakeholders to complete the permitting process for the initial project phase, which the company hopes to conclude later this year. The decision to proceed following the receipt of the necessary permits will depend upon permitting, business conditions and approval of US Steel's Board of Directors.

Mr John P Surma chairman & CEO of US Steel said that "The future of steelmaking requires new thinking and the use of breakthrough technologies in order to operate in cost effective and environmentally responsible ways. By partnering with Carbonyx, Inc. US. Steel is demonstrating its willingness to utilize innovative technologies as alternatives to traditional coke making that will still result in a high quality carbon source for our Fairfield Works and ensure consistent environmental performance and compliance. We look forward to working cooperatively with Gov. Bob Riley, the federal, state and local elected officials representing Alabama's historic agricultural Black Belt, and other stakeholders involved in this important project."

US Steel's operations in Alabama date back one hundred years to the company's acquisition of Tennessee Coal, Iron and Railroad Company on November 1st 1907. Today, the company operates two facilities in Fairfield: Fairfield Works, which is the largest steelmaking facility in Alabama and has an annual raw steelmaking capability of 2.4 million net tons, and Fairfield Tubular Operations, a seamless pipe mill that produces tubular products primarily for the energy industry. US Steel also manages and develops various real estate assets in Alabama through its USS Real Estate division.

voestalpine buys turnout manufacturer in Mexico

Thomson Financial reported that Austrian steel processing and manufacturing company voestalpine AG has acquired the majority holding in DAMY Cambios de Via SA in Mexico for an undisclosed sum.

voestalpine said that with a staff of around 120, Guadalajara based DAMY is the Mexican market leader in turnouts and specialty trackwork components for the railway industry and achieves annual revenues of EUR 5 million.

The majority interest of 51% is held by VAE Nortrak North America Inc a unit of voestalpine's VAE GmbH based in Vienna.

Japan sheet steel to increase with limited domestic availability

JMB reported that Japanese sheet steel distribution market interests concern potential higher import.

The report added that some of the distributors and processors seek alternative offshore source when the domestic makers reduce the shipment for distributors to secure materials for automobile and export. The offshore suppliers are also willing to increase the export to Japan under higher yen rate.

POSCO appoints Mr Yoon suk as new board chairman

koreatimes reported that POSCO has appointed Mr Suh Yoon suk as the new chairman of the board of directors.

POSCO named Mr Suh after Mr Jun Kwang woo who was previously tapped to head the board, took the top position at Financial Services Commission. Mr Suh who has been on POSCO's board of outside directors since 2004 served as the chairman for numerous committees.

He is a graduate of Seoul National University and is concurrently serving as the head of the business school at Ewha Womans University.

Start up of modernized finger shaft EAF at Stahl Gerlafingen

In January 2008, the modernized finger shaft electric arc furnace of Stahl Gerafingen AG was restarted following a project duration of ten months and a furnace downtime of slightly more than three weeks for disassembly, erection and commissioning activities.

The objective of this modernization, carried out by Siemens Metals Technologies, was to increase productivity and at the same time to reduce the emissions of the steel works which is located in the midst of the town of Gerlafingen. The EAF was equipped with a new shaft which included scrap-retaining fingers for the scrap preheating as well as an improved offgas exhaust system and an optimized charging process. The contractual performance parameters were met within a week. The capacity of the modernized furnace was increased considerably and the availability of the plant exceeded 98% within just a few weeks after commissioning.

The Siemens project scope of the modernization comprised the engineering, supply and installation of a new shaft and furnace equipment. This included the roof of the EAF vessel, the shaft support structure, the shaft itself, the scrap-retaining fingers within the shaft and a shaft roof slide gate. A tighter offgas exhaust system equipped with a movable collar for better dilution air infiltration, and a newly designed scrap-basket-guidance and positioning system to improve scrap charging into the shaft to minimize spillage was also part of the project. The hydraulic, automation and visualization systems were also upgraded. The finger-shaft EAF had been originally supplied by Siemens Metals Technologies in 1996.

The furnace has a tapping weight of 80 tonnes of steel. Following furnace modernization, the tap to tap times were shortened by more than two minutes and with a corresponding increase in productivity. This is primarily due to the more efficient and faster charging of scrap into the shaft, improved scrap preheating in addition to the optimized offgas flow within the shaft. The natural gas consumption for postcombustion could be reduced by more than six percent due to the enhanced offgas control system and reduced dilution-air intake. Emissions to the surrounding steel bay were also significantly lowered thanks to the much tighter shaft design and the faster scrap-charging system. Finally, the design of the shaft top and funnel together with exact scrap-bucket positioning for charging means less scrap spillage and potential damage outside the shaft, reducing downtime and maintenance.

The shaft furnace is a highly innovative, energy-saving solution of Siemens Metals Technologies employed in electric steelmaking. Through the preheating of scrap in a shaft installed above the EAF by utilizing the latent as well as chemical heat of the EAF offgas, the electrical energy consumption and tap to tap times can be significantly reduced. At Stahl Gerlafingen, special scrap-retaining "fingers" suspend the scrap within the shaft where it is preheated for the next charge. After the liquid steel has been tapped, the fingers open downwards and the first charge of preheated scrap drops into the EAF shell. The second scrap basket is then immediately charged into the emptied shaft. As the scrap inside the EAF shell melts, the scrap within the shaft gradually descends. Once there is enough room in the shaft, the fingers are closed again and the first scrap charge for the next heat is loaded. In this way, 100% of the entire scrap charge can be efficiently preheated.

Stahl Gerlafingen, the leading Swiss supplier of reinforcing steel products, produces steel for the construction industry as well as for the machine and vehicle construction industry from scrap which is sold as structural and reinforcing steel, steel mats and accessories, flat steel bars, universal plate and rolled wire.

California Steel Industries reports increased revenue

California Steel Industries, Inc announced Q1 results for the period ended March 31st 2008. Sales revenues of USD 369.2 million up by 17% YoY, with a resulting net income for the period of USD 9.6 million, a significant improvement over the same period last year.

EBITDA for the quarter is USD 26.6 million, more than double first quarter 2007’s EBITDA of USD 12.7 million. Compared to fourth quarter 2007, net sales in the first quarter 2008 are 24% higher than fourth quarter 2007’s USD 297.0 million. Shipments are 13 % higher in first quarter 2008 than in fourth quarter 2007, up from 413,143 tons.

Tonnage sold is seven percent higher compared to the first quarter of 2007. Sales volumes are as follows:

(In net tons)

Mr Masakazu Kurushima president & CEO of California Steel said that “First quarter 2008 was a good recovery from our results of fourth quarter 2007. Shipment levels improved, and the average selling price increased about 10%.”

POSCO to invest USD 2.74 billion in domestic facilities

Reuters reported that South Korean steel maker POSCO will invest a combined KRW 2.74 trillion (USD 2.74 billion) to expand domestic facilities to increase its current supply of crude steel.

POSCO said in a filing to the Korea Exchange, it plans to invest KRW 1.93 trillion to newly build facilities aiming produce coke, along with an additional KRW 809 billion to expand existing factories used to process raw materials.

Steel prices hikes set by POSCO and Dongkuk Steel

South Korean POSCO plans to increase its export price of galvanized steel by USD 194 to USD 213 per tonne to Japan for the second quarter.

The price hike is necessary to cover rising steelmaking costs and freight, according to market analyst. Posco will also reduce its supply quantity by about 15% to 20% from first quarter.

Dongkuk Steel is considering to adjust its heavy plate price up. The company said if the slab price raised by about USD 200 to USD 300 per tonne, its heavy plate price will at least increase by USD 200 per tonne.

(Sourced from YIEH.com)

Taiwanese scrap consumption in 2007 reaches 11.87 million tonnes

Taiwan's scrap consumption in 2007 was 11.87 million tonnes up by 7.4% YoY. Besides, the crude steel production from electric arc furnace increased by 6.5% YoY.

Up to the end of December 2007, scrap inventories were 854,000 tonnes, a 9.8% MoM decrease than last month and decreasing by 26.9% than the same period of last year.

(Sourced from YIEH.com)

Insteel Industries Q2 profit up by 41%

Insteel Industries, Inc announced financial results for the Q2 ended March 29th 2008. Net earnings for the quarter were USD 6.9 million as compared with USD 4.9 million for the same period last year. Net sales for the quarter increased 3.3% YoY to USD 77.3 million from USD 74.8 million last year. Shipments decreased 6.5% YoY while average selling prices rose 10.6% YoY.

Gross profit for the quarter increased to USD 15.8 million from USD 12.4 million a year ago due to the higher average selling prices which more than offset higher raw material costs, lower shipments and higher unit conversion costs. Most of the Company's manufacturing facilities continued to operate on reduced schedules during the quarter in response to the soft demand.

Mr H O Woltz III president & CEO of Insteel said that "Insteel posted strong financial results for the second quarter, particularly in view of the unprecedented escalation in raw material costs and the weak demand that we experienced in certain of our markets. During the quarter, we implemented price increases sufficient to recover these additional costs and benefited from the consumption of lower cost material from inventory. Our shipment performance continued to be mixed, characterized by relatively strong demand for products primarily used in nonresidential construction and weak demand from customers with greater exposure to the housing market."

Insteel Industries, Inc. is one of the nation's largest manufacturers of steel wire reinforcing products for concrete construction applications. The Company manufactures and markets prestressed concrete strand and welded wire reinforcement, including concrete pipe reinforcement, engineered structural mesh and standard welded wire reinforcement. Insteel's products are sold primarily to manufacturers of concrete products that are used in non residential construction.

ISRI Convention discusses campaign to improve image

The President’s Breakfast at the 2008 ISRI Convention & Exhibition was packed as Mr Robin Wiener president of ISRI and other guest speakers discussed the importance of the industry’s image and promoting safety in the workplace.

The recycling industry has a negative image attached to it thanks to the increased incidents of scrap theft occurring across the nation. To remove this stigma, Mr Wiener said companies must change the way they do business and become more vocal in their communities.

One way ISRI is trying to change the image of the industry is by improving safety in the workplace. ISRI’s Safety Program strives to help company’s place safety in all of its forms at the top of the management chart, even above profit. The program’s motto is “Safely or Not At All.”

To improve the industry’s image, Mr Pat Cleary senior vice president of Fleishman Hillard said that he believes the recyclers should do the shaping of the industry. He has toured many scrap facilities and describes people in this industry as job creators, key exporters and environmental stewards. The industry has great stories to tell and they should go out there and drive their messag.

Recession reports - OECD predicts subprime losses to hit USD 420 billion

According to an analysis by the Organization for Economic Co operation and Development, losses from the collapse in the US subprime mortgage market will total between USD 350 billion and USD 420 billion.

The figure contrasts with the hair raising USD 945 billion estimate given by the International Monetary Fund last week. The OECD had previously put subprime losses and write downs at about USD 300 billion, based on market prices last September, but it said the market panic had distorted pricing so much this method was no longer reliable.

Its new estimates assume that lenders would recover 40% to 50% of foreclosed loans, if growth and unemployment were similar to the recession of 2001 but house prices weaker than in the early 1990s. It added that “To get anything like recent mark to market losses would require a 0 per cent recovery rate which seems extreme even for the most bearish.”

The IMF’s estimate is based on market prices but includes losses and writedowns in other areas, such as commercial property and leveraged finance.

A more focused IMF analysis, looking only at residential mortgages, suggested a lower level of losses about USD 480 billion but the OECD said its figures were based on a bigger pool of mortgages.

Mr Adrian Blundall Wignal deputy director of OECD that “If looking at a comparable pool of mortgages, the OECD’s estimate of losses would be even lower, at USD 262 billion to USD 315 billion.”

Even though the scale of first round losses could be less than feared, the risks of a credit crunch more acute than that suffered in the US in the early 1990s remain considerable.

The OECD said that USD 60 billion of direct losses could lie with US commercial banks and that it could take from six months to two years for banks to recapitalize. The report said that “The arithmetic of getting quickly back to business as usual requires much more capital than simply offsetting the losses.”

OCED said that interest rate cuts and a policy of cutting dividends to bank shareholders could speed the recovery, but avoiding the 1990s type scenario could require further capital injections and, as a last resort, a government backed bail out of the assets affected.

French port union calls for weekly strike

Reuters reported France's port union, part of the CGT federation, called on workers to stage a 24 hour strike every week in protest of government plans to reform the loading activities of state run ports.

France unveiled plans in January to privatize seven out of nine of the public ports to make them more efficient, provoking anger from union members who had asked for a written guarantee that the ports would not be privatized.

Talks between the union and the government over reforms unveiled in January ended in acrimony this week, with the union accusing the government of turning its back on a strategic sector.

The union said in a statement that “The planned reforms of seven of the nation's nine public ports were entirely ideological and in no case driven by economics and even less so by social aims.”

It said that "The government is taking the deliberate risk to hand over especially profitable port terminals to private operators and, above all, foreigners.” The union said that “It would also create the conditions for monopolies in the sector.”

The planned reforms will affect the following public ports: Marseille, Dunkirk, Le Havre, Rouen, Nantes Saint Nazaire, La Rochelle and Bordeaux.

Japanese shipyards face extra costs on steel – Mr Tazaki

Mr Masamoto Tazaki chairman of the Shipbuilders' Association of Japan, which represents 20 shipyards at a regular press conference in Tokyo said that “There were price increase requests from each steelmaker and Japanese shipbuilding industry faces a difficult situation to accept the sharp and significant price increases.”

He said that “The Association will maintain good relations with the Japan Iron & Steel Federation and exchange the information depending on each others' needs. We intend to continue talks about appropriate prices on premise of long term stable supply of steel.”

Mr Tazaki said that “Members of the Association use 4.4 million tonnes of steel annually. We expect additional costs of JPY 88 billion (USD 871 million) if steel prices increase JPY 20,000 per tonne.'

Japan is the second largest shipbuilding nation by construction after South Korea.

Recession reports - Shocking GE results show size of crisis

FT reported that General Electric underlined the depth of the global financial crisis announcing its worst quarter in five years and slashing full year forecasts.

The news, described as shocking by a senior GE executive, combined with data showing that US consumer confidence was at a 26 year low to send shares lower.

Shares in GE, which derives more than half its revenues overseas and is seen as a bellwether of the global economy led the way, falling 12.8%, its biggest loss since the 1987 stock market crash.

The results are a blow to Mr Jeffrey Immelt chairman & CEO of GE and could increase pressure for action at the group’s underperforming financial and healthcare divisions.

GE executives apologized for reporting the first fall in quarterly profits since 2003, but said their strategy was sound. Mr Keith Sherin CFO of GE told the Financial Times that “The miss is shocking relative to our performance. But we are not going to change our strategy because of a one time miss.”

Mr Immelt presented an upbeat outlook less than a month ago, saying on a webcast that GE would increase earnings at least 10% this year. GE said on Friday its profits would grow no more than 5%in 2008.

Fielding hostile questions from analysts, Mr Immelt said the collapse of Bear Stearns days after the webcast and subsequent market turmoil prevented GE selling real estate. The group was also forced to take a USD 270 million writedown on stocks, loans and securitised assets.

BP PLC and ConocoPhillips to build Denali gas line

BP PLC and ConocoPhillips announced that they will join resources to build a 4bcfd natural gas pipeline extending from Alaska's North Slope to markets in Canada and the US Dubbed Denali, the proposed Alaskan gas line would be the largest private sector construction project ever built in North America.

In a press conference held on April 8th 2008, BP and ConocoPhillips revealed plans to spend USD 600 million over the next 36 months on the first of many phases of the Denali line, namely an open season, which is slated to begin before yearend 2010. After the open season, the companies will file to obtain certification from the US Federal Energy Regulatory Commission and Canada's National Energy Board and will move forward with construction of the project.

The project will comprise about 2000mi of large diameter, buried pipeline that will transverse Alaska, the Yukon Territory and British Columbia to Alberta. The line will operate at about 2500psi and will have 40,000hp compressor stations every 100 mi to 200mi. A gas treatment plant will be built near existing Prudhoe Bay facilities. The line will require 5 to 6 million tonnes of steel, the partners said. The companies said should it later be required to transport gas on from Alberta, the project will also include about 1500mi of large diameter line from Alberta on to the Lower 48 states.

Alaska Gov Sarah Palin said of BP and ConocoPhillips's effort we look forward to any progress they will be able to show us on this project. Their decision to proceed is further proof that competition does work."

Nigeria appoints interim management for Ajaokuta Steel

The Tide Online reported that the Federal Government has inaugurated a 16 member interim management committee for the Ajaokuta Steel Company and the national Iron Ore Mining Company. The committee is made up of eight engineers, four legal professionals, two administrators and two architects.

Mr Alhaji Ahmed Gusau minister of state for mines and steel who inaugurated the committee said it was in line with the government’s decision to re position the plants. He said that “The committee would see to the day to day management of the two companies pending the approval of a substantive management for the companies.”

Mr Gusau said that the committee was to prepare necessary grounds for the conduct of technical audit on the plants. He added that “This followed the termination of the concession agreement between the federal government and Global Infrastructure Holdings Ltd.”

The minister said that “This is necessary because of the vandalism and non payment of staff salaries and allowances which the plants and staff suffered under the concession.” He added that the committee would determine outstanding staff salaries and pension benefits that were neglected during the conversion. These issues were neglected during the concession period and needed to be addressed restore industrial harmony in the companies.” He added that “The committee would also ensure safety and maintenance of the plants with a view to avoiding deterioration.”

The federal government earlier this month, terminated the agreement with Global Infrastructure Holdings due to its inability to meet major provisions of the concession.

Rotterdam port Q1 cargo volumes up by 6.8% YoY

Europe's biggest port Rotterdam announced that there has been another strong increase in throughput in the port of Rotterdam. During the first quarter of this year, 105 million tonnes of goods were handled up by 6.8% YoY. The growth is largely due to the double figure increase in the transshipment of agribulk up by 16%, iron ore and scrap by 15% YoY, crude oil up by 12% and other liquid bulk up by 14%.

Rotterdam said that containers also performed well up by 8% YoY. Roll on/roll off cargo remained on the up by 2%. Less coal down by 3% YoY, other dry bulk down by 7% YoY, mineral oil products down by 1% YoY and other general cargo down by15% YoY were handled.

Mr Hans Smits CEO port of Rotterdam Authority said that "Very healthy figures. Even taking into account a correction for the unique trend in crude oil and iron ore, there are still good signs of growth. I am working on the basis of close on four percent, therefore on continuing demand from producers and consumers.”

The Port of Rotterdam is Germany's most important port in terms of freight handling both to and from Germany. Rotterdam was the first European port to break through the 400 million tonnes barrier, with a cargo throughput of 406 million tonnes in 2007.

Technip and Dodsal won USD 610 pipeline deal

MEED reported that a consortium of Paris based Technip and Dubai based Dodsal has won the USD 610 million contract to build a 131 kilometre long pipeline from Fujairah to Al Ain.

Abu Dhabi is building power and water capacity in Fujairah as part of a plan to spread plants throughout the UAE and ensure supply to the northern emirates.

The engineering, procurement and construction contract covers the installation of a 64 inch steel pipeline from the Fujairah F2 independent water and power project, which is being built, to a water storage facility at Al Hayer close to Al Ain.

The pipeline will pass through 55 kilometres of mountainous terrain, 71 wadis and 15 roads. As part of the project, two fibre optic cable systems will also be installed along the route of the pipeline as part of a communications network. The project should be completed by 2011.

The scope of works also covers five main pumping stations with a flow rate of 5,000 cubic metres an hour, five water booster stations with a flow rate of 6,000 cubic metres an hour, six valve stations, 10 tap-off stations and a cooling water system.

The consultant on the scheme is Germany's ILF Engineers.

ThyssenKrupp opens its new factory in Bursa

German auto parts company ThyssenKrupp has inaugurated its new factory in north western province of Bursa with an investment worth EUR 6 million.

Mr Eckart Cuntz German ambassador to Turkey said that there are over 3,200 German companies operating in Turkey. He added that "There were 67 German companies operating in Bursa by the end of 2007. As far as foreign investments are concerned, Germany has the most investments in Bursa. ThyssenKrupp's investment in Bursa will boost economic relations between Turkey and Germany."

ThyssenKrupp has 14 factories in 7 countries worldwide. OYAK Renault, Fiat, Ford, Toyota and Honda are among its clients.

Inflation causes deep concern in Gulf construction – Report

MEED reported that work has stopped on a number of construction sites in Saudi Arabia due to the steep rise in building material prices. This has led to conflict between contractors and their clients over prices guaranteed when the contracts were let. Contractors fear that if they proceed on fixed price contracts they will incur major losses if their clients insist on sticking to the originally agreed figures.

Speaking for the contractor committee of the Jeddah Chamber of Commerce and Industry, its president Mr Abdulaziz Abdullah Hafani said that the main problem was with government-funded projects.

Mr Hafani also said that it takes a long time to award government contracts to bidding companies and material prices can rise significantly even during this period.

With some USD 2.4 trillion worth of building and civil engineering work in hand, the Gulf region has been severely hit not only by cost inflation but difficulties in obtaining some materials at any price. The United Arab Emirates has suspended import duties on cement and steel to ease the pressure of rising material costs. And the China State Construction Engineering Corporation, which has been working in the UAE since 2004, has called for restrictions on importing road building equipment to be relaxed.

Mr Yu Tao MD of China State Construction Engineering Corporation said that “It can take 4 months to get road machinery into the UAE. Profit margins are being squeezed by sharp increases in steel, cement and bitumen costs in the past 12 months. This makes it increasingly difficult to secure resources that could be used in more profitable markets.”

The CSCEC is working on the Wafi American Hospital contract and the Barsha Al Quoz project for Dubai's Road Transport Authority.

India to facilitate cement imports from Pakistan

It is reported that, faced with increasing political pressure, Indian government will facilitate more cement imports from Pakistan in its efforts to rein in inflation, which has touched a 3 year high of 7%.

Mr Ajay Shankar secretary at department of industrial policy & promotion said that "Lot of cement capacity is coming up. The government will facilitate more cement imports from Pakistan. Cement prices have been reasonably stable in the last 1 year."

Mr Shankar said that though the government is expecting moderation in prices, it is keeping a constant watch on the price situation of both steel and cement. He added that "We are watching the situation carefully."

Inflation touched a three year high of 7% for the week ended March 22nd 2008 on higher prices of food, vegetables, minerals and manufactured items prompting the government to take a slew of measures to check the price rise.

The government last week, decided to abolish import duty on crude form of edible oil, cut rate on refined edible oil and banned exports of non basmati rice to ease pressure on prices. The government has already scrapped import duty on cement to boost supplies.

Date for National Power EoIs extended

Pakistan Privatization Commission has extended the date for submission of expressions of interest till May 5th 2008 to acquire 51% shares of the National Power Construction Company with management control. The decision has been taken owing to increasing interest of the parties in the transaction and to provide maximum opportunity to investors in the field.

Earlier, last date for submission of expressions and statement of qualification was Aug 30th 2007. Those who had earlier submitted their expressions and statement of qualifications and had joined the due diligence process need not apply afresh. However, they would have to reaffirm their continued interest in the transaction, and provide updated financial and other information as required under the request for statement of qualification document.

The NPCC is a specialist contracting company of Pakistan for construction and management of turnkey power projects, including extra high voltage transmission lines, distribution networks, substations, power generation plants, industrial electrification and external lighting of housing complexes. Its major area of operation during the last 3 decades had been in the Middle East, with concentration in Saudi Arabia. The NPCC has successfully secured and completed projects valuing over USD 650 million.

Privatization Commission has asked prospective investors engaged in engineering construction to submit expressions of interest, providing information, such as name of company, nature of business together with copies of constitutive documents, proof of net worth of PKR 300 million as per audited financial statements.

It has also asked the potential buyers to provide duly certified copies of their businesses by chartered accountants firms for the latest year but not earlier than June 2007, list of directors, with copies of computerized national identity card, name, address, telephone, mobile, fax, email of the focal person to be contacted, pending threatened litigations against the company and the directors.

The winning consortium would have to enter into legally bound inter company agreements. The investors have been asked to submit expressions of interest in duplicate, together with a non refundable processing fee of USD 1,000 or PKR 63,000 payable in the form of a bank draft or pay order in favor of government of Pakistan to reach the PC by May 5th 2008.

Mammut won USD 169 million deal from DEWA

It is reported that Mammut Group has won a USD 169 million contract with Dubai Electricity & Water Authority for the construction and maintenance of the 180 million gallon Mushrif Reservoirs in Dubai.

The contract includes the construction, completion, testing and commissioning of three rectangular ground reservoirs, each with a 60 million imperial gallon capacity.

Construction of the concrete reservoirs will be carried out over a 15 month period following preliminary works at the firm's 300,000 square meter facilities in Dubai's Technopark. The contract will be completed in conjunction with Mammut's partners in the project, Max Boegel Group of Germany.

In announcing the contract award, Mammut group chairman & CEO Mr Behzad Ferdows stated that the firm's expertise and competitive pricing demonstrated its strengths and capabilities as one of the region's major contracting companies.

Taqa and TATA in talks to build India power plant

Abu Dhabi National Energy Company said that it is in talks with India's TATA Group about developing a power plant in India. It is also looking to develop 3 power and water stations in Saudi Arabia, in a venture with privately owned Al Zamil Group.

Mr Peter Barker Homek CEO of Taqa said that "We should finalize soon with India's TATA Group to build a power plant in India in a JV where Taqa would take a stake."

TATA Group owns a stake in TATA Power Co, an electricity generating plant developer. It aims to boost its power generating capacity in India to 8,000 MW during the next 3 to 5 years.

Mr Barker Homek said that Taqa operates a 250 MW plant in the south Indian city of Chennai, whose capacity can be doubled. Construction of a 750 MW plant in the northeastern Indian state of Tripura will start soon. He added that "We are now focused on India, Europe and North America. A lot of opportunities are coming there."

On Saudi Arabia, he said that "We are looking at three projects right now across the economic cities in Saudi Arabia with Saudi's Al Zamil Group. You will hear from us on that in 2008."

In 2007, Taqa agreed to buy USD 900 million of assets from US utility CMS Energy Corporation that included ST CMS Co in India.

Shapoorji Pallonji re enters UAE with AED 2.2 billion of projects

The Indian construction company Shapoorji Pallonji International FZE has re entered the UAE market, with 8 projects worth AED 2.2 billion set for delivery over the next 1 and a half to 2 years.

These include, among other projects, the AED 800 million Taj Palace in Dubai's Palm Jumeirah, which is being developed by ETA Star and will be delivered by the end of 2009 and the five-star Fairmont Hotel worth AED 70 million in Abu Dhabi.

Mr Mohan Dass Saini MD & CEO of Shapoorji Pallonji said that the Dubai headquarters would control all the overseas operations of the Mumbai based parent firm, Shapoorji Pallonji & Co Limited, which owns 18% of the TATA Sons, the promoter of the Indian conglomerate, TATA Group.

He stressed that Shapoorji Pallonji was the first Indian construction company to enter the Middle East market in the 1970s, starting with operations in Oman. He added that “It winded up in Dubai in the 1990s, however, when the prices of oil dropped in the world market. It re entered Dubai in 2006.”

Mr Saini said that the parent company aims to have a turnover of AED 3.67 billion from its overseas operations over the next 3 years. As of calendar year ending last month, its total turnover grew up by 20% to AED 2.4 billion.

Saudi Arab nominal GDP seen at SAR 1.74 trillion

Arab News reported that Saudi Arabia’s economy has been growing rapidly in recent years because of rising oil prices and booming public and private investment. With a nominal GDP projected at around USD 465 billion in 2007-08, the Kingdom’s economy is now on a par with that of Switzerland and accounts for a little more than half of the total output of the Gulf Cooperation Council and is twice the size of the second largest GCC economy, the UAE.

The real GDP was 6.1% in 2005 and fell to 4.3% in 2006 and 3.7% in 2007. GDP growth is expected to gather pace in 2007, reaching 6.7% in real terms.

The surge in Saudi oil revenue will support further brisk growth in government spending. Much of this will be directed toward basic infrastructure, but spending on salaries and other benefits, as well as subsidies, will also be raised in a bid to offset the social costs of rising inflation. Inspired by properly sequenced and thorough going economic reforms, both private and foreign investment are surging ahead, most notably in utilities, manufacturing, telecoms, financial services, and the new economic cities. With economic reform momentum likely to be maintained, the prospects for sustained private investment growth are excellent.

The growth in government spending will continue to lag that in oil revenue, keeping the budget in surplus territory by as much as 20% of GDP both this year and next. The balance of payments position is also exceptionally strong and current account surpluses averaging some 25% of GDP in 2008-09 will further boost foreign asset holdings.

Inflation has picked up markedly in the past two years, a phenomenon that is new to Saudi Arabia. The Samba report said economic policy challenges have been heightened by the pickup in inflation, which reached 8.7% in February.

Having been negative in the first 5 years of the decade, average consumer price inflation accelerated to 2.3% in 2006 and further to 4% in 2007. In contrast with previous oil booms, Saudi Arabia has been more measured in raising spending, thereby creating room to pay down domestic debt and build up foreign assets.

Billet price broke CNY 5000 mark in Tangshan

It is reported that billet price hit the new high in history again in North China of Tangshan. Price of plain carbon steel billet broke CNY 5000 per tonne.

Mainstream quotation of steel mills was CNY 5050 to 5100 per tonne and around CNY 4940 to 5000 per tonne at the beginning of this month. Insiders hold a good attitude towards the later market due to the good demand.

Some steelmills said billet price rising due to coking coal and coking price rising. One steelmill in Tangshan said coking price moved up around CNY 200 per tonne once again recently because of the tight coking supply.

Chinese iron ore import situation in 2007

Mr Luo Bingsheng deputy director of China Iron & Steel Association on the 2008 international metallurgy and minerals conference gave a speech on 2007 China iron ore import situation. Given below are the major points of the speech.

1. In 2007, China imported iron ore of 383.0933 million tonnes up by 56.79 million tonnes or 17.4% YoY; of this, 187.9071 million tonnes was shipped in the first half year up by 26.5521 million tonnes or 16.46% and 195.1862 million tonnes was imported in the second half, up 30.2379 million tonnes or 18.33%. Probing into the imports, following features can be summarized.

The imports were mainly sourced from Australia, Brazil, India and South Africa. Of total imports in 2007, 145.6091 million tonnes was from Australia, 38% in proportion; 97.6293 million tonnes from Brazil, 25.48%; 79.3692 million tonnes from India, 20.72%; and 12.2302 million tonnes from South Africa, 3.19%. The above four countries' combined shipments accounted for 87.39%, 1.47 percentage points lower than in 2006.

Import from other countries/regions came to 48.2535 million tonnes up by 11.8897 million tonnes or 32.7% YoY, 12.61% of total iron ore import. Canada, Russia and Iran registered relatively big figures, of 5.9336mt, 5.398 million tonnes and 5.039 million tonnes respectively.

2. Landed price of imported ore kept rising and peaked at the year end

Average CIF ore import price stepped up month on month from USD 68.9 per tonne in January to USD 125.28 per tonne in December growing 81.83%. In specific, Australian ore grew 67.29%, Brazilian ore grew 50.8%, Indian ore, 135.37% and that from South Africa, 47.93%.

Reasons for the price rise are:
a) Freight rates surged
b) Trading price on the spot market marked up too

Based on figures offered by professor Mr Jiao Yushu growth in average landed price of Australian ore in January to November 2007 was contributed by freight rise and by FOB price rise in a proportion 60.1:39.9; for Indian ore, the hiked part was generated 94.7% by freight and 5.3% by rise in FOB price.

FOB ore price from Australia stood at USD 51.27 per tonne in January to November up by 14.49% from 2006; from Brazil USD 35.29 per tonne up by 9.12%; from India USD 45.91 per tonne up by 3.24%; from South Africa, USD 46.95 per tonne up by 24.8%.

The landed price rise hiked markedly especially for Indian ore. In December its average CIF price was USD 157.96 per tonne, 1.28 folds of the Brazilian ore; freight rates India China averaged USD 45.98 per tonne 2.1 folds of that from Australia to China.

3. Medium, long term contract ore took a relatively small part

Of 1126 iron ore import contracts during November to December 2007, long term ones accounted for 40.11%, while spot trading 58.89%; in terms of pricing, 24.77% were transacted on FOB basis, 59.17% on CFR basis leaving 16.06% to others.

4. Fulfillment of long term contracts was low

In 2007, the top three miners fulfilled 92.53% of the long-term ore supply contracts made with qualified Chinese importers, 0.36 percentage points down from 2006; the highest and lowest fulfillment were 97.95% and 87.44% respectively.

5. China's steel industry depends on import for 51.65% ore consumption

China produced a total pig iron of 469.4463 million tonnes last year, up by 61.8922 million tonnes or 15.19% YoY, consuming 741.73 million tonnes iron concentrate. The import was 383.0933 million tonnes 51.65% of the consumption by domestic blast furnaces.

(Sourced from Mysteel.net)

Profit of Chinese steel industry may peak in Q2 - Experts

China Mining reported that profits of the steel sector could peak in the second quarter of this year following a slight QoQ growth in Q1.

As per report 5 listed companies in the steel sector have released their earnings preannouncement for Q1 and one company has released its Q1 results as under
1. Tangshan Iron & Steel, with a projected profit growth of between 50% and 100%
2. Sansteel Minguang with a projected profit growth of 70% to 100%
3. Hangzhou Iron & Steel with a projected profit growth of 50%
4. Xinjiang Bayi Iron & Steel, with a projected profit growth of 150% 5. Hualing Steel Tube & Wire, with a projected profit reduction of 150% to 250%. In addition, Capital Iron & Steel announced an earning per share of CNY 0.0668 up over 20% YoY.

Industrial observers say that three factors have contributed to the profit growth of the steel sector in the first quarter
1. Rising steel price
2. New production capacity and
3. Reduction in income tax.

Mr Zhou Tao Iron & Steel analyst with Sinolink Securities predicts that more listed companies will issue pre announcements of increased profits for Q1. Leading steel makers such as Baosteel, Wuhan Iron & Steel and Anshan Iron & Steel are yet to release their pre announcements. Data collected by China Iron and Steel Association for the first two months of this year show that the whole sector could see a profit growth of some 20% in Q1.

Analysts expect profit of the steel sector to peak in Q1 for the reason that steel price is projected to rise in Q2, while Q1 mainly saw the rise in raw materials and fuel prices.

Listed companies are predicted to achieve even better results in Q2, especially those with long-term negotiated iron ore contracts usually large steel makers.

Baotou Steel 2007 profit up by 160% YoY

China Knowledge reported that Inner Mongolia based Baotou Steel Union Co Ltd posted 2007 net profit soared by 161.75% YoY to hit CNY 1.75 billion on increased production and higher prices.

Baotou Steel earnings per share were CNY 0.36 last year while its sales climbed to CNY 26.77 billion in the same period up by 45.08% over 2006. During the period it produced a total of 17.41 million tonnes of steel and iron products.

Baotou Steel said it benefited from last year's issuance of CNY 3.032 billion worth of A-shares to parent for the purchase of major assets valued at CNY 7.417 billion which enhanced its efficiency and profitability.

Baotou aims full year net profit this year to hit CNY 2.32 billion with production amounting to 28.56 million tonnes.

Chinese work accidents kill 19,000 in January to March

Reuters reported that workplace and traffic accidents killed 19,248 people in China over the first three months of 2008, though the toll had fallen from 2007 levels.

The report cited Mr Wang Jun head of the State Administration of Work Safety as saying that the total number of deaths in over 110,000 accidents was down by 14% YoY from last year. Xinhua quoted him as saying "Despite the decline in the death toll, the work safety situation was still grim."

Deaths in mines dropped off by around a quarter, but Mr Wang said illegal over production and accident cover ups persisted despite government campaigns to improve standards.

China's coal mines are the world's deadliest, with fatal accidents taking place almost on a daily basis as mine owners push productions beyond safety limits to pursue profits.

Chinese scrap import in 2 months down by 11.7% YoY

According to the statistics, China imported 447,000 tonnes of scrap from January to February down by 11.7% YoY compared with the same period of last year.

Also, most of scrap imported from Kazakhstan about 75,000 tonnes which were 16.8% of total import volume. Japan was the second largest country to export the scrap to China with 72,000 tonnes which were 16.1% of total import volume and down by 18% YoY from a year ago. Hong Kong ranked the third with 69,000 tonnes up by 14.8% YoY compared with the same period of last year.

Tonggang Group Q1 profit reaches CNY 979 million

It is reported that during the first quarter of 2008, targeting at constructing a high grade 10 million tons steel base, Tonggang Group improved the management level and profitability, and secured the project construction moving on smoothly. Meanwhile, the group realized revenues CNY 979 million, increasing by CNY 432 million from those of the same period in 2007; and a profit of CNY 230 million more with the same comparison.

Taking the advantage of market recovery when weather comes warmer, the group made suitable sale plans. From January to March 2008, the group produced 635.8 million tonnes of strategic steel products accounting 38.1% of the whole.

While focusing on projects like high grade iron and steel base, the large scale modernizing and captive mine development, the group continued to strengthen the management of new projects that launched operation, to secure a smooth production and steady rising incomes.

Shougang has no intention on taking shares of top three mineral producers

According to Mr Cao Zhong the assistant of general manager of Shougang Group, indicated recently that Shougang is not considering taking shares in BHP, Rio Tinto and Vale at present. Meanwhile, Baosteel Group and Minmetal Group have also denied that they would take shares of BHP Billiton.

However, Mr Cao Zhong indicated that Shougang is willing to start cooperation projects with top three mineral producers hereinbefore and places would include Australia, Brazil, Canada and China.

H beam and channel beam prices rise in China

It is reported that China's market price of H beam and channel beam prices increased last week on strong demand.

Price of H beam with 400*200 from Laisteel is being booked at CNY 6,050 per tonne and the price of H beam with 400*400 from Masteel is at CNY 6,100 per tonne. 8# to 16#from Liusteel is selling at CNY 5,400 per tonne and the 16#afrom Masteel is at CNY 5,480 per tonne.

WISCO issues social responsibility report

It is reported that WISCO has issued the first social responsibility report in Chinese steel companies and there are three contents in the report including strategy and management, social responsibility and resources and environment.

Mr Deng Qilin the general manager of Wuhan Iron & Steel Group Co that said “We should make great efforts to become economic ridgepole in China and the model for all enterprises”

Wisco has cumulatively invested CNY3.25billion in environmental protecting establishment since 2001, in order to improve air and water qualities in Wisco and to recycle solid wastes. The recycling ratio of production water in Qingshan Department in Wisco was as high as 95.56% in 2007 and it is expected that waste water emission in Wisco could be zero in 2009. Meanwhile Wisco has also invest CNY3 billion in energy saving since 2001 and commissioned a great deal of energy saving and technology alteration projects, which are supposed to reduce over 3million tons of carbon dioxide emissions each year after they reach design capacities.

“Social responsibility” has not affected the development of Wisco. Wisco produced 17.02million tonnes of steel in 2007, up by 7.72 million tonnes than in 2004. The profit in Wisco was CNY9.3 billion in 2007, up by CNY 2.3 billion than in 2004.

HR strip price up in Wuxi China

It is reported that hot rolled steel strip has been raised sharply by CNY 50 to CNY 100 per tonne in China Wuxi market. Now current price for 2.5mmx145mm to 204mm is at CNY 5,280 per tonne to CNY 5,300 per tonne, CNY 5,100 per tonne to CNY 5150 per tonne for 2.5mmx210mm to 355mm.

As per report the mills in the north of China are increasing their prices, but demand is not active in the market and stock level is rising.

Agricultural Bank of China to provide CNY 10 billion credit to Benxi Steel

It is reported that Agricultural Bank of China and Benxi Iron and Steel Group signed comprehensive cooperation agreement in Friendship Hotel in Shenyang.

As per the agreement, the Agricultural Bank of China will provide CNY 10 billion intention credits to Benxi Steel, and the two sides will carry out full cooperation in traditional credit business and financing advisers, investment in bank and other fields.

Mr Yang Kun vice president of Agricultural Bank of China said that Agricultural Bank of China is a large-scale state-owned commercial bank, it has been actively supporting the development of Chinese iron and steel industry, providing financial services for iron and steel enterprises’ adjustment of industrial structure, energy saving and emission reduction etc.

As per report, in recent years, Agricultural Bank of China established strategic cooperative partnerships with Ansteel, Wisco, Shougang etc large number of leading steel enterprises in China. At present, the total amount bank loans of Agricultural Bank of China in iron and steel industry has reached about CNY 100 billion.

Jiugang Mechanism Company and Bagang ink strategic pact

It is reported that recently, Jiugang Mechanism Company and Baogang Group Bayi Steel Company signed strategic cooperative agreement which is about equipments, spare parts and materials etc.

With the large-scale construction of Bayi Steel, Jiugang Mechanism Company seized this opportunity to sale promotes its equipments and spare parts which are needed by Bayi Steel’s construction.

The cooperative agreement takes the long term strategy as the basic point, win to win situation for the goal. The two sides made prescription and restriction on product supply, price, quality, service guarantee, procurement priority allocation, technology confidentiality and so on.

Baosteel Zhanjiang project passes examination by experts

It is reported that as an important procedure, Baosteel Zhanjiang Project sea area argumentation has recently passed examination by experts.

Experts have demonstrated the necessity and rationality of sea-area utilization of the project and all experts believed that the program of reclamation and quay address comply with the function orientation of ocean area.

On the meeting, Mr Li Ronggeng, Mr Pan Xingchun, Mr Cheng Yaoguang etc leaders expressed that the construction of Zhanjiang Steel base has an important significance on optimizing the steel industry layout, promoting the technological upgrade of steel products, as well as promoting Zhanjiang’s economic development. In the process of the project’s construction and production, it is necessary to correctly handle the relationship between the steel base and marine environment protection.

Changshu Huaye adds new galvalume plant

It is reported that the Changshu Huaye's 400,000 tonnes per year galvalume plant is set to have its trial production in this August.

The plant construction kicked off last May by China's leading contractor for steelmaking facilities China Metallurgical Construction Group. The output is focused on auto, house appliance and construction industries; market is targeted to Europe, South Africa and Southeast Asia and both for local demand.

BaoTou Steel appoints Mr Chen as new chairman

Inner Mongolia BaoTou Steel Union Company announced that the Company has named Mr Cui Chen as new chairman of the board to replace Mr Cao Zhongkui.

The Company also announced that the Company will pay cash dividend of CNY 1 to shareholders for every 10 shares they hold.

Hyundai China unit to increase use of local steel

Reuters reported that Beijing Hyundai Motor Company, the Chinese unit of Hyundai Motor Co plans to increase the use of Chinese steel in its auto production.

Mr Noh Jae-Man president of Beijing Hyundai Motor Company told reporters ahead of the Beijing Auto Show that "We will use as much steel as possible if it is cheap and good quality. He said we will not use Baosteel because it is too expensive. We are testing product from other steel makers such as Wuhan and Anshan."

He said the China unit was confident of meeting its 2008 sales target.

Kazakhstan may impose metals export duty

Reuters cited Mr Daulet Yergozhin Deputy Finance Minister of Kazakhstan as saying that Kazakhstan may impose a customs duty on exports of metals and other mining industry products and will decide on its size by the end of April 2008.

Mr Yergozhin told reporters on the sidelines of a metals conference in the Kazakh capital Astana that "Some of our companies make a return of above 25%. He said that we think it would be fair if they had an internal rate of return of about 20% to 22%."

Mr Yergozhin refused to name the size of the metals duty. He said "I think it must be lower than the one for oil."

Evraz successfully completes USD 1.6 billion eurobond placing

Thomson Financial reported that Evraz Group SA has successfully completed its USD 1.6 billion, 144A / Reg S eurobond placing consisting of five year and 10 year tranches.

The Russia-based steel and mining group said it intends to use the net placing proceeds for general corporate purposes, including the financing of the recently announced acquisition of IPSCO Tubulars.

The USD 1.05 billion, five year bond issue was priced at 100% with a coupon of 8.875% while the USD 550 million, 10 year bond issue was priced at 100% with a coupon of 9.50%.

OMK Almetyevsk Pipe Plant sums up its results for Q1 of 2008

Almetyevsk Pipe Plant Republic of Tatarstan part of the United Metallurgical Company has summed up its production results for Q1 2008.

During the reporting period, Almetyevsk Pipe Plant manufactured 35,245 tonnes of pipes of various types and 6,368 tonnes of pipes with external polyethylene coating, which exceeded the figure of the similar period in 2007 by 33.5 %.

In Q1 2008, Almetyevsk Pipe Plant dispatched 43,439 tonnes of pipes of various types, including 6,858 tonnes of pipes with external insulation up by 29.7 % YoY.

RZD Seeks Partners for Copper Bid

It is reported that Russian Railways is forming a consortium with the aim of bidding for the huge Udokan copper field in Siberia when the government sells it off this year.

Mr Dmitry Pertsev spokesman for Russian Railways said the company will contribute a partly built railway link to the neighboring Chineiskoye deposit and will be responsible for infrastructure development relating to the billion dollar Udokan project.

Mr Pertsev saind in response to the question "Yes, we are creating a consortium but he did not identify the state owned railway's partners in the project.”

Kommersant reported Wednesday that RZD could join forces with Vneshekonombank, the government debt agent and pensions manager, and Urals Mining and Metals, the country's No. 2 copper miner to bid for Udokan.

The Natural Resources Ministry said that it would announce the conditions within a week for the sale of Udokan, one of only two metals deposits large enough to be declared strategic and therefore unlikely to be sold to foreigners.

The ministry has said investment in the project should total about USD 1.6 billion and that the state should pocket more than USD 3 billion from its development.

Udokan, located in the eastern Siberian region of Zabaikalsky could produce up to 187,000 tonnes of copper per year or about 15% of the country's current output of the metal.

OML Chusovoy sums up its production results for March and Q1

Chusovoy Metallurgical Works, Perm Territory part of the United Metallurgical Company summed up the results of its production activity in March and the Q1 of 2008.

In March 2008, Chusovoy Metallurgical Works manufactured 41,100 tonnes of finished steel. In Q1 2008, the production of finished steel totaled 121,000 tonnes a 17,000 tonne up by 16% YoY as compared with the same period in 2007.

Chusovoy Metallurgical Works steel production in March 2008 accounted for 45,100 tonnes. From early 2008, Chusovoy Metallurgical Works produced a total of 132,000 tonnes of steel up by 6% YoY as compared with the same period in 2007.

United Metallurgical Company is one of Russia's largest producers of pipes, railroad wheels and other metal products for energy, transport, and industrial companies. OMK comprises six largest enterprises in the metallurgical sector. The OMK Pipe Rolling Division comprises Vyksa Steel Works, Almetyevsk Pipe Plant and Trubodetal; the OMK Steel Works Division comprises Chusovoy Metallurgical Works and Gubakha Coke and Shchelkovo Steel Works.

India seeks energy cooperation with Kazakhstan

It is reported that India recently sought Kazakhstan's help to ensure its energy security as the two countries agreed to enhance bilateral trade and economic cooperation.

Mr Hamid Ansari VP of India said after delegation level talks with his Kazak counterpart Mr Kassym Jomart Tokayev that "We held discussions on means of increasing bilateral trade and expanding the areas of economic cooperation, particularly in the hydrocarbon sector."

The parleys saw Kazakhstan extending its support for India's membership in an extended UN Security Council with Mr Tokayev hailing New Delhi as a "reliable partner" of Astana in international fora.

Mr Ansari who also met Mr Karim K Massimov PM of Kazakhstan said addressing the Kazakhstan Senate "Greater economic engagement between India and the countries of the Central Asian region is not only mutually beneficial for the countries but also for the whole region and the world."

He said with the economies of India and Kazakhstan registering impressive growth, describing Central Asia as our extended neighborhood, there is wide ranging opportunities to expand areas of economic cooperation.

Mr Hamid Ansari also expressed India's readiness to cooperate in the higher education sector by sending Indian professionals here and training Kazakh students and professionals in various disciplines in India.

Gazprom and OMV 40 years of gas supply to Austria

Gazprom has announced that Vienna hosted celebrations dedicated to the 40th anniversary of Russian natural gas supply to Austria.

Mr Martin Bartenstein Austrian Economics and Labor Minister said “Over four decades the traditionally kind relations between Austria and Russia have represented a significant factor in the security of Russian gas supplies to our country. Cooperation between the two states will be further deepened. The contracts for natural gas supply to Austria have been extended for many years ahead, till 2027. Additionally, OMV and Gazprom are jointly executing the development project for the Central European Gas Hub at Baumgarten. All that will obviously reinforce the role of Austria in securing stable gas deliveries to Europe.”

Mr Alexey Miller Management Committee Chairman of Gazprom’s stated on the occasion of the 40th anniversary of gas deliveries that “In 1968 OMV was the first West European company to conclude a contract for gas supply from the USSR. Since then throughout 40 years our cooperation has been successfully deepening and spreading to new areas. Nowadays, in addition to gas supply and transportation, our cooperation embraces the development of one of Europe’s largest gas distribution centers at Baumgarten as well as the implementation of joint underground storage projects. Moving ahead at the same pace, Gazprom and OMV will not only strengthen their positions in the global markets, but will also make an invaluable contribution to the European energy security.”

Mr Wolfgang Ruttenstorfer OMV AG Director General said “The years of partnership between OMV and Gazprom have pursued stronger gas supply security. The signing of export agreements, the 40th anniversary of which we are celebrating today, literally was and remains a key event for providing stable energy supply to Austria and Europe. Therefore, we consider it an absolutely logical move to continue our successful partnership: the value of natural gas will be continuously growing due to its environmental friendliness as well as ever-increasing energy consumption.”

Over almost 40 years Austria’s largest oil and gas group OMV has been the major business partner of Gazprom. OMV was the first Western company to enter in 1968 into a long term contract for the purchase of natural gas in the USSR. Until 1987 the state owned a 100% stake in the company. Nowadays the state is the largest shareholder in OMV owning a 31.5% stake.

Shipyard Kherson to construct shipyard in Kherson region by 2010

Ukrainian News Agency reported that Shipyard Kherson LLC intends to construct a boat and yacht shipyard by 2010. The shipbuilding enterprise will be situated in the Valy-Valy bay of the Kakhovka water reserve. The construction of the shipyard will starts on May 2008 and costs USD 20 million.

The LLC intends to use partly personal and partly credit resources.

The enterprise will assemble complete boats and big yachts of river sea class.

Naftogaz Ukrayiny to produce oil in Libya – Ms Yushchenko

Ukrainian Journal Staff cited Mr Viktor Yushchenko president of Ukraine said in an interview with the ICTV channel that Naftogaz Ukrayiny will produce oil at an oil field in Libya.

He said "We agreed that one of the four which were given to Ukraine in 2003 and which later were lost, be returned to Ukraine."

Russia could build nuclear power plant in Mongolia

RIA Novosti reported that Russia could sign a deal with Mongolia to build a small or medium-sized nuclear power plant in the country, state nuclear power corporation Rosatom said on Thursday.

Mr Sergei Kiryenko's General Director of Rosatom said in a statement followed his meeting with Mr Sanjaa Bayar PM of Mongolia who arrived in Moscow on a three day visit.

Mr Kiriyenko said "During the meeting, the Mongolian prime minister confirmed his country's willingness to start elaborating a project to build a small or midsize nuclear power plant. We are prepared to join this work."

He said that "We will sign a joint action plan that envisages comprehensive work. In particular, it will be necessary to conduct additional prospecting of Mongolia's uranium deposits."

According to Mongolian estimates, uranium reserves in the country amount to 60,000 tonnes. However, Russian experts have assessed Mongolia's uranium reserves at 120,000 tonnes to 150,000 tonnes.

Indian SS makers seek separate treatment

BS reported that Indian stainless steel industry is seeking a different treatment than carbon steel, stating that there is a surplus of stainless steel in the country.

Mr NC Mathur president of Indian Stainless Steel Development Association said that “Stainless steel accounts for only 3% of the country’s total steel production and the industry is left with 30% surplus after meeting the consumption. This surplus needs to get exported.”

He said that in view of the major concern in the government about spiraling inflation and rising steel prices, stainless steel should be examined separately in terms of supply and demand.

Mr Mathur in a letter to the ministries of steel and finance said that there has neither been a short supply nor any major change in prices of stainless steel over the last few months, in contrast to the carbon steel industry products. The government is considering measures like banning steel exports to check the price increase in the domestic market. He said that there is no need to take steps to regulate the export of stainless steel as the production capacity is well in excess of the domestic demand, the letter says.

Mr Mathur said that last month, when the government withdrew the duty entitlement passbook scheme benefits on steel exports, it also disadvantaged stainless steel exports. Steel exporters enjoyed a DEPB benefit at 5% of the FOB value of exports.

Stainless steel is a high end product with price ranging between INR 90,000 and INR 160,000 a tonne as against INR 29,000 to INR 49,000 a tonne for carbon steel. Of the estimated 1.6 million tonne domestic stainless steel production, about 70% finds application in kitchenware and the rest in industries.

Stainless steel flat roll hikes fail to stick - Report

Purchasing.com reported that North American stainless sheet buyers appear to have forced producers to withdraw a 5% base price hike.

Buyers told purchasing.com that purchases have been so soft that buyers are holding back on orders rather than accept higher prices. Mr Mark Parr analyst at KeyBanc Capital Markets in Cleveland in a note to clients said that “True demand for stainless steel remains subdued. At this point, the market appears to be struggling to absorb a 5% April base price increase on commodity grades.”

Mr Parr said that and that meshes with the latest buyer survey, which shows original equipment manufacturers have been fighting off the price hike proposals because of weak demand. He added that “Anybody who says we’re not in a recession obviously doesn't work in the manufacturing sector.” So, he and other buyers also have been arguing about stainless prices with service center suppliers who had accepted the 5% increases but haven’t been able pass them along. Atop all that, cold rolled stainless import levels are up 15% year to date.

Inventory destocking at the service center link of the supply chain ended late last year and stockpiles are below normal, but in line with current demand levels, analysts report. Mr Parr said that “So, a near term return to normalized profitability levels for domestic commodity stainless steel and select specialty metals players appears elusive given the current end market environment.”

Stainless steel purchasing in the US dropped 14% last year despite strength in aerospace and energy end markets. So far this year, year over year buys are more than 20% lower than in 2007.

Xining Special Steel pellet project put into production

It is reported that on April 15th, 550,000 tonnes pellet project of Xining Special Steel had been put into production. The experts said that this project’s techniques are reasonable, the equipments are advanced, and the product quality is good, reaching national advanced level.

As per report it is the first pellet project for BERIS Engineering and Research Corporation to design. After the project put into production, high-quality products will bring notable economic benefits for Xining Special Steel, and help it to achieve further development.

Ametek Inc acquired Readling Alloy Inc

Philadelphia Business Journal reported that Ametek Inc bought Reading Alloys, a privately held, niche specialty metals producer. Terms of the transaction weren't disclosed.

This acquisition just fits each other with Ametek's long term interest in growing Reading and Ametek's acquisition of a complementary line of powder metal products.

Ametek is a manufacturer of electronic instruments and electromechanical devices, while Reading is a global leader in specialty titanium master alloys and highly engineered metal powders used in the aerospace, medical implant, military and electronics markets.

Jinchuan grabs 11% stake in Fox Resources

Jinchuan Group, the China's largest nickel producer, paid totaling USD 17.86 million to Fox Resources Limited of Australia, which successfully concluded to purchase an 11% stake in the company.

By the purchase, Jinchuan Group has become the largest shareholder of Fox Resources and these two companies look forward to tight partnership for the base metal exploration potential.

Jinchuan will issue a further 8 million attaching options to raise funds for 18.8 million shares. The funds will be used to development of nickel exploration on the 3,000 kilometre squared of tenements nearby to Fox Resources.

(Sourced from YIEH.com)

Ferrexpo plc Q1 production slightly decline

Ferrexpo Plc announced a mere decline in iron ore production for the first-quarter of 2008 compared to last year. The total iron ore production was 7.13 million tonnes for the first quarter, down from 7.14 million tonnes in the prior year quarter.

(In million tonne)

Highlights
1. Production in Q1 2008 continues at the high levels established in 2007
2. Total pellet output in Q1 2008 increased by 3.6% compared to the previous quarter, with output of pellets from own mined ore up 3.4%
3. Prices for purchased concentrate remain high, and accordingly focus remains on production of pellets from own mined ore
4. Further product quality improvements in Q1 2008, with production of higher quality pellets up 17% versus the equivalent quarter in 2007
5. Emphasis placed on mining higher grade ore to facilitate increased pellet quality
6. Higher grade ore output in Q1 2008 increased by 4% compared to Q4 2007
7. Stripping volumes increased by 13% in Q1 2008 compared to the equivalent period in 2007, facilitating future iron ore production growth
8. Operational efficiency improvements continued, driven by the ongoing Business Improvement Program
9. Ukrainian PPI cost inflation in the first quarter amounted to 12.2%
10. Average achieved price on a DAF/FOB basis for Q1 2008 rose by 5.7% compared to FY 2007.

Mr Viktor Lotous COO of Ferrexpo stated that “I am pleased to report that Ferrexpo continues to produce at the same high levels seen last year. The Company is facing cost inflation in Ukraine in 2008, as well as the impact of higher prices for steel based inputs and diesel fuel in particular. The implementation of further process and efficiency improvement initiatives will continue to help us manage our input costs effectively and mitigate inflationary pressures, to achieve our ambitious production targets and improve our product quality. Our project to expand and extend our GPL mine is on schedule and within budget, and progress has been excellent. We expect to see increased mining volumes as a result of this project from 2009.”

Ferrexpo is a Swiss headquartered resources company with assets in Ukraine, principally involved in the production and export of iron ore pellets, used in producing steel. Current output is over 9 million tonnes, approximately 85% of which is exported to steelmakers around the world.

BHPB bid for Rio –BHP no plan to increase its bid

The Sydney Morning Herald reported that BHP Billiton Ltd has no plans to raise its USD 147 billion takeover bid for Rio Tinto Group.

The news paper without saying where it got the information said that Rio has not been approached by its larger Melbourne based rival with an increased offer.

Rio shares have gained this week amid rumors BHP will raise its offer to 3.7 of its shares for every Rio share plus cash, or four of its shares for every Rio share, the Herald said. BHP is currently offering 3.4 shares for every Rio share.

Cazaly loses iron ore battle with Rio in High Court

Cazaly Resources has lost its three year battle with Rio Tinto over the ownership of the Shovelanna iron ore deposit after the High Court refused an appeal.

The High Court's refusal to grant Cazaly's special leave to appeal effectively ends the bitter stoush for the lucrative iron ore desposit in Western Australia.

Mr Sam Walsh CEO of Rio Tinto set that "This decision is welcomed. It confirms that due process was followed by the Western Australian Minister for Resources.''

Cazaly swooped on Shovelanna in Pilbara region in 2005 when Rio Tinto's license over the tenement expired after a courier failed to deliver documents on time.

The junior arranged financial backing for a potential development and signed an agreement with BHP Billiton to process the ore before the tenement was stripped from the company by the state government and handed back to Rio Tinto.

Raspadskaya 2007 profit up by 115% YoY

Russia’s leading coking coal producers OAO Raspadskaya announced that its 2007 net profit more than doubled to USD 240.2 million up by 115% YoY from USD 111.5 million.

Raspadskaya, part owned by steel maker Evraz Group in a statement said that its 2007 revenues rose by 67.3% to USD 784.1 million in the same comparison.

(In USD million)

Highlights of 2007 are as follows:

1. 28% increase in the production output leading to a record 13.55 million tonnes of raw coal produced in 2007 and positioning Raspadskaya as № 1 producer in Russia and No 5 globally
2. Sales volume of coal concentrate is up by 34%, in particular by 18% in Russia and by 95% for export sales confirming strong Russian demand and surging Ukrainian demand
3. Strong EBITDA of USD 491.4 million and the corresponding EBITDA margin of 63% bolstered by increasing coking coal prices in the 2nd half of 2007
4. Total cash cost per tonne of raw coal produced down from USD 12,0 per tonne to USD 11,5 per tonne and total cash cost per tonne of coal concentrate produced down from USD 18.8 per tonne to USD 18.1 per tonne demonstrating management’s cost controls
5. Strong commitment to shareholders’ value, M&A discipline and operational independence confirmed by our considerate and diligent handling of the complex Yuzhkuzbassugol consolidation process

Due to the growth of sales volume and the tight cost controls, the Company has managed to decrease again its cash costs per tonne of both raw coal and coal concentrate by 4% despite the prevailing inflationary environment.

Mr Gennady Kozovoy CEO & managing shareholder of Raspadskaya’s commented on the 2007 results and 2008 expectations that “In 2007, we have achieved satisfactory production growth rate of 28% and strong financial results. In 2008, we will have to consolidate our position while fighting challenges posed to us by the inflationary pressures. Nonetheless, demands for coking coal and our products and strong pricing environment in Russia, Ukraine and globally which we expect to endure for the foreseeable future shall help us better our financial results in 2008.

He said we shall use it to prepare ground for our renewed growth in next years, in particular through use of new high productive equipment, the involving of our licences and the implementation of our mid-term development program.”

OAO Raspadskaya is located in the Kemerovo region of Russia. The Company comprises two active underground mines, an active open-pit mine, a coal preparation plant and one underground mine under construction, as well as a coal transportation network and a number of integrated infrastructure companies. Raspadskaya is one of the leading Russian coking coal producers whose customers include major steel and coking plants in Russia, Ukraine, as well as in Eastern Europe and Asia.

UC RUSAL to sell a 50% coal mining share in Ekibastuzskoye

UC RUSAL, the world’s largest aluminium and alumina producer, announced that within the framework of its joint venture in Kazakhstan, it has signed an agreement to sell a 50% share in coal mining at the Ekibastuzskoye coal field to Samruk Holding managing state assets. The coal field is located at the Bogatyr and Severny coal mines in the Pavlodar region of Kazakhstan.

Under the signed agreement, Samruk Holding will pay UC RUSAL USD 345 million accounting for a 50% share in coal mining at the Bogatyr and Severny coal mines. The cost of this stake was calculated by Deutsche Bank through a detailed audit and evaluation of the asset.

In November 2007 UC RUSAL and Samruk Holding signed an agreement to establish a joint venture to develop coal and energy industries in Kazakhstan. Under the joint venture, which is currently being established, UC RUSAL and Samruk Holding will produce and deliver coal to serve the Kazakh and Russian markets. The companies will also explore opportunities to use coal for the development of power generating assets as a basis for metals and mining production.

The parties will complete all legal and organizational procedures by September 2008.

South Korean group to invest USD 246 million in El Boleo

Reuters reported that a South Korean consortium has agreed to invest USD 246 million in the El Boleo copper and cobalt project in Mexico by buying a 30% stake held by Canadian firm Baja mining.

An official at steel maker Hyundai Hysco said the company had agreed to join the consortium led by state run Korea Resources Corp to invest in the project due to start production from 2010.

Baja Mining is a small diversified miner, its mining project would yield annually 55,750 tonnes of copper cathode, 1,535 tonnes of cobalt cathode and 6,300 tonnes of zinc contained metal for the first four years.

Rio Tinto produces record amount of iron ore in WA

ABC reported that Rio mined 43 million tonnes of iron ore in the first quarter of 2008 up by 15% YoY.

However Mr Tom Albanese CEO of Rio Tinto said that the company would have produced more iron ore this quarter if its gas supply had not been cut off earlier this year. He added that the company was forced to curtail production and rail operations for several days because of the limited gas supply.

Mr Albanese said that "But for the cyclonic activity and of the course the West Australia wide Woodside gas interruption which as you know turned off the lights pretty much from the southern part of Western Australia to the northern part of Western Australia our production would have been at fourth quarter 2007 rates with expansion to come in 2008.”

Rio Tinto welcomes High Court decision on Shovelanna lease

Commenting on High Court decision regarding the Shovelanna deposit, Mr Sam Walsh CEO of Rio Tinto Iron Ore said that "This decision is welcomed by Rio Tinto. It confirms that due process was followed by the Western Australian Minister for Resources. Since 2003 Rio Tinto Iron Ore has committed more than USD 7 billion to expand its annual iron ore export capacity to 220 million tonnes by 2009.

He added that "Today's decision is important in ensuring the continuity of our operations well into the future, as we progress towards achieving 320 million tonne per annum capacity in 2012."

POSCO to invest USD 200 million in South African mine

Reuters reported that South Korean steel maker POSCO would invest USD 200 million to take 13% of a South African manganese mine, its latest move to add mining assets and cut pressure from soaring raw material prices.

POSCO said the purchase will be made by joining international consortium Pallinghurst, which owns 49.9% of the Kalahari mine in Northern Cape Province and is controlled by privately held coal firm AMCI and South African financial firm Investec. It said the deal will help it secure 25% of its annual requirement of manganese MNG LON, used to harden stainless steel.

The project is expected to start production in 2010 and POSCO will get 130,000 tonnes of manganese supply annually from the project.

COSCO to establish JV with Global Putra for coal transportation

Xinhua reported that sea transport operator China Ocean Shipping Company is making efforts to win coal shipment contract from Indonesia by establishing joint venture with a local firm.

As per report Cosco has teamed up with Indonesia's PT Global Putra International and the joint venture will buy up to 10 coal ships with the capacity of between 50,000 tonnes and 100,000 tonnes.

Mr Sumadi Kusuma president of GPI said that "Each ship has a price tag of USD 50 million to USD 100 million.” He added that “We established the joint venture to answer demands for coal shipment from Indonesia to foreign countries, particularly China.”

Mr Kusuma and Wei Jiatu CEO of COSCO have met with Mr Jusman Syafii Djamal transportation minister to report the joint venture establishment.

Mr Sumadi said that "We have handed over all documents to the government, who has the final say. We are confident the joint venture will become operational this year.”

Vale Carajas railroad cleared as protest ends

Cia Vale do Rio Doce said that about 500 protesters ended a daylong blockade that halted shipments at its Carajas ore railway. Vale usually ships about 300,000 tonnes of iron ore and other goods a day along the route.

A Vale official said that deliveries on the line, which links the company's Carajas iron ore mine in P